Core Viewpoint - IQSTEL Inc. and Cycurion Inc. are advancing their strategic partnership to develop customized cybersecurity solutions for the global telecom industry, entering the execution phase focused on product rollout and market deployment [1][2]. Group 1: Collaboration Details - The partnership includes six pillars of collaboration, focusing on advanced cybersecurity solutions for telecom carrier infrastructure to protect critical operations against breaches and operational risks [3]. - A white-label cybersecurity platform named "Cyber Shield" is being launched, allowing telecom operators to offer high-margin cybersecurity services to their customers, enhancing customer retention and creating new revenue streams [4]. - The integration of IQSTEL's proprietary AI platform into Cycurion's operations aims to optimize internal processes, reduce costs, and accelerate the execution of high-value contracts [8]. Group 2: AI and Cybersecurity Development - The companies are developing an AI-Powered Next-Generation Cybersecurity Platform, combining Cycurion's cybersecurity expertise with IQSTEL's AI technologies to create a proactive defense system tailored for telecom operators [5][10]. - The initiative aims to increase predictive protection, enabling the identification and neutralization of threats before they materialize, and enhance adaptive response with intelligent, real-time countermeasures [9]. Group 3: Market Strategy and Opportunities - A commercial launch is planned for the second half of 2025, with joint teams aligning on product development, packaging, and go-to-market strategies for a coordinated global rollout [11]. - The global cybersecurity market is projected to exceed $500 billion by 2030, driven by digital transformation and escalating cyber threats, with the telecom sector requiring robust digital defense solutions [12]. - IQSTEL's established presence in over 20 countries and relationships with over 600 telecom operators positions the company to deliver cybersecurity solutions at a global scale [13]. Group 4: Leadership Insights - Leandro Iglesias, CEO of IQSTEL, expressed confidence that the partnership will deliver significant value to telecom carriers and their customers [14]. - Kevin Kelly, CEO of Cycurion, highlighted the collaboration's potential to create intelligent, scalable solutions tailored for the telecom industry, leveraging AI expertise [14]. Group 5: Company Profiles - Cycurion Inc. specializes in data protection, threat management, and compliance solutions for various sectors, including telecom, aiming to empower organizations with adaptive security [15]. - IQSTEL Inc. provides advanced solutions across multiple sectors, forecasting $340 million in revenue for FY-2025 and targeting a $1 billion valuation by 2027 [16].

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents IQSTEL Inc.'s unaudited consolidated financial statements for the three months ended March 31, 2025, including Balance Sheets, Statements of Operations, Cash Flows, and Stockholders' Equity, reporting a net loss of $1.14 million [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) Key financial summaries for the consolidated balance sheet, statement of operations, and cash flows are presented for the periods ended March 31, 2025 Consolidated Balance Sheet Summary | Metric | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | **Total Assets** | **$42,020,365** | **$79,007,738** | | Total Current Assets | $26,043,799 | $63,015,046 | | **Total Liabilities** | **$30,464,559** | **$67,107,475** | | Total Current Liabilities | $30,279,641 | $63,821,196 | | **Total Stockholders' Equity** | **$11,555,806** | **$11,900,263** | Consolidated Statement of Operations Summary (Three Months Ended March 31) | Metric | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | **Revenues** | **$57,632,816** | **$51,414,878** | | Gross Profit | $1,934,958 | $1,379,026 | | Operating Loss | ($604,226) | ($183,452) | | **Net Loss** | **($1,144,461)** | **($580,216)** | | Net Loss Attributed to IQSTEL Inc. | ($1,157,958) | ($809,767) | | **Basic and Diluted Loss Per Share** | **($0.44)** | **($0.37)** | Consolidated Statement of Cash Flows Summary (Three Months Ended March 31) | Cash Flow Activity | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($1,906,969) | ($536,888) | | Net Cash Used in Investing Activities | ($58,645) | ($1,622,892) | | Net Cash Provided by Financing Activities | $540,303 | $3,522,683 | | **Net Change in Cash** | **($1,425,311)** | **$1,362,903** | | Cash, End of Period | $1,085,046 | $2,725,571 | [Notes to Financial Statements](index=8&type=section&id=Notes%20to%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the consolidated financial statements, covering business operations, going concern, stock adjustments, and significant subsequent events - The company operates four divisions: Telecom, Fintech, EV, and AI-Enhanced Metaverse, with the **Telecom Division currently generating all revenue**[25](index=25&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) - Recurring losses, negative working capital, and insufficient revenue raise **substantial doubt about the company's ability to continue as a going concern**[55](index=55&type=chunk) - A **1-for-80 reverse stock split** of common stock became effective May 2, 2025, with all share and per-share data retroactively adjusted[33](index=33&type=chunk)[107](index=107&type=chunk) - Post-quarter, non-binding MOUs were signed for the **potential sale of 75% interest in ItsBchain, LLC** and **acquisition of 51% interest in GlobeTopper, LLC**[100](index=100&type=chunk)[103](index=103&type=chunk) - Customer concentration improved, with **19 customers representing 86% of revenue** in Q1 2025, compared to 8 customers representing 86% in the prior year[40](index=40&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results, noting a **12% revenue increase to $57.6 million** and **40% gross margin rise**, despite a widened net loss due to increased operating and interest expenses from the QXTEL acquisition, alongside liquidity challenges and future financing reliance [Business Overview](index=23&type=section&id=Business%20Overview) This section outlines IQSTEL's global operations across its four technology divisions: Telecommunications, EV, Fintech, and AI-Enhanced Metaverse, emphasizing the Telecom Division as the sole revenue generator - IQSTEL is a technology company with a global presence in **20 countries**, operating through four divisions: Telecommunications, EV, Fintech, and AI-Enhanced Metaverse[110](index=110&type=chunk) - The **Telecom Division is the core business and sole revenue source**, providing VoIP, SMS, IoT, and international fiber-optic connectivity via nine subsidiaries[111](index=111&type=chunk) - Pre-revenue divisions under active development include the Fintech ecosystem (Global Money One), EV business line (EVOSS), and AI-enhanced Metaverse platform (Reality Border)[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, detailing revenue growth, gross margin improvements, and the factors contributing to the increased net loss, including operating and interest expenses Revenue and Gross Margin (Three Months Ended March 31) | Metric | 2025 ($) | 2024 ($) | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$57,632,816** | **$51,414,878** | **+12%** | | **Gross Profit** | **$1,934,958** | **$1,379,026** | **+40%** | | Gross Margin % | 3.36% | 2.68% | +25.4% | - Gross margin increase is attributed to **strategic portfolio restructuring**, eliminating low-margin routes and incorporating the newly acquired QXTEL[126](index=126&type=chunk)[130](index=130&type=chunk) - Operating expenses **increased by 62% to $2.5 million** in Q1 2025, primarily due to QXTEL's expenses and higher technology costs for a unified switching platform[132](index=132&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - Net loss for Q1 2025 was **$1.14 million**, widening from $0.58 million in Q1 2024, mainly due to increased operating and interest expenses from the QXTEL acquisition[139](index=139&type=chunk)[140](index=140&type=chunk) - The Telecom Division, on a standalone basis, generated a **positive operating income of $266,653** and a **positive net income of $247,288** in Q1 2025[138](index=138&type=chunk)[142](index=142&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's financial liquidity, highlighting its negative working capital position and outlining strategies for funding operations through sales growth and external financing - As of March 31, 2025, the company reported **negative working capital of $4,235,842**, with current assets of **$26.0 million** and current liabilities of **$30.3 million**[146](index=146&type=chunk) Cash Flow Summary (Three Months Ended March 31, 2025) | Cash Flow Activity | Amount ($) | | :--- | :--- | | Net Cash Used in Operating Activities | ($1,906,969) | | Net Cash Used in Investing Activities | ($58,645) | | Net Cash Provided by Financing Activities | $540,303 | - The company plans to fund operations through increased sales and additional debt or equity financing, though success is not assured[150](index=150&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were **ineffective as of March 31, 2025**, due to identified material weaknesses in internal control over financial reporting, despite believing the financial statements are fairly presented - Material weaknesses in internal control include **inadequate segregation of duties, ineffective risk assessment**, and **insufficient written policies for accounting and financial reporting**[162](index=162&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter[165](index=165&type=chunk) [PART II – OTHER INFORMATION](index=31&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Other Disclosures](index=31&type=section&id=Other%20Disclosures) This section confirms **no material legal proceedings**, discloses the issuance of **100,419 common shares in unregistered sales** for compensation and debt conversion, and refers to the Annual Report for detailed risk factors - The company is **not a party to any material pending legal proceedings**[167](index=167&type=chunk) - In Q1 2025, **100,419 common shares were issued in unregistered transactions** for director compensation (**$32,815**), debt conversion (**$835,834**), and common stock payable (**$82,194**)[170](index=170&type=chunk)[171](index=171&type=chunk) - For detailed risk factors, the company refers to its **Annual Report for the year ended December 31, 2024**[168](index=168&type=chunk)

Part I: Business and Risk Factors [Business Overview](index=3&type=section&id=Item%201.%20Business) IQSTEL Inc. is a technology company operating through four main divisions: Telecommunications, Fintech, Electric Vehicles (EV), and an AI-Enhanced Metaverse. The Telecom division, comprising voice, SMS, and IoT services, is the sole source of revenue, generating **100%** of the company's income for the reported periods. The other divisions, including a blockchain-based mobile number portability application, a fintech ecosystem, an EV motorcycle line, and a metaverse platform, are all in pre-revenue or development stages. The company has a global presence in **20 countries** and pursues growth both organically and through strategic mergers and acquisitions [Company Description and Business Divisions](index=3&type=section&id=Company%20Description%20and%20Business%20Divisions) - IQSTEL operates through four business divisions: Telecommunications, Electric Vehicle (EV), Fintech, and an AI-Enhanced Metaverse. The company has a presence in **20 countries** with over **100 employees**[18](index=18&type=chunk) - The Telecommunications division currently generates **100%** of the company's revenues, while the Fintech, EV, and Metaverse divisions are in a pre-revenue stage[20](index=20&type=chunk)[31](index=31&type=chunk) - The company's developing business lines include a Fintech ecosystem (Global Money One), an EV line (EVOSS), and an AI-enhanced Metaverse platform (Reality Border) for corporations and telecom carriers[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) [Operating Subsidiaries and Services](index=5&type=section&id=Operating%20Subsidiaries%20and%20Services) Voice Services Performance (2023 vs. 2024) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | **Voice Revenue** | $187.2 million | $67.7 million | +176.5% | | **% of Total Revenue** | 66.09% | 46.85% | N/A | | **Minutes Carried** | 5.2 billion | 4.2 billion | +23.81% | SMS Services Performance (2023 vs. 2024) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | **% of Total Revenue** | 33.91% | 53.15% | N/A | | **Gross Margin** | 1.93% | 0.62% | +211% | | **SMS Carried** | 13.9 billion | 11.3 billion | +32.94% | - The company's developing itsBchain subsidiary is testing a mobile number portability solution targeting a market estimated at over **$86 million** per year across **35 countries**[54](index=54&type=chunk)[57](index=57&type=chunk)[59](index=59&type=chunk) - The developing EV division is awaiting European Union E-Mark certification for its new electric motorcycle before beginning manufacturing and sales[62](index=62&type=chunk) [Regulations and Corporate History](index=9&type=section&id=Regulations%20and%20Corporate%20History) - The company's US telecom operations are regulated by the FCC, holding a Section 214 license through its subsidiary Etelix.com USA, LLC. It is also subject to Universal Service Fund contributions[64](index=64&type=chunk)[66](index=66&type=chunk)[68](index=68&type=chunk) - The company has grown significantly through acquisitions, including SwissLink (2019), QGlobal (2020), Whisl and Smartbiz (2022), and QXTEL (2024)[77](index=77&type=chunk)[78](index=78&type=chunk)[83](index=83&type=chunk)[86](index=86&type=chunk) - In March 2025, the company signed non-binding MOUs to potentially sell its **75%** interest in ItsBchain, LLC to Accredited Solutions, Inc. and to purchase a **51%** equity interest in GlobeTopper, LLC[89](index=89&type=chunk)[92](index=92&type=chunk) [Risk Factors](index=12&type=page&id=Item%201A.%20Risk%20Factors) The company faces significant risks, highlighted by an auditor's going concern opinion due to a history of losses and dependence on external financing. Key risks include intense price competition in the telecom sector, high customer concentration, and potential network disruptions from cyber-attacks. Furthermore, the company has identified material weaknesses in its internal financial controls, and its two largest shareholders exercise majority voting control through Series A Preferred Stock, which could influence corporate matters - The auditor has issued a going concern opinion, citing a history of losses with an accumulated deficit of **$32.7 million** as of December 31, 2024, and dependence on obtaining financing to continue operations[99](index=99&type=chunk) - The company faces intense price competition in the telecommunications industry, and the growth of free Over-The-Top (OTT) services like WhatsApp could adversely affect its traditional service offerings[119](index=119&type=chunk)[120](index=120&type=chunk) - There is a significant customer concentration risk, with the **27 largest customers** accounting for **89%** of total consolidated revenues in fiscal year 2024[125](index=125&type=chunk) - Management identified material weaknesses in internal controls, including inadequate segregation of duties and insufficient written accounting policies[162](index=162&type=chunk) - The two largest shareholders, Leandro Iglesias and Alvaro Quintana, hold Series A Preferred Stock that gives them **51%** of the total shareholder vote, allowing them to exercise significant influence over all corporate matters[172](index=172&type=chunk) [Cybersecurity](index=26&type=section&id=Item%201C.%20Cybersecurity) The company acknowledges cybersecurity as a principal enterprise-wide risk, given its role in transmitting large amounts of data globally. It has implemented risk management procedures, including monitoring, anti-malware applications, and employee training, overseen by the Head of IT who reports to the CEO. As of year-end 2024, no cybersecurity incidents with a material impact on the business or financial statements have been identified - Cybersecurity is considered a principal enterprise-wide risk, with management dedicating resources to identify, assess, and mitigate threats[184](index=184&type=chunk) - The company has implemented cybersecurity risk management procedures, including monitoring, detection activities, and employee training, with oversight provided by the Head of IT[187](index=187&type=chunk)[188](index=188&type=chunk) - As of December 31, 2024, the company has not identified any cybersecurity incident that would have a material impact on its business or consolidated financial statements[189](index=189&type=chunk) Part II: Market, Operations, and Financial Condition [Market for Common Equity and Related Matters](index=28&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%20and%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock is quoted on the OTCQX under the symbol "IQST". A limited market exists, and the stock is subject to "penny stock" regulations. The company has never paid dividends and does not anticipate doing so in the foreseeable future. In 2024, the company issued over **30 million shares** of unregistered common stock for purposes including compensation, debt settlement, and warrant exercises Quarterly Common Stock Price Range ($) | Quarter Ended | 2024 High | 2024 Low | 2023 High | 2023 Low | | :--- | :--- | :--- | :--- | :--- | | **March 31** | 0.3950 | 0.3500 | 0.1549 | 0.1425 | | **June 30** | 0.2828 | 0.2470 | 0.1340 | 0.1130 | | **September 30** | 0.1790 | 0.1630 | 0.2250 | 0.2160 | | **December 31** | 0.3094 | 0.2650 | 0.1550 | 0.1440 | - The company has never declared or paid cash dividends on its common stock and does not anticipate paying any in the foreseeable future[204](index=204&type=chunk) - During the year ended December 31, 2024, the Company issued **30,847,055 shares** of common stock for various purposes, including compensation, debt settlement, conversions, and warrant exercises[206](index=206&type=chunk)[207](index=207&type=chunk) [Management's Discussion and Analysis (MD&A)](index=30&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal year 2024, consolidated revenues grew **96%** to **$283.2 million**, driven by both organic growth (**38%**) and the acquisition of QXTEL (**62%**). Gross margin increased by **77%** to **$8.3 million**. However, operating expenses rose **82.6%** to **$9.1 million**, largely due to the QXTEL integration, leading to a consolidated net loss of **$5.2 million**, up from **$0.2 million** in 2023. The profitable Telecom division, with a net income of **$1.7 million**, was offset by losses from pre-revenue ventures and corporate overhead. The company reported negative working capital and stated it lacks sufficient cash for the next 12 months, raising substantial doubt about its ability to continue as a going concern [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Consolidated Results of Operations (2024 vs. 2023) | Metric | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | **Net Revenue** | $283,220,442 | $144,502,351 | +96.0% | | **Cost of Revenue** | $274,948,693 | $139,830,338 | +96.6% | | **Gross Margin** | $8,271,749 | $4,672,013 | +77.1% | | **Operating Expenses** | $9,105,813 | $4,987,516 | +82.6% | | **Net Loss** | ($5,180,036) | ($219,436) | +2260.6% | - The **96%** revenue increase was driven **38%** by organic growth and **62%** by the acquisition of QXTEL Inc[212](index=212&type=chunk) - The Telecom Division, which generates all revenue, remains profitable with a net income of **$1.71 million** in 2024, a **33%** increase from 2023. The consolidated net loss is driven by pre-revenue divisions and corporate holding expenses, including financing costs for the QXTEL acquisition[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) - As of December 31, 2024, the company had a negative working capital of **$806,150**, with current assets of **$63.0 million** and current liabilities of **$63.8 million**[232](index=232&type=chunk) Summary of Cash Flows (2024 vs. 2023) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(2,930,306) | $(1,483,801) | | **Net cash used in investing activities** | $(3,162,971) | $(332,550) | | **Net cash provided by financing activities** | $7,240,966 | $1,833,965 | - Management states the company does not have sufficient cash to operate for the next twelve months and is dependent on obtaining additional financing, which raises substantial doubt about its ability to continue as a going concern[238](index=238&type=chunk) [Financial Statements and Supplementary Data](index=35&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The audited consolidated financial statements for the years ended December 31, 2024, and 2023, are presented. The independent auditor's report includes a "Going Concern" uncertainty paragraph, citing recurring losses and negative working capital. Critical audit matters identified were Revenue Recognition and the Going Concern assessment. Key financial data shows a significant increase in assets and liabilities, primarily due to the QXTEL acquisition. The company's net loss widened considerably in 2024, and subsequent events include non-binding MOUs for the potential sale of itsBchain and acquisition of GlobeTopper - The independent auditor's report contains a paragraph expressing substantial doubt about the Company's ability to continue as a going concern due to recurring losses and negative working capital[247](index=247&type=chunk)[255](index=255&type=chunk) - The auditor identified two Critical Audit Matters: Revenue Recognition, due to significant judgment in determining the timing of recognition, and Going Concern, due to the uncertainty of future financing[252](index=252&type=chunk)[255](index=255&type=chunk) Consolidated Balance Sheet Highlights (As of Dec 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | **Total Assets** | $79,007,738 | $22,155,653 | | **Total Liabilities** | $67,107,475 | $14,109,781 | | **Total Stockholders' Equity** | $11,900,263 | $8,045,872 | Consolidated Statement of Operations Highlights (Year Ended Dec 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | **Revenues** | $283,220,442 | $144,502,351 | | **Gross Profit** | $8,271,749 | $4,672,013 | | **Net Loss** | ($5,180,036) | ($219,436) | | **Basic and Diluted EPS** | ($0.04) | ($0.01) | - Subsequent to year-end, the company signed non-binding MOUs to sell its **75%** interest in ItsBchain, LLC for **$1 million** in cash and stock, and to purchase a **51%** interest in GlobeTopper, LLC for **$700,000** in cash and stock[404](index=404&type=chunk)[407](index=407&type=chunk) [Controls and Procedures](index=65&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that as of December 31, 2024, the company's disclosure controls and procedures were ineffective. This was due to identified material weaknesses in internal control over financial reporting, specifically: inadequate segregation of duties and risk assessment, and insufficient written accounting policies. The company plans to remediate these weaknesses by hiring additional qualified personnel and adopting formal policies, contingent upon securing additional financing - Management concluded that the company's disclosure controls and procedures were ineffective as of December 31, 2024[415](index=415&type=chunk) - Material weaknesses in internal control were identified: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting[416](index=416&type=chunk) - Remediation efforts, which include hiring more staff and adopting new policies, are largely dependent on the company securing additional financing[417](index=417&type=chunk) Part III: Governance and Compensation [Directors, Executive Officers and Corporate Governance](index=67&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) The company is led by CEO Leandro Iglesias and COO/CFO Alvaro Quintana Cardona, both of whom serve on the five-member Board of Directors. The Board has established Audit, Compensation, and Nominating and Governance Committees, comprised of three independent directors. The company has adopted a Code of Business Conduct and Ethics, which is available on its website - The executive team is led by Leandro Iglesias (President, Chairman, CEO) and Alvaro Quintana Cardona (COO, CFO). Both are also directors[425](index=425&type=chunk) - The Board has established an Audit Committee, a Compensation Committee, and a Nominating and Governance Committee, each composed of three independent directors: Raul Perez, Italo Segnini, and Jose Antonio Barreto[450](index=450&type=chunk)[451](index=451&type=chunk)[453](index=453&type=chunk) - The company has adopted a Code of Business Conduct and Ethics applicable to all directors, officers, and employees[456](index=456&type=chunk) [Executive Compensation](index=71&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation is primarily composed of base salaries and potential bonuses tied to net income and stock awards, as determined by the board. In 2024, CEO Leandro Iglesias's salary was **$432,000** and CFO Alvaro Quintana's was **$324,000**. New five-year employment agreements effective January 1, 2024, increased their monthly salaries and outlined performance-based bonuses. Director compensation includes a monthly cash fee and stock, with an additional bonus potential tied to net income Executive Compensation Summary (2024 vs. 2023) | Name and Position | Year | Salary ($) | Total ($) | | :--- | :--- | :--- | :--- | | **Leandro Iglesias** | 2024 | 432,000 | 432,000 | | President, CEO and Director | 2023 | 240,000 | 240,000 | | **Alvaro Quintana** | 2024 | 324,000 | 324,000 | | Treasury, Secretary and Director | 2023 | 144,000 | 144,000 | - Effective January 1, 2024, new five-year employment agreements were established for the CEO and CFO, increasing their base salaries and outlining annual bonuses based on salary, net income, and common stock awards[466](index=466&type=chunk)[467](index=467&type=chunk)[470](index=470&type=chunk) - Effective January 1, 2024, non-employee directors are compensated with a monthly fee of **$2,500** and **10,000 shares** of common stock, plus a potential annual bonus of up to **1%** of net income[475](index=475&type=chunk)[476](index=476&type=chunk) [Security Ownership](index=74&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters.) As of March 24, 2025, the company's executive officers and directors as a group beneficially owned approximately **1.85%** of the outstanding common stock. However, through their ownership of **100%** of the Series A Preferred Stock, CEO Leandro Iglesias (**70%**) and CFO Alvaro Quintana (**30%**) collectively control **51%** of the total voting power of the company's stockholders, giving them significant influence over all corporate matters Beneficial Ownership of Directors and Executive Officers (as of March 24, 2025) | Name of Beneficial Owner | Common Stock Owned | % of Class (Common) | Series A Preferred Stock Owned | % of Class (Series A) | | :--- | :--- | :--- | :--- | :--- | | Leandro Iglesias | 2,095,363 | **0.99%** | **7,000** | **70.00%** | | Alvaro Quintana Cardona | 1,331,842 | **0.63%** | **3,000** | **30.00%** | | All Directors & Officers (5) | 3,907,205 | **1.85%** | **10,000** | **100.00%** | - Holders of Series A Preferred Stock are entitled to vote at a rate of **51%** of the total vote of stockholders, effectively giving Leandro Iglesias and Alvaro Quintana Cardona majority voting control[172](index=172&type=chunk)[374](index=374&type=chunk) [Principal Accountant Fees and Services](index=75&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) The company's audit fees increased from **$175,000** in 2023 to **$240,000** in 2024. Audit-related fees were minimal in both years, and no tax or other fees were billed by the principal auditor Accountant Fees (2023 vs. 2024) | Fee Category | 2024 | 2023 | | :--- | :--- | :--- | | **Audit Services** | $240,000 | $175,000 | | **Audit Related Fees** | $7,511 | $11,800 | | **Tax Fees** | $0 | $0 | | **Other Fees** | $0 | $0 | Part IV: Exhibits and Schedules [Exhibits and Financial Statement Schedules](index=76&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statements%20Schedules) This section lists the financial statements included in Item 8 and provides a comprehensive list of all exhibits filed with the Form 10-K. These exhibits include various agreements such as purchase agreements, debt instruments, employment contracts, and corporate governance documents, as well as required certifications - This section references the financial statements detailed in Item 8 and lists all exhibits filed with the annual report[492](index=492&type=chunk) - Filed exhibits include key corporate documents such as the Share Purchase Agreement for QXTEL, employment agreements for executive officers, various debt and equity financing agreements, and required SEC certifications[493](index=493&type=chunk)

iQSTEL 2025 Shareholder Letter [Strategic Performance & M&A Expertise](index=1&type=section&id=Strategic%20Performance%20%26%20M%26A%20Expertise) iQSTEL highlights its proficiency in mergers and acquisitions, citing 11 successful ventures and the recent QXTEL acquisition as a prime example, which generated $85 million in net revenue and $950,000 in EBITDA from April to December 2024, demonstrating consistent and substantial Revenue Per Share (RPS) growth from 2020 to 2024 - The company has successfully completed 11 venture and acquisition deals, establishing itself as an expert in identifying and integrating high-value companies[3](index=3&type=chunk) QXTEL Post-Acquisition Performance (Apr-Dec 2024, Preliminary) | Metric | Value | | :--- | :--- | | Net Revenue | $85 million | | EBITDA | $950,000 | Revenue Per Share (RPS) Growth Trajectory (2020-2024) | Year | RPS | | :--- | :--- | | 2020 | $0.380 | | 2021 | $0.439 | | 2022 | $0.577 | | 2023 | $0.839 | | 2024 (preliminary) | $1.364 | [2025 Strategic Initiatives and Outlook](index=1&type=section&id=2025%20Strategic%20Initiatives%20and%20Outlook) For 2025, iQSTEL is launching an aggressive M&A campaign to acquire a company in the Telecom, Fintech, Cybersecurity, or AI sectors with over $1 million in annual EBITDA, to be completed before a planned NASDAQ uplisting, while forecasting significant growth with $340 million in revenue and $3 million in operating business EBITDA 2025 Financial Forecast | Metric | Forecast | | :--- | :--- | | Revenue | $340 million | | EBITDA (operating business) | $3 million | - The company is launching an "M&A 2025 Campaign" to acquire a company generating **tens of millions in revenue** and **over $1 million in EBITDA annually**, with the acquisition intended to be completed before a NASDAQ uplisting[5](index=5&type=chunk)[6](index=6&type=chunk) - The NASDAQ uplisting process is progressing steadily, with a focus on organic stock price growth, and a reverse stock split would only be considered in conjunction with the uplisting if necessary[12](index=12&type=chunk)[13](index=13&type=chunk) - Key initiatives for H1 2025 include launching cybersecurity products through a partnership with Cycurion and introducing new AI services via the Airweb.ai platform[15](index=15&type=chunk) [Shareholder Alignment and Long-Term Vision](index=3&type=section&id=Shareholder%20Alignment%20and%20Long-Term%20Vision) Management demonstrates strong alignment with shareholder interests by being the largest shareholder group, holding the equivalent of 40.5 million common shares, supporting the company's long-term vision of reaching $1 billion in revenue with eight-digit positive EBITDA by 2027, and providing financial flexibility through extended convertible note maturities - The company's long-term vision is to become a **$1 billion revenue** company with **eight-digit positive EBITDA** by 2027[11](index=11&type=chunk)[17](index=17&type=chunk) - Management is the largest shareholder group, holding the equivalent of **40.5 million common shares**, aligning their interests directly with other shareholders[16](index=16&type=chunk) - Long-term investors have shown confidence by extending the maturity dates of convertible notes (used to acquire QXTel) from 2025 to 2026, enhancing the company's financial flexibility[19](index=19&type=chunk)[20](index=20&type=chunk) [About iQSTEL and Business Divisions](index=5&type=section&id=About%20iQSTEL%20and%20Business%20Divisions) iQSTEL is a US-based technology and telecommunications company with preliminary 2024 revenues of $277 million, currently in the final stages of a NASDAQ uplisting, operating across four main divisions and launching new Cybersecurity services to leverage its existing customer base for high-margin product sales - Based on preliminary accounting, iQSTEL's FY2024 revenues were **$277 million**[25](index=25&type=chunk) - The company operates through four primary divisions and a new cybersecurity service[28](index=28&type=chunk)[29](index=29&type=chunk)[32](index=32&type=chunk) iQSTEL Business Divisions | Division | Offerings | | :--- | :--- | | **Telecommunications** | VoIP, SMS, IoT, Mobile Portability Blockchain Platform | | **Fintech** | Remittance, Top-Up, MasterCard Debit Card, US Bank Accounts | | **Electric Vehicles (EV)** | Electric Motorcycles, planned Mid-Speed Car | | **Artificial Intelligence (AI)** | AI solutions for customer engagement, white-label platform | | **Cybersecurity** | 24/7 monitoring, threat detection, incident response (via Cycurion partnership) |

[PART I – FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201%3A%20Financial%20Statements) The unaudited consolidated financial statements for the nine months ended September 30, 2024, reflect significant revenue growth driven by the QXTEL acquisition, alongside increased liabilities, operating expenses, a wider net loss, and negative working capital, raising substantial doubt about going concern without additional financing [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of September 30, 2024, total assets increased to $32.4 million from $22.2 million at year-end 2023, primarily due to a $5.5 million increase in goodwill from an acquisition and a $2.4 million rise in accounts receivable, while total liabilities grew to $24.3 million from $14.1 million, shifting working capital from a positive $1.88 million to a deficit of $4.40 million Consolidated Balance Sheet Highlights (Unaudited) | Account | Sep 30, 2024 | Dec 31, 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Current Assets** | $19,664,986 | $15,719,172 | +$3,945,814 | | Goodwill | $10,677,045 | $5,172,146 | +$5,504,899 | | **Total Assets** | **$32,439,118** | **$22,155,653** | **+$10,283,465** | | **Total Current Liabilities** | $24,066,234 | $13,840,944 | +$10,225,290 | | **Total Liabilities** | **$24,349,820** | **$14,109,781** | **+$10,230,039** | | **Total Stockholders' Equity** | $8,089,298 | $8,045,872 | +$43,426 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For the nine months ended September 30, 2024, revenues increased by 89.6% year-over-year to $184.3 million, and despite a 95% increase in gross profit to $5.6 million, the company's net loss widened from $0.27 million to $3.32 million due to higher operating expenses, a significant rise in interest expense, and a loss from derivative liabilities Key Operational Results (Unaudited) | Metric | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenues | $184,346,412 | $97,248,561 | +89.6% | | Gross Profit | $5,608,725 | $3,029,723 | +85.1% | | Operating Loss | ($535,952) | ($499,495) | +7.3% | | Net Loss | ($3,317,107) | ($274,557) | +1108.2% | | Net Loss Attributed to iQSTEL Inc. | ($3,741,707) | ($639,143) | +485.4% | | Basic and Diluted Loss Per Share | ($0.02) | ($0.01) | -100% | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2024, net cash used in operating activities increased to $2.5 million from $0.4 million in the prior-year period, with $3.0 million used in investing activities primarily for an acquisition, funded by $6.2 million in net cash from financing activities, resulting in an overall cash increase of $0.76 million Cash Flow Summary (Unaudited) | Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($2,526,651) | ($434,701) | | Net Cash Used in Investing Activities | ($2,950,367) | ($340,583) | | Net Cash Provided by Financing Activities | $6,239,489 | $1,454,756 | | **Net Change in Cash** | **$762,471** | **$671,931** | [Notes to the Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Key notes detail the company's four-division structure with Telecom as the sole revenue source, the significant QXTEL acquisition, substantial financing activities, and management's going concern assessment due to recurring losses - The company operates through four business divisions: Telecom, Fintech, Electric Vehicle (EV), and AI-Enhanced Metaverse, with all revenues currently generated by the **Telecom Division**[25](index=25&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) - Due to recurring losses and insufficient revenue to cover operating costs, there is **substantial doubt** about the Company's ability to continue as a going concern, with continued operations dependent on raising additional capital[53](index=53&type=chunk)[54](index=54&type=chunk) - On April 1, 2024, the company acquired **51% of QXTEL LIMITED** for a total purchase price of **$6.0 million**, consisting of **$3.0 million in cash**, a **$2.0 million promissory note**, and a **$1.0 million contingent liability**, resulting in **$5.5 million of goodwill**[89](index=89&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) - Subsequent to the quarter's end, the company extended maturity dates on approximately **$3.56 million of promissory notes** and entered into an MOU to acquire the remaining **49% of its subsidiary SwissLink Carrier Ltd.** for a valuation of **$750,000**[111](index=111&type=chunk)[112](index=112&type=chunk)[114](index=114&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=28&type=section&id=Item%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20%28MD%26A%29) Management discusses the significant 89.56% year-over-year revenue growth for the first nine months of 2024, primarily attributed to the acquisition of QXTEL and organic growth, noting that while gross profit increased, operating expenses also rose substantially, leading to a wider net loss due to higher financing costs and a tightened liquidity position requiring additional financing [Business Overview](index=28&type=section&id=Business%20Overview) iQSTEL is a technology company with four business divisions: Telecommunications, Electric Vehicle (EV), Fintech, and AI-Enhanced Metaverse, where the Telecom division is the primary source of all current revenues and operations, while the other divisions are in developmental stages - The company has a global presence in **20 countries** with over **100 employees**[117](index=117&type=chunk) - The **Telecom Division** is the source for all of the company's revenues for the financial periods presented, offering services like VoIP, SMS, and IoT solutions through subsidiaries such as Etelix, SwissLink, and the newly acquired QXTEL[118](index=118&type=chunk) - The company is developing several pre-revenue business lines, including a Fintech platform (Global Money One), an EV motorcycle brand (EVOSS), and an AI-enhanced Metaverse solution (Reality Border)[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) For the nine months ended September 30, 2024, revenue grew 89.56% to $184.3 million, with QXTEL contributing $48.7 million, and despite an increase in gross profit to $5.6 million, operating expenses rose by $2.6 million to $6.1 million, leading to a net loss of $3.3 million driven by higher interest and derivative liability changes Revenue by Subsidiary (Nine Months Ended Sep 30) | Subsidiary | 2024 Revenue | 2023 Revenue | | :--- | :--- | :--- | | Etelix.com USA, LLC | $43,124,776 | $25,635,273 | | IoT Labs LLC | $70,525,343 | $53,279,140 | | QXTEL Limited | $48,676,228 | $0 | | **Total (Consolidated)** | **$184,346,412** | **$97,248,561** | - The Telecom Division, which generates all revenue, had a positive operating income of **$1.5 million** for the nine months ended Sep 30, 2024, offset by operating losses from pre-revenue companies and corporate expenses, resulting in a consolidated operating loss[139](index=139&type=chunk)[140](index=140&type=chunk) - Other expenses for the nine months ended Sep 30, 2024, were **$2.65 million**, a significant shift from other income of **$0.22 million** in the prior year, primarily due to a **$1.06 million loss on derivative liabilities** and a **$1.53 million interest expense**[142](index=142&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity has tightened, with working capital declining from a positive $1.9 million at the end of 2023 to a deficit of $4.4 million as of September 30, 2024, as operations used $2.5 million in cash and the QXTEL acquisition used an additional $2.7 million, funded by $6.2 million raised from financing, primarily through convertible notes, with management intending to seek additional debt or equity financing - The company had a **negative working capital of $4,401,248** as of September 30, 2024, compared to a **positive working capital of $1,878,228** at December 31, 2023[145](index=145&type=chunk) - Cash used in investing activities for the nine months ended Sep 30, 2024 was **$2.95 million**, primarily for the **$2.73 million acquisition of QXTEL**[146](index=146&type=chunk) - Financing activities provided **$6.24 million in cash**, largely from proceeds from convertible notes (**$4.0 million**) used to fund the QXTEL acquisition[147](index=147&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204%3A%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were ineffective as of September 30, 2024, based on the identification of material weaknesses in internal control over financial reporting - The identified material weaknesses are: (i) inadequate segregation of duties and effective risk assessment, and (ii) insufficient written policies and procedures for accounting and financial reporting under US GAAP and SEC guidelines[158](index=158&type=chunk) - No changes were made to the internal control over financial reporting during the nine-month period that have materially affected, or are reasonably likely to materially affect, the internal controls[161](index=161&type=chunk) [PART II – OTHER INFORMATION](index=35&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Key Disclosures](index=35&type=section&id=Key%20Disclosures) The company reports no material pending legal proceedings and no material changes to its previously disclosed risk factors, while during the first nine months of 2024, it issued over 14 million shares of common stock through unregistered sales for director compensation, debt settlement, convertible notes, and warrant exercises - The company is not a party to any material pending legal proceedings[163](index=163&type=chunk) - There have been no material changes to the risk factors disclosed in the company's most recent Annual Report on Form 10-K[164](index=164&type=chunk) - During the nine months ended September 30, 2024, the company issued **14,047,021 shares of common stock** in unregistered transactions for purposes including compensation, debt settlement/conversion, and warrant exercises[165](index=165&type=chunk)[166](index=166&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2024 ☐ Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to__________ Commission File Number: 000-55984 iQSTEL Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organiz ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2024 ☐ Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to__________ Commission File Number: 000-55984 iQSTEL Inc. (Exact name of registrant as specified in its charter) Nevada 45-2808620 (State or other jurisdiction of incor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to ________ Commission file number: 000-55984 IQSTEL Inc. (Exact name of registrant as specified in its charter) Nevada 45-2808620 (State or other jurisdiction of incorporation or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2023 ☐ Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to__________ Commission File Number: 000-55984 iQSTEL Inc. (Exact name of registrant as specified in its charter) Nevada 45-2808620 (State or other jurisdiction of i ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2023 Nevada 45-2808620 300 Aragon Avenue, Suite 375 Coral Gables, FL 33134 (Address of principal executive offices) (954) 951-8191 ☐ Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to__________ Commission File Number: 000-559 ...