iQSTEL Inc 10-K for FY2025
iQSTEL Inc (IQST)
About this 10-K
iQSTEL Inc filed this 10-K on April 6, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $316.9M
- up 11.9% from $283.22M a year earlier
- Net loss
- $8.51M
- compared with a net loss of $5.18M a year earlier
- Diluted EPS
- -$2.86
- compared with -$2.86 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For the fiscal year ended
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| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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Securities registered under Section 12(b) of the Exchange Act:
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Securities registered under Section 12(g) of the Exchange Act:
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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TABLE OF CONTENTS
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PART I
Forward-Looking Statements
This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. All statements other than statements of historical facts are forward-looking statements. In some cases, you can identify these forward-looking statements by words such as “may,” “will,” “should,” “anticipate,” “estimate,” “plans,” “potential,” “projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend” or the negative of these words or other variations on these words or comparable terminology. The statements that contain these or similar words should be read carefully because these statements discuss our future expectations, contain projections of our future results of operations or of our financial position, or state other forward-looking information. These forward-looking statements include, by way of example and not in limitation:
§ our expectations regarding future revenue growth, including contributions from our telecom, fintech (e.g., GlobeTopper digital gift card platform), and developing AI and blockchain initiatives;
§ our ability to integrate recent acquisitions (such as QXTEL and GlobeTopper) and realize anticipated synergies or cost efficiencies;
§ our plans to expand operations, enter new markets, develop new products/services (including AI-enhanced solutions for telecom and enterprise use), and pursue additional mergers and acquisitions;
§ our expectations regarding profitability, liquidity, capital requirements, and our ability to continue as a going concern;
§ the impact of regulatory changes, economic conditions, competition, intellectual property matters, and cybersecurity risks on our business; and
§ other statements regarding our business strategy, plans, objectives, and future financial condition or performance
These statements are based on assumptions that we believe are reasonable, but they are subject to substantial risks and uncertainties, including those described in detail under “Item 1A. Risk Factors” and elsewhere in this Annual Report (such as our history of losses and accumulated deficit, dependence on financing, challenges in achieving and maintaining profitability, risks associated with international operations and acquisitions, intense price competition and technological changes in telecommunications, evolving fintech and AI markets, concentration of revenue among key customers, potential network disruptions or security breaches, goodwill impairment, and our ability to manage growth and integrate acquired businesses). New risks and uncertainties emerge from time to time and it is not possible for us to predict all of them or assess their potential impact. Factors beyond our control, including legislative or regulatory changes, economic conditions, competition, and cybersecurity threats, could cause actual results to differ materially from those expressed or implied.
You should not place undue reliance on any forward-looking statements, as they speak only as of the date they are made. We expressly disclaim any obligation or undertaking to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by applicable law. The occurrence of any of the events described as risk factors or other future events could have a material adverse effect on our business, results of operations, and financial position.
Item 1. Business
Company Description
IQSTEL Inc. (the Company when making reference to consolidated company) is a technology company with operations in 20 countries (Argentina, Armenia, Austria, Canada, Colombia, Germany, Greece, Guatemala, India, Italy, Pakistan, Romania, Serbia, Spain, Switzerland, Turkey, UAE, UK, USA and Venezuela) and over 100 employees that offers leading-edge services through its subsidiaries in the telecommunications, fintech, and AI-enhanced industries. Our global presence includes offices in USA, Argentina, UK, Switzerland, Turkey, and Dubai, and we target diverse and high-growth markets. We maintain more than 603 high value network interconnections around the world, delivering international voice, SMS, and connectivity services that form the core of our business. Our strategy focuses on leveraging synergies among our subsidiaries to drive innovation, operational efficiency, and growth through organic development and strategic acquisitions.
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Our Telecom Division, which represents the majority of current operations and accounted for 91% of our revenues for the year ended December 31, 2025, offers Voice over Internet Protocol (VoIP), SMS, proprietary Internet of Things (IoT) solutions, and international fiber-optic connectivity through its subsidiaries: Etelix (www.etelix.com), SwissLink Carrier (www.swisslink-carrier.com), Smartbiz Telecom (www.smartbiztel.com), Whisl Telecom (www.whisl.com), IoT Labs (www.iotlabs.mx), QGlobal SMS (www.qglobalsms.com), and QXTEL Limited (www.qxtel.com).
Also under the Telecom Division, our developing Blockchain Platform Business Line offers our proprietary Mobile Number Portability Application (MNPA) through our subsidiary, itsBchain (www.itsbchain.com).
The Company’s developing Fintech Business Line offers a complete Fintech ecosystem including a MasterCard Debit Card, US Bank Account (No SSN Needed), and a Mobile App/Wallet for remittances and mobile top-up services. Our Fintech subsidiary, Global Money One Inc., aims to provide immigrants access to reliable financial services that makes it easier to manage their money and stay connected with their families back home. Additionally, GlobeTopper LLC (www.globetopper.com), our most recent acquisition, supports expansion and integration of our business divisions through its B2B digital gift card and incentives platform, which represented 9% and 0% of our revenues for the years ended December 31, 2025 and 2024.
Our Artificial Intelligence (AI) division, Reality Border (www.realityborder.com), initially developed an AI-enhanced immersive digital experience platform. Building on that early development work—including conversational interfaces, multilingual models, and AI-driven workflows—Reality Border now develops practical AI software solutions for enterprise and telecommunications applications.
Reality Border currently serves as IQSTEL’s AI innovation and product development platform. Its activities include AI agents and
related software solutions designed for web, voice, and contact center environments, as well as integration with telecommunications infrastructure,
business systems, and security layers. The Company’s AI strategy includes solutions such as Airweb.ai for AI-powered customer engagement
across web and phone channels, IQ2Call.ai for AI-enabled call center and customer care applications, and IQCortex.ai for broader AI platform
capabilities and enterprise use cases.
Reality Border’s current development efforts include software functionality, workflow orchestration, multilingual interaction,
system integration, and operational deployment models intended for business use. Reality Border’s earlier immersive platform work
contributed to capabilities that are now being applied in its AI products; however, the current business emphasis is on AI solutions
for enterprise and telecommunications operations rather than metaverse-based environments.
The information contained on our websites is not incorporated by reference into this annual report and should not be considered part of this or any other report filed with the SEC.
Operating Subsidiaries
IQSTEL's mission is to serve basic human needs in today's modern world by making the necessary tools accessible regardless of race, ethnicity, religion, socioeconomic status, or identity. We recognize that access to ubiquitous communications, virtual banking, and information/content is critical to the pursuit of human needs (physiological, safety, relationships, esteem, and self-actualization). IQSTEL operates through business divisions focused on telecommunications (communications), fintech (financial freedom), and AI services (information and content). The Company continues to grow and expand its suite of products and services both organically and through mergers and acquisitions (M&A).
Our telecommunication business currently represents 91% of our 2025 revenues, fintech services represent 9%, while our other business lines (including blockchain and certain AI initiatives) are in a pre-revenue stage for the financial periods presented.
Telecom Subsidiaries for voice services:
Etelix.com USA LLC, a wholly owned subsidiary of IQSTEL Inc., is a US based international telecom carrier founded in 2008 that provides telecom and technology solutions worldwide, with commercial presence in North America, Latin America, and Europe. Etelix provides International Long-Distance voice services for Telecommunications Operators (ILD Wholesale), and Submarine Fiber Optic Network capacity for internet (4G and 5G).
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Etelix is interconnected to the most important players in the industry, with a very strong focus on Asian and Latin-American markets, among which it is worth mentioning: China Telecom, PCCW, Hutchinson Telecom, Vodafone India, KDDI, Airtel, Reliance, Viettel, TATA Communications, Flow Jamaica (Cable and Wireless Caribbean), Cable and Wireless Panama, Millicom (TIGO), Telefonica de España (Movistar), Telecom Italia (TIM), Portugal Telecom (MEU), Optimus (NOS), Belgacom (BICS), Deutsche Telekom, iBasis, Orbitel and Entel.
In 2013, Etelix participated in a consortium of telecommunications carriers that upgraded the Maya-1 submarine cable system, which runs from Hollywood, Florida to Tolú, Colombia. As part of this arrangement, Etelix held 10 Gbps of capacity, which was subsequently sold to a third party customer. This transaction expanded Etelix’s ability at that time to provide additional international connectivity capacity to support customer demand.
SwissLink Carrier AG, a 51% owned subsidiary of IQSTEL Inc., strengthens the company’s international telecommunications portfolio as a Switzerland-based carrier with global VoIP connectivity and notable commercial presence across Europe, the CIS, and Latin America. In addition to its license as a Swiss-licensed operator, SwissLink expanded its regulatory footprint in February 2026 by obtaining two key licenses in Italy: (a) Network Infrastructure & Provision, which authorizes the management of network infrastructure, licensed spectrum applications, number-hosting, transit operations, and the support of third-party ISPs; and (b) Publicly Available Telephone Services, enabling the provision of fixed voice services and direct interconnection agreements for voice resellers and value-added services. These dual Italian licenses, alongside its Swiss authorization, position SwissLink as a full-cycle operator in Italy, granting end-to-end autonomy, technical sovereignty, enhanced reliability, cost optimization, operational agility, and complete regulatory compliance. Thanks to its strategic position in Europe, SwissLink enables the IQSTEL group to be highly competitive in capturing voice traffic destined for Asian and African markets. Notably, more than 50% of traffic terminating in Africa originates from European customers, while nearly 40% of traffic to Asia also flows from Europe, underscoring Europe’s crucial role as an international telecommunications hub. SwissLink’s robust interconnections with leading carriers—including Orange Wholesale International, CJC Global Connections & Consulting LLC, iBASIS Communications AG, U.S. South Communications, Inc., Belgacom International Carrier, Bell Canada Inc., and SWISSCOM (SCHWEIZ) AG—further extend IQSTEL’s reach and operational efficiency, supporting expansion in high-growth regions across Asia and Africa.
Whisl Telecom LLC, a 51% owned subsidiary of IQSTEL Inc., significantly enhances the company’s telecom business through its provision of high-quality services and innovative, out-of-the-box solutions. As a U.S.-based company, Whisl Telecom primarily serves the Carrier-to-Carrier Global industry, while also maintaining the network infrastructure necessary to deliver services directly to retail end users (endpoints). Distinguished as one of the few U.S. carriers with substantial Tier 1 capacity, Whisl offers true high-capacity voice termination, supporting high calls per second (CPS) and ensuring optimal call quality.
Whisl Telecom’s capabilities contribute a comprehensive suite of services to IQSTEL’s telecom portfolio, including: (1) US/Canada Inbound/Origination, (2) US/Canada DIDs, (3) US/Canada Toll-Free Numbers, (4) Global DIDs, and (5) Global Toll-Free Numbers.
Smartbiz Telecom LLC. Is a 51% owned subsidiary of IQSTEL Inc. acquired in June 2022. Smartbiz is a US based company that provides international voice termination to niche markets. With this acquisition IQSTEL expanded its telecommunication services offer to markets the company was not serving before. Smartbiz has commercial relations with relevant players in the industry, among which it is worth mentioning the following: Telefonica Global Solutions. S.L, Telintel Ltd, Teliax, Inc Tf, Sistemas Satelitales de Colombia S.A. Esp, and IDT Global Limited.
QXTEL Limited is a 51% owned subsidiary of IQSTEL Inc. acquired in April 2024. QXTEL is one of the most advanced and diversified telecommunications and technology services provider focused on platform services for wholesale, retail and cloud communications service providers, wholesale carrier voice, wholesale carrier messaging (A2P SMS) and carrier technology services with over 20 years in the telecom industry switching more than 5 billion voice and A2P SMS transactions over 200 interconnections worldwide. QXTEL is headquartered in London (UK) with regional offices in Florida (USA), Buenos Aires (Argentina), Dubai (UAE), Belgrade (Serbia) and Istanbul (Turkey). QXTEL maintains commercial relations with significant players in the industry such as BTS Business Telecommunications Service Inc., China Mobile International Limited, Deutsche Telekom AG, Digicel Jamaica Limited, Emirates Telecom Etisalat, Hutchison Global Communication, iBASIS Communications AG, IDT Global Limited, Messagebird, Orange Wholesale International, Tata Communications (Canada) Ltd, Telekom Deutschland Gmbh (T-Mobile), T-Mobile USA, Inc., and Vodafone US Inc.
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With the combination of the technology capabilities of these five subsidiaries, IQSTEL has put together a complete portfolio of services for carriers and end users. These services include:
• International Voice Termination for carriers: This service enables the routing of international voice calls to their final destinations across various countries. Telecom carriers use this to handle large volumes of cross-border voice traffic by connecting through intermediary providers or directly to in-country networks.
• US/Canada Inbound / Origination: This refers to the ability to receive incoming calls originating in the United States or Canada. It ensures seamless connectivity for businesses or carriers looking to establish a local presence in these regions by offering local or toll-free numbers.
• Global DIDs: These are virtual phone numbers that allow users to receive calls from specific geographic locations, regardless of where they are physically located. They are essential for businesses seeking global reach, providing local numbers for customers worldwide.
• Global Toll-Free Numbers: Toll-free numbers work internationally, allowing customers to call businesses without incurring charges. These numbers are ideal for companies serving global clients, offering free and easy access to customer service or sales teams.
• PBX (Private Branch Exchange) for small businesses: A PBX is a private telephone network used within an organization, enabling efficient internal and external communication. For small businesses, modern PBX systems often come as cloud-based or hosted solutions, offering affordability and advanced features like call routing and voicemail.
• SIP Trunking: SIP Trunking enables voice communication over the internet rather than traditional phone lines. It connects a business’s PBX system to the telephone network, offering cost savings, scalability, and support for voice, video, and messaging services.
Telecom services represented 100% of our consolidated revenue in 2024. In 2025, revenue from the telecom services represented 91% of the total revenue.
Voice services accounted for 59.83% of the total revenue in 2025 ($189,605,526 out of the total $316,899,498) compared to 66.09% of the total revenue in 2024 ($187,194,236 out of the total $283,220,442).
Telecom Subsidiaries for SMS services:
QGlobal SMS LLC is a 100% owned subsidiary of IQSTEL Inc. QGlobal SMS is a USA based company founded in 2020 specializing in international and domestic SMS termination. QGlobal SMS has a commercial presence in Europe, USA and Latin America, with robust international interconnection with Tier-1 SMS Aggregators, guaranteeing its customers high quality and low termination rates, in over more than 100 countries. Main customers are Computer-Tel Inc., iBasis Communications AG, Telefonica Global Solutions. S.L, Telintel Ltd., and Twilio Ireland Limited.
IoT Labs LLC is a 51% owned subsidiary of IQSTEL Inc. IoT Labs is an SMS service provider based in Austin, TX. Specialized in the SMS traffic exchange between US and Mexico. Main customers are Aztek Corporative Properties Inc, Bytescale C., Codek Connect LLC, and Nuvoteq LLC.
The Company entered into the SMS business in 2020 through the acquisition of QGlobal and IoT Labs. Both companies specialize in international and domestic SMS termination, with emphasis on the Applications to Person (A2P), Person to Person (P2P) and OmniChannel Marketing Services for several markets: Wholesale Carrier, Government, Corporate, Enterprise, Small and Medium Companies.
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The Global A2P SMS Market is expected to grow at a CAGR of 4.1% to account for $101 billion in 2030, according to Transparency Market Research. This market has experienced significant growth and adoption rate in the past few years and is expected to experience notable growth and adoption in years to come.
The Company’s role in these services is to ensure seamless voice and SMS communication across international borders by establishing peering agreements with other telecommunication entities. This is possible using sophisticated algorithms to determine the most cost-effective and reliable paths for voice/SMS traffic, managing media protocols such as SIP (Session Initiation Protocol) and RTP (Real-time Transport Protocol) to ensure smooth communication between different networks ensuring efficient call routing.
The Company acts as a transit network that allows the completion of voice calls, or SMSs connecting the network where the calls/SMSs are originated and the network where the calls/SMSs are intended to terminate. The graphic below shows the path of a voice call or SMS, all parties involved and where the Company is situated in that ecosystem.
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Fintech services:
GlobeTopper, Inc. In July 2025, the Company acquired a 51% controlling interest in GlobeTopper, Inc., a global business-to-business (“B2B”) digital gift card and incentives platform. GlobeTopper provides enterprises with the infrastructure, catalog access, and operational support required to design, source, and manage digital gift card programs across multiple geographies. Its platform enables clients to incorporate digital gift cards into customer acquisition, loyalty, rewards, employee incentives, and other promotional or payment-adjacent use cases. The company continues to expand its catalog and geographic coverage of more than 4,000 merchant brands across multiple regions and industry categories, adding new brands and markets on an ongoing basis. Since 2024, GlobeTopper has processed over 1 million digital gift card transactions through its platform. GlobeTopper operations reported 9% of our revenues for the year ended December 31, 2025.
New businesses subsidiaries:
ItsBchain LLC is a 75% owned subsidiary of IQSTEL Inc. ItsBchain is a blockchain technology developer and solution provider, with a strong focus on the telecom sector. The company has focused on the development of solutions aimed at using the blockchain ledger and smart contracts to enable more efficiency, quickness in execution and fraud-prevention in the telecommunications industry. Specifically, the company has developed a solution that will enable users and carriers to transfer mobile phone numbers with just a few clicks, allowing users and carriers the ability to transfer retail users from one mobile carrier to another instantly.
The Company has done research covering 35 countries where number portability is mandatory by law. Those 35 countries have a total of 3.3 billion in population and 4.0 billion phone lines that can be ported from one carrier to another. It is estimated that an average of 5% of the total phone lines are ported every year.
Number portability is executed and supervised by a third independent party, who acts as a database administrator and has the responsibility to guarantee all transactions requested by the customers will be completed and his/her phone number will be ported from Carrier A to Carrier B. In the countries under our analysis there are 11 different database administrators.
In terms of dollar value, the number portability market in the countries under our analysis is estimated at over $86 million per year. This is based on the actual cost carriers and/or customers have to pay to get the lines ported. Revenues of the Data Base Administrators comes from a monthly fee charged to all participant carriers, plus a fee for every transaction completed over the platform. The monthly fee and the transactions fee vary from country to country.
Our objective is to offer the market conformity by data-based administrators a much more cost-effective solution, which will not only reduce the operating cost, but that will also make the transactions to complete faster without any additional CAPEX.
Our mobile number portability solution is now being tested prior to its commercial release.
Global Money One Inc. Is a 75% owned subsidiary of IQSTEL Inc. The company offers a complete Fintech ecosystem including a MasterCard Debit Card, US Bank Account (No SSN Needed), and a Mobile App/Wallet to manage Remittances and Mobile Top Up. Our focus is to provide immigrants access to reliable financial services that make it easier to manage their money and stay connected with their families back home.
All available services can be managed through our mobile App “GlobalMoneyOne” available for IOS and Android. The first non-commercial release of the Fintech suite was done in June 2022. Since that date all services have been tested including the known-your-customer (KYC) process for the issuance of debits cards, the settlement process with the issuer bank, the intermediary entities handling the remittances, and the intermediaries and cellular operators for the Top Up, as well as the proper training of our customer care agents.
According to recent estimates from the World Bank, remittances to low- and middle-income countries continued their upward trajectory, approaching nearly $700 billion in 2025. Transfers to Latin America and the Caribbean reached record levels, driven largely by strong labor-market participation of regional migrants in the United States. Within the region, remittances grew sharply in several countries: Nicaragua registered increases of over 22%, Guatemala saw growth of around 14%, and Colombia reported gains of more than 14% during the first half of the year. In contrast, Mexico experienced a decline of roughly 4.6% after more than a decade of uninterrupted growth. As a share of GDP, the most recent data show remittances remaining highly significant across Central America and the Caribbean, with El Salvador and Honduras maintaining ratios above 24% and 25% respectively, while Jamaica and Haiti continue to depend heavily on inflows despite varying economic conditions. These metrics show there are business opportunities in the remittances arena and Global Money One has a developed platform to take advantage of them.
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Reality Border LLC initially developed an early proof-of-concept immersive digital platform for IQSTEL. Building on that early development work, Reality Border now develops AI software solutions for enterprise and telecommunications applications. Reality Border currently serves as IQSTEL’s AI innovation and product development platform, with activities that include AI agents and related software solutions for web, voice, and contact center environments, as well as integration with telecommunications infrastructure, business systems, and security layers. Reality Border’s current development efforts include software functionality, workflow orchestration, multilingual interaction, system integration, and operational deployment models intended for business use.
Regulations
The following is a summary of what we believe to be the material current and proposed international, federal, state, and local laws, regulations, orders, and legislation that could have a material effect on our business, financial condition, and results of operations. This summary is not exhaustive, and new or changed requirements could impose additional material obligations or costs.
Regulation of Telecom in the United States
Telecommunications services in the United States are subject to comprehensive regulation at the federal, state, and local levels. Non-compliance with applicable requirements may result in enforcement actions, including the imposition of interest, fines, or other penalties. The Federal Communications Commission (“FCC”) exercises jurisdiction over all telecommunications common carriers to the extent they provide interstate or international services, including the use of local networks to originate or terminate such traffic. State public utility commissions regulate these same carriers with respect to the provision of intrastate and local services. In addition, local governmental authorities may indirectly affect our operations through zoning restrictions, taxation, permitting and right-of-way requirements, and franchise obligations. Any material changes to the laws, rules, or regulatory frameworks administered by these federal, state, or local authorities could adversely affect our business, operating results, and financial condition.
Regulation of Telecom by the Federal Communications Commission
Universal Service and Other Regulatory Fees and Charges
In 1997, the FCC issued an order, referred to as the Universal Service Order, which requires all telecommunications carriers providing interstate telecommunications services to contribute to universal service support programs administered by the FCC (known as the Universal Service Fund). These periodic contributions are currently assessed based on a percentage of each contributor’s interstate and international end user telecommunications revenues reported to the FCC. Etelix and our other US-based telecom subsidiaries also contribute to several other regulatory funds and programs, most notably Telecommunications Relay Service and FCC Regulatory Fees (collectively, the “Other Funds”). Due to the manner in which these contributions are calculated, we cannot be assured that we fully recover from our customers all of our contributions
In addition, based on the nature of our current business, we receive certain exemptions from federal Universal Service Fund contributions. Changes in our business (including growth in our fintech or AI operations) could eliminate our ability to qualify for some or all of these exemptions. Changes in regulations may also have an impact on the availability of some or all of these exemptions. If even some of these exemptions become unavailable, they could materially increase our federal Universal Service Fund or Other Funds’ contributions and have a material adverse effect on the cost of our operations and, therefore, on our ability to continue to operate profitably, and to develop and grow our business. We cannot be certain of the stability of the contribution factors for the Other Funds. Significant increases in the contribution factor for the Other Funds in general and the Telecommunications Relay Service Fund in particular can impact our profitability. Whether these contribution factors will be stable in the future is unknown, but it is possible that we will be subject to significant increases.
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Regulation of Telecom—International
In connection with our international operations, we have obtained licenses or are otherwise authorized to provide telecommunications services in Switzerland and Italy (including SwissLink’s recent expansion of its regulatory footprint in Italy in February 2026). In several of the jurisdictions in which we currently operate or intend to operate, our activities are subject to local laws and regulatory frameworks that, among other provisions, may restrict or limit the ability of private telecommunications providers to compete with state-owned or state-authorized incumbent carriers. These regulatory constraints can materially affect the scope and manner in which we are permitted to offer telecommunications services in those markets, increase compliance costs, or require additional licensing or approvals.
Regulation of Internet Telephony
The provision of voice communications services over the Internet and private IP networks is generally subject to a less burdensome regulatory framework than traditional circuit-switched telephony in the United States and many foreign jurisdictions. In numerous markets, these IP-based services are not currently subject to certain taxes, fees, or regulatory assessments that apply to legacy telephony and that would otherwise increase our operating costs. As a result, we are able, in many jurisdictions, to offer VoIP services at pricing levels that are more competitive than those applicable to traditional telephone services. However, legislative and regulatory bodies in the United States and abroad have undertaken efforts to align the regulatory treatment of VoIP with that of traditional telephony. Such initiatives could impose additional fees, taxes, charges, or regulatory obligations on IP-based communications services, which could materially increase our costs and diminish or eliminate our pricing advantages. Moreover, several foreign governments have enacted, or are considering, laws or regulations that restrict or prohibit the provision of voice services over the Internet or private IP networks. These measures could similarly impair our ability to offer VoIP services in affected markets.
Money Transmitter and Payment Instrument Laws and Regulations
Our consumer payment services offerings—including prepaid debit cards, remittances, and mobile top-up services provided through Global Money One and GlobeTopper—are heavily regulated industries. Accordingly, we, and the products and services that we offer in consumer payment services, are subject to a variety of federal and state laws and regulations, including:
· Banking laws and regulations;
· Money transmitter and payment instrument laws and regulations (which may require state licensing and ongoing compliance);
· Anti-money laundering laws (including the Bank Secrecy Act and related know-your-customer (“KYC”) and customer due diligence requirements);
· Privacy and data security laws and regulations (including applicable state and federal requirements and, where relevant, international frameworks such as GDPR for European operations);
· Consumer protection laws and regulations;
· Unclaimed property laws; and
· Card association and network organization rules (including Mastercard rules applicable to our debit card offerings).
Compliance with these requirements involves significant ongoing costs, reporting obligations, and risk of penalties for noncompliance. Failure to maintain necessary licenses or adhere to these regulations could materially restrict our ability to offer or expand fintech services.
Employees
Attracting and retaining qualified personnel familiar with our businesses who head our different businesses units is critical to our success. As of December 31, 2025, we had a total of 100 employees, including all subsidiaries.
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Our human capital resources objectives include identifying, recruiting, retaining, incentivizing, and integrating employees, advisors, and consultants. To achieve this, our compensation practices aim to attract and retain qualified personnel and align their interests with our goals and the best interests of our stockholders. Our compensation philosophy is to provide remuneration that meets our current needs and growth initiatives and to offer incentives for achieving our long-term plans, including equity and cash incentive plans that attract, retain, and reward personnel through stock-based and cash-based compensation awards. We consider talent attraction and retention essential for achieving our strategy, and we recognize that a trained, diverse, and engaged workforce is crucial to meeting our objectives. Our recruiting process targets a broad spectrum of potential employees, and we employ a rigorous screening process to identify and hire qualified professionals.
We are committed to diversity and inclusion in the workforce, implementing a policy of non-discriminatory treatment and respect for human rights for all current and prospective employees. We prohibit discrimination based on an individual’s race, religion, creed, color, sex, sexual orientation, age, marital status, disability, national origin, or veteran’s status, which is illegal in many jurisdictions. We respect the human rights of all employees and strive to treat them with dignity in accordance with standards and practices recognized by the international community.
Corporate History
IQSTEL, formerly known as PureSnax International, Inc., was incorporated under the laws of the State of Nevada on June 24, 2011. PureSnax was previously a wellness brand focused on bringing healthy snacks and foods to consumers. On March 8, 2017, PureSnax exited a previous License Agreement with a Canadian snack food Licensor. From March of 2017 until its acquisition of Etelix.com USA, LLC, PureSnax was working to develop its own brand and its own products for manufacture, distribution, sales and marketing of various products within the health foods and snacks industry and to pursue related business opportunities. PureSnax acquired Etelix.com USA, LLC on June 25, 2018. The company left the healthy snacks and foods business to focus on the Telecommunications Business.
On August 30, 2018, PureSnax changed its name to “IQSTEL Inc.” and received a new CUSIP number: 46265G107, as well as a new trading symbol “IQST” in order to better resemble its new name. IQSTEL also changed the Standard Industrial Classification (SIC Code) to 4813, Telephone Communications, Except Radiotelephone.
On April 1, 2019, the Company entered into a Company Purchase Agreement by and between the Company and the Ralf Kohler, which agreement provides for the purchase of 51% of the equity and certain assets of SwissLink Carrier AG (“SwissLink”) (www.swisslink-carrier.com), a Swiss corporation, by the Company.
On February 10, 2020, the Company entered into a Company Acquisition Agreement with Jesus Vega regarding the acquisition of 51% of the shares in QGlobal, LLC (“QGlobal”). QGlobal is a company with the capacity to provide Short Messages (SMS), A2P and P2P messaging services.
On February 21, 2020, the Company entered into a Company Acquisition Agreement with Miguel Scavo regarding the acquisition of 75% of the shares in ItsBchain, LLC (“ItsBchain”) a company specialized in the development of Blockchain applications for telecommunications.
On April 15, 2020, the Company entered into a Company Acquisition Agreement with Francisco Bunt regarding the acquisition of 51% of the shares in loT Labs, LLC (“loT Labs”). The loT Labs’ principal business activity is the sale of SMS between USA and Mexico.
On November 12, 2020, the Company entered into partnership Agreement with Payment Virtual Mobile Solutions, LLC (PayVMS), a Delaware Corporation regarding the incorporation of Global Money One Inc, in which IQSTEL owns 75% of the shares and PayVMS owns the remaining 25%. Global Money One is a Fintech company with a complete infrastructure to provide top-up services, international remittances and prepaid debit cards.
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On October 1, 2021, the Company entered into an agreement with Jesus Vega regarding the acquisition of the remaining 49% of the shares in QGlobal, LLC (“QGlobal”). By means of this transaction IQSTEL increased its ownership of QGlobal to 100%.
On May 13, 2022, the Company entered into a Company Acquisition Agreement regarding the acquisition of 51% of the shares in Whisl telecom LLC (“Whisl”).
On June 1, 2022, the Company entered into a Company Acquisition Agreement regarding the acquisition of 51% of the shares in Smartbiz Telecom LLC (“Smartbiz”).
On March 20, 2023, the Company entered into a Memorandum of Understanding (the “MOU”) with Got My Idol, Inc., a Delaware corporation (“GotMy”). The MOU concerns the formation of a joint venture to implement the commercial development of “Metaverse” products using the current intellectual property of Got My Idol, improving it, and packaged as products under the to be formed joint venture company and using the to be formed joint venture brand that will be owned by the to be formed joint venture company. Our equity position in the new company will be 51% and GotMy shall hold the remaining 49% of the to be formed joint venture entity.
On January 19, 2024, the Company entered into a Share Purchase Agreement with Yukon River Holdings, Ltd. (“Yukon River”), a corporation formed under the laws of the British Virgin Islands concerning the contemplated sale by Yukon River and the purchase by us of 51% of the ordinary shares Yukon River holds in QXTEL LIMITED, a company incorporated in England and Wales.
On November 1, 2024, the Company entered into a binding Memorandum of Understanding (the “Agreement”) with Mr. Ralf Koehler ("Ralf"), SwissLink Carrier Ltd., ("SwissLink") and Impact Trading & Consulting LLC ("Impact") for the purpose of outlining the understanding regarding the exchange of 49% ownership in SwissLink for our shares.
On May 14, 2025, the Company started trading in The NASDAQ Capital Market under the ticker symbol IQST. This milestone marks a defining moment in the company’s journey—from a telecom operator to a high-tech global enterprise.
On May 29, 2025, the Company entered into a Unit Purchase Agreement (the “Agreement”) with Craig Span and GlobeTopper, LLC, a Delaware limited liability company ( “GlobeTopper”), pursuant to which the Company agreed to acquire fifty-one percent (51%) of the membership interests of GlobeTopper. The closing occurred on July 1, 2025.
Item 1A. Risk Factors
You should carefully consider the risks described below together with all of the other information included in this registration statement before making an investment decision with regard to our securities. The statements contained in or incorporated herein that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, you may lose all or part of your investment. In addition to other information in this registration statement and in other filings we make with the Securities and Exchange Commission, the following risk factors should be carefully considered in evaluating our business as they may have a significant impact on our business, operating results and financial condition. If any of the following risks actually occurs, our business, financial condition, results of operations and future prospects could be materially and adversely affected. Because of the following factors, as well as other variables affecting our operating results, past financial performance should not be considered as a reliable indicator of future performance and investors should not use historical trends to anticipate results or trends in future periods.
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Risks Relating to Business and Financial Condition
Because the Company has identified that substantial doubt exists within their ability to continue as a going concern, there is an increased risk associated with an investment in our Company.
We have continually operated at a loss with an accumulated deficit of $43,276,006 as of December 31, 2025. We have not attained profitable operations and, even though the Company maintains a cash position very close to one third year's operating expenses, we are dependent upon obtaining financing or generating revenue from operations to continue operations for the next twelve months. Our future is dependent upon our ability to obtain financing or upon future profitable operations. We may seek additional funds through private placements of our common stock and/or through debt financing; however, we have no formal commitments or arrangements for such funding, and there can be no assurance that financing will be available on acceptable terms or at all. For these reasons, our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern. As a result, there is a risk that you could lose the entire amount of your investment in our Company.
Because we have a limited operating history, you may not be able to accurately evaluate our operations.
We have a limited operating history upon which to evaluate the merits of investing in our Company, particularly with respect to our recent diversification into fintech and AI initiatives. Potential investors should be aware of the difficulties normally encountered by new companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the operations that we plan to undertake. These potential problems include, but are not limited to, unanticipated issues relating to generating sufficient cash flow, managing rapid growth from acquisitions, integrating new business lines, and controlling costs that may exceed current estimates. We expect to continue to incur significant losses into the foreseeable future. We recognize that if the effectiveness of our business plan is not forthcoming, we will not be able to continue business operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and it is doubtful that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.
We are dependent on outside financing for the continuation of our operations.
Because we currently operate at a loss, we are completely dependent on the continued availability of financing in order to continue our business operations. There can be no assurance that financing sufficient to enable us to continue our operations will be available to us in the future.
We will need additional funds to complete further development of our business plan to achieve a sustainable level where ongoing operations can be funded out of revenues. There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us.
Our failure to obtain future financing or to generate sufficient revenue to meet our financial needs could result in our inability to continue as a going concern, and, as a result, our investors could lose their entire investment.
We may be unable to achieve some, all or any of the benefits that we expect to achieve from our plan to expand our operations.
In the future we may require additional financing for capital requirements and growth initiatives, including integration of recent acquisitions and development of fintech and AI capabilities. Accordingly, we will depend on our ability to generate cash flows from operations and to borrow funds and issue securities in the capital markets to maintain and expand our business. We may need to incur debt on terms and at interest rates that may not be as favorable. If additional financing is not available when required or is not available on acceptable terms, we may be unable to operate our business as planned or at all, fund our expansion, successfully promote our business, develop or enhance our products and services, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results of operations.
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As a growing Company, we have yet to achieve a profit and may not achieve a profit in the near future, if at all.
We have revenues but we are not profitable and may not be in the near future, if at all. Further, many of our competitors have a significantly larger industry presence and revenue stream but have yet to achieve profitability. Our ability to continue as a going concern is dependent upon raising capital from financing transactions, increasing revenue and keeping operating expenses below our revenue levels in order to achieve positive cash flows, none of which can be assured.
Risk Factors Related to Our International Operations
Our operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can adversely affect our business, results of operations and financial condition.
A deterioration in economic conditions and related drivers of global uncertainty and change, such as reduced business activity, high unemployment, rising interest rates, housing prices, and energy prices (including the price of gasoline), increased consumer indebtedness, lack of available credit, currency volatility, the rate of inflation, and perceptions of the economy, as well as other factors, such as terrorist attacks, protests, looting, and other forms of civil unrest, cyber-attacks and data breaches, public health emergencies (such as the COVID-19 pandemic and other epidemics), extreme weather conditions and climate change, significant changes in the political environment, political instability, armed conflict (such as the ongoing military conflict between Ukraine and Russia and tensions involving Iran and the Middle East) and/or public policy, including increased state, local or federal taxation, tariffs, sanctions or trade restrictions could adversely affect our operating results and financial condition.
Major public health issues, including pandemics, have adversely affected, and could in the future materially adversely affect, us due to their impact on the global economy and demand for our telecommunications and fintech services; the imposition of protective public safety measures, such as shutdowns and restrictive health mandates; and disruptions in our operations, supply chain, network interconnections, and sales channels, resulting in interruptions to our business and the supply of current products and offering of existing services, and delays in production ramps of new products and development of new services.
In addition to an adverse impact on demand for our regenerative products and services, uncertainty about, or a decline in, global or regional economic conditions can have a significant impact on our suppliers, contract manufacturers, logistics providers, distributors, and other channel partners, and developers. Potential outcomes include financial instability; inability to obtain credit to finance business operations; and insolvency.
As a result, our operating results may be impacted by the health of the global economy. Volatility and disruption in global capital and credit markets may lead to slowdowns or declines in client spending which could adversely affect our business and financial performance. Our business and financial performance, including new business bookings and collection of our accounts receivable, may be adversely affected by current and future economic conditions (including a reduction in the availability of credit, higher energy costs, rising interest rates, financial market volatility and lower than expected economic growth) that cause a slowdown or decline in client spending. Reduced purchases by our clients or changes in payment terms could adversely affect our revenue growth and cause a decrease in our cash flow from operations. Bankruptcies or similar events affecting clients may cause us to incur bad debt expenses at levels higher than historically experienced. Further, volatility and disruption in global financial markets may also limit our ability to access the capital markets at a time when we would like, or need, to raise capital, which could have an impact on our ability to react to changing economic and business conditions. Accordingly, if global financial and economic volatility continues or worsens, our business, results of operations and financial condition could be materially and adversely affected.
Adverse economic conditions can also lead to increased credit and collectability risk on our trade receivables; the failure of derivative counterparties and other financial institutions; limitations on our ability to issue new debt; reduced liquidity; and declines in the fair values of our financial instruments. These and other impacts can materially adversely affect our business, results of operations, financial condition and stock price.
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We have substantial revenue derived from customers outside of the United States, and we may lose revenues and market share due to exchange rate fluctuations and political and economic changes related to foreign business.
A significant portion of our revenue comes from customers and traffic outside of the United States, including high volumes routed to Asia, Africa, and Latin America. Any company conducting foreign business is always subject to economic, political and regulatory uncertainties and risks that are unique to each area of the world. Fluctuations in exchange rates may also affect the prices that foreign customers are willing to pay and may put us at a price disadvantage compared to other competitors. Potentially volatile shifts in exchange rates may negatively affect our financial position and results.
We operate a global business that exposes us to currency, economic and regulatory risks.
Our revenue comes primarily from sales and traffic outside the U.S. and our growth strategy is largely focused on emerging markets in Latin America, Asia, Africa, and the Middle East. Our success delivering solutions and competing in international markets is subject to our ability to manage various risks and difficulties, including, but not limited to:
| • | our ability to effectively staff, provide technical support and manage operations in multiple countries; | |
| • | fluctuations in currency exchange rates; | |
| • | timely collecting of accounts receivable from customers located outside of the U.S.; | |
| • | trade restrictions, political instability, disruptions in financial markets, and deterioration of economic conditions; | |
| • | compliance with the U.S. Foreign Corrupt Practices Act, and other anti-bribery laws and regulations; | |
| • | variations and changes in laws applicable to our operations in different jurisdictions, including enforceability of intellectual property and contract rights; and | |
| • | compliance with export regulations, tariffs and other regulatory barriers. | |
Our global operations subject us to many different and complex laws and rules, and we may face difficulty in compliance.
Due to our global operations across 20 countries and recent acquisitions (including QXTEL with offices in the UK, Argentina, Dubai, Serbia, and Turkey), we are subject to many laws governing international relations (including but not limited to the Foreign Corrupt Practices Act, the U.S. Export Administration Act the EU General Data Protection Regulation, and the U.K. Modern Anti-Slavery Act); which prohibit improper payments to government officials and restrict where and how we can do business, what information or products we can supply to certain countries, what personal information we can transfer, and what information we can provide to a non-U.S. government. Although we have procedures and policies in place that should mitigate the risk of violations of these laws, there is no guarantee that they will be sufficiently effective. If, and when we acquire new businesses, we may not be able to ensure that the pre-existing controls and procedures meant to prevent violations of the rules and laws were effective, and we may not be able to implement effective controls and procedures to prevent violations quickly enough when integrating newly acquired businesses. Acquisitions of new businesses in new non-U.S. jurisdictions may also subject us to new regulations and laws, and we may face difficulties ensuring compliance with these new requirements.
These challenges include: (1) compliance with complex and changing laws, regulations and policies of governments that may impact our operations, such as foreign ownership restrictions, import and export controls, tariffs, and trade restrictions; (2) compliance with U.S. and foreign laws that affect the activities of companies abroad, such as anti-corruption laws, competition laws, currency regulations, and laws affecting dealings with certain nations; (3) the difficulties involved in managing an organization doing business in many different countries; (4) rapid changes in government policy, acts of terrorism, or the threat of international boycotts or U.S. anti-boycott legislation; and (5) currency exchange rate fluctuations.
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Risk Factors Related to the Business of the Company
Our telecommunications line of business is highly sensitive to declining prices, which may adversely affect our revenues and margins.
The telecommunications industry is characterized by intense price competition, which has resulted in declines in both our average per-minute price realizations and our average per-minute termination costs.
A reduction in our prices to compete with any other offers in the market will not always guarantee an increase in traffic, which may result in a reduction of revenue. If these trends in pricing continue or accelerate, it could have a material adverse effect on the revenues generated by our telecommunications businesses and/or our gross margins. The continued growth of Over-The-Top calling and messaging services, such as WhatsApp, Skype and Viber have adversely affected the use of traditional phone communications. We expect this IP-based service, which offers voice communications for free, to continue to increase, which may result in increased substitution on our service offerings.
Our subsidiary GlobeTopper operates in a rapidly evolving digital payments and incentives market, and its business model may not continue to achieve market acceptance.
GlobeTopper’s services depend on continued adoption of digital gift cards, digital incentives, and related payment technologies by enterprises, distribution partners, and end users. Market preferences may shift toward alternative incentive mechanisms, new payment technologies, or competing platforms. If GlobeTopper fails to adapt its offerings to evolving customer needs or technological changes, its growth prospects and financial performance could be adversely affected.
Our products face intense competitive challenges, including rapid technological changes, and pricing pressure from competitors, which could adversely affect our business.
All of our product lines are subject to significant competition from existing and future competitors, market conditions and technological change, or a combination of them, and our sales revenues and gross margins may suffer protracted and serious declines with the result that we would likely incur protracted losses. Further, the barriers to entry in several of our lines of business are relatively low, so we may face competition from new entrants who undercut our prices with products or services that possess superior technological attributes or offer better value to customers. In this instance, we could incur protracted and significant losses and holders of our common stock would suffer losses thereby.
From time to time, we may need to reduce our prices in response to competitive and customer pressures and to maintain our market share. Competition and customer pressures may also restrict our ability to increase prices in response to commodity and other input cost increases. Our results of operations will suffer if profit margins decrease, as a result of a reduction in prices, increased input costs or other factors, and if we are unable to increase sales volumes to offset those profit margin decreases. We may also need to increase spending on marketing, advertising and new product innovation to protect existing market share or increase market share. The success of our investments is subject to risks, including uncertainties about trade and consumer acceptance. As a result, our increased expenditures may not maintain or enhance market share and could result in lower profitability.
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Our operating results may fluctuate, which could have a negative impact on our ability to grow our client base, establish sustainable revenues and succeed overall.
Our results of operations may fluctuate as a result of a number of factors, some of which are beyond our control including but not limited to:
| • | general economic conditions in the geographies and industries where we sell our services and conduct operations; legislative and regulatory policies where we sell our services and conduct operations; | |
| • | the budgetary constraints of our customers; seasonality; | |
| • | the success of our strategic growth initiatives; | |
| • | costs associated with the launching or integration of new or acquired businesses; | |
| • | timing of new product introductions by us, our suppliers and our competitors; product and service mix, availability, utilization and pricing; | |
| • | the mix, by state and country, of our revenues, personnel and assets; | |
| • | movements in interest rates or tax rates; | |
| • | changes in, and application of, accounting rules; | |
| • | changes in the regulations applicable to us; and | |
| • | litigation matters. |
As a result of these factors, we may not succeed in our business, and we could go out of business.
The termination of our carrier agreements and our inability to enter into new carrier agreements in the future could materially and adversely affect our ability to compete, which could reduce our revenues and profits.
We rely upon our carrier agreements to provide our telecommunications services to our customers. These carrier agreements are, in most cases for finite terms and, therefore, there can be no guarantee that these agreements will be renewed at all or on favorable terms to us. Our ability to compete would be adversely affected if our carrier agreements were terminated or we were unable to enter into carrier agreements in the future to provide our telecommunications services to our customers, which could result in a reduction of our revenues and profits.
Our subsidiary GlobeTopper relies on access to a large catalog of merchant brands, and the loss of key merchant relationships could materially impact its business.
GlobeTopper’s value proposition depends on maintaining access to more than 4,000 merchant brands across multiple geographies. Merchant partners may change their distribution strategies, impose new restrictions, or terminate relationships. Any reduction in catalog breadth, particularly among high-demand brands, could reduce client demand and negatively affect revenue.
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Our customers could experience financial difficulties, which could adversely affect our revenues and profitability if we experience difficulties in collecting our receivables.
As a provider of international long-distance services, we depend upon sales of transmission and termination of traffic to other long-distance providers and the collection of receivables from these customers. The wholesale telecommunications market continues to feature many smaller, less financially stable companies. If weakness in the telecommunications industry or the global economy reduces our ability to collect our accounts receivable from our major customers our profitability may be substantially reduced. While our most significant customers, from a revenue perspective, vary from quarter to quarter, our 37 largest customers (representing approximately 5.37% of our total customer base) collectively accounted for 90% of total consolidated revenues in fiscal year 2025. Although we are somewhat insulated from nonpayment because approximately 30% of our revenue is prepaid, this concentration of revenue increases our exposure to non-payments and we may experience significant write-offs if any of our large customers fail to pay their outstanding balances, which could adversely affect our revenues and profitability.
We may fail to successfully integrate our acquisitions or otherwise be unable to benefit from pursuing acquisitions.
We intend to make acquisitions of complementary (including competitive) businesses, products and technologies. However, any future acquisitions may result in material transaction costs, increased interest and amortization expenses related to goodwill and other intangible assets, increased depreciation expenses and increased operating expenses, any of which could have an adverse effect on our operating results and financial position. Acquisitions will require integration of acquired assets and management into our operations to realize economies of scale and control costs. Acquisitions may involve other risks, including diversion of management attention that would otherwise be available for ongoing internal development of our business and risks inherent in entering markets in which we have no or limited prior experience. In connection with future acquisitions, we may make potentially dilutive issuances of equity securities. In addition, consummation of acquisitions may subject us to unanticipated business uncertainties, contingent liabilities or legal matters relating to those acquired businesses for which the sellers of the acquired businesses may not fully indemnify us. There can be no assurance that our business will grow through acquisitions, as anticipated.
We believe there are meaningful opportunities to grow through acquisitions and joint ventures across all product and service categories and we expect to continue a strategy of selectively identifying and acquiring businesses with complementary products and services. We may be unable to identify, negotiate, and complete suitable acquisition opportunities on reasonable terms. There can be no assurance that any business acquired by us will be successfully integrated with our operations or prove to be profitable to us. We may incur future liabilities related to acquisitions. Should any of the following problems, or others, occur as a result of our acquisition strategy, the impact could be material:
| • | diversion of management time and focus from operating our business; | |
| • | use of resources that are needed in other areas of our business; | |
| • | in the case of an acquisition, implementation or remediation of controls, procedures and policies of the acquired company; | |
| • | in the case of an acquisition, difficulty integrating the accounting systems and operations of the acquired company; | |
| • | in the case of an acquisition, coordination of product, engineering and selling and marketing functions, including difficulties and additional expenses associated with supporting legacy services and products and hosting infrastructure of the acquired company and difficulty converting the customers of the acquired company onto our systems, platforms and contract terms, including disparities in the revenues, licensing, support or professional services model of the acquired company; |
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| • | in the case of an acquisition, difficulty integrating, supporting or enhancing acquired product lines or services, including difficulty in transitioning acquired solutions developed with different source code architectures to our integrated platforms, difficulty in supporting feature development across our full suite of house-built and acquired solutions and strain on resources from marketing and supporting multiple platforms prior to integration; | |
| • | in the case of an acquisition, retention and integration of employees from the acquired company, and preservation of our corporate culture; | |
| • | in the case of an acquisition, reliance on certain existing executive teams of acquired companies in new industries; | |
| • | in the case of an acquisition or divestiture, difficulty delivering on our product strategy, including building a platform that enables us to drive value across our full ecosystem of merchants, suppliers and consumers; | |
| • | unforeseen costs or liabilities; | |
| • | adverse effects to our existing business relationships with partners and customers as a result of the acquisition, investment or divestiture; | |
| • | the possibility of adverse tax consequences; | |
| • | in the case of an acquisition or divestiture, we may not be able to secure required regulatory approvals or otherwise satisfy closing conditions for a proposed transaction in a timely manner, or at all; | |
| • | fluctuations in the value of our investments, impairment to the value of our investments, or the failure to realize a return on such investments; | |
| • | regulatory risks, litigation or other claims inherited from or arising in connection with the acquired company, investment or divestiture; | |
| • | in the case of a divestiture, unforeseen loss of institutional knowledge, resources, know-how, or other assets; | |
| • | in the case of a divestiture, potential contractual obligations may trigger, such as change of control obligations, which may negatively impact our ability to execute on such divestiture, our business, our financial condition, or our operating results; and |
| • | in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries. | |
| • | We may not be able to identify acquisition or investment opportunities that meet our strategic objectives, or to the extent that such opportunities are identified, we may not be able to negotiate terms with respect to the acquisition or investment that are acceptable to us. In addition, the acquisitions and investments that we consummate may fail to achieve our strategic objectives, in which case we may shut down, divest, or otherwise exit the acquired business or investment, which could harm our reputation and adversely affect our financial position and results of operations. |
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Natural disasters, terrorist acts, acts of war, pandemics, cyber-attacks or other breaches of network or information technology security may cause equipment failures or disrupt our operations.
Our inability to operate our telecommunications networks because of the events listed above, even for a limited period, may result in loss of revenue, significant expenses, which could have a material adverse effect on our results of operations and financial condition.
We could be harmed by network disruptions, security breaches, or other significant disruptions or failures of our IT infrastructure and related systems. To be successful, we need to continue to have available a high capacity, reliable and secure network for our and our customers’ use. As any other company, we face the risk of a security breach, whether through cyber-attacks, malware, computer viruses, sabotage, or other significant disruption of our IT infrastructure and related systems. There is a risk of a security breach or disruption of the systems we operate, including possible unauthorized access to our proprietary or classified information. We are also subject to breaches of our network resulting in unauthorized utilization of our services, which subject us to the costs of providing those services, which are likely not recoverable. The secure maintenance and transmission of our information is a critical element of our operations. Our information technology and other systems that maintain and transmit customer information may be compromised by a malicious third-party penetration of our network security, or impacted by advertent or inadvertent actions or inactions by our employees, or those of a third-party service provider or business partner. As a result, our or our customers’ information may be lost, disclosed, accessed or taken without the customers’ consent, or our services may be used without payment.
Although we make significant efforts to maintain the security and integrity of these types of information and systems, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging, especially in light of the growing sophistication of cyber-attacks and intrusions. We may be unable to anticipate all potential types of attacks or intrusions or to implement adequate security barriers or other preventative measures. Certain of our business units have been the subject of attempted and successful cyber-attacks in the past. We have researched the situation and do not believe that any material internal or customer information has been compromised.
If we are unable to successfully manage growth, our operations could be adversely affected.
Our progress is expected to require the full utilization of our management, financial and other resources, which to date has occurred with limited working capital. Our ability to manage growth effectively will depend on our ability to improve and expand operations, including our financial and management information systems, and to recruit, train and manage sales personnel. There can be no absolute assurance that management will be able to manage growth effectively.
If we do not properly manage the growth of our business, we may experience significant strains on our management and operations and disruptions in our business. Various risks arise when companies and industries grow quickly. If our business or industry grows too quickly, our ability to meet customer demand in a timely and efficient manner could be challenged. We may also experience development delays as we seek to meet increased demand for our products. Our failure to properly manage the growth that we or our industry might experience could negatively impact our ability to execute on our operating plan and, accordingly, could have an adverse impact on our business, our cash flow and results of operations, and our reputation with our current or potential customers.
Risks Related to Legal Uncertainty
We may be subject to securities litigation, which is expensive and could divert management attention.
In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could seriously hurt our business. Any adverse determination in litigation could also subject us to significant liabilities.
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We may be subject to tax and regulatory audits which could subject us to liabilities.
We are subject to tax and regulatory audits which could result in the imposition of liabilities that may or may not have been reserved. We are subject to audits by taxing and regulatory authorities with respect to certain of our income and operations. These audits can cover periods for several years prior to the date the audit is undertaken and could result in the imposition of liabilities, interest and penalties if our positions are not accepted by the auditing entity.
Changes in regulations or user concerns regarding privacy and protection of user data, or any failure to comply with such laws, could adversely affect our business.
Federal, state, and international laws and regulations govern the collection, use, retention, disclosure, sharing and security of data that we receive from and about our users particularly in our fintech and telecommunications operations. The use of consumer data by online service providers is a topic of active interest among federal, state, and international regulatory bodies, and the regulatory environment is unsettled. Many states have passed laws requiring notification to users where there is a security breach for personal data, such as California’s Information Practices Act. We face similar risks in international markets where our products and services are offered. Any failure, or perceived failure, by us to comply with or make effective modifications to our policies, or to comply with any applicable federal, state, or international privacy, data-retention or data-protection-related laws, regulations, orders or industry self-regulatory principles could result in proceedings or actions against us by governmental entities or others, a loss of user confidence, damage to our business and brand, and a loss of users, which could potentially have an adverse effect on our business.
In addition, various federal, state and foreign legislative or regulatory bodies may enact new or additional laws and regulations concerning privacy, data retention, data transfer and data protection issues, including laws or regulations mandating disclosure to domestic or international law enforcement bodies, which could adversely impact our business, our brand or our reputation with users. For example, some countries are considering or have enacted laws mandating that user data regarding users in their country be maintained in their country (data localization requirements). In addition, the EU General Data Protection Regulation (GDPR) and similar frameworks impose operational and compliance requirements that differ from those currently in place in other jurisdictions and include significant penalties for non-compliance.
The interpretation and application of privacy, data protection, data transfer and data retention laws and regulations are often uncertain and in flux in the United States and internationally. These laws may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices, complicating long-range business planning decisions. If privacy, data protection, data transfer or data retention laws are interpreted and applied in a manner that is inconsistent with our current policies and practices, we may be fined or ordered to change our business practices in a manner that adversely impacts our operating results. Complying with these varying international requirements could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business and operating results.
We may be subject to legal liability associated with providing online services or content.
We host and provide a wide variety of services and technology products that enable and encourage individuals and businesses to exchange information; upload or otherwise generate photos, videos, text, and other content; advertise products and services; conduct business; and engage in various online activities both domestically and internationally. The law relating to the liability of providers of online services and products for activities of their users is currently unsettled both within the United States and internationally. We may be subject to domestic or international actions alleging that certain content we have generated or third-party content that we have made available within our services violates laws in domestic and international jurisdictions.
It is also possible that if any information provided directly by us contains errors or is otherwise wrongfully provided to users, third parties could make claims against us. For example, we offer web-based e-mail services and fintech operations, which expose us to potential risks, such as liabilities or claims, by our users and third parties, resulting from unsolicited communications, lost or misdirected messages, illegal or fraudulent use of e-mail, alleged violations of policies, property interests, privacy protections, including civil or criminal laws, or interruptions or delays in service. We may also face purported consumer class actions or state actions relating to our online services, including our fee-based services. In addition, our customers, third parties, or government entities may assert claims or actions against us if our online services or technologies are used to spread or facilitate malicious or harmful code or applications.
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Investigating and defending these types of claims are expensive, even if the claims are without merit or do not ultimately result in liability and could subject us to significant monetary liability or cause a change in business practices that could negatively impact our ability to compete.
Security breaches, denial of service attacks, or other hacking and phishing attacks on our systems or other security breaches, including internal security failures, could harm our reputation or subject us to significant liability, and adversely affect our business and financial results.
As a critical infrastructure service provider in telecommunications and fintech, we transmit large amounts of data over our systems, and process and store highly sensitive customer data. Consequently we, our third-party service providers, and our customers operate in an industry that is prone to cyber-attacks. Despite our efforts to prevent these events, some of these attacks could result in a material adverse impact to our operations due to distributed denial of service attacks, ransomware attacks, malware, virus, credential harvesting, man-in-the-middle attacks, or social engineering attacks. We do not believe these incidents are likely to have a material adverse impact on our ability to serve our customers or our business, operations or financial results.
Cyber-attacks on our systems may stem from a variety of sources and take many forms. Cyber-attacks can put at risk personally identifiable information, customer data or protected information, thereby implicating stringent domestic and foreign data protection laws. These threats may also arise from failure or intrusions of systems owned, operated or controlled by other unaffiliated third-party operators, upon whom we are materially reliant to operate our business. Various other factors could intensify these risks, including, (i) our maintenance of information in digital form stored on servers connected to the Internet, (ii) our use of open- and software-defined networks, (iii) the challenges of operating and maintaining our complex multi-continent network composed of legacy and acquired properties, which is more difficult to safeguard than newer fully-integrated networks, (iv) growth in the size and sophistication of our customers and their service requirements, (v) increased use of our network due to greater demand for data services, (vi) the large number of our employees working from remote locations, (vii) our IT support agreements with purchasers of businesses we have divested over the past few years and (viii) as further discussed below, the difficulty of defending against increasingly sophisticated attacks.
Cyber-attacks could (i) disrupt the proper functioning of our networks and systems, which could in turn disrupt the operations of our customers, (ii) result in the destruction, loss, theft, misappropriation or release of proprietary, confidential, sensitive, classified or otherwise valuable information of ours, our employees, our customers or our customers’ end users, (iii) require us to notify customers, regulatory agencies or the public of data incidents, (iv) damage our reputation or result in a loss of business, (v) require us to provide credits for future service to our customers or to offer expensive incentives to retain customers, (vi) subject us to claims by our customers or regulators for damages, fines, penalties, license or permit revocations or other remedies, (vii) result in the loss of industry certifications or (viii) require significant management attention or financial resources to remedy the resulting damages or to change our systems. Any or all of the foregoing developments could have a material adverse impact on us.
We believe the importance of our network to global internet data flows will continue to make it a target to a wide range of threat actors, including nation state actors and other advanced persistent threat actors. Moreover, the risk of incidents is likely to continue to increase due to several factors, including (i) the increasing use of machine learning, AI and other sophisticated techniques to initiate cyber and phishing attacks, (ii) the wider accessibility of cyber-attack tools that can circumvent security controls and evade detection, which can delay and limit our ability to accurately assess and fully remediate the impact of the attack, and (iii) growing threats from Chinese, Russian and other state actors due to heightened geopolitical tensions and rivalries, and the attendant increased possibility of cyber warfare targeting us in the event of a direct conflict. It should also be noted that defenses against cyber-attacks currently available to us and others are unlikely to prevent intrusions by a highly-determined, highly-sophisticated threat actor. Thus far, none of our past security incidents have had a material adverse effect on us, and we continue to take steps designed to limit our cyber risks. Nonetheless, we cannot assure you that future cyber incidents or events will not ultimately have a material adverse impact on our business, operations or financial results.
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Provisions in the Nevada Revised Statutes and our Bylaws could make it very difficult for an investor to bring any legal actions against our directors or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in any such actions.
Members of our board of directors and our officers will have no liability for breaches of their fiduciary duty of care as a director or officer, except in limited circumstances, pursuant to provisions in the Nevada Revised Statutes and our Bylaws as authorized by the Nevada Revised Statutes. Specifically, Section 78.138 of the Nevada Revised Statutes provides that a director or officer is not individually liable to the Company or its stockholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer unless it is proven that (1) the director’s or officer’s act or failure to act constituted a breach of his or her fiduciary duties as a director or officer and (2) his or her breach of those duties involved intentional misconduct, fraud or a knowing violation of law. This provision is intended to afford directors and officers protection against and to limit their potential liability for monetary damages resulting from suits alleging a breach of the duty of care by a director or officer. Accordingly, you may be unable to prevail in a legal action against our directors or officers even if they have breached their fiduciary duty of care. In addition, our Bylaws allow us to indemnify our directors and officers from and against any and all costs, charges and expenses resulting from their acting in such capacities with us. This means that if you were able to enforce an action against our directors or officers, in all likelihood, we would be required to pay any expenses they incurred in defending the lawsuit and any judgment or settlement they otherwise would be required to pay. Accordingly, our indemnification obligations could divert needed financial resources and may adversely affect our business, financial condition, results of operations and cash flows, and adversely affect prevailing market prices for our common stock.
Nevada law and certain anti-takeover provisions of our corporate documents could entrench our management or delay or prevent a third party from acquiring us or a change in control even if it would benefit our shareholders.
Certain provisions of Nevada law may have an anti-takeover effect and may delay or prevent a tender offer or other acquisition transaction that a shareholder might consider to be in his or her best interest. The summary of the provisions of Nevada law set forth below does not purport to be complete and is qualified in its entirety by reference to Nevada law.
The issuance of shares of preferred stock, the issuance of rights to purchase such shares, and the imposition of certain other adverse effects on any party contemplating a takeover could be used to discourage an unsolicited acquisition proposal. For instance, the issuance of a series of preferred stock might impede a business combination by including class voting rights that would enable a holder to block such a transaction. In addition, under certain circumstances, the issuance of preferred stock could adversely affect the voting power of holders of our common stock.
Under Nevada law, a director, in determining what he reasonably believes to be in or not opposed to the best interests of the corporation, does not need to consider only the interests of the corporation’s shareholders in any takeover matter but may also, in his discretion, may consider any of the following:
| (i) | The interests of the corporation’s employees, suppliers, creditors and customers; | |
| (ii) | The economy of the state and nation; | |
| (iii) | The impact of any action upon the communities in or near which the corporation’s facilities or operations are located; | |
| (iv) | The long-term interests of the corporation and its shareholders, including the possibility that those interests may be best served by the continued independence of the corporation; and | |
| (v) | Any other factors relevant to promoting or preserving public or community interests. |
Because our board of directors is not required to make any determination on matters affecting potential takeovers solely based on its judgment as to the best interests of our shareholders, our board could act in a manner that would discourage an acquisition attempt or other transaction that some, or a majority, of our shareholders might believe to be in their best interests or in which such shareholders might receive a premium for their stock over the then market price of such stock. Our board presently does not intend to seek shareholder approval prior to the issuance of currently authorized stock, unless otherwise required by law or applicable stock exchange rules.
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As a smaller reporting company, we areexempt from certain disclosure requirements, which could make our Common Stock less attractive to potential investors.
We are a smaller reporting company, and we will remain a smaller reporting company until the fiscal year following the determination that our voting and non-voting common shares held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or our annual revenues are more than $100 million during the most recently completed fiscal year and our voting and non-voting common shares held by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter.
Since we are no longer eligible for emerging growth company status, we will be subject to the reporting obligations of a smaller reporting company and, if we continue to grow, we may be subject to increased reporting requirements applicable to accelerated filers, which are more onerous than those applicable to smaller reporting companies.
Similar to emerging growth companies, smaller reporting companies are able to provide simplified executive compensation disclosure, are exempt from the auditor attestation requirements of Section 404, and have certain other reduced disclosure obligations, including, among other things, being required to provide only two years of audited financial statements and not being required to provide selected financial data, supplemental financial information or risk factors. These scaled disclosure requirements are less comprehensive than issuers that are not smaller reporting companies which could make our Common Stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares.
If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common shares.
We are required, under Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting that results in more than a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. Section 404 of the Sarbanes-Oxley Act also generally requires an attestation from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. However, for as long as we remain a smaller reporting company, we intend to take advantage of the exemption permitting us not to comply with the independent registered public accounting firm attestation requirement.
Our compliance with Section 404 will require that we incur substantial accounting expense and expend significant management efforts. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective.
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 cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows. This may expose us, including individual executives, to potential liability which could significantly affect our business. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting once that firm begins its audits of internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common shares could decline, and we could be subject to sanctions or investigations by FINRA, the SEC, or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
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Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to management, recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.
Deficiencies in disclosure controls and procedures and internal control over financial reporting could result in a material misstatement in our financial statements.
We could be adversely affected if there are deficiencies in our disclosure controls and procedures or in our internal controls over financial reporting. The design and effectiveness of our disclosure controls and procedures and our internal controls over financial reporting may not prevent all errors, misstatements or misrepresentations. Consistent with other entities in similar stages of development, we have a limited number of employees currently in the accounting group, limiting our ability to provide for segregation of duties and secondary review. A lack of resources in the accounting group could lead to material misstatements resulting from undetected errors occurring from an individual performing primarily all areas of accounting with limited secondary review. Deficiencies in internal controls over financial reporting which may occur could result in material misstatements of our results of operations, restatements of financial statements, other required remediations, a decline in the price of our common shares, or otherwise materially adversely affect our business, reputation, results of operations, financial condition or liquidity.
Risks Relating to Our Securities
We have the right to issue additional common stock and preferred stock without the consent of stockholders which would have the effect of diluting investors’ ownership and could decrease the value of their investment.
We have additional authorized, but unissued shares of our common stock that may be issued by us for any purpose without the consent or vote of our stockholders that would dilute stockholders’ percentage ownership of our Company.
In addition, our certificate of incorporation authorizes the issuance of shares of preferred stock and/or the conversion of existing outstanding preferred stock into common stock, the rights, preferences, designations and limitations of which may be set by the Board of Directors. Our certificate of incorporation has authorized issuance of up to 26,000,000 shares of common stock and up to 1,200,000 shares of preferred stock in the discretion of our Board.
The shares of authorized but unissued preferred stock may be issued upon Board of Directors approval; no further stockholder action is required. If issued, the rights, preferences, designations and limitations of such preferred stock would be set by our Board and could operate to the disadvantage of the outstanding common stock. Such terms could include, among others, preferences as to dividends and distributions on liquidation, conversion rights, voting rights and others, potentially diluting common stockholders or adversely affecting the market price of our common stock.
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Our largest shareholders, officers and directors and related parties, Leandro Iglesias and Alvaro Cardona, have substantial control over us and our policies as a result of their holdings in Series A Preferred Stock, and will be able to influence all corporate matters, which might not be in other shareholders’ interests.
There were 10,000 shares of Series A Preferred Stock outstanding as of the date of this Annual Report, with Mr. Iglesias holding 7,000 shares and Mr. Cardona the other 3,000 shares. There were 5,070,743 shares of our common stock issued and outstanding as of the date of this Annual report, with Mr. Iglesias holding 18,436 shares and Mr. Cardona holding 18,066 shares, which together accounts for just over 0.719% of our outstanding common stock. Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to shareholders at a rate of 51% of the total vote of shareholders, including the election of directors. Our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. By virtue of their ownership of Series A Preferred Stock and common stock, they are able to vote at a rate of approximately 51.35% of the total vote of shareholders. They are therefore able to exercise significant influence over all matters requiring approval by our stockholders, including the election of directors, the approval of significant corporate transactions, and any change of control of our Company. They could prevent transactions, which would be in the best interests of the other shareholders. Their interests may not necessarily be in the best interests of the shareholders in general.
We do not expect to pay cash dividends in the foreseeable future. Any return on investment may be limited to the value of our common stock.
We do not anticipate paying cash dividends on our common stock in the foreseeable future. The payment cash of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant. If we do not pay cash dividends, our common stock may be less valuable because a return on your investment will occur only if our stock price appreciates.
Risks Related to the Market for our Securities
If a market for our common stock does not develop, stockholders may be unable to sell their shares.
Our common stock is listed on the Nasdaq Capital Market under the symbol “IQST.” Although our shares are listed on a national securities exchange, trading in our common stock has historically been limited, and there can be no assurance that an active or sustained trading market will develop. Limited liquidity may make it difficult for stockholders to sell their shares without adversely affecting the market price. Unless we are able to generate and maintain increased investor interest in our securities, the market price of our common stock may continue to experience significant volatility.
The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control.
Our stock price is subject to a number of factors, including:
• Technological innovations or new products and services by us or our competitors;
• Government regulation of our products and services;
• The establishment of partnerships with other companies;
• Intellectual property disputes;
• Additions or departures of key personnel;
• Sales of our common stock or preferred stock;
• Our ability to integrate operations, technology, products and services;
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• Our ability to execute our business plan;
• Operating results below or exceeding expectations;
• Whether we achieve profits or not;
• Loss or addition of any strategic relationship;
• Industry developments;
• Economic and other external factors; and
• Period-to-period fluctuations in our financial results.
Our stock price may fluctuate widely as a result of any of the above. In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
If our common stock were to be delisted from the Nasdaq Capital Market, we could become subject to the SEC’s “penny stock” rules, which could reduce the level of trading activity in our stock.
Although our common stock is currently listed on the Nasdaq Capital Market and therefore exempt from the SEC’s penny stock rules,
any delisting could result in our securities being subject to those rules. The SEC generally defines a “penny stock” as an
equity security with a market price of less than $5.00 per share, subject to certain exemptions. The penny stock rules impose additional
sales practice and disclosure requirements on broker-dealers that effect transactions in penny stocks, including providing a standardized
risk disclosure document, disclosing current bid and ask quotations, detailing broker-dealer compensation, and obtaining a written determination
of suitability from the purchaser. These requirements could reduce the level of trading activity in our stock and make it more difficult
for investors to sell their shares if our securities become subject to the penny stock rules.
We will likely conduct further offerings of our equity securities in the future, in which case your proportionate interest may become diluted.
We will likely be required to conduct equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake. If our common stock shares are issued in return for additional funds, the price per share could be lower than that paid by our current shareholders. We anticipate continuing to rely on equity sales of our common stock shares in order to fund our business operations. If we issue additional common stock shares or securities convertible into shares of our common stock, your percentage interest in us could become diluted.
If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.
The trading market for our common stock will, to some extent, depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline. If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
Item 1B. Unresolved Staff Comments
None.
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Item 1C. Cybersecurity
As a technology and communications company that globally transmits large amounts of information over our networks, we recognize the critical importance of maintaining the security and integrity of information and systems under our control. We view cybersecurity risk as one of our principal enterprise-wide risks, subject to control and monitoring at various levels of management throughout our Company. We dedicate resources commensurate with our risk profile and business size to programs designed to identify, assess, manage, mitigate and respond to cybersecurity threats.
As described in Item 1A “Risk Factors,” several features of our operations heighten our susceptibility to cyber-attacks, including (i) our material reliance on systems owned, operated or controlled by unaffiliated third-party operators (including carriers and network partners), (ii) our processing and storage of large amounts of sensitive customer data in our telecommunications and fintech operations, and (iii) the complexity of our multi-continent network composed of legacy and acquired systems. Cyber-attacks on our systems may be initiated by a wide variety of intruders, including employees, cyber-criminals, nation state actors and other advanced persistent threat actors, and may include attempts by outside parties to gain access to sensitive data that is stored in or transmitted across our network. Cyber-attacks can take many forms, including computer hackings, computer viruses, ransomware, worms or other destructive or disruptive software, denial of service attacks, or other malicious activities.
We have implemented cybersecurity risk management procedures, in accordance with our risk profile and business size. We rely on our information technology to operate our business. As such, we have policies and processes designed to protect our information technology systems, some of which are managed by third parties, and resolve issues in a timely manner in the event of a cybersecurity threat or incident.
We have designed our business applications to minimize the impact that cybersecurity incidents could have on our business and have identified back-up systems where appropriate. We seek to further mitigate cybersecurity risks through a combination of monitoring and detection activities, use of anti-malware applications, employee training, quality audits and communication and reporting structures, among other processes. We have a trained group of people to carry out the activities of monitoring and detection of cybersecurity threats and respond to any cybersecurity threats or incidents. The Head of IT department is responsible for oversight of cybersecurity risks and addressing potential cybersecurity risks to business programs, employees, clients, vendors and partners. The Head of IT Department reports to our Chief Executive Officer who reports to the Audit Committee at the board-level, as appropriate.
As of December 31, 2025, the Company has not identified
any cybersecurity incidents that have materially affected, or are reasonably likely to materially affect, our business strategy, results
of operations, or financial condition.
The Company continues to monitor its systems and third-party environments for potential threats and to evaluate and enhance our cybersecurity controls as our business evolves, including following acquisitions and the expansion of fintech services.
Item 2. Properties
We do not own any material real property. Our principal executive offices are located at 300 Aragon Avenue, Suite 375, Coral Gables, FL 33134. We lease office and operational space in multiple locations to support our global operations, including facilities in the United States, Argentina, the United Kingdom, Switzerland, Turkey, and Dubai. These leases are generally short-term or cancellable with reasonable notice and are used for administrative, technical, and network operations. The disclosures concerning our leased properties and operational facilities are contained in Item 1. Business above and incorporated herein by reference. We believe our current facilities are adequate for our present needs and that suitable additional or alternative space will be available as required.
Item 3. Legal Proceedings
We are not currently a party to any material legal proceedings. From time to time, we may become involved in various legal proceedings arising in the ordinary course of our business. We have no current legal proceedings that we believe would have a material adverse effect on our business, financial condition, or results of operations.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock is listed on The Nasdaq Capital Market under the symbol “IQST”, where it has traded since May 14, 2025. Prior to that date, our common stock was quoted on the OTCQX marketplace.
The Company did not repurchase any shares of its common stock during the fiscal year ended December 31, 2025.
The following table sets forth the high and low sales prices per share of our common stock for the periods indicated. These prices reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions.
| Fiscal Year Ending December 31, 2025 | ||||||||||
| Quarter Ended | High $ | Low $ | ||||||||
| December 31, 2025 | 3.050 | 2.840 | ||||||||
| September 30, 2025 | 6.850 | 6.200 | ||||||||
| June 30, 2025 | 9.825 | 9.550 | ||||||||
| March 31, 2025 | 12.000 | 11.760 | ||||||||
| Fiscal Year Ending December 31, 2024 | ||||||||||
| Quarter Ended | High $ | Low $ | ||||||||
| December 31, 2024 | 24.752 | 21.200 | ||||||||
| September 30, 2024 | 14.320 | 13.040 | ||||||||
| June 30, 2024 | 22.624 | 19.760 | ||||||||
| March 31, 2024 | 31.600 | 28.000 | ||||||||
On March 31, 2026, the last sales price per share of our common stock was $1.59.
Holders of Our Common Stock
As of March 31, 2026, we had 5,070,743 shares of our common stock issued and outstanding, held by approximately 82 stockholders of record at our transfer agent, with additional stockholders holding our shares in street name.
Dividends
We currently intend to retain future earnings for the operation of our business. We have never declared or paid cash dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future.
In the event that a dividend is declared, common stockholders on the record date are entitled to share ratably in any dividends that may be declared from time to time on the common stock by our board of directors from funds legally available.
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There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
| 1. | We would not be able to pay our debts as they become due in the usual course of business; or |
| 2. | Our total assets would be less than the sum of our total liabilities, plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution. |
Securities Authorized for Issuance under Equity Compensation Plans
We do not have an equity compensation plan.
Recent Sales of Unregistered Securities
During the year ended December 31, 2025, the Company issued 2,130,808 shares of common stock valued at fair market value on issuance as follows:
| • | 475,125 shares for conversion of Series D Preferred Stock; | |
| • | 7,500 shares for compensation to our directors valued at $81,813; | |
| • | 1,271,720 shares for conversion of debt of $5,640,893; | |
| • | 264,980 shares for settlement of debt of $1,886,658; | |
| • | 32,400 shares for service valued at $223,200; | |
| • | 3,563 shares for common stock payable value at $82,194; | |
| • | 75,529 shares for stock dividend valued at $500,000; | |
| • | (9) shares for reverse stock split adjustment. |
These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Certain statements in this Annual Report constitute forward-looking statements. See " Forward-Looking Statements" immediately prior to Item 1 of Part I of this report for factors relating to these statements and "Risk Factors" in Item 1A of Part I of this report for a discussion of certain risk factors applicable to our business, financial condition, results of operations, liquidity or prospects.
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Results of Operations for the Years Ended December 31, 2025 and 2024
Net Revenue
Our net revenue for the year ended December 31, 2025 was $316,899,498 as compared with $283,220,442 for the year ended December 31, 2024. These numbers reflect an increase of 12% year over year on our consolidated Revenues.
When looking at the numbers by subsidiary, we have the following breakout for the years ended December 31, 2025 and 2024:
| Revenue Year Ended December 31, | ||||||||
| Subsidiary | 2025 | 2024 | ||||||
| IQSTEL Inc | $ | 220,755 | $ | — | ||||
| Etelix.com USA, LLC | 31,748,230 | 75,405,682 | ||||||
| SwissLink Carrier AG | 22,394,346 | 13,349,998 | ||||||
| QGlobal LLC | 1,766,881 | 1,694,891 | ||||||
| IoT Labs LLC | 117,370,459 | 94,170,000 | ||||||
| Smartbiz Telecom | 12,743,474 | 21,435,486 | ||||||
| Whisl Telecom | 2,916,447 | 4,301,577 | ||||||
| QXTEL Limited | 141,624,991 | 95,681,790 | ||||||
| GlobeTopper LLC | 27,955,101 | — | ||||||
| $ | 358,740,684 | $ | 306,039,424 | |||||
| Intercompany eliminations | (41,841,186 | ) | (22,818,982 | ) | ||||
| $ | 316,899,498 | $ | 283,220,442 | |||||
The continued growth in revenue is the result of the development of our commercial strategy, including the strengthening of our commercial and operational activities, as well as intercompany synergies developed throughout the year. The largest revenue concentration comes from IOT, which increased by 25% compared to last year, and QXTEL, which since its inclusion in mid-2024 continues to represent the highest share of revenue, accounting for 39% of the total volume for this period. The increase also includes the contribution from the newly acquired subsidiary, GlobeTopper LLC, which was consolidated starting July 1, 2025.
In 2024, our revenue was entirely derived from telecommunications services, with approximately 33.91% generated from SMS and 66.09% from voice. In 2025, our revenue mix evolved meaningfully: SMS increased to 36.6%, voice represented 54.51%, and our newly launched fintech operations contributed 8.89% of total revenue. The continued expansion of SMS traffic is strategically beneficial, as SMS services generally carry higher gross margins than traditional voice offerings, supporting improvements in our overall profitability profile. In addition, the introduction of fintech as a new revenue-generating segment reflects the early stages of a broader diversification strategy, reducing reliance on a single business line and positioning the Company with a more balanced and resilient revenue base over time.
Intercompany eliminations rose as well, driven by higher transactions among group entities, which are removed to avoid double counting at the consolidated level.
These intercompany transactions are part of our strategy to optimize operations across subsidiaries by leveraging more efficient routing alternatives for our voice and SMS services, cost reductions, and improved service delivery. This synergy among our entities strengthens our position in the market and contributes to enhanced gross margin results.
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Cost of Revenue
Our total cost of revenue for the year ended December 31, 2025 was $307,442,244 as compared with $274,948,693 for the year ended December 31, 2024.
When looking at the numbers by subsidiary, we have the following breakout for the years ended December 31, 2025 and 2024:
| Cost of Revenue Year Ended December 31, | ||||||||
| Subsidiary | 2025 | 2024 | ||||||
| IQSTEL Inc | $ | 52,770 | $ | — | ||||
| Etelix.com USA, LLC | 31,097,001 | 74,848,503 | ||||||
| SwissLink Carrier AG | 21,568,250 | 12,541,394 | ||||||
| QGlobal LLC | 1,183,985 | 1,300,453 | ||||||
| IoT Labs LLC | 116,258,375 | 92,196,261 | ||||||
| Smartbiz Telecom | 11,801,401 | 20,508,454 | ||||||
| Whisl Telecom | 2,441,573 | 3,606,438 | ||||||
| QXTEL Limited | 136,995,565 | 92,486,843 | ||||||
| GlobeTopper LLC | 27,403,231 | — | ||||||
| $ | 348,802,151 | $ | 297,488,346 | |||||
| Intercompany eliminations | (41,359,907 | ) | (22,539,653 | ) | ||||
| $ | 307,442,244 | $ | 274,948,693 | |||||
Our cost of revenue 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, as well as the costs of the digital prepaid products related to Fintech (GlobeTopper) operations.
The behavior in the costs shows a logical correlation with the behavior of the revenue commented above. We have reached a higher volume of revenue and every additional unit sold (Telecom and Fintech) has its corresponding termination cost.
Our cost of revenue for the year ended December 31, 2025 was $307,442,244 as compared with $ 274,948,693 for the year ended December 31, 2024. These numbers reflect an increase of 12% year over year.
The consolidation of GlobeTopper, along with the traffic volumes generated by QXTEL and the portfolio reorganization among subsidiaries, highlights the synergies created through the group’s commercial and operational integration. As a result, intercompany transactions have increased, supporting our strategy to optimize routing and improve cost efficiency. This is expected to contribute positively to future revenue and margin performance.
Gross Margin
Our gross margin, which is simply the difference between our revenues and our cost of sales, discussed above, increased from $8,271,749 in 2024 to $9,457,254 in 2025, which is an increase of 14% year-over-year.
The Company’s traffic mix continues to shift toward higher-margin services, reinforcing the strategic evolution of its telecom portfolio. In 2025, the business carried 17.4 billion SMS and short-code messages, up from 13.9 billion in 2024, an increase of 3.5 billion messages or 25.18% year over year. While this growth follows an exceptional 32.94% expansion from 2023 to 2024, the sustained double-digit trajectory highlights the strengthening role of SMS within the Company’s service mix. Because SMS consistently delivers superior gross margins compared to traditional voice, this shift not only expands volumes but also enhances the overall profitability profile of the communications segment, signaling a deliberate and effective enrichment of the Company’s product offering
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This trend is reflected in our quarterly performance: total gross margin increased from 2.74% in the fourth quarter of 2024 to 3.46% in the fourth quarter of 2025, representing a 26.17% year-over-year improvement.
| Cost of Revenue for the Three Months Ended December 31, | ||||||||
| Description | 2025 | 2024 | ||||||
| Revenue | $ | 84,215,893 | $ | 98,920,186 | ||||
| Cost of Revenue | 81,305,798 | 96,211,006 | ||||||
| $ | 2,910,095 | $ | 2,709,180 | |||||
| Gross margin % | 3.46 | % | 2.74 | % | ||||
Operating Expenses
Operating expenses for the year ended December 31, 2025 were $13,709,264 as compared with $9,105,813 for the year ended December 31, 2024. The detail by major category is reflected in the table below:
| Operating Expenses Year Ended December 31, | ||||||||
| Category | 2025 | 2024 | ||||||
| Salaries, Wages and Benefits | $ | 3,803,370 | $ | 3,639,319 | ||||
| Technology | 1,617,232 | 1,192,185 | ||||||
| Professional Fees | 916,349 | 1,110,773 | ||||||
| Legal & Regulatory | 351,570 | 328,500 | ||||||
| Travel & Events | 286,176 | 234,295 | ||||||
| Public Cost | 120,945 | 102,773 | ||||||
| Advertising | 1,878,274 | 968,206 | ||||||
| Bank Services and Fees | 238,725 | 211,591 | ||||||
| Depreciation and Amortization | 627,667 | 499,535 | ||||||
| Office, Facility and Other | 1,370,092 | 529,892 | ||||||
| Insurances | 18,902 | 63,534 | ||||||
| Bad debt expense | 6,397 | 1991 | ||||||
| $ | 11,235,699 | $ | 8,882,594 | |||||
| Stock-based compensation | 305,013 | 223,219 | ||||||
| Impairment loss of goodwill | 2,168,552 | — | ||||||
| $ | 13,709,264 | $ | 9,105,813 | |||||
When looking at the numbers by subsidiary, we have the following:
| Operating Expenses Year Ended December 31, | ||||||||
| Subsidiary | 2025 | 2024 | ||||||
| IQSTEL Inc | $ | 4,158,073 | $ | 2,881,662 | ||||
| Etelix.com USA, LLC | 495,897 | 428,603 | ||||||
| SwissLink Carrier AG | 989,396 | 974,233 | ||||||
| Itsbchain | 2,639 | 14,788 | ||||||
| QGlobal LLC | 380,029 | 552,388 | ||||||
| IoT Labs LLC | 293,111 | 246,254 | ||||||
| Global Money One | 1,006 | 762 | ||||||
| Smartbiz Telecom | 960,303 | 800,922 | ||||||
| Whisl Telecom | 334,937 | 978,760 | ||||||
| QXTEL Limited | 3,883,944 | 2,227,441 | ||||||
| GlobeTopper LLC | 547,002 | — | ||||||
| $ | 12,046,337 | $ | 9,105,813 | |||||
| Intercompany eliminations | (505,625 | ) | — | |||||
| $ | 11,540,712 | $ | 9,105,813 | |||||
| Impairment loss of goodwill | 2,168,552 | — | ||||||
| $ | 13,709,264 | $ | 9,105,813 | |||||
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General and administration expenses increased from $9,105,813 to $13,709,264 as of December 2025. IQSTEL represents the largest share of general and administration expenses for the period at 30%, followed by QXTEL with 28%.
The increase compared to the prior year is mainly driven by the expansion of the group and the consolidation of QXTEL and GlobeTopper. The most significant variations include the increase in technology expenses related to the deployment and upgrade of the switching platform to support all subsidiaries, which is expected to generate cost efficiencies once the migration process is completed.
Additionally, the Company recognized a non-cash goodwill impairment of $2,168,552. Including this effect, total operating expenses reached $13,709,264, representing an increase of 50.56% compared to the prior year. This adjustment is non-recurring in nature and does not impact cash flow.
The underlying increase in operating expenses is primarily related to higher salaries, depreciation and amortization, and general administrative costs, in line with the growth of the business and the integration of newly consolidated subsidiaries. Advertising expenses also increased to support commercial expansion, while insurance expenses decreased during the period.
We are continually identifying operational synergies among all of our subsidiaries to be more cost efficient.
Other Income (Expenses)
We had other expenses of $4,136,551 for the year ended December 31, 2025, as compared with other expense of $3,951,942 for the year ended December 31, 2024. The increase in Other Expenses in 2025 compared to 2024 is due largely to the loss on settlement of debt and salary payable of $2,441,462 for the year ended December 31, 2025 compared to $482,085 for the year ended December 31, 2024.
Net Loss
We finished the year ended December 31, 2025 with a net loss of $8,510,266 as compared to a loss of $5,180,036 during the year ended December 31, 2024. The results for the period were significantly impacted by expenses at the holding entity (IQSTEL), which include a high component of interest and other financial expenses related to the funds borrowed for the acquisition of QXTEL Limited.
Additionally, during 2025, the Company recognized a non-cash goodwill impairment of $2,168,552, which represents a material, non-recurring expense for the period and does not impact the Company’s cash flow. Excluding this effect, the variation in net loss would have been less pronounced.
Our Telecom Division, currently the primary source of revenue for the Company, continued to generate positive Operating Income. Meanwhile, our pre-revenue companies are operating with minimal expenses, focused solely on completing product and service development prior to their market launch. As we have indicated on several occasions, our strategy is to strengthen our telecommunications division so that it can serve as a lever for the development of new lines of business, such as Fintech which is already generating revenue, Cybersecurity and AI.
A comparison of the tables below highlights the progress of our Telecom Division, as evidenced by the increase in revenue, gross profit, and operating income for both the three- and twelve-month periods ended December 31, 2025. As we have previously stated, our strategy remains centered on strengthening the telecommunications segment to serve as a growth engine for the development and expansion of new business lines.
Our telecom division revenues have increased year over year. Additionally, its gross profit has risen by 6%, going from $8,271,749 to $8,737,399.
On the other hand, our Fintech division continues to strengthen its position within the Group’s strategy. For the year ended 2025, the division reported revenues of $27,955,101 and operating expenses of $547,002, resulting in operating income of $4,868 and net income of $2,176.
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This performance reflects the initial contribution from GlobeTopper, which was incorporated during 2025 and represents an important milestone for the development of this business line. While the division did not generate profits in 2024, the progress achieved in 2025 demonstrates the Company’s commitment to expanding its presence in the fintech segment and leveraging new opportunities that can also support the growth of our other business lines.
| Telecom Division | Fintech Division | Pre-revenue companies | IQSTEL | Consolidated | ||||||||||||||||||||||||||||||||||||
| Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | |||||||||||||||||||||||||||||||
| Revenues | 288,723,642 | 283,220,442 | 27,955,101 | — | — | — | 220,755 | — | 316,899,498 | 283,220,442 | ||||||||||||||||||||||||||||||
| Cost of revenue | 279,986,243 | 274,948,693 | 27,403,231 | — | — | — | 52,770 | — | 307,442,244 | 274,948,693 | ||||||||||||||||||||||||||||||
| Gross profit | 8,737,399 | 8,271,749 | 551,870 | — | — | — | 167,985 | — | 9,457,254 | 8,271,749 | ||||||||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||||||||||||||||
| General and administration | 6,831,992 | 6,208,601 | 547,002 | — | 3,645 | 15,550 | 4,158,073 | 2,881,662 | 11,540,712 | 9,105,813 | ||||||||||||||||||||||||||||||
| Impairment loss of goodwill | — | — | — | — | — | — | 2,168,552 | — | 2,168,552 | — | ||||||||||||||||||||||||||||||
| Total Operating Expenses | 6,831,992 | 6,208,601 | 547,002 | — | 3,645 | 15,550 | 6,326,625 | 2,881,662 | 13,709,264 | 9,105,813 | ||||||||||||||||||||||||||||||
| Operating income/(loss) | 1,905,407 | 2,063,148 | 4,868 | — | (3,645 | ) | (15,550 | ) | (6,158,640 | ) | (2,881,662 | ) | (4,252,010 | ) | (834,064 | ) | ||||||||||||||||||||||||
| Other income (expense) | (113,219 | ) | 41,124 | (2,692 | ) | — | (120 | ) | (4,020,640 | ) | (3,992,946 | ) | (4,136,551 | ) | (3,951,942 | ) | ||||||||||||||||||||||||
| Net income (loss) before income taxes | 1,792,188 | 2,104,272 | 2,176 | — | (3,645 | ) | (15,670 | ) | (10,179,280 | ) | (6,874,608 | ) | (8,388,561 | ) | (4,786,006 | ) | ||||||||||||||||||||||||
| Income taxes | (118,143 | ) | (394,030 | ) | — | — | — | — | (3,562 | ) | — | (121,705 | ) | (394,030 | ) | |||||||||||||||||||||||||
| Net income (loss) | 1,674,045 | 1,710,242 | 2,176 | — | (3,645 | ) | (15,670 | ) | (10,182,842 | ) | (6,874,608 | ) | (8,510,266 | ) | (5,180,036 | ) | ||||||||||||||||||||||||
| Depreciation and Amortization | 619,253 | 499,535 | 8,414 | — | — | — | — | — | 627,667 | 499,535 | ||||||||||||||||||||||||||||||
| Interest expense | 31,147 | 41,611 | 2,692 | — | — | — | 1,120,567 | 2,117,814 | 1,154,406 | 2,159,425 | ||||||||||||||||||||||||||||||
| FX Gains/Losses | 43,461 | — | 6,701 | — | — | — | (1,501 | ) | 48,661 | |||||||||||||||||||||||||||||||
| Loss on settlement of debt | — | — | — | — | — | — | 2,224,481 | 482,085 | 2,224,481 | 482,085 | ||||||||||||||||||||||||||||||
| Loss on settlement of salary payable | — | — | — | — | — | — | 216,981 | 216,981 | — | |||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | 305,013 | 223,219 | 305,013 | 223,219 | ||||||||||||||||||||||||||||||
| Impairment loss of goodwill | — | — | 2,168,552 | 2,168,552 | — | |||||||||||||||||||||||||||||||||||
| Other non recurrent | 153,786 | — | — | — | — | — | — | — | 153,786 | — | ||||||||||||||||||||||||||||||
| Taxes | 189,365 | 394,030 | 0 | — | — | — | 3,562 | — | 192,927 | 394,030 | ||||||||||||||||||||||||||||||
| Change in fair value of derivatives | 1,393,046 | 1,393,046 | ||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | 2,711,057 | 2,645,418 | 19,983 | — | (3,645 | ) | (15,670 | ) | (4,145,187 | ) | (2,658,444 | ) | (1,417,792 | ) | (28,696 | ) | ||||||||||||||||||||||||
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In evaluating our financial performance, we utilize Adjusted EBITDA as a supplemental measure to provide insights into the profitability of our core operations. (Please see Adjusted EBITDA, which is reconciled to the Net Income in the table above.) Adjusted EBITDA excludes, in addition to non-operational expenses like interest expenses, taxes, depreciation and amortization; items that we believe are not indicative of our operating performance, such as:
· Change in Fair Value of Derivative Liabilities: These adjustments reflect unrealized gains or losses that are non-operational and subject to market volatility.
· Loss on Settlement of Debt: This represents non-recurring expenses associated with specific financing activities and does not impact ongoing business operations.
· Stock-Based Compensation: As a non-cash expense, this adjustment eliminates variability caused by equity-based incentives.
· Impairment loss of Goodwill: This represents a non-cash, non-recurring charge related to the deterioration in the value of goodwill and does not impact the Company’s cash flow.
· Tax Provision: This adjustment reflects the recognition of income tax expense, which may vary depending on jurisdictional results and does not directly reflect the Company’s core operating performance.
We believe Adjusted EBITDA offers a clearer view of the cash-generating potential of our business, excluding non-recurring, non-cash, and non-operational impacts.
According to our adjusted EBITDA analysis, our Telecommunications division continues to be a high-performing segment generating solid operating profits, as adjusted EBITDA for the current period increased by 2.35% compared to the prior period. Meanwhile, the contribution of our Fintech business, which debuted with an EBITDA of $19,983, representing a significant milestone in the diversification of our business lines and supporting the Company's long-term growth strategy.
Consolidated figures show a negative Adjusted EBITDA; while this isn’t ideal, we are in a transitional period, scaling operations and investing heavily in growth initiatives with the execution of our M&A plan. Management has also identified areas for cost-cutting and operational improvements and has acted in that direction
Goodwill Impairment Analysis
During the year ended December 31, 2025, the Company performed its annual goodwill impairment assessment in accordance with ASC 350, Intangibles—Goodwill and Other. Consistent with our policy, each reporting unit was evaluated by comparing its estimated fair value to its carrying amount. Management engaged an independent valuation firm to assist in the determination of fair value using a discounted cash flow approach and market participant assumptions. The analysis indicates, “the carrying value of SwissLink Carrier AG, IoT Labs, LLC, Smartbiz Telecom, LLC and Whisl Telecom are in excess of its fair value indicating impairment in the amount of $402,445, $81,782, $796,690, and $887,635, respectively.”
Based on this analysis, the Company recorded total goodwill impairment charges of approximately $2.17 million for the year ended December 31, 2025. These non-cash charges reflect changes in the long-term financial outlook of the affected reporting units, including updated assumptions regarding revenue growth, margin performance, and discount rates. The impairment charges do not impact the Company’s liquidity, cash flows from operations, or compliance with debt covenants. Management will continue to monitor macroeconomic conditions, reporting-unit performance, and other triggering events that may require interim impairment testing.
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Liquidity and Capital Resources
As of December 31, 2025 we had total current assets of $36,162,424, compared with total current liabilities of $34,606,407, resulting in a positive working capital of $ 1,556,017 and a current ratio of approximately 1.04 to 1.
Following is a table with summary data from the consolidated statements of cash flows for the years ended December 31, 2025 and 2024, as presented.
| 2025 | 2024 | |||||||
| Net cash used in operating activities | $ | (3,844,872 | ) | $ | (2,930,306 | ) | ||
| Net cash used in investing activities | (239,651 | ) | (3,162,971 | ) | ||||
| Net cash provided by financing activities | 3,729,525 | 7,240,966 | ||||||
| Net change in cash | $ | (354,998 | ) | $ | 1,147,689 | |||
Our operating activities used $3,844,872 in the year ended December 31, 2025, as compared with $2,930,306 used in operating activities in the year ended December 31, 2024. 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 $239,651 for the year ended December 31, 2025, as compared with $3,162,971 used in investing activities for the year ended December 31, 2024. The cash used in 2024 in investing activities is largely due to the acquisition of QXTEL, where the Company invested $2,955,121, while in 2025 the cash used in investing activities was largely purchases of property and equipment totaling $113,020.
Financing activities provided $3,729,525 for the year ended December 31, 2025, as compared to $7,240,966 provided for the year ended December 31, 2024. The cash provided in 2025 was largely from loans. We have financed our operations largely through private placements and secured and unsecured debt.
Material Cash Requirements
The Company’s material cash requirements include:
- Working capital needs associated with high-volume telecom traffic settlement cycles.
- Vendor and carrier payments, including interconnection fees, SMS termination costs, and network capacity charges.
- Debt service obligations, including interest and scheduled principal payments under existing credit facilities.
- Capital expenditures related to network infrastructure, platform development, and AI-driven software enhancements.
- Regulatory and compliance costs, including licensing, audits, and data protection requirements across multiple jurisdictions.
Based upon our current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve months. We intend to fund operations through increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements. We have not attained profitable operations and even though the Company maintains a cash position very close to one third year's operating expenses, we are dependent upon obtaining financing or generating revenue from operations to continue operations for the next twelve months. Our future is dependent upon our ability to obtain financing or upon future profitable operations. We reserve the right to seek additional funds through private placements of our common stock and/or through debt financing. Our ability to raise additional financing is unknown. We do not have any formal commitments or arrangements for the advancement or loan of funds. 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 twelve-month period ended December 31, 2025.
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Critical Accounting Policies
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 Annual Report on Form 10-K for the year ended December 31, 2025; however, we consider our critical accounting policies to be those related to the allowance for doubtful accounts, valuation of assets, significant estimates in the valuation of financial instruments 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 Annual Report for a complete discussion of our significant accounting policies.
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. The Company estimates expected credit losses related to accounts receivable balances based on a review of available and relevant information including current economic conditions, projected economic conditions, historical loss experience, account aging, and other factors that could affect collectability. No allowance for doubtful accounts was recorded as of December 31, 2025 or 2024. During the years ended December 31, 2025 and 2024, the Company recorded bad debt expense of $6,397 and $1,991, respectively.
Long-Lived Assets
Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.
Intangible Assets
Intangible assets represent mainly the interconnection agreements acquired from the acquisition of QXTEL. The acquired intangible asset was recognized and measured at fair value at the time of acquisition and is amortized on a straight-line basis over the estimated economic useful life of the respective asset. The estimated useful life of the acquired interconnection agreements is 16 years.
Impairment of tangible and intangible assets
Tangible and intangible assets (excluding goodwill) are assessed at each reporting date for indications that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset's recoverable amount. The asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs of disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or a group of assets exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or the group of assets.
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Goodwill Impairment
Goodwill represents the excess purchase consideration over the fair value of identifiable net assets acquired in business combinations. We test goodwill for impairment at least annually, or more frequently if events or changes in circumstances indicate that the carrying value of a reporting unit may not be recoverable. The impairment test requires significant judgment and the use of estimates, including projected future cash flows, long-term growth rates, discount rates, and market participant assumptions.
For the annual impairment test performed as of December 31, 2025, the Company engaged an independent valuation specialist to assist in determining the fair value of each reporting unit. The valuation was performed under ASC 350 using a discounted cash flow methodology and fair value measurement concepts under ASC 820. As described in the analysis, fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
The analysis concluded that four reporting units—SwissLink Carrier AG, IoT Labs, LLC, Smartbiz Telecom, LLC, and Whisl Telecom—had carrying values that exceeded their estimated fair values, resulting in goodwill impairments of $402,445, $81,782, $796,690, and $887,635, respectively. The determination of fair value is highly sensitive to changes in key assumptions. For example, variations in discount rates, long-term growth rates, or projected cash flows could materially affect the estimated fair value of a reporting unit and potentially result in additional impairment charges in future periods.
Management believes the assumptions used in the impairment analysis are reasonable and consistent with those a market participant would apply. However, because these estimates involve inherent uncertainty, actual results may differ, and future impairment charges may be required if reporting-unit performance falls short of expectations or if macroeconomic conditions deteriorate.
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; goodwill; 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.
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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.
Income Taxes
The Company uses the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on differences between financial reporting and the tax basis of assets, liabilities, the carry forward of operating losses and tax credits, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.
Off Balance Sheet Arrangements
As of December 31, 2025, there were no off-balance sheet arrangements.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public business entities to provide disaggregated disclosures of certain income statement expense captions in the notes to the financial statements. The ASU does not change the presentation of expense captions on the face of the income statement. This guidance will be effective for the Company on January 1, 2027, and the Company is currently evaluating the impact of adoption.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision-usefulness of income tax disclosures, including expanded rate reconciliation categories and disaggregation of income taxes paid. This guidance is effective for annual periods beginning after December 15, 2024. The adoption of the ASU had an impact on our annual income tax disclosures in our consolidated financial statements. We added disclosures for income/(loss) before tax by jurisdiction. We expanded our rate reconciliation disclosures to include disaggregated reconciling items by nature utilizing the 5% threshold and added applicable percentages for each item disclosed. Additionally, we added expanded disclosures for income taxes paid, by jurisdiction utilizing a quantitative threshold of 5% of total income taxes paid. The new standard allows for prospective or retrospective adoption of these disclosure items, and management adopted the ASU on a prospective basis.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. The ASU addresses thirty-three items, representing the changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. Generally, the amendments in this Update are not intended to result in significant changes for most entities. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026. The adoption method of this ASU may vary, on an issue-by-issue basis. Early adoption is permitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.
The Company has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial statements.
| 40 |
Item 8. Financial Statements and Supplementary Data
Index to Financial Statements Required by Article 8 of Regulation S-X:
Audited Financial Statements:
| F-1 | Report of Independent
Registered Public Accounting Firm (PCAOB ID |
| F-3 | Consolidated Balance Sheets as of December 31, 2025 and 2024; |
| F-4 | Consolidated Statements of Operations for the years ended December 31, 2025 and 2024; |
| F-5 | Consolidated Statement of Stockholders’ Equity (Deficit) for the years ended December 31, 2025 and 2024; |
| F-6 | Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024; and |
| F-7 | Notes to Consolidated Financial Statements. |
| 41 |
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors iQSTEL, Inc.
Coral Gables, FL
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of iQSTEL, Inc. (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Uncertainty – See Also Critical Audit Matters Section Below
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring losses from operations, negative working capital, and does not have established sources of revenue sufficient to cover its operating costs, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Revenue Recognition
Critical Audit Matter Description
The Company recognizes revenue upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services.
| F-1 |
Significant judgment is exercised by the Company in determining revenue recognition for customer agreements, and includes the pattern of delivery (i.e., timing of when revenue is recognized) for each distinct performance obligation.
The related audit effort in evaluating management’s judgments in determining revenue
recognition for customer agreements required a high degree of auditor judgment.
How the Critical Audit Matter was Addressed in the Audit
Our principal audit procedures related to the Company’s revenue recognition for customer
agreements included the following:
• We gained an understanding of internal controls related to revenue recognition.
• We evaluated management’s significant accounting policies for compliance with accounting principles generally accepted in the United States of America.
• We selected a sample of revenues recognized and performed the following procedures:
o Obtained and read contract source documents for each selection and other documents that were part of the agreement, if applicable.
o Assessed the terms in the customer agreement and evaluated the appropriateness of management’s application of their accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions.
o We tested the mathematical accuracy of management’s calculations of revenue
and the associated timing of revenue recognized in the financial statements.
o We confirmed significant customer balances.
Going Concern
Critical Audit Matter Description
As described further in Note 3 to the consolidated financial statements, the Company has suffered recurring losses from operations, negative working capital, and does not have an established source of revenues sufficient to cover its operating costs. 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. Accordingly, the Company has determined that these factors raise substantial doubt as to the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. Management intends to continue to fund its business by way of public or private offerings of the Company’s stock or through loans from private investors, in order satisfy the Company’s obligations as they come due for at least one year from the financial statement issuance date. However, the Company has not concluded that these plans alleviate the substantial doubt related to its ability to continue as a going concern.
How the Critical Audit Matter was Addressed in the Audit
We determined the Company’s ability to continue as a going concern is a critical audit matter due to the estimation and uncertainty regarding the Company’s available capital and the risk of bias in management’s judgments and assumptions in their determination. Our audit procedures related to the Company’s assertion on its ability to continue as a going concern included the following, among others:
• We performed testing procedures such as analytical procedures to identify conditions and events that indicate that there could be substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.
• We reviewed and evaluated management's plans for dealing with adverse effects of these conditions and events.
• We inquired of Company management and reviewed company records to assess whether there are additional factors that contribute to the uncertainties disclosed.
• We assessed whether the Company’s determination that there is substantial doubt
about its ability to continue as a going concern was adequately disclosed.
Goodwill Impairment
Critical Audit Matter Description
As described in Note 2 to the consolidated financial statements, the Company recorded
$2,168,552 of goodwill impairment during the year ended December 31, 2025. The Company evaluates its goodwill and intangible assets annually or when events or circumstances, such as declines in operating results or sustained market capitalization below the Company’s carrying value, require.
How the Critical Audit Matter was Addressed in the Audit
Our principal audit procedures related to the Company’s goodwill impairment analysis included the following:
• We evaluated the design of certain internal controls over the Company’s goodwill
impairment process
• We evaluated the Company’s assessment of the value of reporting units under the discounted cash flow method.
• We involved valuation professionals with specialized skills and knowledge who assisted in evaluating the reasonableness of the valuation methodologies and significant assumptions selected by management.
/s/
We have served as the Company's
auditor since 2020. Pittsburgh,
April 6, 2026
| F-2 |
IQSTEL INC
Consolidated Balance Sheets
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventory | ||||||||
| Due from related parties | ||||||||
| Prepaid and other current assets | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible asset, net | ||||||||
| Goodwill | ||||||||
| Deferred tax assets | ||||||||
| Other assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued and other current liabilities | ||||||||
| Contract liabilities | ||||||||
| Due to related parties | ||||||||
| Loans payable - net of discount of $ | ||||||||
| Loans payable - related parties | ||||||||
| Convertible notes - net of discount of
$ | ||||||||
| Contingent liability for acquisition of subsidiary | ||||||||
| Stock payable for acquisition of subsidiary | ||||||||
| Total Current Liabilities | ||||||||
| Convertible notes - net of discount of
$ | ||||||||
| Loans payable, non-current | ||||||||
| Employee benefits, non-current | ||||||||
| TOTAL LIABILITIES | ||||||||
| Stockholders' Equity | ||||||||
| Preferred stock: authorized; par value | ||||||||
| Series A Preferred
stock:
designated;
par value, shares issued and outstanding | ||||||||
| Series B Preferred
stock:
designated;
par value, and shares issued and outstanding, respectively | ||||||||
| Series C Preferred stock: designated; par value, shares issued and outstanding | ||||||||
| Series D Preferred
stock:
designated;
par value, and shares issued and outstanding, respectively | ||||||||
| Common stock: authorized; par value and shares issued and outstanding, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Equity attributed to stockholders of IQSTEL Inc. | ||||||||
| Equity attributable to noncontrolling interests | ||||||||
| TOTAL STOCKHOLDERS' EQUITY | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-3 |
IQSTEL INC
Consolidated Statements of Operations
Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenue | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| General and administration | ||||||||
| Impairment loss of goodwill | ||||||||
| Total operating expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income (expense) | ||||||||
| Other income | ||||||||
| Other expenses | ( | ) | ( | ) | ||||
| Interest expense | ( | ) | ( | ) | ||||
| Change in fair value of derivative liabilities | ( | ) | ||||||
| Loss on settlement of debt | ( | ) | ( | ) | ||||
| Loss on settlement of salary payable | ( | ) | ||||||
| Total other expense | ( | ) | ( | ) | ||||
| Net loss before provision for income taxes | ( | ) | ( | ) | ||||
| Income taxes | ( | ) | ( | ) | ||||
| Net loss | ( | ) | ( | ) | ||||
| Less: Net income attributable to noncontrolling interests | ||||||||
| Net loss attributed to IQSTEL Inc. | $ | ( | ) | $ | ( | ) | ||
| Dividend on Series B Preferred Stock | ( | ) | ( | ) | ||||
| Undeclared dividend on Series D Preferred Stock | ( | ) | ||||||
| Net loss attributed to stockholders of IQSTEL Inc. | $ | ( | ) | $ | ( | ) | ||
| Comprehensive loss | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Foreign currency adjustment | ||||||||
| Total loss | $ | ( | ) | $ | ( | ) | ||
| Less: Comprehensive income attributable to noncontrolling interests | ||||||||
| Net comprehensive loss attributed to IQSTEL Inc. | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted loss per common share | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of common shares outstanding - Basic and diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
IQSTEL INC
Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
For the years ended December 31, 2025 and 2024
| Series A Preferred Stock | Series B Preferred Stock | Series D Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Additional Paid in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total | Non Controlling Interest | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||
| Balance - December 31, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||
| Series B Preferred stock issued as dividend | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for settlement of debt | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for conversion of debt | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued in conjunction with convertible notes | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for the extension of debt | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for warrant exercises | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for conversion of series B preferred stock | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for cash | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Resolution of derivative liabilities upon exercise of warrant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock payable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of subsidiary | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance - December 31, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Series B Preferred stock issued as dividend | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series B Preferred stock issued for settlement of salary payable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series D Preferred stock issued for settlement of debt | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for conversion of series D preferred stock | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for conversion of debt | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for settlement of debt | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for service | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for common stock payable | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividend | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock split adjustment | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividend to non-controlling interest | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of subsidiary | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance - December 31, 2025 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
IQSTEL INC
Consolidated Statements of Cash Flows
| December 31, Years Ended | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock based compensation | ||||||||
| Bad debt expense | ||||||||
| Depreciation and amortization | ||||||||
| Impairment loss | ||||||||
| Amortization of debt discount | ||||||||
| Change in fair value of derivative liabilities | ||||||||
| Loss on settlement of debt | ||||||||
| Loss on settlement of salary payable | ||||||||
| Deferred income tax (benefit) expense | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventory | ( | ) | ||||||
| Prepaid and other assets | ( | ) | ( | ) | ||||
| Due from related parties | ( | ) | ||||||
| Accounts payable | ||||||||
| Accrued and other current liabilities | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Acquisitions of subsidiary, net of cash received | ( | ) | ( | ) | ||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Payment of loan receivable - related party | ( | ) | ( | ) | ||||
| Collection of amounts due from related parties | ||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from loans payable | ||||||||
| Repayments of loans payable | ( | ) | ( | ) | ||||
| Repayments of note payable issued for acquisition of subsidiary | ( | ) | ||||||
| Proceeds from loans payable - related parties | ||||||||
| Repayment of loans payable - related parties | ( | ) | ( | ) | ||||
| Proceeds from common stock payable | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Proceeds from common stock issued | ||||||||
| Proceeds from convertible notes | ||||||||
| Repayment of convertible notes | ( | ) | ( | ) | ||||
| Dividend paid to non-controlling interest | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash | ||||||||
| Net change in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Non-cash transactions: | ||||||||
| Series B Preferred stock issued as dividend | $ | $ | ||||||
| Series B Preferred stock issued for settlement of salary payable | $ | $ | ||||||
| Series D Preferred stock issued for settlement of debt | $ | $ | ||||||
| Common stock issued for settlement of debt | $ | $ | ||||||
| Common stock issued in connection with convertible notes | $ | $ | ||||||
| Common stock issued for conversion of debt | $ | $ | ||||||
| Common stock issued for modification of debts | $ | $ | ||||||
| Cashless warrant exercised | $ | $ | ||||||
| Common stock issued for conversion of preferred stock | $ | $ | ||||||
| Common stock issued for common stock payable | $ | $ | ||||||
| Common stock dividend | $ | $ | ||||||
| Resolution of derivative liabilities | $ | $ | ||||||
| Note payable issued for acquisition of subsidiary | $ | $ | ||||||
| Contingent liability for acquisition of subsidiary | $ | $ | ||||||
| Stock payable for acquisition of subsidiary | $ | $ | ||||||
| Purchase of vehicle with financing loan and a related party advance | $ | $ | ||||||
| Stock split adjustment | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-6 |
IQSTEL INC
Notes to the Consolidated Financial Statements
December 31, 2025
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
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 over 603 active interconnection agreements with mobile companies, fixed line companies and other wholesale carriers.
The Company is a technology company with a presence in 20 countries and approximately 100 employees that is offering leading-edge services through its three business divisions.
The Telecom Division, which represents the majority of current operations and which also represents 91% of all of the Company’s revenues, offers VoIP, SMS, proprietary Internet of Things (IoT) solutions, and international fiber-optic connectivity through its subsidiaries: Etelix.com USA, LLC, SwissLink Carrier AG, Smartbiz Telecom LLC, Whisl Telecom LLC, IoT Labs, LLC, QGlobal SMS, LLC, and QXTEL LIMITED.
Also under the Telecom Division, the Company’s developing Blockchain Platform Business Line offers our proprietary Mobile Number Portability Application (MNPA) to serve the in-country portability needs through its subsidiary, ItsBchain, LLC.
The Company’s developing Fintech Business Line offers a complete Fintech ecosystem MasterCard Debit Card, US Bank Account (No SSN Needed), Mobile App/Wallet (Remittances, Mobile Top Up). The Company’s Fintech subsidiary, Global Money One Inc., is to provide immigrants access to reliable financial services that makes it easier to manage their money and stay connected with their families back home. Additionally, GlobeTopper LLC (www.GlobeTopper.com) our most recent acquisition, plays a strategic role in supporting the expansion and integration of our business divisions. Through its operations, the Company continues to strengthen its global presence and enhance the synergy in Fintech segments through its solution for gift card programs, representing 9% of our revenues for the year ended December 31, 2025.
Our developing Artificial Intelligence (AI) division, Reality Border (www.realityborder.com), initially developed an AI-enhanced immersive digital experience platform intended to support customer interaction and content presentation in virtual environments. Building on that early development work, including conversational interfaces, multilingual interaction models, and AI-driven workflow design, Reality Border now develops practical AI software solutions for enterprise and telecommunications applications.
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States of America. The Company’s fiscal year end is December 31.
| F-7 |
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 Inc (“Global Money One”), Whisl Telecom LLC (“Whisl”), Smartbiz Telecom LLC (“Smartbiz”), QXTEL LIMITED (“QXTEL”) and GlobeTopper LLC (“GlobeTopper”). All significant intercompany balances and transactions have been eliminated in consolidation.
Reverse stock split
The Company announced a reverse stock split effective on May 2, 2025 (the “Market Effective Date”). The Board of Directors of the Company approved a reverse stock split of the Company’s authorized, issued and outstanding shares of common stock, par value per share (the “Common Stock”), at a ratio of 1-for-80. Prior to the Reverse Stock Split, the Company was authorized to issue shares of Common Stock. As a result of the Reverse Stock Split, the Company is authorized to issue shares of Common Stock. As of December 31, 2024, there were 202,976,685 shares of Common Stock outstanding and there were 182,211,063 weighted average number of common shares outstanding for the year ended December 31, 2024. As a result of the Reverse Stock Split, there were shares of Common Stock outstanding at December 31, 2024 and there were 2,314,413 weighted average number of common shares outstanding for the year ended December 31, 2024. All issued and outstanding common stock, options and warrants to purchase common stock and per share amounts contained in this report have been adjusted retroactively to reflect the change in capital structure for all periods presented.
All share and per share information in these financial statements retroactively reflect this reverse stock split.
Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP in the United States of America 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 U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”.
| F-8 |
The functional currency and reporting currency of Etelix, QGlobal, ItsBchain, IoT Labs, Whisl, Smartbiz, Global Money One, QXTEL and
GlobeTopper is the U.S. dollar, while SwissLink’s functional currency was the Swiss Franc (“CHF”). At January 1, 2024,
we changed the functional currency of SwissLink from their respective local currency to the US dollar. The change in functional currency
is due to increased exposure to the US dollar as a result of a change in facts and circumstances in the primary economic environment
in which this subsidiary operates. The effects of the change in functional currency were not significant to our consolidated financial
statements.
For the years ended December 31, 2025 and 2024,
the Company recorded exchange loss of $
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
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. The Company estimates expected credit losses related to accounts receivable balances based on a review of available and relevant
information including current economic conditions, projected economic conditions, historical loss experience, account aging, and other
factors that could affect collectability. No allowance for doubtful accounts was recorded as of December 31, 2025 or 2024. During
the years ended December 31, 2025 and 2024, the Company recorded bad debt expense of $
Inventory
Inventories, consisting of smart gas parts, are primarily accounted for using the first-in-first-out (“FIFO”) method of accounting. Inventories are measured at the lower of cost and net realizable value. The Company estimates the net realizable value of inventories based on an assessment of expected sales prices.
Long-Lived Assets
Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.
Fixed Assets
Fixed assets, consisting of telecommunications
equipment and software, are recorded at cost reduced by accumulated depreciation and amortization. Depreciation and amortization expense
is recognized over the assets’ estimated useful lives of
| F-9 |
Intangible Assets
Intangible assets represent mainly the interconnection
agreements acquired from the acquisition of QXTEL. The acquired intangible asset was recognized and measured at fair value at the time
of acquisition and is amortized on a straight-line basis over the estimated economic useful life of the respective asset. The estimated
useful life of the acquired interconnection agreements is
Impairment of tangible and intangible assets
Tangible and intangible assets (excluding goodwill) are assessed at each reporting date for indications that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset's recoverable amount. The asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs of disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or a group of assets exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or the group of assets.
Goodwill
We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.
Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The fair value of each reporting unit is estimated primarily through the use of a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital.
The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit.
As a result of the evaluation of goodwill, the
Company recognized $
The following table provides a summary of changes in the carrying amounts of goodwill.
| Balance at December 31, 2023 | $ | |||
| Additions | ||||
| Balance at December 31, 2024 | $ | |||
| Additions | ||||
| Impairment loss | ( | ) | ||
| Balance at December 31, 2025 | $ |
| F-10 |
Retirement Benefit Costs
Payments to defined contribution retirement benefit schemes for SwissLink are charged as an expense as they fall due. Payments made to state-managed retirement benefit schemes are dealt with as payments to defined contribution schemes where the Company’s obligations under the schemes are equivalent to those arising in a defined contribution retirement benefit scheme.
For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the period in which they occur. They are recognized outside the income statement and are presented in other comprehensive income. Past service cost is recognized immediately in the income statement in the period in which it occurs.
The retirement benefit obligation recognized in the balance sheet represents the present value of the defined obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of the scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the scheme.
The Company has adopted ASC 260, ”Earnings per 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 to common stockholders less the cumulative undeclared preferred stock dividend by the weighted average number of shares of common stock outstanding during the year. 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. Dilutive potential common shares include outstanding Series B Preferred stock and Series D Preferred stock and they were excluded from the computation of diluted net loss per share as the result was anti-dilutive for the years ended December 31, 2025 and 2024.
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, accounts receivable, 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. Based on the Federal Deposit Insurance Corporation (FDIC) applicable in the United Sates, Switzerland’s deposit protection system (Esisuisse) and the Financial Services Compensation Scheme (FSCS) applicable in the U.K., 58.55% of our cash and cash equivalent are protected by the applicable government insurance limits.
During the year ended December 31, 2025, we
had 37 customers representing
Approximately
| F-11 |
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; goodwill; 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-12 |
Income Taxes
The Company uses the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on differences between financial reporting and the tax basis of assets, liabilities, the carry forward of operating losses and tax credits, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.
Related Parties
The Company follows ASC 850, “Related Party Disclosures” for the identification of related parties and disclosure of related party transactions (see Note 15).
Revenue Recognition
Telecommunications
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 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 client.
Usage charges refer to the fees that customers are billed based on their actual usage of the services. For voice services, this typically means charges are based on the duration of calls made. For SMS (text messaging), it usually means charges per message sent. Other recurring charges are referred to charges for services such as (1) Global DIDs, (2) Global Toll-Free Numbers, (3) PBX (Private Branch Exchange) for small businesses, and (4) SIP Trunking. The provision of these services usually has set-up fees and are offered on a subscription or month-to-month basis.
Revenue is reported on a gross basis since the Company acts as the principal in the transaction, meaning it has control over the goods or services before they are transferred to the customer. This includes having the primary responsibility for fulfilling the contract and determining the price. With respect to the specific performance obligations of the Company in its contracts with its customers, our standard service agreement establishes the following:
| • | The Company agrees to furnish to Customer, and Customer agrees to purchase from the Company, International Long Distance telecommunication services and/or SMS services at the rates agreed to in writing by the Parties. | ||
| • | The Company will provide, operate and maintain communications equipment, international links and network administration and support in the United States and other countries as may be agreed upon. | ||
| • | The Company will be responsible for its own expenses and will provide, operate, and maintain transmission facilities required to link its domestic network with the other Party's nearest point of presence (POP). | ||
| • | The Company shall provide Customer all required IP network addresses, Domain Name Server (DNS) information and, if necessary, the associated prefixes used to exchange voice traffic as provided on the provisioning form. | ||
| • | The Company shall take all appropriate security measures to protect its network from fraudulent traffic coming from unknown or unauthorized sources. Any and all IP and network information received by the Company from Customer for the purposes of this agreement shall be strictly confidential, and disclosed only to those employees or personnel with a need to know. |
| F-13 |
The Company recognizes revenue from telecommunication services in accordance with ASC 606. Topic 606 establishes a comprehensive 5 step framework for determining revenue recognition. Under this framework, the Company considers each service a single performance obligation, since typically, the Company provides a series of distinct services.
Under ASC 606, voice and SMS termination services typically qualify for over time recognition because the customer receives and consumes the benefits as the entity performs
| • | Each call or message is terminated in real time. | |
| • | The customer cannot "stockpile" the service — it's consumed instantly. | |
| • | The service is indivisible and recurring, with no alternative use. |
Fintech
The Company’s primary performance obligation is the transfer of digital prepaid products to customers upon purchase. Revenue is recognized at a point in time when the digital prepaid products are made available to the customer, as this is when the customer obtains control and can benefit from the use of the products. The Company has evaluated additional services, including API integration and technical support, and determined that these services are not distinct performance obligations. These services are highly interdependent and integrated with the primary obligation to deliver digital prepaid products. As such, revenue recognition for these services is bundled with the primary performance obligation and recognized at the same point in time.
The transaction price is determined based on the pricing appendix provided to customers at the time of contract signing, with the Company reserving the right to adjust prices with a three-day notice. Since the Company has only one primary performance obligation, there is no allocation of the transaction price across multiple obligations. The application of the 5 step Topic 606 revenue recognition framework to the Company's operations is depicted as follows:
| Topic 606 Conceptual Framework | Related Company Policy & Procedures |
Step 1 Identify the contract(s) with customer
|
A contract is defined as an approved mutual agreement between the Company and a customer setting performance obligation, and criteria that must be met in accordance with the Company's customary commercial business practices and entered into with the probable expectation that all estimated consideration will be realized in the ordinary course of business.
|
Step 2 Identify the performance obligations
|
Performance obligations are identified in the customer agreement, and any subsequent amendments stated in per minute, time and message usage criteria; and digital prepaid products. The Company considers each service a single performance obligation, including instances where the Company provides a series of services that are substantially the same and have the same pattern of transfer.
|
Step 3 Determine the transaction price
|
The transaction price is determined at contract inception and is subsequently reviewed periodically to reflect applicable rate amendments, trends in regulatory, market conditions and usage of service and products by a customer. The transaction price excludes amounts collected on behalf of third parties such as sales taxes and regulatory fees.
|
Step 4 Allocate the transaction price to the performance obligations
|
The transaction price is allocated to each performance obligation based on the standalone contractual selling price of the time measured service, net of any related discount.
|
Step 5 Recognize revenue when the entity satisfies a performance obligation
|
The Company recognizes revenues from contracts with customers when control of the usage of the services and digital prepaid products has been transferred to the customer, as recorded and measured by the Company's internal information systems. Revenues are recognized at the probable amount of consideration expected in exchange for transferring control of usage. |
| F-14 |
Cost of revenue
Costs of revenue represent direct charges from vendors that the Company incurs to deliver services to its customers. These costs include usage charges for voice and SMS termination services, which are recognized over time consistent with the Company’s revenue-recognition pattern for these services, as well as the acquisition cost of digital prepaid products purchased from issuing partners for resale, which is recognized at a point in time when the products are made available to customers.
Lease
The Company leases office space for corporate and network monitoring activities and to house telecommunications equipment.
In accordance with ASC 842, “Leases,” we determine if an arrangement is a lease at inception.
The office lease meets the definition of a short-term lease because the lease term is 12 months or less. Consequently, consistent with Company’s accounting policy election, the Company does not recognize the right-of-use asset and the lease liability arising from this lease.
Reclassification
Certain amounts in the consolidated financial statements of prior year periods have been reclassified to conform to the current period’s presentation.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03 Final Standard on Income Statement: Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This guidance will be effective for us on January 1, 2027. The Company is currently evaluating the impact of adopting ASU 2024-03.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. The ASU addresses thirty-three items, representing the changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. Generally, the amendments in this Update are not intended to result in significant changes for most entities. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026. The adoption method of this ASU may vary, on an issue-by-issue basis. Early adoption is permitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.
The Company has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial statements.
| F-15 |
Recently adopted accounting pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements prospectively to the current annual period.
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, minimal or negative working capital 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, and loans from third parties. 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 29, 2025, the Company entered into a
Unit Purchase Agreement (the “Agreement”) with Craig Span (the “Seller”) and GlobeTopper, LLC, a Delaware limited
liability company, pursuant to which the Company agreed to acquire fifty-one percent (
Pursuant to the Agreement, the Company acquired
the Transferred Membership Interests of GlobeTopper for a total purchase price consisting of $
Additional payments based on GlobeTopper’s EBITDA growth, payable in common shares of the Company at a 20% discount to the greater of the VWAP during the five days following the applicable period or preceding the payment date, will be payable as follows:
| • | September 30, 2026: 50% of the positive difference between EBITDA at acquisition and EBITDA 12 months post-Closing. | |
| • | September 30, 2027: 50% of the positive difference between EBITDA 12 months and 24 months post-Closing. |
The acquisition was closed on July 1, 2025. GlobeTopper has been included in our consolidated results of operations since the acquisition date.
| F-16 |
The following table summarizes the fair value of the consideration paid by the Company:
| July 1, | ||||
| Fair Value of Consideration: | 2025 | |||
| Cash | $ | |||
| Promissory note | ||||
| IQSTEL common stock | ||||
| Contingent liability | ||||
| Total Purchase Price | $ | |||
The following table summarizes the preliminary identifiable assets acquired and liabilities assumed upon acquisition of GlobeTopper and the calculation of goodwill:
| Total purchase price | $ | |||
| Assets Acquired: | ||||
| Cash | ||||
| Prepaid expenses and other current assets | ||||
| Total identifiable assets | ||||
| Liabilities Assumed: | ||||
| Other current liabilities | ( | ) | ||
| Contract liabilities | ( | ) | ||
| Line of credit | ( | ) | ||
| Total liabilities assumed | ( | ) | ||
| Net assets | ( | ) | ||
| Non-controlling interest - 49% | ||||
| Total net assets | ( | ) | ||
| Goodwill | $ |
QXTEL
On
The purchase price (the “Purchase Price”)
payable to the Seller for the shares was $
| F-17 |
At closing, in addition to the $
During the years ended December 31, 2025 and
2024, the Company repaid $
The acquisition was closed on April 1, 2024. QXTEL has been included in our consolidated results of operations since the acquisition date.
The following table summarizes the fair value of the consideration paid by the Company:
| April 1, | ||||
| Fair Value of Consideration: | 2024 | |||
| Cash | $ | |||
| Promissory note | ||||
| Contingent liability | ||||
| Total Purchase Price | $ | |||
The following table summarizes the identifiable assets acquired and liabilities assumed upon acquisition of QXTEL and the calculation of goodwill:
| Total purchase price | $ | |||
| Cash | ||||
| Accounts receivable | ||||
| Due from related party | ||||
| Other asset | ||||
| Equipment | ||||
| Intangible assets recognized | ||||
| Total identifiable assets | ||||
| Accounts payable | ( | ) | ||
| Other current liabilities | ( | ) | ||
| Total liabilities assumed | ( | ) | ||
| Net assets | ||||
| Non-controlling interest - | ( | ) | ||
| Total net assets | ||||
| Goodwill | $ | |||
| F-18 |
Unaudited combined proforma results of operations for the years ended December 31, 2025 and 2024 as though the Company acquired QXTEL and GlobeTopper on January 1, 2024, are set forth below:
| Years Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other expense | ( | ) | ( | ) | ||||
| Income tax | ( | ) | ( | ) | ||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
NOTE 5 – PREPAID AND OTHER CURRENT ASSETS
Prepaid and other current assets at December 31, 2025 and 2024 consisted of the following:
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Other receivable | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Advance payment | ||||||||
| Tax receivable | ||||||||
| Deposit for acquisition of asset | ||||||||
| Security deposit | ||||||||
| Prepaid Expenses | $ | $ | ||||||
NOTE 6 – PROPERTY AND EQUIPMENT
Property and equipment at December 31, 2025 and 2024 consisted of the following:
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Telecommunication equipment | $ | $ | ||||||
| Telecommunication software | ||||||||
| Vehicle | ||||||||
| Other equipment | ||||||||
| Total property and equipment | ||||||||
| Accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Total property and equipment | $ | $ | ||||||
Depreciation expense for the years ended December
31, 2025 and 2024 amounted to $
| F-19 |
NOTE 7 – INTANGIBLE ASSETS
Intangible assets at December 31, 2025 and 2024 consisted of the following:
2025
| Useful life | Gross carrying amount | Accumulated amortization | Net carrying amount | |||||||||||
| New gas regulator intangible | Not yet in service | $ | $ | |||||||||||
| Interconnection agreements | ( | ) | ||||||||||||
| $ | $ | ( | ) | $ | ||||||||||
2024
| Useful life | Gross carrying amount | Accumulated amortization | Net carrying amount | |||||||
| New gas regulator intangible | Not yet in service | $ | $ | $ | ||||||
| Interconnection agreements | ( | ) | ||||||||
| $ | $ | ( | ) | $ | ||||||
Amortization expense for the years ended December
31, 2025 and 2024 amounted to $
The following table outlines the estimated future amortization expense at December 31, 2025:
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| $ |
NOTE 8 – ACCRUED AND OTHER CURRENT LIABILITIES
Accrued and other current liabilities at December 31, 2025 and 2024 consisted of the following
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accrued liabilities | $ | $ | ||||||
| Cost provision | ||||||||
| Accrued interest | ||||||||
| Salary payable - management | ||||||||
| Salary payable and employee benefit | ||||||||
| Other current liabilities | ||||||||
| Income tax payable | ||||||||
| Total accrued and other current liabilities | $ | $ | ||||||
| F-20 |
NOTE 9 - LOANS PAYABLE
Loans payable at December 31, 2025 and 2024 consisted of the following:
| December 31, | December 31, | Interest | ||||||||||||
| 2025 | 2024 | Term | rate | |||||||||||
| Martus | $ | $ | Note was issued on | % | ||||||||||
| Darlene Covid19 | Note was issued on | % | ||||||||||||
| Promissory note payable | Note was issued | % | ||||||||||||
| Promissory note payable - acquisition of QXTEL | Note was issued | % | ||||||||||||
| Promissory note payable | Note was issued | % | ||||||||||||
| Promissory note payable | Note was issued | % | ||||||||||||
| Promissory note payable | Note was issued | % | ||||||||||||
| Promissory note payable | Note was issued | % | ||||||||||||
| Promissory note payable | Note was issued | % | ||||||||||||
| Promissory note payable | Note was issued | % | ||||||||||||
| Promissory note payable | Note was issued | % | ||||||||||||
| Promissory note payable | Note was issued | % | ||||||||||||
| Promissory note payable | Note was issued | % | ||||||||||||
| Promissory note payable | Note was issued | % | ||||||||||||
| Financing loan | $1,148.94
monthly payment for | % | ||||||||||||
| Total | ||||||||||||||
| Less: Unamortized debt discount | ( | ) | ( | ) | ||||||||||
| Total loans payable | ||||||||||||||
| Less: Current portion of loans payable | ( | ) | ( | ) | ||||||||||
| Long-term loans payable | $ | $ | ||||||||||||
| F-21 |
Loans payable - related parties at December 31, 2025 and 2024 consisted of the following:
| December 31, | December 31, | Interest | ||||||||||||
| 2025 | 2024 | Term | rate | |||||||||||
| 49% of Shareholder of SwissLink | $ | $ | % | |||||||||||
| 49% of Shareholder of SwissLink | % | |||||||||||||
| Minority Shareholder of QXTEL | Note was due on | % | ||||||||||||
| Total | ||||||||||||||
| Less: Current portion of loans payable - related parties | ||||||||||||||
| Long-term loans payable - related parties | $ | $ | ||||||||||||
During the years ended December 31, 2025 and
2024, the Company borrowed from third parties totaling $
During the year ended December 31, 2025, the
Company issued a note payable of $
During the years ended December 31, 2025 and
2024, the Company recorded interest expense of $
During the year ended December 31, 2025, the Company settled loans as follows;
| • | Principal
amount and accrued interest of 5 notes payable issued in June through October 2024 by issuing shares
of common stock. As a result, the Company recorded a loss on settlement of debt of $ |
||
| • | Principal
amount and accrued interest of 3 notes payable issued in June 2025 by issuing shares
of Series D Preferred Stock. As a result, the Company recorded a loss on settlement of debt of $ |
||
| • | Principal
amount and accrued interest of 4 notes payable issued in January through May 2025 by issuing shares
of common stock. As a result, the Company recorded a loss on settlement of debt of $ |
||
During the year ended December 31, 2024, the Company settled 2 loans as follows:
| • | Principal
amount and accrued interest of a note payable issued in April 2023 by issuing shares
of common stock. As a result, the Company recorded a loss on settlement of debt of $ |
||
| • | Principal
amount of future receipts loan issued in April 2024 by early settlement. As a result, the Company recorded a loss on settlement of
debt of $ |
| F-22 |
NOTE 10 - CONVERTIBLE LOANS
Convertible loans at December 31, 2025 and 2024 consisted of the following:
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Issued in fiscal year 2024 | $ | $ | ||||||
| Total convertible notes payable | ||||||||
| Less: Unamortized debt discount | ( | ) | ||||||
| Total convertible notes | ||||||||
| Less: current portion of convertible notes | ||||||||
| Long-term convertible notes | $ | $ | ||||||
During the years ended December 31, 2025 and
2024, the Company recorded interest expense of $
Conversion
During the year ended December 31, 2025, one
note holder converted notes with principal amounts of $
During the year ended December 31, 2024,
one note holder converted notes with principal amounts of $
Settlement
During the year ended December 31, 2025, the
Company settled the principal amount of convertible notes of $
Issued in fiscal year 2025
During the year ended December 31, 2025, the
Company borrowed amounts from third parties totaling $
| Principal | Issuance | Maturity | Interest | Payment | ||||||||||||
| amount | date | Date | rate | schedule | ||||||||||||
| $ | ||||||||||||||||
| $ | ||||||||||||||||
| $ | The outstanding balance was paid on December 5, 2025 | |||||||||||||||
| F-23 |
Issued in fiscal year 2024
In January 24, 2024, we entered into a securities
purchase agreement (the “SPA”) with M2B Funding Corp., a Florida corporation, for it to purchase up to the principal amount
of $
The initial tranche was executed in January
2024 for $
In October 2024, we entered into a Memorandum of Understanding (the “Agreement”) with M2B Funding Corp. to extend the maturity date on three promissory notes in exchange for stock consideration. Pursuant to the Agreement, the following promissory notes were extended by 12 months from their original date of maturity:
| • | First
Note: Originally due January 1, 2025, with an outstanding amount of $ | |
| • | Second
Note: Originally due March 12, 2025, with an outstanding amount of $ | |
| • | Third
Note: Originally due March 25, 2025, with an outstanding amount of $ |
In consideration for this extension, the Company
issued
restricted common shares. As a result of the extension, the Company recognized the loss on debt extinguishment of $
Additionally, during the year ended December
31, 2024, the Company borrowed amounts from a third party totaling $
| Principal | Issuance | Maturity | Interest | Payment | ||||||||||||
| amount | date | date | rate | schedule | ||||||||||||
| $ | 10 payments each in the amount of $ | |||||||||||||||
| $ | ||||||||||||||||
| $ | 9 payments each in the amount of $ | |||||||||||||||
| $ | ||||||||||||||||
| $ | 9 payments each in the amount of $ | |||||||||||||||
| $ | Outstanding balance was paid on | |||||||||||||||
| F-24 |
NOTE 11 – WARRANTS
On February 12, 2024, we issued a Common Stock
Purchase Option (the “Option”) to ADI Funding LLC (“ADI Funding”) for that
expired on December 31, 2024, for the right to acquire up to shares
of common stock.
If the Company issued securities less than the exercise price of the option, ADI Funding had a right to also use that lesser price in the exercise of its Option. The Option also contained rights to any Company distributions and consideration in fundamental transactions.
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
The Company determined that the warrants had net cash settlement and categorized the warrants as a liability in the accompanying consolidated financial statements.
A summary of activity regarding warrants issued as follows:
| Warrants Outstanding | |||||||||||||
| Weighted Average | Weighted Average Remaining | ||||||||||||
| Shares | Exercise Price | Contractual life (in years) | |||||||||||
| Outstanding, December 31, 2023 | $ | — | |||||||||||
| Granted | |||||||||||||
| Exercised | ( | ) | |||||||||||
| Forfeited/canceled | |||||||||||||
| Outstanding, December 31, 2024 | $ | — | |||||||||||
The intrinsic value of the warrants at December 31, 2024 was . No warrants were outstanding as of and for the year ended December 31, 2025.
| F-25 |
NOTE 12 – DERIVATIVE LIABILITIES
Fair Value Assumptions Used in Accounting for Derivative Liabilities
ASC 815 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 at December 31, 2024. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock 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 year ended December 31, 2024, the estimated fair values of the liabilities measured on a recurring basis were as follows:
| Year ended | ||||
| December 31, | ||||
| 2024 | ||||
| Expected term | | |||
| Expected average volatility | | |||
| Expected dividend yield | ||||
| Risk-free interest rate | - |
The following table summarizes the changes in the derivative liabilities during the years ended December 31, 2024:
| Fair Value Measurements Using Significant Observable Inputs (Level 3) | ||||
| Balance - December 31, 2023 | $ | |||
| Addition of new derivatives recognized as cash received | ||||
| Exercise on issuance of common stock | ( | ) | ||
| Change in fair value of the warrant | ||||
| Balance - December 31, 2024 | $ | |||
The following table summarizes the change in fair value of derivative liabilities included in the income statement for the years ended December 31, 2025 and 2024, respectively.
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Addition of new derivatives recognized as loss on derivatives | $ | $ | ||||||
| Revaluation of derivative liabilities | ||||||||
| Change in fair value of derivative liability | $ | $ | ||||||
There were no derivative liabilities outstanding as of and for the year ended December 31, 2025.
| F-26 |
NOTE 13 – STOCKHOLDERS’ EQUITY
Common Stock
The Company’s authorized capital consists of shares of common stock with a par value of per share.
During the year ended December 31, 2025, the Company issued shares of common stock, valued at fair market value on issuance as follows:
• shares for conversion of Series D Preferred Stock
• shares for compensation to our directors valued at
•
shares for conversion of debt of $
•
shares for settlement of debt of $
•
shares for service valued at $
•
shares for common stock payable value at $
•
shares for stock dividend valued at $
• shares for reverse stock split adjustment
During the year ended December 31, 2024, the Company issued shares of common stock and 3,563 shares payable, valued at fair market value on issuance as follows:
• shares for compensation to our directors valued at
•
shares
for settlement of debt valued at $
•
shares
in conjunction with convertible notes valued at $
• shares for exercise of warrants for
•
shares
for conversion of debt of $
•
shares
issued for cash of $
•
shares
for the extension of debt valued at $
• shares for conversion of Series B Preferred Stock
•
shares
of stock payable for service valued at $
At December 31, 2025 and 2024, and shares of common stock were issued and outstanding, respectively.
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 shares,
par value .
Under the Certificate of Designation,
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
At December 31, 2025 and 2024, shares of Series A Preferred Stock were issued and outstanding.
| F-27 |
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 shares,
par value .
In December 2025, the Company declared and issued shares
Series B stock to our management as dividends, valued at $
In June 2025, the Company issued
In December 2024, a member of Company management
converted shares
of Series B Preferred Stock into
In November 2024, the Company declared and issued
As of December 31, 2025 and 2024, and shares of Series B Preferred Stock were issued and outstanding, respectively.
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 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.
At December 31, 2025 and 2024, Series C Preferred Stock was issued or outstanding.
| F-28 |
Series D Preferred Stock
On October 10, 2025, the Company filed a Second Amended and Restated Certificate of Designation for the Series D Preferred Stock (the “Certificate of Designation”) with the Secretary of State of Nevada to amend and restate the terms of its Series D Preferred Stock, originally established on November 3, 2023, and first amended on July 7, 2025. The Second Amended and Restated Certificate of Designation maintains the number of authorized shares at and revises the terms by introducing a True-Up Adjustment mechanism to the conversion rate, as described below. The amended terms include the following key provisions:
- Redemption Provisions: Optional redemption by the Company at 105% of the price paid by the holder, upon not more than three trading days’ notice.
- Leak-Out Restriction: After three months, conversions to common stock and sales are limited to 10% of the average daily trading volume of the Company’s common stock per holder.
During the year ended December 31, 2025, the
Company issued
During the year ended December 31, 2025, shares of Series D Preferred Stock were converted into shares of common stock.
At December 31, 2025 and 2024, and shares Series D Preferred Stock was issued or outstanding.
NOTE 14 – PROVISION FOR INCOME TAXES
Income (loss) before provision for income taxes consisted of the following for the years ended December 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| United States | $ | ( | ) | $ | ( | ) | ||
| Foreign | ||||||||
| Total loss before income taxes | $ | ( | ) | $ | ( | ) | ||
| F-29 |
The following table presents a reconciliation of the income taxes presented in the Statements of Operations for the years ended December 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| The federal and state income tax provision (benefit) is summarized as follows: | ||||||||
| Current: | ||||||||
| U.S. federal | $ | $ | ||||||
| State and local | ||||||||
| Foreign | ||||||||
| Total current provision for income taxes | $ | $ | ||||||
| Deferred: | ||||||||
| U.S. federal | $ | ( | ) | $ | ||||
| State and local | ||||||||
| Foreign | ||||||||
| Total deferred provision for income taxes | $ | ( | ) | $ | ||||
| Total: | ||||||||
| U.S. federal | $ | ( | ) | $ | ||||
| State and local | ||||||||
| Foreign | ||||||||
| Total provision for income taxes | $ | $ | ||||||
The Company paid income taxes as follows for the years ended December 31, 2025 and 2024:
| Income taxes paid: | 2025 | 2024 | ||||||
| Federal | $ | $ | ||||||
| Foreign - UK | ||||||||
| State | ||||||||
| Total paid during the year | $ | $ | ||||||
The tax effects of temporary differences that give rise to significant components of the Company’s deferred tax assets and liabilities are as follows:
| 2025 | 2024 | |||||||
| Deferred tax assets | ||||||||
| Interest carryforward | $ | $ | ||||||
| Other | ||||||||
| Net operating losses | ||||||||
| Total deferred tax assets | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Total deferred tax assets, net | $ | $ | ||||||
| Deferred tax liabilities | ||||||||
| Intangibles | $ | ( | ) | $ | ||||
| Property and equipment | ( | ) | ||||||
| Total deferred tax liabilities | ( | ) | ||||||
| Net deferred tax assets | $ | $ | ||||||
| F-30 |
The Change in the valuation allowance for the years ended December 31, was as follows:
| 2025 | 2024 | |||||||
| Balance at beginning of year | $ | $ | 2,392,012 | |||||
| Additions charged to tax expense | ||||||||
| Balance at end of year | $ | $ | 2,972,455 | |||||
ASC 740 requires a valuation allowance to reduce deferred tax assets if it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.
The Company performed a comprehensive review of its uncertain tax positions and determined that no adjustments were necessary relating to unrecognized tax benefits as of December 31, 2025 and 2024. The Company’s federal and state income tax returns are subject to examination for three years after filing and remain open to examination for those periods.
The components of the Company’s provision for income taxes and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded at December 31, 2025, are as follows:
| December 31, | ||||||||
| 2025 | ||||||||
| U.S. federal statutory tax benefit on pretax loss | $ | ( | ) | 21.0 | % | |||
| State and local income taxes, net of federal benefit | 0.0 | % | ||||||
| Foreign tax effects | (6.0 | )% | ||||||
| Switzerland | ||||||||
| Changes in Valuation Allowance | (1.8 | )% | ||||||
| Other | (1.6 | )% | ||||||
| United Kingdom | ||||||||
| Other | (2.7 | )% | ||||||
| Changes in Valuation Allowance | (37.5 | )% | ||||||
| Nontaxable or nondeductible items | (10.3 | )% | ||||||
| Tax effect of income not subject to entity level federal income tax | ( | ) | 1.3 | % | ||||
| Equity Debt Settlement | (6.1 | )% | ||||||
| Goodwill Impairment | (5.4 | )% | ||||||
| Other | 0.0 | % | ||||||
| Other | ( | ) | 31.4 | % | ||||
| Change in 163j Interest Limitation | ( | ) | 26.1 | % | ||||
| Change in Net Operating Losses | ( | ) | 5.3 | % | ||||
| Total provision for income taxes | $ | (1.5 | )% | |||||
| F-31 |
The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of December 31, 2024, are as follows:
| December 31, | ||||
| 2024 | ||||
| Net Operating loss carryforward | $ | |||
| Effective tax rate | % | |||
| Deferred tax asset | ||||
| Foreign taxes | ( | ) | ||
| Less: valuation allowance | ( | ) | ||
| Net deferred tax asset | $ | |||
At December 31, 2025, the Company has approximately $15,400,000 of net operating losses (“NOL”) generated to December 31, 2025 carried forward to offset taxable income in future years which began to expire in 2023. The Company’s net operating loss carry forwards may be subject to annual limitations, which could eliminate, reduce or defer the utilization of the losses because of an ownership change as defined in Section 382 of the Internal Revenue Code. U.S. Federal tax returns are closed by statute for years through 2018. The status of state and non-U.S. tax examinations varies due to the numerous legal entities and jurisdictions in which the Company operates.
NOTE 15 - RELATED PARTY TRANSACTIONS
Due from related party
During the years ended December 31, 2025 and 2024, the Company loaned $
At December 31, 2025 and 2024, the Company had
amounts due from related parties of $
Due to related parties
At December 31, 2025 and 2024, the Company had
amounts due to related parties of $
Employment agreements
During the years ended December 31, 2025 and
2024, the Company recorded management salaries and bonus of $
On June 23, 2025, the board of directors of the Company approved amended employment agreements in favor of its Chief Executive Officer, Leandro Iglesias, and its Chief Financial Officer, Alvaro Quintana Cardona.
In case the monthly remuneration is not set in full on time , the amended agreements provide that Messrs. Iglesias and Quintana may convert their accrued salary/bonus into shares of common stock or Series B Preferred Stock of the Company. For common stock, the number of shares issuable is determined by considering the average price per share of common stock on the Nasdaq Capital Market during the last 10 days and applying a discount of 25% and then dividing the accrued salary by the average price per share. For Series B Preferred stock, the number of shares issuable is determined by considering the discounted average price per share of common stock on the Nasdaq Capital Market during the last 10 days, dividing the accrued salary by the discounted average price per share, and then dividing that number of shares by 12.5.
In June 2025, the Company issued
At December 31, 2025 and 2024, the Company recorded
and accrued management salaries of $
| F-32 |
NOTE 16 – 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
NOTE 17 - SEGMENT
The Company operates in two industry segments, telecommunication services and fintech services, and three geographic segments, USA, UK
and Switzerland, where current assets and equipment are located. The Company's chief operating decision maker ("CODM") is its
chief financial officer, who reviews the operating results for the Company as a whole to make decisions about allocating resources and
assessing financial performance. The CODM uses operating activities and net assets to assess financial performance and allocate resources.
These financial metrics are used by the CODM to make key operating decisions, such as the determination of the rate at which the Company
seeks to grow, the allocation of budget between cost of sales and operating expenses and the management of assets.
The following tables show reportable operating activities information by industrial segment for the years ended December 31, 2025 and 2024. The Company has two industrial segments since the Company acquired GlobeTopper LLC in July 2025:
Year ended December 31, 2025
| NOTE 17 - SEGMENT - Industrial Segment (Details) | ||||||||||||||||||||
| Telecom | Fintech | Corporate | Elimination | Total | ||||||||||||||||
| Revenues | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Cost of revenue | ( | ) | ||||||||||||||||||
| Gross profit | ( | ) | ||||||||||||||||||
| Operating expenses | ( | ) | ||||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax expense | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Net income (loss) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||
Year ended December 31, 2024
| Telecom | Corporate | Elimination | Total | |||||||||||||
| Revenues | $ | $ | $ | ( | ) | $ | ||||||||||
| Cost of revenue | ( | ) | ||||||||||||||
| Gross profit | ( | ) | ||||||||||||||
| Operating expenses | ||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Other income (expense) | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax expense | ( | ) | ( | ) | ||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| F-33 |
The following tables show operating activities information by geographic segment for the years ended December 31, 2025 and 2024:
Year ended December 31, 2025
| USA | Switzerland | UK | Elimination | Total | ||||||||||||||||
| Revenues | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Cost of revenue | ( | ) | ||||||||||||||||||
| Gross profit | ( | ) | ||||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| Salaries, wages and benefits | ||||||||||||||||||||
| Technology | ( | ) | ||||||||||||||||||
| Professional fees | ||||||||||||||||||||
| Legal and regulatory | ||||||||||||||||||||
| Travel and events | ( | ) | ||||||||||||||||||
| Public cost | ||||||||||||||||||||
| Advertising | ||||||||||||||||||||
| Bank services and fees | ( | ) | ||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Office, facility and other | ( | ) | ||||||||||||||||||
| Insurance | ||||||||||||||||||||
| Bad debt expense | ||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||
| General and administration | ( | ) | ||||||||||||||||||
| Impairment loss of goodwill | ||||||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Income tax benefit (expense) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||||
| F-34 |
Year ended December 31, 2024
| USA | Switzerland | UK | Elimination | Total | ||||||||||||||||
| Revenues | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Cost of revenue | ( | ) | ||||||||||||||||||
| Gross profit | ( | ) | ||||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| Salaries, Wages and Benefits | ||||||||||||||||||||
| Technology | ( | ) | ||||||||||||||||||
| Professional Fees | ||||||||||||||||||||
| Legal and Regulatory | ||||||||||||||||||||
| Travel & Events | ||||||||||||||||||||
| Public Cost | ||||||||||||||||||||
| Bad Debt Expense | ||||||||||||||||||||
| Depreciation and Amortization | ||||||||||||||||||||
| Advertising | ||||||||||||||||||||
| Bank Services and Fees | ||||||||||||||||||||
| Office, Facility and Other | ( | ) | ||||||||||||||||||
| Sales Commissions | ( | ) | ||||||||||||||||||
| Insurance | ||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||
| General and administration | ||||||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Other income (expense) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Income tax expense | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||||
Asset Information
The following table shows asset and liability information by industrial segment at December 31, 2025 and 2024:
| December 31, 2025 | Telecom | Fintech | Corporate | Elimination | Total | |||||||||||||||
| Assets | ||||||||||||||||||||
| Current assets | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Non-current assets | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Liabilities | ||||||||||||||||||||
| Current liabilities | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Non-current liabilities | $ | $ | $ | $ | $ | |||||||||||||||
| December 31, 2024 | Telecom | Corporate | Elimination | Total | ||||||||||||
| Assets | ||||||||||||||||
| Current assets | $ | $ | $ | ( | ) | $ | ||||||||||
| Non-current assets | $ | $ | $ | ( | ) | $ | ||||||||||
| Liabilities | ||||||||||||||||
| Current liabilities | $ | $ | $ | ( | ) | $ | ||||||||||
| Non-current liabilities | $ | $ | $ | $ | ||||||||||||
| F-35 |
The following table shows asset and liability information by geographic segment at December 31, 2025 and December 31, 2024:
| December 31, 2025 | USA | Switzerland | UK | Elimination | Total | |||||||||||||||
| Assets | ||||||||||||||||||||
| Current assets | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Non-current assets | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Liabilities | ||||||||||||||||||||
| Current liabilities | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Non-current liabilities | $ | $ | $ | $ | $ | |||||||||||||||
| Net Asset | ( | ) | ( | ) | ||||||||||||||||
| December 31, 2024 | USA | Switzerland | UK | Elimination | Total | |||||||||||||||
| Assets | ||||||||||||||||||||
| Current assets | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Non-current assets | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Liabilities | ||||||||||||||||||||
| Current liabilities | $ | $ | $ | $ | ( | $ | ||||||||||||||
| Non-current liabilities | $ | $ | $ | $ | $ | |||||||||||||||
NOTE 18 – SUBSEQUENT EVENTS.
Subsequent to December 31, 2025 and through the date that these financials were made available, the Company had no subsequent events.
| F-36 |
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
There were no changes or disagreements with our accountants on accounting and financial disclosure.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report, being December 31, 2025. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our Company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Based upon that evaluation, including our Chief Executive Officer and Chief Financial Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this annual report.
Management’s Annual Report on Internal Control over Financing Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2025 based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of December 31, 2025, our internal control over financial reporting was not effective. 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 plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending December 31, 2026: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to an exemption for non-accelerated filers set forth in Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
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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 Controls over Financial Reporting
There were no changes in our internal control over financial reporting during the three month period ended December 31, 2025, 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.
Item 9B. Other Information
None
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
The following information sets forth the names, ages, and positions of our current directors and executive officers.
| Name | Age | Positions and Offices Held | ||||
| Leandro Iglesias | 59 | President, Chairman, Chief Executive Officer and Director | ||||
| Alvaro Quintana Cardona | 53 | Chief Operating Officer, Chief Financial Officer and Director | ||||
| Raul Perez | 73 | Director | ||||
| Jose Antonio Barreto | 66 | Director | ||||
| Italo Segnini | 59 | Director | ||||
Set forth below is a brief description of the background and business experience of each of our current executive officers and directors.
Leandro Iglesias
Before founding Etelix in year 2008, where he has acted as President and CEO, Mr. Iglesias was the International Business Manager at CANTV/Movilnet (the Venezuelan biggest telecommunications services provider). He held this position between January 2003 and July 2008, while the company was under the control of Verizon. Previous to his position in Cantv/Movilnet Mr. Iglesias was Executive Vice President and responsible of the Latin America marketing division of American Internet Communications (August 1998 – December 2002). Leandro Iglesias has developed a career for more than 20 years in the telecommunications industry with a particular emphasis in the international long-distance traffic business, submarine cables, satellite communications and international roaming services. He is Electronic Engineer graduate from Universidad Simon Bolivar and graduated from the Management Program at IESA Business School. He also holds an MBA from Universidad Nororiental Gran Mariscal de Ayacucho.
Aside from that provided above, Mr. Iglesias does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.
We believe that Mr. Iglesias is qualified to serve on our Board of Directors because of his wealth of experience in the telecom industry.
Alvaro Quintana Cardona
Alvaro Quintana has developed a career of more than twenty years of experience in the telecommunication industry with particular focus on regulatory affairs, strategic planning, value added services and international interconnection agreements. Before joining Etelix in year 2013 as Chief Operation Officer and Chief Financial Officer, Mr. Quintana acted between June 2004 and May 2013 as Interconnection and Value-Added Services Manager at Digitel (a mobile service provider in Venezuela, formerly a Telecom Italia Mobile subsidiary). He holds a Bachelor Degree in Business Administration and a Specialist Degree in Economics, both from the Universidad Catolica Andres Bello. He also holds a Master in Telecommunications from the EOI Business School in Spain.
Aside from that provided above, Mr. Cardona does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.
We believe that Mr. Quintana is qualified to serve on our Board of Directors because of his wealth of experience in the telecom industry.
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Raul A Perez
From December 1, 2014 to present, Mr. Perez serves as CFO of Deerbrook Family Dentistry, PC, Dental Practice in Humble, Texas. From November 1, 2017 to January 31, 2019, he served as Senior Accountant to Principrin School, PC, Day Care in Houston, Texas.
Mr. Perez has been in finance for more than 40 years, starting in 1970 as analyst in treasury and finance departments and progressively assuming different positions up to corporate treasurer for large corporations. He served for Sudamtex of Venezuela, C.A for 5 years and Polar Brewery in Caracas, Venezuela for 10 year. Beginning in 2000, he accepted a position as a Director of the Security and Exchange Commission of Venezuela to have the surveillance of Venezuelan stock market participants. Also, in 2004 he completed the requirements and received his certification as a Venezuelan Investment Advisor. Later, as an independent contractor for three years, he was selected as the Corporate Compliance Officer for an especially important stock market broker dealer in Venezuela, Activalores Casa de Bolsa, in which he developed the Compliance Unit and manuals required by local and international anti money laundering laws. He also taught Advanced Institute of Finance (IAF) in Caracas being a professor of Corporate Finance and Managerial Accounting for 5 years.
Mr. Perez has a Bachelor’s degree in accounting (1976), and MBA Finance (1982), gave me the overall knowledge of finance and how to plan, start up, run, and control a business.
We have selected Mr. Perez to serve as an independent director because of his education, skills and experience in finance and his regulatory history.
Jose Antonio Barreto
From 2006 to the present, Mr. Barreto has been Chief Business Development Officer of Xpectra Remote Management / Mexico. There he was in charge of directing all aspects of account development and sales effort to close specific private and government opportunities and developing strategic accounts in Mexico and the LATAM region. From 2020 to present, he has been an advisor to our Board of Directors.
Mr. Barreto has more than 30 years of experience working in telecommunications and technology companies. He has been directly responsible of leading the business development and operational in several telecommunication and technology companies’ acquisition activity, with the responsibility of leading the technical, operation and financial analysis. Over the last 14 years, Jose Antonio has been the North and Central American leader, spanning from Mexico to Panama, in the development of commercial processes in the technology security field, artificial intelligence, Internet of Things (IoT) platforms, as well as cutting edge technology solutions and software systems.
He studied Electronic Engineering at the Universidad Simón Bolivar followed by a Master of Science Degree in Electrical and Computer Engineering at Rice University. He also completed the Master in Telecommunications Management offered by Universidad Simon Bolivar and the Telecom SudParis Institute.
We have selected Mr. Barreto to serve as an independent director because of his education, skills and experience in technology companies.
Italo R. Segnini
From March 2020 to the present, Mr. Segnini has been serving as Global Carrier Partnership Director of Sierra Wireless. From June 2019 to February 2020, he served as an Independent Telecom Consultant. From 2017 to 2019, he served as Director of International Carrier Business for Televisa Telecom. From 2012 to 2019, he served as Director International Carrier Business for Millicom.
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Mr. Segnini is a long time Telecommunicaction industry professional who has had high level positions at Global Tier Ones for more than 20 years, Telefonica, Millicon and Televisa, Sierra Wireless to mention a few. Mr. Segnini has extensive executive experience in the Telecom areas like Voice, A2P, SMS, Data, Roaming, Mobility Services, B2B, MNO, MVNO, IoT, Interconnection, etc., and a solid business performance record spanning multiple functions including International commercial negotiations, management, sales, business development, sales, regulatory and operations. Italo R. Segnini holds a Juris Doctor degree from the Andres Bello Catholic University, a Telecommunication Masters Degree from Madrid Pontificia Comillas University and an MBA from IESA Business School
Term of Office
Our Directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board, subject to their respective employment agreements.
Significant Employees
We have no significant employees other than our officers and directors.
Family Relationships
There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.
Involvement in Certain Legal Proceedings
During the past 10 years, none of our current directors, nominees for directors or current executive officers has been involved in any legal proceeding identified in Item 401(f) of Regulation S-K, including:
1. Any petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he or she was a general partner at or within two years before the time of such filing, or any corporation or business association of which he or she was an executive officer at or within two years before the time of such filing;
2. Any conviction in a criminal proceeding or being named a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
3. Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him or her from, or otherwise limiting, the following activities:
i. Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
ii. Engaging in any type of business practice; or
iii. Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
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4. Being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any type of business regulated by the Commodity Futures Trading Commission, securities, investment, insurance or banking activities, or to be associated with persons engaged in any such activity;
5. Being found by a court of competent jurisdiction in a civil action or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
6. Being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7. Being subject to, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
i. Any Federal or State securities or commodities law or regulation; or
ii. Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
iii. Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8. Being subject to, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Director Independence
The Board of Directors reviews the independence of our directors on the basis of standards adopted by the NASDAQ Stock Market (“NASDAQ”). As a part of this review, the Board of Directors considers transactions and relationships between our Company, on the one hand, and each director, members of the director’s immediate family, and other entities with which the director is affiliated, on the other hand. The purpose of such a review is to determine which, if any, of such transactions or relationships were inconsistent with a determination that the director is independent under NASDAQ rules. As a result of this review, the Board of Directors has determined that each of Messrs Perez, Segnini and Barreto is an “independent director” within the meaning of applicable NASDAQ listing standards.
Committees of the Board
On August 25, 2021, the Board authorized the creation of an Audit Committee. Raul Perez (chair), Italo Segnini and Jose Antonio Barreto were appointed to serve on the Audit Committee.
Mr. Perez was identified and designated by the Board as an “audit committee financial expert,” as defined by the SEC in Item 407 of Regulation S-K.
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On November 17, 2022, we authorized the creation of a Compensation Committee. The Compensation Committee’s responsibilities, which are discussed in detail in its Charter, include the following:
| • | In consultation with our senior management, establish our general compensation philosophy and oversee the development and implementation of our compensation programs; | |
| • | Recommend the base salary, incentive compensation and any other compensation for our Chief Executive Officer to the Board of Directors and review and approve the Chief Executive Officer’s recommendations for the compensation of all other officers of our Company and its subsidiary; | |
| • | Administer our incentive and stock-based compensation plans, and discharge the duties imposed on the Compensation Committee by the terms of those plans; | |
| • | Review and approve any severance or termination payments proposed to be made to any current or former officer of our Company; and | |
| • | Perform other functions or duties deemed appropriate by the Board of Directors. |
The Committee is comprised of, Raul Perez, Jose Antonio Barreto, and Italo Segnini, with Mr. Segnini serving as Chairperson.
On June 12, 2023, our Board of Directors adopted a charter for our newly created Nominating and Governance Committee (the “Committee”). The Committee is responsible for the oversight of our director nominations process, including recommending nominees to the Board of Directors for approval and for the development and maintenance of our corporate governance policies.
Our Board of Directors appointed the following persons to the Committee: Raul Perez, Jose Antonio Barreto and Italo Segnini, with Mr. Barreto serving as Chairperson.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent beneficial stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To the best of our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us, no persons have failed to file, on a timely basis, the identified reports required by Section 16(a) of the Exchange Act during fiscal year ended December 31, 2025.
Code of Ethics
On October 31, 2022, our Board of Directors approved and adopted a Code of Business Conduct and Ethics (the “Code of Ethics”). The Code of Ethics is applicable to all directors, officers and employees of our Company, our Company’s subsidiaries and any subsidiaries that may be formed in the future. The Code of Ethics addresses such individuals’ conduct with respect to, among other things, conflicts of interests; compliance with applicable laws, rules, and regulations; full, fair, accurate, timely, and understandable disclosure; competition and fair dealing; corporate opportunities; confidentiality; insider trading; protection and proper use of our assets; fair treatment; and reporting suspected illegal or unethical behavior.
A copy of our Code of Ethics is posted on our website at http://IQSTEL.com/. We will make any legally required disclosures regarding amendments to, or waivers of, provisions of our Code of Business Conduct and Ethics on our website. The reference to the IQSTEL website address does not constitute incorporation by reference of the information contained at or available through our website, and you should not consider it to be part of this annual report.
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Item 11. Executive Compensation
The table below summarizes all compensation awarded to, earned by, or paid to our former or current executive officers for the fiscal years ended December 31, 2025 and 2024.
Name and principal Position |
Year | Salary ($) |
Bonus ($) |
Stock Awards ($) |
Option Awards ($) |
All Other Compensation ($) (1)(2) |
Total ($) |
Leandro Iglesias
President, CEO and Director
|
2025
2024
|
432,000
432,000
|
—
—
|
—
—
|
—
—
|
—
—
|
432,000
432,000
|
Alvaro Quintana
Treasury, Secretary and Director
|
2025
2024
|
324,000
324,000
|
—
—
|
—
—
|
—
—
|
—
—
|
324,000
324,000
|
On May 2, 2019, the Company entered into Employment Agreements with the following persons: (i) Leandro Iglesias as President, CEO and Chairperson of the Company’s Board of Directors with an annual salary of $168,000 with an annual bonus of 3% of our net income; and (ii) Alvaro Quintana Cardona as Chief Operating Officer and Chief Financial Officer with an annual salary of $144,000 with an annual bonus of 3% of our net income. The Employment Agreements have a term of 36 months, are renewable automatically for 24-month periods, unless the Company gives written notice at least 90 days prior to termination of the initial 36-month term. The Company shall have the right to terminate any of the employment agreements at any time without prior notice, but in that event, the Company shall pay these persons salaries and other benefits they are entitled to receive under their respective agreements for three years. The above executive officers agreed to two year non-compete and non-solicit restrictive covenants with the Company. If any of the executive officers are terminated for cause they shall forfeit any rights to severance.
On November 1, 2020, our board of directors approved amended employments in favor of our Chief Executive Officer, Leandro Iglesias, and our Chief Financial Officer, Alvaro Quintana.
The amended employment agreement in favor of Mr. Iglesias extended the term of employment from 36 months to 60 months. The now five year employment agreement with Mr. Iglesias provides that we will compensate him with a salary of $17,000 monthly and he is eligible for quarterly bonus of 3,125 shares of our common stock. If we do not have the cash available, the agreement provides that Mr. Iglesias may convert his accrued salary/bonus into shares of our common stock or newly created Series A Preferred Stock. For common shares, the amount of accrued salary to be converted into shares must be determined by considering the average price per share of the Company’s common stock on the OTC Markets during the last 10 days and applying a discount of 25%.” For Series A Preferred Shares, the amount of accrued salary to be converted into shares is the per share conversion price for common shares multiplied by ten US Dollars ($10). Mr. Iglesias has a further right to convert any common shares under his control into Series A Preferred shares at any time at a rate of ten (10) common shares for each Series A Preferred share.
The amended employment agreement in favor of Mr. Quintana extended the term of employment from 36 months to 60 months. The now five year employment agreement with Mr. Quintana provides that he is eligible for quarterly bonus of 2,500 shares of our common stock. If we do not have the cash available, the agreement provides that Mr. Quintana may convert his accrued salary/bonus into shares of our common stock or newly created Series A Preferred Stock. For common shares, the amount of accrued salary to be converted into shares must be determined by considering the average price per share of the Company’s common stock on the OTC Markets during the last 10 days and applying a discount of 25%.” For Series A Preferred Shares, the amount of accrued salary to be converted into shares is the per share conversion price for common shares multiplied by ten US Dollars ($10). Mr. Quintana has a further right to convert any common shares under his control into Series A Preferred shares at any time at a rate of ten (10) common shares for each Series A Preferred share.
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On February 29, 2024, our board of directors approved amended and restated employment and indemnification agreements in favor of our Chief Executive Officer, Leandro Jose Iglesias and our Chief Financial Officer, Alvaro Quintana Cardona, to replace their existing agreements. The agreements are effective as of January 1, 2024.
The new five year employment agreement with Mr. Iglesias provides that we will compensate him with a salary of $31,000 monthly and he is eligible for a bonus as follows: (i) up to two months of salary on a yearly basis, (ii) up to 4% of our net income on a yearly basis, and (iii) up to 12,500 shares of our common stock, as determined by our board of directors, all payable 15 days after our annual report is filed. If we do not have the cash available, the agreement provides that Mr. Iglesias may convert his accrued salary/bonus into shares of our common stock at the average price of our common stock during the last 10 days after applying a discount of 25%.
Mr. Iglesias agreed to two year non-compete and non-solicit restrictive covenants. If Mr. Iglesias is terminated for cause he shall forfeit any rights to severance, which is available to him in the event of termination without cause.
The new five year employment agreement with Mr. Quintana provides that we will compensate him with a salary of $22,000 monthly and he is eligible for a bonus as follows: (i) up to two months of salary on a yearly basis, (ii) up to 4% of our net income on a yearly basis, and (iii) up to 10,000 shares of our common stock, as determined by our board of directors, all payable 15 days after our annual report is filed. If we do not have the cash available, the agreement provides that Mr. Quintana may convert his accrued salary/bonus into shares of our common stock at the average price of our common stock during the last 10 days after applying a discount of 25%.
Mr. Quintana agreed to two year non-compete and non-solicit restrictive covenants. If Mr. Quintana is terminated for cause he shall forfeit any rights to severance, which is available to him in the event of termination without cause.
Option Grants
We have not granted any options or stock appreciation rights to our named executive officers or directors since inception. We do not have any stock option plans.
Compensation of Directors
All Directors shall receive reimbursement for reasonable travel expenses incurred to attend Board and committee meetings.
Effective on July 1, 2021 and thereafter, all Directors shall be compensated monthly up to 4,000 shares of common stock cash of $1,000 for their service as Directors. The Chairman and Secretary of the Board shall receive an additional $2,000 per month in addition to the Director compensation.
In lieu of the cash compensation set forth above, each Director may elect to receive shares of the Corporation's Common Stock equal to the total cash compensation divided by the average market value of the Company's Common Stock during the last 10 trading days and applying a discount of 25%.
Effective on January 1, 2024, and thereafter, all Directors shall be compensated monthly with 10,000 shares of common stock cash of $2,500 for their service as Directors. The Chairman and Secretary of the Board shall receive an additional $2,500 per month in addition to the Director compensation.
Each Director shall also be entitled to a bonus of up to 1% of our net income on a yearly basis.
In lieu of the cash compensation set forth above, each Director may elect to receive shares of our Common Stock equal to the total cash compensation divided by the average market value of the Company's Common Stock during the last 10 trading days and applying a discount of 25%.
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Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.
Compensation Committee
The Company have a compensation committee of the board of directors. This committee is constituted by independent members of the Board and participates in the consideration of executive officer and director compensation.
Indebtedness of Directors, Senior Officers, Executive Officers and Other Management
None of our directors or executive officers or any associate or affiliate of our Company during the last two fiscal years is or has been indebted to our Company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth, as of March 31, 2026, certain information as to shares of our voting stock owned by (i) each person known by us to beneficially own more than 5% of our outstanding voting stock, (ii) each of our directors, and (iii) all of our executive officers and directors as a group.
Unless otherwise indicated below, to our knowledge, all persons listed below have sole voting and investment power with respect to their shares of voting stock, except to the extent authority is shared by spouses under applicable law. Unless otherwise indicated below, each entity or person listed below maintains an address of 300 Aragon Avenue, Suite 375, Coral Gables, FL 33134.
The number of shares beneficially owned by each stockholder is determined under rules promulgated by the SEC. The information is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting or investment power and any shares as to which the individual or entity has the right to acquire beneficial ownership within 60 days through the exercise of any stock option, warrant or other right. The inclusion in the following table of those shares, however, does not constitute an admission that the named stockholder is a direct or indirect beneficial owner.
| Common Stock | ||||||||
| Name of Beneficial Owner | Number of Shares Owned (1) | Percent of Class (2) | ||||||
| Leandro Iglesias | 18,436 | 0.376 | % | |||||
| Alvaro Quintana Cardona | 18,066 | 0.368 | % | |||||
| Raul Perez | 3,811 | 0.078 | % | |||||
| Jose Antonio Barreto | 3,811 | 0.078 | % | |||||
| Italo Segnini | 1,905 | 0.039 | % | |||||
| All Directors and Executive Officers as a Group (5 persons) | 46,029 | 0.939 | % | |||||
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| Series A Preferred Stock | ||||||||
| Name of Beneficial Owner | Number of Shares Owned (1) | Percent of Class (3) | ||||||
| Leandro Iglesias | 7,000 | 70.00 | % | |||||
| Alvaro Quintana Cardona | 3,000 | 30.00 | % | |||||
| Juan Carlos Lopez Silva | — | — | ||||||
| Raul Perez | — | — | ||||||
| Jose Antonio Barreto | — | — | ||||||
| Italo Segnini | — | — | ||||||
| All Directors and Executive Officers as a Group (6 persons) | 10,000 | 100.00 | % | |||||
(1) Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares that power with that person’s spouse) with respect to all shares of voting stock listed as owned by that person or entity.
(2) Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants. The percent of class is based on 5,070,743 voting shares as of March 31, 2026.
(3) Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants. The percent of class is based on 10,000 voting shares as of March 31, 2026.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Other than described below or the transactions described under the heading “Executive Compensation” (or with respect to which such information is omitted in accordance with SEC regulations), there have not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a participant in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.
Due from related party
During the years ended December 31, 2025 and 2024, the Company loaned $56,162 and $89,832 to a related party and collected $0 and $33,602, respectively.
At December 31, 2025 and 2024, the Company had amounts due from related parties of $639,519 and $630,715, respectively. The loans are unsecured, non-interest bearing and due on demand.
Due to related parties
At December 31, 2025 and 2024, the Company had amounts due to related parties of $65,829 and $26,613, respectively. The amounts are unsecured, non-interest bearing and due on demand. During the years ended December 31, 2025, a related party paid $39,216 to purchase a vehicle on behalf of the Company. The amounts are unsecured, non-interest bearing and due on demand.
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Item 14. Principal Accounting Fees and Services
Below are tables of Audit Fees (amounts in US$) billed by our auditors in connection with the audits of the Company’s annual financial statements for the years ended:
| Financial
Statements for the Year Ended December 31 |
Audit Services | Audit Related Fees | Tax Fees | Other Fees | |||||||||||||
| 2025 | $ | 206,700 | $ | 15,770 | $ | 0 | $ | 0 | |||||||||
| 2024 | $ | 240,000 | $ | 7,511 | $ | 0 | $ | 0 | |||||||||
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PART IV
Item 15. Exhibits, Financial Statements Schedules
| (a) Financial Statements and Schedules |
The following financial statements and schedules listed below are included in this Form 10-K.
Financial Statements (See Item 8)
| (b) Exhibits |
Filed herewith**
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| 1. | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on June 28, 2018. | |
| 2. | Incorporated by reference to the Company’s Registration Statement on Form S-1 filed with the US Securities and Exchange Commission on August 18, 2011. | |
| 3. | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on August 31, 2018. | |
| 4. | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on March 30, 2020. | |
| 5. | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on February 25, 2020. | |
| 6. | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on February 19, 2020. | |
| 7. | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on February 13, 2020. | |
| 8. | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on January 6, 2020. | |
| 9. | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on December 11, 2019. | |
| 10. | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on May 6, 2019. | |
| 11. | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on April 4, 2019. | |
| 12 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on April 26, 2022. | |
| 13 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on May 10, 2022. | |
| 14 | Incorporated by reference to the Company’s Form S-1/A filed with the US Securities and Exchange Commission on September 22, 2022. | |
| 15 | Incorporated by reference to the Company’s Form 8-K/A filed with the US Securities and Exchange Commission on October 6, 2022. | |
| 16 | Incorporated by reference to the Company’s Form S-1/A filed with the US Securities and Exchange Commission on October 11, 2022. | |
| 17 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on November 2, 2022. | |
| 18 | Incorporated by reference to the Company’s DEF 14C filed with the US Securities and Exchange Commission on May 12, 2020. | |
| 19 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on December 14, 2022. | |
| 20 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on January 8, 2021. | |
| 21 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on November 13, 2020. | |
| 22 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on November 6, 2020. | |
| 23 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on January 25, 2024. | |
| 24 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on February 13, 2024. | |
| 25 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on March 4, 2024. | |
| 26 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on May 10, 2024. | |
| 27 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on July 2, 2024. | |
| 28 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on October 22, 2024. | |
| 29 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on November 4, 2024. | |
| 30 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on January 17, 2025 | |
| 31 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on May 2, 2025 | |
| 32 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on May 30, 2025 | |
| 33 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on June 25, 2025 | |
| 34 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on July 9, 2025 | |
| 35 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on September 3, 2025 | |
| 36 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on September 19, 2025 | |
| 37 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on September 26, 2025 | |
| 38 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on October 10, 2025 | |
| 39 | Incorporated by reference to the Company’s Form 8-K filed with the US Securities and Exchange Commission on February 3, 2026 |
Item 16. Form 10-K Summary
None
| 55 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| IQSTEL Inc. | |
| By: | /s/ Leandro Iglesias |
Leandro Iglesias Chief Executive Officer, Principal Executive Officer | |
| April 6, 2026 |
| By: | /s/ Alvaro Quintana Cardona |
| Alvaro Quintana Cardona | |
| Title: | Chief Operating Officer, Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer |
| Date: | April 6, 2026 |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ Leandro Iglesias |
Leandro Iglesias Chief Executive Officer, Principal Executive Officer | |
| April 6, 2026 |
| By: | /s/ Alvaro Quintana Cardona |
| Alvaro Quintana Cardona | |
| Title: | Chief Operating Officer, Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer |
| Date: | April 6, 2026 |
| By: | /s/ Raul Perez |
| Raul Perez | |
| Title: | Director |
| Date: | April 6, 2026 |
| By: | /s/ Jose Antonio Barreto |
| Jose Antonio Barreto | |
| Title: | Director |
| Date: | April 6, 2026 |
| By: | /s/ Italo Segnini |
| Italo Segnini | |
| Title: | Director |
| Date: | April 6, 2026 |
| 56 |
| CERTIFICATIONS |
I, Leandro Iglesias, certify that;
| 1. | I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2025 of iQSTEL Inc. (the “registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: April 6, 2026
/s/ Leandro Iglesias
By: Leandro Iglesias
Title: Chief Executive Officer
| CERTIFICATIONS |
I, Alvaro Quintana Cardona, certify that;
| 1. | I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2025 of iQSTEL Inc. (the “registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: April 6, 2026
/s/ Alvaro Quintana Cardona
By: Alvaro Quintana Cardona
Title: Chief Financial Officer
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
In connection with the Annual Report of iQSTEL, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the “Report”), I, Leandro Iglesias, Chief Executive Office, and I, Alvaro Quintana Cardona, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented. |
| By: | /s/ Leandro Iglesias |
| Name: | Leandro Iglesias |
| Title: | Principal Executive Officer |
| Date: | April 6, 2026 |
| By: | /s/ Alvaro Quintana Cardona |
| Name: | Alvaro Quintana Cardona |
| Title: | Principal Financial Officer |
| Date: | April 6, 2026 |
This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.