Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the quarterly period ended March 31, 2024

☐	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

	For the transition period from __________ to__________

	Commission File Number: 000-55984

iQSTEL Inc.

(Exact name of registrant as specified in its charter)


Nevada	45-2808620
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

300 Aragon Avenue, Suite 375 Coral Gables, FL 33134
(Address of principal executive offices)

(954) 951-8191
(Registrant’s telephone number)
_______________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [X] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth 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.

☐ Large accelerated filer	☐ Accelerated filer
☒ Non-accelerated Filer	☒ Smaller reporting company
	☐ 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. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[ ] Yes [X] No

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 176,834,984 common shares as of May 15, 2024

Table of Contents

TABLE OF CONTENTS
		Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	10
Item 4:	Controls and Procedures	10
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	11
Item 1A:	Risk Factors	11
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	11
Item 3:	Defaults Upon Senior Securities	11
Item 4:	Mine Safety Disclosures	11
Item 5:	Other Information	11
Item 6:	Exhibits	11

Table of Contents

Item 1. Financial Statements

Our unaudited consolidated financial statements included in this Form 10-Q are as follows:

F-1	Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023;
F-2	Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 (unaudited);
F-3	Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (unaudited); and
F-4	Consolidated Statements of Stockholder’s Equity as of March 31, 2024 and 2023 (unaudited)
F-5	Notes to Consolidated Financial Statements (unaudited).

These interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended March 31, 2024 are not necessarily indicative of the results that can be expected for the full year.

Table of Contents

iQSTEL INC

Consolidated Balance Sheets

(Unaudited)

	March 31,			December 31,
	2024			2023
ASSETS
Current Assets
Cash	$	2,725,571		$	1,362,668
Accounts receivable, net		9,000,237			12,539,774
Inventory		26,936			27,121
Due from related parties		391,745			340,515
Deposit for acquisition		1,500,000			—
Prepaid and other current assets		1,975,266			1,449,094
Total Current Assets		15,619,755			15,719,172

Property and equipment, net		559,497			522,997
Intangible asset		99,592			99,592
Goodwill		5,172,146			5,172,146
Deferred tax assets		426,755			426,755
Other asset		241,025			214,991
TOTAL ASSETS	$	22,118,770		$	22,155,653

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	1,614,500		$	2,966,279
Accrued and other current liabilities		8,010,927			9,993,585
Due to related parties		26,613			26,613
Loans payable - net of discount of $0 and $3,750, respectively		103,738			264,988
Loans payable - related parties		259,447			259,447
Convertible notes - net of discount of $923,185 and $39,012, respectively		3,469,435			330,032
Total Current Liabilities		13,484,660			13,840,944

Loans payable, non-current		90,214			99,099
Employee benefits, non-current		169,738			169,738
TOTAL LIABILITIES		13,744,612			14,109,781

Stockholders' Equity
Preferred stock: 1,200,000 authorized; $0.001 par value
Series A Preferred stock: 10,000 designated; $0.001 par value, 10,000 shares issued and outstanding		10			10
Series B Preferred stock: 200,000 designated; $0.001 par value, 31,080 shares issued and outstanding		31			31
Series C Preferred stock: 200,000 designated; $0.001 par value, No shares issued and outstanding		—			—
Series D Preferred stock: 75,000 designated; $0.001 par value, No shares issued and outstanding		—			—
Common stock: 300,000,000 authorized; $0.001 par value 177,584,984 and 172,129,630 shares issued and outstanding, respectively		177,585			172,130
Additional paid in capital		35,263,931			34,360,884
Accumulated deficit		(26,893,900	)		(26,084,133	)
Accumulated other comprehensive loss		(25,340	)		(25,340	)
Equity attributed to stockholders of iQSTEL Inc.		8,522,317			8,423,582
Deficit attributable to noncontrolling interests		(148,159	)		(377,710	)
TOTAL STOCKHOLDERS' EQUITY		8,374,158			8,045,872

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	22,118,770		$	22,155,653

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

F-1

Table of Contents

iQSTEL INC

Consolidated Statements of Operations

(Unaudited)


	Three Months Ended
	March 31,
	2024			2023

Revenues	$	51,414,878		$	24,666,529
Cost of revenues		50,035,852			23,449,793
Gross profit		1,379,026			1,216,736

Operating expenses
General and administration		1,562,478			1,534,266
Total operating expenses		1,562,478			1,534,266

Operating loss		(183,452	)		(317,530	)

Other income (expense)
Other income		71,777			—
Other expenses		(407	)		(33,954	)
Interest expense		(365,474	)		(3,645	)
Change in fair value of derivative liabilities		—			196,307
Gain (loss) on settlement of debt		(102,660	)		—
Total other income (expense)		(396,764	)		158,708

Net loss before provision for income taxes		(580,216	)		(158,822	)
Income taxes		—			—
Net loss		(580,216	)		(158,822	)
Less: Net income attributable to noncontrolling interests		229,551			204,363
Net loss attributed to iQSTEL Inc.	$	(809,767	)	$	(363,185	)


Comprehensive income (loss)
Net loss	$	(580,216	)	$	(158,822	)
Foreign currency adjustment		—			1,577
Total comprehensive loss	$	(580,216	)	$	(157,245	)
Less: Comprehensive income attributable to noncontrolling interests		229,551			205,136
Net comprehensive loss attributed to iQSTEL Inc.	$	(809,767	)	$	(362,381	)

Basic and diluted loss per common share	$	(0.00	)	$	(0.00	)

Weighted average number of common shares outstanding - Basic and diluted		175,152,920			164,034,479

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

F-2

Table of Contents

iQSTEL INC

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

For the three months ended March 31, 2024 and 2023

(Unaudited)


	Series A Preferred Stock				Series B Preferred Stock				Common Stock
	Shares		Amount		Shares		Amount		Shares		Amount		Additional Paid in Capital		Accumulated Deficit			Accumulated Comprehensive Loss			Total			Non Controlling Interest			Total Stockholders' Deficit
Balance - December 31, 2023		10,000	$	10		31,080	$	31		172,129,630	$	172,130	$	34,360,884	$	(26,084,133	)	$	(25,340	)	$	8,423,582		$	(377,710	)	$	8,045,872

Common stock issued for compensation		—		—		—		—		150,000		150		30,915		—			—			31,065			—			31,065
Common stock issued for settlement of debt		—		—		—		—		1,770,000		1,770		277,890		—			—			279,660			—			279,660
Common stock issued in conjunction with convertible notes		—		—		—		—		3,535,354		3,535		594,242		—			—			597,777			—			597,777
Net income (loss)		—		—		—		—		—		—		—		(809,767	)		—			(809,767	)		229,551			(580,216	)
Balance - March 31, 2024		10,000	$	10		31,080	$	31		177,584,984	$	177,585	$	35,263,931	$	(26,893,900	)	$	(25,340	)	$	8,522,317		$	(148,159	)	$	8,374,158


	Series A Preferred Stock				Series B Preferred Stock				Common Stock
	Shares		Amount		Shares		Amount		Shares		Amount		Additional Paid in Capital		Accumulated Deficit			Accumulated Comprehensive Loss			Total			Non Controlling Interest			Total Stockholders' Deficit
Balance - December 31, 2022		10,000	$	10		21,000	$	21		161,595,511	$	161,595	$	31,136,120	$	(24,504,395	)	$	(33,557	)	$	6,759,794		$	(924,377	)	$	5,835,417

Common stock issued for warrant exercises		—		—		—		—		2,941,177		2,942		397,058		—			—			400,000			—			400,000
Common stock issued for compensation		—		—		—		—		60,000		60		11,170		—			—			11,230			—			11,230
Resolution of derivative liabilities upon exercise of warrants		—		—		—		—		—		—		240,258		—			—			240,258			—			240,258
Foreign currency translation adjustments		—		—		—		—		—		—		—		—			804			804			773			1,577
Net income (loss)		—		—		—		—		—		—		—		(363,185	)		—			(363,185	)		204,363			(158,822	)
Balance - March 31, 2023		10,000	$	10		21,000	$	21		164,596,688	$	164,597	$	31,784,606	$	(24,867,580	)	$	(32,753	)	$	7,048,901		$	(719,241	)	$	6,329,660

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

F-3

Table of Contents

iQSTEL INC

Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended
	March 31,
	2024			2023

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(580,216	)	$	(158,822	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Stock-based compensation		31,065			11,230
Bad debt expense		725			—
Depreciation and amortization		35,161			34,060
Amortization of debt discount		207,742			—
Change in fair value of derivative liabilities		—			(196,307	)
Loss on settlement of debt		102,660			—
Changes in operating assets and liabilities:
Accounts receivable		2,743,089			564,365
Inventory		185			—
Prepaid and other current assets		(552,204	)		(16,204	)
Due from related parties		—			5,131
Accounts payable		(556,055	)		537,667
Accrued and other current liabilities		(1,969,040	)		(583,957	)
Net cash (used in) provided by operating activities		(536,888	)		197,163

CASH FLOWS FROM INVESTING ACTIVITIES:
Deposit for acquisitions of subsidiary		(1,500,000	)		—
Purchase of property and equipment		(71,662	)		(63,247	)
Purchase of intangible assets		—			(80,000	)
Advances of loans receivable - related party		(51,230	)		—
Collection of amounts due from related parties		—			300
Net cash used in investing activities		(1,622,892	)		(142,947	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of loans payable		(8,885	)		(9,006	)
Proceeds from exercise of warrants		—			400,000
Proceeds from convertible notes		3,722,500			—
Repayment of convertible notes		(190,932	)		—
Net cash provided by financing activities		3,522,683			390,994

Effect of exchange rate changes on cash		—			2,627

Net change in cash		1,362,903			447,837
Cash, beginning of period		1,362,668			1,329,389
Cash, end of period	$	2,725,571		$	1,777,226

Supplemental cash flow information
Cash paid for interest	$	89,578		$	—
Cash paid for taxes	$	—		$	—

Non-cash transactions:
Common stock issued for settlement of debt	$	279,660		$	—
Resolution of derivative liabilities upon exercise of warrants	$	—		$	240,258
Common stock issued in connection with convertible notes	$	597,777		$	—

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

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iQSTEL INC

Notes to the Consolidated Financial Statements

March 31, 2024

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 over 400 active interconnection agreements with mobile companies, fixed line companies and other wholesale carriers.

The Company is a technology company with presence in 19 countries and 70 employees that is offering leading-edge services through its four business divisions.

The Telecom Division, which represents the majority of current operations and which also represents the source for all of the Company’s revenues, 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.com USA, LLC, SwissLink Carrier AG, Smartbiz Telecom LLC, Whisl Telecom LLC, IoT Labs, LLC, and QGlobal SMS, LLC.

The Company’s developing Fintech Business Line offers a complete Fintech ecosystem MasterCard Debit Card, US Bank Account (No SSN Needed), Mobile App/Wallet (Remittances, Mobile Top Up). The Company’s Fintech subsidiary, Global Money One Inc., is to provide immigrants access to reliable financial services that makes it easier to manage their money and stay connected with their families back home.

The Company’s developing BlockChain Platform Business Line offers our proprietary Mobile Number Portability Application (MNPA) to serve the in-country portability needs through its subsidiary, itsBchain, LLC.

The Company’s developing Electric Vehicle (EV) Business Line offers electric motorcycles for work and recreational use 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 Company’s developing Artificial Intelligence (AI)-Enhanced Metaverse Division offers a white-label solution designed specifically for corporations, businesses, and the telecommunications industry. Delivering a full suite of immersive content services, creating a comprehensive virtual experience that can be accessed through the Web or our proprietary mobile apps.

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.

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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 March 31, 2024 and the results of operations and cash flows for the periods presented. The results of operations for the three months ended March 31, 2024 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, 2023 filed with the SEC on April 1, 2024.

Reclassification

Certain accounts from prior periods have been reclassified to conform to the current period presentation.

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.

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.

Foreign Currency Translation and Re-measurement

The Company translates its foreign operations to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”.

The functional currency and reporting currency of Etelix, QGlobal, ItsBchain, IoT Labs, Whisl, Smartbiz and Global Money One is the U.S. dollar, while SwissLink’s functional currency was the Swiss Franc (“CHF”). As of January 1, 2024, we changed the functional currency of SwissLink from their respective local currency to the US dollar. The change in functional currency is due to increased exposure to the US dollar as a result of a change in facts and circumstances in the primary economic environment in which this subsidiary operates. The effects of the change in functional currency were not significant to our consolidated financial statements.

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 March 31, 2024 and December 31, 2023.

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 estimates expected credit losses related to accounts receivable balances based on a review of available and relevant information including current economic conditions, projected economic conditions, historical loss experience, account aging, and other factors that could affect collectability. During the three months ended March 31, 2024 and 2023, the Company recorded bad debt expense of $725 and $0, respectively.

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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. 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 three months ended March 31, 2024 and 2023.

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 three months ended March 31, 2024, 8 customers represented 86% of our revenue compared to 12 customers representing 86% of our revenue for the three months ended March 31, 2023. For the three months ended March 31, 2024 and 2023, 47% and 62% 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.

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.

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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; accounts receivable; deposit for acquisition, prepaid and other current assets; accounts payable; accrued liabilities and 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 parties due to their related party nature.

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.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" which allows disclosure of one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources and assess performance. Additionally, the standard requires enhanced disclosures of significant segment expenses and other segment items, as well as incremental qualitative disclosures on both an annual and interim basis. This guidance is effective for annual reporting periods beginning after December 15, 2023, and interim reporting periods after December 15, 2024. Early adoption is permitted and retrospective application is required for all periods presented. The Company is currently evaluating the impact of adopting this guidance on its Consolidated Financial Statements and disclosures included within Notes to Consolidated Financial Statements.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” which requires enhanced disclosures, including specific categories and disaggregation of information in the effective tax rate reconciliation, disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. This guidance is effective for annual reporting periods beginning after December 15, 2024. Early adoption is permitted and should be applied on a prospective basis; however, retrospective application is permitted. The Company is currently evaluating the impact of adopting this guidance on its Consolidated Financial Statements and disclosures included within Notes to Consolidated Financial Statements.

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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.

NOTE 4 – PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets at March 31, 204 and December 31, 2023 consisted of the following:


	March 31,		December 31,
	2024		2023
Other receivable	$	115,922	$	312,116
Prepaid expenses		1,320,870		738,050
Advance payment		21,000		21,000
Tax receivable		26,767		428
Deposit for acquisition of asset		357,500		357,500
Security deposit		133,207		20,000
	$	1,975,266	$	1,449,094

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment at March 31, 204 and December 31, 2023 consisted of the following:


	March 31,			December 31,
	2024			2023
Telecommunication equipment	$	386,700		$	386,700
Telecommunication software		908,503			836,840
Other equipment		91,468			99,892
Total property and equipment		1,386,671			1,323,432
Accumulated depreciation and amortization		(827,174	)		(800,435	)
Total property and equipment	$	559,497		$	522,997

Depreciation expense for the three months ended March 31, 2024 and 2023 amounted to $35,161 and $34,060, respectively.

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NOTE 6 –LOANS PAYABLE

Loans payable at March 31, 204 and December 31, 2023 consisted of the following:

	March 31,			December 31,				Interest
	2024			2023			Term	rate
Martus	$	103,738		$	103,738		Note was issued on October 23, 2018 and due on June 30, 2024		5.0	%
Darlene Covid19		90,214			99,099		Note was issued on April 1, 2020 and due on March 31, 2025		0.0	%
Promissory note payable		—			165,000		Note was issued April 4, 2023 and paid in full in March 2024		24.0	%
Total		193,952			367,837
Less: Unamortized debt discount		—			(3,750	)
Total loans payable		193,952			364,087
Less: Current portion of loans payable		(103,738	)		(264,988	)
Long-term loans payable	$	90,214		$	99,099

During the three months ended March 31, 2024 and 2023, the Company repaid the principal amount of $8,885 and $9,006, respectively.

During the three months ended March 31, 2024, the Company settled principal amount and accrued interest of a note payable issued in April 2023 by issuing 1,770,000 shares of common stock. As a result, the Company recorded a loss on settlement of debt of $102,660.

Loans payable - related parties at March 31, 204 and December 31, 2023 consisted of the following:

	March 31,		December 31,			Interest
	2024		2023		Term	rate
49% of Shareholder of SwissLink	$	21,606	$	21,606	Note is due on demand		0	%
49% of Shareholder of SwissLink		237,841		237,841	Note is due on demand		5	%
Total		259,447		259,447
Less: Current portion of loans payable - related parties		259,447		259,447
Long-term loans payable - related parties	$	—	$	—

During the three months ended March 31, 2024 and 2023, the Company recorded interest expense of $9,053 and $3,645 and recognized amortization of discount, included in interest expense, of $3,750 and $0, respectively.

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NOTE 7 - CONVERTIBLE NOTES

Convertible notes at March 31, 2024 and December 31, 2023 consisted of the following:

	March 31,			December 31,
	2024			2023
Issued in fiscal year 2023	$	179,732		$	369,044
Issued in fiscal year 2024		4,212,888			—
Total convertible notes payable		4,392,620			369,044
Less: Unamortized debt discount		(923,185	)		(39,012	)
Total convertible notes		3,469,435			330,032

Less: current portion of convertible notes		3,469,435			330,032
Long-term convertible notes	$	—		$	—

Issued in fiscal year 2023

During the year ended December 31, 2023, the Company borrowed $284,760 and $256,760 from a third party totaling $541,520, which includes original issue discount and financing costs of $66,520. The notes are due on June 1, 2024 and October 15, 2024, and a one-time interest charge of 12% shall be applied. Accrued, unpaid interest and outstanding principal shall be paid in 10 payments each in the amount of $31,893 and $28,757 beginning on July 16, 2023 and January 15, 2024. The notes are convertible at the option of the holders at any time following an event of default, and the conversion price is 75% multiplied by the lowest trading price of Company’s common stock during the 10 trading days prior to the conversion date.

Issued in fiscal year 2024

On January 24, 2024, we entered into a securities purchase agreement (the “SPA”) with M2B Funding Corp., a Florida corporation, for it to purchase up to the principal amount of $3,888,889 in secured convertible promissory notes (the “Notes”) for an aggregate purchase price of $3,500,000 (the “Purchase Price”), which Notes are convertible into shares (“Conversion Shares”) of our common stock with an initial conversion price of $0.11 per share. Each noteholder shall receive shares of common stock (“Kicker Shares”) in an amount equal to ten percent of the principal amount of any Note issued divided by $0.11. The Notes are secured by all of our assets under a Security Agreement signed with the SPA.

The initial tranche was executed in January 2024 for $2,222,222 in face value of Notes and 2,020,200 Kicker Shares, with an original issue discount of $222,222; second and third tranches were executed in March 2024 for $1,111,111 and $555,556, respectively, in face value of Notes and 1,010,101 and 505,051 Kicker Shares, with an original issue discount of US $111,111 and $55,556, respectively. Each one year note bears interest at 18% per annum.

During the period ended March 31, 2024, the Company borrowed $146,900 and $177,100 from a third party totaling $324,000, which includes original issue discount and financing costs of $49,000. The notes are due on January 15, 2025, and a one-time interest charge of 12% and 14%, respectively, shall be applied. Accrued, unpaid interest and outstanding principal on the $146,900 note shall be paid in 10 payments each in the amount of $16,453 beginning on April 15, 2024; accrued, unpaid interest and outstanding principal on the $177,100 note shall be paid in 5 payments, one payment of $100,947 and four payments of $25,237, beginning in September 2024. The notes are convertible at the option of the holders at any time following an event of default, and the conversion price is 75% multiplied by the lowest trading price of Company’s common stock during the 10 trading days prior to the conversion date.

During the three months ended March 31, 2024 and 2023, the Company recorded interest expense of $139,979 and $0 and recognized amortization of discount, included in interest expense, of $203,992 and $0, respectively.

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NOTE 8 – STOCKHOLDERS’ EQUITY

Common Stock

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

During the three months ended March 31, 2024, the Company issued 5,455,354 shares of common stock, valued at fair market value on issuance as follows:

•

150,000 shares for compensation to our directors valued at 31,065

•

3,535,354 shares in connection with convertible notes valued at $597,777; and

•

1,770,000 shares for settlement of debt valued at $279,660

As of March 31, 2024 and December 31, 2023, 177,584,984 and 172,129,630 shares of common stock were issued and outstanding, respectively.

Preferred Stock

The Company’s authorized capital consists of 1,200,000 shares of preferred 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 March 31, 2024 and December 31, 2023, 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.

As of March 31, 2024 and December 31, 2023, 31,080 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 March 31, 2024 and December 31, 2023, no Series C Preferred Stock was issued or outstanding.

Series D Preferred Stock

On November 3, 2023, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series D Preferred Stock, consisting of up 75,000 shares, par value $0.001. Under the Certificate of Designation, in the event of any dissolution, liquidation or winding up of the Corporation, the Holders of Series D Preferred Stock shall be entitled to participate in any distribution out of the assets of the Corporation before the holders of the Common Stock, Series A Preferred Stock and Series C Preferred Stock, but shall be considered on parity to the liquidation rights of the Series B Preferred Stockholders. The holders of shares of Series D 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 D Preferred Stock do not have voting rights but may convert into common stock at a conversion rate of one thousand (1,000) shares of Common Stock for every one (1) share of Series D Preferred Stock.

The rights of the holders of Series D Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on November 3, 2023.

As of March 31, 2024 and December 31, 2023, no Series D Preferred Stock was issued or outstanding.

NOTE 9 - RELATED PARTY TRANSACTIONS

Due from related party

As of March 31, 2024 and December 31, 2023, the Company had amounts due from related parties of $391,745 and $340,515, respectively. The loans are unsecured, non-interest bearing and due on demand.

Due to related parties

As of March 31, 2024 and December 31, 2023, the Company had amounts due to related parties of $26,613. The amounts are unsecured, non-interest bearing and due on demand.

Employment agreements

During the three months ended March 31, 2024 and 2023, the Company recorded management salaries of $211,500 and $144,000, respectively, and stock-based compensation bonuses of $31,065 and $11,230, respectively.

As of March 31, 2024 and December 31, 2023, the Company recorded and accrued management salaries of $137,127 and $100,128, 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 three months ended March 31, 2024 and 2023, the Company incurred rent expense of $7,122 and $900, respectively.

NOTE 11 – DEPOSIT FOR ACQUISITION

On January 19, 2024, we entered into a Share Purchase Agreement (“Purchase Agreement”) with Yukon River Holdings, Ltd. (“Yukon River”), a corporation formed under the laws of the British Virgin Islands (“Seller”) concerning the contemplated sale by Seller and the purchase by us of 51% of the ordinary shares Seller holds in QXTEL LIMITED (“QXTEL”), a company incorporated in England and Wales.

The purchase price (the “Purchase Price”) payable to the Seller for the shares is $5,000,000. Upon the execution of the Purchase Agreement, we agreed to deposit $1,500,000 of the Purchase Price into the trust account of a law firm acting as escrow agent (the “Escrow Agent”) as a nonrefundable deposit to evidence our good faith intention to purchase the shares. If the Purchase Agreement does not close before April 30, 2024, the deposit is non-refundable. If the Purchase Agreement closes, the deposit will be credited against the Purchase Price.

At closing, in addition to the $1,500,000 with the Escrow Agent that will form part of the Purchase Price, we are required to pay $1,500,000 in cash and $2,000,000 to the Seller, either (A) in the form of a promissory note (the “Promissory Note”), or (B) by the delivery of iQSTEL shares to Seller. Seller may decide the form of payment between the Promissory Note or the share of iQSTEL, and if a Promissory Note is chosen, we have agreed to allow Seller the option to exchange the Promissory Note for shares of iQSTEL.

As of March 31, 2024, the acquisition was not closed yet. The acquisition was closed on April 1, 2024, please refer to Note 13 – Subsequent Events for more details.

NOTE 12 - SEGMENT

At March 31, 2024 and December 31, 2023, 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 months ended March 31, 2024 and 2023:

Three months ended March 31, 2024


	USA			Switzerland			Elimination			Total
Revenues	$	52,111,257			1,035,919		$	(1,732,298	)	$	51,414,878
Cost of revenue		50,931,826			836,324			(1,732,298	)		50,035,852
Gross profit		1,179,431			199,595			—			1,379,026

Operating expenses
General and administration		1,356,006			206,472			—			1,562,478

Operating loss		(176,575	)		(6,877	)		—			(183,452	)

Other income (expense)		(435,483	)		38,719			—			(396,764	)

Net income (loss)	$	(612,058	)	$	31,842		$	—		$	(580,216	)

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Three months ended March 31, 2023


	USA			Switzerland			Elimination			Total
Revenues	$	24,847,671			1,347,435		$	(1,528,577	)	$	24,666,529
Cost of revenue		23,825,886			1,152,484			(1,528,577	)		23,449,793
Gross profit		1,021,785			194,951			—			1,216,736

Operating expenses
General and administration		1,350,956			183,310			—			1,534,266

Operating (loss) income		(329,171	)		11,641			—			(317,530	)

Other income (expense)		174,955			(16,247	)		—			158,708

Net loss	$	(154,216	)	$	(4,606	)	$	—		$	(158,822	)

Asset Information

The following table shows asset information by geographic segment as of March 31, 204 and December 31, 2023:


March 31, 2024	USA		Switzerland		Elimination			Total
Assets
Current assets	$	15,834,379	$	748,064	$	(962,688	)	$	15,619,755
Non-current assets	$	11,859,742	$	823,835	$	(6,184,562	)	$	6,499,015
Liabilities
Current liabilities	$	13,027,346	$	1,420,002	$	(962,688	)	$	13,484,660
Non-current liabilities	$	139	$	259,813	$	—		$	259,952


December 31, 2023	USA		Switzerland		Elimination			Total
Assets
Current assets	$	14,537,969	$	1,874,627	$	(693,424	)	$	15,719,172
Non-current assets	$	11,810,606	$	810,437	$	(6,184,562	)	$	6,436,481
Liabilities
Current liabilities	$	11,978,244	$	2,556,124	$	(693,424	)	$	13,840,944
Non-current liabilities	$	139	$	268,698	$	—		$	268,837

NOTE 13 – SUBSEQUENT EVENTS

Subsequent to March 31, 2024 and through the date that these financials were made available, the Company had the following subsequent events:

On April 1, 2024 the Company closed the acquisition of 51% of the issued ordinary shares of QXTEL Limited as it was established in the Shares Purchase Agreement executed and disclosed in a Form 8-K on January 19, 2024 . At closing, the Company acquired 51% of the issued ordinary shares of QXTEL Limited.

The purchase price (the “Purchase Price”) payable to the Seller for the shares is US $5,000,000. Upon the execution of the Purchase Agreement, on January 19, 2024 we deposited US $1,500,000 of the Purchase Price into the trust account of a law firm acting as escrow agent (the “Escrow Agent”) as a nonrefundable deposit to evidence our good faith intention to purchase the shares. At closing on April 1, 2024, in addition to the US $1,500,000 with the Escrow Agent that will form part of the Purchase Price, we paid US $1,500,000 in cash and US $2,000,0000 to the Seller, in the form of a promissory note (the “Promissory Note”). We have agreed to allow Seller the option to exchange the Promissory Note for shares of iQSTEL under a formula discounted by 20% of the average closing sales price for 5 consecutive days on the trading market. If the Promissory Note is not exchanged for shares, the $2,000,000 will be paid with no interest in 7 monthly payments of $200,000 each and an eighth payment of $600,000.

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On May 10, 2024, the Company entered into a Purchase Company Agreement (“Purchase Company Agreement”) with Omar Luna and Lynk Holding LLC (together, the “Seller”) concerning the sale by Seller and the purchase by us of 51% of the membership interests the Seller holds in Lynk Telecom, LLC, a Virginia limited liability company (“Lynk Telecom”). The closing of the Purchase Company Agreement is expected to occur no later than July 1, 2024, once due diligence has been completed.

Lynk Telecom provides certified business telephone, SMS, connectivity, and networking services across various sectors in the United States. Lynk Holding LLC recently acquired selected assets from a company known as Voyce Telecom, and Lynk Holding LLC has the obligation to pay the shareholders of Voyce Telecom the purchase price in that acquisition, which is outstanding.

The Purchase Price for 51% of the membership interests of Lynk Telecom is US $1,500,000, and this amount will be paid by the Seller to the Buyer in 12 consecutive monthly cash payments of US$ 125,000 each. The Seller agrees to use these funds for the amortization of the payments that it owes to Voyce in relation to the contract between Lynk Holding and Voyce Telecom.

Once we have paid the $1,500,000 for the acquisition of Lynk Telecom, and Lynk Telecom has achieved the business goals outlined in the Purchase Company Agreement, under what we refer to as “Phase I,” we have agreed to lend up to US$1,500,000 to Lynk Telecom, in installments of up to US$100,000 per month, to be used solely for marketing campaigns, promotion and development of the retail services, according to a business plan that has to be approved by Lynk Telecom’s board of directors.

The disbursements of this loan will be subject to the achievements of the quarterly goals set in the business plan of Lynk Telecom. This retail business plan will have the aim of achieving the objective of generating a minimum of US$200,000 in operating income per month, with intermediate staggered quarterly goals.

Upon the completion of Phase I, and the business goals in the Purchase Company Agreement have been achieved, we have agreed to lend Lynk Telecom up to US$1,500,000 in at least three stages, each of up to US$500,000 per year to help accelerate the amortization of the debt Lynk Holding LLC has with the Voyce Telecom shareholders. These loans would be linked to compliance with the financial statements for fiscal years 2026, 2027, 2028, 2029 and 2030. The goals for these years will be defined posteriori by the parties and approved by Lynk Telecom’s Board of Directors. The payment of this loan will be guaranteed with the portion of dividends that correspond to Lynk Holding LLC when Lynk Telecom makes a dividend distribution.

If, as a result of operations, Lynk Telecom does not reach the projections in the Purchase Company Agreement, and the business plan for the years 2026, 2027, 2028, 2029 and 2030 approved by Lynk Telecom´s Board of Directors, we may retain the stipulated loan. If Lynk Telecom surpassed the projections in the Purchase Company Agreement, we have agreed to true up the purchase price, with details of the true up contained in the Purchase Company Agreement.

Once this Purchase Company Agreement is signed, the manager of Lynk Telecom, Omar Luna, is expected to enter into a 3-year employment agreement with Lynk Telecom, that will be executed before the closing date, renewable for a 2-year period to guarantee the operational continuity of Lynk Telecom and the implementation of a business plan that will lead Lynk Telecom into a productive company with positive net income as established in the Purchase Company Agreement.

Lynk Telecom shall have a Board of Directors composed of 3 members: 2 of the members shall be appointed by us and the remaining member shall be appointed by the Seller. The position of President and Secretary will be reserved for us.

The closing of the Purchase Agreement is subject to, among other things, Lynk Telecom having prepared all accounting information in accordance with SEC standards in such a manner that any audit of the Company, if required, may be performed.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Overview

iQSTEL Inc. (www.iqstel.com) is a technology company with a presence in 19 countries and 70 employees that is offering leading-edge services through its business divisions.

Our Telecom Division, which represents the majority of current operations and which also represents the source for all of our revenues for the financial periods presented, 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).

Our developing 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 makes it easier to manage their money and stay connected with their families back home.

Our developing 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.

Our developing Electric Vehicle (EV) Business Line (www.evoss.net) offers electric motorcycles for work and recreational use 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.

Our Artificial Intelligence (AI)-Enhanced Metaverse Division (information and content) (www.realityborder.com) is currently developing a groundbreaking white-label solution designed specifically for corporations, businesses, and the telecommunications industry. Delivering a full suite of immersive content services, creating a comprehensive virtual experience that can be accessed through the Web or our proprietary mobile apps. The features include up to four simultaneous video screens for versatile content presentation, various virtual halls such as the main hall, home hall, auditorium, exhibition space, shopping center, and meeting rooms. Stands for mobile application downloads, clickable gates for immediate purchasing, and direct communication tools are seamlessly integrated to foster collaboration, engagement, and interactivity. It goes beyond traditional virtual spaces by utilizing cutting-edge AI technology. This ensures video conferencing and real-time communication with other users within the Metaverse, offering our customers a collective and fully immersive experience that caters to diverse needs such as content acquisition, entertainment, and shared virtual experiences. It is a future-ready platform that encourages creativity, connectivity, and collaboration like never before.

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Our metaverse leverages advanced AI to introduce Non-Player Characters (NPCs) that significantly enhance user engagement and functionality within virtual environments. These NPCs are not mere static elements; rather, they are powered by OpenAI's latest language models, enabling dynamic interaction with users. This AI-driven interaction allows NPCs to serve as sales and brand assistants, guiding users through immersive experiences that can extend to purchasing products from external websites. Furthermore, these intelligent agents can control access to gated spaces within the metaverse based on user interactions, showcasing a personalized approach to user experience.

A key innovation in our AI implementation is the NPCs' ability to autonomously make decisions based on their understanding of user interactions. This is achieved through state-of-the-art natural language processing and understanding capabilities, which are supported in seven languages. Additionally, our NPCs utilize advanced text-to-speech and speech-to-text technologies to facilitate seamless communication with users across diverse linguistic backgrounds. The incorporation of "function call" features further enhances the NPCs' ability to perform complex tasks and interact meaningfully with the environment and the users.

Our reference to our technology as "cutting-edge" is grounded in our commitment to continuous improvement and innovation. We consistently integrate the latest advancements in AI, particularly in the areas of chatbots, language understanding, and user interaction technologies. This ensures that our metaverse remains at the forefront of AI application in virtual spaces, offering an unparalleled user experience that goes beyond traditional virtual environments.

We are currently in an advanced phase of development, with ongoing enhancements to AI functionalities and user interaction models. Our team is dedicated to exploring and implementing the latest AI technologies to ensure that our metaverse remains a leading example of innovation in virtual space technology.

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.

Results of Operations

Revenues

Our total revenue reported for the three months ended March 31, 2024 was $51,414,878, compared with $24,666,529 for the three months ended March 31, 2023. These numbers reflect an increase of 108% quarter over quarter on our consolidated revenues.

When looking at the numbers by subsidiary, we have the following breakout for the three months ended March 31, 2024 compared to the three months ended March 31, 2023:

Subsidiary	Revenue Three Months Ended March 31, 2024		Revenue Three Months Ended March 31, 2023
Etelix.com USA, LLC	$	18,629,910	$	4,348,986
SwissLink Carrier AG		974,734		1,275,285
QGlobal LLC		367,260		85,051
IoT Labs LLC		24,338,199		15,261,282
Whisl		923,328		304,686
Smartbiz		6,181,447		3,391,240
	$	51,414,878	$	24,666,529

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 expanding the synergies among our subsidiaries.

We expect that our revenue will continue to grow consistently over the coming quarters until reaching a projected total of +$250,000,000 by the end of 2024.

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Cost of Revenues

Our total cost of revenues for the three months ended March 31, 2024 increased to $50,035,852, compared with $23,449,793 for the three months ended March 31, 2023.

When looking at the numbers by subsidiary, we have the following breakout for the three months ended March 31, 2024 compared to the three months ended March 31, 2023:

Subsidiary	Cost of Revenue Three Months Ended March 31, 2024		Cost of Revenue Three Months Ended March 31, 2023
Etelix.com USA, LLC	$	17,832,936	$	3,764,473
SwissLink Carrier AG		770,168		1,103,857
QGlobal LLC		242,417		51,549
IoT Labs LLC		23,796,575		14,878,901
Whisl		1,129,010		567,719
Smartbiz		6,264,746		3,083,294
	$	50,035,852	$	23,449,793

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 networks.

The behavior in the costs shows a logical correlation with the behavior of the revenue commented on 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, was $1,379,026 for the three months ended March 31, 2024 compared to $1,216,736 for the three months ended March 31, 2023. This represents an increase of 13.34% in the gross margin quarter over quarter.

We expect our gross margin will increase through the increment in the revenue associated with the SMS businesses offered by QGlobal SMS, whose margin is greater than 25%, compared to the margins of the wholesale voice business of 3% average. While our revenue associated with voice services grew 187% when comparing the three months ended on March 31, 2024 to the three months ended on March 31, 2023, the revenue of QGlobal SMS grew 332% in the same period.

Operating Expenses

Operating expenses increased to $1,562,478 for the three months ended March 31, 2024 from $1,534,266 for the three months ended March 31, 2023. The detail by major category is reflected in the table below.

	Three Months Ended March 31,
	2024		2023
Salaries, Wages and Benefits	$	375,426	$	459,130
Technology		221,463		124,215
Professional Fees		503,572		450,487
Legal and Regulatory		32,164		60,495
Travel and Events		35,736		24,361
Public Cost		71,930		10,445
Advertising		184,740		287,126
Bank Services and Fees		19,736		7,756
Depreciation and Amortization		35,161		34,060
Office, Facility and Other		49,962		62,978
Insurance		798		1,983
Bad debt expense		725		—

Sub Total		1,531,413		1,523,036

Stock-based compensation		31,065		11,230
Total Operating Expenses	$	1,562,478	$	1,534,266

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When looking at the numbers by subsidiary, we have the following breakout for the three months ended March 31, 2024 compared to the three months ended March 31, 2023:

	Three Months Ended March 31,
	2024		2023		Difference
iQSTEL		657,410		664,552		(7,142	)
Etelix		68,176		105,286		(37,110	)
SwissLink		206,472		183,309		(23,163	)
ItsBchain		10,416		11,789		(1,373	)
QGlobal		109,012		63,875		45,137
IoT Labs		52,522		62,806		(10,284	)
Global Money One		250		43,449		(43,199	)
Whisl		240,048		154,440		85,608
Smartbiz		218,172		244,760		(26,588	)
		1,562,478		1,534,266		28,212

The most significant differences are: (1) the increase in Professional Fees; (2) the increases in technology expenses related to the deployment and upgrade of the Switching platform to allocate Smartbiz. This platform is currently used by SwissLink and Etelix; and (3) the increase in Public Cost.

We are continually identifying operational synergies among all of our subsidiaries to be more cost efficient. We are currently making investments in the development of a unique voice switching platform that will allow us to reduce costs between fifty and sixty thousand dollars per quarter.

Operating Income

The Company showed negative Operating Income for the three months ended March 31, 2024 of $183,452 compared with a negative result of $317,530 for the three months ended March 31, 2023.

Even though the Company showed negative Operating Income, the number shows a trend of significant improvement year over year.

Our Telecom Division, which is the one generating revenue at the present time, generated positive Operating Income. The expenses of our Pre-revenue companies are set at the minimum required to finish the development of the product/services prior to market launch.

			Pre revenue companies
	Telecom Division		ItsBchain			Global Money One			iQSTEL			Consolidated
Revenues	$	51,414,878		—			—			—		$	51,414,878
Cost of revenues		50,035,852		—			—			—			50,035,852
Gross profit		1,379,026		—			—			—			1,379,026

Operating expenses
General and administration		894,402		10,416			250			657,410			1,562,478
Total operating expenses		894,402		10,416			250			657,410			1,562,478

Operating income/(loss)	$	484,624		(10,416	)		(250	)		(657,410	)	$	(183,452	)

The reason why there are practically no operating expenses associated with the Fintech project is because the product development has already been completed. The Company is working on the design of the marketing and sales strategy for the start of commercial activities.

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Other Expenses/Other Income

We had other expenses of $396,764 for the three months ended March 31, 2024, as compared with other income of $158,708 for the same period ended 2023. The other expenses in 2024 are largely due to $365,474 in Interest Expense associated with the financing for the acquisition of QXTEL, which allows us to drive the organic growth of the company. Our other income in 2023 was largely due to the positive change in fair value of derivative liabilities.

Net Loss

We finished the three months ended March 31, 2024 with a net loss of $580,216, as compared to a loss of $158,822 during the three months ended March 31, 2023. The net loss as of March 31, 2024 is highly impacted by interest expense incurred in the acquisition of QXTEL; however, the increase in the Company's value and the beneficial effects of this acquisition could be observed in the consolidated proformas that were presented in conjunction with the acquisition of QXTEL .

QXTEL is expecting to add over eighty million dollars in annual revenues and net income around one million dollars per year.

Liquidity and Capital Resources

As of March 31, 2024, we had total current assets of $15,619,755 and current liabilities of $13,484,660, resulting in a positive working capital of $2,135,095 and a current ratio of approximately 1.16 to 1. This compares to working capital of $1,878,228 at December 31, 2023.

The positive evolution of our working capital is an indicator that the company's capital resources allow us to cover operating costs more easily every day and finance organic growth.

Our operating activities used $536,888 for the three months ended March 31, 2024 as compared with $197,163 provided in operating activities in the three months ended March 31, 2023. Our cash flow from operations varies depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable.

Investing activities used $1,622,892 for the three months ended March 31, 2024 as compared with $142,947 for the three months ended March 31, 2023. Uses of funds in investing activities in 2024 consisted primarily of the first payment of $1,500,000 for the acquisition of QXTEL in January 2024. Uses of funds on investing activities in 2023 were primarily the acquisition of property and equipment and the issuance of a related party loan.

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Financing activities provided $3,522,683 in the three months ended March 31, 2024 compared with $390,994 provided in the three months ended March 31, 2023. Our positive financing cash flow in 2024 was largely the result of the financing secured to complete the acquisition of QXTEL. Our positive financing cash flow in 2023 was largely the result of the net proceeds from the exercise of an option in the amount of $400,000.

Our current financial condition has improved significantly. However, we intend to fund operations through increased sales and debt and/or equity financing arrangements, to strengthen our liquidity and capital resources. 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 three-month period ended March 31, 2024.

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 Quarterly Report on Form 10-Q for the three months ended March 31, 2024; 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.

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Off Balance Sheet Arrangements

As of March 31, 2024, 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company and are not required to provide the information under this item pursuant to Regulation S-K.

Item 4. Controls and Procedures

Disclosure Controls and Procedures - Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report.

These controls are designed to ensure that information required to be disclosed in the reports we file or submit pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Based on this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were ineffective as of March 31, 2024. 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.

We believe that our financial statements presented in this quarterly report on Form 10-Q fairly present, in all material respects, our financial position, results of operations, and cash flows for all periods presented herein.

Inherent Limitations - Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake. In particular, many of our current processes rely upon manual reviews and processes to ensure that neither human error nor system weakness has resulted in erroneous reporting of financial data.

Changes in Internal Control over Financial Reporting - There were no changes in our internal control over financial reporting during the three-month period ended March 31, 2024, which were identified in conjunction with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any material pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

Item 1A: Risk Factors

See Risk Factors contained in our Form 10-K filed with the SEC on April 1, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The information set forth below relates to our issuances of securities without registration under the Securities Act of 1933.

During the three months ended March 31, 2024, the Company issued 5,455,354 shares of common stock, valued at fair market value on issuance as follows:

•

150,000 shares for compensation to our directors valued at 31,065

•

3,535,354 shares in connection with convertible notes valued at $597,777; and

•

1,770,000 shares for settlement of debt valued at $279,660

These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

N/A

Item 5. Other Information

None

Item 6. Exhibits

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 formatted in Extensible Business Reporting Language (XBRL).
	**Provided herewith

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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 May 15, 2024 on its behalf by the undersigned thereunto duly authorized.

IQSTEL INC.

/s/Leandro Iglesias
Leandro Iglesias Principal Executive Officer


/s/ Alvaro Quintana Cardona
Alvaro Quintana Cardona Principal Financial and Accounting Officer

CERTIFICATIONS

I, Leandro Iglesias, certify that;

I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of iQSTEL Inc. (the “registrant”);

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2024

/s/ Leandro Iglesias

By: Leandro Iglesias

Title: Chief Executive Officer

CERTIFICATIONS

I, Alvaro Quintana Cardona, certify that;

I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of iQSTEL Inc. (the “registrant”);

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2024

/s/ Alvaro Quintana Cardona

By: Alvaro Quintana Cardona

Title: Chief Financial Officer

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of iQSTEL, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024 filed with the Securities and Exchange Commission (the “Report”), I, Leandro Iglesias, Chief Executive Office, and I, Alvaro Quintana Cardona, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented.

By:	/s/ Leandro Iglesias
Name:	Leandro Iglesias
Title:	Principal Executive Officer
Date:	May 15, 2024

By:	/s/ Alvaro Quintana Cardona
Name:	Alvaro Quintana Cardona
Title:	Principal Financial Officer
Date:	May 15, 2024

This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2024	May 15, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	000-55984
Entity Registrant Name	iQSTEL Inc.
Entity Central Index Key	0001527702
Entity Tax Identification Number	45-2808620
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	300 Aragon Avenue
Entity Address, Address Line Two	Suite 375
Entity Address, City or Town	Coral Gables
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33134
City Area Code	954
Local Phone Number	951-8191
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		176,834,984

Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Current Assets
Cash	$ 2,725,571	$ 1,362,668
Accounts receivable, net	9,000,237	12,539,774
Inventory	26,936	27,121
Due from related parties	391,745	340,515
Deposit for acquisition	1,500,000
Prepaid and other current assets	1,975,266	1,449,094
Total Current Assets	15,619,755	15,719,172
Property and equipment, net	559,497	522,997
Intangible asset	99,592	99,592
Goodwill	5,172,146	5,172,146
Deferred tax assets	426,755	426,755
Other asset	241,025	214,991
TOTAL ASSETS	22,118,770	22,155,653
Current Liabilities
Accounts payable	1,614,500	2,966,279
Accrued and other current liabilities	8,010,927	9,993,585
Due to related parties	26,613	26,613
Loans payable - net of discount of $0 and $3,750, respectively	103,738	264,988
Loans payable - related parties	259,447	259,447
Convertible notes - net of discount of $923,185 and $39,012, respectively	3,469,435	330,032
Total Current Liabilities	13,484,660	13,840,944
Loans payable, non-current	90,214	99,099
Employee benefits, non-current	169,738	169,738
TOTAL LIABILITIES	13,744,612	14,109,781
Stockholders' Equity
Common stock: 300,000,000 authorized; $0.001 par value 177,584,984 and 172,129,630 shares issued and outstanding, respectively	177,585	172,130
Additional paid in capital	35,263,931	34,360,884
Accumulated deficit	(26,893,900)	(26,084,133)
Accumulated other comprehensive loss	(25,340)	(25,340)
Equity attributed to stockholders of iQSTEL Inc.	8,522,317	8,423,582
Deficit attributable to noncontrolling interests	(148,159)	(377,710)
TOTAL STOCKHOLDERS' EQUITY	8,374,158	8,045,872
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	22,118,770	22,155,653
Preferred Class A [Member]
Stockholders' Equity
Preferred stock: 1,200,000 authorized; $0.001 par value	10	10
Preferred Class B [Member]
Stockholders' Equity
Preferred stock: 1,200,000 authorized; $0.001 par value	31	31
Preferred Class C [Member]
Stockholders' Equity
Preferred stock: 1,200,000 authorized; $0.001 par value
Preferred Class D [Member]
Stockholders' Equity
Preferred stock: 1,200,000 authorized; $0.001 par value

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