SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): September 1, 2020
iQSTEL
Inc.
(Exact
name of registrant as specified in its charter)
Nevada
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000-55984
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45-2808620
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(State
or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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300
Aragon Avenue, Suite 375
Coral
Gables, FL 33134
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33134
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(Address of principal executive offices)
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(Zip
Code)
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Registrant’s telephone number, including area code: (954) 951-8191
________________________________________________
(Former name or former address, if changed since last report)
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17CFR
230.425)
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[ ]
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Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
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 13(a) of the Exchange Act. [ ]
SECTION 1 - Registrant's Business and Operations
Item 1.01 – Entry into a Material Definitive Agreement
On
September 1, 2020, we entered into a Multipurpose Agreement (the
“Agreement”) with M2B Funding Corp., a Florida corporation (“M2B”)
to, among other things as stated below, restrict the public trading
of a certain number of its shares for the consideration provided
for in the Agreement.
From
January 2020 to May 2020, we sold and issued fifteen (15)
Convertible Promissory Notes (collectively, the “Original Notes”)
in favor of M2B with an aggregate principal balance of $985,555.54
and an aggregate accrued and unpaid interest balance of $59,771 as
of September 1, 2020.
Also
at September 1, 2020, M2B has converted $13,888 of the principal
amount under the Original Notes into 603,865 of our common stock
(the “Conversion Shares”). MB2 has agreed to not dispose of any
shares of our common stock into the public markets, other the
Conversion Shares, through and including November 30, 2020 (the
“Lock-Up Period”). In addition, during each calendar month
following the conclusion of the Lock-up Period, the aggregate
number of shares of common stock that M2B sells into the public
markets, excluding the Conversion Shares, shall not exceed 10% of
the number of shares of common stock that were traded in the public
market during the immediately preceding month.
Upon
a principal prepayment of $150,000.00 and the payment of any
accrued but unpaid interest thereon at 12% from September 1, 2020
through and including November 30, 2020, the term of the Lock-up
Period shall be extended through and including February 28, 2021,
without the requirement of any further action by us or M2B.
As
further provided for in the Agreement, we issued a new note (the
“Amalgamated Note”) to M2B that replaced the Original Notes. The
Amalgamated Note has a principal amount of $1,045,326.96, interest
at 12% per annum and payable starting on October 1, 2020, may be
prepaid within 185 days at 120% of principal and accrued interest,
and may be converted into our common stock after 90 days at a
conversion price of 75% of the lowest trading price during the 10
days prior to the conversion date. The Amalgamated Note has other
provision related to right of first refusal and restrictions on
future borrowings, among others.
We
also issued another promissory note (the “Additional Note”) to M2B.
The Additional Note has a principal amount of $300,000, interest at
12% per annum and payable starting on October 1, 2020. This note is
not convertible into our common stock. The Additional Note has
other provision related to right of first refusal and restrictions
on future borrowings, among others.
Upon
the commencement of trading of the Company’s Common Stock on the
New York Stock Exchange, the NYSE American, or the Nasdaq Stock
Market, all outstanding amount balances of the Amalgamated Note and
Additional Note would be automatically converted into shares of our
common stock at the conversion rate stated above.
Finally, we are required to tender to M2B 10% of any proceeds we
receive from our Regulation A offering for prepayment purposes up
to the extent of any outstanding balances that are due under the
Amalgamated Note or the Additional Note.
The
foregoing description of the Agreement, the Amalgamated Note and
the Additional Note does not purport to be complete and is
qualified in its entirety by reference to the complete text of the
Agreement, the Amalgamated Note and the Additional Note filed as
Exhibits 10.1, 4.1 and 4.2 hereto and incorporated herein by
reference.
SECTION 2 -
FINANCIAL INFORMATION
Item 2.03 –
Creation of a Direct Financial Obligation
The
information set forth in Items 1.01 is incorporated into this Item
2.03 by reference.
SECTION 9 –
FINANCIAL STATEMENTS AND EXHIBITS
Item 9.01 -
Financial Statements and Exhibits
Exhibit
No.
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Description
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10.1
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Multipurpose
Agreement, dated September 1, 2020
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4.1
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Amalgamated Note ,
dated September 1, 2020
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4.2
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Additional Note,
dated September 1, 2020
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
iQSTEL
Inc.
/s/ Leandro
Iglesias
Leandro Iglesias
CEO
Date: September 4,
2020