IQST iQSTEL Inc (QX)

ITEM 1.01 - ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On February 21, 2020, we entered into a Memorandum of Understanding and Shareholders Agreement (“MOU”) with Miguel Scavo and our officer and director, Leandro Iglesias. The agreement concerns the formation of a joint venture named ITSBCHAIN, LLC for the development of a telephone numbering plan administration for number portability and a wholesale carrier settlement and payment platform.

Under then MOU, Mr. Scavo will contribute to the joint venture by tendering his intellectual property and software developed for the telephone numbering plan administration for number portability in exchange for $80,000 in cash and $50,000 in our common stock (iQSTEL) valued at $1.30 per share. We also agreed to fund the joint venture with up to $500,000 within the first three years.

Mr. Iglesias has agreed to transfer to us his 50% interest in the already formed ITSBCHAIN, LLC. Mr. Scavo will transfer 25% of his interest for a total of 75% to us and 25% to Mr. Scavo. ITSBCHAIN, LLC will have 4 board members, which will include Mr. Iglesias, our CEO and director, Oscar Brito, our director, Mr. Scavo and Alvaro Quintana, our CFO and director.

The MOU calls for the management agreements to be drafted for the three officers of the joint venture: Mr. Iglesias as President and CEO, Mr. Quintana as CFO and Mr. Scavo as COO. Until the board of directors of ITSBCHAIN, LLC reaches such an agreement with respect to Mr. Scavo, he is entitled to a salary of $2,000 USD per month.

The foregoing description of the MOU is not complete and is qualified in its entirety by reference to the text of such document, which is filed as Exhibit 2.1 hereto and which is incorporated herein by reference.