# EDGAR Filing Document

**Accession Number:** 0001527702
**File Stem:** 0001663577-23-000070
**Filing Date:** 2023-2
**Character Count:** 367326
**Document Hash:** 9299b96ccd2e85a012aaa1725cc4c6cd
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001663577-23-000070.hdr.sgml**: 20231026

**ACCESSION NUMBER**: 0001663577-23-000070

**CONFORMED SUBMISSION TYPE**: S-1/A

**PUBLIC DOCUMENT COUNT**: 107

**FILED AS OF DATE**: 20230210

**DATE AS OF CHANGE**: 20230927

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** iQSTEL Inc
- **CENTRAL INDEX KEY:** 0001527702
- **STANDARD INDUSTRIAL CLASSIFICATION:** TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813]
- **IRS NUMBER:** 452808620
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** S-1/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-268856
- **FILM NUMBER:** 23613439

**BUSINESS ADDRESS:**
- **STREET 1:** 300 ARAGON AVENUE, SUITE 375
- **CITY:** CORAL GABLES
- **STATE:** FL
- **ZIP:** 33134
- **BUSINESS PHONE:** (954) 951-8191

**MAIL ADDRESS:**
- **STREET 1:** 300 ARAGON AVENUE, SUITE 375
- **CITY:** CORAL GABLES
- **STATE:** FL
- **ZIP:** 33134

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PURESNAX INTERNATIONAL, INC.
- **DATE OF NAME CHANGE:** 20151124

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PURE SNAX INTERNATIONAL, INC.
- **DATE OF NAME CHANGE:** 20150813

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** B-MAVEN, INC.
- **DATE OF NAME CHANGE:** 20110810

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM S-1/A**

**Amendment No. 1**

**REGISTRATION STATEMENT**

**UNDER**

**THE SECURITIES ACT OF 1933**

**iQSTEL Inc.**

**(Exact name of registrant as specified in its charter)**

---

| | | |
|:---|:---|:---|
| **NV** | **4813** | **45-2808620** |
| **(State of other jurisdiction of**<br> **incorporation or organization)** | **(Primary Standard Industrial**<br> **Classification Code Number)** | **(IRS Employer**<br> **Identification Number)** |

---

**300 Aragon Avenue, Suite 375**

**Coral Gables, FL 33134**

**Phone: (954) 951-8191 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)**

**The Corporate Place, Inc.**

**601 E. Charleston Blvd. Ste. 100**

**Las Vegas, NV 89104** 

**Phone: (877) 786-8500** 

**(Name, address, including zip code, and telephone number, including area code, of agent for service)**

**With copies to:**

**Scott Doney, Esq.**

**The Doney Law Firm**

**4955 S. Durango Dr. Ste. 165**

**Las Vegas, NV 89113**

**Phone: (702) 982-5686** 

**Approximate date of commencement of proposed sale to the public:** As soon as practicable after the registration statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box: [X]

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer [ ] Accelerated filer [ ] <br> Non-accelerated filer [X] Smaller reporting company [X] <br> Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. [ ]

**The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.** 

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

<br> PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED February 10, 2023 <br>      

15,000,000 shares offered by the Selling Shareholder

This prospectus relates to the resale by the selling stockholder of up to 15,000,000 shares of our common stock issuable upon the exercise of a one year option dated April 5, 2022, which has a fixed exercise price of $2.00 per share. We have already registered the original 4,800,000 shares of common stock under the option, but the option is subject to a provision that reduces the exercise price and correspondingly increases the number of shares of common stock available under the option (called a "sub-option") in the event that our daily average VWAP for the ten trading days prior to exercise is less than $2.00 per share. The amount of reduction to the exercise price and the corresponding amount of new shares under the sub-option varies depending on the price of our daily average VWAP for the ten trading days prior to exercise. If the WVAP is below $2.00 per share, but at least $1.501 per share, then the discount will be 16% of the VWAP. If the WVAP is $1.50 or less per share, then the discount will be 32% of the VWAP. No discounts are provided if the VWAP is $2.00 or greater.

As a result of past exercises on the option, dated October 5, 2022 and November 14, 2022, the daily average VWAP for the ten trading days prior to each exercise was less than $2.00 per share, resulting in the creation of the sub-option, or an amount up to the 15,000,000 shares of common stock offered herein.

The selling shareholders may offer and sell or otherwise dispose of the shares described in this prospectus from time to time through public or private transaction at prevailing market prices, at prices related to such prevailing market prices, at varying prices determined at the time of sale, at negotiated prices, or at fixed prices. We will not receive any of the proceeds from the common stock sold by the selling shareholders, but we will receive the exercise price for the sub-option, which we plan to use for working capital.

We are currently quoted on the OTCQX under the symbol "IQST." On February 7 2023, the reported closing price of our common stock was $0.18 per share. Prior to this offering, there has been a very limited market for our securities. While our common stock is quoted on the OTCQX, there has been negligible trading volume. There is no guarantee that an active trading market will develop in our securities.

The holders of our Series A Preferred Stock, which is comprised of our officers and directors, Leandro Iglesias and Alvaro Quintana Cardona, control our company with a 51% vote on all matters regarding shareholder approval by virtue of their ownership in our Series A Preferred Stock. There were 10,000 shares of Series A Preferred Stock outstanding as of the date of this prospectus, with Mr. Iglesias holding 7,000 shares and Mr. Cardona the other 3,000 shares. There were 164,176,688 shares of common stock outstanding as of the date of this prospectus, with Mr. Iglesias holding 542,932 shares and Mr. Cardona holding 1,121,842 shares, which together accounts for just over 1% of our outstanding common stock. Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to shareholders at a rate of 51% of the total vote of shareholders, including the election of directors. Our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. By virtue of their ownership of Series A Preferred Stock and common stock, they are able to vote at a rate of approximately 51.50% of the total vote of shareholders and therefore able to exercise significant influence over our company, including the election of directors, the approval of significant corporate transactions, and any change of control of our company. See "Principal Stockholders."

**Investing in our common stock involves a high degree of risk. See "Risk Factors" beginning on page 2 of this prospectus for a discussion of information that should be considered in connection with an investment in our common stock.**

**Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.**

The date of this prospectus is February 10, 2023

![](image_002.jpg)

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | Page |
| [PROSPECTUS SUMMARY](#a_001) | 1 |
| [THE OFFERING](#a_001) | 1 |
| [RISK FACTORS](#a_002) | 2 |
| [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](#a_003) | 12 |
| [USE OF PROCEEDS](#a_004) | 12 |
| [DIVIDEND POLICY](#a_005) | 12 |
| [SELLING SHAREHOLDERS](#a_006) | 13 |
| [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#a_007) | 15 |
| [BUSINESS](#a_008) | 22 |
| [MANAGEMENT](#a_009) | 25 |
| [EXECUTIVE COMPENSATION](#a_010) | 29 |
| [CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS](#a_011) | 31 |
| [PRINCIPAL STOCKHOLDERS](#a_012) | 31 |
| [DESCRIPTION OF CAPITAL STOCK](#a_013) | 33 |
| [PLAN OF DISTRIBUTION](#a_014) | 36 |
| [INTERESTS OF NAMED EXPERTS AND COUNSEL](#a_015) | 38 |
| [WHERE YOU CAN FIND MORE INFORMATION](#a_016) | 38 |
| [INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE](#a_017) | 39 |
| [INDEX TO FINANCIAL STATEMENTS](#a_018) | 40 |

---

Neither we nor the underwriter has authorized anyone to provide you with information that is different from that contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. When you make a decision about whether to invest in our common stock, you should not rely upon any information other than the information in this prospectus or in any free writing prospectus that we may authorize to be delivered or made available to you. Neither the delivery of this prospectus nor the sale of our common stock means that the information contained in this prospectus or any free writing prospectus is correct after the date of this prospectus or such free writing prospectus. This prospectus is not an offer to sell or the solicitation of an offer to buy shares of common stock in any circumstances under which the offer or solicitation is unlawful.

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity and market share, is based on information from our own management estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third parties. Management estimates are derived from publicly available information, our knowledge of our industry and assumptions based on such information and knowledge, which we believe to be reasonable. Our management estimates have not been verified by any independent source, and we have not independently verified any third-party information. In addition, assumptions and estimates of our and our industry's future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "Risk Factors." These and other factors could cause our future performance to differ materially from our assumptions and estimates. See "Cautionary Note Regarding Forward-Looking Statements."

This prospectus contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the® or™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies' trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

i

**PROSPECTUS SUMMARY**

 

*This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, especially the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of this prospectus and the financial statements and related notes appearing at the end of this prospectus before making an investment decision.*

 

*Unless the context provides otherwise, all references in this prospectus to "IQSTEL Inc." "we," "us," "our," the "Company," or similar terms, refer to IQSTEL Inc. Inc. and its directly and indirectly owned subsidiaries on a consolidated basis.*

**Our Company**

**Company Description**

iQSTEL Inc. (OTCQX: IQST, www.iQSTEL.com) is a US-based publicly-listed company holding an Independent Board of Directors and Audit Committee with a presence in 19 countries and 70 employees are offering leading-edge services through its four business lines.

The Telecom Division (www.iqstelecom.com), which represents the majority of current operations, offers VoIP, SMS, proprietary Internet of Things (IoT) solutions (www.iotsmartgas.com and www.iotsmarttank.com), and international fiber-optic connectivity through its subsidiaries: Etelix (www.etelix.com), SwissLink Carrier (www.swisslink-carrier.com), Smartbiz Telecom (www.smartbiztel.com), Whisl Telecom (www.whisl.com), IoT Labs (www.iotlabs.mx), and QGlobal SMS (www.qglobalsms.com).

The Fintech business line (www.globalmoneyone.com) (www.maxmo.vip) offers a complete Fintech ecosystem MasterCard Debit Card, US Bank Account (No SSN Needed), Mobile App/Wallet (Remittances, Mobile Top Up). Our Fintech subsidiary, Global Money One, is to provide immigrants access to reliable financial services that make it easier to manage their money and stay connected with their families back home.

The BlockChain Platform Business Line (www.itsbchain.com) offers our proprietary Mobile Number Portability Application (MNPA) to serve the in-country portability needs through its subsidiary, itsBchain.

The Electric Vehicle (EV) Business Line (www.evoss.net) offers electric motorcycles to work and have fun in the USA, Spain, Portugal, Panama, Colombia, and Venezuela. EVOSS is also working on the development of an EV Mid Speed Car to serve the niche of the 2nd car in the family.

The information contained on our websites is not incorporated by reference into this Prospectus and should not be considered part of this or any other report filed with the SEC.

**The Offering**

*The following summary of the offering contains basic information about the offering and the common stock and is not intended to be complete. It does not contain all the information that is important to you. For a more complete understanding of the common stock, please refer to the section of this prospectus entitled "Description of Capital Stock."*

---

| | |
|:---|:---|
| Common stock offered by the selling shareholder | 15,000,000 shares of our common stock.<br>Represents shares of the Registrant's common stock and common stock issuable upon the exercise of an option dated April 5, 2022. |
| Common stock outstanding before and after this offering | 164,176,688 shares of our common stock as of the date of this Prospectus and 179,176,688 shares will be outstanding assuming the complete exercise of all 15,000,000 option shares. |
| Use of proceeds | We will not receive any proceeds from the sale or other disposition of the shares of common stock covered by this prospectus, aside from the exercise price for the option, which we plan to use for general working capital. See "Use of Proceeds" |
| Risk Factors | See the section entitled "Risk Factors" beginning on page 2 of this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock. |
| OTC Markets symbol | "IQST" |

---

[**Table of Contents**](#toc)

**RISK FACTORS**

*Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors and all other information contained in this prospectus before purchasing our common stock. If any of the following risks actually occur, we may be unable to conduct our business as currently planned and our financial condition and results of operations could be seriously harmed. In addition, the trading price of our common stock could decline due to the occurrence of any of these risks, and you may lose all or part of your investment. The risks and uncertainties discussed below are not the only ones we face. Our business, results of operations, financial condition or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. In assessing the risks and uncertainties described below, you should also consider carefully the other information contained in this prospectus before making a decision to invest in our common stock.*

 ****

**Risk Factors Related to the Financial Condition of the Company**

***Because our auditor has issued a going concern opinion regarding our company, there is an increased risk associated with an investment in our company.***

We have continually operated at a loss with an accumulated deficit of $19,511,934 as of September 30, 2022. We have not attained profitable operations and are dependent upon obtaining financing or generating revenue from operations to continue operations for the next twelve months. Our future is dependent upon our ability to obtain financing or upon future profitable operations. We reserve the right to seek additional funds through private placements of our common stock and/or through debt financing. Our ability to raise additional financing is unknown. We do not have any formal commitments or arrangements for the advancement or loan of funds. For these reasons, our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern. As a result, there is an increased risk that you could lose the entire amount of your investment in our company.

***Because we have a limited operating history, you may not be able to accurately evaluate our operations.***

We have had limited operations to date. Therefore, we have a limited operating history upon which to evaluate the merits of investing in our company. Potential investors should be aware of the difficulties normally encountered by new companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the operations that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to the ability to generate sufficient cash flow to operate our business and additional costs and expenses that may exceed current estimates. We expect to continue to incur significant losses into the foreseeable future. We recognize that if the effectiveness of our business plan is not forthcoming, we will not be able to continue business operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and it is doubtful that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.

***We are dependent on outside financing for the continuation of our operations.***

Because we have generated limited revenues and currently operate at a loss, we are completely dependent on the continued availability of financing in order to continue our business operations. There can be no assurance that financing sufficient to enable us to continue our operations will be available to us in the future.

We will need additional funds to complete further development of our business plan to achieve a sustainable level where ongoing operations can be funded out of revenues. We anticipate that we must raise for next 12 months $490,000 for our budget expenses, $1,000,000 for Capital Infusion for business growth, $8,500,000 for New Subsidiaries Acquisitions to fully implement our business plan to its fullest potential and achieve our growth plans. There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us.

Our failure to obtain future financing or to produce levels of revenue to meet our financial needs could result in our inability to continue as a going concern, and, as a result, our investors could lose their entire investment.

[**Table of Contents**](#toc)

***We may be unable to achieve some, all or any of the benefits that we expect to achieve from our plan to expand our operations.***

In the future we may require additional financing for capital requirements and growth initiatives. Accordingly, we will depend on our ability to generate cash flows from operations and to borrow funds and issue securities in the capital markets to maintain and expand our business. We may need to incur debt on terms and at interest rates that may not be as favorable. If additional financing is not available when required or is not available on acceptable terms, we may be unable to operate our business as planned or at all, fund our expansion, successfully promote our business, develop or enhance our products and services, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results of operations.

***As a growing company, we have yet to achieve a profit and may not achieve a profit in the near future, if at all.***

We have revenues but we are not profitable and may not be in the near future, if at all. Further, many of our competitors have a significantly larger industry presence and revenue stream but have yet to achieve profitability. Our ability to continue as a going concern is dependent upon raising capital from financing transactions, increasing revenue and keeping operating expenses below our revenue levels in order to achieve positive cash flows, none of which can be assured.

**Risk Factors Related to the Business of the Company**

***Our telecommunications line of business is highly sensitive to declining prices, which may adversely affect our revenues and margins.***

The telecommunications industry is characterized by intense price competition, which has resulted in declines in both our average per-minute price realizations and our average per-minute termination costs.

A reduction of our prices to compete with any other offers in the market will not always guarantee and increase in the traffic, which may result in a reduction of revenue. If these trends in pricing continue or accelerate, it could have a material adverse effect on the revenues generated by our telecommunications businesses and/or our gross margins.

The continued growth of Over-The-Top calling and messaging services, such as WhatsApp, Skype and Viber has adversely affected the use of traditional phone communications. We expect this IP-based services which offer voice communications for free to continue to increase, which may result in increased substitution on our service offerings.

***Our operating results may fluctuate, which could have a negative impact on our ability to grow our client base, establish sustainable revenues and succeed overall.***

Our results of operations may fluctuate as a result of a number of factors, some of which are beyond our control including but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ general economic conditions in the geographies and industries where we sell our services and conduct operations; legislative policies where we sell our services and conduct operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ the budgetary constraints of our customers; seasonality;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ the success of our strategic growth initiatives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ costs associated with the launching or integration of new or acquired businesses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ timing of new product introductions by us, our suppliers and our competitors; product and service mix, availability, utilization and pricing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ the mix, by state and country, of our revenues, personnel and assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ movements in interest rates or tax rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ changes in, and application of, accounting rules;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ changes in the regulations applicable to us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Litigation matters.

As a result of these factors, we may not succeed in our business, and we could go out of business.

[**Table of Contents**](#toc)

***The termination of our carrier agreements or our inability to enter into new carrier agreements in the future could materially and adversely affect our ability to compete, which could reduce our revenues and profits.***

We rely upon our carrier agreements in order to provide our telecommunications services to our customers. These carrier agreements are in most cases for finite terms and, therefore, there can be no guarantee that these agreements will be renewed at all or on favorable terms to us. Our ability to compete would be adversely affected if our carrier agreements were terminated or we were unable to enter into carrier agreements in the future to provide our telecommunications services to our customers, which could result in a reduction of our revenues and profits.

***Our customers, could experience financial difficulties, which could adversely affect our revenues and profitability if we experience difficulties in collecting our receivables.***

As a provider of international long-distance services, we depend upon sales of transmission and termination of traffic to other long distance providers and the collection of receivables from these customers. The wholesale telecommunications market continues to feature many smaller, less financially stable companies. If weakness in the telecommunications industry or the global economy reduces our ability to collect our accounts receivable from our major customers our profitability may be substantially reduced. While our most significant customers, from a revenue perspective, vary from quarter to quarter, our ten largest customers (3% of our total customer base) collectively accounted for 87% of total consolidated revenues by the nine months ended September 30, 2022. This concentration of revenues increases our exposure to non-payment by our larger customers, and we may experience significant write-offs if any of our large customers fail to pay their outstanding balances, which could adversely affect our revenues and profitability.

 ****

***We may fail to successfully integrate our acquisitions or otherwise be unable to benefit from pursuing acquisitions.***

We believe there are meaningful opportunities to grow through acquisitions and joint ventures across all product and service categories and we expect to continue a strategy of selectively identifying and acquiring businesses with complementary products and services. We may be unable to identify, negotiate, and complete suitable acquisition opportunities on reasonable terms. There can be no assurance that any business acquired by us will be successfully integrated with our operations or prove to be profitable to us. We may incur future liabilities related to acquisitions. Should any of the following problems, or others, occur as a result of our acquisition strategy, the impact could be material:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ difficulties integrating personnel from acquired entities and other corporate cultures into our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ difficulties integrating information systems;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ the potential loss of key employees of acquired companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ the assumption of liabilities and exposure to undisclosed or unknown liabilities of acquired companies; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ the diversion of management attention from existing operations.

 ****

***Natural disasters, terrorist acts, acts of war, cyber-attacks or other breaches of network or information technology security may cause equipment failures or disrupt our operations.***

Our inability to operate our telecommunications networks because of such events, even for a limited period of time, may result in loss of revenue, significant expenses, which could have a material adverse effect on our results of operations and financial condition.

We could be harmed by network disruptions, security breaches, or other significant disruptions or failures of our IT infrastructure and related systems. To be successful, we need to continue to have available a high capacity, reliable and secure network for our and our customers' use. As any other company, we face the risk of a security breach, whether through cyber-attacks, malware, computer viruses, sabotage, or other significant disruption of our IT infrastructure and related systems. There is a risk of a security breach or disruption of the systems we operate, including possible unauthorized access to our proprietary or classified information. We are also subject to breaches of our network resulting in unauthorized utilization of our services, which subject us to the costs of providing those services, which are likely not recoverable. The secure maintenance and transmission of our information is a critical element of our operations. Our information technology and other systems that maintain and transmit customer information may be compromised by a malicious third-party penetration of our network security, or impacted by advertent or inadvertent actions or inactions by our employees, or those of a third party service provider or business partner. As a result, our or our customers' information may be lost, disclosed, accessed or taken without the customers' consent, or our services may be used without payment.

[**Table of Contents**](#toc)

Although we make significant efforts to maintain the security and integrity of these types of information and systems, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging, especially in light of the growing sophistication of cyber-attacks and intrusions. We may be unable to anticipate all potential types of attacks or intrusions or to implement adequate security barriers or other preventative measures. Certain of our business units have been the subject of attempted and successful cyber-attacks in the past. We have researched the situations and do not believe any material internal or customer information has been compromised.

***We operate a global business that exposes us to currency, economic and regulatory.***

Our revenue comes primarily from sales outside the U.S. and our growth strategy is largely focused on emerging markets. Our success delivering solutions and competing in international markets is subject to our ability to manage various risks and difficulties, including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ our ability to effectively staff, provide technical support and manage operations in multiple countries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ fluctuations in currency exchange rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ timely collecting of accounts receivable from customers located outside of the U.S;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ trade restrictions, political instability, disruptions in financial markets, and deterioration of economic conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ compliance with the U.S. Foreign Corrupt Practices Act, and other anti-bribery laws and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ variations and changes in laws applicable to our operations in different jurisdictions, including enforceability of intellectual property and contract rights; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ compliance with export regulations, tariffs and other regulatory barriers.

***If we are unable to successfully manage growth, our operations could be adversely affected.***

Our progress is expected to require the full utilization of our management, financial and other resources, which to date has occurred with limited working capital. Our ability to manage growth effectively will depend on our ability to improve and expand operations, including our financial and management information systems, and to recruit, train and manage sales personnel. There can be no absolute assurance that management will be able to manage growth effectively.

If we do not properly manage the growth of our business, we may experience significant strains on our management and operations and disruptions in our business. Various risks arise when companies and industries grow quickly. If our business or industry grows too quickly, our ability to meet customer demand in a timely and efficient manner could be challenged. We may also experience development delays as we seek to meet increased demand for our products. Our failure to properly manage the growth that we or our industry might experience could negatively impact our ability to execute on our operating plan and, accordingly, could have an adverse impact on our business, our cash flow and results of operations, and our reputation with our current or potential customers.

**Risks Related to Legal Uncertainty**

***We may be subject to tax and regulatory audits which could subject us to liabilities.***

We are subject to tax and regulatory audits which could result in the imposition of liabilities that may or may not have been reserved. We are subject to audits by taxing and regulatory authorities with respect to certain of our income and operations. These audits can cover periods for several years prior to the date the audit is undertaken and could result in the imposition of liabilities, interest and penalties if our positions are not accepted by the auditing entity.

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***Changes in regulations or user concerns regarding privacy and protection of user data, or any failure to comply with such laws, could adversely affect our business.***

Federal, state, and international laws and regulations govern the collection, use, retention, disclosure, sharing and security of data that we receive from and about our users. The use of consumer data by online service providers is a topic of active interest among federal, state, and international regulatory bodies, and the regulatory environment is unsettled. Many states have passed laws requiring notification to users where there is a security breach for personal data, such as California's Information Practices Act. We face similar risks in international markets where our products and services are offered. Any failure, or perceived failure, by us to comply with or make effective modifications to our policies, or to comply with any applicable federal, state, or international privacy, data-retention or data-protection-related laws, regulations, orders or industry self-regulatory principles could result in proceedings or actions against us by governmental entities or others, a loss of user confidence, damage to our business and brand, and a loss of users, which could potentially have an adverse effect on our business.

In addition, various federal, state and foreign legislative or regulatory bodies may enact new or additional laws and regulations concerning privacy, data retention, data transfer and data protection issues, including laws or regulations mandating disclosure to domestic or international law enforcement bodies, which could adversely impact our business, our brand or our reputation with users. For example, some countries are considering or have enacted laws mandating that user data regarding users in their country be maintained in their country. In addition, there currently is a data protection regulation applicable to member states of the European Union that includes operational and compliance requirements that are different than those currently in place and that also includes significant penalties for non-compliance.

The interpretation and application of privacy, data protection, data transfer and data retention laws and regulations are often uncertain and in flux in the United States and internationally. These laws may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices, complicating long-range business planning decisions. If privacy, data protection, data transfer or data retention laws are interpreted and applied in a manner that is inconsistent with our current policies and practices, we may be fined or ordered to change our business practices in a manner that adversely impacts our operating results. Complying with these varying international requirements could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business and operating results.

***We may be subject to legal liability associated with providing online services or content.***

We host and provide a wide variety of services and technology products that enable and encourage individuals and businesses to exchange information; upload or otherwise generate photos, videos, text, and other content; advertise products and services; conduct business; and engage in various online activities both domestically and internationally. The law relating to the liability of providers of online services and products for activities of their users is currently unsettled both within the United States and internationally. We may be subject to domestic or international actions alleging that certain content we have generated or third-party content that we have made available within our services violates laws in domestic and international jurisdictions.

It is also possible that if any information provided directly by us contains errors or is otherwise wrongfully provided to users, third parties could make claims against us. For example, we offer web-based e-mail services, which expose us to potential risks, such as liabilities or claims, by our users and third parties, resulting from unsolicited e-mail, lost or misdirected messages, illegal or fraudulent use of e-mail, alleged violations of policies, property interests, or privacy protections, including civil or criminal laws, or interruptions or delays in e-mail service. We may also face purported consumer class actions or state actions relating to our online services, including our fee-based services. In addition, our customers, third parties, or government entities may assert claims or actions against us if our online services or technologies are used to spread or facilitate malicious or harmful code or applications.

Investigating and defending these types of claims are expensive, even if the claims are without merit or do not ultimately result in liability, and could subject us to significant monetary liability or cause a change in business practices that could negatively impact our ability to compete.

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***Nevada law and certain anti-takeover provisions of our corporate documents could entrench our management or delay or prevent a third party from acquiring us or a change in control even if it would benefit our shareholders.***

Certain provisions of Nevada law may have an anti-takeover effect and may delay or prevent a tender offer or other acquisition transaction that a shareholder might consider to be in his or her best interest. The summary of the provisions of Nevada law set forth below does not purport to be complete and is qualified in its entirety by reference to Nevada law.

The issuance of shares of preferred stock, the issuance of rights to purchase such shares, and the imposition of certain other adverse effects on any party contemplating a takeover could be used to discourage an unsolicited acquisition proposal. For instance, the issuance of a series of preferred stock might impede a business combination by including class voting rights that would enable a holder to block such a transaction. In addition, under certain circumstances, the issuance of preferred stock could adversely affect the voting power of holders of our common stock.

Under Nevada law, a director, in determining what he reasonably believes to be in or not opposed to the best interests of the corporation, does not need to consider only the interests of the corporation's shareholders in any takeover matter but may also, in his discretion, may consider any of the following:

(i) The interests of the corporation's employees, suppliers, creditors and customers;

(ii) The economy of the state and nation;

(iii) The impact of any action upon the communities in or near which the corporation's facilities or operations are located;

(iv) The long-term interests of the corporation and its shareholders, including the possibility that those interests may be best served by the continued independence of the corporation; and

(v) Any other factors relevant to promoting or preserving public or community interests.

Because our board of directors is not required to make any determination on matters affecting potential takeovers solely based on its judgment as to the best interests of our shareholders, our board could act in a manner that would discourage an acquisition attempt or other transaction that some, or a majority, of our shareholders might believe to be in their best interests or in which such shareholders might receive a premium for their stock over the then market price of such stock. Our board presently does not intend to seek shareholder approval prior to the issuance of currently authorized stock, unless otherwise required by law or applicable stock exchange rules.

***We are no longer an "emerging growth company" and therefore no longer eligible for reduced reporting requirements applicable to emerging growth companies.***

It has been five years since our first registered sale of common stock in 2012, so we are no longer eligible for the reduced disclosure requirements applicable to "emerging growth companies."

Emerging growth companies may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

We are also a smaller reporting company, and we will remain a smaller reporting company until the fiscal year following the determination that our voting and non-voting common shares held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or our annual revenues are more than $100 million during the most recently completed fiscal year and our voting and non-voting common shares held by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter. Similar to emerging growth companies, smaller reporting companies are able to provide simplified executive compensation disclosure, are exempt from the auditor attestation requirements of Section 404, and have certain other reduced disclosure obligations, including, among other things, being required to provide only two years of audited financial statements and not being required to provide selected financial data, supplemental financial information or risk factors.

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Since we are no longer eligible for emerging growth company status, we will be subject to the reporting obligations of a smaller reporting company and, if we continue grow, we may be subject to increased reporting requirements applicable to accelerated filers, which are more onerous than those applicable to smaller reporting companies.

***As a smaller reporting company and will be exempt from certain disclosure requirements, which could make our Common Stock less attractive to potential investors.***

Rule 12b-2 of the Exchange Act defines a "smaller reporting company" as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:

&nbsp;&nbsp;&nbsp;&nbsp;• had a public float of less than $250 million as of the last business day of our most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of our voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or

• in the case of an initial registration statement under the Securities Act, or the Exchange Act, for shares of our common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or

• in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available.

As a smaller reporting company, we will not be required and may not include a Compensation Discussion and Analysis section in our proxy statements; we will provide only two years of financial statements; and we need not provide the table of selected financial data. We also will have other "scaled" disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our Common Stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares.

***If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common shares.***

We are required, under Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting that results in more than a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. Section 404 of the Sarbanes-Oxley Act also generally requires an attestation from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. However, for as long as we remain a smaller reporting company, we intend to take advantage of the exemption permitting us not to comply with the independent registered public accounting firm attestation requirement.

Our compliance with Section 404 will require that we incur substantial accounting expense and expend significant management efforts. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective.

As of the date of our last Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

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We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows. This may expose us, including individual executives, to potential liability which could significantly affect our business. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting once that firm begins its audits of internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common shares could decline, and we could be subject to sanctions or investigations by FINRA, the SEC, or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

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***Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.***

Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to management, recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.

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***Deficiencies in disclosure controls and procedures and internal control over financial reporting could result in a material misstatement in our financial statements.***

We could be adversely affected if there are deficiencies in our disclosure controls and procedures or in our internal controls over financial reporting. The design and effectiveness of our disclosure controls and procedures and our internal controls over financial reporting may not prevent all errors, misstatements or misrepresentations. Consistent with other entities in similar stages of development, we have a limited number of employees currently in the accounting group, limiting our ability to provide for segregation of duties and secondary review. A lack of resources in the accounting group could lead to material misstatements resulting from undetected errors occurring from an individual performing primarily all areas of accounting with limited secondary review. Deficiencies in internal controls over financial reporting which may occur could result in material misstatements of our results of operations, restatements of financial statements, other required remediations, a decline in the price of our common shares, or otherwise materially adversely affect our business, reputation, results of operations, financial condition or liquidity.

**Risks Related to Our Securities**

***We have the right to issue additional common stock and preferred stock without consent of stockholders. This would have the effect of diluting investors' ownership and could decrease the value of their investment.***

We have additional authorized, but unissued shares of our common stock that may be issued by us for any purpose without the consent or vote of our stockholders that would dilute stockholders' percentage ownership of our company.

In addition, our certificate of incorporation authorizes the issuance of shares of preferred stock and/or the conversion of existing outstanding preferred stock into common stock, the rights, preferences, designations and limitations of which may be set by the Board of Directors. Our certificate of incorporation has authorized issuance of up 300,000,000 shares of common stock and up to 1,200,000 shares of preferred stock in the discretion of our Board.

The shares of authorized but unissued preferred stock may be issued upon Board of Directors approval; no further stockholder action is required. If issued, the rights, preferences, designations and limitations of such preferred stock would be set by our Board and could operate to the disadvantage of the outstanding common stock. Such terms could include, among others, preferences as to dividends and distributions on liquidation.

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***Our largest shareholders, officers and directors and related parties, Leandro Iglesias and Alvaro Cardona, have substantial control over us and our policies as a result of their holdings in Series A Preferred Stock, and will be able to influence all corporate matters, which might not be in other shareholders' interests.***

There were 10,000 shares of Series A Preferred Stock outstanding as of the date of this prospectus, with Mr. Iglesias holding 7,000 shares and Mr. Cardona the other 3,000 shares. There were 164,176,688 shares of common stock outstanding as of the date of this prospectus, with Mr. Iglesias holding 542,932 shares and Mr. Cardona holding 1,121,842 shares, which together accounts for just over 1% of our outstanding common stock. Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to shareholders at a rate of 51% of the total vote of shareholders, including the election of directors. Our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. By virtue of their ownership of Series A Preferred Stock and common stock, they are able to vote at a rate of approximately 51.50% of the total vote of shareholders. They are therefore able to exercise significant influence over all matters requiring approval by our stockholders, including the election of directors, the approval of significant corporate transactions, and any change of control of our company. They could prevent transactions, which would be in the best interests of the other shareholders. Their interests may not necessarily be in the best interests of the shareholders in general.

***We do not expect to pay dividends in the foreseeable future. Any return on investment may be limited to the value of our common stock.***

We do not anticipate paying cash dividends on our common stock in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your investment will occur only if our stock price appreciates.

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**Risks Related to the Offering and the Market for our Stock**

***If a market for our common stock does not develop, shareholders may be unable to sell their shares.***

Our common stock is quoted under the symbol "IQST" on the OTCQX operated by OTC Markets Group, Inc., an electronic inter-dealer quotation medium for equity securities. We do not currently have an active trading market. There can be no assurance that an active and liquid trading market will develop or, if developed, that it will be sustained.

Our securities are very thinly traded. Accordingly, it may be difficult to sell shares of our common stock without significantly depressing the value of the stock. Unless we are successful in developing continued investor interest in our stock, sales of our stock could continue to result in major fluctuations in the price of the stock.

***The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control.***

Our stock price is subject to a number of factors, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Technological innovations or new products and services by us or our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Government regulation of our products and services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The establishment of partnerships with other telecom companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Intellectual property disputes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Additions or departures of key personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Sales of our common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Our ability to integrate operations, technology, products and services;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Our ability to execute our business plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Operating results below or exceeding expectations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether we achieve profits or not;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Loss or addition of any strategic relationship;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Industry developments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Economic and other external factors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Period-to-period fluctuations in our financial results.

Our stock price may fluctuate widely as a result of any of the above. In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

***Because we are subject to the "Penny Stock" rules, the level of trading activity in our stock may be reduced.***

The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any listed, trading equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules which may increase the difficulty Purchasers may experience in attempting to liquidate such securities.

***We will likely conduct further offerings of our equity securities in the future, in which case your proportionate interest may become diluted.***

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We will likely be required to conduct equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake. If our common stock shares are issued in return for additional funds, the price per share could be lower than that paid by our current shareholders. We anticipate continuing to rely on equity sales of our common stock shares in order to fund our business operations. If we issue additional common stock shares or securities convertible into shares of our common stock, your percentage interest in us could become diluted.

***If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.***

The trading market for our common stock will, to some extent, depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline. If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

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***We may be subject to securities litigation, which is expensive and could divert management attention.***

In the past companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management's attention and resources, which could seriously hurt our business. Any adverse determination in litigation could also subject us to significant liabilities.

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**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This prospectus contains forward-looking statements. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, timing and likelihood of success, plans and objectives of management for future operations, and future results of current and anticipated products are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expect," "plan," "anticipate," "could," "intend," "target," "project," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. The forward-looking statements in this prospectus are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this prospectus and are subject to a number of risks, uncertainties and assumptions described under the sections in this prospectus entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this prospectus. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for us to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

This prospectus also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk.

**USE OF PROCEEDS**

The common shares offered by the selling security holder are being registered for the account of the selling security holder identified in this prospectus. All net proceeds from the sale of these common shares will go to the selling security holder who offers and sells its common shares. We will not receive any part of the proceeds from such sales of common shares, other than the exercise price for the option, which we expect to use for working capital.

**DIVIDEND POLICY**

We have never paid dividends on our common stock, and currently do not intend to pay any cash dividends on our common stock in the foreseeable future. In addition, we may incur debt financing in the future, the terms of which will likely prohibit us from paying cash dividends or distributions on our common stock. Even if we are permitted to pay cash dividends in the future, we currently anticipate that we will retain all future earnings, if any, to fund the operation and expansion of our business and for general corporate purposes.

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**SELLING SHAREHOLDER**

This prospectus relates to the offer and sale by the selling stockholders from time to time of up to an aggregate of 15,000,000 shares of common stock.

When we refer to the "selling stockholder" in this prospectus, we mean the entity listed in the table below, and each of its respective pledgees, donees, permitted transferees, assignees, successors and others who later come to hold any of such selling stockholder's interests in shares of our Common Stock other than through a public sale.

Other than as described in this prospectus, the selling stockholders have not within the past three years had any position, office or other material relationship with us or any of our predecessors or affiliates other than as a holder of our securities. None of the selling stockholders is a broker-dealer or affiliate of a broker-dealer.

We issued a one-year Common Stock Purchase Option with a grant date of April 5, 2022 to Apollo Management Group, Inc. for $500,000, for the right to acquire up to 4,800,000 at an exercise price of $2.00 per share, subject to certain adjustments as explained below. The one-year period commences when the option may be exercised, with an initial exercise date of September 30, 2022, and expiration date of September 30, 2023. If at the time of any exercise, the shares of common stock underlying the option are not subject to an effective registration statement, the option may be exercised, in whole or in part, at any time or from time to time by means of a "cashless exercise" in which the holder is entitled to receive a number of shares of common stock equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) = the daily average of the VWAP for the shares of common stock for the 10 trading days immediately preceding the date on which holder elects to exercise the option by means of a cashless exercise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) = the exercise price of $2.00, as may adjusted by certain provisions in the option, such as stock splits, price adjustments for future options with lower exercise prices, price adjustments in the event our stock trades below $2.00 on the initial exercise date with such new exercise price to be at a discount of 16% and up to 32% of the market price of our stock (if the stock falls below $1.50) on the date of exercise; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(X) = the number of shares of common stock that would be issuable upon exercise of the option in accordance with the terms of the option if such exercise were by means of a cash exercise rather than a cashless exercise.

Conversions are required to be made in recognition of holder's beneficial ownership limitation of 4.99% of our outstanding common stock, which upon notice may be increased to 9.99%.

The option also contains rights to any company distributions and consideration in fundamental transactions, subject to the beneficial ownership limitation.

On September 29, 2022, the Company amended the Common Stock Purchase Option (the "Amended Option") with Holder to set the minimum aggregate exercise value for each individual exercise. Under the Amended Option, Holder and the Company agreed that the Holder has the right and the obligation to exercise, on a cashless basis, in accordance with the exercise price and utilizing the cashless methodology in the amended option, $1,000,000 of the amended option not later than October 15, 2022. Thereafter, the Holder shall undertake to exercise not less than (a) $400,000 of the amended option on a "cash basis" not later than the later of (i) November 14, 2022 or (ii) the date on which there is an effective registration statement permitting the issuance of the option shares to or resale of the option shares by the Holder and (b) an additional $400,000 of the amended option on a "cash basis" not later than the latest of (i) thirty (30) days following the exercise of the amended option under subsection (a), above, (ii) December 14, 2022, or (iii) the date on which there is an effective registration statement permitting the issuance of the option shares to or resale of the option shares by the Holder. From and after the occurrence of the three above-referenced exercises, each additional exercise of Options hereunder shall be in an amount not less than $200,000 and exercised only on a cash basis.

On April 5, 2022, we granted registration rights in favor of Apollo Management Group, Inc. for the resale of shares underlying the option.

Pursuant to the Registration Rights Agreement, The Company' is obligated to file a registration statement, obtain effectiveness of the registration statement, and maintain the continuous effectiveness of any registration statement that has been declared effective began on the Grant Date or April 5, 2022 and continues until all of the shares underlying the option may be sold without any restrictions pursuant to Rule 144 of the Securities Act.

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In addition, if at any time there is not an effective registration statement covering the shares underlying the option and the Company proposes to register the offer and sale of any shares of its Common Stock under the Securities Act (other than a registration statement for any employee stock plan or on Form S-4 or a registration statement in connection with any dividend or distribution reinvestment or similar plan), the Company shall give prompt written notice to the option holder of its intention to effect such a registration and shall include in such registration all of the shares underlying the option with respect to which the Company has received written requests for inclusion unless they may be sold without restrictions pursuant to Rule 144.

We are required under the Registration Rights Agreement to keep current in our SEC reports, to furnish copies of registration statements and other filings to the option holder of notify the same of any untrue statements made in any registration statement to which we have agreed to indemnify the option holder.

The table below presents information regarding the selling stockholder, the shares of Common Stock that it may sell or otherwise dispose of from time to time under this prospectus and the number of shares and percentage of our outstanding shares of Common Stock each of the selling stockholder will own assuming all of the shares covered by this prospectus are sold by the selling stockholder.

We do not know when or in what amounts the selling stockholder may sell or otherwise dispose of the shares of Common Stock offered hereby. The selling stockholder might not sell or dispose of any or all of the shares covered by this prospectus or may sell or dispose of some or all of the shares other than pursuant to this prospectus. Because the selling stockholder may not sell or otherwise dispose of some or all of the shares covered by this prospectus and because there are currently no agreements, arrangements or understandings with respect to the sale or other disposition of any of the shares, we cannot estimate the number of shares that will be held by the selling stockholder after completion of the offering. However, for purposes of this table, we have assumed that all of the shares of Common Stock covered by this prospectus will be sold by the selling stockholders, and all the 10,000,000 offering sales will be sold too.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name of selling stockholder** | Shares of Common stock owned prior to offering | Shares of Common stock to be sold | Shares of Common stock owned after offering (if all shares are sold) | **Percent of common stock owned after offering (if all shares are sold) (1)** |
| Apollo Management (2) | 4877364 | 15000000 | 0 | 11.0937% |
| **Total** | **4877364** | **15000000** | **0** | **11.0937%** |

---

(1) The information in
 the table is based on information supplied to us by the selling shareholders. The percentages of ownership are calculated based on
 179,176,688 shares of common stock outstanding as of February 10, 2023, and taking in consideration the exercise of the 15,000,000
 option shares. Beneficial ownership is determined in accordance with Section 13(d) of the Exchange Act, and generally includes shares over
 which the selling stockholder has voting or dispositive power, including any shares that the selling stockholder has the
 right to acquire within 60 days of the date of this prospectus.

(2) Mr.Yohan Naraine has voting and dispositive control over the shares held by Apollo Management Group, Inc.

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**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*The following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that are based on beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results may differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this prospectus, particularly in the section entitled "Risk Factors." See "Cautionary Note Regarding Forward-Looking Statements."*

The discussion and analysis of our financial condition and results of operations are based on our financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

As used in this "Management's Discussion and Analysis of Financial Condition and Results of Operation," except where the context otherwise requires, the term "we," "us," "our," or "the Company," refers to the business of IQSTEL Inc.

 

**Results of Operations for the Three and Nine Months Ended September 30, 2022 and 2021**

***Revenues***

Our total revenue reported for the three months ended September 30, 2022 was $21,936,634, compared with $16,516,739 for the three months ended September 30, 2021. These numbers reflect an increase of 32.81% quarter over quarter on our consolidated revenues. Our total revenue reported for the nine months ended September 30, 2022 was $65,055,661, compared with $46,842,717 for the nine months ended September 30, 2021. These numbers reflect an increase of 38.88% year over year on our consolidated revenues.

When looking at the numbers by subsidiary, we have the following breakout for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021:

---

| | | |
|:---|:---|:---|
| **Subsidiary** | **Revenue**<br> **Nine Months Ended**<br> **September 30, 2022** | **Revenue**<br> **Nine Months Ended**<br> **September 30, 2021** |
| &nbsp;&nbsp;Etelix.com USA, LLC | $17510601 | $11271992 |
| &nbsp;&nbsp;SwissLink Carrier AG | 3554591 | 3474215 |
| &nbsp;&nbsp;QGlobal LLC | 317594 | 585151 |
| &nbsp;&nbsp;IoT Labs LLC | 39733761 | 31547531 |
| &nbsp;&nbsp;Smartbiz Telecom | 3712432 |  |
| &nbsp;&nbsp;Whisl Telecom | 2624573 |  |
| &nbsp;&nbsp;Sub-total | $67453552 | $46878889 |
| &nbsp;&nbsp;Inter-company sales | (2397891) | (36172) |
|  | $65055661 | $46842717 |

---

The continued growth of our revenue is the result of the development of our business strategy, which includes the strengthening of our commercial and operating activities and new acquisitions.

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***Cost of Revenues***

Our total cost of revenues for the three months ended September 30, 2022 increased to $20,621,674, compared with $15,675,687 for the three months ended September 30, 2021. Our total cost of revenues for the nine months ended September 30, 2022 increased to $62,410,367, compared with $45,469,730 for the nine months ended September 30, 2021.

When looking at the numbers by subsidiary, we have the following breakout for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021:

---

| | | |
|:---|:---|:---|
| **Subsidiary** | **Cost of Revenue**<br> **Nine Months Ended**<br> **September 30, 2022** | **Cost of Revenue**<br> **Nine Months Ended**<br> **September 30, 2021** |
| &nbsp;&nbsp;Etelix.com USA, LLC | $16818292 | $10855644 |
| &nbsp;&nbsp;SwissLink Carrier AG | 2969719 | 3018877 |
| &nbsp;&nbsp;QGlobal LLC | 236402 | 486296 |
| &nbsp;&nbsp;IoT Labs LLC | 39356735 | 31145085 |
| &nbsp;&nbsp;Smartbiz Telecom | 3330051 |  |
| &nbsp;&nbsp;Whisl Telecom | 2097059 |  |
| &nbsp;&nbsp;Sub-total | $64808258 | $45505902 |
| &nbsp;&nbsp;Inter-company sales | (2397891) | (36172) |
|  | $62410367 | $45469730 |

---

Our cost of revenues consists of direct charges from vendors that the Company incurs to deliver services to its customers. These costs primarily consist of usage charges for calls and SMS terminated in vendor's network.

The behavior in the costs shows a logical correlation with the behavior of the revenue commented above. We have reached a higher volume of sales and every additional unit sold (minutes and SMS) has its corresponding termination cost.

***Gross Profit***

The gross profit for the three months ended September 30, 2022 increased to $1,314,960 from $841,052 for the same period of year 2021. For the nine months ended September 30, 2022 the gross profit increased to $2,645,294 from $1,372,987 for the same period of year 2021.

When we analyze the numbers expressed in percentages, the gross profit for the nine months ended September 30, 2022 was 4.07%, which compared to 2.93% for the nine months ended September 30, 2021, an increase in the consolidated gross profit of 38.91%.

When looking at the numbers by subsidiary, we have the following breakout for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021:

---

| | | |
|:---|:---|:---|
| **Subsidiary** | **Gross Margin**<br> **Nine Months Ended**<br> **September 30, 2022** | **Gross Margin**<br> **Nine Months Ended**<br> **September 30, 2021** |
| Etelix.com USA, LLC% | 3.95% | 3.69 |
| SwissLink Carrier AG | 16.45 | 13.11 |
| QGlobal LLC | 25.56 | 16.89 |
| IoT Labs LLC | 0.95 | 1.28 |
| Smartbiz Telecom | 10.30 |  |
| Whisl Telecom | 20.10 |  |
| % | 4.07% | 2.93 |

---

The increase of our consolidated gross margin is the result of the improvement of the gross margin of Etelix, SwissLink and QGlobal; combined with the relatively high gross margin of our most recent acquisitions Smartbiz and Whisl.

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***Operating Expenses***

Operating expenses increased to $1,256,147 for the three months ended September 30, 2022 from $957,195 for the three months ended September 30, 2021. Operating expenses decreased to $3,390,097 for the nine months ended September 30, 2022 from $3,664,473 for the nine months ended September 30, 2021. The detail by major category for the nine months ended September 30, 2022 and 2021 is reflected in the table below.

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2022** | **2021** |
| Salaries, Wages and Benefits | $1239271 | $863413 |
| Technology | 188950 | 198143 |
| Professional Fees | 475143 | 353080 |
| Legal and Regulatory | 199768 | 87448 |
| Bad Debt Expense | 26299 |  |
| Travel and Events | 55281 | 15710 |
| Public Cost | 24122 | 30078 |
| Advertising | 486153 | 705175 |
| Insurances | 7328 |  |
| Bank Services and Fees | 27109 | 85885 |
| Financial Expenses | 134608 |  |
| Depreciation and Amortization | 91221 | 66924 |
| Penalties and Settlements | 110767 |  |
| Office, Facility and Other | 231947 | 337983 |
| &nbsp;&nbsp;&nbsp;&nbsp; Sub Total | 3297967 | 2743839 |
| Stock-based compensation | 92130 | 920634 |
| Total Operating Expense | $3390097 | $3664473 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The main reasons for the overall decrease in operating expenses for the nine months ended September 30, 2022 compared to the same period of 2021 is due to the significant decrease in Stock-based compensation.

When looking at the numbers by subsidiary, we have the following breakout for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021:

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2022** | **2021** | **Difference** |
| iQSTEL | $1382701 | 2395047 | (1012346) |
| Etelix | 326432 | 266894 | 59538 |
| SwissLink | 597810 | 587154 | 10656 |
| ItsBchain | 12653 | 2198 | 10455 |
| QGlobal | 133532 | 92881 | 40651 |
| IoT Labs | 185736 | 187773 | (2037) |
| Global Money One | 109627 | 132526 | (22899) |
| Smartbiz Telecom | 246268 |  | 246268 |
| Whisl Telecom | 395338 |  | 395338 |
|  | $**3390097** | **3664473** | **(274376)** |

---

The most significant difference is generated by iQSTEL which is due to the reduction in Stock-based compensation.

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***Operating Income***

The Company showed positive Operating Income for the three months ended September 30, 2022 of $58,813 compared with a negative result of $116,143 for the three months ended September 30, 2021.

The Company showed negative Operating Income for the nine months ended September 30, 2022 of $744,803 compared with a negative result of $2,291,486 for the nine months ended September 30, 2021.

Despite the operating loss incurred during the nine months ended September 30, 2022, the numbers compared with the same period of year 2021 reflect a positive evolution process as shown by the positive operating income during the three months ended September 30, 2022.

***Other Expenses/Other Income***

We had other expenses of $38,073 for the nine months ended September 30, 2022, as compared with other expenses of $820,593 for the same period ended 2021. The decrease in other expenses is a consequence of a significant reduction in interest expenses and other expenses related to derivatives.

***Net Income***

We finished the three months ended September 30, 2022 with a net income of $27,312, as compared to a loss of $111,218 during the three months ended September 30, 2021. We also finished the nine months ended September 30, 2022 with a loss of $782,876, as compared to a loss of $3,112,079 during the nine months ended September 30, 2021.

The decreased loss for the nine-month period above is primarily due to a $1,012,346 year over year reduction in the costs associated with the operation of the public entity (iQSTEL, Inc.).

**Results of Operations for the Years Ended December 31, 2021 and 2020**

***Net Revenue***

 ****

Our net revenue for the year ended December 31, 2021 was $64,702,018 as compared with $44,910,006 for the year ended December 31, 2020. These numbers reflect an increase of 44% year over year on our consolidated Revenues.

When looking at the numbers by subsidiary, we have the following breakout for the years ended December 31, 2021 and 2020:

---

| | | |
|:---|:---|:---|
| **Subsidiary** | **Revenue**<br> **Year Ended**<br> **December 31, 2021** | **Revenue**<br> **Year Ended**<br> **December 31, 2020** |
| Etelix.com USA, LLC | 15445161 | 14033528 |
| SwissLink Carrier AG | 4681978 | 5432022 |
| QGlobal LLC | 666887 | 421619 |
| IoT Labs LLC | 43907992 | 25022837 |
|  | 64702018 | 44910006 |

---

The continued growth of our revenue is the result of the development of our business strategy, which includes the strengthening of our commercial and operating activities and new acquisitions.

If net revenues continue growing at a similar rate for the next twelve months, we believe that the company will reach a total consolidated revenue of approximately $90 million by December 31, 2022.

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***Cost of Revenue***

 ****

Our total cost of sales for the year ended December 31, 2021 was $63,168,303 as compared with $43,947,654 for the year ended December 31, 2020.

When looking at the numbers by subsidiary, we have the following breakout for the years ended December 31, 2021 and 2020:

---

| | | |
|:---|:---|:---|
| **Subsidiary** | **Cost of revenue**<br> **Year Ended**<br> **December 31, 2021** | **Cost of revenue**<br> **Year Ended**<br> **December 31, 2020** |
| Etelix.com USA, LLC | 15080687 | 14062553 |
| SwissLink Carrier AG | 3986334 | 4656865 |
| QGlobal LLC | 563528 | 311409 |
| IoT Labs LLC | 43537754 | 24916827 |
|  | 63168303 | 43947654 |

---

Our cost of revenues consists of direct charges from vendors that the Company incurs to deliver services to its customers. These costs primarily consist of usage charges for calls and SMS terminated in vendor's network.

The behavior in the costs shows a logical correlation with the behavior of the revenue commented above. We have reached a higher volume of sales and every additional unit sold (minutes and SMS) has its corresponding termination cost.

***Gross Margin***

Our gross margin, which is simply the difference between our revenues and our cost of sales, discussed above, increased from $962,352 in 2020 to $1,533,715 in 2021.

We expect an increase in the gross margin for the next twelve months as a result of having better termination costs.

***Operating Expenses***

Operating expenses for the year ended December 31, 2021 were $4,517,632, as compared with $4,174,367 for the year ended December 31, 2020. The detail by major category is reflected in the table below.

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31** | **Years Ended December 31** |
|  | **2021** | **2020** |
| Salaries, Wages and Benefits | $1160021 | $1208709 |
| Technology | 218053 | 133400 |
| Professional Fees | 441490 | 374821 |
| Legal and Regulatory | 106001 | 121229 |
| Travel & Events | 23117 | 8596 |
| Public Cost | 42674 | 87234 |
| Allowance for doubtful accounts |  | 183414 |
| Depreciation and Amortization | 91474 | 68602 |
| Advertising | 977334 | 942950 |
| Bank Services and Fees | 117886 | 137598 |
| Office, Facility and Other | 392117 | 209956 |
| &nbsp;&nbsp;&nbsp;&nbsp;Subtotal | 3570167 | 3476509 |
| Stock-based compensation | 947464 | 697858 |
| Total Operating Expenses | $4517631 | $4174367 |

---

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Operating Expenses by subsidiary are as follow:

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2021** | **2020** | **Difference** |
| iQSTEL | $2906114 | $2623555 | $282560 |
| Etelix | 339354 | 407937 | (68583) |
| SwissLink | 784052 | 815130 | (31078) |
| ItsBchain | 2396 | 52684 | (50288) |
| QGlobal | 106803 | 83304 | 23499 |
| Global Money One | 175324 |  | 175324 |
| IoT Labs | 203588 | 191757 | 11831 |
|  | $**4517631** | $**4174367** | $**343265** |

---

The most significant difference is generated by iQSTEL which is basically due to the Stock-based compensation. This item includes compensation to Management, Directors and other professional service providers.

No allowance for doubtful accounts were established due to additional controls already implemented within the commercial area and collection team.

Advertising corresponds to the third-party consultancy for the design and implementation of a Social Media communication strategy oriented to build and enhance our companies and brand image and a marketing program for the Regulation A offering.

All other items were stable from one year to the other, which allows us to affirm that the cost structure of the company is under control.

***Other Expenses***

 ****

We had other expenses of $880,085 for the year ended December 31, 2021, as compared with other expenses of $3,487,315 for the year ended December 31, 2020. The reduction in Other Expenses in 2021 compared to 2020 is due to the significant reduction in the interest expense of $3,509,323 for the year ended December 31, 2020 to $675,481 for the year ended December 31, 2021.

***Net Loss***

We finished the year ended December 31, 2021 with a loss of $3,864,001 as compared to a loss of $6,699,482 during the year ended December 31, 2020. This represents an improvement in our financial results year over year, due to an increment in the Gross Revenue and a significant reduction of the Interest Expenses.

**Liquidity and Capital Resources**

As of September 30, 2022, we had total current assets of $6,141,182 and current liabilities of $2,769,981, resulting in a positive working capital of $3,371,201. This compares with the working capital of $4,203,509 at December 31, 2021. This decrease in working capital, as discussed in more detail below, is primarily the result of the decrease of $2,039,832 in the cash position due to the funds used in the acquisitions of Smartbiz and Whisl.

Our operating activities used $1,488,901 in the nine months ended September 30, 2022 as compared with $2,486,045 used in operating activities in the nine months ended September 30, 2021.

Investing activities used $1,901,223 for the nine months ended September 30, 2022. Uses of funds in investing activities were primarily for the acquisition of subsidiaries of $1,814,132 and the purchase of property and equipment for $86,491.

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Financing activities provided $1,367,982 in the nine months ended September 30, 2022 compared with $3,314,313 provided in the nine months ended September 30, 2021. Our positive financing cash flow in 2022 was largely the result of the proceeds from common stock issued of $1,100,000 and the common stock purchase option of $500,000.

Our current financial condition has improved significantly with a positive working capital of $3,371,201 and a cash position of $1,294,981 as of September 30, 2022. However, we intend to fund operations through increased sales and debt and/or equity financing arrangements to strengthen our liquidity and capital resources. The Company has received the qualification of a S-1 Offering Statement for the sale of up to 10,000,000 common stocks. This offering will be conducted on a "best efforts" basis, which means that there is no guarantee that any minimum amount will be sold from the available shares. We also plan to seek additional financing in a private equity offering to secure funding for operations. There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

**Inflation**

Although our operations are influenced by general economic conditions, we do not believe that inflation had a material effect on our results of operations during the nine-month period ended September 30, 2022.

**Critical Accounting Polices**

A "critical accounting policy" is one which is both important to the portrayal of a company's financial condition and results, and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Our accounting policies are discussed in detail in the footnotes to our financial statements included in this prospectus for the nine months ended September 30, 2022; however, we consider our critical accounting policies to be those related to allowance for doubtful accounts, valuation of long-lived assets, and income taxes. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. See the Consolidated Financial Statements in this Quarterly Report for a complete discussion of our significant accounting policies.

**Off Balance Sheet Arrangements**

As of September 30, 2022, there were no off-balance sheet arrangements.

**Recent Accounting Pronouncements**

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operation, financial position, or cash flow.

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**BUSINESS**

**Company Description**

iQSTEL Inc. (OTCQX: IQST, www.iQSTEL.com) is a US-based publicly-listed company holding an Independent Board of Directors and Audit Committee with a presence in 19 countries and 70 employees are offering leading-edge services through its four business lines.

The Telecom Division (www.iqstelecom.com), which represents the majority of current operations, offers VoIP, SMS, proprietary Internet of Things (IoT) solutions (www.iotsmartgas.com and www.iotsmarttank.com), and international fiber-optic connectivity through its subsidiaries: Etelix (www.etelix.com), SwissLink Carrier (www.swisslink-carrier.com), Smartbiz Telecom (www.smartbiztel.com), Whisl Telecom (www.whisl.com), IoT Labs (www.iotlabs.mx), and QGlobal SMS (www.qglobalsms.com).

The Fintech business line (www.globalmoneyone.com) (www.maxmo.vip) offers a complete Fintech ecosystem MasterCard Debit Card, US Bank Account (No SSN Needed), Mobile App/Wallet (Remittances, Mobile Top Up). Our Fintech subsidiary, Global Money One, is to provide immigrants access to reliable financial services that make it easier to manage their money and stay connected with their families back home.

The BlockChain Platform Business Line (www.itsbchain.com) offers our proprietary Mobile Number Portability Application (MNPA) to serve the in-country portability needs through its subsidiary, itsBchain.

The Electric Vehicle (EV) Business Line (www.evoss.net) offers electric motorcycles to work and have fun in the USA, Spain, Portugal, Panama, Colombia, and Venezuela. EVOSS is also working on the development of an EV Mid Speed Car to serve the niche of the 2nd car in the family.

The information contained on our websites is not incorporated by reference into this Prospectus and should not be considered part of this or any other report filed with the SEC.

**History**

iQSTEL, formerly known as PureSnax International, Inc., was incorporated under the laws of the State of Nevada on June 24, 2011. PureSnax was previously a wellness brand focused on bringing healthy snacks and foods to consumers. On March 8, 2017, PureSnax exited a previous License Agreement with a Canadian snack food Licensor. From March of 2017 until its acquisition of Etelix.com USA, LLC, PureSnax was working to develop its own brand and its own products for manufacture, distribution, sales and marketing of various products within the health foods and snacks industry and to pursue related business opportunities. PureSnax acquired Etelix.com USA, LLC on June 25, 2018. The company left the healthy snacks and foods business to focus on the Telecommunications Business.

In August 30, 2018, PureSnax changed its name to "iQSTEL Inc." and received a new CUSIP number: 46265G107, as well as a new trading symbol "IQST" in order to better resemble its new name. iQSTEL also changed the Standard Industrial Classification (SIC Code) to 4813, Telephone Communications, Except Radiotelephone.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The transformative process is an ongoing effort. However, in the last year the Company achieved the restructuring of its revenue from a 100% VoIP business to one where currently VoIP represents half of overall Company revenue, while SMS and value-added SMS services account for the other half. SMS and value-added SMS is a much higher gross profit business; thus the Company's bottom line has increased in tandem.

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**Operating Subsidiaries**

Based on our current business infrastructure, the Company has expanded from its original VoIP services into new business areas: Short Message Service (SMS) for Applications to Person (A2P) and Person to Person (P2P); Internet of Things (IoT) solutions and Blockchain-based platforms.

Etelix.com USA LLC, a wholly owned subsidiary of iQSTEL Inc., is a Miami, Florida-based international telecom carrier founded in 2008 that provides telecom and technology solutions worldwide, with commercial presence in North America, Latin America, and Europe. Etelix provides International Long-Distance voice services for Telecommunications Operators (ILD Wholesale), and Submarine Fiber Optic Network capacity for internet (4G and 5G).

Etelix is interconnected to the most important players in the industry, with a very strong focus on Asian markets, among which it is worth mentioning: China Telecom, PCCW, Hutchinson Telecom, Vodafone India, KDDI, Airtel, Reliance, Viettel, TATA Communications, Flow Jamaica (Cable and Wireless Caribbean), Cable and Wireless Panama, Millicom (TIGO), Telefonica de España (Movistar), Telecom Italia (TIM), Portugal Telecom (MEU), Optimus (NOS), Belgacom (BICS), Deutsche Telekom, iBasis, Orbitel and Entel.

An important milestone in the evolution of Etelix was in 2013, when the company become part of a consortium of major carriers for the upgrade of the Maya-1 submarine cable systems that runs from Hollywood, Florida to the city of Tolu in Colombia. This consortium is led by Orange Telecom and Orbitel, where Etelix participates with 10 Gbps of capacity. The bulk of this contract was sold to Millicom (Tigo Costa Rica). This capacity considerably enhanced Tigo's ability to deploy world-class 4G services to its customers in Costa Rica.

SwissLink Carrier AG is a 51% owned subsidiary of iQSTEL Inc. SwissLink Carrier AG is a Switzerland based international Telecommunications Carrier founded in 2015 providing international VoIP connectivity worldwide, with commercial presence in Europe, CIS and Latin America. SwissLink Carrier AG is a Swiss licensed Operator.

One of Company's strategic line of actions is to expand the participation in Asian and African traffic. Africa is currently the market with the higher contribution to margin and Asia concentrate one third of the termination traffic in the industry. Estimations show that 56% (International Telecommunication Union) of the traffic terminating in Africa is originated from customers in Europe; while the corresponding percentage of traffic terminated in Asia is 37% (International Telecommunication Union). Based on these numbers the goal to expand the participation in the Asian and African traffic goes through establishing a strong presence in Europe.

The acquisition of Swisslink strengthened the Company's presence in Europe putting us in a very competitive position to capture traffic to Asian and African countries; however, it will also give us the opportunity to compete in the European traffic, where we currently have a low participation.

QGlobal SMS LLC is a 100% owned subsidiary of iQSTEL Inc. QGlobal SMS is a USA based company founded in 2020 specialized in international and domestic SMS termination.

IoT Labs LLC is a 51% owned subsidiary of iQSTEL Inc. IoT Labs is a SMS service provider based in Austin, TX.

The Company has entered into the SMS business in 2020 through the acquisition of QGlobal and IoT Labs. Both companies specialize in international and domestic SMS termination, with emphasis on the Applications to Person (A2P), Person to Person (P2P) and OmniChannel Marketing Services for several markets: Wholesale Carrier, Government, Corporate, Enterprise, Small and Medium Companies.

QGlobal SMS has commercial presence in Europe, USA and Latin America, with robust international interconnection with Tier-1 SMS Aggregators, guarantying to its customers' high quality and low termination rates, in over more than 100 countries, while IoT Labs is specialized in the SMS traffic exchange between US and Mexico.

With the acquisition of these two SMS providers, we quickly began to cross-sell services to our existing client base.

The Global A2P SMS Market is expected to grow at a CAGR of 4.1% during the forecast period 2018 – 2030, to account for US$101 billion in 2030, according to Transparency Market Research. This market has experienced significant growth and adoption rate in the past few years and is expected to experience notable growth and adoption in years to come.

ItsBchain LLC is a 75% owned subsidiary of iQSTEL Inc. ItsBchain is a blockchain technology developer and solution provider, with a strong focus on the telecom sector. The company is in the final stage of development of a series of blockchain solutions aimed at using the blockchain ledger and smart contract solutions to enable more efficiency, quickness in execution and fraud-prevention in the telco industry. Specifically, the company is developing a solution that will enable users and carriers to transfer mobile phone numbers with just a few clicks, allowing users and carriers the ability to transfer retail users from one mobile carrier to another instantly.

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**Regulations**

Telecommunications services are subject to extensive government regulation in the United States of America. Any violations of the regulations may subject us to enforcement actions, including interest and penalties. The FCC has jurisdiction over all telecommunications common carriers to the extent they provide interstate or international communications services, including the use of local networks to originate or terminate such services

**Regulation of Telecom by the Federal Communications Commission**

<u>Telecommunication License</u>

Anyone seeking to conduct telecommunications business where the telecommunication services will transpire between the United States of America and an international destination must obtain a license from the Federal Communications Commission (FCC). This particular license is named a Section 214 license, after the section in the Communications Act of 1934.

Etelix.com USA, LLC was authorized by the Federal Communications Commission to provide facility-based services in accordance with section 63.18(e)(1) of the Commission's rules; and also to provide resale services in accordance with section 63.18(e)(2) under license number ITC-214-20090625-00303.

Since Etelix has no other network infrastructure outside the United States of America, no other licenses are required for us to operate as an international carrier service provider.

<u>Universal Service and Other Regulatory Fees and Charges</u>

In 1997, the FCC issued an order, referred to as the Universal Service Order, which requires all telecommunications carriers providing interstate telecommunications services to contribute to universal service support programs administered by the FCC (known as the Universal Service Fund). These periodic contributions are currently assessed based on a percentage of each contributor's interstate and international end user telecommunications revenues reported to the FCC. Etelix also contributed to several other regulatory funds and programs, most notably Telecommunications Relay Service and FCC Regulatory Fees (collectively, the Other Funds). Due to the manner in which these contributions are calculated, we cannot be assured that we fully recover from our customers all of our contributions.

In addition, based on the nature of our current business, we receive certain exemptions from federal Universal Service Fund contributions. Changes in our business could eliminate our ability to qualify for some or all of these exemptions. Changes in regulation may also have an impact on the availability of some or all of these exemptions. If even some of these exemptions become unavailable, they could materially increase our federal Universal Service Fund or Other Funds' contributions and have a material adverse effect on the cost of our operations and, therefore, on our ability to continue to operate profitably, and to develop and grow our business. We cannot be certain of the stability of the contribution factors for the Other Funds. Significant increases in the contribution factor for the Other Funds in general and the Telecommunications Relay Service Fund in particular can impact our profitability. Whether these contribution factors will be stable in the future is unknown, but it is possible that we will be subject to significant increases.

**Employees**

iQSTEL, including all subsidiaries, has 70 employees as of February 10, 2022.

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**MANAGEMENT**

The following information sets forth the names, ages, and positions of our current directors and executive officers.

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Positions and Offices Held** |
| Leandro Iglesias | 57 | President, Chairman, Chief Executive Officer and Director |
| Alvaro Quintana Cardona | 51 | Chief Operating Officer, Chief Financial Officer and Director |
| Juan Carlos Lopez Silva | 53 | Chief Commercial Officer |
| Raul Perez | 69 | Director |
| Jose Antonio Barreto | 62 | Director |
| Italo Segnini | 55 | Director |

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Set forth below is a brief description of the background and business experience of each of our current executive officers and directors.

**Leandro Iglesias**

Before founding Etelix in year 2008, where he has acted as President and CEO, Mr. Iglesias was the International Business Manager at CANTV/Movilnet (the Venezuelan biggest telecommunications services provider). He held this position between January 2003 and July 2008, while the company was under the control of Verizon. Previous to his position in Cantv/Movilnet Mr. Iglesias was Executive Vice President and responsible of the Latin America marketing division of American Internet Communications (August 1998 – December 2002). Leandro Iglesias has developed a career for more than 20 years in the telecommunications industry with a particular emphasis in the international long-distance traffic business, submarine cables, satellite communications and international roaming services. He is Electronic Engineer graduate from Universidad Simon Bolivar and graduated from the Management Program at IESA Business School. He also holds an MBA from Universidad Nororiental Gran Mariscal de Ayacucho.

Aside from that provided above, Mr. Iglesias does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.

We believe that Mr. Iglesias is qualified to serve on our Board of Directors because of his wealth of experience in the telecom industry.

**Alvaro Quintana Cardona**

Alvaro Quintana has developed a career of more than twenty years of experience in the telecommunication industry with particular focus on regulatory affairs, strategic planning, value added services and international interconnection agreements. Before joining Etelix in year 2013 as Chief Operation Officer and Chief Financial Officer, Mr. Quintana acted between June 2004 and May 2013 as Interconnection and Value-Added Services Manager at Digitel (a mobile service provider in Venezuela, formerly a Telecom Italia Mobile subsidiary). He holds a Bachelor Degree in Business Administration and a Specialist Degree in Economics, both from the Universidad Catolica Andres Bello. He also holds a Master in Telecommunications from the EOI Business School in Spain.

Aside from that provided above, Mr. Cardona does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.

We believe that Mr. Quintana is qualified to serve on our Board of Directors because of his wealth of experience in the telecom industry.

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**Juan Carlos Lopez Silva**

Juan Carlos Lopez Silva is an Engineer graduated from Universidad de Los Andes, with a Master degree in Project Management from the Pontificia Universidad Javeriana; and MBA from EADA Business School; with more than 20 years of experience in project management, negotiation, business development and management on international companies. Previous to joining Etelix in August 2011 as Chief Commercial Officer, Juan Carlos was International Carrier Relations Manager at Colombia Telecomunicaciones S.A. Esp. a subsidiary of Telefonica of Spain, between September 2003 and June 2011.

Aside from that provided above, Mr. Silva does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.

**Raul A Perez**

From December 1, 2014 to present, Mr. Perez serves as CFO of Deerbrook Family Dentistry, PC, Dental Practice in Humble, Texas. From November 1, 2017 to January 31, 2019, he served as Senior Accountant to Principrin School, PC, Day Care in Houston, Texas.

Mr. Perez has been in finance for more than 40 years, starting in 1970 as analyst in treasury and finance departments and progressively assuming different positions up to corporate treasurer for large corporations. He served for Sudamtex of Venezuela, C.A for 5 years and Polar Brewery in Caracas, Venezuela for 10 year. Beginning in 2000, he accepted a position as a Director of the Security and Exchange Commission of Venezuela to have the surveillance of Venezuelan stock market participants. Also, in 2004 he completed the requirements and received his certification as a Venezuelan Investment Advisor. Later, as an independent contractor for three years, he was selected as the Corporate Compliance Officer for an especially important stock market broker dealer in Venezuela, Activalores Casa de Bolsa, in which he developed the Compliance Unit and manuals required by local and international anti money laundering laws. He also taught Advanced Institute of Finance (IAF) in Caracas being a professor of Corporate Finance and Managerial Accounting for 5 years.

Mr. Perez has a Bachelor's degree in accounting (1976), and MBA Finance (1982), gave me the overall knowledge of finance and how to plan, start up, run, and control a business.

We have selected Mr. Perez to serve as an independent director because of his education, skills and experience in finance and his regulatory history.

**Jose Antonio Barreto**

From 2006 to the present, Mr. Barreto has been Chief Business Development Officer of Xpectra Remote Management / Mexico. There he was in charge of directing all aspects of account development and sales effort to close specific private and government opportunities and developing strategic accounts in Mexico and the LATAM region. From 2020 to present, he has been an advisor to our Board of Directors.

Mr. Barreto has more than 30 years of experience working in telecommunications and technology companies. He has been directly responsible of leading the business development and operational in several telecommunication and technology companies' acquisition activity, with the responsibility of leading the technical, operation and financial analysis. Over the last 14 years, Jose Antonio has been the North and Central American leader, spanning from Mexico to Panama, in the development of commercial processes in the technology security field, artificial intelligence, Internet of Things (IoT) platforms, as well as cutting edge technology solutions and software systems.

He studied Electronic Engineering at the Universidad Simón Bolivar followed by a Master of Science Degree in Electrical and Computer Engineering at Rice University. He also completed the Master in Telecommunications Management offered by Universidad Simon Bolivar and the Telecom SudParis Institute.

We have selected Mr. Barreto to serve as an independent director because of his education, skills and experience in technology companies.

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**Italo R. Segnini** 

From March 2020 to the present, Mr. Segnini has been serving as Global Carrier Partnership Director of Sierra Wireless. From June 2019 to February 2020, he served as an Independent Telecom Consultant. From 2017 to 2019, he served as Director of International Carrier Business for Televisa Telecom. From 2012 to 2019, he served as Director International Carrier Business for Millicom.

Mr. Segnini is a long time Telecommunicaction industry professional who has had high level positions at Global Tier Ones for more than 20 years, Telefonica, Millicon and Televisa, Sierra Wireless to mention a few. Mr. Segnini has extensive executive experience in the Telecom areas like Voice, A2P, SMS, Data, Roaming, Mobility Services, B2B, MNO, MVNO, IoT, Interconnection, etc., and a solid business performance record spanning multiple functions including International commercial negotiations, management, sales, business development, sales, regulatory and operations. Italo R. Segnini holds a Juris Doctor degree from the Andres Bello Catholic University, a Telecommunication Masters Degree from Madrid Pontificia Comillas University and an MBA from IESA Business School

**Term of Office**

Our Directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board, subject to their respective employment agreements.

**Significant Employees**

We have no significant employees other than our officers and directors.

**Family Relationships**

There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.

**Involvement in Certain Legal Proceedings**

During the past 10 years, none of our current directors, nominees for directors or current executive officers has been involved in any legal proceeding identified in Item 401(f) of Regulation S-K, including:

1. Any petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he or she was a general partner at or within two years before the time of such filing, or any corporation or business association of which he or she was an executive officer at or within two years before the time of such filing;

2. Any conviction in a criminal proceeding or being named a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

3. Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him or her from, or otherwise limiting, the following activities:

i. Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

ii. Engaging in any type of business practice; or

iii. Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

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4. Being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any type of business regulated by the Commodity Futures Trading Commission, securities, investment, insurance or banking activities, or to be associated with persons engaged in any such activity;

5. Being found by a court of competent jurisdiction in a civil action or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

6. Being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

7. Being subject to, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Any Federal or State securities or commodities law or regulation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

8. Being subject to, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

**Director Independence**

The Board of Directors reviews the independence of our directors on the basis of standards adopted by the NASDAQ Stock Market ("NASDAQ"). As a part of this review, the Board of Directors considers transactions and relationships between our company, on the one hand, and each director, members of the director's immediate family, and other entities with which the director is affiliated, on the other hand. The purpose of such a review is to determine which, if any, of such transactions or relationships were inconsistent with a determination that the director is independent under NASDAQ rules. As a result of this review, the Board of Directors has determined that each of Messrs. Perez, Barreto and Segnini are "independent directors" within the meaning of applicable NASDAQ listing standards.

**Committees of the Board**

Our full board serves the functions that would normally be served by a separately-designated Nominating Committee.

On November 17, 2022, we authorized the creation of a Compensation Committee. The Compensation Committee's responsibilities, which are discussed in detail in its Charter, include the following:

• In consultation with our senior management, establish our general compensation philosophy and oversee the development and implementation of our compensation programs;

• Recommend the base salary, incentive compensation and any other compensation for our Chief Executive Officer to the Board of Directors and review and approve the Chief Executive Officer's recommendations for the compensation of all other officers of our company and its subsidiary;

• Administer our incentive and stock-based compensation plans, and discharge the duties imposed on the Compensation Committee by the terms of those plans;

• Review and approve any severance or termination payments proposed to be made to any current or former officer of our company; and

• Perform other functions or duties deemed appropriate by the Board of Directors.

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The Committee is comprised of, Raul Perez, Jose Antonio Barreto, and Italo Segnini, with Mr. Segnini serving as Chairperson. Each of Messrs. Perez, Barreto and Segnini have been determined by the Board to be an independent director within the meaning of NASDAQ Rule 5605.

Company has an Audit Committee with a financial expert on the Board. The committee is comprised of Messrs., Barreto and Segnini, with Perez as Chairperson.

**Section 16(a) Beneficial Ownership Reporting Compliance**

Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of the Company's equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent beneficial stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To the best of our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us, no persons have failed to file, on a timely basis, the identified reports required by Section 16(a) of the Exchange Act during fiscal year ended December 31, 2021. Following the year end, all of the Form 3s were filed late for incoming management of Etelix.com USA LLC.

**Code of Ethics**

On October 31, 2022, our Board of Directors approved and adopted a Code of Business Conduct and Ethics (the "Code of Ethics"). The Code of Ethics is applicable to all directors, officers and employees of our company, our company's subsidiaries and any subsidiaries that may be formed in the future. The Code of Ethics addresses such individuals' conduct with respect to, among other things, conflicts of interests; compliance with applicable laws, rules, and regulations; full, fair, accurate, timely, and understandable disclosure; competition and fair dealing; corporate opportunities; confidentiality; insider trading; protection and proper use of our assets; fair treatment; and reporting suspected illegal or unethical behavior.

A copy of our Code of Ethics is posted on our website at http://iqstel.com/. We will make any legally required disclosures regarding amendments to, or waivers of, provisions of our Code of Business Conduct and Ethics on our website. The reference to the iQSTEL website address does not constitute incorporation by reference of the information contained at or available through our website, and you should not consider it to be part of this prospectus.

**EXECUTIVE COMPENSATION**

The table below summarizes all compensation awarded to, earned by, or paid to our former or current executive officers for the fiscal years ended December 31, 2021 and 2020.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and principal**<br> **Position** | **Year** | **Salary ($)** | **Bonus**<br> **($)** | **Stock**<br> **Awards**<br> **($)** | **Option**<br> **Awards**<br> **($)** | **All Other**<br> **Compensation**<br> **($) (1)(2)** | **Total**<br> **($)** |
| Leandro Iglesias<br> *President, CEO and Director* | 2020<br> 2021 | 76800<br> 174000 | -<br> 419024 | -<br> - | -<br> - | -<br> - | 76800<br> 593024 |
| Alvaro Quintana<br> *Treasury, Secretary and Director* | 2020<br> 2021 | 25100<br> 159088 | -<br> 337674 | -<br> - | -<br> - | -<br> - | 25100<br> 496762 |
| Juan Carlos López<br> *Chief Commercial Officer* | 2020<br> 2021 | 28500<br> 80000 | -<br> 244050 | -<br> - | -<br> - | -<br> - | 28500<br> 324050 |

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On May 2, 2019, the Company entered into Employment Agreements with the following persons: (i) Leandro Iglesias as President, CEO and Chairperson of the Company's Board of Directors with an annual salary of $168,000 with an annual bonus of 3% of our net income; (ii) Juan Carlos Lopez Silva as Chief Commercial Officer with an annual salary of $120,000 with an annual bonus of 3% of our net income; and Alvaro Quintana Cardona as Chief Operating Officer and Chief Financial Officer with an annual salary of $144,000 with an annual bonus of 3% of our net income. The Employment Agreements have a term of 36 months, are renewable automatically for 24-month periods, unless the Company gives written notice at least 90 days prior to termination of the initial 36-month term. The Company shall have the right to terminate any of the employment agreements at any time without prior notice, but in that event, the Company shall pay these persons salaries and other benefits they are entitled to receive under their respective agreements for three years. The above executive officers agreed to two year non-compete and non-solicit restrictive covenants with the Company. If any of the executive officers are terminated for cause they shall forfeit any rights to severance.

On November 1, 2020, our board of directors approved amended employments in favor of our Chief Executive Officer, Leandro Iglesias, our Chief Financial Officer, Alvaro Quintana, and our Chief Commercial Officer, Juan Carlos Lopez Silva.

The amended employment agreement in favor of Mr. Iglesias extended the term of employment from 36 months to 60 months. The now five year employment agreement with Mr. Iglesias provides that we will compensate him with a salary of $17,000 monthly and he is eligible for quarterly bonus of 250,000 shares of our common stock. If we do not have the cash available, the agreement provides that Mr. Iglesias may convert his accrued salary/bonus into shares of our common stock or newly created Series A Preferred Stock. For common shares, the amount of accrued salary to be converted into shares must be determined by considering the average price per share of the Company's common stock on the OTC Markets during the last 10 days and applying a discount of 25%." For Series A Preferred Shares, the amount of accrued salary to be converted into shares is the per share conversion price for common shares multiplied by ten US Dollars ($10). Mr. Iglesias has a further right to convert any common shares under his control into Series A Preferred shares at any time at a rate of ten (10) common shares for each Series A Preferred share.

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The amended employment agreement in favor of Mr. Quintana extended the term of employment from 36 months to 60 months. The now five year employment agreement with Mr. Quintana provides that he is eligible for quarterly bonus of 200,000 shares of our common stock. If we do not have the cash available, the agreement provides that Mr. Quintana may convert his accrued salary/bonus into shares of our common stock or newly created Series A Preferred Stock. For common shares, the amount of accrued salary to be converted into shares must be determined by considering the average price per share of the Company's common stock on the OTC Markets during the last 10 days and applying a discount of 25%." For Series A Preferred Shares, the amount of accrued salary to be converted into shares is the per share conversion price for common shares multiplied by ten US Dollars ($10). Mr. Quintana has a further right to convert any common shares under his control into Series A Preferred shares at any time at a rate of ten (10) common shares for each Series A Preferred share.

The amended employment agreement in favor of Mr. Silva extended the term of employment from 36 months to 60 months. Mr. Silva is eligible for quarterly bonuses of 150,000 shares of our common stock. If we do not have the cash available, the agreement provides that Mr. Iglesias may convert his accrued salary/bonus into shares of our common stock at the average price of our common stock during the last 10 days after applying a discount of 25%.

**Option Grants**

We have not granted any options or stock appreciation rights to our named executive officers or directors since inception. We do not have any stock option plans.

**Compensation of Directors**

All Directors shall receive reimbursement for reasonable travel expenses incurred to attend Board and committee meetings.

Effective on July 1, 2021 and thereafter, all Directors shall be compensated monthly up to 4,000 shares of common stock cash of $1,000 for their service as Directors. The Chairman and Secretary of the Board shall receive an additional $2,000 per month in addition to the Director compensation.

In lieu of the cash compensation set forth above, each Director may elect to receive shares of the Corporation's Common Stock equal to the total cash compensation divided by the average market value of the Company's Common Stock during the last 10 trading days and applying a discount of 25%.

**Pension, Retirement or Similar Benefit Plans**

There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.

**Compensation Committee**

We do not currently have a compensation committee of the board of directors or a committee performing similar functions. The board of directors as a whole participates in the consideration of executive officer and director compensation.

**Indebtedness of Directors, Senior Officers, Executive Officers and Other Management**

None of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.

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**CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS**

Other than described below or the transactions described under the heading "Executive Compensation" (or with respect to which such information is omitted in accordance with SEC regulations), there have not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a participant in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.

***Due from related party***

During the year ended December 31, 2021, the Company loaned $220,674 to our CEO and applied to due to CEO of $8,004.

During the year ended December 31, 2021, the Company wrote off due from related party of $10,148.

During the year ended December 31, 2020, the Company loaned $20,182 to related parties who are a stockholder and a former director, collected $20,197 and wrote off amounts totaling $43,375.

During the years ended December 31, 2021 and 2020, the Company loaned $220,674 and $18,888 to a related party and collected $226 and $2,088, respectively.

As of December 31, 2021 and 2020, the Company had due from related parties of $424,086 and $221,790, respectively. The loans are unsecured, non-interest bearing and due on demand.

***Due to related parties***

During the years ended December 31, 2021 and 2020, the Company borrowed $0 and $20,182 from CEO and CFO of the Company, and repaid $90,787 and $20,197 to the CEO and CFO, respectively.

During the year ended December 31, 2020, the Company borrowed $20,000 from Francisco Bunt who owns 49% of loT Labs and repaid $20,000.

As of December 31, 2021 and 2020, the Company had amounts due to related parties of $26,613 and $94,616, respectively, which included $0 and $60,000 to Francisco Bunt (Note 4), respectively. The amounts are unsecured, non-interest bearing and due on demand.

***Dept to Equity Swap***

During the year ended December 31, 2021 the Company recorded a debt-to-equity swap to a related party of $1,647,150 as additional paid in capital.

**PRINCIPAL STOCKHOLDERS**

The following table sets forth, as of February 10, 2023, certain information as to shares of our voting stock owned by (i) each person known by us to beneficially own more than 5% of our outstanding voting stock, (ii) each of our directors, and (iii) all of our executive officers and directors as a group.

Unless otherwise indicated below, to our knowledge, all persons listed below have sole voting and investment power with respect to their shares of voting stock, except to the extent authority is shared by spouses under applicable law. Unless otherwise indicated below, each entity or person listed below maintains an address of 300 Aragon Avenue, Suite 375, Coral Gables, FL 33134.

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The number of shares beneficially owned by each stockholder is determined under rules promulgated by the SEC. The information is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting or investment power and any shares as to which the individual or entity has the right to acquire beneficial ownership within 60 days through the exercise of any stock option, warrant or other right. The inclusion in the following table of those shares, however, does not constitute an admission that the named stockholder is a direct or indirect beneficial owner.

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| | | |
|:---|:---|:---|
| | **Common Stock** | **Common Stock** |
| <br>**Name of Beneficial Owner** | **Number of Shares Owned**<br> **(1)** | **Percent of Class**<br> **(2)**  |
| Leandro Iglesias | 542932 | 0.331% |
| Alvaro Quintana Cardona | 1121842 | 0.683% |
| Juan Carlos Lopez Silva | 925497 | 0.564% |
| Raul Perez | 8000 | 0.005% |
| Jose Antonio Barreto | 8000 | 0.005% |
| Italo Segnini | 8000 | 0.005% |
| All Directors and Executive Officers as a Group (6 persons) | 2614271 | 1.592% |

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| | | |
|:---|:---|:---|
| | **Series A Preferred Stock(4)** | **Series A Preferred Stock(4)** |
| <br>**Name of Beneficial Owner** | **Number of Shares Owned**<br> **(1)** | **Percent of Class**<br> **(3)** |
| Leandro Iglesias | 7000 | 70.00% |
| Alvaro Quintana Cardona | 3000 | 30.00% |
| Juan Carlos Lopez Silva |  |  |
| Raul Perez |  |  |
| Jose Antonio Barreto |  |  |
| Italo Segnini |  |  |
| All Directors and Executive Officers as a Group (6 persons) | 10000 | 100.00% |

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| | | |
|:---|:---|:---|
|  | **Total Voting Power** | **Total Voting Power** |
| **Name of Beneficial Owner** | **Number of Votes**<br> **(5)** | **Percent of Vote**<br> **(5)** |
| Leandro Iglesias | 120157376 | 35.86% |
| Alvaro Quintana Cardona | 52385175 | 15.63% |
| Juan Carlos Lopez Silva | 925497 | \* |
| Raul Perez | 8000 | \* |
| Jose Antonio Barreto | 8000 | \* |
| Italo Segnini | 8000 | \* |
| All Directors and Executive Officers as a Group (6 persons) | 173492048 | 51.78% |
| \* Less than 1% |  |  |

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(1) Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares that power with that person's spouse) with respect to all shares of voting stock listed as owned by that person or entity.

(2) Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants. The percent of class is based on 164,176,688 voting shares as of February 10, 2023

(3) Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants. The percent of class is based on 10,000 voting shares as of February 10, 2023.

(4) Under the Certificate of Designation, holders of Series A Preferred Stock will participate on an equal basis per-share with holders of our common stock in any distribution upon winding up, dissolution, or liquidation. Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to shareholders at a rate of 51% of the total vote of shareholders.

(5) There are 157,630,497 total shares of common stock outstanding entitled to one vote per share. Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to shareholders at a rate of 51% of the total vote of shareholders, including the election of directors. Our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. As a result of voting feature of the Series A Preferred Stock, there are 157,630,497 votes represented by the common stock, which means that there are 164,064,395 votes available to the holders of the 10,000 shares of Series A Preferred Stock for 51% of the total vote. Combining the common stock and the Series A Preferred Stock, there are a total of 321,694,892 votes that may be cast.

**DESCRIPTION OF CAPITAL STOCK**

Our authorized capital stock consists of 300,000,000 shares of common stock, with a par value of $0.001 per share, and 1,200,000 shares of preferred stock, with a par value of $0.001 per share. As of February 10, 2023, there were 164,176,688 shares of our common stock issued and outstanding, 10,000 shares of Series A Preferred Stock issued and outstanding, 21,000 shares of Series B Preferred Stock issued and outstanding and 0 shares of Series C Preferred stock issued and outstanding. Our shares of common stock are held by seventy three (73) stockholders of record.

**Common Stock**

Our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. The holders of our common stock possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy, subject to any voting rights granted to holders of any preferred stock. Holders of our common stock representing a majority of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our Articles of Incorporation do not provide for cumulative voting in the election of directors.

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**Preferred Stock**

Our board of directors may become authorized to authorize preferred shares of stock and to divide the authorized shares of our preferred stock into one or more series, each of which must be so designated as to distinguish the shares of each series of preferred stock from the shares of all other series and classes. Our board of directors is authorized, within any limitations prescribed by law and our articles of incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of preferred stock including, but not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The number of shares constituting that series and the distinctive designation of that series, which may be by distinguishing number, letter or title;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The dividend rate on the shares of that series, whether dividends will be cumulative, and if so, from which date(s), and the relative rights of priority, if any, of payment of dividends on shares of that series;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Whether that series will have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Whether that series will have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board of Directors determines;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Whether or not the shares of that series will be redeemable, and, if so, the terms and conditions of such redemption, including the date or date upon or after which they are redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Whether that series will have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the corporation, and the relative rights of priority, if any, of payment of shares of that series; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Any other relative rights, preferences and limitations of that series.

**Series A Preferred Stock**

On November 1, 2020, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series A Preferred Stock, consisting of up 10,000 shares, par value $0.001. Under the Certificate of Designation, holders of Series A Preferred Stock will participate on an equal basis per-share with holders of our common stock in any distribution upon winding up, dissolution, or liquidation. Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to shareholders at a rate of 51% of the total vote of shareholders.

**Series B Preferred Stock**

On November 11, 2020, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series B Preferred Stock, consisting of up 200,000 shares, par value $0.001. Under the Certificate of Designation, holders of Series B Preferred Stock will receive $81 per share in any distribution upon winding up, dissolution, or liquidation before junior security holders. Holders of Series B Preferred Stock are entitled to receive as, when, and if declared by the Board of Directors, dividends in kind at an annual rate equal to twenty four percent (24%) of $81 per share for each of the then outstanding shares of Series B Preferred Stock, calculated on the basis of a 360-day year consisting of twelve 30-day months. Holders of Series B Preferred Stock do not have voting rights but may convert into common stock after twelve months from the issuance date. Upon conversion, the shares are subject to a one-year leak-out restriction on sales into the market of no more than 5% previous month's stock liquidity.

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On January 15, 2021, we entered into Conversion Agreements with Leandro Iglesias, our Chief Executive Officer and director, Alvaro Quintana, Chief Financial Officer and director, and Juan Carlos Lopez, our Chief Commercial Officer, pursuant to which we agreed to convert 21,000,000 shares of common stock from each officer into 21,000 shares of our Series B Preferred Stock, as follow:

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| | | |
|:---|:---|:---|
| **Shareholders** | **Number of Shares of Common**<br> **Stock Converting Into Series B Preferred Stock** | **Number of shares of Series B Preferred Stock acquired in conversion** |
| Leandro Iglesias | 12200000 | 12200 |
| Alvaro Cardona | 5300000 | 5300 |
| Juan Carlos Lopez | 3500000 | 3500 |
| **Total** | **21000000** | **21000** |

---

The parties entered into these Conversion Agreements to, among other things, allow more common stock to be available for future issuances in connection with note conversions and as a means to lock-up the shares of common stock underlying the Series B Preferred held by our officers from trading and to establish a leak-out agreement upon any future conversions back to common stock.

**Series C Preferred Stock**

On January 7, 2021, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series C Preferred Stock, consisting of up 200,000 shares, par value $0.001. Under the Certificate of Designation, holders of Series C Preferred Stock will rank junior to the Series B Preferred Stock, but on par with common stock and Series A Preferred Stock in any distribution upon winding up, dissolution, or liquidation of the company, as provided in the designation. The holders of shares of Series C Preferred Stock have no dividend rights except as may be declared by the Board in its sole and absolute discretion, out of funds legally available for that purpose. Holders of Series B Preferred Stock do not have voting rights but may convert into common stock after twenty four months from the issuance date, at a conversion rate of one thousand (1,000) shares of Common Stock for every one (1) share of Series C Preferred Stock. Upon conversion, the shares are subject to a one-year leak-out restriction on sales into the market of no more than 5% previous month's stock liquidity.

**Dividend Policy**

We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.

**Nevada Anti-Takeover Laws**

Nevada Revised Statutes sections 78.378 to 78.379 provide state regulation over the acquisition of a controlling interest in certain Nevada corporations unless the articles of incorporation or bylaws of the corporation provide that the provisions of these sections do not apply. Our articles of incorporation and bylaws do not state that these provisions do not apply. The statute creates a number of restrictions on the ability of a person or entity to acquire control of a Nevada company by setting down certain rules of conduct and voting restrictions in any acquisition attempt, among other things. The statute is limited to corporations that are organized in the state of Nevada and that have 200 or more stockholders, at least 100 of whom are stockholders of record and residents of the State of Nevada; and does business in the State of Nevada directly or through an affiliated corporation. Because of these conditions, the statute currently does not apply to our company.

**Listing of Common Stock**

Our Common Stock is currently quoted on the OTCQX under the trading symbol "IQST."

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**Transfer Agent and Registrar**

The transfer agent and registrar of our Common Stock is VStock Transfer, LLC.

**Penny Stock Regulation**

The SEC has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) of less than $5.00 per share or an exercise price of less than $5.00 per share. Such securities are subject to rules that impose additional sales practice requirements on broker-dealers who sell them. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchaser of such securities and have received the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prepared by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market. Finally, among other requirements, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. As the Shares immediately following this Offering will likely be subject to such penny stock rules, purchasers in this Offering will in all likelihood find it more difficult to sell their Shares in the secondary market.

 **PLAN OF DISTRIBUTION** 

We are registering the shares of Common Stock to permit the resale of these shares of Common Stock by the Selling Shareholder and any of its transferees, pledgees, assignees, donees, and successors-in-interest from time to time after the date of this prospectus. All net proceeds from the sale of these common shares will go to the Selling Shareholder who offers and sells its common shares. We will not receive any part of the proceeds from such sales of common shares, other than the exercise price for the option, which we expect to use for working capital. We will bear all fees and expenses incident to our obligation to register the shares of Common Stock.

The Selling Shareholder of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the OTCQX or stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Shareholder may use any one or more of the following methods when selling securities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• purchases
 by a broker-dealer as principal and resale by the broker-dealer for its account;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an exchange distribution in accordance with the rules of the applicable exchange;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• privately negotiated transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in transactions through broker-dealers that agree with the Selling Shareholders to sell a specified number of such securities at a stipulated price per security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a combination of any such methods of sale; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any other method permitted pursuant to applicable law.

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The Selling Shareholder may also sell securities under Rule 144 under the Securities Act of 1933, as amended (the "Securities Act"), if available, rather than under this prospectus.

Broker-dealers engaged by the Selling Shareholder may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Shareholder (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.

In connection with the sale of the securities or interests therein, the Selling Shareholder may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Shareholder may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Shareholder may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The Selling Shareholder and any broker-dealers or agents that are involved in selling the securities may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Shareholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities. In no event shall any broker-dealer receive fees, commissions and markups which, in the aggregate, would exceed eight percent (8%).

Because Selling Shareholder may be deemed to be an "underwriter" within the meaning of the Securities Act, it will be subject to the prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. The Selling Shareholder has advised us that there is no underwriter or coordinating broker acting in connection with the proposed sale of the resale securities by the Selling Shareholder.

We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Shareholder without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Shareholder will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of securities of the common stock by the Selling Shareholder or any other person. We will make copies of this prospectus available to the Selling Shareholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

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**INTERESTS OF NAMED EXPERTS AND COUNSEL**

No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.

The Doney Law Firm, our independent legal counsel, has provided an opinion on the validity of our common stock.

Urish Popeck & Co., LLC has audited our consolidated financial statements as of and for the years ended December 31, 2021 and 2020 included in this prospectus and registration statement. Urish Popeck & Co., LLC has presented their report with respect to our audited consolidated financial statements. The report of Urish Popeck & Co., LLC is included in reliance upon their authority as experts in accounting and auditing

**WHERE YOU CAN FIND MORE INFORMATION**

We have filed with the Securities and Exchange Commission a registration statement on Form S-1 (including the exhibits, schedules and amendments thereto) under the Securities Act, with respect to the shares of our common stock offered hereby. This prospectus does not contain all of the information set forth in the registration statement and the exhibits and schedules thereto. For further information with respect to us and the common stock offered hereby, reference is made to the registration statement and the exhibits and schedules filed therewith. Statements contained in this prospectus as to the contents of any contract, agreement or other documents are summaries of the material terms of that contract, agreement or other document. With respect to each of these contracts, agreements or other documents filed as an exhibit to the registration statement, reference is made to the exhibits for a more complete description of the matter involved. Copies of the registration statement, and the exhibits and schedules thereto, may be accessed at the Securities and Exchange Commission's website at www.sec.gov. The Securities and Exchange Commission maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Securities and Exchange Commission. The address of the Securities and Exchange Commission's website is http://www.sec.gov.

We are required to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. We make our periodic reports and other information filed with or furnished to the Securities and Exchange Commission available, free of charge, through our website at www.iQSTEL.com/investor-releations, as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the Securities and Exchange Commission. Information on our website or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus. You may read and copy any reports, statements or other information on file at the public reference rooms. You can also request copies of these documents, for a copying fee, by writing to the Securities and Exchange Commission, or you can review these documents on the Securities and Exchange Commission's website, as described above. In addition, we will provide electronic or paper copies of our filings free of charge upon request.

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**INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE** 

The Securities and Exchange Commission allows us to "incorporate by reference" certain information we have filed with the Securities and Exchange Commission into this prospectus, which means we are disclosing important information to you by referring you to other information we have filed with the Securities and Exchange Commission. The information we incorporate by reference is considered part of this prospectus. All reports and definitive proxy or information statements subsequently filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, on or after the date of this prospectus and prior to the sale of all securities registered hereunder or termination of the registration statement of which this prospectus forms a part (excluding any disclosures that are furnished and not filed with the Securities and Exchange Commission) shall be deemed to be incorporated by reference into this prospectus and to be part hereof from the date of filing of such reports and other documents.

Notwithstanding the foregoing, we are not incorporating by reference any documents, portions of documents, exhibits or other information that is deemed to have been furnished to, rather than filed with, the Securities and Exchange Commission.

Any statement contained in a document incorporated by reference into this prospectus shall be deemed to be modified or superseded for the purposes of this prospectus or any prospectus supplement to the extent that a statement contained herein or any prospectus supplement or in any subsequently filed document that is also incorporated by reference in this prospectus or any prospectus supplement modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus or any prospectus supplement.

You may request a copy of the filings incorporated herein by reference, including exhibits to such documents that are specifically incorporated by reference, at no cost, by writing or calling us at the following address or telephone number:

IQSTEL Inc. Inc.

300 Aragon Avenue, Suite 375

Coral Gables, FL 33134

Phone: (877) 786-8500

Statements contained in this prospectus as to the contents of any contract or other documents are not necessarily complete, and in each instance investors are referred to the copy of the contract or other document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference and the exhibits and schedules thereto.

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**IQSTEL INC.**

**INDEX TO UNAUDITED FINANCIAL STATEMENTS**

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| | |
|:---|:---|
|  | **Page** |
| Balance Sheets | F-1 |
| Statement of Operations | F-2 |
| Statement of Changes in Stockholders' Deficit | F-3 |
| Statement of Cash Flows | F-4 |
| Notes to Financial Statements | F-5 |

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**IQSTEL INC.**

**INDEX TO AUDITED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
|  | **Page** |
| Report of Independent Registered Public Accounting Firms | F-15 |
| Balance Sheets | F-17 |
| Statement of Operations | F-18 |
| Statement of Changes in Stockholders' Deficit | F-19 |
| Statement of Cash Flows | F-20 |
| Notes to Financial Statements | F-21 |

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**iQSTEL INC**

**Consolidated Balance Sheets**

 **(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2022** | **December 31,**<br>**2021** |
| **ASSETS** |  |  |
| Current Assets |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $1294981 | $3334813 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 3922778 | 2540515 |
| &nbsp;&nbsp;&nbsp;Inventory | 26124 |  |
| &nbsp;&nbsp;&nbsp;Due from related parties | 351139 | 424086 |
| &nbsp;&nbsp;&nbsp;Prepaid and other current assets | 546160 | 267110 |
| Total Current Assets | 6141182 | 6566524 |
| Property and equipment, net | 391762 | 409382 |
| Intangible asset | 99592 | 99592 |
| Goodwill | 5172146 | 1537742 |
| Deferred tax assets | 413438 | 446402 |
| &nbsp;&nbsp;&nbsp;**TOTAL ASSETS** | $**12218120** | $**9059642** |
| **LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** |  |  |
| Current Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | 1913304 | 1474595 |
| &nbsp;&nbsp;&nbsp;Due to related parties | 26613 | 26613 |
| &nbsp;&nbsp;&nbsp;Loans payable - net of discount of $0 and $7,406 | 93204 | 315450 |
| &nbsp;&nbsp;&nbsp;Loans payable - related parties | 221637 | 239308 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 515223 | 307049 |
| Total Current Liabilities | 2769981 | 2363015 |
| &nbsp;&nbsp;&nbsp;Loans payable, non-current | 101590 | 119295 |
| &nbsp;&nbsp;&nbsp;Employee benefits, non-current | 144883 | 156434 |
| TOTAL LIABILITIES | 3016454 | 2638744 |
| Stockholders' Equity |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock: 1,200,000 authorized; $0.001 par value |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series A Preferred stock: 10,000 designated; $0.001 par value, <br> 10,000 shares issued and outstanding, respectively | 10 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series B Preferred stock: 200,000 designated; $0.001 par value, <br> 21,000 shares issued and outstanding | 21 | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series C Preferred stock: 200,000 designated; $0.001 par value, <br>No shares issued and outstanding |  |  |
| &nbsp;&nbsp;&nbsp;Common stock: 300,000,000 authorized; $0.001 par value<br> 151,830,378 and 147,477,358 shares issued and outstanding, respectively | 151830 | 147477 |
| &nbsp;&nbsp;&nbsp;Additional paid in capital | 29437832 | 25842982 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (19511934) | (18536921) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (37935) | (36658) |
| Equity attributed to stockholders of iQSTEL Inc. | 10039824 | 7416911 |
| Deficit attributable to noncontrolling interests | (838158) | (996013) |
| Total Stockholders' Equity | 9201666 | 6420898 |
| &nbsp;&nbsp;&nbsp;**TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | $**12218120** | $**9059642** |

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The accompanying notes are an integral part of these unaudited consolidated financial statements.

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**iQSTEL INC**

**Consolidated Statements of Operations**

 **(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Revenues | $21936634 | $16516739 | $65055661 | $46842717 |
| Cost of revenue | 20621674 | 15675687 | 62410367 | 45469730 |
| Gross profit | 1314960 | 841052 | 2645294 | 1372987 |
| Operating expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administration | 1256147 | 957195 | 3390097 | 3664473 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 1256147 | 957195 | 3390097 | 3664473 |
| Operating income (loss) | 58813 | (116143) | (744803) | (2291486) |
| Other income (expense) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other income | 43219 | 11252 | 38591 | 40431 |
| &nbsp;&nbsp;&nbsp;Other expenses | (71027) | 475 | (54247) | (421) |
| &nbsp;&nbsp;&nbsp;Interest expense | (3693) | (6802) | (22417) | (648889) |
| &nbsp;&nbsp;&nbsp;Change in fair value of derivative liabilities |  |  |  | 317080 |
| &nbsp;&nbsp;&nbsp;Loss on settlement of debt |  |  |  | (528794) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | (31501) | 4925 | (38073) | (820593) |
| Net income (loss) before provision for income taxes | 27312 | (111218) | (782876) | (3112079) |
| &nbsp;&nbsp;&nbsp;Income taxes |  |  |  |  |
| **Net income (loss)** | **27312** | **(111218)** | **(782876)** | **(3112079)** |
| Less: Net income attributable to noncontrolling interests | **96175** | **87736** | **192137** | **16642** |
| **Net loss attributed to stockholders of iQSTEL Inc.** | $**(68863)** | $**(198954)** | $**(975013)** | $**(3128721)** |
| **Comprehensive income (loss)** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income (loss) | $27312 | $(111218) | $(782876) | $(3112079) |
| &nbsp;&nbsp;&nbsp;Foreign currency adjustment | (1096) | 3406 | (2503) | 54398 |
| Total comprehensive income (loss) | **26216** | $**(107812)** | $**(785379)** | $**(3057681)** |
| Less: Comprehensive income attributable to noncontrolling interests | 95638 | 89405 | 190911 | 43297 |
| **Net comprehensive loss attributed to stockholders of iQSTEL Inc.** | $**(69422)** | $**(197217)** | $**(976290)** | $**(3100978)** |
| Basic income (loss) per common share | $0.00 | $(0.00) | $(0.01) | $(0.02) |
| Diluted income (loss) per common share | $0.00 | $(0.00) | $(0.01) | $(0.02) |
| Weighted average number of common shares outstanding - Basic and diluted | 151750426 | 141697141 | 150057315 | 133173421 |
| Weighted average number of common shares outstanding - Diluted | 153930452 | 141697141 | 150057315 | 133173421 |

---

&nbsp;&nbsp;&nbsp;&nbsp;

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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**iQSTEL INC**

**Consolidated Statements of Changes in Stockholders' Equity (Deficit)**

**For the three and nine months ended September 30, 2022 and 2021**

 **(Unaudited)**

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| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series B Preferred Stock** | **Series B Preferred Stock** | **Common Stock** | **Common Stock** | | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | <br>**Additional Paid in Capital** | <br> **Accumulated Deficit** | <br> **Accumulated Comprehensive Loss** | <br> **Total** | <br> **Non Controlling Interest** | <br> **Total Stockholders' Equity** |
| **Balance - December 31, 2021** | **10000** | $**10** | **21000** | $**21** | **147477358** | $**147477** | $**25842982** | $**(18536921)** | $**(36658)** | $**7416911** | $**(996013)** | $**6420898** |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued for cash |  |  |  |  | 2000000 | 2000 | 998000 |  |  | 1000000 |  | 1000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued for compensation |  |  |  |  | 60000 | 60 | 41079 |  |  | 41139 |  | 41139 |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustments |  |  |  |  |  |  |  |  | (196) | (196) | (188) | (384) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) |  |  |  |  |  |  |  | (554970) |  | (554970) | 30239 | (524731) |
| **Balance - March 31, 2022** | **10000** | $**10** | **21000** | $**21** | **149537358** | $**149537** | $**26882061** | $**(19091891)** | $**(36854)** | $**7902884** | $**(965962)** | $**6936922** |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued for compensation |  |  |  |  | 60000 | 60 | 30430 |  |  | 30490 |  | **30490** |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued and to be issued for acquisition of subsidiaries |  |  |  |  | 1461653 | 1462 | 1548538 |  |  | 1550000 | (33056) | **1516944** |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued for asset acquisition |  |  |  |  | 500000 | 500 | 324500 |  |  | 325000 |  | **325000** |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock payable |  |  |  |  |  |  | 18900 |  |  | 18900 |  | **18900** |
| &nbsp;&nbsp;&nbsp;&nbsp;Warrant granted |  |  |  |  |  |  | 500000 |  |  | 500000 |  | **500000** |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustments |  |  |  |  |  |  |  |  | (522) | (522) | (501) | **(1023)** |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) |  |  |  |  |  |  |  | (351180) |  | (351180) | 65723 | **(285457)** |
| **Balance - June 30, 2022** | **10000** | $**10** | **21000** | $**21** | **151559011** | $**151559** | $**29304429** | $**(19443071)** | $**(37376)** | $**9975572** | $**(933796)** | $**9041776** |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued for compensation |  |  |  |  | 60000 | 60 | 20440 |  |  | 20500 |  | **20500** |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued for settlement of debt |  |  |  |  | 161367 | 161 | 80513 |  |  | 80674 |  | **80674** |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued for asset acquisition |  |  |  |  | 50000 | 50 | 32450 |  |  | 32500 |  | **32500** |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustments |  |  |  |  |  |  |  |  | (559) | (559) | (537) | **(1096)** |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) |  |  |  |  |  |  |  | (68863) |  | (68863) | 96175 | **27312** |
| **Balance - September 30, 2022** | **10000** | $**10** | **21000** | $**21** | **151830378** | $**151830** | $**29437832** | $**(19511934)** | $**(37935)** | $**10039824** | $**(838158)** | $**9201666** |

---

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series B Preferred Stock** | **Series B Preferred Stock** | **Common Stock** | **Common Stock** | | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | <br> **Additional**<br> **Paid in**<br> **Capital**  | <br> **Accumulated**<br> **Deficit**  | <br> **Accumulated**<br> **Comprehensive**<br> **Loss**  | <br> **Total** | <br> **Non**<br> **Controlling**<br> **Interest**  | <br> **Total**<br> **Stockholders'**<br> **Deficit**  |
| **Balance - December 31, 2020** | **10000** | $**10** | **—** | $**—** | **118133432** | $**118133** | $**13267261** | $**(14699148)** | $**(74831)** | $**(1388575)** | $**(1006461)** | $**(2395036)** |
| &nbsp;&nbsp;&nbsp;Preferred stock issued for conversion of common stock |  |  | 21000 | 21 | (21000000) | (21000) | 20979 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Common stock issued for cash |  |  |  |  | 35862500 | 35863 | 3550387 |  |  | 3586250 |  | 3586250 |
| &nbsp;&nbsp;&nbsp;Common stock issued for service |  |  |  |  | 195000 | 195 | 284505 |  |  | 284700 |  | 284700 |
| &nbsp;&nbsp;&nbsp;Common stock issued for compensation |  |  |  |  | 600000 | 600 | 563400 |  |  | 564000 |  | 564000 |
| &nbsp;&nbsp;&nbsp;Common stock issued for forbearance of debt |  |  |  |  | 250000 | 250 | 49675 |  |  | 49925 |  | 49925 |
| &nbsp;&nbsp;&nbsp;Common stock issued for conversion of debt |  |  |  |  | 6080632 | 6081 | 416214 |  |  | 422295 |  | 422295 |
| &nbsp;&nbsp;&nbsp;Cancellation of common stock |  |  |  |  | (1294600) | (1295) | (88809) |  |  | (90104) |  | (90104) |
| &nbsp;&nbsp;&nbsp;Resolution of derivative liabilities |  |  |  |  |  |  | 708611 |  |  | 708611 |  | 708611 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments |  |  |  |  |  |  |  |  | 54905 | 54905 | 52751 | 107656 |
| &nbsp;&nbsp;&nbsp;Net income (loss) |  |  |  |  |  |  |  | (1942391) |  | (1942391) | 63902 | (1878489) |
| **Balance - March 31, 2021** | **10000** | $**10** | **21000** | $**21** | **138826964** | $**138827** | $**18772223** | $**(16641539)** | $**(19926)** | $**2249616** | $**(889808)** | $**1359808** |
| &nbsp;&nbsp;&nbsp;Common stock issued for compensation |  |  |  |  | 600000 | 600 | 411600 |  |  | 412200 |  | **412200** |
| &nbsp;&nbsp;&nbsp;Common stock issued for settlement of debt |  |  |  |  | 2230394 | 2230 | 2054300 |  |  | 2056530 |  | **2056530** |
| &nbsp;&nbsp;&nbsp;Debt forgiveness |  |  |  |  |  |  | 807103 |  |  | 807103 |  | **807103** |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments |  |  |  |  |  |  |  |  | (28899) | (28899) | (27765) | **(56664)** |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  |  |  | (987376) |  | (987376) | (134996) | **(1122372)** |
| **Balance - June 30, 2021** | **10000** | $**10** | **21000** | $**21** | **141657358** | $**141657** | $**22045226** | $**(17628915)** | $**(48825)** | $**4509174** | $**(1052569)** | $**3456605** |
| &nbsp;&nbsp;&nbsp;Common stock issued for compensation |  |  |  |  | 60000 | 60 | 34478 |  |  | 34538 |  | **34538** |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments |  |  |  |  |  |  |  |  | 1737 | 1737 | 1669 | **3406** |
| &nbsp;&nbsp;&nbsp;Net income (loss) |  |  |  |  |  |  |  | (198954) |  | (198954) | 87736 | **(111218)** |
| **Balance - September 30, 2021** | **10000** | $**10** | **21000** | $**21** | **141717358** | $**141717** | $**22079704** | $**(17827869)** | $**(47088)** | $**4346495** | $**(963164)** | $**3383331** |

---

The accompanying notes are an integral part of these unaudited consolidated financial statements.

[**Table of Contents**](#toc)

**iQSTEL INC**

**Consolidated Statements of Cash Flows**

 **(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended** | **Nine Months Ended** |
|  | **September 30,** | **September 30,** |
|  | **2022** | **2021** |
|  **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(782876) | $(3112079) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 111029 | 1205334 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bad debt | 26299 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Write-off of due from related party |  | 7648 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 91221 | 66924 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discount | 7407 | 435956 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of derivative liabilities |  | (317080) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on settlement of debt |  | 528794 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepayment and default penalty |  | 122020 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (832263) | (943615) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | (26124) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid and other current assets | (31714) | (108338) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due from related parties | (5143) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (97373) | (239857) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | 50636 | (131752) |
| &nbsp;&nbsp;&nbsp;Net cash used in operating activities | (1488901) | (2486045) |
|  **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Acquisition of subsidiaries, net of cash acquired | (1814132) | (60000) |
| &nbsp;&nbsp;&nbsp;Purchase of property and equipment | (86491) | (74799) |
| &nbsp;&nbsp;&nbsp;Purchase of intangible assets |  | (27824) |
| &nbsp;&nbsp;&nbsp;Payment of loan receivable - related parties | (1000) | (215674) |
| &nbsp;&nbsp;&nbsp;Collection of amounts due from related parties | 400 | 226 |
| &nbsp;&nbsp;&nbsp;Net cash used in investing activities | (1901223) | (378071) |
|  **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from loans payable |  | 400000 |
| &nbsp;&nbsp;&nbsp;Repayments of loans payable | (232018) | (331150) |
| &nbsp;&nbsp;&nbsp;Repayment of loans payable - related parties |  | (90787) |
| &nbsp;&nbsp;&nbsp;Proceeds from common stock issued | 1100000 | 3586250 |
| &nbsp;&nbsp;&nbsp;Proceed from issuance of common stock purchase option | 500000 |  |
| &nbsp;&nbsp;&nbsp;Repayment of convertible notes |  | (250000) |
| &nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 1367982 | 3314313 |
|  Effect of exchange rate changes on cash | (17690) | (12709) |
|  Net change in cash | (2039832) | 437488 |
|  Cash, beginning of period | 3334813 | 753316 |
|  Cash, end of period | $1294981 | $1190804 |
|  Supplemental cash flow information |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $3333 | $117198 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for taxes | $— | $— |
|  Non-cash transactions: |  |  |
| &nbsp;&nbsp;&nbsp;Common stock issued for asset acquisition | $357500 | $— |
| &nbsp;&nbsp;&nbsp;Common stock issued and to be issued for acquisition of subsidiaries | $1550000 | $— |
| &nbsp;&nbsp;&nbsp;Common stock issued for conversion of debt | $— | $422295 |
| &nbsp;&nbsp;&nbsp;Resolution of derivative liabilities | $— | $708611 |
| &nbsp;&nbsp;&nbsp;Related party debt forgiveness | $— | $807103 |
| &nbsp;&nbsp;&nbsp;Common stock issued for settlement of debt | $80674 | $2056530 |
| &nbsp;&nbsp;&nbsp;Common stock issued for forbearance of debt | $— | $49925 |
| &nbsp;&nbsp;&nbsp;Preferred stock issued for conversion of common stock | $— | $21000 |

---

The accompanying notes are an integral part of these unaudited consolidated financial statements.

[**Table of Contents**](#toc)

**iQSTEL INC**

**Notes to the Unaudited Consolidated Financial Statements**

**September 30, 2022**

**NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS**

***Organization and Operations***

iQSTEL Inc. ("iQSTEL", "we", "us", or the "Company") was incorporated under the laws of the State of Nevada on June 24, 2011 under the name of B-Maven Inc. The Company changed its name to PureSnax International, Inc. on September 18, 2015; and more recently it changed its name to iQSTEL Inc. on August 7, 2018.

The Company has been engaged in the business of telecommunication services as a wholesale carrier of voice, SMS and data for other telecom companies around the World with more than 150 active interconnection agreements with mobile companies, fixed line companies and other wholesale carriers.

***Acquisitions***

On May 13, 2022, we entered into a Company Acquisition Agreement regarding the acquisition of 51% of the shares in Whisl telecom LLC ("Whisl").

On June 1, 2022, we entered into a Company Acquisition Agreement regarding the acquisition of 51% of the shares in Smartbiz Telecom LLC ("Smartbiz").

Both acquisitions are detailed in Note 4.

**NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of Presentation***

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Regulation S-X of the United States Securities and Exchange Commission ("SEC"). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America ("GAAP") for annual financial statements.

In the opinion of the Company's management, the accompanying unaudited interim consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2022 and the results of operations and cash flows for the periods presented. The results of operations for the nine months ended September 30, 2022 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on April 15, 2022.

***Consolidation Policy***

The consolidated financial statements of the Company include the accounts of the Company and its owned subsidiaries, Etelix.com USA, LLC ("Etelix"), SwissLink Carrier AG ("Swisslink"), ITSBCHAIN, LLC ("ItsBchain"), QGLOBAL SMS, LLC ("QGlobal"), IoT Labs, LLC ("IoT Labs"), Global Money One Inc ("Global Money One"), Whisl telecom LLC ("Whisl") and Smartbiz Telecom LLC ("Smartbiz"). All significant intercompany balances and transactions have been eliminated in consolidation.

[**Table of Contents**](#toc)

***Use of Estimates***

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

***Business Combinations***

In accordance with ASC 805-10, "*Business Combinations*", the Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that the Company holds in the acquired company prior to the acquisition is re-measured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and the existing book value. Results of operations of the acquired entity are included in the Company's results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets.

***Foreign Currency Translation and Re-measurement***

The Company translates its foreign operations to the U.S. dollar in accordance with ASC 830, "*Foreign Currency Matters*".

The functional currency and reporting currency of the Company, Etelix, QGlobal, Itsbchain, IoT Labs, Global Money One, Whisl, and Smartbiz is the U.S. dollar, while the functional currency of SwissLink is the Swiss Franc ("CHF").

SwissLink translates their records into the U.S. dollar as follows:

&nbsp;&nbsp;&nbsp;&nbsp;• Assets and liabilities at the
rate of exchange in effect at the balance sheet date

&nbsp;&nbsp;&nbsp;&nbsp;• Equities at historical rate

&nbsp;&nbsp;&nbsp;&nbsp;• Revenue and expense items at
the average rate of exchange prevailing during the period

Adjustments arising from such translations are included in accumulated other comprehensive income (loss) in stockholders' equity.

***Accounts Receivable and Allowance for Uncollectible Accounts***

Substantially all of the Company's accounts receivable balance is related to trade receivables. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in its existing accounts receivable. The Company reviews its allowance for doubtful accounts daily and past due balances over 60 days and a specified amount are reviewed individually for collectability. Account balances are charged off after all means of collection have been exhausted and the potential for recovery is considered remote. During the nine months ended September 30, 2022 and 2021, the Company recorded bad debt expense of $26,299 and $0 respectively.

***Net Income (Loss) Per Share of Common Stock***

The Company has adopted ASC 260, *"Earnings per Share"* which requires presentation of basic earnings per share on the face of the statements of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share computation. In the accompanying financial statements, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants unless the result would be antidilutive. There were 4,800,000 warrants outstanding during the nine months ended September 30, 2022, which were included in the calculation of the diluted earnings per share. There were no other potentially dilutive shares of common stock outstanding for the nine months ended September 30, 2021.

[**Table of Contents**](#toc)

***Concentrations of Credit Risk***

The Company's financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables. The Company places its cash and cash equivalents with financial institutions of high creditworthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits.

During the nine months ended September 30, 2022, 10 customers represented 87% of our revenues. During the nine months ended September 30, 2021, 6 customers represented 87% of our revenues.

***Revenue Recognition***

The Company recognizes revenue from telecommunication services in accordance with ASC 606, "*Revenue from Contracts with Customers."*

The Company recognizes revenue related to monthly usage charges and other recurring charges during the period in which the telecommunication services are rendered, provided that persuasive evidence of a sales arrangement existed, and collection is reasonably assured. Management considers persuasive evidence of a sales arrangement to be a written interconnection agreement. The Company's payment terms vary by clients.

***Recent Accounting Pronouncements***

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company's management believes that these recent pronouncements will not have a material effect on the Company's financial statements.

**NOTE 3 - GOING CONCERN**

The Company's consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has suffered recurring losses from operations and does not have an established source of revenues sufficient to cover its operating costs. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its business plan and eventually attain profitable operations.

During the next year, the Company's foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing in the industry and continuing its marketing efforts. The Company may experience a cash shortfall and be required to raise additional capital.

Historically, the Company has relied upon funds from its stockholders. Management may raise additional capital through future public or private offerings of the Company's stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company's failure to do so could have a material and adverse effect upon its operations and its stockholders.

[**Table of Contents**](#toc)

**NOTE 4 – ACQUISITIONS**

On May 13, 2022, we entered into a Company Acquisition Agreement (Purchase Agreement) with US Acquisitions, LLC, a California limited liability company (Seller) concerning the contemplated sale by Seller and the purchase by us of 51% of the membership interests Seller held in Whisl, a Texas limited liability company. Whisl provides local US termination for Voice through its FCC license of VoIP Service number 832742; and is in the process to obtain a C-Lec FCC License over next 12 months. Whisl is one of the premier Intermediate Voice Providers in the USA. It has been a carrier since 2017 with billions of minutes traversing its network and provides its customers with multiple levels of Redundancy, Diversity, and Disaster Recovery for their applications and ability to make changes to underlying carrier configuration in real time. Whisl offers a single carrier solution for Voice Global services, and its customers benefit from hundreds of interconnection agreements that the company has cultivated since its inception. Pursuant to the Purchase Agreement, the closing of the purchase of the 51% membership interests was $1,800,000, which consisted of $1,250,000 in cash and $550,000 in our restricted common stock to Seller, which amounts to 1,461,653 sharesof common stock.

On June 1, 2022, we entered into a Purchase Agreement for the purchase of 51% of the membership interests in Smartbiz, a Florida Corporation which provides telecommunication services, dedicated to VoIP business for wholesale and retail markets. The purchase price for the acquisition was $1,800,000, which consisted of $800,000 in cash and $1,000,000 in our common stock to the seller, which amounts to 2,850,330 sharesof common stock.

Smartbiz and Whisl have been included in our consolidated results of operations since the acquisition dates.

The following table summarizes the fair value of the consideration paid by the Company:

<u>Whisl</u>

---

| | |
|:---|:---|
|  | **May 13,** |
| Fair Value of Consideration: | **2022** |
| Cash | $1000000 |
| Payable to seller | 250000 |
| 1,461,653 shares of common stock | 550000 |
| Total Purchase Price | $1800000 |

---

<u>Smartbiz</u>

---

| | |
|:---|:---|
| | **June 1,** |
| Fair Value of Consideration: | **2022** |
| Cash | $725000 |
| Payable to seller | 75000 |
| 2,850,330 shares of common stock | 1000000 |
| Total Purchase Price | $1800000 |

---

The following table summarizes the identifiable assets acquired and liabilities assumed upon acquisition of Smartbiz and Whisl and the calculation of goodwill:

<u>Whisl</u>

---

| | |
|:---|:---|
| Total purchase price | $1800000 |
| Cash | 141113 |
| Accounts receivable | 109762 |
| &nbsp;&nbsp;&nbsp;Total identifiable assets | 250875 |
| Accounts payable | (241426) |
| Other current liabilities | (2075) |
| &nbsp;&nbsp;&nbsp;Total liabilities assumed | (243501) |
| Net assets | 7374 |
| Non-controlling interest | 3613 |
| Total net assets | 3761 |
| Goodwill | $1796239 |

---

[**Table of Contents**](#toc)

<u>Smartbiz</u>

---

| | |
|:---|:---|
| Total purchase price | $1800000 |
| Cash | 19755 |
| Accounts receivable | 789515 |
| &nbsp;&nbsp;&nbsp;Total identifiable assets | 809270 |
| Accounts payable | (807265) |
| Other current liabilities | (76839) |
| &nbsp;&nbsp;&nbsp;Total liabilities assumed | (884104) |
| Net assets | (74834) |
| Non-controlling interest | (36669) |
| Total net assets | (38165) |
| Goodwill | $1838165 |

---

Unaudited combined proforma results of operations for the nine months ended September 30, 2022 and 2021 as though the Company acquired Smartbiz and Whisl on January 1, 2021, are set forth below:

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended** | **Nine Months Ended** |
|  | **September 30,** | **September 30,** |
|  | **2022** | **2021** |
| Revenues | $69165130 | $59028492 |
| Cost of revenues | 66683557 | 56430726 |
| Gross profit | 2481573 | 2597766 |
| Operating expenses | 4322526 | 4724857 |
| Operating loss | (1840953) | (2127091) |
| Other expense | (38073) | (820593) |
| Net Loss | $(1879026) | $(2947684) |

---

**NOTE 5 – PROPERTY AND EQUIPMENT**

Property and equipment at September 30, 2022 and December 31, 2021 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2022** | **December 31,**<br>**2021** |
| Telecommunication equipment | $301462 | $258871 |
| Telecommunication software | 581545 | 618125 |
| Other equipment | 97096 | 108805 |
| Total property and equipment | 980103 | 985801 |
| Accumulated depreciation and amortization | (588341) | (576419) |
| Property and equipment, net | $391762 | $409382 |

---

Depreciation and amortization expense for the nine months ended September 30, 2022 and 2021 amounted to $91,221 and $66,924, respectively.

[**Table of Contents**](#toc)

**NOTE 6 –LOANS PAYABLE**

Loans payable at September 30, 2022 and December 31, 2021 consisted of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30,**<br>**2022** | **December 31,**<br>**2021** | <br>**Term** | **Interest**<br>**rate** |
| Bridge Loan | $— | $222222 | &nbsp;&nbsp;Note was issued on November 1, 2020 and due on January 30, 2022 | 18.0% |
| Martus | 93204 | 100634 | &nbsp;&nbsp;Note was issued on October 23, 2018 and due on January 3, 2023 | 5.0% |
| Swisspeers AG |  | 9605 | &nbsp;&nbsp;Note was issued on April 8, 2019 and originally due on October 4, 2022 | 7.0% |
| Darlene Covid19 | 101590 | 109690 | &nbsp;&nbsp;Note was issued on April 1, 2020 and due on March 31, 2025 | 0.0% |
| Total | 194794 | 442151 |  |  |
| Less: Unamortized debt discount |  | (7406) |  |  |
| Total loans payable | 194794 | 434745 |  |  |
| Less: Current portion of loans payable | (93204) | (315450) |  |  |
| Long-term loans payable | $101590 | $119295 |  |  |

---

During the nine months ended September 30, 2022 and 2021, the Company borrowed from third parties totaling $0 and $444,444, which includes original issue discount and financing costs of $0 and $44,444 and repaid the principal amount of $232,018 and $331,150, respectively.

During the nine months ended September 30, 2022 and 2021, the Company recorded interest expense of $22,417 and $179,504 and recognized amortization of discount, included in interest expense, of $7,406and $63,666, respectively. In 2021, the Company recorded interest expense from convertible notes of $33,430 and recognized amortization of discount, included in interest expense, of $372,290.

During the nine months ended September 30, 2021, a related party loan of $807,103 (Euro 735,000) was forgiven and the Company recorded it as additional paid in capital.

Loans payable to related parties at September 30, 2022 and December 31, 2021 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2022** | **December 31,**<br>**2021** |
| 49% of Shareholder of SwissLink | $18457 | $19929 |
| 49% of Shareholder of SwissLink | 203180 | 219379 |
| Total | 221637 | 239308 |
| Less: Current portion of loans payable –related parties | 221637 | 239308 |
| Long-term loans payable – related parties | $— | $— |

---

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**NOTE 7 – OTHER CURRENT LIABILITIES**

Other current liabilities at September 30, 2022 and December 31, 2021 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2022** | **December 31,**<br>**2021** |
| Accrued liabilities | $30825 | $61153 |
| Payable for acquisition of subsidiaries | 75000 |  |
| Accrued interest |  | 8173 |
| Salary payable - management | 89628 | 92229 |
| Salary payable | 3708 |  |
| Employee benefits | 112309 | 105221 |
| Other current liabilities | 203753 | 40273 |
|  | $515223 | $307049 |

---

**NOTE 8 – STOCKHOLDERS' EQUITY**

The Company's authorized capital consists of 300,000,000 shares of common stock with a par value of $0.001 per share.

*Series A Preferred Stock*

On November 3, 2020, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series A Preferred Stock, consisting of up 10,000 shares, par value $0.001. Under the Certificate of Designation, holders of Series A Preferred Stock will participate on an equal basis per-share with holders of our common stock in any distribution upon winding up, dissolution, or liquidation. Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to stockholders at a rate of 51% of the total vote of stockholders.

The rights of the holders of Series A Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on November 3, 2020.

As of September 30, 2022 and December 31, 2021, 10,000 sharesof Series A Preferred Stock were issued and outstanding.

*Series B Preferred Stock*

On November 11, 2020, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series B Preferred Stock, consisting of up 200,000 shares, par value $0.001. Under the Certificate of Designation, holders of Series B Preferred Stock will receive a liquidation preference of $81 per share in any distribution upon winding up, dissolution, or liquidation of the Company before junior security holders, as provided in the designation. Holders of Series B Preferred Stock are entitled to receive as, when, and if declared by the Board of Directors, dividends in kind at an annual rate equal to twenty four percent (24%) of $81 per share for each of the then outstanding shares of Series B Preferred Stock, calculated on the basis of a 360-day year consisting of twelve 30-day months. Holders of Series B Preferred Stock do not have voting rights but may convert into common stock after twelve months from the issuance date, at a conversion rate of one thousand (1,000) shares of Common Stock for every one (1) share of Series B Preferred Stock. Upon conversion, the shares are subject to a one-year leak-out restriction on sales into the market of no more than 5% previous month's stock liquidity.

As of September 30, 2022 and December 31, 2021, 21,000 shares of Series B Preferred Stock were issued and outstanding.

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*Series C Preferred Stock*

On January 7, 2021, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series C Preferred Stock, consisting of up 200,000 shares, par value $0.001. Under the Certificate of Designation, holders of Series C Preferred Stock will rank junior to the Series B Preferred Stock, but on par with common stock and Series A Preferred Stock in any distribution upon winding up, dissolution, or liquidation of the company, as provided in the designation. The holders of shares of Series C Preferred Stock have no dividend rights except as may be declared by the Board in its sole and absolute discretion, out of funds legally available for that purpose. Holders of Series C Preferred Stock do not have voting rights but may convert into common stock after twenty four months from the issuance date, at a conversion rate of one thousand (1,000) shares of Common Stock for every one (1) share of Series C Preferred Stock. Upon conversion, the shares are subject to a one-year restriction on sales into the market of no more than 5% previous month's stock liquidity.

The rights of the holders of Series C Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on January 7, 2021.

As of September 30, 2022 and December 31, 2021, no SeriesC Preferred Stock was issued or outstanding.

*Common Stock*

During the nine months ended September 30, 2022, the Company issued 4,353,020 shares of common stock, valued at fair market value on issuance as follows:

&nbsp;&nbsp;&nbsp;&nbsp;• 2,000,000 shares issued for cash of $1,000,000

&nbsp;&nbsp;&nbsp;&nbsp;• 180,000 shares for compensation to our directors valued at $92,129

&nbsp;&nbsp;&nbsp;&nbsp;• 1,461,653 shares for acquisition of Whisl valued at $550,000

&nbsp;&nbsp;&nbsp;&nbsp;• 550,000 shares for asset acquisition valued at $357,500

&nbsp;&nbsp;&nbsp;&nbsp;• 161,367 shares for settlement of debt valued at $80,674

As of September 30, 2022 and December 31, 2021, 151,830,378 and 147,477,358 shares of common stock were issued and outstanding, respectively.

<u>Common Stock Purchase Option</u>

On April 25, 2022, we entered into a Common Stock Purchase Option Agreement with Apollo Management Group, Inc. to subscribe for and purchase from the Company, 4,800,000 shares of Common Stock with an exercise price per share of $2.00; and an initial exercise date September 30, 2022. The purchase price of this option is $500,000.

**NOTE 9 - RELATED PARTY TRANSACTIONS**

*Due from related parties*

During the nine months ended September 30, 2022 and 2021, the Company advanced $1,000 and $35,674 to related parties and collected $100 and $226, respectively.

During the nine months ended September 30, 2021, the Company loaned $180,000 to our CEO and wrote off amounts totaling $8,004.

During the nine months ended September 30, 2021, the Company wrote off due from related party of $7,648.

As of September 30, 2022 and December 31, 2021, the Company had amounts due from related parties of $351,139 and $424,086. The loans are unsecured, non-interest bearing and due on demand.

*Due to related parties*

During the nine months ended September 30, 2022 and 2021, the Company repaid $0 and $90,787 to certain members of Company management.

As of September 30, 2022 and December 31, 2021, the Company had amounts due to related parties of $26,613.

***Employment agreements***

During the nine months ended September 30, 2022 and 2021, the Company recorded management fees of $405,000 and $414,000, bonus of $0 and $976,200 and paid $407,602 and $411,300, respectively. Additionally, managementreceived stock-based compensation of $92,130 and $34,538 during the nine months ended September 30, 2022 and 2021, respectively.

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**NOTE 10 – COMMITMENTS AND CONTINGENCIES**

*Leases and Long-term Contracts*

The Company has not entered into any long-term leases, contracts or commitments. The Company leases facilities which the term is 12 months. For the nine months ended September 30, 2022 and 2021, the Company incurred $56,405 and $32,023, respectively.

**NOTE 11 - SEGMENTS**

At September 30, 2022, the Company operates in one industry segment, telecommunication services, and two geographic segments, USA and Switzerland, where current assets and equipment are located**.**

***Operating Activities***

The following table shows operating activities information by geographic segment for the three and nine months ended September 30, 2022 and 2021:

*Three months ended September 30, 2022*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **USA** | **Switzerland** | **Elimination** | **Total** |
| Revenues | $22364201 | 1291688 | $(1719255) | $21936634 |
| Cost of revenue | 21226541 | 1114388 | (1719255) | 20621674 |
| Gross profit | 1137660 | 177300 |  | 1314960 |
| Operating expenses |  |  |  |  |
| General and administration | 1089194 | 166953 |  | 1256147 |
| Operating income | 48466 | 10347 |  | 58813 |
| Other expense | (29411) | (2090) |  | (31501) |
| **Net income** | $19055 | $8257 | $— | $27312 |

---

*Three months Ended September 30, 2021*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **USA** | **Switzerland** | **Elimination** | **Total** |
| Revenues | $15347282 | 1189230 | $(19773) | $16516739 |
| Cost of revenue | 14706065 | 989395 | (19773) | 15675687 |
| Gross profit | 641217 | 199835 |  | 841052 |
| Operating expenses |  |  |  |  |
| General and administration | 738578 | 218617 |  | 957195 |
| Operating loss | (97361) | (18782) |  | (116143) |
| Other income | 1525 | 3400 |  | 4925 |
| **Net loss** | $(95836) | $(15382) | $— | $(111218) |

---

[**Table of Contents**](#toc)

*Nine months ended September 30, 2022*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **USA** | **Switzerland** | **Elimination** | **Total** |
| Revenues | $63898961 | 3554591 | $(2397891) | $65055661 |
| Cost of revenue | 61838539 | 2969719 | (2397891) | 62410367 |
| Gross profit | 2060422 | 584872 |  | 2645294 |
| Operating expenses |  |  |  |  |
| General and administration | 2792287 | 597810 |  | 3390097 |
| Operating loss | (731865) | (12938) |  | (744803) |
| Other income (expense) | (45938) | 7865 |  | (38073) |
| **Net loss** | $(777803) | $(5073) | $— | $(782876) |

---

*Nine months Ended September 30, 2021*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **USA** | **Switzerland** | **Elimination** | **Total** |
| Revenues | $43404674 | 3474215 | $(36172) | $46842717 |
| Cost of revenue | 42487024 | 3018878 | (36172) | 45469730 |
| Gross profit | 917650 | 455337 |  | 1372987 |
| Operating expenses |  |  |  |  |
| General and administration | 3077319 | 587154 |  | 3664473 |
| Operating loss | (2159669) | (131817) |  | (2291486) |
| Other income (expense) | (839316) | 18723 |  | (820593) |
| **Net loss** | $(2998985) | $(113094) | $— | $(3112079) |

---

***Asset Information***

The following table shows asset information by geographic segment as of September 30, 2022 and December 31, 2021:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **September 30, 2022** | **USA** | **Switzerland** | **Elimination** | **Total** |
| Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current assets | $5628559 | $1091622 | $(578999) | $6141182 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-current assets | $11660618 | $600882 | $(6184562) | $6076938 |
| Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current liabilities | $1729868 | $1619112 | $(578999) | $2769981 |
| &nbsp;&nbsp;&nbsp;Non-current liabilities | $— | $246473 | $— | $246473 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **December 31, 2021** | **USA** | **Switzerland** | **Elimination** | **Total** |
| Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Current assets | $5783859 | $997216 | $(214551) | $6566524 |
| &nbsp;&nbsp;&nbsp;Non-current assets | $4468491 | $609189 | $(2584562) | $2493118 |
| Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Current liabilities | $1070972 | $1506594 | $(214551) | $2363015 |
| &nbsp;&nbsp;&nbsp;Non-current liabilities | $— | $275729 | $— | $275729 |

---

**NOTE 12 – SUBSEQUENT EVENTS**

Management has evaluated subsequent events through the date these consolidated financial statements were available to be issued. The following subsequent event was identified:

&nbsp;&nbsp;&nbsp;&nbsp;· The Company issued 3,790,597 shares of common stock for cashless exercise of warrants.

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**Report of Independent Registered Public Accounting Firm**

To the Stockholders and Board of Directors iQSTEL, Inc.

Coral Gables, FL

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying consolidated balance sheets of iQSTEL, Inc. (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of operations, stockholders' equity, and cash flows for the years then ended, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years then ended**,** in conformity with accounting principles generally accepted in the United States of America.

**Going Concern Uncertainty – See Also Critical Audit Matters Section Below**

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring losses from operations and does not have an established source of revenues sufficient to cover its operating costs, which raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

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**Critical Audit Matters**

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

***Revenue Recognition***

*Critical Audit Matter Description*

The Company recognizes revenue upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services.

Significant judgment is exercised by the Company in determining revenue recognition for customer agreements, and include the pattern of delivery (i.e., timing of when revenue is recognized) for each distinct performance obligation.

The related audit effort in evaluating management's judgments in determining revenue recognition for customer agreements required a high degree of auditor judgment.

*How the Critical Audit Matter was Addressed in the Audit*

 

Our principal audit procedures related to the Company's revenue recognition for customer agreements included the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· We gained an understanding of internal controls related to revenue recognition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· We evaluated management's significant accounting policies for reasonableness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· We selected a sample of revenues recognized and performed the following procedures:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Obtained and read contract source documents for each selection and other documents that were part of the agreement, if applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Assessed the terms in the customer agreement and evaluated the appropriateness of management's application of their accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o We tested the mathematical accuracy of management's calculations of revenue and the associated timing of revenue recognized in the financial statements.

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***Going Concern***

 ****

*Critical Audit Matter Description*

 

As described further in Note 3 to the consolidated financial statements, the Company has suffered recurring losses from operations and does not have an established source of revenues sufficient to cover its operating costs. The ability of the Company to continue as a going concern is dependent on executing its business plan and ultimately to attain profitable operations. Accordingly, the Company has determined that these factors raise substantial doubt as to the Company's ability to continue as a going concern for a period of one year from the issuance of these financial statements. Management intends to continue to fund its business by way of public or private offerings of the Company's stock or through loans from private investors, in order satisfy the Company's obligations as they come due for at least one year from the financial statement issuance date. However, the Company has not concluded that these plans alleviate the substantial doubt related to its ability to continue as a going concern.

*How the Critical Audit Matter was Addressed in the Audit*

 

We determined the Company's ability to continue as a going concern is a critical audit matter due to the estimation and uncertainty regarding the Company's available capital and the risk of bias in management's judgments and assumptions in their determination. Our audit procedures related to the Company's assertion on its ability to continue as a going concern included the following, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· We performed testing procedures such as analytical procedures to identify conditions and events that indicate that there could be substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· We reviewed and evaluated management's plans for dealing with adverse effects of these conditions and events.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· We inquired of Company management and reviewed company records to assess whether there are additional factors that contribute to the uncertainties disclosed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· We assessed whether the Company's determination that there is substantial doubt about its ability to continue as a going concern was adequately disclosed.

/s/ Urish Popeck & Co., LLC

We have served as the Company's auditor since 2020.

Pittsburgh, PA

April 15, 2022

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**iQSTEL INC**

**Consolidated Balance Sheets**

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2021** | **December 31,**<br>**2020** |
| **ASSETS** |  |  |
| Current Assets |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $3334813 | $753316 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 2540515 | 2528321 |
| &nbsp;&nbsp;&nbsp;Due from related parties | 424086 | 221790 |
| &nbsp;&nbsp;&nbsp;Prepaid and other current assets | 267110 | 78157 |
| Total Current Assets | 6566524 | 3581584 |
| Property and equipment, net | 409382 | 350530 |
| Intangible asset | 99592 | 21875 |
| Goodwill | 1537742 | 1537742 |
| Deferred tax assets | 446402 | 460036 |
| &nbsp;&nbsp;&nbsp;**TOTAL ASSETS** | $**9059642** | $**5951767** |
| **LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** |  |  |
| Current Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | 1474595 | 2737411 |
| &nbsp;&nbsp;&nbsp;Due to related parties | 26613 | 94616 |
| &nbsp;&nbsp;&nbsp;Loans payable - net of discount of $7,406 and $19,221 | 315450 | 1332612 |
| &nbsp;&nbsp;&nbsp;Loans payable - related parties | 239308 | 2054379 |
| &nbsp;&nbsp;&nbsp;Current portion of convertible notes - net of discount of $0 and $370,106 |  | 253554 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 307049 | 413676 |
| &nbsp;&nbsp;&nbsp;Derivative liabilities |  | 1025691 |
| Total Current Liabilities | 2363015 | 7911939 |
| &nbsp;&nbsp;&nbsp;Convertible notes - net of discount of $0 and $2,184 |  | 2816 |
| &nbsp;&nbsp;&nbsp;Loans payable, non-current | 119295 | 270836 |
| &nbsp;&nbsp;&nbsp;Employee benefits, non-current | 156434 | 161212 |
| TOTAL LIABILITIES | 2638744 | 8346803 |
| Stockholders' Equity (Deficit) |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock: 1,200,000 authorized; $0.001 par value |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series A Preferred stock: 10,000 designated; $0.001 par value, 10,000 shares issued and outstanding, respectively | 10 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series B Preferred stock: 200,000 designated; $0.001 par value, 21,000 and 0 shares issued and outstanding | 21 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series C Preferred stock: 200,000 designated; $0.001 par value, No shares issued and outstanding |  |  |
| &nbsp;&nbsp;&nbsp;Common stock: 300,000,000 authorized; $0.001 par value 147,477,358 and 118,133,432 shares issued and outstanding, respectively | 147477 | 118133 |
| &nbsp;&nbsp;&nbsp;Additional paid in capital | 25842982 | 13267261 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (18536921) | (14699148) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (36658) | (74831) |
| Equity (Deficit) attributed to stockholders of iQSTEL Inc. | 7416911 | (1388575) |
| Deficit attributable to noncontrolling interests | (996013) | (1006461) |
| Total stockholders' Equity (Deficit) | 6420898 | (2395036) |
| &nbsp;&nbsp;&nbsp;**TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** | $**9059642** | $**5951767** |

---

The accompanying notes are an integral part of these consolidated financial statements.

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**iQSTEL INC**

**Consolidated Statements of Operations**

---

| | | |
|:---|:---|:---|
|  | **Years Ended** | **Years Ended** |
|  | **December 31,** | **December 31,** |
|  | **2021** | **2020** |
| Revenues | $64702018 | $44910006 |
| Cost of revenue | 63168303 | 43947654 |
| Gross profit | 1533715 | 962352 |
| Operating expenses |  |  |
| &nbsp;&nbsp;&nbsp;General and administration | 4517631 | 4174367 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 4517631 | 4174367 |
| Operating loss | (2983916) | (3212015) |
| Other income (expense) |  |  |
| &nbsp;&nbsp;&nbsp;Other income | 4426 | 38585 |
| &nbsp;&nbsp;&nbsp;Other expenses | 2684 | (117562) |
| &nbsp;&nbsp;&nbsp;Interest expense | (675481) | (3509323) |
| &nbsp;&nbsp;&nbsp;Change in fair value of derivative liabilities | 317080 | 255614 |
| &nbsp;&nbsp;&nbsp;Gain (loss) on settlement of debt | (528794) | (154629) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | (880085) | (3487315) |
| Net loss before provision for income taxes | (3864001) | (6699330) |
| &nbsp;&nbsp;&nbsp;Income taxes |  | (152) |
| **Net income (loss)** | **(3864001)** | **(6699482)** |
| Less: Net income (loss) attributable to noncontrolling interests | **(26228)** | **(125591)** |
| **Net income (loss) attributed to stockholders of iQSTEL Inc.** | $**(3837773)** | $**(6573891)** |
| **Comprehensive income (loss)** |  |  |
| &nbsp;&nbsp;&nbsp;Net income (loss) | $(3864001) | $(6699482) |
| &nbsp;&nbsp;&nbsp;Foreign currency adjustment | 74849 | (146373) |
| Total comprehensive income (loss) | $**(3789152)** | $**(6845855)** |
| Less: Comprehensive income attributable to noncontrolling interests | 10448 | (197314) |
| **Net comprehensive income (loss) attributed to stockholders of iQSTEL Inc.** | $**(3799600)** | $**(6648541)** |
| Basic and diluted loss per common share | $(0.03) | $(0.10) |
| Weighted average number of common shares outstanding - Basic and diluted | 135383893 | 63941222 |

---

The accompanying notes are an integral part of these consolidated financial statements.

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**iQSTEL INC**

**Consolidated Statements of Changes in Stockholders' Equity (Deficit)**

**For the years ended December 31, 2021 and 2020**

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series B Preferred Stock** | **Series B Preferred Stock** | **Common Stock** | **Common Stock** | | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | <br>**Additional Paid in Capital** | <br>**Accumulated Deficit** | <br>**Accumulated Other Comprehensive Loss** | <br> **Total** | <br>**Non Controlling Interest** | <br> **Total Shareholders' Deficit** |
| **Balance - December 31, 2019** |  | $— |  | $— | 18008591 | $18008 | $3240528 | $(8125257) | $(181) | $(4866902) | $(903513) | $(5770415) |
| Preferred stock issued for conversion of common stock | 10000 | 10 |  |  | (100000) | (100) | 90 |  |  |  |  |  |
| Common stock issued for cash |  |  |  |  | 23937500 | 23938 | 1891067 |  |  | 1915005 |  | 1915005 |
| Common stock issued for settlement of debt |  |  |  |  | 12818145 | 12818 | 876275 |  |  | 889093 |  | 889093 |
| Common stock issued for services |  |  |  |  | 6267600 | 6268 | 641590 |  |  | 647858 |  | 647858 |
| Common stock issued for forbearance of debt |  |  |  |  | 1150000 | 1150 | 91100 |  |  | 92250 |  | 92250 |
| Common stock issued for conversion of debt |  |  |  |  | 46575378 | 46575 | 1349865 |  |  | 1396440 |  | 1396440 |
| Common stock issued for exercised cashless warrant |  |  |  |  | 9476218 | 9476 | (9476) |  |  |  |  |  |
| Common stock issued for acquisition of Itsbchain LLC |  |  |  |  |  |  | 50000 |  |  | 50000 |  | 50000 |
| Acquisition of IoT Lab |  |  |  |  |  |  |  |  |  |  | 94366 | 94366 |
| Resolution of derivative liabilities |  |  |  |  |  |  | 5136222 |  |  | 5136222 |  | 5136222 |
| Foreign currency translation adjustments |  |  |  |  |  |  |  |  | (74650) | (74650) | (71723) | (146373) |
| Net loss |  |  |  |  |  |  |  | (6573891) |  | (6573891) | (125591) | (6699482) |
| **Balance - December 31, 2020** | 10000 | $10 |  | $— | 118133432 | $118133 | $13267261 | $(14699148) | $(74831) | $(1388575) | $(1006461) | $(2395036) |
| Preferred stock issued for conversion of common stock |  |  | 21000 | 21 | (21000000) | (21000) | 20979 |  |  |  |  |  |
| Common stock issued for cash and subscription receivable |  |  |  |  | 41562500 | 41563 | 6394687 |  |  | 6436250 |  | 6436250 |
| Common stock issued for settlement of debt |  |  |  |  | 2230394 | 2230 | 2054300 |  |  | 2056530 |  | 2056530 |
| Common stock issued for service |  |  |  |  | 195000 | 195 | 284505 |  |  | 284700 |  | 284700 |
| Common stock issued for compensation |  |  |  |  | 1320000 | 1320 | 1036248 |  |  | 1037568 |  | 1037568 |
| Common stock issued for forbearance of debt |  |  |  |  | 250000 | 250 | 49675 |  |  | 49925 |  | 49925 |
| Common stock issued for conversion of debt |  |  |  |  | 6080632 | 6081 | 416214 |  |  | 422295 |  | 422295 |
| Common stock payable |  |  |  |  |  |  | 52161 |  |  | 52161 |  | 52161 |
| Related party debt to equity swap |  |  |  |  |  |  | 1647150 |  |  | 1647150 |  | 1647150 |
| Cancellation of common stock |  |  |  |  | (1294600) | (1295) | (88809) |  |  | (90104) |  | (90104) |
| Resolution of derivative liabilities |  |  |  |  |  |  | 708611 |  |  | 708611 |  | 708611 |
| Foreign currency translation adjustments |  |  |  |  |  |  |  |  | 38173 | 38173 | 36676 | 74849 |
| Net loss |  |  |  |  |  |  |  | (3837773) |  | (3837773) | (26228) | (3864001) |
| **Balance - December 31, 2021** | 10000 | $10 | 21000 | $21 | 147477358 | $147477 | $25842982 | $(18536921) | $(36658) | $7416911 | $(996013) | $6420898 |

---

The accompanying notes are an integral part of these consolidated financial statements.

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**iQSTEL INC**

**Consolidated Statements of Cash Flows**

---

| | | |
|:---|:---|:---|
| h | <br> **Years Ended** | <br> **Years Ended** |
|  | **December 31,** | **December 31,** |
|  | **2021** | **2020** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(3864001) | $(6699482) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock based compensation and cancellation | 1284325 | 697858 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bad debt |  | 137749 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Write-off of due from related party | 10148 | 43375 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 91474 | 68602 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discount | 450771 | 2221506 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of derivative liabilities | (317080) | (255614) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on settlement of debt | 528794 | 154629 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepayment and default penalty | 122020 | 358046 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (39862) | 167077 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid and other current assets | (91066) | 21629 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (1231946) | 432872 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | (95758) | 535579 |
| &nbsp;&nbsp;&nbsp;Net cash used in operating activities | (3152181) | (2116174) |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Acquisition of subsidiary, net of cash acquired | (60000) | 15781 |
| &nbsp;&nbsp;&nbsp;Purchase of property and equipment | (153183) | (90192) |
| &nbsp;&nbsp;&nbsp;Purchase of intangible assets | (77717) |  |
| &nbsp;&nbsp;&nbsp;Payment of loan receivable - related party | (220674) | (18888) |
| &nbsp;&nbsp;&nbsp;Collection of due from related parties | 226 | 2088 |
| &nbsp;&nbsp;&nbsp;Net cash used in investing activities | (511348) | (91211) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from loans payable | 600000 | 1239620 |
| &nbsp;&nbsp;&nbsp;Repayments of loans payable | (344483) | (969664) |
| &nbsp;&nbsp;&nbsp;Proceeds from loans payable - related parties |  | 20182 |
| &nbsp;&nbsp;&nbsp;Repayment of loans payable - related parties | (90787) | (20197) |
| &nbsp;&nbsp;&nbsp;Common stock issued | 6336250 | 1915005 |
| &nbsp;&nbsp;&nbsp;Proceeds from convertible notes |  | 1420000 |
| &nbsp;&nbsp;&nbsp;Repayment of convertible notes | (250000) | (942190) |
| &nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 6250980 | 2662756 |
| Effect of exchange rate changes on cash | (5954) | 27442 |
| Net change in cash | 2581497 | 482813 |
| Cash, beginning of period | 753316 | 270503 |
| Cash, end of period | $3334813 | $753316 |
| Supplemental cash flow information |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $126818 | $976234 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for taxes | $— | $— |
| Non-cash transactions: |  |  |
| &nbsp;&nbsp;&nbsp;Derivative liabilities recognized as debt discount | $— | $1673393 |
| &nbsp;&nbsp;&nbsp;Common stock payable | $52161 | $— |
| &nbsp;&nbsp;&nbsp;Common stock issued for conversion of debt | $422295 | $1396440 |
| &nbsp;&nbsp;&nbsp;Cashless warrant exercised | $— | $9476 |
| &nbsp;&nbsp;&nbsp;Resolution of derivative liabilities | $708611 | $5136222 |
| &nbsp;&nbsp;&nbsp;Related party debt to equity swap | $1647150 | $— |
| &nbsp;&nbsp;&nbsp;Common stock issued for settlement of debt | $2056530 | $889093 |
| &nbsp;&nbsp;&nbsp;Amount owing for acquisition of IOT | $— | $60000 |
| &nbsp;&nbsp;&nbsp;Common stock issued for forbearance of debt | $49925 | $92250 |
| &nbsp;&nbsp;&nbsp;Replacement of convertible notes to note payable | $— | $1000000 |
| &nbsp;&nbsp;&nbsp;Preferred stock issued for conversion of common stock | $21 | $10 |
| &nbsp;&nbsp;&nbsp;Subscription receivable | $100000 | $— |

---

The accompanying notes are an integral part of these consolidated financial statements.

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**iQSTEL INC**

**Notes to the Consolidated Financial Statements**

**December 31, 2021**

**NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS**

***Organization and Operations***

iQSTEL Inc. ("iQSTEL", "we", "us", or the "Company") was incorporated under the laws of the State of Nevada on June 24, 2011 under the name of B-Maven Inc. The Company changed its name to PureSnax International, Inc. on September 18, 2015; and more recently it changed its name to iQSTEL Inc. on August 7, 2018.

The Company has been engaged in the business of telecommunication services as a wholesale carrier of voice, SMS and data for other telecom companies around the World with more than 150 active interconnection agreements with mobile companies, fixed line companies and other wholesale carriers.

The Company incorporated a 75% owned subsidiary, Global Money One Inc. under the laws of the state of Delaware, on November 16, 2020.

***COVID-19***

A novel strain of coronavirus (COVID-19) was first identified in December 2019, and subsequently declared a global pandemic by the World Health Organization on March 11, 2020. As a result of the outbreak, many companies have experienced disruptions in their operations and in markets served. The Company has instituted some and may take additional temporary precautionary measures intended to help ensure the well-being of its employees and minimize business disruption. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse impacts on the Company's results of operations and financial position at December 31, 2021. The full extent of the future impacts of COVID-19 on the Company's operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company, including the timing and ability of the Company to collect accounts receivable and the ability of the Company to continue to provide high quality services to its clients. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of April 15, 2022, the date of issuance of this Annual Report on Form 10-K. These estimates may change, as new events occur and additional information is obtained.

**NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of Presentation***

The consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The financial statements have been prepared in accordance with Generally Accepted Accounting Principles ("GAAP") of the United States of America. The Company's fiscal year end is December 31.

***Consolidation Policy***

The consolidated financial statements of the Company include the accounts of the Company and its owned subsidiaries, Etelix.com USA, LLC ("Etelix"), SwissLink Carrier AG ("Swisslink"), ITSBCHAIN, LLC ("ItsBchain"), QGLOBAL SMS, LLC ("QGlobal"), IoT Labs, LLC ("IoT Labs") and Global Money One Inc ("Global Money One"). All significant intercompany balances and transactions have been eliminated in consolidation.

***Use of Estimates***

The preparation of the consolidated financial statements in conformity with GAAP in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

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***Business Combinations***

In accordance with ASC 805-10, "*Business Combinations*", the Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that the Company holds in the acquired company prior to the acquisition is re-measured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and the existing book value. Results of operations of the acquired entity are included in the Company's results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets.

***Foreign Currency Translation and Re-measurement***

The Company translates its foreign operations to U.S. dollar in accordance with ASC 830, "*Foreign Currency Matters*".

The functional currency and reporting currency of Etelix, QGlobal, ItsBchain, IoT Labs and Global Money One is the U.S. dollar, while SwissLink's functional currency is the Swiss Franc ("CHF").

The Company's subsidiaries, whose functional currency is not the U.S. dollar, translate their records into U.S. dollar as follows:

&nbsp;&nbsp;&nbsp;&nbsp;· Assets
 and liabilities at the rate of exchange in effect at the balance sheet date

&nbsp;&nbsp;&nbsp;&nbsp;· Equities
 at historical rate

&nbsp;&nbsp;&nbsp;&nbsp;· Revenue
 and expense items at the average rate of exchange prevailing during the period

Adjustments arising from such translations are included in accumulated other comprehensive income in stockholders' equity.

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2021** | **December 31,**<br>**2020** |
| Spot CHF: USD exchange rate | $1.0974 | $1.1304 |
| Average CHF: USD exchange rate | $1.0969 | $1.0662 |

---

***Cash and Cash Equivalents***

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had no cash equivalents at December 31, 2021 and 2020.

***Accounts Receivable and Allowance for Uncollectible Accounts***

Substantially all of the Company's accounts receivable balance is related to trade receivables. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in its existing accounts receivable. The Company reviews its allowance for doubtful accounts daily and past due balances over 60 days and a specified amount are reviewed individually for collectability. Account balances are charged off after all means of collection have been exhausted and the potential for recovery is considered remote. During the years ended December 31, 2021 and 2020, the Company had bad debt expense of $0 and $137,749, respectively.

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***Long-Lived Assets***

Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.

***Fixed Assets***

Fixed assets, consisting of telecommunications equipment and software, is recorded at cost reduced by accumulated depreciation and amortization. Depreciation and amortization expense is recognized over the assets' estimated useful lives of 3 years for computers and laptops, 5 years for telecommunications equipment and switches; and 5 years for software using the straight-line method. Major additions and improvements are capitalized as additions to the property and equipment accounts, while replacements, maintenance and repairs that do not improve or extend the life of the respective assets, are expensed as incurred. Estimated useful lives are periodically reviewed and, when appropriate, changes are made prospectively. When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts.

***Impairment of tangible and intangible assets***

Tangible and intangible assets (excluding goodwill) are assessed at each reporting date for indications that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset's recoverable amount. The asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs of disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or a group of assets exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or the group of assets.

***Goodwill***

We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The fair value of each reporting unit is estimated primarily through the use of a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital.

The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit.

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***Retirement Benefit Costs***

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. Payments made to state-managed retirement benefit schemes are dealt with as payments to defined contribution schemes where the Company's obligations under the schemes are equivalent to those arising in a defined contribution retirement benefit scheme.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the period in which they occur. They are recognized outside the income statement and are presented in other comprehensive income. Past service cost is recognized immediately in the income statement in the period in which it occurs.

The retirement benefit obligation recognized in the balance sheet represents the present value of the defined obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of the scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the scheme.

***Net Income (Loss) Per Share of Common Stock***

The Company has adopted ASC 260, *"Earnings per Share"* which requires presentation of basic earnings per share on the face of the statements of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share computation. In the accompanying financial statements, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants unless the result would be antidilutive. Dilutive potential common shares include outstanding Series B Preferred stock, and it was excluded from the computation of diluted net loss per share as the result was anti-dilutive for the year ended December 31, 2021. There were no potentially dilutive shares of common stock outstanding for the year ended December 31, 2021.

***Concentrations of Credit Risk***

The Company's financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables that it will likely incur in the near future. The Company places its cash and cash equivalents with financial institutions of high creditworthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits.

During the year ended December 31, 2021 and 2020, 7 and 6 customers represented 88% and 70% of our revenues, respectively. For the year ended December 31, 2021 68% of the revenue comes from customers under prepayment conditions which means there is no credit or bad debt risk on that portion of the customers portfolio.

***Financial Instruments***

The Company follows ASC 820, "*Fair Value Measurements and Disclosures,*" which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

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Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The carrying values of our financial instruments, including, cash and cash equivalents; accounts receivable; prepaid and other current assets; accounts payable; other current liabilities; and due from/to related parties approximate their fair values due to the short-term maturities of these financial instruments.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due to related party's due to their related party nature.

***Derivative Financial Instruments***

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

***Income Taxes***

The Company uses the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on differences between financial reporting and the tax basis of assets, liabilities, the carry forward of operating losses and tax credits, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.

***Related Parties***

The Company follows ASC 850, *"Related Party Disclosures,"* for the identification of related parties and disclosure of related party transactions (see Note 13).

***Revenue Recognition***

The Company recognizes revenue from telecommunication services in accordance with ASC 606, "*Revenue from Contracts with Customers."*

The Company recognizes revenue related to monthly usage charges and other recurring charges during the period in which the telecommunication services are rendered, provided that persuasive evidence of a sales arrangement exists, and collection is reasonably assured. Management considers persuasive evidence of a sales arrangement to be a written interconnection agreement. The Company's payment terms vary by client.

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***Cost of revenue***

Costs of revenue represent direct charges from vendors that the Company incurs to deliver services to its customers. These costs primarily consist of usage charges for calls terminated in vendor's network.

***Lease***

The Company leases office space for corporate and network monitoring activities and to house telecommunications equipment.

In accordance with ASC 842, "*Leases*", we determine if an arrangement is a lease at inception.

The office lease meets the definition of a short-term lease because the lease term is 12 months or less. Consequently, consistent with Company's accounting policy election, the Company does not recognize the right-of-use asset and the lease liability arising from this lease.

***Recent Accounting Pronouncements***

In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 "*Debt—Debt with "Conversion and Other Options*" and ASC subtopic 815-40 "*Hedging—Contracts in Entity's Own Equity*". The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements.

**NOTE 3 - GOING CONCERN**

The Company's consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has suffered recurring losses from operations and does not have an established source of revenues sufficient to cover its operating costs. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its business plan and eventually attain profitable operations.

During the next year, the Company's foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing in the industry and continuing its marketing efforts. The Company may experience a cash shortfall and be required to raise additional capital.

Historically, the Company has relied upon funds from its stockholders. Management may raise additional capital through future public or private offerings of the Company's stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company's failure to do so could have a material and adverse effect upon its operations and its stockholders.

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**NOTE 4 - ACQUISITION**

**IoT Labs**

On April 15, 2020, we entered into a Company Acquisition Agreement (the "Agreement") with Francisco Bunt regarding the acquisition of 51% of the shares in IoT Labs, whose principal business activity is the sale of Short Messages (SMS) between USA and Mexico, for $180,000.

The following table summarizes the identifiable assets acquired and liabilities assumed upon acquisition of IoT Labs and the calculation of goodwill:

---

| | |
|:---|:---|
| Total purchase price | $180000 |
| Cash | 135781 |
| Other current assets | 953 |
| Property and equipment | 34075 |
| Intangible asset | 21875 |
| Total identifiable assets | 192684 |
| Accounts payable | (100) |
| Total liabilities assumed | (100) |
| Net assets | 192584 |
| Non-controlling interest | 94366 |
| Total net assets | 98218 |
| Goodwill | $81782 |

---

Unaudited combined proforma results of operations for the year ended December 31, 2020 as though the Company acquired IoT Labs on January 1, 2020, are set forth below:

---

| | |
|:---|:---|
|  | **December 31,**<br>**2020** |
| Revenues | $55784168 |
| Cost of revenues | 54631017 |
| Gross profit | 1153151 |
| Operating expenses | 4224903 |
| Operating loss | (3071752) |
| Other expense | (3487315) |
| Net Loss | $(6559067) |

---

**NOTE 5 – PREPAID AND OTHER CURRENT ASSETS**

Prepaid and other current assets at December 31, 2021 and 2020 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2021** | **December 31,**<br>**2020** |
| Subscription receivable | $100000 | $— |
| Other receivable | 143187 | 77557 |
| Prepaid expenses | 23320 |  |
| Tax receivable | 603 | 600 |
|  | 267110 | 78157 |

---

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**NOTE 6 – PROPERTY AND EQUIPMENT**

Property and equipment at December 31, 2021 and 2020 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2021** | **December 31,**<br>**2020** |
| Telecommunication equipment | $258871 | $259000 |
| Telecommunication software | 618125 | 530514 |
| Other equipment | 108805 | 47206 |
| Total property and equipment | 985801 | 836720 |
| Accumulated depreciation and amortization | (576419) | (486190) |
| Total property and equipment | $409382 | $350530 |

---

Depreciation expense for the year ended December 31, 2021 and 2020 amounted to $91,474 and $68,602, respectively.

**NOTE 7 –LOANS PAYABLE** 

Loans payable at December 31, 2021 and 2020 consisted of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31,**<br>**2021** | **December 31,**<br>**2020** | <br>**Term** | **Interest**<br>**Rate** |
| Unique Funding Solutions_2 | $— | $2000 | Note was issued on October 12, 2018 and due on January 17, 2019 | 28.6% |
| YES LENDER LLC 3 |  | 5403 | Note was issued on August 3, 2020 and due on January 12, 2021 | 26.0% |
| Advance Service Group LLC |  | 12143 | Note was issued on October 20, 2020, and due on February 19, 2021 | 29.0% |
| Apollo Management Group, Inc |  | 63158 | Note was issued on March 18, 2020 and due on December 15, 2020 | 12.0% |
| Apollo Management Group, Inc 2 |  | 68421 | Note was issued on March 25, 2020 and due on December 15, 2020 | 12.0% |
| Apollo Management Group, Inc 3 |  | 66316 | Note was issued on April 1, 2020 and due on October 1, 2021 | 12.0% |
| Apollo Management Group, Inc 4 |  | 73684 | Note was issued on April 2, 2020 and due on October 2, 2021 | 12.0% |
| Apollo Management Group, Inc 5 |  | 36842 | Note was issued on April 7, 2020 and due on October 7, 2021 | 12.0% |
| Apollo Management Group, Inc 6 |  | 84211 | Note was issued on April 15, 2020 and due on October 15, 2021 | 12.0% |
| Apollo Management Group, Inc 7 |  | 55000 | Note was issued on April 20, 2020 and due on December 15, 2020 | 12.0% |
| Apollo Management Group, Inc 14 |  | 32432 | Note was issued on December 4, 2020 and due on January 4, 2021 | 12.0% |
| Labrys Fund |  | 280000 | Note was issued on June 26, 2020 and due on April 1, 2021 | 12.0% |
| M2B Funding Corp |  | 300000 | Note was issued on September 1, 2020 and due on September 1, 2021 | 12.0% |
| M2B Funding Corp 1 |  | 77778 | Note was issued on December 10, 2020 and due on January 9, 2021 | 22.0% |
| M2B Funding Corp 2 |  | 27778 | Note was issued on December 18, 2020 and due on January 17, 2021 | 22.0% |
| M2B Funding Corp 3 |  | 55556 | Note was issued on December 24, 2020 and due on January 23, 2021 | 22.0% |
| M2B Funding Corp 4 |  | 111111 | Note was issued on December 30, 2020 and due on January 29, 2021 | 22.0% |
| Bridge Loan | 222222 |  | Note was issued on November 1, 2021 and due on January 30, 2022 | 18.0% |
| Martus | 100634 | 108609 | Note was issued on October 23, 2018 and due on January 3, 2022 | 5.0% |
| Swisspeers AG | 9605 | 49187 | Note was issued on April 8, 2019 and due on October 4, 2022 | 7.0% |
| Darlene Covid19 | 109690 | 113040 | Note was issued on April 1, 2020 and due on March 31, 2025 | 0.0% |
| Total | 442151 | 1622669 |  |  |
| Less: Unamortized debt discount | (7406) | (19221) |  |  |
| Total loans payable | 434745 | 1603448 |  |  |
| Less: Current portion of loans payable | 315450 | 1332612 |  |  |
| Long-term loans payable | $119295 | $270836 |  |  |

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Loans payable - related parties at December 31, 2021 and 2020 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2021** | **December 31,**<br>**2020** |
| Alonso Van Der Biest | $— | $80200 |
| Alvaro Quintana |  | 10587 |
| 49% of Shareholder of SwissLink | 19929 | 1737512 |
| 49% of Shareholder of SwissLink | 219379 | 226080 |
| Total | 239308 | 2054379 |
| Less: Current portion of loans payable | 239308 | 2054379 |
| Long-term loans payable | $— | $— |

---

During the years ended December 31, 2021 and 2020, the Company borrowed from third parties totaling $600,000 and $1,239,620, which includes original issue discount and financing costs of $66,666 and $63,970 and repaid the principal amount of $344,483 and $969,664, respectively.

During the years ended December 31, 2021 and 2020, the Company recorded interest expense of $191,281 and $77,101 and recognized amortization of discount, included in interest expense, of $78,481 and $44,749, respectively.

During the year ended December 31, 2021, the related party loan of $1,647,150 (CHF 1,518,909) was swapped into capital and the Company recorded it as additional paid in capital.

During the year ended December 31, 2021, the Company settled loans payable of $1,516,667 by issuing 2,230,394 shares of common stock valued at $2,056,530. As a result, the Company recorded loss on settlement of debt of $539,863.

**NOTE 8 – OTHER CURRENT LIABILITIES**

Other current liabilities at December 31, 2021 and 2020 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2021** | **December 31,**<br>**2020** |
| Accrued liabilities | $61153 | $6789 |
| Accrued interest | 8173 | 170960 |
| Salary payable - management | 92229 | 28300 |
| Employee benefits | 105221 | 181231 |
| Other current liabilities | 40273 | 26396 |
| Total Other Current Liabilities | $307049 | $413676 |

---

**NOTE 9 - CONVERTIBLE LOANS**

At December 31, 2021 and 2020, convertible loans consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2021** | **December 31,**<br>**2020** |
| Promissory notes – Issued in fiscal year 2019, with variable conversion features | $— | $5000 |
| Promissory notes – Issued in fiscal year 2020, with variable conversion features |  | 623660 |
| Total convertible notes payable |  | 628660 |
| Less: Unamortized debt discount |  | (372290) |
| Total convertible notes |  | 256370 |
| Less: current portion of convertible notes |  | 253554 |
| Long-term convertible notes | $— | $2816 |

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During the years ended December 31, 2021 and 2020, the Company recorded interest expense of $33,429 and $487,012 and recognized amortization of discount, included in interest expense, of $372,290 and $2,176,757, respectively.

During the years ended December 31, 2021 and 2020, the Company repaid notes of $250,000 and $942,190 and accrued interest including prepayment penalty of $6,027 and $675,771, respectively.

*Conversion*

During the year ended December 31, 2021, the Company converted notes with principal amounts and accrued interest of $422,295 into 6,080,632 shares of common stock. The corresponding derivative liability at the date of conversion of $708,611 was settled through additional paid in capital.

During the year ended December 31, 2020, the Company converted notes with principal amounts of $1,302,785 and accrued interest of $93,656 into 46,575,378 shares of common stock. The corresponding derivative liability at the date of conversion of $4,275,728 was settled through additional paid in capital.

*Settlement*

During the year ended December 31, 2021, the Company recorded gain on settlement of debt of $11,069.

On June 10, 2020, the Company settled a convertible note with accrued interest of $64,230 with a total of 650,000 share issuances. The Company issued 200,000 shares in June, 225,000 shares in July and 503,571 shares in August, which included 278,571 true-up shares. As a result, the Company recognized a loss on settlement of debt of $24,699.

On June 26, 2020, the Company issued a loan payable of $700,000 to Labrys Fund to settle the previously-outstanding convertible notes with accrued interest of $986,340. As a result, the Company recognized a gain on settlement of debt of $286,340 (Note 7).

On July 22, 2020, the Company settled a convertible note with accrued interest of $64,363 and an original common stock purchase warrant to purchase 20,000 shares of common stock with a total of 650,000 share issuances. During the period ended September 30, 2020, the Company issued 1,038,375 shares which included 388,375 true-up shares. As a result, the Company recognized a loss on settlement of debt of $9,886.

On September 1, 2020, the Company entered into a Multipurpose agreement and issued a new note which a principal balance of $1,045,327 to replace the 15 notes issued from January 2020 to May 2020 which an aggregate principal amount was $985,556 and an aggregate accrued interest was $59,771. The Company also issued another promissory note of $300,000 (Note 7). As a result, the Company recognized a loss on settlement of debt of $300,000.

*Promissory Notes - Issued in fiscal year 2019*

During the year ended December 31, 2019, the Company issued a total of $2,544,250 in notes with the following terms:

• Terms ranging from 6
 months to 3
 years .

• Annual interest rates ranging from of 8% to 12% .

• Convertible at the option of the holders at issuance or 180 days from issuance.

• Conversion
 prices are typically based on the discounted (39% or 0% discount) lowest trading prices of the Company's shares during various
 periods prior to conversion.

The convertible notes were also provided with a total of 661,216 common shares and warrant to purchase up to 92,000 shares of common stock at exercise price of $2.5 per share for 3 years.

Certain notes allow the Company to redeem the notes at rates ranging from 110% to 150% depending on the redemption date provided that no redemption is allowed after the 180th day. Likewise, the notes include original issue discount and financing costs totaling $278,000 and the Company received cash of $2,266,250.

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*Promissory Notes - Issued in fiscal year 2020*

During the year ended December 31, 2020, the Company issued a total of $2,708,771 in notes with the following terms:

• Terms 12
 months .

• Annual interest rates 5% or 12% .

• Convertible at the option of the holders 90 or 180 days from issuance.

• Conversion
 prices are typically based on the discounted (25% or 60% discount) lowest trading prices of the Company's shares during 30
 trading day periods prior to conversion. Certain note has a capped conversion price of $0.025.

Notes allow the Company to redeem the notes at a range from 120% to 125% provided that no redemption is allowed after the 180th or 185th day. Likewise, the notes include original issue discount and financing costs totaling $229,444 and the Company received cash of $1,420,000. Certain convertible notes were also provided with a total of 6,500,000 warrants with exercise price ranging from $0.02 to $0.03.

*Derivative liabilities*

The Company valued the conversion features of convertible notes and warrants using the Black Scholes valuation model. The fair value of the derivative liability for all the note and warrants that became convertible for the year ended December 31, 2020, amounted to $2,714,029. $1,673,393 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $1,040,636 was recognized as a "day 1" derivative loss.

*Warrants*

A summary of activity during the year ended December 31, 2020 follows. There was no 2021 activity.

---

| | | | |
|:---|:---|:---|:---|
|  | **Warrants Outstanding** | **Warrants Outstanding** | **Warrants Outstanding** |
|  | **Shares** | **Weighted Average Exercise Price** | **Weighted Average Remaining Contractual life (in years)** |
| Outstanding, December 31, 2019 | 367343 | $0.480 | 4.05 |
| Granted | 6500000 | 0.024 | 6.00 |
| Reset | 10813001 | 0.014 | 1.92 |
| Cashless Exercised | (10597010) | 0.023 | 4.24 |
| Settled | (7083334) | 0.012 | 1.64 |
| Outstanding, December 31, 2020 |  | $— |  |

---

The reset feature of warrants associated with the convertible notes was effective at the time that a separate convertible note with lower exercise price was issued. As a result of the reset features for warrants, the warrants increased by 10,813,001 at $0.0014 per share. We accounted for the issuance of the warrants as a liability and recognized the derivative liability.

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**NOTE 10 – DERIVATIVE LIABILITY**

The Company analyzed the conversion option for derivative accounting consideration under ASC 815, "*Derivatives and Hedging*" and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

*Fair Value Assumptions Used in Accounting for Derivative Liabilities*

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of December 31, 2020. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Black-Scholes valuation model.

For the year ended December 31, 2021 and 2020, the estimated fair values of the liabilities measured on a recurring basis are as follows:

---

| | | |
|:---|:---|:---|
|  | **Year ended** | **Year ended** |
|  | **December 31,** | **December 31,** |
|  | **2021** | **2020** |
| Expected term | 0.16 - 1.18 years | 0.02 - 6.00 years |
| Expected average volatility | 145% - 241% | 74% - 550% |
| Expected dividend yield |  |  |
| Risk-free interest rate | 0.07% - 0.09% | 0.05% - 2.56% |

---

The following table summarizes the changes in the derivative liabilities during the year ended December 31, 2021 and 2020:

---

| | |
|:---|:---|
| **Fair Value Measurements Using Significant Observable Inputs (Level 3)** | **Fair Value Measurements Using Significant Observable Inputs (Level 3)** |
| Balance - December 31, 2019 | $4744134 |
| Addition of new derivatives recognized as debt discounts | 1673393 |
| Addition of new derivatives recognized as loss on derivatives | 1040636 |
| Settled on issuance of common stock | (5136222) |
| Change in fair value of the derivative | (1296250) |
| Balance - December 31, 2020 | $1025691 |
| Settled on issuance of common stock | (708611) |
| Change in fair value of the derivative | (317080) |
| Balance - December 31, 2021 | $— |

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The following table summarizes the change in fair value of derivative liability included in the income statement for the year ended December 31, 2021 and 2020, respectively.

---

| | | |
|:---|:---|:---|
|  | **Years Ended** | **Years Ended** |
|  | **December 31,** | **December 31,** |
|  | **2021** | **2020** |
| Addition of new derivatives recognized as loss on derivatives | $— | $1040636 |
| Revaluation of derivative liabilities | (317080) | (1296250) |
| (Gain) on change in fair value of the derivative | $(317080) | $(255614) |

---

**NOTE 11 – STOCKHOLDERS' EQUITY**

The Company's authorized capital consists of 300,000,000 shares of common stock with a par value of $0.001 per share.

*Series A Preferred Stock*

On November 3, 2020, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series A Preferred Stock, consisting of up 10,000 shares, par value $0.001. Under the Certificate of Designation, holders of Series A Preferred Stock will participate on an equal basis per-share with holders of our common stock in any distribution upon winding up, dissolution, or liquidation. Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to stockholders at a rate of 51% of the total vote of stockholders.

The rights of the holders of Series A Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on November 3, 2020

During the year ended December 31, 2020, 100,000 shares of common stock were converted into 10,000 shares of Series A Preferred Stock by our management.

As of December 31, 2021 and 2020, 10,000 shares of Series A Preferred Stock were issued and outstanding.

*Series B Preferred Stock*

On November 11, 2020, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series B Preferred Stock, consisting of up 200,000 shares, par value $0.001. Under the Certificate of Designation, holders of Series B Preferred Stock will receive a liquidation preference of $81 per share in any distribution upon winding up, dissolution, or liquidation of the Company before junior security holders, as provided in the designation. Holders of Series B Preferred Stock are entitled to receive as, when, and if declared by the Board of Directors, dividends in kind at an annual rate equal to twenty four percent (24%) of $81 per share for each of the then outstanding shares of Series B Preferred Stock, calculated on the basis of a 360-day year consisting of twelve 30-day months. Holders of Series B Preferred Stock do not have voting rights but may convert into common stock after twelve months from the issuance date, at a conversion rate of one thousand (1,000) shares of Common Stock for every one (1) share of Series B Preferred Stock. Upon conversion, the shares are subject to a one-year restriction on sales into the market of no more than 5% previous month's stock liquidity.

During the year ended December 31, 2021, 21,000,000 shares of common stock were converted into 21,000 shares of Series B Preferred Stock by our management.

As of December 31, 2021 and 2020, 21,000 and 0 shares of Series B Preferred Stock were issued and outstanding, respectively.

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*Series C Preferred Stock*

On January 7, 2021, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series C Preferred Stock, consisting of up 200,000 shares, par value $0.001. Under the Certificate of Designation, holders of Series C Preferred Stock will rank junior to the Series B Preferred Stock, but on par with common stock and Series A Preferred Stock in any distribution upon winding up, dissolution, or liquidation of the company, as provided in the designation. The holders of shares of Series C Preferred Stock have no dividend rights except as may be declared by the Board in its sole and absolute discretion, out of funds legally available for that purpose. Holders of Series C Preferred Stock do not have voting rights but may convert into common stock after twenty four months from the issuance date, at a conversion rate of one thousand (1,000) shares of Common Stock for every one (1) share of Series C Preferred Stock. Upon conversion, the shares are subject to a one-year restriction on sales into the market of no more than 5% previous month's stock liquidity.

The rights of the holders of Series C Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on January 7, 2021.

As of December 31, 2021 and 2020, no Series C Preferred Stock was issued or outstanding.

*Common Stock*

During the year ended December 31, 2021, the Company issued 51,638,526 shares of common stock, valued at fair market value on issuance as follows;

&nbsp;&nbsp;&nbsp;&nbsp;· 41,562,500 shares issued for cash of $6,536,250 ,
 of which $100,000 was recorded as subscription receivable as of
 December 31, 2021. The Company received the $100,000 on January 3, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;· 2,230,394 shares, valued at $2,056,530 ,
 issued for settlement of debt of $1,516,667

&nbsp;&nbsp;&nbsp;&nbsp;· 195,000 shares for services valued at $284,700

&nbsp;&nbsp;&nbsp;&nbsp;· 1,320,000 shares issued to our management for compensation valued
 at $1,037,568

&nbsp;&nbsp;&nbsp;&nbsp;· 250,000 shares for forbearance of debt valued at $49,925

&nbsp;&nbsp;&nbsp;&nbsp;· 6,080,632 shares issued for conversion of debt of $422,295

During the year ended December 31, 2021, the Company terminated a placement agent and advisory services agreement with a FINRA member dated September 22, 2020, and cancelled 1,294,600 shares of common stock, which was issued for those services. The termination agreement allowed the FINRA member to retain 400,000 shares of the Company's common stock in connection with the services.

During the year ended December 31, 2020, the Company issued 100,224,841 shares of common stock, valued at fair market value on issuance as follows;

* 23,937,500
shares issued for cash of $1,915,005
 

* 12,818,145
shares issued for settlement of debt of $889,093
 

* 6,267,600
shares issued for services valued at $647,858
 

* 1,150,000
shares issued for forbearance of debt of $92,250

* 46,575,378
shares issued for conversion of debt of $1,396,440
 

* 9,476,218
shares issued for cashless exercised warrant 

As of December 31, 2021 and 2020, 147,477,358 and 118,133,432 shares of common stock were issued and outstanding, respectively.

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**NOTE 12 – PROVISION FOR INCOME TAXES**

The Company provides for income taxes under ASC 740, "*Income Taxes."* Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

The components of the Company's deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of December 31, 2021 and 2020, are as follows:

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| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2021** | **December 31,**<br>**2020** |
| Net Operating loss carryforward | $12332310 | $8601999 |
| Effective tax rate | 21% | 21% |
| Deferred tax asset | 2589785 | 1806420 |
| Foreign taxes | (7242) | (5112) |
| Less: valuation allowance | (2136141) | (1341272) |
| Net deferred tax asset | $446402 | $460036 |

---

As of December 31, 2021, the Company has approximately $12,332,000 of net operating losses ("NOL") generated to December 31, 2021 carried forward to offset taxable income in future years which expire commencing in fiscal 2037. NOLs generated in tax years prior to December 31, 2017, can be carryforward for twenty years, whereas NOLs generated after December 31, 2017 can be carryforward indefinitely. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets relating to NOLs for every period because it is more likely than not that all of the deferred tax assets will not be realized other than those recorded at SwissLink, because the Company anticipates utilizing the NOLs prior to their expiration.

Utilization of the NOL carry forwards may be subject to an annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"). These ownership changes may limit the amount of the NOL carry forwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an "ownership change" as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders.

Tax returns for the years ended 2016 through 2021 are subject to review by the tax authorities.

**NOTE 13 - RELATED PARTY TRANSACTIONS**

*Due from related party*

During the year ended December 31, 2021, the Company loaned $220,674 to our CEO and applied to due to CEO of $8,004.

During the year ended December 31, 2021, the Company wrote off due from related party of $10,148.

During the year ended December 31, 2020, the Company loaned $20,182 to related parties who are a stockholder and a former director, collected $20,197 and wrote off amounts totaling $43,375.

During the years ended December 31, 2021 and 2020, the Company loaned $220,674 and $18,888 to a related party and collected $226 and $2,088, respectively.

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As of December 31, 2021 and 2020, the Company had due from related parties of $424,086 and $221,790, respectively. The loans are unsecured, non-interest bearing and due on demand.

*Due to related parties*

During the years ended December 31, 2021 and 2020, the Company borrowed $0 and $20,182 from CEO and CFO of the Company, and repaid $90,787 and $20,197 to the CEO and CFO, respectively.

During the year ended December 31, 2020, the Company borrowed $20,000 from Francisco Bunt who owns 49% of loT Labs and repaid $20,000.

As of December 31, 2021 and 2020, the Company had amounts due to related parties of $26,613 and $94,616, respectively, which included $0 and $60,000 to Francisco Bunt (Note 4), respectively. The amounts are unsecured, non-interest bearing and due on demand.

*Debt to Equity Swap*

During the year ended December 31, 2021 the Company recorded a debt to equity swap of $1,647,150 as additional paid in capital.

***Employment agreements***

On July 1, 2021, the Company appointed three independent directors. Effective on July 1, 2021 and thereafter, all directors shall be compensated monthly up to 4,000 shares of common stock and cash of $1,000 for their service as directors.

On May 2, 2019, the Company entered into Employment Agreements with the following persons: (i) Leandro Iglesias as President, CEO and Chairperson of the Company's Board of Directors with an annual salary of $168,000 with an annual bonus of 3% of our net income; (ii) Juan Carlos Lopez Silva as Chief Commercial Officer with an annual salary of $120,000 with an annual bonus of 3% of our net income; and Alvaro Quintana Cardona as Chief Operating Officer and Chief Financial Officer with an annual salary of $144,000 with an annual bonus of 3% of our net income. The Employment Agreements have a term of 36 months, are renewable automatically for 24-month periods, unless the Company gives written notice at least 90 days prior to termination of the initial 36-month term. The Company shall have the right to terminate any of the employment agreements at any time without prior notice, but in that event, the Company shall pay these persons salaries and other benefits they are entitled to receive under their respective agreements for three years. The above executive officers agreed to two year non-compete and non-solicit restrictive covenants with the Company. If any of the executive officers are terminated for cause they shall forfeit any rights to severance.

On November 1, 2020, our board of directors approved amended employments in favor of our Chief Executive Officer, Leandro Iglesias, our Chief Financial Officer, Alvaro Quintana, and our Chief Commercial Officer, Juan Carlos Lopez Silva.

The amended employment agreement in favor of Mr. Iglesias extended the term of employment from 36 months to 60 months. The now five year employment agreement with Mr. Iglesias provides that we will compensate him with a salary of $17,000 monthly and he is eligible for quarterly bonus of 250,000 shares of our common stock. If we do not have the cash available, the agreement provides that Mr. Iglesias may convert his accrued salary/bonus into shares of our common stock or newly created Series A Preferred Stock. For common shares, the amount of accrued salary to be converted into shares must be determined by considering the average price per share of the Company's common stock on the OTC Markets during the last 10 days and applying a discount of 25%." For Series A Preferred Shares, the amount of accrued salary to be converted into shares is the per share conversion price for common shares multiplied by ten US Dollars ($10). Mr. Iglesias has a further right to convert any common shares under his control into Series A Preferred shares at any time at a rate of ten (10) common shares for each Series A Preferred share.

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The amended employment agreement in favor of Mr. Quintana extended the term of employment from 36 months to 60 months. The now five year employment agreement with Mr. Quintana provides that he is eligible for quarterly bonus of 200,000 shares of our common stock. If we do not have the cash available, the agreement provides that Mr. Quintana may convert his accrued salary/bonus into shares of our common stock or newly created Series A Preferred Stock. For common shares, the amount of accrued salary to be converted into shares must be determined by considering the average price per share of the Company's common stock on the OTC Markets during the last 10 days and applying a discount of 25%." For Series A Preferred Shares, the amount of accrued salary to be converted into shares is the per share conversion price for common shares multiplied by ten US Dollars ($10). Mr. Quintana has a further right to convert any common shares under his control into Series A Preferred shares at any time at a rate of ten (10) common shares for each Series A Preferred share.

The amended employment agreement in favor of Mr. Silva extended the term of employment from 36 months to 60 months. Mr. Silva is eligible for quarterly bonuses of 150,000 shares of our common stock. If we do not have the cash available, the agreement provides that Mr. Iglesias may convert his accrued salary/bonus into shares of our common stock at the average price of our common stock during the last 10 days after applying a discount of 25%.

On March 3, 2020, Oscar Brito resigned as a member of our Board of Directors. There was no known disagreement with Mr. Brito on any matter relating to our operations, policies or practices. The Company provided the severance package as follows;

• 2,000,000 shares of common stock valued at $300,000

• Additional 173,000 shares in order to apply the anti-dilution protection, valued at $10,034

• Forgiveness of amounts due to the Company totaling $43,375

• Cash payment of $15,000 .

On March 16, 2020, our Board of Directors adopted a Director Compensation Plan that applies to members of our Board of Directors. Below are the features of the plan:

• All Directors shall receive reimbursement for reasonable travel expenses incurred to attend
 Board and committee meetings.

• All Directors shall be compensated $3,000 monthly for their service as Directors.

• In lieu of the cash compensation set forth above, each Director may elect to receive shares of the Corporation's
 Common Stock equal to the total cash compensation divided by the average market value of the Company's Common Stock during the last
 10 trading days and applying a discount of 10%.

• Directors Alvaro Cardona and Leandro Iglesias shall each receive 1,000,000 shares of the Company's Common Stock, valued at $70,000 each, for their service as members of the Board of Directors for the period from June 2018 to December 2019.

During the years ended December 31, 2021 and 2020, the Company recorded management salaries of $558,000 and $510,000 and bonuses of $976,200 and $0, respectively, of which $1,037,568 and $0 were stock based compensation.

During the year ended December 31, 2020, the Company settled accrued salary – management of $619,531 and issued 10,851,199 shares. As at December 31, 2021 and 2020, the Company recorded and accrued management salaries of $92,229 and $22,300, respectively.

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**NOTE 14 – COMMITMENTS AND CONTINGENCIES**

*Leases and Long-term Contracts*

The Company has not entered into any long-term leases, contracts or commitments. The Company leases facilities which the term is 12 months. For the years ended December 31, 2021 and 2020, the Company incurred $37,823 and $18,400, respectively.

*Advisory service*

On March 3, 2020, we appointed Oscar Brito as an advisor to our Board of Directors and agreed to pay him $5,000 per month for such services. Mr. Brito acted as an advisor to our Board of Directors. On February 11, 2021, the Company paid $12,600 and the service was terminated.

On January 4, 2021, the Company terminated a placement agent and advisory services agreement with a FINRA member dated September 22, 2020, and cancelled 1,294,600 shares of common stock, which was issued for those services. The termination agreement allowed the FINRA member to retain 400,000 shares of the Company's common stock in connection with the services.

**NOTE 15 - SEGMENT**

At December 31, 2021 and 2020, the Company operates in one industry segment, telecommunication services, and two geographic segments, USA and Switzerland, where current assets and equipment are located**.**

***Operating Activities***

The following table shows operating activities information by geographic segment for the years ended December 31, 2021 and 2020:

*Year ended December 31, 2021*

NOTE 15 - SEGMENT Schedule of Operating Activities by Geographic Segment

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **USA** | **Switzerland** | **Elimination** | **Total** |
| Revenues | $60112852 | 4681978 | $(92812) | $64702018 |
| Cost of revenue | 59274781 | 3986334 | (92812) | 63168303 |
| Gross profit | 838071 | 695644 |  | 1533715 |
| Operating expenses |  |  |  |  |
| General and administration | 3733579 | 784052 |  | 4517631 |
| Operating income (loss) | (2895508) | (88408) |  | (2983916) |
| Other income (expense) | (897507) | 17422 |  | (880085) |
| **Net income (loss)** | $(3793015) | $(70986) | $— | $(3864001) |

---

[**Table of Contents**](#toc)

*Year ended December 31, 2020*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **USA** | **Switzerland** | **Elimination** | **Total** |
| Revenues | $39495542 | $5432022 | $(17558) | $44910006 |
| Cost of revenue | 39308347 | 4656865 | (17558) | 43947654 |
| Gross profit | 187195 | 775157 |  | 962352 |
| Operating expenses |  |  |  |  |
| General and administration | 3359237 | 815130 |  | 4174367 |
| Operating loss | (3172042) | (39973) |  | (3212015) |
| Other expense | (3356881) | (130434) |  | (3487315) |
| **Net loss** | $(6528923) | $(170407) | $— | $(6699330) |

---

***Asset Information***

The following table shows asset information by geographic segment as of December 31, 2021 and 2020:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **December 31, 2021** | **USA** | **Switzerland** | **Elimination** | **Total** |
| Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Current assets | $5783859 | $997216 | $(214551) | $6566524 |
| &nbsp;&nbsp;&nbsp;Non-current assets | $4468491 | $609189 | $(2584562) | $2493118 |
| Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Current liabilities | $1070972 | $1506594 | $(214551) | $2363015 |
| &nbsp;&nbsp;&nbsp;Non-current liabilities | $— | $275729 | $— | $275729 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **December 31, 2020** | **USA** | **Switzerland** | **Elimination** | **Total** |
| Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Current assets | $3245725 | $1225399 | $(889540) | $3581584 |
| &nbsp;&nbsp;&nbsp;Non-current assets | $3478147 | $561551 | $(1669515) | $2370183 |
| Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Current liabilities | $5630060 | $3171419 | $(889540) | $7911939 |
| &nbsp;&nbsp;&nbsp;Non-current liabilities | $2816 | $432048 | $— | $434864 |

---

**NOTE 16 – SUBSEQUENT EVENTS**.

Subsequent to December 31, 2020 and through the date that these financials were made available, the Company had the following subsequent events:

On March 31, 2022 the Company sold 2,000,000 common shares under a subscription agreement of our Regulation A offering statement for an aggregated amount of $1,000,000. The shares were issued on April, 6, 2022.

[**Table of Contents**](#toc)

**Part II**

**INFORMATION NOT REQUIRED IN PROSPECTUS**

**ITEM 13. Other Expenses of Issuance and Distribution**

The estimated costs of this Offering are as follows:

---

| | |
|:---|:---|
| Expenses\* |  |
| Securities and exchange Commission Registration Fee | $395.74 |
| Transfer Agent Fees | $1000 |
| Accounting Fees and Expenses | $5000 |
| Legal Fees and Expenses | $4000 |
| Total\* | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10395.74 |

---

\* All amounts are estimates, other than the SEC's registration fee

We are paying all expenses of the Offering listed above. No portion of these expenses will be paid by the selling security holders. The selling security holders, however, will pay any other expenses incurred in selling their shares, including any brokerage commissions or costs of sale.

**ITEM 14. Indemnification of Directors and Officers**

Under our bylaws, every person who was or is a party to, or is threatened to be made a party to, or is involved in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that he is or was our director or officer, or is or was serving at our request as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust, or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the laws of the State of Nevada from time to time against all expenses, liability, and loss (including attorneys' fees judgments, fines, and amounts paid or to be paid in settlement) reasonably incurred or suffered by him or her in connection therewith. Such right of indemnification shall be a contract right, which may be enforced in any manner desired by such person. The expenses of officers and directors incurred in defending a civil or criminal action, suit, or proceeding must be paid by us as they are incurred and in advance of the final disposition of the action, suit, or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by us. Such right of indemnification shall not be exclusive of any other right which such directors, officers, or representatives may have or hereafter acquire, and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of shareholders, provision of law, or otherwise.

Without limiting the application of the foregoing, our board of directors may adopt bylaws from time to time with respect to indemnification, to provide at all times the fullest indemnification permitted by the laws of the State of Nevada, and may cause us to purchase and maintain insurance on behalf of any person who is or was our director or officer, or is or was serving at our request as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust, or other enterprise against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not we would have the power to indemnify such person. The indemnification provided shall continue as to a person who has ceased to be a director, officer, employee, or agent, and shall inure to the benefit of the heirs, executors and administrators of such person.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

We have not entered into any agreements with our directors and executive officers that require us to indemnify these persons against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred (including expenses of a derivative action) in connection with any proceeding, whether actual or threatened, to which any such person may be made a party by reason of the fact that the person is or was our director or officer or any of our affiliated enterprises. We have an insurance policy covering our officers and directors with respect to certain liabilities, including liabilities arising under the Securities Act, or otherwise.

[**Table of Contents**](#toc)

**ITEM 15. Recent Sales of Unregistered Securities**

During the year ended December 31, 2021, the Company issued 51,638,526 shares of common stock, valued at fair market value on issuance as follows;

• 41,562,500
 shares issued for cash of $6,536,250, of which $100,000 was recorded as subscription receivable as of December 31, 2021. The Company
 received the $100,000 on January 3, 2022.

• 2,230,394 shares,
 valued at $2,056,530, issued for settlement of debt of $1,516,667

• 195,000 shares
 for services valued at $284,700

• 1,320,000 shares
 issued to our management for compensation valued at $1,037,568

• 250,000 shares
 for forbearance of debt valued at $49,925

• 6,080,632 shares
 issued for conversion of debt of $422,295

During the nine months ended September 30, 2022, the Company issued 4,353,020 shares of common stock, valued at fair market value on issuance as follows;

• 2,000,000 shares issued for cash of $1,000,000

• 180,000 shares for compensation to our directors valued at $92,129

• 1,461,653 shares for acquisition of Whisl valued at $550,000

• 550,000 shares for asset acquisition valued at $357,500

• 161,367 shares for settlement of debt valued at $80,674

The offers, sales, and issuances of the securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was an accredited or sophisticated person and had adequate access, through employment, business or other relationships, to information about us.

**ITEM 16. Exhibits and Financial Statement Schedules**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Exhibits

See the Exhibit Index immediately following the signature page included in this registration statement, which is incorporated herein by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Financial Statement Schedules.

See "Index to Financial Statements" which is located on page 38 of this prospectus.

[**Table of Contents**](#toc)

**ITEM 17. Undertakings**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) The undersigned registrant hereby undertakes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increases or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If the registrant is relying on Rule 430B:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or

[**Table of Contents**](#toc)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) To provide to the underwriter at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) The undersigned registrant hereby undertakes that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

[**Table of Contents**](#toc)

**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on February 10, 2023.

---

| | |
|:---|:---|
|  | IQSTEL Inc. |
| By: | /s/ Leandro Iglesias |
|  | Leandro Iglesias<br> Chief Executive Officer, Principal Executive Officer and Director |

---

---

| | |
|:---|:---|
| By: | /s/ Alvaro Quintana Cardona |
|  | Alvaro Quintana Cardona&nbsp;&nbsp;&nbsp;&nbsp; |
| Title: | Chief Operating Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director |

---

**POWER OF ATTORNEY**

Each person whose signature appears below constitutes and appoints Leandro Iglesias and Alvaro Quintana Cardona with full power to act alone and without the others, his true and lawful attorney-in-fact, with full power of substitution, and with the authority to execute in the name of each such person, any and all amendments (including without limitation, post-effective amendments) to this registration statement, to sign any and all additional registration statements relating to the same offering of securities as this registration statement that are filed pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file such registration statements with the Securities and Exchange Commission, together with any exhibits thereto and other documents therewith, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, which amendments may make such other changes in the registration statement as the aforesaid attorney-in-fact executing the same deems appropriate.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

---

| | |
|:---|:---|
| By: | /s/ Leandro Iglesias |
|  | Leandro Iglesias<br> Chief Executive Officer, Principal Executive Officer and Director |
|  | February 10, 2023 |

---

---

| | |
|:---|:---|
| By: | /s/ Alvaro Quintana Cardona |
|  | Alvaro Quintana Cardona&nbsp;&nbsp;&nbsp;&nbsp; |
| Title: | Chief Operating Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director |
| Date: | February 10, 2023 |

---

---

| | |
|:---|:---|
| By: | /s/ Raul Perez |
|  | Raul Perez&nbsp;&nbsp;&nbsp;&nbsp; |
| Title: | Director |
| Date: | February 10, 2023 |

---

---

| | |
|:---|:---|
| By: | /s/ Jose Antonio Barreto |
|  | Jose Antonio Barreto |
| Title: | Director |
| Date: | February 10, 2023 |

---

---

| | |
|:---|:---|
| By: | /s/ Italo Segnini |
|  | Italo Segnini |
| Title: | Director |
| Date: | February 10, 2023 |

---

[**Table of Contents**](#toc)

**EXHIBIT INDEX**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description of Exhibit** |
| Exhibit 2.1 | [Membership Interest Purchase Agreement(1)](http://www.sec.gov/Archives/edgar/data/1527702/000107878218000661/f8k062818_ex2z1.htm) |
| Exhibit 2.2 | [Memorandum of Understanding and Shareholders Agreement dated February 21, 2020(5)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000138/f8k022120_ex2z1.htm) |
| Exhibit 2.3 | [Memorandum of Understanding and Shareholders Agreement dated February 12, 2020(6)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000128/f8k021920_ex2z1.htm) |
| Exhibit 2.4 | [Company Purchase Agreement, dated April 1, 2019(11)](https://www.sec.gov/Archives/edgar/data/1527702/000107878219000290/f8k040319_ex2z1.htm) |
| Exhibit 3.1 | [Articles of Incorporation of the Registrant(2)](http://www.sec.gov/Archives/edgar/data/1527702/000107878211002345/bmavens1ex31.htm) |
| Exhibit 3.2 | [Certificate of Amendment(3)](http://www.sec.gov/Archives/edgar/data/1527702/000107878218000942/f8k083018_ex3z1.htm) |
| Exhibit 3.3 | [Certificate of Amendment(18)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000316/def14c051120_def14c.htm) |
| Exhibit 3.4 | [Certificate of Designation(20)](https://www.sec.gov/Archives/edgar/data/1527702/000107878221000023/f8k010721_ex3z1.htm) |
| Exhibit 3.5 | [Certificate of Designation(21)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000855/f8k111120_ex3z1.htm) |
| Exhibit 3.6 | [Certificate of Designation(22)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000821/f8k110120_ex3z1.htm) |
| Exhibit 3.7 | [Amended and Restated Bylaws of the Registrant(19)](https://www.sec.gov/Archives/edgar/data/1527702/000166357722000700/ex3_1.htm) |
| Exhibit 4.1 | [Amendment #2 to the Crown Capital Note dated March 2, 2020(4)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000217/f8k030219_ex4z1.htm) |
| Exhibit 4.2 | [Amendment #2 to the Auctus Fund Note dated March 2, 2020(4)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000217/f8k030219_ex4z2.htm) |
| Exhibit 4.2 | [Amendment #1 to the Labrys Fund Note dated February 11, 2020(7)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000102/f8k021120_ex4z1.htm) |
| Exhibit 4.3 | [Amendment #1 to the Apollo Note dated December 23, 2019(8)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000002/f8k010320_ex4z1.htm) |
| Exhibit 4.4 | [Amendment #1 to the Apollo Note dated December 24, 2019(8)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000002/f8k010320_ex4z2.htm) |
| Exhibit 4.5 | [Amendment #1 to the Apollo Note dated December 24, 2019(8)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000002/f8k010320_ex4z3.htm) |
| Exhibit 4.6 | [Amendment #1 to the Apollo Note dated December 24, 2019(8)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000002/f8k010320_ex4z4.htm) |
| Exhibit 4.7 | [Amendment #1 to the Apollo Note dated December 24, 2019(8)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000002/f8k010320_ex4z5.htm) |
| Exhibit 4.8 | [Amendment #1 to the Apollo Note dated December 24, 2019(8)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000002/f8k010320_ex4z6.htm) |
| Exhibit 4.9 | [Amendment #1 to the Apollo Note dated December 24, 2019(8)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000002/f8k010320_ex4z7.htm) |
| Exhibit 4.10 | [Amendment #1 to the Crown Capital Note dated December 23, 2019(8)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000002/f8k010320_ex10z2.htm) |
| Exhibit 4.11 | [Amendment #1 to the Auctus Fund Note dated January 1, 2020(8)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000002/f8k010320_ex10z3.htm) |
| Exhibit 4.12 | [Senior Secured Convertible Promissory Note to Labrys Fund dated December 3, 2019(9)](https://www.sec.gov/Archives/edgar/data/1527702/000107878219000901/f8k121119_ex4z1.htm) |
| Exhibit 4.13 | [Purchase Company Agreement, dated April 21, 2022(12)](https://www.sec.gov/Archives/edgar/data/1527702/000166357722000259/ex10_1.htm) |
| Exhibit 4.14 | [Purchase Company Agreement, dated May 6, 2022(13)](https://www.sec.gov/Archives/edgar/data/1527702/000166357722000279/ex2_1.htm) |
| Exhibit 4.15 | [Common Stock Purchase Option with Apollo Management dated April 5, 2022(14)](https://www.sec.gov/Archives/edgar/data/1527702/000166357722000558/ex4_15.htm) |
| Exhibit 4.16 | [Amended Common Stock Purchase Option with Apollo Management dated September 29, 2022(15)](https://www.sec.gov/Archives/edgar/data/1527702/000166357722000578/ex4_1.htm) |
| Exhibit 5.1 | [Opinion of The Doney Law Firm, with consent to use(23)](https://www.sec.gov/Archives/edgar/data/1527702/000166357722000711/ex5_1.htm) |
| Exhibit 10.1 | [Conversion Agreement with Carmen Cabell(1)](https://www.sec.gov/Archives/edgar/data/1527702/000107878218000661/f8k062818_ex10z1.htm) |
| Exhibit 10.2 | [Conversion Agreement with Patrick Gosselin(1)](https://www.sec.gov/Archives/edgar/data/1527702/000107878218000661/f8k062818_ex10z2.htm) |
| Exhibit 10.3 | [Conversion Agreement with Mark Engler(1)](https://www.sec.gov/Archives/edgar/data/1527702/000107878218000661/f8k062818_ex10z3.htm) |
| Exhibit 10.4 | [Employment Agreement with Leandro Iglesias(1)](https://www.sec.gov/Archives/edgar/data/1527702/000107878218000661/f8k062818_ex10z4.htm) |
| Exhibit 10.5 | [Employment Agreement with Alvaro Quintana Cardona(1)](https://www.sec.gov/Archives/edgar/data/1527702/000107878218000661/f8k062818_ex10z5.htm) |
| Exhibit 10.6 | [Employment Agreement with Juan Carlos Lopez Silva(1)](https://www.sec.gov/Archives/edgar/data/1527702/000107878218000661/f8k062818_ex10z6.htm) |
| Exhibit 10.7 | [Forbearance Agreement dated December 12, 2019(8)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000002/f8k010320_ex10z1.htm) |
| Exhibit 10.8 | [Temporary Forbearance Agreement dated December 18, 2019(8)](https://www.sec.gov/Archives/edgar/data/1527702/000107878220000002/f8k010320_ex10z4.htm) |
| Exhibit 10.9 | [Securities Purchase Agreement, dated December 3, 2019(9)](https://www.sec.gov/Archives/edgar/data/1527702/000107878219000901/f8k121119_ex10z1.htm) |
| Exhibit 10.10 | [Employment and Indemnification Agreements with Leandro Iglesias, dated May 2, 2019(10)](https://www.sec.gov/Archives/edgar/data/1527702/000107878219000396/f8k050319_ex10z1.htm) |
| Exhibit 10.11 | [Employment and Indemnification Agreements with Alvaro Quintana, dated May 2, 2019(10)](https://www.sec.gov/Archives/edgar/data/1527702/000107878219000396/f8k050319_ex10z2.htm) |
| Exhibit 10.12 | [Employment and Indemnification Agreements with Juan Carlos Lopez Silva, dated May 2, 2019(10)](https://www.sec.gov/Archives/edgar/data/1527702/000107878219000396/f8k050319_ex10z3.htm) |
| Exhibit 10.13 | [Registration Rights Agreement with Apollo Management dated April 5, 2022(16)](https://www.sec.gov/Archives/edgar/data/1527702/000166357722000585/ex10_13.htm) |
| Exhibit 14.1 | [Code of Business Conduct and Ethics(17)](https://www.sec.gov/Archives/edgar/data/1527702/000166357722000612/ex14_1.htm) |
| Exhibit 23.1 | [Consent of Independent Registered Public Accounting Firm\*\*](ex23_1.htm) |
| Exhibit 23.2 | [Consent of The Doney Law Firm (included in Exhibit 5.1)(23)](https://www.sec.gov/Archives/edgar/data/1527702/000166357722000711/ex5_1.htm) |
| Exhibit 24.1 | Power of Attorney (included on signature page) |

---

Filed herewith\*\*

---

| | |
|:---|:---|
| 1. | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on June 28, 2018. |
| 2. | Incorporated by reference to the Company's Registration Statement on Form S-1 filed with the US Securities and Exchange Commission on August 18, 2011. |
| 3. | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on August 31, 2018. |
| 4. | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on March 30, 2020. |
| 5. | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on February 25, 2020. |
| 6. | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on February 19, 2020. |
| 7. | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on February 13, 2020. |
| 8. | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on January 6, 2020. |
| 9. | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on December 11, 2019. |
| 10. | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on May 6, 2019. |
| 11. | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on April 4, 2019. |
| 12 | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on April 26, 2022. |
| 13 | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on May 10, 2022. |
| 14 | Incorporated by reference to the Company's Form S-1/A filed with the US Securities and Exchange Commission on September 22, 2022. |
| 15 | Incorporated by reference to the Company's Form 8-K/A filed with the US Securities and Exchange Commission on October 6, 2022. |
| 16 | Incorporated by reference to the Company's Form S-1/A filed with the US Securities and Exchange Commission on October 11, 2022. |
| 17 | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on November 2, 2022. |
| 18 | Incorporated by reference to the Company's DEF 14C filed with the US Securities and Exchange Commission on May 12, 2020. |
| 19 | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on December 14, 2022. |
| 20 | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on January 8, 2021. |
| 21 | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on November 13, 2020. |
| 22 | Incorporated by reference to the Company's Form 8-K filed with the US Securities and Exchange Commission on November 6, 2020. |
| 23 | Incorporated by reference to the Company's Form S-1 filed with the US Securities and Exchange Commission on December 16, 2022. |

---

## Exhibit 23.1

<u>Consent of Independent Registered Public Accounting Firm</u>

iQSTEL, Inc.

Coral Gables, Florida

We hereby consent to the use in the Prospectus constituting a part of this Registration Statement of our report dated April 15, 2022, relating to the consolidated financial statements of iQSTEL, Inc., which is contained in that Prospectus. Our report contains an explanatory paragraph regarding the Company's ability to continue as a going concern.

We also consent to the reference to us under the caption "Experts" in the Prospectus.

/s/ Urish Popeck & Co., LLC

Pittsburgh, PA

February 10, 2023

## Corresp

**iQSTEL Inc.**

**300 Aragon Avenue, Suite 375**

**Coral Gables, FL 33134**

***<u>Via EDGAR</u>***

 **

February 10, 2023

United States Securities and Exchange Commission

100 F Street, N.E. Mailstop 3720

Washington D.C., 20549-7010

Attention: Kyle Wiley

**Re: iQSTEL Inc**

**Registration Statement on Form S-1**

**Filed December 16, 2022**

**File No. 333-268856**

Dear Marion Graham:

I write on behalf of iQSTEL Inc. (the "Company") in response to Staff's letter of January 13, 2022, by the Division of Corporation Finance of the United States Securities and Exchange Commission (the "Commission") regarding the above-referenced Registration Statement on Form S-1, filed December 16, 2022 (the Comment Letter").

Paragraph numbering used for each response corresponds to the numbering used in the Comment letter.

**<u>Form S-1 filed December 16, 2022</u>**

**<u>Prospectus Summary, page 1</u>**

1. Please clarify the percentage of revenue that is generated from your four business lines for all periods presented: (i) telecom division; (ii) fintech business line; (iii) blockchain platform business line; and (iv) electric vehicle business line.

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp; <br>**Business Line** | &nbsp;&nbsp; **Revenue**<br> **Nine**<br> **months**<br> **Ended**<br> **September 30, 2020** | &nbsp;&nbsp; **Revenue**<br> **Nine**<br> **months**<br> **Ended**<br> **September 30, 2021** | &nbsp;&nbsp; <br> **Revenue**<br> **Year**<br> **Ended**<br> **December 31, 2020** | &nbsp;&nbsp; <br> **Revenue**<br> **Year**<br> **Ended**<br> **December 31, 2021** |
| &nbsp;&nbsp;Telecom Division | &nbsp;&nbsp;100% | &nbsp;&nbsp;100% | &nbsp;&nbsp;100% | &nbsp;&nbsp;100% |
| &nbsp;&nbsp;Fintech | &nbsp;&nbsp;- | &nbsp;&nbsp;- | &nbsp;&nbsp;- | &nbsp;&nbsp;- |
| &nbsp;&nbsp;Blockchain Platform | &nbsp;&nbsp;- | &nbsp;&nbsp;- | &nbsp;&nbsp;- | &nbsp;&nbsp;- |
| &nbsp;&nbsp;Electric Vehicle | &nbsp;&nbsp;- | &nbsp;&nbsp;- | &nbsp;&nbsp;- | &nbsp;&nbsp;- |
| &nbsp;&nbsp;Total | &nbsp;&nbsp;100% | &nbsp;&nbsp;100% | &nbsp;&nbsp;100% | &nbsp;&nbsp;100% |

---

Currently, 100% of our revenues are from the Telecom Division, the rest of our business lines are in a pre- revenue stage.

2. We note that the Mobile App/Wallet includes the ability to buy/sell crypto. Please revise

as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• affirmatively identify all of the crypto assets that you hold or transact in;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• discuss your intentions to hold or transact in any other crypto assets and update this disclosure in future filings as appropriate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• describe your process, if any, for analyzing whether a particular crypto asset that you intend to hold or transact in is a "security" within the meaning of Section 2(a)(1) of the Securities Act. Disclose that this is a risk-based judgment and does not constitute a legal determination binding on regulators or the courts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• expand your risk factors to describe the specific potential consequences to you and

to investors if it is subsequently determined that you have participated in the unregistered issuance or distribution of securities, including the specific risks inherent in your business model that may necessitate corrective measures as a result of judicial or regulatory actions. Prominently disclose this risk in the Summary.

In response to this comment, the Company revised its disclosures in the amended registration statement concerning its Fintech business line. The Company does not have a mobile app or wallet that includes the ability to buy or sell cryptocurrencies, and the Company does not hold or transact any cryptocurrencies. Moreover, the Company does not intend to engage in any such business.

The Company revised the disclosures to state its current business operations for Fintech, which includes business resulting from referring immigrant customers to sign up with US banks for access to traditional depository accounts to enable the immigrant customers the ability to send money to their home countries for phone services. The Company planned to extend that business model to potentially refer cryptocurrency users to exchanges to trade their assets, but has not found a partner to do so, such as in the case of banks, and has therefore decided not to pursue the extended line of business.

**<u>Risk Factors, page 2</u>**

3. With the digital wallet offered by Global Money One and customers' ability to "Buy/Sell

Crypto" on the platform, describe any material risks related to safeguarding your, your affiliates', or your customers' crypto assets. Describe any material risks to your business and financial condition if your policies and procedures surrounding the safeguarding of crypto assets, conflicts of interest, or comingling of assets are not effective.

In response to this comment, the Company does not intend to offer customers the ability to buy and sell cryptocurrencies.

4. To the extent material, describe any gaps your board or management have identified with respect to risk management processes and policies in light of current crypto asset market conditions as well as any changes they have made to address those gaps.

In response to this comment, the Company does not intend to offer customers the ability to buy and sell cryptocurrencies.

5. To the extent material, describe any of the following risks due to disruptions in the crypto

asset markets:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risk from depreciation in your stock price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risk of loss of customer demand for your products and services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Financing risk, including equity and debt financing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risk of increased losses or impairments in your investments or other assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks of legal proceedings and government investigations, pending or known to be

threatened, in the United States or in other jurisdictions against you or your affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks from price declines or price volatility of crypto assets.

In response to this comment, the Company does not intend to offer customers the ability to buy and sell cryptocurrencies.

**<u>Business, page 22</u>**

6. Please disclose the manner in which digital wallets are stored on behalf of third parties or

customers. For example, disclose whether the wallets are stored in cold storage, or are

connected to the internet.

In response to this comment, the Company does not intend to offer customers the ability to buy and sell cryptocurrencies.

7. If material to an understanding of your business, discuss any steps you take to safeguard

your customers' crypto assets and describe any policies and procedures that are in place to

prevent self-dealing and other potential conflicts of interest, particularly in the digital

wallet through Global Money One. Describe any policies and procedures you have regarding the commingling of assets, including customer assets, your assets, and those of affiliates or others. Identify what material changes, if any, have been made to your processes in light of the current crypto asset market disruption.

In response to this comment, the Company does not intend to offer customers the ability to buy and sell cryptocurrencies.

8. Provide disclosure of any significant crypto asset market developments material to understanding or assessing your business, financial condition and results of operations, or share price since your last reporting period, including any material impact from the price volatility of crypto assets. For example, provide disclosure pertaining to the Fintech business line, Global Money One, and the impact of recent market events on the company's digital wallet offering.

In response to this comment, the Company does not intend to offer customers the ability to buy and sell cryptocurrencies.

**<u>General</u>**

9. We note that the company issued a press release on November 7, 2022 that it has "begun the application process to dual list its shares on Upstream." Please disclose whether a listing on Upstream is a condition to this offering and what security is being listed on Upstream (i.e., common stock or tokenized equity). Disclose whether Upstream is a registered exchange and in what jurisdiction and the risks and uncertainties with listing on this exchange, including any restrictions on investors in this offering. Tell us the status of your listing application process on Upstream.

In response to this comment, MERJ Exchange (MERJ) operates Upstream as a fully regulated and licensed integrated securities exchange, clearing system and depository for digital and non-digital securities. MERJ is an affiliate of the World Federation of Exchanges (WFE), recognized by HM Revenue and Customs UK, a full member of the Association of National Numbering Agencies (ANNA) and a Qualifying Foreign Exchange for OTC Markets in the US. MERJ is also a member of the Sustainable Stock Exchanges Initiative. MERJ is regulated in the Seychelles by the Financial Services Authority Seychelles, https://fsaseychelles.sc/.

In early November, we applied to dual listing our currently issued and outstanding shares on Upstream. The dual listing on Upstream is not a condition to this offering. The Company has applied to list its currently issued and outstanding shares of common stock which will be represented on Upstream as a digital security listing (uncertificated common stock). The common stock to be dual listed has been registered with the Commission or is exempt from registration and are without restrictive legend. There are no new shares to be issued for this Upstream listing.

As described in detail below, in the U.S., a shareholder may request that their shares to be deposited at their broker for secondary trading, where such requests are handled by the company's transfer agent where the TA increments the share count of CEDE & Co. and decrements the TA's book-entry share count for the name of the shareholder depositing the shares for secondary trading at their broker.

Pursuant to a dual listing of the company on the Upstream stock exchange, a shareholder may instead request the transfer agent increments the share count of MERJ Dep. ("MERJ Depository and Registry Limited") in the TA's books and records and decrements the TA's book-entry share count for the name of the shareholder depositing the shares for secondary trading on Upstream.

Accordingly, the company's transfer agents share count remains the same and the shares being counted in the books and records of the transfer agent shall be only the issued and registered number of shares of common stock in the company. No new shares will be issued by company for the dual listing of its common stock on Upstream.

All Upstream traders undergo a Know Your Customer (KYC) review where their nationality and country of residence is ascertained. The facility to purchase securities on Upstream is only available to KYC'ed, non-U.S., international investors. U.S./Canadian persons are prevented from purchasing any Upstream listed security. However, U.S./Canadian citizens/residents are permitted to deposit and sell (liquidation only) free-trading company securities that they previously acquired and have deposited on Upstream for secondary sale (MERJ Dep.) solely via the company's TA.

The Company's application for listing is currently going through review with the MERJ Exchange Limited regulatory staff to ensure that the Company complies with the listing and disclosure requirements of MERJ Exchange Limited as defined by Securities Act 2007 (as amended) of the Seychelles and any other measure prescribed thereunder by the Minister or the Financial Services Authority Seychelles.

10. We note that the Upstream website allows trading of tokenized equity of certain companies. Please clarify whether you intend to list the tokenized equity on Upstream. If so, provide a materially complete description of the tokenized shares and the process by which shareholders exchange their common shares for the tokenized shares, including the entire lifecycle from the initial exchange of common shares for tokenized shares through the exchange back into common shares. Include the company's legal analysis as to the characterization of the tokenized equity and whether it is the same class as the common shares, a different class of common stock, or a security based swap. Provide a detailed explanation of how such securities are the same as the issued and outstanding shares of common stock already registered, as well as how such shares compare in regards to transferability and the role of the transfer agent, whether on Upstream or otherwise. In your response, please explain the role of MERJ Depository and Registry Limited and how it interacts with the company's U.S. transfer agent, and also address how any "tokenized equity" is held on Upstream through MERJ Depository and Registry Limited (e.g., whether through a shareholder's wallet or an omnibus wallet).

In response to this comment, the Company intends to list the same class of shares currently registered with the Commission that are currently issued and outstanding, which will be represented on MERJ as a "digital security" " in the form of uncertificated securities. There will be no new issue of securities. All Shares have been registered with the Commission and make up the entire number of shares issued and outstanding and have the same CUSIP/ISIN number. There are no differences in shareholder rights such as transferability. Shareholders may elect to hold their shares in depositories: Book Entry with TA, CEDE & Co or MERJ Dep.

Digital securities on Upstream are interchangeable terms that have the same meaning. The digital securities (or tokenized equities) are a digital representation of the company's common stock that have been issued and registered with the Commission. A digital security is a 1:1 representation of a company's common stock that acts as a receipt for the deposit or purchase and ownership of shares in the company. The digital recording of ownership is handled in the same manner as a database of shares issued to shareholders and, on Upstream, certifies registered ownership of company shares from a particular date. The ownership details of a tokenized equity balance of the company's shares for an Upstream shareholder shall include but not be limited to:

&nbsp;&nbsp;&nbsp;&nbsp;· Certificate number

&nbsp;&nbsp;&nbsp;&nbsp;· Company name and CUSIP/ISIN number

&nbsp;&nbsp;&nbsp;&nbsp;· Shareholder name and address

&nbsp;&nbsp;&nbsp;&nbsp;· Number of shares owned

&nbsp;&nbsp;&nbsp;&nbsp;· Class of shares

&nbsp;&nbsp;&nbsp;&nbsp;· Issue date of shares

&nbsp;&nbsp;&nbsp;&nbsp;· Amount paid for the shares the Upstream secondary market

Digital securities are recognized as the same securities under corporate law. On June 30, 2017, the Delaware legislature approved various amendments to the Delaware General Corporation Law (the "<u>DGCL</u>"). The blockchain-related changes include amendments to Sections 151(f), 202(a), 219(a), 219(c), 224, 232(c) and 364 of the DGCL. Amendments to Sections 219, 224 and 232 and related provisions are intended to provide specific statutory authority for Delaware corporations to use networks of electronic databases (examples of which are described as "distributed ledgers" or a "blockchain") for the creation and maintenance of corporate records, including a corporation's stock ledger. Section 219(c), as amended, now includes a definition of "stock ledger." Section 224, as amended, requires that the stock ledger serve three functions contemplated by the DGCL: it must enable the corporation to prepare the list of stockholders specified in Sections 219 and 220; it must record the information specified in Sections 156, 159, 217(a) and 218; and, as required by Section 159, it must record transfers of stock as governed by Article 8 of subtitle I of Title 6. Sections 151, 202 and 364 have also been amended to clarify that the notices given to holders of uncertificated shares pursuant to those sections may be given by electronic transmission. On August 1, 2017, the Governor of Delaware signed the proposed DGCL amendments into law. The changes to Delaware law permit issuers to begin to issue as digital securities. The basic idea behind digital securities is to "tokenize" shares of stock, debentures, warrants or any other type of security, by representing each unit of a given security as a unique cryptographic public-private key pair that is stored and transferred on a blockchain. The changes to the DCGL were merely clarifications of what was already possible based on the truly fundamental changes to the DGCL in 2005 that permitted the issuance of "uncertificated" shares of stock. Perkins Coie, in fact, gave the very first "duly authorized and validly issued" legal opinion with respect to digital securities; it was filed as the Exhibit 5 opinion to Overstock's S-3 Registration Statement, which registered the first digital securities in 2015. Nevada corporate law recognized blockchain in 2017 as well.

A shareholder may request that their shares to be deposited at their broker for secondary trading, where such requests are handled by the company's transfer agent. When deposited at a broker, the transfer agent increments the share count in the transfer agents' books and records for CEDE & Co. and decrements the share count for the name of the shareholder depositing the shares for secondary trading.

Pursuant to a dual listing of the company on the Upstream stock exchange, a shareholder may request the transfer agent to increment the share count of MERJ Dep. ("MERJ Depository and Registry Limited") and decrement the share count for the name of the shareholder depositing the shares for secondary trading on Upstream.

Therefore, the company's transfer agents share count remains the same and the transfer agent may have an individual share count per person/entity for shares that are not deposited with either CEDE & Co. or MERJ Dep. for secondary trading. And the transfer agent will have a share count for CEDE & Co. and another share count for MERJ Dep. In all cases the shares being counted in the books and records of the transfer agent shall be only the issued and registered number share of common stock in the company. No new shares shall be issued by company for the dual listing of its common stock on Upstream.

Using the Upstream app, an Upstream user may send a request to the company's transfer agent to deposit their shares for secondary trading on Upstream. The information passed to the transfer agent is then reviewed by the transfer agent, where such information includes the company's security name, number of shares being requested for transfer, and a complete know-your-customer (KYC) pack from Upstream that contains (but is not limited to) name, residential address, date of birth, nationality, social security number, selfie-photo, photo-id, utility bill, phone number, and email address. Once the transfer agent is satisfied that the Upstream user requesting the share deposit is the same as the person in the transfer agents' books and records, then the transfer will decrement the share count in the name of the shareholder, increment the share count of MERJ Dep. and notify MERJ Dep. of the successful share deposit. MERJ Dep. will then notify Upstream to update the users portfolio balance of the company's shares in the Upstream app. The shares are now ready for secondary sale on the Upstream stock exchange, if the shareholder wishes.

The shareholder may withdraw their shares back from Upstream directly to the transfer agent. Upstream does not allow third party transfers, withdraws or movements. The shares may only be withdrawn to the same shareholder and the shareholder information must match the KYC pack.

<u>Transfer Agent Records & Role</u>

An issuers' common stock, regardless of whether it is represented in a physical (certificate) or electronic (e.g., tokenized, spreadsheet, database) form, are recorded on the transfer agent records in (i) book entry (e.g., individual name & address), (ii) CEDE & Co.(street name), or (iii) MERJ Dep. (street name). There is no concept of tokenized securities at the transfer agent. All securities have the same CUSIP/ISIN.

Upon successful transfer of shares by the transfer agent from book entry to either street name, CEDE & Co. or MERJ Dep., then the relevant nominee will represent the shares in their books and records, typically in an electronic form (e.g., tokenized, database).

MERJ Dep. operates as a nominee account (street name) in the same manner as CEDE & Co, that accepts shareholder deposits in an electronic form from the transfer agent that facilitates the buying and selling of such shares on Upstream (e.g., by an individual name & address). Upstream is the trading technology employed by MERJ Exchange Ltd., a regulated national stock exchange.

<u>Share Withdrawals from Upstream back to transfer agent</u>

The Upstream app has a function under Investor Services, Manage Securities, Withdraw Securities. The shareholder then enters the ticker symbol and the number of shares to being withdrawn and taps 'Notarize' to cryptographically sign this transaction. The shares are removed from the users Upstream portfolio and an email is sent to the transfer agent with a share withdrawal request whereafter the transfer agent will liaise directly with the shareholder to ensure the share balance is entered in 'book entry' into the users name & address. Third party share withdrawals from Upstream are not permitted, the share withdrawal request name and address (as retrieved from the Upstream KYC information by Upstream compliance) is required to be the same name and address that will be entered in the transfer agents 'book entry' for this shareholder.

For the TA books the following entries would occur**:**

&nbsp;&nbsp;&nbsp;&nbsp;· Withdraw from MERJ Dep:

&nbsp;&nbsp;&nbsp;&nbsp;· Debit MERJ Dep. share count and credit Shareholder share
count in book entry.

The transfer agent will adhere to their own policies regarding any Medallion Signature Guarantee requirements from a depositing shareholder, just as they would for share deposits via CEDE & Co. etc.

<u>MERJ Dep. Security Facility</u>

To dual list on Upstream, the company executes a certificate of appointment of MERJ Depository and Registry Limited as a Securities Facility and confirms that the shares outstanding on the date of the certificate execution (a) are duly authorized, validly issued, fully paid and non-assessable and any pre-emptive and other contractual rights related to all issuances of the shares have been satisfied, and (b) have been registered under the applicable law of the domicile of the company or are exempt from registration. All issuances and transfers of company shares have been, and after the date of the certificate will be, in compliance with all applicable laws, rules and regulations. The company requires MERJ Dep. to provide services ("Securities Facility Services") as prescribed in the MERJ Dep Securities Facility Rules, including the Directive on Depository Interests and MERJ Dep. Procedures as a requirement of its listing on Upstream.

MERJ Dep. is a company licensed as a Securities Facility pursuant to the Seychelles Securities Act, 2007. The Issuer that lists its Securities on the Seychelles Securities Exchange, operated by MERJ Exchange Ltd., known as Upstream, utilizes MERJ Dep. to provide Securities Facility Services to manages it securities as prescribed in an agrement with the Issuer and pursuant to the MERJ Dep.'s Securities Facility Rules, including the Directive on Depository Interests and MERJ Dep. procedures as a requirement of its listing on MERJ Exchange Ltd. The Issuer appoints MERJ Dep. to act as the Depository Nominee in respect of any securities traded which are quoted on Upstream and grants MERJ Dep. as the Depository Nominee, pursuant to the Securities Facility Rules Directive on Depository Interests.

<u>Nominee</u>

Upon successful transfer of shares by the transfer agent from book entry to either street name, CEDE & Co. or MERJ Dep., then the relevant nominee will represent the total share count in their books and records, typically in an electronic form (e.g., tokenized, database).

<u>Self-Directed User Trading</u>

Upstream users create a trading account using the Upstream smartphone app, with a random-generated username (in the form of an address that's a 42-character hexadecimal address derived from the last 20 bytes of a random public key) and a password (in the form of a random cryptographic private key).The public and private key (the cryptographic <u>keypair</u>) is generated locally on the smartphone and only the public key is ever known to Upstream, MERJ Dep., or peer to peer trading counterparties on Upstream. Only the individual users hold their private keys. This privacy ensures that only the Upstream user can cryptographically sign a securities transaction (bid/offer/buy/sell/cancel) for it to be executed on Upstream, that is, all transactions such as share sales are self-directed, peer to peer, and instantly settled using the Upstream distributed ledger platform.

In order to buy, sell, deposit or withdraw shares on Upstream, an Upstream user that has created their account as outlined in the previous paragraph, is required to submit know your customer (KYC) information for the Upstream compliance team to review. KYC information is then linked to the users public key, and if the user passes KYC review, then this users cryptographic keypair's transactions will be accepted as legitimate self-directed securities transaction requests to Upstream for execution on the platform.

It should be noted that the Upstream technology will reject securities <u>buy</u> orders from cryptographic keypair's that, pursuant to their KYC review, come from U.S. or Canadian persons. No securities buy orders are accepted without a user having successfully undergone the Upstream KYC review process.

<u>Subsequent Secondary Share Sales</u>

Individual shares traded on the Upstream secondary market are not reflected in the transfer agents books and records. They are recorded inside the street name depository of MERJ Dep.

The MERJ Dep. nominee books and records service will only accept self-directed, cryptographically signed, executed securities sales from the Upstream app and adjust the share counts accordingly.

Therefore, the securities are held at the nominee, and are moved between accounts inside the nominees omnibus solution pursuant to a cryptographically signed, self-directed instruction from the shareholder as executed by the Upstream matching-engine and notified to MERJ Dep.

11. We note that the press release indicates that shareholders are eligible to receive digital

dividends. Explain whether you are planning to offer digital dividends to shareholders and disclose the process for distribution of digital dividends, including whether the digital dividends will be limited to those who hold the tokenized shares.

In response to this comment, the Company is not currently planning to offer digital dividends to the shareholders. If and when a digital dividend is contemplated to be issued, all shareholders of record of the Company will be entitled to the dividend.

12. Please clarify whether there could be discrepancies between the trading prices of common

shares on Nasdaq and the tokenized shares on Upstream, whether resulting from different

liquidity in the markets or otherwise.

In response to this comment, as in all dual listed securities that are traded on multiple marketplaces, there can be differences in pricing as a result of different liquidity, price discovery and otherwise.

13. Please clarify what information is publicly available about the trading activity that occurs on Upstream and, in particular, what information holders of common shares would have about the trading on Upstream before making a decision to exchange their common shares for tokenized shares.

In response to this comment, Upstream is accessible via the preferred app stores. Interested parties may download the application and will have access to review all the securities that trade on Upstream including trading activity, regulatory disclosures and other corporate information. All information is available prior to the account opening process and application. This includes a listing particulars document, which is a required disclosure as part of the requirements of MERJ Exchange Limited as defined by Securities Act 2007 (as amended) of the Seychelles and any other measure prescribed thereunder by the Minister or the Securities Authority.

Investors may choose to open an account and deposit their securities. Investors who elect to transfer their shares to Upstream may withdraw their shares from Upstream back to the transfer agent if they choose to trade via their US broker at any time.

The Upstream policy, terms and conditions, also clearly state that if you are a U.S. or Canadian based investor, either a Canadian citizen, U.S. citizen or permanent resident, you will not be able to buy shares on the Upstream secondary market. However, U.S. and Canadian citizens may sell securities they previously purchased from an issuer, stockbroker or stock exchange that has dual-listed on Upstream for liquidation only and will not be permitted to purchase any securities on Upstream. Note that U.S. or Canadian-based investors include those U.S. or Canadian citizens who may be living abroad.

Sincerely

<u>/s/ Alvaro Cardona</u>

Alvaro Cardona

Chief Financial Officer