iQSTEL Inc(US:IQST)2024-08-14 16:05Financial Performance - Total revenues for the three months ended June 30, 2024, were $78,635,764, a significant increase from $32,824,829 in the same period of 2023, representing a growth of approximately 139.8%[16] - Gross profit for the six months ended June 30, 2024, was $3,542,650, compared to $2,001,202 for the same period in 2023, indicating a year-over-year increase of about 77.0%[16] - The company reported total operating expenses of $4,068,205 for the six months ended June 30, 2024, compared to $2,571,450 for the same period in 2023, an increase of approximately 58.2%[16] - For the six months ended June 30, 2024, the company reported a net loss of $2,544,103 compared to a net loss of $320,466 for the same period in 2023, indicating a significant increase in losses[23] - The company reported a net loss of $1,963,887 for the three months ended June 30, 2024, compared to a loss of $161,644 for the same period in 2023, indicating a deterioration in performance[153] Assets and Liabilities - Total assets as of June 30, 2024, amounted to $29,986,660, up from $22,155,653 as of December 31, 2023, marking an increase of approximately 35.5%[14] - Current liabilities increased to $22,200,638 as of June 30, 2024, from $13,840,944 at the end of 2023, representing a rise of about 60.5%[14] - Cash and cash equivalents decreased to $797,227 as of June 30, 2024, down from $1,362,668 as of December 31, 2023, a decline of approximately 41.5%[14] - Total loans payable increased to $2,544,878 as of June 30, 2024, from $364,087 as of December 31, 2023, representing a substantial increase of approximately 600%[61] - The total stockholders' deficit as of March 31, 2024, was $(148,159), a decrease from $(377,710) as of December 31, 2023, showing an improvement in the company's financial position[19] Cash Flow - Net cash used in operating activities was $3,151,688 for the six months ended June 30, 2024, compared to $721,400 for the same period in 2023, reflecting a worsening cash flow situation[23] - Financing activities provided $5,306,444 in the six months ended June 30, 2024, a significant increase from $790,994 in the same period of 2023, driven by loans and convertible notes[158] Shareholder Information - The weighted average number of common shares outstanding for the three months ended June 30, 2024, was 178,445,909, compared to 164,636,688 for the same period in 2023, indicating an increase of about 8.3%[16] - The Company issued 7,427,570 shares of common stock during the six months ended June 30, 2024, raising the total outstanding shares to 179,557,200[73] Acquisitions and Growth Strategy - The company made acquisitions of subsidiaries totaling $2,505,121 during the six months ended June 30, 2024, indicating a strategy focused on growth through acquisitions[23] - The Company entered into a Share Purchase Agreement to acquire 51% of QXTEL for a total purchase price of $6,000,000, which includes $3,000,000 in cash and a promissory note of $2,000,000[91][97] - The acquisition of QXTEL was closed on April 1, 2024, and has been included in the Company's consolidated results since that date[96] Operational Highlights - The Telecom Division remains the primary source of revenue, offering VoIP, SMS, and IoT solutions, with over 400 active interconnection agreements[26] - The company has a developing Fintech Business Line aimed at providing immigrants with access to reliable financial services, which includes a MasterCard Debit Card and a mobile app[29] - The company operates in one industry segment, telecommunication services, across three geographic segments: USA, UK, and Switzerland[100] Management and Compensation - The Company recorded management salaries of $423,000 and stock-based compensation bonuses of $77,665 for the six months ended June 30, 2024, compared to $270,000 and $18,130, respectively, for the same period in 2023, indicating a significant increase in management compensation[88] Risks and Concerns - The Company has suffered recurring losses from operations, raising substantial doubt about its ability to continue as a going concern[54] - The Company has a cash shortfall risk and may need to raise additional capital to support its operations and marketing efforts[55] Accounting and Reporting - The Company is currently evaluating the impact of new accounting standards on its financial statements, including ASU No. 2023-07 and ASU No. 2023-09, which will enhance segment reporting and income tax disclosures, respectively[52][53]