FRANCISCO V. AGUILAR

Secretary of State

401 North Carson Street

Carson City, Nevada 89701-4201

(775) 684-5708

Website: www.nvsos.gov

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Revised: 1/1/2019 

FIRST AMENDED AND RESTATED CERTIFICATE OF DESIGNATION OF

iQSTEL INC.

Pursuant to Section 78.1955 of the Nevada Revised Statutes

SERIES D PREFERRED STOCK

On behalf of iQSTEL Inc., a Nevada corporation (the “Corporation”), the undersigned hereby certifies that the following resolution has been duly adopted by the board of directors of the Corporation (the “Board”):

RESOLVED, that, pursuant to the authority granted to and vested in the Board by the provisions of the articles of incorporation of the Corporation (the “Articles of Incorporation”), there hereby is created, out of the 1,200,000 shares of preferred stock, par value $0.001 per share, of the Corporation authorized by Article III of the Articles of Incorporation (“Preferred Stock”), a series of Series D Preferred Stock, consisting of 100,000 shares, which series shall have the following powers, designations, preferences and relative participating, optional and other special rights, and the following qualifications, limitations and restrictions:

The specific powers, preferences, rights and limitations of the Series D Preferred Stock are as follows:

1.        Designation; Rank. This series of Preferred Stock shall be designated and known as “Series D Preferred Stock.” The number of shares constituting the Series D Preferred Stock shall be 100,000 shares. The Series D Preferred Stock shall be subordinate to and rank junior to all indebtedness of the Corporation now or hereafter outstanding.

2.        Dividends. The holders of Series D Preferred Stock shall be entitled to receive as, when, and if declared by the Board of Directors, dividends of common stock at an annual rate equal to twelve percent (12%), calculated on the basis of a 360-day year consisting of twelve 30-day months. Such dividends shall begin to accrue and shall accumulate (to the extent not otherwise declared and paid as set forth above) on each share of Series B Preferred Stock, from the date of issuance of such share of Series B Preferred Stock (the “Original Issue Date”), whether or not declared and shall cease accruing on the date that is the day prior to the Conversion Date (as defined in Section 5). If the holder elects to convert the Series D Preferred Stock into common shares prior to the end of the year, the dividend shall be calculated on a pro rata basis for the period during which the Series D Preferred Shares were held.

3.        Liquidation Preference. In the event of any dissolution, liquidation or winding up of the Corporation (a “Liquidation”), whether voluntary or involuntary, the Holders of Series D Preferred Stock shall be entitled to participate in any distribution out of the assets of the Corporation before the holders of the Common Stock, Series A Preferred Stock and Series C Preferred Stock, but shall be considered on parity to the liquidation rights of the Series B Preferred Stock. A sale of all or substantially all of the Corporation’s assets or an acquisition of the Corporation by another entity by means of any transaction or series of related

transactions (including, without limitation, a reorganization, consolidated or merger) that results in the transfer of fifty percent (50%) or more of the outstanding voting power of the Corporation, shall not be deemed to be a Liquidation for purposes of this Designation.

4.          Voting. Except as required by applicable law or as set forth herein, the holders of shares of Series D Preferred Stock will have no right to vote on any matters, questions or proceedings of this Corporation including, without limitation, the election of directors.

5.        Voluntary Conversion.

a)   Conversion Rate. Upon the filing of this Amended and Restated Certificate of Designation, which, once effective, makes available a sufficient number of authorized but unissued and unreserved shares of common stock to permit all then outstanding shares of Series D Preferred Stock to be so converted, then, after three months from the Original Issue Date, the holder of any shares of the Series D Preferred Stock may convert any such shares into fully paid and non-assessable shares of common stock at the rate of 12.5 shares of common stock for each share of Series D Preferred Stock (“Conversion Rate”) subject to adjustment in accordance with Section 4(f).

b)  Method of Conversion. Before any holder of Series D Preferred Stock shall be entitled to convert the same into shares of common stock, such holder shall surrender the certificate or certificates therefore, duly endorsed, at the office of the Corporation or of any transfer agent for the Series D Preferred Stock, and shall give written notice 15 business days prior to date of conversion to the Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of common stock are to be issued. The Corporation shall, within five business days, issue and deliver at such office to such holder of Series D Preferred Stock, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of common stock to which such holder shall be entitled as aforesaid. Conversion shall be deemed to have been effected on the date when delivery of notice of an election to convert and certificates for shares is made, and such date is referred to herein as the “Conversion Date.”

c)  Status of Converted Stock. In the event any shares of Series D Preferred Stock shall be converted or otherwise acquired by the Corporation, the shares so converted shall be canceled and shall resume the status of authorized shares of preferred stock without differentiation as to series. All such shares may be reissued as part of a new series of preferred stock subject to the conditions and restrictions on issuance set forth in the Articles of Incorporation or in any certificate of designation creating a series of preferred stock or any similar stock or as otherwise required by law.

d)  Transfer Taxes. The Corporation shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of common stock upon conversion of any shares of Series D Preferred Stock, provided that the Corporation shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of the shares of Series D Preferred Stock in respect of which such shares are being issued.

f)  Adjustments to Conversion Rate.

i)  Subdivisions, Combinations, or Consolidations of Common Stock. In the event the outstanding shares of common stock shall be subdivided, combined or consolidated, by stock split, stock dividend, combination or like event, into a greater or lesser number of shares of common stock after the effective date of this Certificate of Designation, the Series D Conversion Rate in effect immediately prior to such subdivision, combination, consolidation or stock dividend shall, concurrently with the effectiveness of such subdivision, combination or consolidation, be proportionately adjusted as more fully set forth in Section 4(f)(ii).

ii)   Adjustment for Common Stock Dividends and Distributions. If the Corporation at any time subdivides, combines or consolidates the outstanding shares of common stock as contemplated by Section 4(f)(i), in each such event the Series D Conversion Rate that is then in effect shall be adjusted as of the time of such event by multiplying the Series D Conversion Rate then in effect by a fraction (x) the numerator of which is the total number of shares of common stock issued and outstanding immediately after the time of such subdivision, combination or consolidation, and (y) the denominator of which is the total number of shares of common stock issued and outstanding immediately prior to such subdivision, combination or consolidation.

iii)   Reclassifications and Reorganizations. In the case, at any time after the date hereof, of any capital reorganization, merger or any reclassification of the stock of the Corporation (other than solely as a result of a stock dividend or subdivision, split-up or combination of shares), the Series D Conversion Rate then in effect shall, concurrently with the effectiveness of such reorganization or reclassification, be proportionately adjusted and the terms of the Series D Preferred Stock shall be deemed amended such that the shares of the Series D Preferred Stock shall, after such reorganization or reclassification, be convertible into the kind and number of shares of stock or other securities or property of the Corporation or otherwise to which such holder would have been entitled if immediately prior to such reorganization or reclassification, the holder’s shares of the Series D Preferred Stock had been converted into common stock. The provisions of this Section 4(f)(iii) shall similarly apply to successive reorganizations or reclassifications.

g)  Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Series D Conversion Rate pursuant to Section 4(f), the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of the Series D Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Series D Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments; (ii) the Series D Conversion Rate at the time in effect; and (iii) the number of shares of common stock and the amount, if any, of other securities, cash or property which at the time would be received upon the conversion of the Series D Preferred Stock.

h)  Fractional Shares. Fractional shares of Series D Preferred Stock may be issued and all conversion, voting and other rights shall be applied to such fractional shares on a proportional basis; provided, however, that in lieu of any fractional shares of common stock to which the holder of Series D Preferred Stock would be entitled upon conversion or otherwise pursuant hereto, the Corporation shall issue to such holder, one whole share of common stock. The number of whole shares to be issuable to each holder upon such conversion shall be determined on the basis of the number of shares of common stock issuable upon conversion of the total number of shares of Series D Preferred Stock of such holder at the time converting into common stock.

6.        Redemption. Notwithstanding anything to the contrary contained herein, at any time the Corporation will have the right, at its option, to redeem all or any portion of the shares of Series D Preferred Stock, exercisable on not more than three (3) Trading Days (as defined herein) prior written notice to the Holders, in full, in accordance with this Section 6. Any notice of redemption hereunder (an “Optional Redemption Notice”) shall be delivered to each Holder at its registered addresses and shall state: (1) that the Corporation is exercising its right to redeem the Series D Preferred Stock, and (2) the date of redemption which shall be not more than three (3) Trading Days (as defined herein) from the date of the Optional Redemption Notice. On the date fixed for redemption (the “Optional Redemption Date”), the Corporation

shall make payment of 105% of the price paid by the Holder for the Series D Preferred Stock (the Optional Redemption Amount”) to the applicable Holder. If the Company delivers an Optional Redemption Notice and fails to pay the Optional Redemption Amount due to the applicable Holder within two (2) business days following the Optional Redemption Date, the Company shall forever forfeit its right to redeem the Series D Preferred Stock pursuant to this Section 6.

7.        Leak-Out Restriction. After three months from the Original Issue Date, the holders of Series D Preferred Stock shall be permitted to convert into common stock and sell shares subject to a limitation of 10% of the average daily trading volume of the Corporation’s common stock, calculated on a per-holder basis.

8.        No Impairment. Except and to the extent as waived or consented to by the holder, or as otherwise provided herein, the Corporation shall not by any action, including, without limitation, amending its Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of the Series D Preferred Stock, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of holders as set forth in this Certificate of Designations against impairment.

9.        No Preemptive Rights. No holder of the Series D Preferred Stock shall be entitled to rights to subscribe for, purchase or receive any part of any new or additional shares of any class, whether now or hereinafter authorized, or of bonds or debentures, or other evidences of indebtedness convertible into or exchangeable for shares of any class, but all such new or additional shares of any class, or any bond, debentures or other evidences of indebtedness convertible into or exchangeable for shares, may be issued and disposed of by the Board of Directors on such terms and for such consideration (to the extent permitted by law), and to such person or persons as the Board of Directors in their absolute discretion may deem advisable.

10.        Vote to Change the Terms of or Issue Preferred Stock. The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting, of the majority holders (in addition to any other corporate approvals then required to effect such action), shall be required for any change to this Certificate of Designation or the Company's Articles of Incorporation which would amend, alter, change or repeal any of the powers, designations, preferences and rights of the Series D Preferred Stock.

11.       Lost or Stolen Certificates. Upon receipt by the Company of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any Preferred Stock Certificates representing the shares of Series D Preferred Stock, and, in the case of loss, theft or destruction, of any indemnification undertaking by the holder to the Company and, in the case of mutilation, upon surrender and cancellation of the Preferred Stock Certificate(s), the Company shall execute and deliver new preferred stock certificate(s) of like tenor and date; provided, however, that the Company shall not be obligated to re-issue Preferred Stock Certificates if the holder contemporaneously requests the Company to convert such shares of Series D Preferred Stock into Common Stock.

12.        Failure or Indulgence Not Waiver. No failure or delay on the part of a holder of Series D Preferred Stock in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

IN WITNESS WHEREOF the undersigned has signed this Designation this 7th day of July 2025.

IQSTEL INC.

By: /s/ Leandro Iglesias

Name: Leandro Iglesias

Title: CEO

DEBT EXCHANGE AGREEMENT

THIS DEBT EXCHANGE AGREEMENT (this “Agreement”) is entered into as of July 3, 2025 (the “Effective Date”) by and between IQSTEL Inc., a Nevada corporation (the “Issuer”) and ADI Funding LLC., a Florida corporation (the “Creditor”). The Creditor and the Issuer are occasionally referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

A.         Creditor is the beneficial owner of various secured loans made to the Issuer under standard promissory notes, that may be converted at the maturity date if the parties agreed with, the aggregate amount of principal and accrued but unpaid interest, including all amounts due through the date of this Agreement is two million one hundred fourteen thousand seven hundred seventy- one and 93/100 United States dollars ($2,114,771.93) (collectively, the “Debt”). The Debt is listed in the attached Exhibit A;

B.         The parties desire to cause the Debt to be repaid, and the obligations of the Issuer represented thereby to be cancelled, by exchanging the Debt for shares of the Issuer’s Amended and Restated Series D Preferred Stock (the “Series D Preferred Stock”). The Certificate of Designation setting forth the terms, preferences, privileges, restrictions and limitations for the Series D Preferred Stock is attached hereto as Exhibit B;

D.         The Creditor desires to acquire shares of the Series D Preferred Stock in exchange for the satisfaction and cancellation of the Debt; and,

E.         The Issuer and the Creditor are entering into this Agreement to set forth the terms and conditions applicable to the exchange of the Debt for the consideration stated herein;

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged by the parties hereto, the parties hereby agree as follows:

Article 1

EXCHANGE OF STOCK AND DEBT SECURITIES

1.1               Exchange.

(a)                The Creditor hereby agrees, subject to the terms and conditions set forth herein, to exchange the aggregate principal amount of the Debt, together with all interest thereon accrued up to but not including the effective date of such exchange, for 22,131 shares of the Issuer’s Series D Preferred Stock, (the “Debt Exchange”). The number of shares of Series D Preferred Shares to be issued shall be determined by dividing the Debt by the lowest End-of-Day Volume-Weighted Average Price (EDO VWAP) of Issuer’s common stock in the 10 trading days prior to the date of this Agreement less a 20% discount divided by 12.5. The Creditor agrees with the terms, preferences, privileges, restrictions and limitations set forth in the Amended and Restated Certificate of Designation for the Series D Preferred Stock in Exhibit B.

(b)                Subject to the terms and conditions of this Agreement, the consummation of the Debt Exchange shall take place at a closing (the “Closing”) at such time, date or place as the Parties hereto may mutually agree upon. At the Closing, the Creditor shall deliver the Debt for cancellation and the Issuer shall deliver to the Creditor the aforementioned consideration for the Debt Exchange.

(c)                The consideration for the Debt Exchange will be issued in full satisfaction and payment of the Debt, and from and after the consummation of the Debt Exchange the Debt shall represent solely the right to receive the consideration for the Debt Exchange. In the event that as a result of the Debt Exchange, fractional shares of Series D Preferred Stock would be required to be issued, such fractional shares shall be rounded up or down to the nearest whole share. The Issuer shall pay any documentary, stamp or similar issue or transfer tax due with respect to the Debt Exchange.

1.2               Legend. Any certificate or certificates representing the Series D Preferred Stock (or any part thereof) will bear the following legend, together with any and all other legends as may be required pursuant to applicable law (and the Issuer may issue appropriate corresponding stop transfer instructions to any transfer agent for any of such securities):

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, or under any applicable state law and may not be transferred, sold or otherwise disposed of unless registered under such act and applicable state laws or unless an exemption from the registration requirements under such act or applicable state law requirements is available.”

Such legend and the stop transfer instructions shall be removed and the Issuer shall issue a certificate representing such securities without such legend to the holder thereof if (i) such securities are registered under the Securities Act of 1933, or (ii) if such securities are sold pursuant to an exemption of the registration requirements of the Securities Act of 1933. In either case, the Creditor shall furnish to the Issuer evidence to such effect that Issuer finds reasonably satisfactory which may include, without limitation, an opinion of counsel reasonably acceptable to the Issuer (as to form and substance and counsel).

1.3               Registration. The Company will file a resale registration statement for all of the Common Shares underlying the Series D Preferred Stock within 45 days from the signing of this Agreement, on a best-efforts basis.

Article 2

REPRESENTATIONS AND WARRANTIES OF THE ISSUER

The Issuer hereby represents and warrants to the Creditor that:

2.1               Corporate Status. The Issuer is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate or other power and authority to carry on its business as now being conducted.

2.2               Capitalization. The authorized capital stock of the Issuer consists of 3,750,000 shares of common stock, par value $0.001 per share, and 1,200,000 shares of preferred stock, of which 3,498,829 shares of common stock are outstanding and 52,108 shares of preferred stock are outstanding, consisting of 10,000 shares of Series A Preferred and 42,108 shares of Series B Preferred.

2.3               Power and Authority; Binding Agreement. The Issuer has the requisite corporate power and authority to execute and deliver, and when the Certificate of Designation for the Series D

Preferred Stock has been adopted and filed with the Secretary of State of the State of Nevada, to perform its obligations under, this Agreement, and the Issuer has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and the consummation of the Debt Exchange. This Agreement has been duly executed and delivered by the Issuer and, assuming the due authorization, execution and delivery by each of the other parties hereto, constitutes the valid and binding agreement of the Issuer enforceable against the Issuer in accordance with its terms.

2.4               Non-Contravention. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated by this Agreement, and compliance with the provisions hereof, will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under the Articles of Incorporation or By-laws of the Issuer. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or loss of a benefit under, or result in the creation of any lien or encumbrance upon any of the properties or assets of the Issuer or any of its subsidiaries under, (i) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, obligation, instrument, permit, concession, franchise, license or similar authorization applicable to the Issuer or any of its subsidiaries or their respective properties or assets or (ii) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Issuer or any of its subsidiaries or their respective properties or assets, other than any such conflicts, violations, defaults, rights, losses, liens or encumbrances that, individually or in the aggregate, are not reasonably likely to have a material adverse effect on (x) the business condition of the Issuer and its subsidiaries taken as a whole or (y) the ability of the Issuer to perform its obligations under this Agreement.

2.5               Consents and Governmental Approvals. No consent, approval, order or authorization of, action by or in respect of, or registration, declaration or filing with, any federal, state, local or foreign government, any court, administrative, regulatory or other governmental agency, commission, body or authority or any non-governmental self-regulatory agency, commission, body or authority is required by the Issuer in connection with the execution and delivery of this Agreement by the Issuer or the consummation by the Issuer of the Debt Exchange or the other transactions contemplated by this Agreement, except for the filing of the Certificate of Designation with the Secretary of State of the State of Nevada, and such other consents, approvals, orders or authorizations the failure of which to be made or obtained, individually or in the aggregate, is not reasonably likely to have a material adverse effect on the Issuer.

2.6               Valid Issuance. When issued pursuant to this Agreement in connection with the Debt Exchange, the consideration for the Debt Exchange will be duly authorized, validly issued, fully paid and nonassessable, and the Creditor will receive good title to such shares, free and clear of any liens, claims, security interest or encumbrances.

Article 3

REPRESENTATIONS AND WARRANTIES OF THE CREDITOR

The Creditor represents and warrants to the Issuer that:

3.1               Authority. The Creditor has all requisite power and authority to execute and deliver, and perform its obligations under, this Agreement. All acts required to be taken by the Creditor to enter into this Agreement and consummate the transactions contemplated hereby have been properly taken.

3.2               Title to the Debt. The Creditor is the record and beneficial holder of the Debt and holds the Debt free and clear of all claims, liens, security interests, title defects and objections or any other encumbrances of any kind or nature whatsoever. The Creditor represents and warrants to the Issuer that the Debt has not been assigned to any other party.

3.3               Investment Intent. Creditor is acquiring the shares being delivered to Creditor under this Agreement for its own account and with no present intention of distributing or selling any of them in violation of the Securities Act of 1933 or any applicable state securities law. Creditor is aware that an investment in the Issuer is speculative and involves certain risks, including the possible loss of the entire investment. Creditor has made an independent examination and investigation of an investment in the shares and the Issuer and has depended on the advice of its legal and financial advisors and agrees that the Issuer will not be responsible in any way whatsoever for the Creditor's decision to invest in the shares and the Issuer. Creditor (i) has adequate net worth and means of providing for its current financial needs and possible personal contingencies, (ii) has no need for liquidity in this investment, and (iii) is able to bear the economic risks of an investment in the shares for an indefinite period of time. Creditor (i) is able to fend for itself in the Debt Exchange; (ii) has such knowledge and experience in business matters as to be capable of evaluating the merits and risks of its prospective investment in the shares; and (iii) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment. Creditor is representing and warranting that it is an "accredited Creditor" as that term is defined in Rule 501 of Regulation D of the Securities Act of 1933 Act. Creditor will not sell or otherwise dispose of any of such shares unless such sale or other disposition has been registered or is exempt from registration under the Securities Act of 1933 and has been registered or qualified or is exempt from registration or qualification under applicable state securities laws. Creditor understands that the shares it is acquiring under this Agreement have not been registered under the Securities Act of 1933 by reason of their contemplated issuance in transactions exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 and that the reliance of the Issuer on this exemption is predicated in part on these representations and warranties of Creditor. Creditor acknowledges and agrees that a restrictive legend consistent with the foregoing has been or will be placed on the certificates for the shares and related stop transfer instructions will be noted in the transfer records of the Issuer and/or its transfer agent for the shares, and that such Creditor will not be permitted to sell, transfer or assign any of the shares acquired hereunder until such shares are registered or an exemption from the registration and prospectus delivery requirements of the Securities Act of 1933 is available.

Article 4

CONDITIONS

4.1               Issuer’s Conditions. The obligations of the Issuer to consummate the transactions contemplated by this Agreement shall be subject to fulfillment of the following conditions on or prior to the date of Closing:

(a)                The representations and warranties of the Creditor set forth in Article 3 shall be true and correct on and as of the date of Closing.

(b)                All proceedings, corporate or otherwise, required to be taken by the Creditor on or prior to the date of Closing in connection with this Agreement, and the Debt Exchange

contemplated hereby, shall have been duly and validly taken, and all necessary consents, approvals or authorizations required to be obtained by the Creditor on or prior to the Closing shall have been obtained.

(c)                The Creditor shall have delivered the Debt to the Issuer for cancellation.

(d)                The Creditor shall have delivered to the Issuer such other documents, certificates or other information as the Issuer or its counsel may reasonably request.

(e)                The Issuer hereby agrees that it shall cause its attorney, at the Creditor’s cost, to render any opinion letter requested by the Creditor to remove any and all restrictive legends from any common stock from conversion of the preferred shares, due to Creditor per the terms of this Agreement (the “Opinion Letter”). The Opinion Letter shall be issued to Creditor as required and requested by Creditor to be able to deposit any common stock from the conversion of the preferred shares into common stock, at Creditor’s broker of choice.

4.2               Creditor’s Conditions. The obligations of the Creditor to consummate the transaction contemplated by this Agreement shall be subject to fulfillment of the following conditions on or prior to the date of Closing:

(a)                The representations and warranties of the Issuer set forth in Article 2 shall be true and correct on and as of the date of Closing.

(b)                All proceedings, corporate or otherwise required to be taken by the Issuer on or prior to the date of Closing in connection with this Agreement, and the Debt Exchange contemplated hereby, shall have been duly and validly taken, and all necessary consents, approvals or authorizations required to be obtained by the Issuer on or prior to the Closing shall have been obtained.

(c)                The Issuer shall have issued and delivered, or cause to be issued and delivered, to the Creditor, stock certificates, registered in the name of the Creditor, representing duly authorized, validly issued, fully paid and non-assessable Series D Preferred Stock.

Article 5

MISCELLANEOUS

5.2               Headings. The headings in this Agreement are for purposes of reference only and are not to be considered in construing this Agreement.

5.3               Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered constitutes an original and all together shall constitute one Agreement.

5.4               Enforceability. If any term or provision of this Agreement, or the application thereof to any person or circumstance, is, to any extent, invalid or unenforceable, the remaining terms and provisions of this Agreement or application to other Persons and circumstances are not invalidated thereby, and each term and provision hereof is to be construed with all other remaining terms and provisions hereof to effect the intent of the parties hereto to the fullest extent permitted by law.

5.5               Law Governing. This Agreement is to be construed and enforced in accordance with and shall be governed by the laws of the State of Nevada applicable to contracts executed in and to be fully performed in that state.

5.6               Confidentiality. Until the Issuer makes a press release or other public announcement about the Exchange, the Creditor will maintain the confidentiality of the Debt Exchange and the terms of the Debt Exchange.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the day and year first above written.

Dated: July 3, 2025

“Issuer"

IQSTEL Inc.,

 a Nevada Corporation

By: /s/ Leandro Iglesias

Name: Leandro Iglesies 

Title Chief Executive Officer 

Dated: July 3, 2025

“Creditor”

ADI Funding LLC.

a Florida corporation

By: /s/ Ariella Basdeo

Name: Ariella Basdeo

Title: Managing Member

Exhibit A

Balance as of 7/3/2025

Lowest EDO VWAP for the period June 13 to June 27 = $9.5559 (June 20, 2025)

Conversion price = $9.5559 x 80% = $7.6447

Preferred Serie D shares to be issued: $2,114,771.93 / $7.6447 / 12.5 = 22,131

Exhibit B

Certificate of Designation for Series D Preferred Stock

See exhibit 3.1

DEBT EXCHANGE AGREEMENT

THIS DEBT EXCHANGE AGREEMENT (this “Agreement”) is entered into as of July 3, 2025 (the “Effective Date”) by and between IQSTEL Inc., a Nevada corporation (the “Issuer”) and M2B Funding Corp., a Florida corporation (the “Creditor”). The Creditor and the Issuer are occasionally referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

A.         Creditor is the beneficial owner of various secured loans made to the Issuer under standard promissory notes, that may be converted at the maturity date if the parties agreed with, the aggregate amount of principal and accrued but unpaid interest, including all amounts due through the date of this Agreement is one million four hundred thirty-one thousand three hundred sixty four and 80/100 United States dollars ($1,431,364.80) (collectively, the “Debt”). The Debt is listed in the attached Exhibit A;

B.         The parties desire to cause the Debt to be repaid, and the obligations of the Issuer represented thereby to be cancelled, by exchanging the Debt for shares of the Issuer’s Amended and Restated Series D Preferred Stock (the “Series D Preferred Stock”). The Certificate of Designation setting forth the terms, preferences, privileges, restrictions and limitations for the Series D Preferred Stock is attached hereto as Exhibit B;

D.         The Creditor desires to acquire shares of the Series D Preferred Stock in exchange for the satisfaction and cancellation of the Debt; and,

E.         The Issuer and the Creditor are entering into this Agreement to set forth the terms and conditions applicable to the exchange of the Debt for the consideration stated herein;

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged by the parties hereto, the parties hereby agree as follows:

Article 1

EXCHANGE OF STOCK AND DEBT SECURITIES

1.1               Exchange.

(a)                The Creditor hereby agrees, subject to the terms and conditions set forth herein, to exchange the aggregate principal amount of the Debt, together with all interest thereon accrued up to but not including the effective date of such exchange, for 14,979 shares of the Issuer’s Series D Preferred Stock, (the “Debt Exchange”). The number of shares of Series D Preferred Shares to be issued shall be determined by dividing the Debt by the lowest End-of-Day Volume-Weighted Average Price (EDO VWAP) of Issuer’s common stock in the 10 trading days prior to the date of this Agreement less a 20% discount divided by 12.5. The Creditor agrees with the terms, preferences, privileges, restrictions and limitations set forth in the Amended and Restated Certificate of Designation for the Series D Preferred Stock in Exhibit B.

(b)                Subject to the terms and conditions of this Agreement, the consummation of the Debt Exchange shall take place at a closing (the “Closing”) at such time, date or place as the Parties hereto may mutually agree upon. At the Closing, the Creditor shall deliver the Debt for cancellation and the Issuer shall deliver to the Creditor the aforementioned consideration for the Debt Exchange.

(c)                The consideration for the Debt Exchange will be issued in full satisfaction and payment of the Debt, and from and after the consummation of the Debt Exchange the Debt shall represent solely the right to receive the consideration for the Debt Exchange. In the event that as a result of the Debt Exchange, fractional shares of Series D Preferred Stock would be required to be issued, such fractional shares shall be rounded up or down to the nearest whole share. The Issuer shall pay any documentary, stamp or similar issue or transfer tax due with respect to the Debt Exchange.

1.2               Legend. Any certificate or certificates representing the Series D Preferred Stock (or any part thereof) will bear the following legend, together with any and all other legends as may be required pursuant to applicable law (and the Issuer may issue appropriate corresponding stop transfer instructions to any transfer agent for any of such securities):

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, or under any applicable state law and may not be transferred, sold or otherwise disposed of unless registered under such act and applicable state laws or unless an exemption from the registration requirements under such act or applicable state law requirements is available.”

Such legend and the stop transfer instructions shall be removed and the Issuer shall issue a certificate representing such securities without such legend to the holder thereof if (i) such securities are registered under the Securities Act of 1933, or (ii) if such securities are sold pursuant to an exemption of the registration requirements of the Securities Act of 1933. In either case, the Creditor shall furnish to the Issuer evidence to such effect that Issuer finds reasonably satisfactory which may include, without limitation, an opinion of counsel reasonably acceptable to the Issuer (as to form and substance and counsel).

1.3               Registration. The Company will file a resale registration statement for all of the Common Shares underlying the Series D Preferred Stock within 45 days from the signing of this Agreement, on a best-efforts basis.

Article 2

REPRESENTATIONS AND WARRANTIES OF THE ISSUER

The Issuer hereby represents and warrants to the Creditor that:

2.1               Corporate Status. The Issuer is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate or other power and authority to carry on its business as now being conducted.

2.2               Capitalization. The authorized capital stock of the Issuer consists of 3,750,000 shares of common stock, par value $0.001 per share, and 1,200,000 shares of preferred stock, of which 3,498,829 shares of common stock are outstanding and 52,108 shares of preferred stock are outstanding, consisting of 10,000 shares of Series A Preferred and 42,108 shares of Series B Preferred.

2.3               Power and Authority; Binding Agreement. The Issuer has the requisite corporate power and authority to execute and deliver, and when the Certificate of Designation for the Series D

Preferred Stock has been adopted and filed with the Secretary of State of the State of Nevada, to perform its obligations under, this Agreement, and the Issuer has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and the consummation of the Debt Exchange. This Agreement has been duly executed and delivered by the Issuer and, assuming the due authorization, execution and delivery by each of the other parties hereto, constitutes the valid and binding agreement of the Issuer enforceable against the Issuer in accordance with its terms.

2.4               Non-Contravention. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated by this Agreement, and compliance with the provisions hereof, will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under the Articles of Incorporation or By-laws of the Issuer. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or loss of a benefit under, or result in the creation of any lien or encumbrance upon any of the properties or assets of the Issuer or any of its subsidiaries under, (i) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, obligation, instrument, permit, concession, franchise, license or similar authorization applicable to the Issuer or any of its subsidiaries or their respective properties or assets or (ii) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Issuer or any of its subsidiaries or their respective properties or assets, other than any such conflicts, violations, defaults, rights, losses, liens or encumbrances that, individually or in the aggregate, are not reasonably likely to have a material adverse effect on (x) the business condition of the Issuer and its subsidiaries taken as a whole or (y) the ability of the Issuer to perform its obligations under this Agreement.

2.5               Consents and Governmental Approvals. No consent, approval, order or authorization of, action by or in respect of, or registration, declaration or filing with, any federal, state, local or foreign government, any court, administrative, regulatory or other governmental agency, commission, body or authority or any non-governmental self-regulatory agency, commission, body or authority is required by the Issuer in connection with the execution and delivery of this Agreement by the Issuer or the consummation by the Issuer of the Debt Exchange or the other transactions contemplated by this Agreement, except for the filing of the Certificate of Designation with the Secretary of State of the State of Nevada, and such other consents, approvals, orders or authorizations the failure of which to be made or obtained, individually or in the aggregate, is not reasonably likely to have a material adverse effect on the Issuer.

2.6               Valid Issuance. When issued pursuant to this Agreement in connection with the Debt Exchange, the consideration for the Debt Exchange will be duly authorized, validly issued, fully paid and nonassessable, and the Creditor will receive good title to such shares, free and clear of any liens, claims, security interest or encumbrances.

Article 3

REPRESENTATIONS AND WARRANTIES OF THE CREDITOR

The Creditor represents and warrants to the Issuer that:

3.1               Authority. The Creditor has all requisite power and authority to execute and deliver, and perform its obligations under, this Agreement. All acts required to be taken by the Creditor to enter into this Agreement and consummate the transactions contemplated hereby have been properly taken.

3.2               Title to the Debt. The Creditor is the record and beneficial holder of the Debt and holds the Debt free and clear of all claims, liens, security interests, title defects and objections or any other encumbrances of any kind or nature whatsoever. The Creditor represents and warrants to the Issuer that the Debt has not been assigned to any other party.

3.3               Investment Intent. Creditor is acquiring the shares being delivered to Creditor under this Agreement for its own account and with no present intention of distributing or selling any of them in violation of the Securities Act of 1933 or any applicable state securities law. Creditor is aware that an investment in the Issuer is speculative and involves certain risks, including the possible loss of the entire investment. Creditor has made an independent examination and investigation of an investment in the shares and the Issuer and has depended on the advice of its legal and financial advisors and agrees that the Issuer will not be responsible in any way whatsoever for the Creditor's decision to invest in the shares and the Issuer. Creditor (i) has adequate net worth and means of providing for its current financial needs and possible personal contingencies, (ii) has no need for liquidity in this investment, and (iii) is able to bear the economic risks of an investment in the shares for an indefinite period of time. Creditor (i) is able to fend for itself in the Debt Exchange; (ii) has such knowledge and experience in business matters as to be capable of evaluating the merits and risks of its prospective investment in the shares; and (iii) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment. Creditor is representing and warranting that it is an "accredited Creditor" as that term is defined in Rule 501 of Regulation D of the Securities Act of 1933 Act. Creditor will not sell or otherwise dispose of any of such shares unless such sale or other disposition has been registered or is exempt from registration under the Securities Act of 1933 and has been registered or qualified or is exempt from registration or qualification under applicable state securities laws. Creditor understands that the shares it is acquiring under this Agreement have not been registered under the Securities Act of 1933 by reason of their contemplated issuance in transactions exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 and that the reliance of the Issuer on this exemption is predicated in part on these representations and warranties of Creditor. Creditor acknowledges and agrees that a restrictive legend consistent with the foregoing has been or will be placed on the certificates for the shares and related stop transfer instructions will be noted in the transfer records of the Issuer and/or its transfer agent for the shares, and that such Creditor will not be permitted to sell, transfer or assign any of the shares acquired hereunder until such shares are registered or an exemption from the registration and prospectus delivery requirements of the Securities Act of 1933 is available.

Article 4

CONDITIONS

4.1               Issuer’s Conditions. The obligations of the Issuer to consummate the transactions contemplated by this Agreement shall be subject to fulfillment of the following conditions on or prior to the date of Closing:

(a)                The representations and warranties of the Creditor set forth in Article 3 shall be true and correct on and as of the date of Closing.

(b)                All proceedings, corporate or otherwise, required to be taken by the Creditor on or prior to the date of Closing in connection with this Agreement, and the Debt Exchange

contemplated hereby, shall have been duly and validly taken, and all necessary consents, approvals or authorizations required to be obtained by the Creditor on or prior to the Closing shall have been obtained.

(c)                The Creditor shall have delivered the Debt to the Issuer for cancellation.

(d)                The Creditor shall have delivered to the Issuer such other documents, certificates or other information as the Issuer or its counsel may reasonably request.

(e)                The Issuer hereby agrees that it shall cause its attorney, at the Creditor’s cost, to render any opinion letter requested by the Creditor to remove any and all restrictive legends from any common stock from conversion of the preferred shares, due to Creditor per the terms of this Agreement (the “Opinion Letter”). The Opinion Letter shall be issued to Creditor as required and requested by Creditor to be able to deposit any common stock from the conversion of the preferred shares into common stock, at Creditor’s broker of choice.

4.2               Creditor’s Conditions. The obligations of the Creditor to consummate the transaction contemplated by this Agreement shall be subject to fulfillment of the following conditions on or prior to the date of Closing:

(a)                The representations and warranties of the Issuer set forth in Article 2 shall be true and correct on and as of the date of Closing.

(b)                All proceedings, corporate or otherwise required to be taken by the Issuer on or prior to the date of Closing in connection with this Agreement, and the Debt Exchange contemplated hereby, shall have been duly and validly taken, and all necessary consents, approvals or authorizations required to be obtained by the Issuer on or prior to the Closing shall have been obtained.

(c)                The Issuer shall have issued and delivered, or cause to be issued and delivered, to the Creditor, stock certificates, registered in the name of the Creditor, representing duly authorized, validly issued, fully paid and non-assessable Series D Preferred Stock.

Article 5

MISCELLANEOUS

5.2               Headings. The headings in this Agreement are for purposes of reference only and are not to be considered in construing this Agreement.

5.3               Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered constitutes an original and all together shall constitute one Agreement.

5.4               Enforceability. If any term or provision of this Agreement, or the application thereof to any person or circumstance, is, to any extent, invalid or unenforceable, the remaining terms and provisions of this Agreement or application to other Persons and circumstances are not invalidated thereby, and each term and provision hereof is to be construed with all other remaining terms and provisions hereof to effect the intent of the parties hereto to the fullest extent permitted by law.

5.5               Law Governing. This Agreement is to be construed and enforced in accordance with and shall be governed by the laws of the State of Nevada applicable to contracts executed in and to be fully performed in that state.

5.6               Confidentiality. Until the Issuer makes a press release or other public announcement about the Exchange, the Creditor will maintain the confidentiality of the Debt Exchange and the terms of the Debt Exchange.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the day and year first above written.

Dated: July 3, 2025

“Issuer”

IQSTEL Inc.,

a Nevada corporation 

By: /s/ Leandro Igleasias

Leandro Iglesias

Title: Chief Executive Officer

 Dated: July 3, 2025

“Creditor”

M2B Funding Corp. 

a Florida Corporation 

By: /s/ Daniel Kordash

Name: Daniel Kordash

Title: President

Exhibit A

Balance as of 7/3/2025

Lowest EDO VWAP for the period June 13 to June 27 = $9.5559 (June 20, 2025)

Conversion price = $9.5559 x 80% = $7.6447

Preferred Serie D shares to be issued: $1,431,364.80 / $7.6447 / 12.5 = 14,979

Exhibit B

Certificate of Designation for Series D Preferred Stock

See Exhibit 3.1

IQST – IQSTEL Strengthens Equity Position with $6.9 Million Debt Cut — Almost $2 Per Share

New York, NY — July 9, 2025 — IQSTEL Inc. (NASDAQ: IQST), a leading global telecommunications and technology company, is pleased to announce a significant reduction of $6.9 million in debt from its balance sheet, marking a strategic milestone in the company’s ongoing financial strengthening and long-term growth plan.

This debt reduction will have a direct and positive impact on the company’s net stockholders’ equity, which stood at $11.34 million as of Q1 2025. The reduction was achieved through a combination of debt conversions into common shares and Series D Preferred Shares. The conversion into Series D Preferred Shares reflects investor confidence in IQSTEL’s strategic plan to reach $1 billion in annual revenue by 2027.

In addition to improving the company’s capital structure, this transaction provides $0.92 million in interest savings, directly enhancing IQSTEL’s cash flow and operational flexibility.

“Our company is $6.9 million stronger than it was last week — that’s a significant step,” said Leandro Iglesias, CEO of IQSTEL. “We are fully committed to reaching our $1 billion revenue target by 2027, and actions like this reinforce our foundation and demonstrate our determination to build long-term shareholder value. A simple and clear way to see the impact of this move is that we’ve reduced our debt by approximately $2 per share. That’s a direct and tangible creation of value for our shareholders.”

At the same time, IQSTEL is actively working on improving its adjusted EBITDA while reinforcing its balance sheet — a dual approach that the company believes is the most effective path to maximize shareholder value.

This strategic move comes in conjunction with the fully executed acquisition of Globetopper, and the release of a favorable independent analyst report by Litchfield Hills Research, available here: https://hillsresearch.com/wp-content/uploads/2025/07/LHR-IQST-intitiation-report.pdf

The execution date of the debt reduction was July 3, 2025, and the financial impact will be reflected in the company’s Q3 2025 Form 10-Q filing. Further details have been disclosed in the company’s corresponding Form 8-K filed with the SEC.

With these developments, IQSTEL begins the second half of 2025 on a remarkable path — stronger, leaner, and more prepared than ever to deliver on its ambitious vision.

About IQSTEL Inc.

IQSTEL Inc. (NASDAQ: IQST) is a multinational technology company providing advanced solutions across Telecom, High-Tech Telecom Services, Fintech, AI-Powered Telecom Platforms, and Cybersecurity. With operations in 21 countries and a team of 100 employees, IQSTEL serves a broad global customer base with high-value, high-margin services. Backed by a strong and scalable business platform, the company is forecasting $340 million in revenue for FY-2025, reinforcing its trajectory toward becoming a $1 billion tech-driven enterprise by 2027.

Use of Non-GAAP Financial Measures: The Company uses certain financial calculations such as Adjusted EBITDA, Return on Assets and Return on Equity as factors in the measurement and evaluation of the Company’s operating performance and period-over-period growth. The Company derives these financial calculations on the basis of methodologies other than generally accepted accounting principles (“GAAP”), primarily by excluding from a comparable GAAP measure certain items the Company does not consider to be representative of its actual operating performance. These financial calculations are “non-GAAP financial measures” as defined under the SEC rules. The Company uses these non-GAAP financial measures in operating its business because management believes they are less susceptible to variances in actual operating performance that can result from the excluded items, other infrequent charges and currency fluctuations. The Company presents these financial measures to investors because management believes they are useful to investors in evaluating the primary factors that drive the Company’s core operating performance and provide greater transparency into the Company’s results of operations. However, items that are excluded and other adjustments and assumptions that are made in calculating these non-GAAP financial measures are significant components in understanding and assessing the Company’s financial performance. These non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, the Company’s GAAP financial measures. Further, because these non-GAAP financial measures are not determined in accordance with GAAP, and are thus susceptible to varying calculations, the non-GAAP financial measures, as presented, may not be comparable to other similarly-titled measures of other companies.

Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity. It is presented here not as an alternative to net income, but rather as a measure of the Company's operating performance. 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.

The Company believes Adjusted EBITDA offers a clearer view of the cash-generating potential of its business, excluding non-recurring, non-cash, and non-operational impacts. Management believes that Adjusted EBITDA is useful in evaluating the Company's operating performance compared to that of other companies in its industry because the calculation of Adjusted EBITDA generally eliminates the effects of financing, income taxes, non-cash and certain other items that may vary for different companies for reasons unrelated to overall operating performance and also believes this information is useful to investors.

Safe Harbor Statement: Statements in this news release may be "forward-looking statements". Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions, or any other information relating to our future activities or other future events or conditions. Words such as "anticipate," "believe," "estimate," "expect," "intend", "could" and similar expressions, as they relate to the company or its management, identify forward-looking statements. These statements are based on current expectations, estimates, and projections about our business based partly on assumptions made by management. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: our ability to successfully market our products and services; our continued ability to pay operating costs and ability to meet demand for our products and services; the amount and nature of competition from other telecom products and services; the effects of changes in the cybersecurity and telecom markets; our ability to successfully develop new products and services; our ability to complete complementary acquisitions and dispositions that benefit our company; our success establishing and maintaining collaborative, strategic alliance agreements with our industry partners; our ability to comply with applicable regulations; our ability to secure capital when needed; and the other risks and uncertainties described in our prior filings with the Securities and Exchange Commission.

These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual outcomes and results may and are likely to differ materially from what is expressed or forecasted in forward-looking statements due to numerous factors. Any forward-looking statements speak only as of the date of this news release, and IQSTEL Inc. undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this news release.

For more information, please visit www.IQSTEL.com.

Investor Relations Contact:

IQSTEL Inc.

300 Aragon Avenue, Suite 375, Coral Gables, FL 33134

Email: [email protected]