UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended | |
☐ | Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from __________ to__________ | |
Commission File Number: 000-55984 |
iQSTEL Inc.
(Exact name of registrant as specified in its charter)
Nevada | 45-2808620 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
300 Aragon Avenue, Suite 375 Coral Gables, FL33134 | |
(Address of principal executive offices) | |
(954) 951-8191 | |
(Registrant’s telephone number) | |
| |
(Former name, former address and former fiscal year, if changed since last report) |
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
☐ Large accelerated filer | ☐ Accelerated filer |
☒ Non-accelerated Filer | ☒Smaller reporting company |
☐ Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes [X] No
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: November 14, 2022May 15, 2023
1 |
TABLE OF CONTENTS | ||
Page | ||
PART I – FINANCIAL INFORMATION
| ||
Item 1: | Financial Statements | 3 |
Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4 |
Item 3: | Quantitative and Qualitative Disclosures About Market Risk | |
Item 4: | Controls and Procedures | |
PART II – OTHER INFORMATION
| ||
Item 1: | Legal Proceedings | |
Item 1A: | Risk Factors | |
Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 3: | Defaults Upon Senior Securities | |
Item 4: | Mine Safety Disclosures | |
Item 5: | Other Information | |
Item 6: | Exhibits |
2 |
Item 1. Financial Statements
Our unaudited consolidated financial statements included in this Form 10-Q are as follows:
F-1 | Consolidated Balance Sheets as of |
F-2 | Consolidated Statements of Operations for the three and nine months ended |
F-3 | Consolidated Statements of Cash Flows for the |
F-4 | Consolidated Statements of Stockholder’s Equity as of |
F-5 | Notes to Consolidated Financial Statements (unaudited). |
These interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended September 30, 2022March 31, 2023 are not necessarily indicative of the results that can be expected for the full year.
3 |
iQSTEL INC
Consolidated Balance Sheets
(Unaudited)
September 30, | December 31, | March 31, | December 31, | |||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
ASSETS | ||||||||||||||||
Current Assets | ||||||||||||||||
Cash | $ | 1,294,981 | $ | 3,334,813 | $ | 1,777,226 | $ | 1,329,389 | ||||||||
Accounts receivable, net | 3,922,778 | 2,540,515 | 3,969,503 | 4,209,125 | ||||||||||||
Inventory | 26,124 | — | 26,124 | 26,124 | ||||||||||||
Due from related parties | 351,139 | 424,086 | 400,893 | 326,324 | ||||||||||||
Prepaid and other current assets | 546,160 | 267,110 | 563,221 | 545,628 | ||||||||||||
Total Current Assets | 6,141,182 | 6,566,524 | 6,736,967 | 6,436,590 | ||||||||||||
Property and equipment, net | 391,762 | 409,382 | 433,119 | 401,021 | ||||||||||||
Intangible asset | 99,592 | 99,592 | 99,592 | 99,592 | ||||||||||||
Goodwill | 5,172,146 | 1,537,742 | 5,172,146 | 5,172,146 | ||||||||||||
Deferred tax assets | 413,438 | 446,402 | 445,100 | 440,135 | ||||||||||||
TOTAL ASSETS | $ | 12,218,120 | $ | 9,059,642 | $ | 12,886,924 | $ | 12,549,484 | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||
Current Liabilities | ||||||||||||||||
Accounts payable | 1,913,304 | 1,474,595 | 2,270,211 | 2,254,636 | ||||||||||||
Accrued and other current liabilities | 2,748,968 | 2,482,352 | ||||||||||||||
Due to related parties | 26,613 | 26,613 | 26,613 | 26,613 | ||||||||||||
Loans payable - net of discount of $0 and $7,406 | 93,204 | 315,450 | ||||||||||||||
Loans payable | 95,407 | 94,342 | ||||||||||||||
Loans payable - related parties | 221,637 | 239,308 | 238,610 | 235,949 | ||||||||||||
Other current liabilities | 515,223 | 307,049 | ||||||||||||||
Derivative liabilities | 921,222 | 1,357,787 | ||||||||||||||
Total Current Liabilities | 2,769,981 | 2,363,015 | 6,301,031 | 6,451,679 | ||||||||||||
Loans payable, non-current | 101,590 | 119,295 | 100,255 | 108,150 | ||||||||||||
Employee benefits, non-current | 144,883 | 156,434 | 155,978 | 154,238 | ||||||||||||
TOTAL LIABILITIES | 3,016,454 | 2,638,744 | 6,557,264 | 6,714,067 | ||||||||||||
Stockholders' Equity | ||||||||||||||||
Preferred stock: | authorized; par value||||||||||||||||
Series A Preferred stock: shares issued and outstanding, respectively | designated; par value,10 | 10 | 10 | 10 | ||||||||||||
Series B Preferred stock: shares issued and outstanding | designated; par value,21 | 21 | 21 | 21 | ||||||||||||
Series C Preferred stock: shares issued and outstanding | designated; par value,— | — | — | — | ||||||||||||
Common stock: and shares issued and outstanding, respectively | authorized; par value151,830 | 147,477 | ||||||||||||||
Common stock: and shares issued and outstanding, respectively | authorized; par value164,597 | 161,595 | ||||||||||||||
Additional paid in capital | 29,437,832 | 25,842,982 | 31,784,606 | 31,136,120 | ||||||||||||
Accumulated deficit | (19,511,934 | ) | (18,536,921 | ) | (24,867,580 | ) | (24,504,395 | ) | ||||||||
Accumulated other comprehensive loss | (37,935 | ) | (36,658 | ) | (32,753 | ) | (33,557 | ) | ||||||||
Equity attributed to stockholders of iQSTEL Inc. | 10,039,824 | 7,416,911 | ||||||||||||||
Equity attributable to stockholders of iQSTEL Inc. | 7,048,901 | 6,759,794 | ||||||||||||||
Deficit attributable to noncontrolling interests | (838,158 | ) | (996,013 | ) | (719,241 | ) | (924,377 | ) | ||||||||
Total Stockholders' Equity | 9,201,666 | 6,420,898 | ||||||||||||||
TOTAL STOCKHOLDERS' EQUITY | 6,329,660 | 5,835,417 | ||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 12,218,120 | $ | 9,059,642 | $ | 12,886,924 | $ | 12,549,484 |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-1 |
iQSTEL INC
Consolidated Statements of Operations
(Unaudited)
Three Months Ended | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||
September 30, | September 30, | March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | |||||||||||||||||||
Revenues | $ | 21,936,634 | $ | 16,516,739 | $ | 65,055,661 | $ | 46,842,717 | $ | 24,666,529 | $ | 19,419,311 | ||||||||||||
Cost of revenue | 20,621,674 | 15,675,687 | 62,410,367 | 45,469,730 | 23,449,793 | 18,935,251 | ||||||||||||||||||
Gross profit | 1,314,960 | 841,052 | 2,645,294 | 1,372,987 | 1,216,736 | 484,060 | ||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||
General and administration | 1,256,147 | 957,195 | 3,390,097 | 3,664,473 | 1,534,266 | 989,498 | ||||||||||||||||||
Total operating expenses | 1,256,147 | 957,195 | 3,390,097 | 3,664,473 | 1,534,266 | 989,498 | ||||||||||||||||||
Operating income (loss) | 58,813 | (116,143 | ) | (744,803 | ) | (2,291,486 | ) | |||||||||||||||||
Operating loss | (317,530 | ) | (505,438 | ) | ||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||
Other income | 43,219 | 11,252 | 38,591 | 40,431 | — | 24,159 | ||||||||||||||||||
Other expenses | (71,027 | ) | 475 | (54,247 | ) | (421 | ) | (33,954 | ) | (28,564 | ) | |||||||||||||
Interest expense | (3,693 | ) | (6,802 | ) | (22,417 | ) | (648,889 | ) | (3,645 | ) | (14,888 | ) | ||||||||||||
Change in fair value of derivative liabilities | — | — | — | 317,080 | 196,307 | — | ||||||||||||||||||
Loss on settlement of debt | — | — | — | (528,794 | ) | |||||||||||||||||||
Total other income (expense) | (31,501 | ) | 4,925 | (38,073 | ) | (820,593 | ) | 158,708 | (19,293 | ) | ||||||||||||||
Net income (loss) before provision for income taxes | 27,312 | (111,218 | ) | (782,876 | ) | (3,112,079 | ) | |||||||||||||||||
Net loss before provision for income taxes | (158,822 | ) | (524,731 | ) | ||||||||||||||||||||
Income taxes | — | — | — | — | — | — | ||||||||||||||||||
Net income (loss) | 27,312 | (111,218 | ) | (782,876 | ) | (3,112,079 | ) | |||||||||||||||||
Net loss | (158,822 | ) | (524,731 | ) | ||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | 96,175 | 87,736 | 192,137 | 16,642 | 204,363 | 30,239 | ||||||||||||||||||
Net loss attributed to stockholders of iQSTEL Inc. | $ | (68,863 | ) | $ | (198,954 | ) | $ | (975,013 | ) | $ | (3,128,721 | ) | ||||||||||||
Net loss attributable to stockholders of iQSTEL Inc. | $ | (363,185 | ) | $ | (554,970 | ) | ||||||||||||||||||
Comprehensive income (loss) | �� | |||||||||||||||||||||||
Net income (loss) | $ | 27,312 | $ | (111,218 | ) | $ | (782,876 | ) | $ | (3,112,079 | ) | |||||||||||||
Net loss | $ | (158,822 | ) | $ | (524,731 | ) | ||||||||||||||||||
Foreign currency adjustment | (1,096 | ) | 3,406 | (2,503 | ) | 54,398 | 1,577 | (384 | ) | |||||||||||||||
Total comprehensive income (loss) | 26,216 | $ | (107,812 | ) | $ | (785,379 | ) | $ | (3,057,681 | ) | ||||||||||||||
Total comprehensive (loss) | $ | (157,245 | ) | $ | (525,115 | ) | ||||||||||||||||||
Less: Comprehensive income attributable to noncontrolling interests | 95,638 | 89,405 | 190,911 | 43,297 | 205,136 | 30,051 | ||||||||||||||||||
Net comprehensive loss attributed to stockholders of iQSTEL Inc. | $ | (69,422 | ) | $ | (197,217 | ) | $ | (976,290 | ) | $ | (3,100,978 | ) | ||||||||||||
Net comprehensive (loss) attributable to stockholders of iQSTEL Inc. | $ | (362,381 | ) | $ | (555,166 | ) | ||||||||||||||||||
Basic income (loss) per common share | $ | 0.00 | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.02 | ) | |||||||||||||
Diluted income (loss) per common share | $ | 0.00 | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.02 | ) | |||||||||||||
Basic and diluted loss per common share | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||||||||||||
Weighted average number of common shares outstanding - Basic and diluted | 151,750,426 | 141,697,141 | 150,057,315 | 133,173,421 | 164,034,479 | 147,539,580 | ||||||||||||||||||
Weighted average number of common shares outstanding - Diluted | 153,930,452 | 141,697,141 | 150,057,315 | 133,173,421 |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-2 |
iQSTEL INC
Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
For the three and nine months ended September 30,March 31, 2023 and 2022 and 2021
(Unaudited)
Series A Preferred Stock | Series B Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Additional Paid in Capital | Accumulated Deficit | Accumulated Comprehensive Loss | Total | Non Controlling Interest | Total Stockholders' Deficit | |||||||||||||||||||||||||||||||||||||
Balance - December 31, 2022 | 10,000 | $ | 10 | 21,000 | $ | 21 | 161,595,511 | $ | 161,595 | $ | 31,136,120 | $ | (24,504,395 | ) | $ | (33,557 | ) | $ | 6,759,794 | $ | (924,377 | ) | $ | 5,835,417 | ||||||||||||||||||||||||
Common stock issued for warrant exercises | — | — | — | — | 2,941,177 | 2,942 | 397,058 | — | — | 400,000 | — | 400,000 | ||||||||||||||||||||||||||||||||||||
Common stock issued for compensation | — | — | — | — | 60,000 | 60 | 11,170 | — | — | 11,230 | — | 11,230 | ||||||||||||||||||||||||||||||||||||
Resolution of derivative liabilities upon exercise of warrants | — | — | — | — | — | — | 240,258 | — | — | 240,258 | — | 240,258 | ||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | — | 804 | 804 | 773 | 1,577 | ||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | (363,185 | ) | — | (363,185 | ) | 204,363 | (158,822 | ) | |||||||||||||||||||||||||||||||||
Balance - March 31, 2023 | 10,000 | $ | 10 | 21,000 | $ | 21 | 164,596,688 | $ | 164,597 | $ | 31,784,606 | $ | (24,867,580 | ) | $ | (32,753 | ) | $ | 7,048,901 | $ | (719,241 | ) | $ | 6,329,660 |
Series A Preferred Stock | Series B Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Additional Paid in Capital | Accumulated Deficit | Accumulated Comprehensive Loss | Total | Non Controlling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||
Balance - December 31, 2021 | 10,000 | $ | 10 | 21,000 | $ | 21 | 147,477,358 | $ | 147,477 | $ | 25,842,982 | $ | (18,536,921 | ) | $ | (36,658 | ) | $ | 7,416,911 | $ | (996,013 | ) | $ | 6,420,898 | |||||||||||||||||||||||
Common stock issued for cash | — | — | — | — | 2,000,000 | 2,000 | 998,000 | — | — | 1,000,000 | — | 1,000,000 | |||||||||||||||||||||||||||||||||||
Common stock issued for compensation | — | — | — | — | 60,000 | 60 | 41,079 | — | — | 41,139 | — | 41,139 | |||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | — | (196 | ) | (196 | ) | (188 | ) | (384) | ||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | (554,970 | ) | — | (554,970 | ) | 30,239 | (524,731) | |||||||||||||||||||||||||||||||||
Balance - March 31, 2022 | 10,000 | $ | 10 | 21,000 | $ | 21 | 149,537,358 | $ | 149,537 | $ | 26,882,061 | $ | (19,091,891 | ) | $ | (36,854 | ) | $ | 7,902,884 | $ | (965,962 | ) | $ | 6,936,922 | |||||||||||||||||||||||
Common stock issued for compensation | — | — | — | — | 60,000 | 60 | 30,430 | — | — | 30,490 | — | 30,490 | |||||||||||||||||||||||||||||||||||
Common stock issued and to be issued for acquisition of subsidiaries | — | — | — | — | 1,461,653 | 1,462 | 1,548,538 | — | — | 1,550,000 | (33,056 | ) | 1,516,944 | ||||||||||||||||||||||||||||||||||
Common stock issued for asset acquisition | — | — | — | — | 500,000 | 500 | 324,500 | — | — | 325,000 | — | 325,000 | |||||||||||||||||||||||||||||||||||
Common stock payable | — | — | — | — | — | — | 18,900 | — | — | 18,900 | — | 18,900 | |||||||||||||||||||||||||||||||||||
Warrant granted | — | — | — | — | — | — | 500,000 | — | — | 500,000 | — | 500,000 | |||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | — | (522 | ) | (522 | ) | (501 | ) | (1,023) | ||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | (351,180 | ) | — | (351,180 | ) | 65,723 | (285,457) | |||||||||||||||||||||||||||||||||
Balance - June 30, 2022 | 10,000 | $ | 10 | 21,000 | $ | 21 | 151,559,011 | $ | 151,559 | $ | 29,304,429 | $ | (19,443,071 | ) | $ | (37,376 | ) | $ | 9,975,572 | $ | (933,796 | ) | $ | 9,041,776 | |||||||||||||||||||||||
Common stock issued for compensation | — | — | — | — | 60,000 | 60 | 20,440 | — | — | 20,500 | — | 20,500 | |||||||||||||||||||||||||||||||||||
Common stock issued for settlement of debt | — | — | — | — | 161,367 | 161 | 80,513 | — | — | 80,674 | — | 80,674 | |||||||||||||||||||||||||||||||||||
Common stock issued for asset acquisition | — | — | — | — | 50,000 | 50 | 32,450 | — | — | 32,500 | — | 32,500 | |||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | — | (559 | ) | (559 | ) | (537 | ) | (1,096) | ||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | (68,863 | ) | — | (68,863 | ) | 96,175 | 27,312 | |||||||||||||||||||||||||||||||||
Balance - September 30, 2022 | 10,000 | $ | 10 | 21,000 | $ | 21 | 151,830,378 | $ | 151,830 | $ | 29,437,832 | $ | (19,511,934 | ) | $ | (37,935 | ) | $ | 10,039,824 | $ | (838,158 | ) | $ | 9,201,666 |
Series A Preferred Stock | Series B Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Additional Paid in Capital | Accumulated Deficit | Accumulated Comprehensive Loss | Total | Non Controlling Interest | Total Stockholders’ Deficit | |||||||||||||||||||||||||||||||||||||
Balance - December 31, 2021 | 10,000 | $ | 10 | 21,000 | $ | 21 | 147,477,358 | $ | 147,477 | $ | 25,842,982 | $ | (18,536,921 | ) | $ | (36,658 | ) | $ | 7,416,911 | $ | (996,013 | ) | $ | 6,420,898 | ||||||||||||||||||||||||
Common stock issued for cash | — | — | — | — | 2,000,000 | 2,000 | 998,000 | — | — | 1,000,000 | — | 1,000,000 | ||||||||||||||||||||||||||||||||||||
Common stock issued for compensation | — | — | — | — | 60,000 | 60 | 41,079 | — | — | 41,139 | — | 41,139 | ||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | — | (196 | ) | (196 | ) | (188 | ) | (384 | ) | ||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | (554,970 | ) | — | (554,970 | ) | 30,239 | (524,731 | ) | |||||||||||||||||||||||||||||||||
Balance - March 31, 2022 | 10,000 | $ | 10 | 21,000 | $ | 21 | 149,537,358 | $ | 149,537 | $ | 26,882,061 | $ | (19,091,891 | ) | $ | (36,854 | ) | $ | 7,902,884 | $ | (965,962 | ) | $ | 6,936,922 |
Series A Preferred Stock | Series B Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Additional Paid in Capital | Accumulated Deficit | Accumulated Comprehensive Loss | Total | Non Controlling Interest | Total Stockholders' Deficit | ||||||||||||||||||||||||||||||||||||
Balance - December 31, 2020 | 10,000 | $ | 10 | — | $ | — | 118,133,432 | $ | 118,133 | $ | 13,267,261 | $ | (14,699,148 | ) | $ | (74,831 | ) | $ | (1,388,575 | ) | $ | (1,006,461 | ) | $ | (2,395,036) | ||||||||||||||||||||||
Preferred stock issued for conversion of common stock | — | — | 21,000 | 21 | (21,000,000 | ) | (21,000 | ) | 20,979 | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Common stock issued for cash | — | — | — | — | 35,862,500 | 35,863 | 3,550,387 | — | — | 3,586,250 | — | 3,586,250 | |||||||||||||||||||||||||||||||||||
Common stock issued for service | — | — | — | — | 195,000 | 195 | 284,505 | — | — | 284,700 | — | 284,700 | |||||||||||||||||||||||||||||||||||
Common stock issued for compensation | — | — | — | — | 600,000 | 600 | 563,400 | — | — | 564,000 | — | 564,000 | |||||||||||||||||||||||||||||||||||
Common stock issued for forbearance of debt | — | — | — | — | 250,000 | 250 | 49,675 | — | — | 49,925 | — | 49,925 | |||||||||||||||||||||||||||||||||||
Common stock issued for conversion of debt | — | — | — | — | 6,080,632 | 6,081 | 416,214 | — | — | 422,295 | — | 422,295 | |||||||||||||||||||||||||||||||||||
Cancellation of common stock | — | — | — | — | (1,294,600 | ) | (1,295 | ) | (88,809 | ) | — | — | (90,104 | ) | — | (90,104) | |||||||||||||||||||||||||||||||
Resolution of derivative liabilities | — | — | — | — | — | — | 708,611 | — | — | 708,611 | — | 708,611 | |||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | — | 54,905 | 54,905 | 52,751 | 107,656 | |||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | (1,942,391 | ) | — | (1,942,391 | ) | 63,902 | (1,878,489) | |||||||||||||||||||||||||||||||||
Balance - March 31, 2021 | 10,000 | $ | 10 | 21,000 | $ | 21 | 138,826,964 | $ | 138,827 | $ | 18,772,223 | $ | (16,641,539 | ) | $ | (19,926 | ) | $ | 2,249,616 | $ | (889,808 | ) | $ | 1,359,808 | |||||||||||||||||||||||
Common stock issued for compensation | — | — | — | — | 600,000 | 600 | 411,600 | — | — | 412,200 | — | 412,200 | |||||||||||||||||||||||||||||||||||
Common stock issued for settlement of debt | — | — | — | — | 2,230,394 | 2,230 | 2,054,300 | — | — | 2,056,530 | — | 2,056,530 | |||||||||||||||||||||||||||||||||||
Debt forgiveness | — | — | — | — | — | — | 807,103 | — | — | 807,103 | — | 807,103 | |||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | — | (28,899 | ) | (28,899 | ) | (27,765 | ) | (56,664) | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (987,376 | ) | — | (987,376 | ) | (134,996 | ) | (1,122,372) | ||||||||||||||||||||||||||||||||
Balance - June 30, 2021 | 10,000 | $ | 10 | 21,000 | $ | 21 | 141,657,358 | $ | 141,657 | $ | 22,045,226 | $ | (17,628,915 | ) | $ | (48,825 | ) | $ | 4,509,174 | $ | (1,052,569 | ) | $ | 3,456,605 | |||||||||||||||||||||||
Common stock issued for compensation | — | — | — | — | 60,000 | 60 | 34,478 | — | — | 34,538 | — | 34,538 | |||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | — | 1,737 | 1,737 | 1,669 | 3,406 | |||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | (198,954 | ) | — | (198,954 | ) | 87,736 | (111,218) | |||||||||||||||||||||||||||||||||
Balance - September 30, 2021 | 10,000 | $ | 10 | 21,000 | $ | 21 | 141,717,358 | $ | 141,717 | $ | 22,079,704 | $ | (17,827,869 | ) | $ | (47,088 | ) | $ | 4,346,495 | $ | (963,164 | ) | $ | 3,383,331 |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-3 |
iQSTEL INC
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended | Three Months Ended | |||||||||||||||
September 30, | March 31, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net loss | $ | (782,876 | ) | $ | (3,112,079 | ) | $ | (158,822 | ) | $ | (524,731 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Stock-based compensation | 111,029 | 1,205,334 | ||||||||||||||
Bad debt | 26,299 | — | ||||||||||||||
Write-off of due from related party | — | 7,648 | ||||||||||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||||
Stock based compensation | 11,230 | 41,139 | ||||||||||||||
Depreciation and amortization | 91,221 | 66,924 | 34,060 | 33,547 | ||||||||||||
Amortization of debt discount | 7,407 | 435,956 | — | 7,407 | ||||||||||||
Change in fair value of derivative liabilities | — | (317,080 | ) | (196,307 | ) | — | ||||||||||
Loss on settlement of debt | — | 528,794 | ||||||||||||||
Prepayment and default penalty | — | 122,020 | ||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | (832,263 | ) | (943,615 | ) | 564,365 | (87,361 | ) | |||||||||
Inventory | (26,124 | ) | — | |||||||||||||
Prepaid and other current assets | (31,714 | ) | (108,338 | ) | (16,204 | ) | 24,677 | |||||||||
Due from related parties | (5,143 | ) | — | |||||||||||||
Due from related party | 5,131 | 23,316 | ||||||||||||||
Accounts payable | (97,373 | ) | (239,857 | ) | 537,667 | 73,445 | ||||||||||
Other current liabilities | 50,636 | (131,752 | ) | (583,957 | ) | (39,091 | ) | |||||||||
Net cash used in operating activities | (1,488,901 | ) | (2,486,045 | ) | ||||||||||||
Net cash provided by (used in) operating activities | 197,163 | (447,652 | ) | |||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
Acquisition of subsidiaries, net of cash acquired | (1,814,132 | ) | (60,000 | ) | ||||||||||||
Purchase of property and equipment | (86,491 | ) | (74,799 | ) | (63,247 | ) | (24,918 | ) | ||||||||
Purchase of intangible assets | — | (27,824 | ) | |||||||||||||
Payment of loan receivable - related parties | (1,000 | ) | (215,674 | ) | ||||||||||||
Payment of loan receivable - related party | (80,000 | ) | — | |||||||||||||
Collection of amounts due from related parties | 400 | 226 | 300 | — | ||||||||||||
Net cash used in investing activities | (1,901,223 | ) | (378,071 | ) | (142,947 | ) | (24,918 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Proceeds from loans payable | — | 400,000 | ||||||||||||||
Repayments of loans payable | (232,018 | ) | (331,150 | ) | (9,006 | ) | (232,018 | ) | ||||||||
Repayment of loans payable - related parties | — | (90,787 | ) | |||||||||||||
Proceeds from common stock issued | 1,100,000 | 3,586,250 | — | 1,100,000 | ||||||||||||
Proceed from issuance of common stock purchase option | 500,000 | — | ||||||||||||||
Repayment of convertible notes | — | (250,000 | ) | |||||||||||||
Proceeds from exercise of warrants | 400,000 | — | ||||||||||||||
Proceeds from issuance of common stock purchase options | — | 500,000 | ||||||||||||||
Net cash provided by financing activities | 1,367,982 | 3,314,313 | 390,994 | 1,367,982 | ||||||||||||
Effect of exchange rate changes on cash | (17,690 | ) | (12,709 | ) | 2,627 | (3,181 | ) | |||||||||
Net change in cash | (2,039,832 | ) | 437,488 | 447,837 | 892,231 | |||||||||||
Cash, beginning of period | 3,334,813 | 753,316 | 1,329,389 | 3,334,813 | ||||||||||||
Cash, end of period | $ | 1,294,981 | $ | 1,190,804 | $ | 1,777,226 | $ | 4,227,044 | ||||||||
Supplemental cash flow information | ||||||||||||||||
Cash paid for interest | $ | 3,333 | $ | 117,198 | $ | — | $ | 3,333 | ||||||||
Cash paid for taxes | $ | — | $ | — | $ | — | $ | — | ||||||||
Non-cash transactions: | ||||||||||||||||
Common stock issued for asset acquisition | $ | 357,500 | $ | — | ||||||||||||
Common stock issued and to be issued for acquisition of subsidiaries | $ | 1,550,000 | $ | — | ||||||||||||
Common stock issued for conversion of debt | $ | — | $ | 422,295 | ||||||||||||
Resolution of derivative liabilities | $ | — | $ | 708,611 | ||||||||||||
Related party debt forgiveness | $ | — | $ | 807,103 | ||||||||||||
Common stock issued for settlement of debt | $ | 80,674 | $ | 2,056,530 | ||||||||||||
Common stock issued for forbearance of debt | $ | — | $ | 49,925 | ||||||||||||
Preferred stock issued for conversion of common stock | $ | — | $ | 21,000 | ||||||||||||
Resolution of derivative liabilities upon exercise of warrants | $ | 240,258 | $ | — |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-4 |
iQSTEL INC
Notes to the Unaudited Consolidated Financial Statements
September 30, 2022March 31, 2023
NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS
Organization and Operations
iQSTEL Inc. (“iQSTEL”, “we”, “us”, or the “Company”) was incorporated under the laws of the State of Nevada on June 24, 2011 under the name of B-Maven Inc. The Company changed its name to PureSnax International, Inc. on September 18, 2015; and more recently it changed its name to iQSTEL Inc. on August 7, 2018.
The Company has been engaged in the business of telecommunication services as a wholesale carrier of voice, SMS and data for other telecom companies around the World with more than 150404 active interconnection agreements with mobile companies, fixed line companies and other wholesale carriers.
Acquisitions
On May 13, 2022, we entered into a Company Acquisition Agreement regarding the acquisition of 51% of the shares in Whisl telecom LLC (“Whisl”).
On June 1, 2022, we entered into a Company Acquisition Agreement regarding the acquisition of 51% of the shares in Smartbiz Telecom LLC (“Smartbiz”).
Both acquisitions are detailed in Note 4.
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for annual financial statements.
In the opinion of the Company’s management, the accompanying unaudited interim consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2022March 31, 2023 and the results of operations and cash flows for the periods presented. The results of operations for the ninethree months ended September 30, 2022March 31, 2023 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20212022 filed with the SEC on April 15, 2022.14, 2023.
Consolidation Policy
The consolidated financial statements of the Company include the accounts of the Company and its owned subsidiaries, Etelix.com USA, LLC (“Etelix”), SwissLink Carrier AG (“Swisslink”), ITSBCHAIN, LLC (“ItsBchain”), QGLOBAL SMS, LLC (“QGlobal”), IoT Labs, LLC (“IoT Labs”), Global Money One IncInc. (“Global Money One”), Whisl telecomTelecom LLC (“Whisl”) and Smartbiz Telecom LLC (“Smartbiz”). All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP 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. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.
Business Combinations
In accordance with ASC 805-10, “Business Combinations”, the Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that the Company holds in the acquired company prior to the acquisition is re-measured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and the existing book value. Results of operations of the acquired entity are included in the Company’s results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets.
Foreign Currency Translation and Re-measurement
The Company translates its foreign operations to the U.S. dollardollars in accordance with ASC 830, “Foreign Currency Matters”.
The functional currency and reporting currency of the Company, Etelix, QGlobal, Itsbchain,ItsBchain, IoT Labs, Whisl, Smartbiz and Global Money One Whisl, and Smartbiz is the U.S. dollar, while theSwissLink’s functional currency of SwissLink is the Swiss Franc (“CHF”).
F-5 |
SwissLink translates their records into the U.S. dollardollars as follows:
• | Assets and liabilities at the rate of exchange in effect at the balance sheet date |
• | Equities at historical rate |
• | Revenue and expense items at the average rate of exchange prevailing during the period |
Adjustments arising from such translations are included in accumulated other comprehensive income (loss) in stockholders’ equity.
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had no cash equivalents at March 31, 2023 and December 31, 2022.
Accounts Receivable and Allowance for Uncollectible Accounts
Substantially all of the Company’s accounts receivable balance is related to trade receivables. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. TheUnder the expected credit loss model, the Company reviews its allowance for doubtful accounts daily and past due balances over 60 days and a specified amount are reviewed individually for collectability. Account balances are charged off after all means of collection have been exhausted and the potential for recovery is considered remote. During the ninethree months ended September 30,March 31, 2023 and 2022, and 2021, the Company recorded no bad debt expense of $26,299 and $0 respectively.expense.
The Company has adopted ASC 260, ”Earnings per Share”Share,” which requires presentation of basic earnings per share on the face of the statements of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share computation. In the accompanying financial statements, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants unless the result would be antidilutive. There were 4,800,000 warrantsDilutive potential common shares include outstanding duringSeries B Preferred stock, and it was excluded from the ninecomputation of diluted net loss per share as the result was anti-dilutive for the three months ended September 30, 2022, which were included in the calculation of the diluted earnings per share. There were no other potentially dilutive shares of common stock outstanding for the nine months ended September 30, 2021.March 31, 2023 and 2022.
Concentrations of Credit Risk
The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables. The Company places its cash and cash equivalents with financial institutions of high creditworthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits.
During the ninethree months ended September 30, 2022, 10March 31, 2023, 12 customers represented 87%86% of our revenues. During the nine months ended September 30, 2021, 6revenue compared to 4 customers representedrepresenting 87%86% of our revenues.revenue for the three months ended March 31, 2022. For the three months ended March 31, 2023 and 2022, 62% and 64% of the revenue comes from customers under prepayment conditions which means there is no credit or bad debt risk on that portion of the customers portfolio.
F-6 |
Financial Instruments
The Company follows ASC 820, “Fair Value Measurements and Disclosures,” which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The carrying values of our financial instruments, including, cash; accounts receivable; prepaid and other current assets; accounts payable; accrued liabilities and other current liabilities; and due from/to related parties approximate their fair values due to the short-term maturities of these financial instruments.
Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due to related parties due to their related party nature.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company used a Black-Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
F-7 |
Revenue Recognition
The Company recognizes revenue from telecommunication services in accordance with ASC 606, “Revenue from Contracts with Customers.”
The Company recognizes revenue related to monthly usage charges and other recurring charges during the period in which the telecommunication services are rendered, provided that persuasive evidence of a sales arrangement existed,exists, and collection is reasonably assured. Management considers persuasive evidence of a sales arrangement to be a written interconnection agreement. The Company’s payment terms vary by clients.client.
Recent Accounting Pronouncements
ManagementIn June 2022, the FASB issued ASU 2022-03, ASC Subtopic “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” These amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update are effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments Credit Losses —Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected, which includes the Company’s accounts receivable. This ASU is effective for the Company for reporting periods beginning after December 15, 2022. The Company adopted this accounting pronouncement on January 1, 2023 and it did not have any impact to its financial statements.
The Company has consideredreviewed all recentother recently issued, but not yet effective, accounting pronouncements issued sinceand does not believe the last auditfuture adoption of any such pronouncements may be expected to cause a material impact on our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.
NOTE 3 - GOING CONCERN
The Company's consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has suffered recurring losses from operations and does not have an established source of revenues sufficient to cover its operating costs. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its business plan and eventually attain profitable operations.
During the next year, the Company's foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing in the industry and continuing its marketing efforts. The Company may experience a cash shortfall and be required to raise additional capital.
Historically, the Company has relied upon funds from its stockholders. Management may raise additional capital through future public or private offerings of the Company's stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company's failure to do so could have a material and adverse effect upon its operations and its stockholders.
NOTE 4 – ACQUISITIONS
On May 13, 2022, we entered into a Company Acquisition Agreement (Purchase Agreement) with US Acquisitions, LLC, a California limited liability company (Seller) concerning the contemplated sale by Seller and the purchase by us of 51% of the membership interests Seller held in Whisl, a Texas limited liability company. Whisl provides local US termination for Voice through its FCC license of VoIP Service number 832742; and is in the process to obtain a C-Lec FCC License over next 12 months. Whisl is one of the premier Intermediate Voice Providers in the USA. It has been a carrier since 2017 with billions of minutes traversing its network and provides its customers with multiple levels of Redundancy, Diversity, and Disaster Recovery for their applications and ability to make changes to underlying carrier configuration in real time. Whisl offers a single carrier solution for Voice Global services, and its customers benefit from hundreds of interconnection agreements that the company has cultivated since its inception. Pursuant to the Purchase Agreement, the closing of the purchase of the 51% membership interests was $1,800,000, which consisted of $1,250,000 in cash and $550,000 in our restricted common stock to Seller, which amounts to shares of common stock.
On June 1, 2022, we entered into a Purchase Agreement for the purchase of 51% of the membership interests in Smartbiz, a Florida Corporation which provides telecommunication services, dedicated to VoIP business for wholesale and retail markets. The purchase price for the acquisition was $1,800,000, which consisted of $800,000 in cash and $1,000,000 in our common stock to the seller, which amounts to shares of common stock.
Smartbiz and Whisl have been included in our consolidated results of operations since the acquisition dates.
The following table summarizes the fair value of the consideration paid by the Company:
Whisl
May 13, | ||||
Fair Value of Consideration: | 2022 | |||
Cash | $ | 1,000,000 | ||
Payable to seller | 250,000 | |||
1,461,653 shares of common stock | 550,000 | |||
Total Purchase Price | $ | 1,800,000 |
Smartbiz
June 1, | |||||
Fair Value of Consideration: | 2022 | ||||
Cash | $ | 725,000 | |||
Payable to seller | 75,000 | ||||
shares of common stock | 1,000,000 | ||||
Total Purchase Price | $ | 1,800,000 |
The following table summarizes the identifiable assets acquired and liabilities assumed upon acquisition of Smartbiz and Whisl and the calculation of goodwill:
Whisl
Total purchase price | $ | 1,800,000 | ||
Cash | 141,113 | |||
Accounts receivable | 109,762 | |||
Total identifiable assets | 250,875 | |||
Accounts payable | (241,426 | ) | ||
Other current liabilities | (2,075 | ) | ||
Total liabilities assumed | (243,501 | ) | ||
Net assets | 7,374 | |||
Non-controlling interest | 3,613 | |||
Total net assets | 3,761 | |||
Goodwill | $ | 1,796,239 |
F-8 |
SmartbizNOTE 4 – PREPAID AND OTHER CURRENT ASSETS
Total purchase price | $ | 1,800,000 | ||
Cash | 19,755 | |||
Accounts receivable | 789,515 | |||
Total identifiable assets | 809,270 | |||
Accounts payable | (807,265 | ) | ||
Other current liabilities | (76,839 | ) | ||
Total liabilities assumed | (884,104 | ) | ||
Net assets | (74,834 | ) | ||
Non-controlling interest | (36,669 | ) | ||
Total net assets | (38,165 | ) | ||
Goodwill | $ | 1,838,165 |
Prepaid and other current assets as of March 31, 2023 and December 31, 2022 consisted of the following:
Unaudited combined proforma results of operations for the nine months ended September 30, 2022 and 2021 as though the Company acquired Smartbiz and Whisl on January 1, 2021, are set forth below:
Nine Months Ended | ||||||||
September 30, | ||||||||
2022 | 2021 | |||||||
Revenues | $ | 69,165,130 | $ | 59,028,492 | ||||
Cost of revenues | 66,683,557 | 56,430,726 | ||||||
Gross profit | 2,481,573 | 2,597,766 | ||||||
Operating expenses | 4,322,526 | 4,724,857 | ||||||
Operating loss | (1,840,953 | ) | (2,127,091 | ) | ||||
Other expense | (38,073 | ) | (820,593 | ) | ||||
Net Loss | $ | (1,879,026 | ) | $ | (2,947,684 | ) |
March 31, | December 31, | |||||||
2023 | 2022 | |||||||
Other receivable | $ | 129,967 | $ | 120,139 | ||||
Prepaid expenses | 20,450 | 26,600 | ||||||
Advance payment | 21,000 | 21,000 | ||||||
Tax receivable | 394 | 389 | ||||||
Deposit for acquisition of asset | 362,000 | 357,500 | ||||||
Security deposit | 20,000 | 20,000 | ||||||
Process costing | 9,410 | — | ||||||
Total prepaid and other current assets | $ | 563,221 | $ | 545,628 |
NOTE 5 – PROPERTY AND EQUIPMENT
Property and equipment at September 30, 2022as of March 31, 2023 and December 31, 20212022 consisted of the following:
September 30, | December 31, | March 31, | December 31, | |||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Telecommunication equipment | $ | 301,462 | $ | 258,871 | $ | 332,944 | $ | 317,958 | ||||||||
Telecommunication software | 581,545 | 618,125 | 693,006 | 640,566 | ||||||||||||
Other equipment | 97,096 | 108,805 | 99,192 | 99,126 | ||||||||||||
Total property and equipment | 980,103 | 985,801 | 1,125,142 | 1,057,650 | ||||||||||||
Accumulated depreciation and amortization | (588,341 | ) | (576,419 | ) | (692,023 | ) | (656,629 | ) | ||||||||
Property and equipment, net | $ | 391,762 | $ | 409,382 | ||||||||||||
Total property and equipment | $ | 433,119 | $ | 401,021 |
Depreciation and amortization expense for the ninethree months ended September 30,March 31, 2023 and 2022 and 2021 amounted to $91,22134,060 and $66,92433,547, respectively.
NOTE 6 –LOANS PAYABLE
Loans payable as of March 31, 2023 and December 31, 2022 consisted of the following:
March 31, | December 31, | Interest | |||||||||||
2023 | 2022 | Term | rate | ||||||||||
Martus | $ | 95,407 | $ | 94,342 | Note was issued on October 23, 2018 and due on January 2, 2024 | 5.0% | |||||||
Darlene Covid19 | 100,255 | 108,150 | Note was issued on April 1, 2020 and due on March 31, 2025 | 0.0% | |||||||||
Total | 195,662 | 202,492 | |||||||||||
Less: Unamortized debt discount | — | — | |||||||||||
Total loans payable | 195,662 | 202,492 | |||||||||||
Less: Current portion of loans payable | (95,407 | ) | (94,342 | ) | |||||||||
Long-term loans payable | $ | 100,255 | $ | 108,150 |
F-9 |
NOTE 6 –LOANS PAYABLE
Loans payable at September 30, 2022- related parties as of March 31, 2023 and December 31, 20212022 consisted of the following:
September 30, | December 31, | Interest | |||||||||||
2022 | 2021 | Term | rate | ||||||||||
Bridge Loan | $ | — | $ | 222,222 | Note was issued on November 1, 2020 and due on January 30, 2022 | 18.0% | |||||||
Martus | 93,204 | 100,634 | Note was issued on October 23, 2018 and due on January 3, 2023 | 5.0% | |||||||||
Swisspeers AG | — | 9,605 | Note was issued on April 8, 2019 and originally due on October 4, 2022 | 7.0% | |||||||||
Darlene Covid19 | 101,590 | 109,690 | Note was issued on April 1, 2020 and due on March 31, 2025 | 0.0% | |||||||||
Total | 194,794 | 442,151 | |||||||||||
Less: Unamortized debt discount | — | (7,406 | ) | ||||||||||
Total loans payable | 194,794 | 434,745 | |||||||||||
Less: Current portion of loans payable | (93,204 | ) | (315,450 | ) | |||||||||
Long-term loans payable | $ | 101,590 | $ | 119,295 |
March 31, | December 31, | Interest | |||||||||||
2023 | 2022 | Term | rate | ||||||||||
49% of Shareholder of SwissLink | $ | $ | Note is due on demand | ||||||||||
49% of Shareholder of SwissLink | Note is due on demand | ||||||||||||
Total | 238,610 | 235,949 | |||||||||||
Less: Current portion of loans payable | 238,610 | 235,949 | |||||||||||
Long-term loans payable | $ | — | $ | — |
During the nine months ended September 30, 2022 and 2021, the Company borrowed from third parties totaling $0 and $444,444, which includes original issue discount and financing costs of $0 and $44,444 and repaid the principal amount of $232,018 and $331,150, respectively.
During the ninethree months ended September 30,March 31, 2023 and 2022, and 2021, the Company recorded interest expense of $22,4173,645 and $179,504 and recognized amortization of discount, included in interest expense, of $7,406and $63,666, respectively. In 2021, the Company recorded interest expense from convertible notes of $33,4307,481 and recognized amortization of discount, included in interest expense, of $372,2900 .and $7,407 , respectively.
DuringNOTE 7 – WARRANTS
On April 5, 2022, we entered into a Common Stock Purchase Option Agreement with Apollo Management Group, Inc (Holder) to subscribe for and purchase from the nine months ended Company, shares of Common Stock with an exercise price per share of $2.00; and an initial exercisable date on September 30, 2021,2022. The purchase price of this option was . The Company determined that the warrants had a related party loanfixed monetary value with a variable number of shares at inception and categorized the warrants as a liability in the accompanying consolidated financial statements.
$807,103 (Euro 735,000) was forgivenThe Holder and the Company recorded it asagreed that the Holder had the right and the obligation to exercise, on a cashless basis, $1,000,000 of the Options not later than October 15, 2022. Thereafter, the Holder shall undertake to exercise not less than (i) $400,000 of the Options on a “cash basis” not later than the later of (y) November 14, 2022 or (z) the date on which there is an effective registration statement permitting the issuance of the Option Shares to or resale of the Option Shares by the Holder and (ii) an additional paid$400,000 of the Options on a “cash basis” not later than the latest of (x) thirty (30) days following the exercise of the Option under subsection (i), above, (y) December 14, 2022, or (z) the date on which there is an effective registration statement permitting the issuance of the Option Shares to or resale of the Option Shares by the Holder. From and after the occurrence of the three above-referenced exercises, each additional exercise of Options hereunder shall be in capital.an amount not less than $200,000 and exercised only on a cash basis.
Loans payableThe Holder’s obligation to related partiesexercise each specified portion of this option on the specific dates above is subject to the volume-weighted average price (“VWAP”, market value), being not less than $0.20 per share on the relevant option exercise date. Adjusted option shares at September 30, 2022 and December 31, 2021 consistedVWAP of the following:$0.20 shall be 48,000,000 shares.
September 30, | December 31, | |||||||
2022 | 2021 | |||||||
49% of Shareholder of SwissLink | $ | $ | ||||||
49% of Shareholder of SwissLink | ||||||||
Total | 221,637 | 239,308 | ||||||
Less: Current portion of loans payable –related parties | 221,637 | 239,308 | ||||||
Long-term loans payable – related parties | $ | — | $ | — |
A summary of activity regarding warrants issued as follows:
Warrants Outstanding | ||||||||||||
Weighted Average | Weighted Average Remaining | |||||||||||
Warrants | Exercise Price | Contractual life (in years) | ||||||||||
Outstanding, December 31, 2022 | $ | 0.75 | ||||||||||
Granted | — | |||||||||||
Increase in number of warrants by VWAP | 0.14 | |||||||||||
Exercised | ( | ) | ||||||||||
Forfeited/canceled | ||||||||||||
Outstanding, March 31, 2023 | $ | 0.50 |
F-10 |
NOTE 78 – OTHER CURRENTDERIVATIVE LIABILITIES
OtherFair Value Assumptions Used in Accounting for Derivative Liabilities
ASC 815, “Derivatives and Hedging,” requires we assess the fair market value of derivative liabilities at the end of each reporting period and recognize any change in the fair market value as other income or expense.
The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of March 31, 2023. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current liabilities at September 30, 2022stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement.
For the three months ended March 31, 2023 and year ended December 31, 2021 consisted2022, the estimated fair values of the following:liabilities measured on a recurring basis are as follows:
Three months ended March 31, 2023 | Year ended December 31, 2022 | |||||||
Expected term | 0.50 - 0.70 years | 0.75 - 1.49 years | ||||||
Expected average volatility | 77% - 81% | 83% - 152% | ||||||
Expected dividend yield | — | — | ||||||
Risk-free interest rate | - | - |
September 30, | December 31, | |||||||
2022 | 2021 | |||||||
Accrued liabilities | $ | 30,825 | $ | 61,153 | ||||
Payable for acquisition of subsidiaries | 75,000 | — | ||||||
Accrued interest | — | 8,173 | ||||||
Salary payable - management | 89,628 | 92,229 | ||||||
Salary payable | 3,708 | — | ||||||
Employee benefits | 112,309 | 105,221 | ||||||
Other current liabilities | 203,753 | 40,273 | ||||||
$ | 515,223 | $ | 307,049 |
The following table summarizes the changes in the derivative liabilities during the three months ended March 31, 2023 and 2022:
Fair Value Measurements Using Significant Observable Inputs (Level 3) | ||||
Balance - December 31, 2022 | $ | 1,357,787 | ||
Settled on issuance of common stock | (240,258 | ) | ||
Change in fair value of the warrant | (196,307 | ) | ||
Balance - March 31, 2023 | $ | 921,222 |
The following table summarizes the change in fair value of derivative liabilities included in the income statement for the three months ended March 31, 2023 and 2022, respectively.
Three months ended | ||||||||
March 31, | ||||||||
2023 | 2022 | |||||||
Addition of new derivatives recognized as loss on derivatives | $ | — | $ | — | ||||
Revaluation of derivative liabilities | (196,307 | ) | — | |||||
Change in fair value of derivative liabilities | $ | (196,307 | ) | $ | — |
F-11 |
NOTE 89 – STOCKHOLDERS’ EQUITY
The Company’s authorized capital consists of
shares of common stock with a par value of per share.
Series A Preferred Stock
On November 3, 2020, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series A Preferred Stock, consisting of up $0.001. . Under the Certificate of Designation, holders of Series A Preferred Stock will participate on an equal basis per-share with holders of our common stock in any distribution upon winding up, dissolution, or liquidation. Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to stockholders at a rate of 51% of the total vote of stockholders. shares, par value
The rights of the holders of Series A Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on November 3, 2020.
As of September 30, 2022March 31, 2023 and December 31, 2021,2022, shares of Series A Preferred Stock were issued and outstanding.
Series B Preferred Stock
On November 11, 2020, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series B Preferred Stock, consisting of up $0.001. . Under the Certificate of Designation, holders of Series B Preferred Stock will receive a liquidation preference of $81 per share in any distribution upon winding up, dissolution, or liquidation of the Company before junior security holders, as provided in the designation. Holders of Series B Preferred Stock are entitled to receive as, when, and if declared by the Board of Directors, dividends in kind at an annual rate equal to twenty four percent (24%) of $81 per share for each of the then outstanding shares of Series B Preferred Stock, calculated on the basis of a 360-day year consisting of twelve 30-day months. Holders of Series B Preferred Stock do not have voting rights but may convert into common stock after twelve months from the issuance date, at a conversion rate of one thousand (1,000) shares of Common Stock for every one (1) share of Series B Preferred Stock. Upon conversion, the shares are subject to a one-year leak-out restriction on sales into the market of no more than 5% previous month’s stock liquidity. shares, par value
As of September 30, 2022March 31, 2023 and December 31, 2021,2022, shares of Series B Preferred Stock were issued and outstanding.
Series C Preferred Stock
On January 7, 2021, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series C Preferred Stock, consisting of up $0.001. . Under the Certificate of Designation, holders of Series C Preferred Stock will rank junior to the Series B Preferred Stock, but on par with common stock and Series A Preferred Stock in any distribution upon winding up, dissolution, or liquidation of the company, as provided in the designation. The holders of shares of Series C Preferred Stock have no dividend rights except as may be declared by the Board in its sole and absolute discretion, out of funds legally available for that purpose. Holders of Series C Preferred Stock do not have voting rights but may convert into common stock after twenty four months from the issuance date, at a conversion rate of one thousand (1,000) shares of Common Stock for every one (1) share of Series C Preferred Stock. Upon conversion, the shares are subject to a one-year restriction on sales into the market of no more than 5% previous month’s stock liquidity. shares, par value
The rights of the holders of Series C Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on January 7, 2021.
As of September 30, 2022March 31, 2023 and December 31, 2021,2022, Series C Preferred Stock was issued or outstanding.
Common Stock
During the ninethree months ended September 30, 2022,March 31, 2023, the Company issued shares of common stock, valued at fair market value on issuance as follows:
shares for compensation to our directors valued at |
As of September 30, 2022March 31, 2023 and December 31, 2021,2022, and shares of common stock were issued and outstanding, respectively.
Common Stock Purchase Option
On April 25, 2022, we entered into a Common Stock Purchase Option Agreement with Apollo Management Group, Inc. to subscribe for and purchase from the Company, shares of Common Stock with an exercise price per share of $2.00; and an initial exercise date September 30, 2022. The purchase price of this option is $500,000.
F-12 |
NOTE 910 - RELATED PARTY TRANSACTIONS
Due from related partiesparty
During the nine months ended September 30, 2022 and 2021, the Company advanced $1,000 and $35,674 to related parties and collected $100 and $226, respectively.
During the nine months ended September 30, 2021, the Company loaned $180,000 to our CEO and wrote off amounts totaling $8,004.
During the nine months ended September 30, 2021, the Company wrote off due from related party of $7,648.
As of September 30, 2022March 31, 2023 and December 31, 2021,2022, the Company had amounts due from related parties of $351,139400,893 and $424,086326,324., respectively. The loans are unsecured, non-interest bearing and due on demand.
Due to related parties
During the nine months ended September 30, 2022 and 2021, the Company repaid $0 and $90,787 to certain members of Company management.
As of September 30, 2022March 31, 2023 and December 31, 2021,2022, the Company had amounts due to related parties of $26,613. The amounts are unsecured, non-interest bearing and due on demand.
Employment agreements
During the ninethree months ended September 30,March 31, 2023 and 2022, and 2021, the Company recorded management feessalaries of $405,000144,000 and stock-based compensation bonuses of $11,230 and $414,00041,139, bonusrespectively.
As of March 31, 2023 and December 31, 2022, the Company recorded and accrued management salaries of $0104,628 and $976,200 and paid $407,60279,628, respectively. and $411,300, respectively. Additionally, management received stock-based compensation of and during the nine months ended September 30, 2022 and 2021, respectively.
NOTE 1011 – COMMITMENTS AND CONTINGENCIES
Leases and Long-term Contracts
The Company has not entered into any long-term leases, contracts or commitments. The Company leases facilities which the term is 12 months. For the ninethree months ended September 30,March 31, 2023 and 2022, and 2021, the Company incurred rent expense of $56,405900 and $32,02320,150, respectively.
NOTE 1112 - SEGMENTS
At September 30,December 31, 2022 and 2021, the Company operates in one industry segment, telecommunication services, and two geographic segments, USA and Switzerland, where current assets and equipment are located.
Operating Activities
The following table shows operating activities information by geographic segment for the three and nine months ended September 30, 2022March 31, 2023 and 2021:2022:
Three months ended September 30, 2022March 31, 2023
NOTE 1112 - SEGMENTSSEGMENT - Schedule of Operating Activities by Geographic Segment
USA | Switzerland | Elimination | Total | ||||||||||||
Revenues | $ | 22,364,201 | 1,291,688 | $ | (1,719,255 | ) | $ | 21,936,634 | |||||||
Cost of revenue | 21,226,541 | 1,114,388 | (1,719,255 | ) | 20,621,674 | ||||||||||
Gross profit | 1,137,660 | 177,300 | — | 1,314,960 | |||||||||||
Operating expenses | |||||||||||||||
General and administration | 1,089,194 | 166,953 | — | 1,256,147 | |||||||||||
Operating income | 48,466 | 10,347 | — | 58,813 | |||||||||||
Other expense | (29,411 | ) | (2,090 | ) | — | (31,501) | |||||||||
Net income | $ | 19,055 | $ | 8,257 | $ | — | $ | 27,312 |
Three months Ended September 30, 2021
USA | Switzerland | Elimination | Total | USA | Switzerland | Elimination | Total | ||||||||||||||||||||||||
Revenues | $ | 15,347,282 | 1,189,230 | $ | (19,773 | ) | $ | 16,516,739 | $ | 24,847,671 | 1,347,435 | $ | (1,528,577 | ) | $ | 24,666,529 | |||||||||||||||
Cost of revenue | 14,706,065 | 989,395 | (19,773 | ) | 15,675,687 | 23,825,886 | 1,152,484 | (1,528,577 | ) | 23,449,793 | |||||||||||||||||||||
Gross profit | 641,217 | 199,835 | — | 841,052 | 1,021,785 | 194,951 | — | 1,216,736 | |||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||
General and administration | 738,578 | 218,617 | — | 957,195 | 1,350,956 | 183,310 | — | 1,534,266 | |||||||||||||||||||||||
Operating loss | (97,361 | ) | (18,782 | ) | — | (116,143) | |||||||||||||||||||||||||
Operating (loss) income | (329,171 | ) | 11,641 | — | (317,530 | ) | |||||||||||||||||||||||||
Other income | 1,525 | 3,400 | — | 4,925 | |||||||||||||||||||||||||||
Other income (expense) | 174,955 | (16,247 | ) | — | 158,708 | ||||||||||||||||||||||||||
Net loss | $ | (95,836 | ) | $ | (15,382 | ) | $ | — | $ | (111,218) | $ | (154,216 | ) | $ | (4,606 | ) | $ | — | $ | (158,822 | ) |
F-13 |
NineThree months ended September 30,March 31, 2022
USA | Switzerland | Elimination | Total | USA | Switzerland | Elimination | Total | ||||||||||||||||||||||||
Revenues | $ | 63,898,961 | 3,554,591 | $ | (2,397,891 | ) | $ | 65,055,661 | $ | 18,475,113 | 1,026,080 | $ | (81,882 | ) | $ | 19,419,311 | |||||||||||||||
Cost of revenue | 61,838,539 | 2,969,719 | (2,397,891 | ) | 62,410,367 | 18,193,952 | 823,181 | (81,882 | ) | 18,935,251 | |||||||||||||||||||||
Gross profit | 2,060,422 | 584,872 | — | 2,645,294 | 281,161 | 202,899 | — | 484,060 | |||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||
General and administration | 2,792,287 | 597,810 | — | 3,390,097 | 781,300 | 208,198 | — | 989,498 | |||||||||||||||||||||||
Operating loss | (731,865 | ) | (12,938 | ) | — | (744,803) | |||||||||||||||||||||||||
Operating (loss) | (500,139 | ) | (5,299 | ) | — | (505,438 | ) | ||||||||||||||||||||||||
Other income (expense) | (45,938 | ) | 7,865 | — | (38,073) | ||||||||||||||||||||||||||
Other (expense) income | (29,841 | ) | 10,548 | — | (19,293 | ) | |||||||||||||||||||||||||
Net loss | $ | (777,803 | ) | $ | (5,073 | ) | $ | — | $ | (782,876) | |||||||||||||||||||||
Net (loss) income | $ | (529,980 | ) | $ | 5,249 | $ | — | $ | (524,731 | ) |
Nine months Ended September 30, 2021
USA | Switzerland | Elimination | Total | ||||||||||||
Revenues | $ | 43,404,674 | 3,474,215 | $ | (36,172 | ) | $ | 46,842,717 | |||||||
Cost of revenue | 42,487,024 | 3,018,878 | (36,172 | ) | 45,469,730 | ||||||||||
Gross profit | 917,650 | 455,337 | — | 1,372,987 | |||||||||||
Operating expenses | |||||||||||||||
General and administration | 3,077,319 | 587,154 | — | 3,664,473 | |||||||||||
Operating loss | (2,159,669 | ) | (131,817 | ) | — | (2,291,486) | |||||||||
Other income (expense) | (839,316 | ) | 18,723 | — | (820,593) | ||||||||||
Net loss | $ | (2,998,985 | ) | $ | (113,094 | ) | $ | — | $ | (3,112,079) |
Asset Information
The following table shows asset information by geographic segment as of September 30, 2022March 31, 2023 and December 31, 2021:2022:
September 30, 2022 | USA | Switzerland | Elimination | Total | |||||||||||||||||||||||||||
March 31, 2023 | USA | Switzerland | Elimination | Total | |||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Current assets | $ | 5,628,559 | $ | 1,091,622 | $ | (578,999 | ) | $ | 6,141,182 | $ | 6,419,124 | $ | 1,235,556 | $ | (917,713 | ) | $ | 6,736,967 | |||||||||||||
Non-current assets | $ | 11,660,618 | $ | 600,882 | $ | (6,184,562 | ) | $ | 6,076,938 | $ | 11,631,453 | $ | 703,066 | $ | (6,184,562 | ) | $ | 6,149,957 | |||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Current liabilities | $ | 1,729,868 | $ | 1,619,112 | $ | (578,999 | ) | $ | 2,769,981 | $ | 5,378,018 | $ | 1,840,726 | $ | (917,713 | ) | $ | 6,301,031 | |||||||||||||
Non-current liabilities | $ | — | $ | 246,473 | $ | — | $ | 246,473 | $ | — | $ | 256,233 | $ | — | $ | 256,233 |
December 31, 2021 | USA | Switzerland | Elimination | Total | |||||||||||||||||||||||||||
December 31, 2022 | USA | Switzerland | Elimination | Total | |||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Current assets | $ | 5,783,859 | $ | 997,216 | $ | (214,551 | ) | $ | 6,566,524 | $ | 6,496,354 | $ | 1,172,889 | $ | (1,232,653 | ) | $ | 6,436,590 | |||||||||||||
Non-current assets | $ | 4,468,491 | $ | 609,189 | $ | (2,584,562 | ) | $ | 2,493,118 | $ | 11,646,662 | $ | 650,794 | $ | (6,184,562 | ) | $ | 6,112,894 | |||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Current liabilities | $ | 1,070,972 | $ | 1,506,594 | $ | (214,551 | ) | $ | 2,363,015 | $ | 5,967,729 | $ | 1,716,603 | $ | (1,232,653 | ) | $ | 6,451,679 | |||||||||||||
Non-current liabilities | $ | — | $ | 275,729 | $ | — | $ | 275,729 | $ | — | $ | 262,388 | $ | — | $ | 262,388 |
NOTE 1213 – SUBSEQUENT EVENTS.
Management has evaluated subsequent events through the date these consolidated financial statements were available to be issued. The following subsequent event was identified:Based on our evaluation no material events have occurred that require disclosure.
F-14 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Overview
iQSTEL Inc. (the “Company”) (OTCQB:(OTC Pink: IQST) (www.iqstel.com) is a technology company offering a wide array of services to global telecommunications and technology industries with presence in 13 countries.
The Company has an extensive portfolio of products and services for its clients such as: SMS, VoIP, 4G & 5G international infrastructure connectivity, Cloud-PBX, OmniChannel Marketing, IoT services, blockchain and payment solutions. These services are grouped within four business divisions: Telecom, Fintech, Electric vehicles and Metaverse.
The company operates its business through its wholly-owned subsidiary Etelix.com USA, LLC (“Etelix”) (www.etelix.com); and its majority-owned subsidiaries SwissLink Carrier AG (www.swisslink-carrier.com), QGlobal SMA (www.qglobalsms.com/SMS (https://www.qglobalsms.com/), Smart Gas (www.iotsmartgas.com/(http://iotsmartgas.com/) and ItsBChain (www.itsbchain.com/(http://itsbchain.com/), Whisl Telecom LLC (www.whisl.com), and Smartbiz Telecom LLC (www.smartbiztel.com) and Whisl Telecom (www.whisl.com).
The information contained on our websites is not incorporated by reference into this Quarterly Report on Form 10-Q and should not be considered part of this or any other report filed with the SEC.
Results of Operations
Revenues
Our total revenue reported for the three months ended September 30, 2022March 31, 2023 was $21,936,634,$24,666,529, compared with $16,516,739$19,419,311 for the three months ended September 30, 2021.March 31, 2022. These numbers reflect an increase of 32.81%27.02% quarter over quarter on our consolidated revenues. Our total revenue reported for the nine months ended September 30, 2022 was $65,055,661, compared with $46,842,717 for the nine months ended September 30, 2021. These numbers reflect an increase of 38.88% year over year on our consolidated revenues.
When looking at the numbers by subsidiary, we have the following breakout for the ninethree months ended September 30, 2022March 31, 2023 compared to the ninethree months ended September 30, 2021:March 31, 2022:
Subsidiary | Revenue Three Months Ended March 31, 2023 | Revenue Three Months Ended March 31, 2022 | ||||||
Etelix.com USA, LLC | $ | 4,348,986 | $ | 5,914,300 | ||||
SwissLink Carrier AG | 1,275,285 | 1,026,080 | ||||||
QGlobal LLC | 85,051 | 109,196 | ||||||
IoT Labs LLC | 15,261,282 | 12,369,735 | ||||||
Whisl | 304,686 | — | ||||||
Smartbiz | 3,391,240 | — | ||||||
$ | 24,666,529 | $ | 19,419,311 |
Subsidiary | Revenue Nine Months Ended September 30, 2022 | Revenue Nine Months Ended September 30, 2021 | ||||||
Etelix.com USA, LLC | $ | 17,510,601 | $ | 11,271,992 | ||||
SwissLink Carrier AG | 3,554,591 | 3,474,215 | ||||||
QGlobal LLC | 317,594 | 585,151 | ||||||
IoT Labs LLC | 39,733,761 | 31,547,531 | ||||||
Smartbiz Telecom | 3,712,432 | — | ||||||
Whisl Telecom | 2,624,573 | — | ||||||
Sub-total | $ | 67,453,552 | $ | 46,878,889 | ||||
Inter-company sales | (2,397,891 | ) | (36,172 | ) | ||||
$ | 65,055,661 | $ | 46,842,717 |
The continued growth of our revenue is the result of the development of our business strategy, which includes the strengthening of our commercial and operating activities and new acquisitions.
4 |
Cost of Revenues
Our total cost of revenues for the three months ended September 30, 2022March 31, 2023 increased to $20,621,674,$23,449,793, compared with $15,675,687$18,935,251 for the three months ended September 30, 2021. Our total cost of revenues for the nine months ended September 30, 2022 increased to $62,410,367, compared with $45,469,730 for the nine months ended September 30, 2021.
March 31, 2022.
When looking at the numbers by subsidiary, we have the following breakout for the ninethree months ended September 30, 2022March 31, 2023 compared to the ninethree months ended September 30, 2021:March 31, 2022:
Subsidiary | Cost of Revenue Nine Months Ended September 30, 2022 | Cost of Revenue Nine Months Ended September 30, 2021 | Cost of Revenue Three Months Ended March 31, 2023 | Cost of Revenue Three Months Ended March 31, 2022 | ||||||||||||
Etelix.com USA, LLC | $ | 16,818,292 | $ | 10,855,644 | $ | 3,764,473 | $ | 5,804,495 | ||||||||
SwissLink Carrier AG | 2,969,719 | 3,018,877 | 1,103,857 | 823,181 | ||||||||||||
QGlobal LLC | 236,402 | 486,296 | 51,549 | 89,998 | ||||||||||||
IoT Labs LLC | 39,356,735 | 31,145,085 | 14,878,901 | 12,217,577 | ||||||||||||
Smartbiz Telecom | 3,330,051 | — | ||||||||||||||
Whisl Telecom | 2,097,059 | — | ||||||||||||||
Sub-total | $ | 64,808,258 | $ | 45,505,902 | ||||||||||||
Inter-company sales | (2,397,891 | ) | (36,172 | ) | ||||||||||||
Whisl | 567,719 | — | ||||||||||||||
Smartbiz | 3,083,294 | — | ||||||||||||||
$ | 62,410,367 | $ | 45,469,730 | $ | 23,449,793 | $ | 18,935,251 |
Our cost of revenuesrevenue consists of direct charges from vendors that the Company incurs to deliver services to its customers. These costs primarily consist of usage charges for calls and SMS terminated in vendor’s network.
The behavior in the costs shows a logical correlation with the behavior of the revenue commented above. We have reached a higher volume of sales and every additional unit sold (minutes and SMS) has its corresponding termination cost.
Gross Margin
Our gross margin, which is simply the difference between our revenues and our cost of sales, discussed above, was $1,216,736 for the three months ended March 31, 2023 compared to $484,060 for the three months ended March 31, 2022. This represents an increase of 151.36% in the gross margin quarter over quarter.
But more importantly, the Gross Margin in terms of percentage of Revenue was 2.49% for the three months ended March 31, 2022 compared to 4.93% for the three months ended March 31, 2023, representing an increase of 98% quarter over quarter.
Operating Expenses
Operating expenses increased to $1,534,266 for the three months ended March 31, 2023 from $989,498 for the three months ended March 31, 2022. The detail by major category is reflected in the table below.
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Salaries, Wages and Benefits | $ | 459,130 | $ | 325,628 | ||||
Technology | 124,215 | 45,160 | ||||||
Professional Fees | 450,487 | 323,315 | ||||||
Legal and Regulatory | 60,495 | 10,699 | ||||||
Travel and Events | 24,361 | 7,561 | ||||||
Public Cost | 10,445 | 9,556 | ||||||
Advertising | 287,126 | 76,878 | ||||||
Bank Services and Fees | 7,756 | 29,457 | ||||||
Depreciation and Amortization | 34,060 | 33,547 | ||||||
Office, Facility and Other | 62,978 | 86,558 | ||||||
Insurance | 1,983 | — | ||||||
Sub Total | 1,523,039 | 948,359 | ||||||
Stock-based compensation | 11,230 | 41,139 | ||||||
Total Operating Expense | $ | 1,534,266 | $ | 989,498 |
5 |
Gross Profit
The gross profit for the three months ended September 30, 2022 increased to $1,314,960 from $841,052 for the same period of year 2021. For the nine months ended September 30, 2022 the gross profit increased to $2,645,294 from $1,372,987 for the same period of year 2021.
When we analyze the numbers expressed in percentages, the gross profit for the nine months ended September 30, 2022 was 4.07%, which compared to 2.93% for the nine months ended September 30, 2021, an increase in the consolidated gross profit of 38.91%.
When looking at the numbers by subsidiary, we have the following breakout for the ninethree months ended September 30, 2022March 31, 2023 compared to the ninethree months ended September 30, 2021:March 31, 2022:
Subsidiary | Gross Margin Nine Months Ended September 30, 2022 | Gross Margin Nine Months Ended September 30, 2021 | ||||||
Etelix.com USA, LLC | % | 3.95 | % | 3.69 | ||||
SwissLink Carrier AG | 16.45 | 13.11 | ||||||
QGlobal LLC | 25.56 | 16.89 | ||||||
IoT Labs LLC | 0.95 | 1.28 | ||||||
Smartbiz Telecom | 10.30 | — | ||||||
Whisl Telecom | 20.10 | — | ||||||
% | 4.07 | % | 2.93 |
Three Months Ended March 31, | ||||||||||||
2023 | 2022 | Difference | ||||||||||
iQSTEL | $ | 664,552 | $ | 537,032 | $ | 127,520 | ||||||
Etelix | 105,286 | 103,292 | 1,994 | |||||||||
SwissLink | 183,309 | 208,197 | -24,888 | |||||||||
ItsBchain | 11,789 | 254 | 11,535 | |||||||||
QGlobal | 63,875 | 28,137 | 35,738 | |||||||||
IoT Labs | 62,806 | 59,158 | 3,648 | |||||||||
Global Money One | 43,449 | 53,428 | -9,979 | |||||||||
Whisl | 154,440 | — | 154,440 | |||||||||
Smartbiz | 244,760 | — | 244,760 | |||||||||
$ | 1,534,266 | $ | 989,498 | $ | 544,768 |
The most significant differences are: (1) the increase of our consolidated gross margin isin Salaries, wages and benefits primarily due to an increment in the resultheadcount related to Whisl and Smartbiz; (2) the increases in technology expenses related to the deployment and upgrade of the improvement ofSwitching platform; and (3) the gross margin of Etelix, SwissLink and QGlobal; combined with the relatively high gross margin of our most recent acquisitions Smartbiz and Whisl.increase in Advertising expenses.
Operating ExpensesIncome
The Company showed negative Operating expenses increased to $1,256,147Income for the three months ended September 30, 2022 from $957,195March 31, 2023 of $317,530 compared with a negative result of $505,438 for the three months ended September 30, 2021. Operating expenses decreased to $3,390,097 for the nine months ended September 30, 2022 from $3,664,473 for the nine months ended September 30, 2021. The detail by major category for the nine months ended September 30, 2022 and 2021 is reflected in the table below.March 31, 2022.
Nine Months Ended September 30, | ||||||||
2022 | 2021 | |||||||
Salaries, Wages and Benefits | $ | 1,239,271 | $ | 863,413 | ||||
Technology | 188,950 | 198,143 | ||||||
Professional Fees | 475,143 | 353,080 | ||||||
Legal and Regulatory | 199,768 | 87,448 | ||||||
Bad Debt Expense | 26,299 | — | ||||||
Travel and Events | 55,281 | 15,710 | ||||||
Public Cost | 24,122 | 30,078 | ||||||
Advertising | 486,153 | 705,175 | ||||||
Insurances | 7,328 | — | ||||||
Bank Services and Fees | 27,109 | 85,885 | ||||||
Financial Expenses | 134,608 | — | ||||||
Depreciation and Amortization | 91,221 | 66,924 | ||||||
Penalties and Settlements | 110,767 | — | ||||||
Office, Facility and Other | 231,947 | 337,983 | ||||||
Sub Total | 3,297,967 | 2,743,839 | ||||||
Stock-based compensation | 92,130 | 920,634 | ||||||
Total Operating Expense | $ | 3,390,097 | $ | 3,664,473 |
Even though the Company showed a negative Operating Income, the number shows a trend of significant improvement year over year.
Our Telecom Division, which is the one generating revenue at the present time, has a positive Operating Income. The expenses of our Pre-revenue companies are set at the minimum required to finish the development of the product/services prior to market launch. Management implemented a process that intends to reduce future general and administrative expenses of iQSTEL to a maximum of $400,000 per quarter.
Pre revenue companies | ||||||||||||||||||||
Telecom Division | ItsBchain | Global Money One | iQSTEL | Consolidated | ||||||||||||||||
Revenues | $ | 24,666,529 | — | — | — | 24,666,529 | ||||||||||||||
Cost of revenue | 23,449,793 | — | — | — | 23,449,793 | |||||||||||||||
Gross profit | 1,216,736 | — | — | — | 1,216,736 | |||||||||||||||
Operating expenses | ||||||||||||||||||||
General and administration | 814,477 | 11,789 | 43,449 | 664,552 | 1,534,266 | |||||||||||||||
Total operating expenses | 814,477 | 11,789 | 43,449 | 664,552 | 1,534,266 | |||||||||||||||
Operating income/(loss) | $ | 402,260 | (11,789 | ) | (43,449 | ) | (664,552 | ) | (317,530 | ) |
6 |
The main reasons for the overall decrease in operating expenses for the nine months ended September 30, 2022 compared to the same period of 2021 is due to the significant decrease in Stock-based compensation.
When looking at the numbers by subsidiary, we have the following breakout for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021:
Nine Months Ended September 30, | ||||||||||||
2022 | 2021 | Difference | ||||||||||
iQSTEL | $ | 1,382,701 | 2,395,047 | -1,012,346 | ||||||||
Etelix | 326,432 | 266,894 | 59,538 | |||||||||
SwissLink | 597,810 | 587,154 | 10,656 | |||||||||
ItsBchain | 12,653 | 2,198 | 10,455 | |||||||||
QGlobal | 133,532 | 92,881 | 40,651 | |||||||||
IoT Labs | 185,736 | 187,773 | -2,037 | |||||||||
Global Money One | 109,627 | 132,526 | -22,899 | |||||||||
Smartbiz Telecom | 246,268 | — | 246,268 | |||||||||
Whisl Telecom | 395,338 | — | 395,338 | |||||||||
$ | 3,390,097 | 3,664,473 | -274,376 |
The most significant difference is generated by iQSTEL which is due to the reduction in Stock-based compensation.
Operating Income
The Company showed positive Operating Income for the three months ended September 30, 2022 of $58,813 compared with a negative result of $116,143 for the three months ended September 30, 2021.
The Company showed negative Operating Income for the nine months ended September 30, 2022 of $744,803 compared with a negative result of $2,291,486 for the nine months ended September 30, 2021.
Despite the operating loss incurred during the nine months ended September 30, 2022, the numbers compared with the same period of year 2021 reflect a positive evolution process as shown by the positive operating income during the three months ended September 30, 2022.
Other Expenses/Other Income
We had other expensesincome of $38,073$158,708 for the ninethree months ended September 30, 2022,March 31, 2023, as compared with other expenses of $820,593$19,293 for the same period ended 2021.2022. The decreaseincrease in other expensesincome is a consequencelargely due to the positive change in fair value of a significant reduction in interest expenses and other expenses related to derivatives.derivative liabilities.
Net IncomeLoss
We finished the three months ended September 30, 2022March 31, 2023 with a net incomeloss attributable to shareholders of $27,312,iQSTEL Inc. of $363,185, as compared to a loss of $111,218$554,970 during the three months ended September 30, 2021. We also finishedMarch 31, 2022. When comparing the nine months ended September 30, 2022 with a loss of $782,876, as compared to a loss of $3,112,079 during the nine months ended September 30, 2021.
The decreased loss for the nine-month period above is primarily due to a $1,012,346results year over year, reduction inthese numbers show a significant improvement, as the costs associated with the operationfundamentals of the public entity (iQSTEL, Inc.).Company are getting stronger quarter after quarter leading to our goal of generating positive net income.
Liquidity and Capital Resources
As of September 30, 2022,March 31, 2023, we had total current assets of $6,141,182$6,736,967 and current liabilities of $2,769,981,$6,301,031, resulting in a positive working capital of $3,371,201.$435,936 and a current ratio of approximately 1.07 to 1. This compares with theto a negative working capital of $4,203,509$15,089 at December 31, 2021. This decrease in working capital, as discussed in more detail below, is primarily the result of the decrease of $2,039,832 in the cash position due to the funds used in the acquisitions of Smartbiz and Whisl.2022.
Our operating activities used $1,488,901provided $197,163 in the ninethree months ended September 30, 2022March 31, 2023 as compared with $2,486,045$447,652 used in operating activities in the ninethree months ended September 30, 2021.March 31, 2022. Our cash flow from operations varies depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable.
Investing activities used $1,901,223$142,947 for the ninethree months ended September 30,March 31, 2023 compared with $24,918 for the three months ended March 31, 2022. Uses of funds inon investing activities in 2023 were primarily for the acquisition of subsidiaries of $1,814,132 and the purchase of property and equipment for $86,491.and the issuance of a related party loan.
Financing activities provided $1,367,982$390,994 in the ninethree months ended September 30, 2022March 31, 2023 compared with $3,314,313$1,367,982 provided in the ninethree months ended September 30, 2021.March 31, 2022. Our positive financing cash flow in 20222023 was largely the result of the net proceeds from common stock issuedthe execution of $1,100,000 and the common stock purchase optionOption shares in the amount of $500,000.$400,000.
Our current financial condition has improved significantly with a positive working capital of $3,371,201 and a cash position of $1,294,981 as of September 30, 2022.significantly. However, we intend to fund operations through increased sales and debt and/or equity financing arrangements, to strengthen our liquidity and capital resources. The Company has received the qualification of a S-1an Offering Statement under Form S-1 for the sale of up to 10,000,000 shares of common stocks.stock. This offering will beis being conducted on a “best efforts” basis, which means that there is no guarantee that any minimum amount will be sold from the available shares.sold. We also plan to seek additional financing in a private equity offering to secure funding for operations. There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.
Inflation
Although our operations are influenced by general economic conditions, we do not believe that inflation had a material effect on our results of operations during the nine-monththree-month period ended September 30, 2022.March 31, 2023.
Critical Accounting Polices
A “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Our accounting policies are discussed in detail in the footnotes to our financial statements included in this Quarterly Report on Form 10-Q for the ninethree months ended September 30, 2022;March 31, 2023; however, we consider our critical accounting policies to be those related to allowance for doubtful accounts, valuation of long-lived assets, and income taxes. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. See the Consolidated Financial Statements in this Quarterly Report for a complete discussion of our significant accounting policies.
7 |
Off Balance Sheet Arrangements
As of September 30, 2022,March 31, 2023, there were no off-balance sheet arrangements.
Recent Accounting Pronouncements
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operation, financial position, or cash flow.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company and are not required to provide the information under this item pursuant to Regulation S-K.
Item 4. Controls and Procedures
Disclosure Controls and Procedures - Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report.
These controls are designed to ensure that information required to be disclosed in the reports we file or submit pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
Based on this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were ineffective as of September 30, 2022. March 31, 2023. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
We believe that our financial statements presented in this quarterly report on Form 10-Q fairly present, in all material respects, our financial position, results of operations, and cash flows for all periods presented herein.
Inherent Limitations - Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake. In particular, many of our current processes rely upon manual reviews and processes to ensure that neither human error nor system weakness has resulted in erroneous reporting of financial data.
Changes in Internal Control over Financial Reporting - There were no changes in our internal control over financial reporting during the nine-monththree-month period ended September 30, 2022,March 31, 2023, which were identified in conjunction with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any material pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
Item 1A: Risk Factors
See Risk Factors contained in our Form 10-K filed with the SEC on April 15, 2022.14, 2023.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The information set forth below relates to our issuances of securities without registration under the Securities Act of 1933.
During the ninethree months ended September 30, 2022,March 31, 2023, the Company issued 4,353,0203,001,177 shares of common stock, valued at fair market value on issuance as follows;follows:
• |
• |
Item 3. Defaults upon Senior Securities
None
Item 4. Mine Safety Disclosures
N/A
Item 5. Other Information
None
Item 6. Exhibits
Exhibit Number | Description of Exhibit
|
31.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101** | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended |
**Provided herewith |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on November 14, 2022May 15, 2023 on its behalf by the undersigned thereunto duly authorized.
IQSTEL INC. | |
/s/Leandro Iglesias | |
Leandro Iglesias Principal Executive Officer | |
/s/ Alvaro Quintana Cardona | |
Alvaro Quintana Cardona Principal Financial and Accounting Officer |