Core Insights - IQSTEL Inc. reported preliminary unaudited revenue of $128.8 million for the first half of 2025, with June revenue reaching $27.3 million, up from $23.7 million in May, indicating strong commercial momentum [1][2] - The company will start consolidating revenue from its newly acquired subsidiary, Globetopper, expected to contribute an additional $5 million to $6 million per month, positioning IQSTEL to achieve a $400 million annualized revenue run rate in Q3, ahead of its original target [2][3] - CEO Leandro Iglesias expressed confidence in reaching the $340 million revenue forecast for 2025, supported by the acquisition and the launch of high-tech products like IQ2Call.ai, aimed at enhancing net income and adjusted EBITDA [3][4] Financial Performance - The company aims for $340 million in revenue for FY-2025, with a strategic roadmap targeting $1 billion in revenue by 2027 [4][5] - Revenue growth has been significant, increasing from $13 million in 2018 to nearly $300 million last year, demonstrating a robust growth trajectory [4] Strategic Initiatives - IQSTEL is executing its growth strategy through organic expansion, strategic acquisitions, and AI-powered service offerings, enhancing its position as a next-generation telecom and tech company [4] - The focus on high-margin, high-tech products is expected to drive top-line growth and improve profitability, reinforcing the company's transformation from a traditional telecom operator to a technology-driven enterprise [3][4]

Core Insights - IQSTEL Inc. has launched IQ2Call, an AI-powered call center service aimed at enhancing customer engagement by eliminating wait times and providing scalable solutions [1][2][3] - The global call center services market is valued at approximately $496 billion in 2024 and is projected to exceed $750 billion by 2030, driven by increasing demands for customer experience and automation [3] - The launch of IQ2Call aligns with IQSTEL's strategy to expand beyond traditional telecom services and focus on high-tech, high-margin solutions [4][5] Company Strategy - IQ2Call represents a vertical integration of IQSTEL's telecom services and AI solutions, positioning the company uniquely in the global call center industry [5] - The company aims to leverage its global infrastructure and commercial relationships to create new value streams and margin expansion opportunities [4][8] - IQSTEL has grown its revenue from $13 million in 2018 to nearly $300 million in the previous year, indicating a strong growth trajectory [8] Product Features - IQ2Call offers zero wait time, auto-scaling capabilities, and 24/7 coverage with AI agents fluent in over 50 languages [6] - The service includes features such as live monitoring, performance analytics, and smart escalation from AI to human agents when necessary [11][12] - It is designed to serve various sectors including Telecommunications, Healthcare, Finance, and E-commerce, enhancing operational excellence and brand value [7] Market Opportunity - The launch of IQ2Call is positioned to address the long-standing limitations of traditional call centers, such as long wait times and inconsistent service quality [3][4] - The increasing shift towards automation in customer service presents a significant opportunity for disruption in the call center market [3]

Core Insights - IQSTEL Inc. has successfully reduced its debt by $6.9 million, marking a significant step in its financial strengthening and long-term growth strategy [1][2][4] - The debt reduction positively impacts the company's net stockholders' equity, which was $11.34 million as of Q1 2025, and is part of a broader plan to achieve $1 billion in annual revenue by 2027 [2][4] - The transaction is expected to save the company $0.92 million in interest, enhancing cash flow and operational flexibility [3][4] Financial Impact - The debt reduction was executed on July 3, 2025, and its financial effects will be reported in the Q3 2025 Form 10-Q filing [6] - The company anticipates that this move will create approximately $2 per share in value for shareholders [4] - IQSTEL is forecasting $340 million in revenue for FY-2025, reinforcing its trajectory towards becoming a $1 billion tech-driven enterprise by 2027 [7] Strategic Initiatives - The debt reduction aligns with the acquisition of Globetopper and follows a favorable independent analyst report from Litchfield Hills Research [5] - The company is focused on improving its adjusted EBITDA while simultaneously reinforcing its balance sheet to maximize shareholder value [4]

Core Insights - IQSTEL Inc. has officially closed the acquisition of 51% of GlobeTopper, marking a significant step in its global fintech expansion strategy and aiming for $1 billion in annual revenue by 2027 [1][4][10] Financial Performance - GlobeTopper is projected to generate $85 million in revenue and $0.62 million in EBITDA for FY-2026, indicating a strong underlying business model [4] - For the second half of 2025, GlobeTopper is expected to contribute $34 million in revenue and $0.26 million in EBITDA, starting with $5 million in July and scaling to over $6 million by December [7][8] Strategic Vision - The acquisition of GlobeTopper is expected to enhance IQSTEL's revenue and EBITDA from day one, reinforcing its trajectory towards a $400 million annual revenue run rate target [4][8] - The company plans to leverage cross-selling of high-margin fintech products and integration with its global infrastructure to scale GlobeTopper to exceed a $100 million annual revenue run rate and achieve $1 million in Adjusted EBITDA [3][8] Leadership and Integration - Craig Span will continue to lead GlobeTopper, ensuring a seamless integration into IQSTEL's fintech operations, with a focus on expanding cross-border payments and digital financial services [5][10] Growth Strategy - IQSTEL's strategy combines organic growth with strategic acquisitions, aiming to create additional shareholder value and align with its $1 billion revenue vision [9][10]

[iQSTEL Inc. Form 8-K Filing (June 10, 2025)](index=1&type=section&id=iQSTEL%20Inc.%20Form%208-K%20Filing) This 8-K filing announces iQSTEL Inc.'s preliminary revenue results and lists the associated press release as an exhibit [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) iQSTEL Inc. issued a press release detailing preliminary revenue results for January-April 2025, furnished under SEC regulations - The company announced preliminary revenue results for the period of January 2025 through April 2025[4](index=4&type=chunk) - The information was provided in a press release (Exhibit 99.1) and is 'furnished,' not 'filed,' under SEC regulations[5](index=5&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the press release, dated June 5, 2025, as Exhibit 99.1 to the Form 8-K filing Exhibits Filed | Exhibit No. | Description | | :--- | :--- | | 99.1 | Press Release, dated June 5, 2025 |

Core Viewpoint - IQSTEL Inc. is on track to achieve its full-year revenue forecast of $340 million for 2025, with preliminary accounting revenue of $101.5 million reported for the first five months of the year [1][4]. Financial Performance - The company reported $23.7 million in net revenue for May 2025, with expectations to reach $33 million in monthly net revenue by year-end, driven by organic growth and strategic integration [2]. - IQSTEL anticipates reaching a $400 million annualized revenue run rate by the end of 2025 based on current performance trends [2]. Growth Catalysts - The integration of GlobeTopper, a fintech platform, is expected to significantly contribute to revenue and positive EBITDA, enhancing the company's fintech division [3]. - The company aims to become a $1 billion revenue enterprise by 2027, with its recent uplisting to NASDAQ generating strong market interest and daily trading volume [4]. Management Insights - CEO Leandro Iglesias highlighted the emergence of adjusted EBITDA in the millions as a key step toward unlocking shareholder value, expressing confidence in the company's growth momentum [5]. - The company is optimistic about the second half of 2025 marking a historic milestone, supported by new high-margin business units and a favorable public market [5]. Company Overview - IQSTEL Inc. operates in 21 countries, providing advanced solutions across telecommunications, fintech, AI, and cybersecurity, with a forecast of $340 million in revenue for FY-2025 [7].

Core Viewpoint - Cycurion Inc. and IQSTEL Inc. are advancing their strategic partnership to develop customized cybersecurity solutions for the global telecom industry, entering an 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 from 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]. - Cycurion is exploring the integration of IQSTEL's proprietary AI platform to optimize operational processes and enhance cybersecurity measures [5]. Group 2: AI and Cybersecurity Development - The companies are developing an AI-Powered Next-Generation Cybersecurity Platform, leveraging Cycurion's cybersecurity expertise and IQSTEL's AI technologies to create a proactive defense system tailored for telecom operators [5][9]. - The initiative aims to increase predictive protection and enhance adaptive response capabilities, allowing for intelligent, real-time countermeasures against evolving cyber threats [8]. Group 3: Market Opportunity - The global cybersecurity market is projected to exceed $500 billion by 2030, driven by digital transformation and increasing cyber threats, with the telecom sector requiring robust digital defenses [11]. - IQSTEL operates in over 20 countries and has established relationships with more than 600 telecom operators, positioning itself to deliver cybersecurity solutions on a global scale [12]. Group 4: Future Plans - A commercial launch of the joint products is planned for the second half of 2025, with teams aligning on product development and go-to-market strategies for a coordinated rollout [10].

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)