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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 June 30, 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: 183,532,742 common shares as of August 14, 2024

 

  

 


 

 

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  12

 

 2 

 

PART I - FINANCIAL INFORMATION

 

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 June 30, 2024 (unaudited) and December 31, 2023;
F-2 Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023 (unaudited);
F-3 Consolidated Statements of Stockholder’s Equity (Deficit) for the three and six months ended June 30, 2024 and 2023 (unaudited).
F-4 Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (unaudited); and
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 June 30, 2024 are not necessarily indicative of the results that can be expected for the full year.

 

 3 

 

Item 1. Financial Statements

iQSTEL INC

Consolidated Balance Sheets

 (Unaudited)

 

   June 30,  December 31,
   2024  2023
ASSETS      
Current Assets          
Cash  $797,227   $1,362,668 
Accounts receivable, net   13,765,855    12,539,774 
Inventory   26,936    27,121 
Due from related parties   661,087    340,515 
Prepaid and other current assets   1,969,155    1,449,094 
Total Current Assets   17,220,260    15,719,172 
           
Property and equipment, net   583,314    522,997 
Intangible asset   99,592    99,592 
Goodwill   10,677,045    5,172,146 
Deferred tax assets   426,755    426,755 
Other asset   979,694    214,991 
TOTAL ASSETS  $29,986,660   $22,155,653 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current Liabilities          
Accounts payable  $7,507,182   $2,966,279 
Accrued and other current liabilities   5,498,006    9,993,585 
Due to related parties   26,613    26,613 
Loans payable - net of discount of $143,197 and $3,750, respectively   2,544,878    264,988 
Loans payable - related parties   1,092,766    259,447 
Convertible note - net of discount of $726,900 and $39,012, respectively   3,555,006    330,032 
Contingent liability for acquisition of subsidiary   1,000,000       
Warrant liability   976,187       
Total Current Liabilities   22,200,638    13,840,944 
           
Loans payable, non-current         99,099 
Employee benefits, non-current   214,143    169,738 
TOTAL LIABILITIES   22,414,781    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
179,557,200 and 172,129,630 shares issued and outstanding, respectively
   179,557    172,130 
Additional paid in capital   35,947,882    34,360,884 
Accumulated deficit   (28,902,052)   (26,084,133)
Accumulated other comprehensive loss   (25,340)   (25,340)
Equity attributed to stockholders of iQSTEL Inc.   7,200,088    8,423,582 
Equity (Deficit) attributable to noncontrolling interests   371,791    (377,710)
TOTAL STOCKHOLDERS' EQUITY   7,571,879    8,045,872 
           
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $29,986,660   $22,155,653 

 

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

 

 F-1 

 

iQSTEL INC

Consolidated Statements of Operations

   (Unaudited)  

                                 
  

Three Months Ended

June 30,

 

Six Months Ended

June 30,

   2024  2023  2024  2023
             
Revenues  $78,635,764   $32,824,829   $130,050,642   $57,491,358 
Cost of revenue   76,472,140    32,040,363    126,507,992    55,490,156 
Gross profit   2,163,624    784,466    3,542,650    2,001,202 
                     
Operating expenses                    
General and administration   2,505,727    1,037,184    4,068,205    2,571,450 
Total operating expenses   2,505,727    1,037,184    4,068,205    2,571,450 
                     
Operating income (loss)   (342,103)   (252,718)   (525,555)   (570,248)
                     
Other income (expense)                    
Other income   55,524    4,164    127,301    519 
Other expenses   (443)   (39,255)   (850)   (73,209)
Interest expense   (496,080)   (20,103)   (861,554)   (20,103)
Change in fair value of derivative liabilities   (1,115,510)   146,268    (1,115,510)   342,575 
Gain (loss) on settlement of debt               (102,660)      
Total other income (expense)   (1,556,509)   91,074    (1,953,273)   249,782 
                     
Net loss before provision for income taxes   (1,898,612)   (161,644)   (2,478,828)   (320,466)
Income taxes   (65,275)         (65,275)      
Net loss   (1,963,887)   (161,644)   (2,544,103)   (320,466)
Less: Net income attributable to noncontrolling interests   44,265    52,301    273,816    256,664 
Net loss attributed to iQSTEL Inc.  $(2,008,152)  $(213,945)  $(2,817,919)  $(577,130)
                     
                     
Comprehensive income (loss)                    
Net loss  $(1,963,887)  $(161,644)  $(2,544,103)  $(320,466)
Foreign currency adjustment         2,993          4,570 
Total comprehensive loss   (1,963,887)  $(158,651)  $(2,544,103)  $(315,896)
Less: Comprehensive income attributable to noncontrolling interests   44,265    53,767    273,816    258,903 
Net comprehensive loss attributed to iQSTEL Inc.  $(2,008,152)  $(212,418)  $(2,817,919)  $(574,799)
                     
Basic and diluted loss per common share  $(0.01)  $(0.00)  $(0.02)  $(0.00)
                     
Weighted average number of common shares outstanding - Basic and diluted   178,445,909    164,636,688    176,799,415    164,346,860 

  

 

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

   

 F-2 

 

iQSTEL INC

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

For the three and six months ended June 30, 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
                                                            
Common stock issued for compensation                           150,000    150    46,450                46,600          46,600
Common stock issued for warrant exercises                           1,822,216    1,822    398,178                400,000          400,000
Resolution of derivative liabilities upon exercise of warrant                                       239,323                239,323          239,323
Acquisition of subsidiary                                                               475,685    475,685
Net income (loss)                                             (2,008,152)         (2,008,152)   44,265    (1,963,887)
Balance - June 30, 2024   10,000   $10    31,080   $31    179,557,200   $179,557   $35,947,882   $(28,902,052   $(25,340)  $7,200,088   $371,791   $7,571,879

 

 

 

 

 

   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 warrant                                       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
                                                            
Common stock issued for compensation                           60,000    60    6,840                6,900          6,900
Foreign currency translation adjustments                                                   1,527    1,527    1,466    2,993
Net income (loss)                                             (213,945)         (213,945)   52,301    (161,644)

Balance - June 30,

2023

   10,000   $10    21,000   $21    164,656,688   $164,657   $31,791,446   $(25,081,525)  $(31,226)  $6,843,383   $(665,474)  $6,177,909

 


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

 

 F-3 

 

iQSTEL INC

Consolidated Statements of Cash Flows 

  (Unaudited)  

                 
  

Six Months Ended

June 30,

   2024  2023
           
 CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(2,544,103)  $(320,466)
Adjustments to reconcile net loss to net cash used in operating activities:          
Stock based compensation   77,665    18,130 
Bad debt expense   1,801       
Depreciation and amortization   68,939    68,488 
Amortization of debt discount   468,797    7,226 
Change in fair value of derivative liabilities   1,115,510    (342,575)
Loss on settlement of debt   102,660       
Changes in operating assets and liabilities:          
Accounts receivable   12,944,081    (589,928)
Inventory   185    (1,995)
Prepaid and other assets   (500,544)   (75,867)
Due from related parties         46,631 
Accounts payable   (9,519,447)   1,144,422 
Accrued and other current liabilities   (5,367,232)   (675,466)
Net cash used in operating activities   (3,151,688)   (721,400)
           
 CASH FLOWS FROM INVESTING ACTIVITIES:          
Acquisitions of subsidiary, net of cash received   (2,505,121)      
Purchase of property and equipment   (103,474)   (132,249)
Purchase of intangible assets         (149,537)
Advances of loan receivable - related party   (111,602)      
Collection of amounts due from related parties         2,700 
Net cash used in investing activities   (2,720,197)   (279,086)
           
 CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from loans payable   699,525    150,000 
Repayments of loans payable   (147,253)   (9,006)
Proceeds from loans payable - related parties   1,000,000       
Repayment of loans payable - related parties   (166,681)      
Proceeds from exercise of warrants   400,000    400,000 
Proceeds from convertible notes   3,722,500    250,000 
Proceeds from stock purchase option   100,000    —   
Repayment of convertible notes   (301,647)      
Net cash provided by financing activities   5,306,444    790,994 
           
 Effect of exchange rate changes on cash         6,873 
           
 Net change in cash   (565,441)   (202,619)
 Cash, beginning of period   1,362,668    1,329,389 
 Cash, end of period  $797,227   $1,126,770 
           
 Supplemental cash flow information          
Cash paid for interest  $289,493   $6,600 
Cash paid for taxes  $     $   
           
 Non-cash transactions:          
Common stock issued for settlement of debt  $279,660   $   
Resolution of derivative liabilities upon exercise of warrants  $239,323   $240,258 
Common stock issued in connection with convertible notes  $597,777   $   
Note payable issued for acquisition of subsidiary  $2,000,000   $   
Contingent liability for acquisition of subsidiary  $1,000,000   $   

 

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

 

 F-4 

 

iQSTEL INC

Notes to the Consolidated Financial Statements

June 30, 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 20 countries and over 100 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, QGlobal SMS, LLC, and QXTEL LIMITED.

 

Also under the Telecom Division, 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 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 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.

 

 F-5 

 

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 June 30, 2024 and the results of operations and cash flows for the periods presented. The results of operations for the six months ended June 30, 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”), Smartbiz Telecom LLC (“Smartbiz”) and QXTEL LIMITED (“QXTEL”). 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.

 

Business Combinations

 

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

   

Foreign Currency Translation and Re-measurement

 

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

 

The functional currency and reporting currency of Etelix, QGlobal, ItsBchain, IoT Labs, Whisl, Smartbiz, Global Money One and QXTEL 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.

 

 F-6 

 

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 $797,227 and $1,362,668 in cash and cash equivalents at June 30, 2024 and December 31, 2023, respectively.

 

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 six months ended June 30, 2024 and 2023, the Company recorded bad debt expense of $1,801 and $0, respectively.

 

Net Income (Loss) Per Share of Common Stock

 

The Company has adopted ASC 260, ”Earnings per Share” which requires presentation of basic earnings per share on the face of the statements of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share computation. In the accompanying financial statements, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants unless the result would be antidilutive. 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 six months ended June 30, 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 six months ended June 30, 2024, 15 customers represented 86% of our revenue compared to 23 customers representing 87% of our revenue for the six months ended June 30, 2023. For the six months ended June 30, 2024 and 2023, 38% and 39% 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:

 

 F-7 

 

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.

 

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.

  

 F-8 

 

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 financed its operations through private placements, Regulation A offerings, related party loans, convertible notes, and unsecured debt. 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 June 30, 2024 and December 31, 2023 consisted of the following:

                 
   June 30,  December 31,
   2024  2023
Other receivable  $150,726   $312,116 
Prepaid expenses   1,285,619    738,050 
Advance payment   21,000    21,000 
Tax receivable   25,607    428 
Deposit for acquisition of asset   357,500    357,500 
Security deposit   128,703    20,000 
 Prepaid Expenses and Other Current Assets  $1,969,155   $1,449,094 

 

NOTE 5 – PROPERTY AND EQUIPMENT

 

Property and equipment at June 30, 2024 and December 31, 2023 consisted of the following:

                 
   June 30,  December 31,
   2024  2023
Telecommunication equipment  $709,417   $386,700 
Telecommunication software   645,861    836,840 
Other equipment   150,940    99,892 
Total property and equipment   1,506,218    1,323,432 
Accumulated depreciation and amortization   (922,904)   (800,435)
Total property and equipment  $583,314   $522,997 

 

Depreciation expense for the six months ended June 30, 2024 and 2023 amounted to $68,939 and $68,488, respectively.

 

 F-9 

 

NOTE 6 –LOANS PAYABLE

 

Loans payable at June 30, 2024 and December 31, 2023 consisted of the following:

 

   June 30,  December 31,     Interest
   2024  2023  Term  rate
Martus  $103,738   $103,738   Note was issued on October 23, 2018 and due on January 2, 2025   5.0%
Darlene Covid19   89,866    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 due on April 4, 2024   24.0%
Future receipts loan   552,080         Loan was issued April 23, 2023 and due in February 26, 2025   Effective rate (1) 98.9% 
Promissory note payable   217,391         Note was issued June 11, 2024 and due on June 11, 2025   2.0%
Promissory note payable - acquisition of QXTEL   1,725,000         Note was issued April 1, 2024 and due on June 30, 2025   4.89%
Total   2,688,075    367,837         
Less: Unamortized debt discount   (143,197)   (3,750)        
Total loans payable   2,544,878    364,087         
Less: Current portion of loans payable   (2,544,878)   (264,988)        
Long-term loans payable  $     $99,099       

 

 

 

 

(1)The purchase price is $504,575, net of financing fee of $10,425, and the amount to be paid is $690,100. The monthly payment amount is $69,010.

 

During the six months ended June 30, 2024 and 2023, the Company repaid the principal amount of $147,253 and $9,006, respectively.

 

During the six months ended June 30, 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.

  

 F-10 

 

Loans payable - related parties at June 30, 2024 and December 31, 2023 consisted of the following:

 

   June 30,  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%
Minority Shareholder of QXTEL   833,319         Note is due on October 1, 2025   4.89%
Total   1,092,766    259,447         
Less: Current portion of loans payable - related parties   1,092,766    259,447         

Long-term loans payable - related

parties

  $     $           

 

 

During the six months ended June 30, 2024 and 2023, the Company recorded interest expense of $47,665 and $9,460 and recognized amortization of discount, included in interest expense, of $68,519 and $3,750, respectively.

  

NOTE 7 - CONVERTIBLE NOTES

 

Convertible notes at June 30, 2024 and December 31, 2023 consisted of the following:

 

   June 30,  December 31,
   2024  2023
Issued in fiscal year 2023  $109,494   $369,044 
Issued in fiscal year 2024   4,172,412       
Total convertible notes payable   4,281,906    369,044 
Less: Unamortized debt discount   (726,900)   (39,012)
Total convertible notes   3,555,006    330,032 
           
Less: current portion of convertible notes   3,555,006    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.

 

 F-11 

 

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 $111,111 and $55,556, respectively. Each one year note bears interest at 18% per annum.

 

During the three months ended June 30, 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 six months ended June 30, 2024 and 2023, the Company recorded interest expense of $345,092 and $3,417 and recognized amortization of discount, included in interest expense, of $400,278 and $3,476, respectively.

 

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 six months ended June 30, 2024, the Company issued 7,427,570 shares of common stock, valued at fair market value on issuance as follows:

 

300,000 shares for compensation to our directors valued at $77,665
1,770,000 shares for settlement of debt valued at $279,660 
3,535,354 shares in connection with convertible notes valued at $597,777; and
1,822,216 shares for exercise of warrants for $400,000 

 

As of June 30, 2024 and December 31, 2023, 179,557,200 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 liquidationHolders 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

 

 F-12 

 

As of June 30, 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 $0.001Under 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 designationHolders 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 monthsHolders 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 June 30, 2024 and December 31, 2023, 31,080 shares of Series B Preferred Stock were issued and outstanding.

 

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 $0.001Under 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 designationThe 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 purposeHolders 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 June 30, 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 StockholdersThe 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 June 30, 2024 and December 31, 2023, no Series D Preferred Stock was issued or outstanding.

 

 F-13 

 

NOTE 9 - RELATED PARTY TRANSACTIONS

 

Due from related party

 

As of June 30, 2024 and December 31, 2023, the Company had amounts due from related parties of $661,087 and $340,515, respectively. The loans are unsecured, non-interest bearing and due on demand.

  

Due to related parties

 

As of June 30, 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 six months ended June 30, 2024 and 2023, the Company recorded management salaries of $423,000 and $270,000, respectively, and stock-based compensation bonuses of $77,665 and $18,130, respectively.

 

As of June 30, 2024 and December 31, 2023, the Company recorded and accrued management salaries of $205,627 and $100,128, respectively.

 

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 six months ended June 30, 2024 and 2023, the Company incurred rent expense of $14,028 and $2,137, respectively.

 

NOTE 11 – 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, which was credited against the Purchase Price.

 

At closing, in addition to the $1,500,000 with the Escrow Agent that formed part of the Purchase Price, we were 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 could decide the form of payment between the Promissory Note or the shares of iQSTEL, and if a Promissory Note was chosen, we agreed to allow Seller the option to exchange the Promissory Note for shares of iQSTEL. On June 27, 2024, we entered into a second amendment to the Purchase Agreement (the “Amendment”) that required us to issue an amended and restated promissory note to the Seller. We have paid down $200,000 of the note, so the amended and restated promissory note was issued in the principal amount of US $1,800,000. The amended and restated promissory note also changed the payment structure, from installment payments of $200,000 for each of the months of May through November ($1,400,000) with a balloon payment of $600,000, to monthly installments of $75,000 plus interest during 2024, and $212,500 plus interest during the first 6 months of 2025.  We also revised the Earnout Payment due to the Seller. The Earnout Payment was redefined at $721,035 net income, to be achieved in Q2, Q3 and Q4 of 2024. The $1,000,000 payment that IQSTEL has to pay upon achievement of the Earnout Payment will be paid during the first half of 2025, in monthly installments.

 

 F-14 

 

During the six months ended June 30, 2024, the Company repaid a note payable of $275,000.

 

The acquisition was closed on April 1, 2024. QXTEL has been included in our consolidated results of operations since the acquisition date.

 

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

 

   April 1,
Fair Value of Consideration:  2024
Cash  $3,000,000 
Promissory note   2,000,000 
Contingent liability   1,000,000 
Total Purchase Price  $6,000,000 

 

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

 

Total purchase price  $6,000,000 
      
Cash   769,879 
Accounts receivable   14,946,919 
Due from related party   208,550 
Other asset   214,564 
Equipment   30,963 
Total identifiable assets   16,170,875 
      
Accounts payable   (14,796,505)
Other current liabilities   (403,584)
Total liabilities assumed   (15,200,089)
Net assets   970,786 
      
Non-controlling interest - 49%   475,685 
Total net assets   495,101 
Goodwill  $5,504,899 

 

Unaudited combined proforma results of operations for the six months ended June 30, 2024 and 2023 as though the Company acquired QXTEL on January 1, 2023, are set forth below:

                 
   Six Months Ended
   June 30,
   2024  2023
Revenues  $157,734,103   $97,988,300 
Cost of revenues   153,669,990    94,185,602 
Gross profit   4,064,113    3,802,698 
           
Operating expenses   4,696,867    3,992,419 
Operating loss   (632,754)   (189,721)
           
Other income (expense)   (1,953,273)   249,782 
Income tax   (65,275)   (94,225)
Net Loss  $(2,651,302)  $(34,164)

 

 F-15 

 

NOTE 12 - SEGMENT

 

At June 30, 2024 and December 31, 2023, the Company operates in one industry segment, telecommunication services, and three geographic segments, USA, UK and Switzerland, where current assets and equipment are located.

 

Operating Activities

 

The following table shows operating activities information by geographic segment for the three and six months ended June 30, 2024 and 2023:

 

Three months ended June 30, 2024

 

                                       
   USA  Switzerland  UK  Elimination  Total
Revenues  $46,933,532    1,026,797    31,474,055   $(798,620)  $78,635,764 
Cost of revenue   45,956,484    883,919    30,430,357    (798,620)   76,472,140 
Gross profit   977,048    142,878    1,043,698          2,163,624 
                          
Operating expenses                         
General and administration   1,602,751    237,073    665,903          2,505,727 
                          
Operating income (loss)   (625,703)   (94,195)   377,795          (342,103)
                          
Other income (expense)   (1,597,506)   47,525    (6,528)         (1,556,509)
                          
Income tax expense               (65,275)         (65,275)
                          
Net income (loss)  $(2,223,209)  $(46,670)  $305,992   $     $(1,963,887)

 

Three months ended June 30, 2023

                                 
   USA  Switzerland  Elimination  Total
Revenues  $32,960,138    1,334,080   $(1,469,389)  $32,824,829 
Cost of revenue   32,359,937    1,149,815    (1,469,389)   32,040,363 
Gross profit   600,201    184,265          784,466 
                     
Operating expenses                    
General and administration   845,485    191,699          1,037,184 
                     
Operating loss   (245,284)   (7,434)         (252,718)
                     
Other income (expense)   98,224    (7,150)         91,074 
                     
Net loss  $(147,060)  $(14,584)  $     $(161,644)

 

 F-16 

 

Six months ended June 30, 2024

                                         
   USA  Switzerland  UK  Elimination  Total
Revenues  $99,044,789    2,062,716    31,474,055   $(2,530,918)  $130,050,642 
Cost of revenue   96,888,310    1,720,243    30,430,357    (2,530,918)   126,507,992 
Gross profit   2,156,479    342,473    1,043,698          3,542,650 
                          
Operating expenses                         
General and administration   2,958,757    443,545    665,903          4,068,205 
                          
Operating income (loss)   (802,278)   (101,072)   377,795          (525,555)
                          
Other income (expense)   (2,032,989)   86,244    (6,528)         (1,953,273)
                          
Income tax expense               (65,275)         (65,275)
                          
Net income (loss)  $(2,835,267)  $(14,828)  $305,992   $     $(2,544,103)

 

Six months ended June 30, 2023

                                 
   USA  Switzerland  Elimination  Total
Revenues  $57,807,809    2,681,515   $(2,997,966)  $57,491,358 
Cost of revenue   56,185,823    2,302,299    (2,997,966)   55,490,156 
Gross profit   1,621,986    379,216          2,001,202 
                     
Operating expenses                    
General and administration   2,196,441    375,009          2,571,450 
                     
Operating (loss) income   (574,455)   4,207          (570,248)
                     
Other income (expense)   273,179    (23,397)         249,782 
                     
Net loss  $(301,276)  $(19,190)  $     $(320,466)

 

Asset Information

 

The following table shows asset information by geographic segment as of June 30, 2024 and December 31, 2023:

                                         
June 30, 2024  USA  Switzerland  UK  Elimination  Total
Assets                         
Current assets  $9,072,423   $763,359   $7,997,811   $(613,333)  $17,220,260 
Non-current assets  $23,368,080   $828,551   $754,331   $(12,184,562)  $12,766,400 
Liabilities                         
Current liabilities  $13,806,116   $1,576,897   $7,430,958   $(613,333)  $22,200,638 
Non-current liabilities  $139   $169,599   $44,405   $     $214,143 

 

                                 
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 

  

 F-17 

 

NOTE 13 – WARRANTS

 

On February 12, 2024, we issued a Common Stock Purchase Option (the “Option”) to ADI Funding LLC (“ADI Funding”) for $100,000 that expires on December 31, 2024, for the right to acquire up to 10,000,000 shares of common stock. The exercise price per share of the common stock under the Option shall be (i) 70% of the VWAP of the common stock during the then 10 Trading Days immediately preceding, but not including the date of exercise if the VWAP is below $2.00 or (ii) seventy five percent (75%) of the VWAP of the common stock during the then 10 Trading Days immediately preceding, but not including the date of exercise if the VWAP is equal or above $2.00.

 

ADI Funding has the right and the obligation to exercise, on a “cash basis”, not less than (i) 2,000,000 of the shares of common stock underlying the option not later than the later of March 31, 2024 or the date on which there is an effective registration statement permitting the resale of the shares by ADI Funding. From and after the occurrence of the above-referenced exercise, each additional exercise of the Option shall be in an amount not less than 1,000,000 shares, which shall occur every thirty (30) days and shall be exercised only on a cash basis. ADI Funding’s obligation to exercise each specified portion of the Option is subject to the exercise price being not less than $0.11

 

If the Company issues securities less than the exercise price of the option, ADI Funding has a right to also use that lesser price in the exercise of its Option. The Option also contains rights to any company distributions and consideration in fundamental transactions.

 

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

 

The Company determined that the warrants had net cash settlement and categorized the warrants as a liability in the accompanying consolidated financial statements.

 

A summary of activity regarding warrants issued as follows:

                   
     Weighted Average Remaining
   Warrants outstanding  Contractual life (in years)
       
Outstanding, December 31, 2023             
Granted    10,000,000    0.88 
Exercised    (1,822,216)      
Forfeited/canceled             
Outstanding, June 30, 2024    8,177,784    0.50 

 

The intrinsic value of the warrants as of June 30, 2024 is approximately $680,000. All of the outstanding warrants are exercisable as of June 30, 2024; however, each exercise is subject to a beneficial ownership limitation of 4.99% of the Company’s outstanding common stock, which, upon notice, may be increased to 9.99%.

 

Fair Value Assumptions Used in Accounting for Derivative Liabilities

 

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

 

 F-18 

 

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of June 30, 2024. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. 

As of June 30, 2024, the estimated fair values of the liabilities measured on a recurring basis are as follows:

 

    As of June 30, 2024
Expected term   0.50 - 0.65 years  
Exercise price  $0.17$0.23 
Expected average volatility   108% - 117%  
Expected dividend yield     
Risk-free interest rate   5.33% - 5.44%  

 

The following table summarizes the changes in the derivative liabilities during the six months ended June 30, 2024:

 

Fair Value Measurements Using Significant Observable Inputs (Level 3)
    
Balance - December 31, 2023  $   
      
Addition of new derivatives recognized as cash received   100,000 
Settled on issuance of common stock   (239,323)
Change in fair value of derivative liabilities   1,115,510 
Balance - June 30, 2024  $976,187 

 

NOTE 14 – SUBSEQUENT EVENTS

 

Subsequent to June 30, 2024, and through the date that these financials were made available, the Company had the following subsequent events:

  

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, once due diligence has been completed, during the third quarter of fiscal year 2024, although there are no assurances that the deal will close as planned.

 

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.

 

 F-19 

 

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.

 

 F-20 

 

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 20 countries and over 100 employees that is offering leading-edge services through its four 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), QGlobal SMS (www.qglobalsms.com), and QXTEL Limited (www.qxtel.com).

 

Also under the Telecom Division, 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 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 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 developing 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.

 

 4 

 

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 June 30, 2024 was $78,635,764, compared with $32,824,829 for the three months ended June 30, 2023. These numbers reflect an increase of 139.56% quarter over quarter on our consolidated revenues. Our total revenue reported for the six months ended June 30, 2024 was $130,050,642, compared with $57,491,358 for the six months ended June 30, 2023; an increase of 126.21%.

When looking at the numbers by subsidiary, we have the following breakout for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023:

   Revenue for the Three Months Ended June  Revenue for the Six Months Ended June
Subsidiary  2024  2023  2024  2023
Etelix.com USA, LLC  $14,381,303   $10,692,139   $33,011,213   $15,041,124 
SwissLink Carrier AG   901,198    1,273,004    1,875,932    2,548,289 
QGlobal LLC   422,982    211,258    790,242    296,309 
IoT Labs LLC   24,448,290    17,215,267    48,786,489    32,476,549 
Smartbiz Telecom   6,210,123    2,935,867    12,391,570    6,327,107 
Whisl Telecom   800,003    497,294    1,723,331    801,980 
QXTEL Limited   31,471,866    —      31,471,866    —   
   $78,635,764   $32,824,829   $130,050,642   $57,491,358 

 

The increase in revenue is due to an increment in the commercial efforts and the result of commercial synergies amongst all companies. The organic growth during the three-months ended June 30, 2024 was 60% of the total revenue for that period, while the newly acquired company QXTEL Limited contributed with 40% of the total revenue.

 

 5 

 

When looking at the figures for the six months ended June 30, 2024, the organic growth was 76%, while QXTEL Limited contributed 24%.

 

We consider organic growth the revenues reported by our existing subsidiaries; including Etelix, SwissLink, QGlobal, IoT Labs, Smartbiz and Whisl.

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

 

Cost of Revenue

 

Our total cost of revenue for the three months ended June 30, 2024 increased to $76,472,140, compared with $32,040,363 for the three months ended June 30, 2023. Our total cost of revenue for the six months ended June 30, 2024 increased to $126,507,992, compared with $55,490,156 for the six months ended June 30, 2023.

 

When looking at the numbers by subsidiary, we have the following breakout for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023:

 

   Cost of Revenue for the Three Months Ended June  Cost of Revenue for the Six Months Ended June
Subsidiary  2024  2023  2024  2023
Etelix.com USA, LLC  $14,089,625   $10,019,546   $31,922,561   $13,784,019 
SwissLink Carrier AG   829,267    1,055,418    1,599,435    2,159,275 
QGlobal LLC   299,915    142,330    542,332    193,879 
IoT Labs LLC   24,230,045    17,211,748    48,026,620    32,090,649 
Smartbiz Telecom   6,074,427    3,125,835    12,339,173    6,209,129 
Whisl Telecom   526,551    485,486    1,655,561    1,053,205 
QXTEL Limited   30,422,311    —      30,422,311    —   
   $76,472,140   $32,040,363   $126,507,992   $55,490,156 

 

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

 

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

 

Gross Margin

 

The Consolidated Gross Margin for the three months ended June 30, 2024 was 2.75%, which compared to 2.39% for the three months ended June 30, 2023 represents an increase in our consolidated Gross Margin of 15.13%.

 

The Consolidated Gross Margin for the six months ended June 30, 2024 was 2.72%, which compared to 3.48% for the six months ended June 30, 2023.

 

The decrease in the Gross Margin is due to the decrease in the margins of voice services, which is an expected trend in the industry. To offset this trend, the Company has implemented a plan to modify the composition of the product portfolio by increasing SMS businesses that have increasing margins. As an example, we can indicate that for the six months ended on June 30, 2024, the contribution to the margin of the SMS business with respect to the total was 24% compared to only 8% for the same period in 2023. With the incorporation of QXTEL and the increase in the QGlobal SMS business, the gross margin of our SMS services portfolio increased by 297% when comparing the figures of June 2024 vs. June 2023.

 

Operating Expenses

 

Operating expenses, consisting entirely of general and administrative expenses, increased to $2,505,727 for the three months ended June 30, 2024 from $1,037,184 for the three months ended June 30, 2023. Operating expenses, consisting entirely of general and administrative expenses, increased to $4,068,205 for the six months ended June 30, 2024 from $2,571,450 for the six months ended June 30, 2023. The detail by major category for the six months ended June 30, 2024 and 2023 is reflected in the table below.

 

 6 

 

   Six Months Ended June 30,
   2024  2023
Salaries, Wages and Benefits  $1,143,692   $881,830 
Technology   542,140    185,975 
Professional Fees   1,064,047    586,726 
Legal & Regulatory   151,639    110,179 
Travel & Events   97,489    102,356 
Public Cost   85,378    18,083 
Advertising   501,997    405,537 
Bank Services and Fees   121,566    25,709 
Depreciation and Amortization   68,939    68,488 
Office, Facility and Other   190,132    160,010 
Insurances   21,720    8,427 
Bad debt expense   1,801    —   
           
      Sub Total   3,990,540    2,553,320 
           
Stock-based compensation   77,665    18,130 
Total Operating Expense  $4,068,205   $2,571,450 

                            

When looking at the numbers by subsidiary, we have the following breakout for the six months ended June 30, 2024 compared to the six months ended June 30, 2023:

 

   Six Months Ended June 30,
   2024  2023  Difference
iQSTEL  $1,420,141   $1,027,793   $392,348 
Etelix   182,516    207,309    -24,793 
Swisslink   443,546    375,008    68,538 
ItsBchain   14,384    22,019    -7,635 
QGlobal   262,845    119,035    143,810 
IoT Labs   134,718    115,013    19,705 
Global Money One   400    60,799    -60,399 
Smartbiz Telecom   461,282    316,129    145,153 
Whisl Telecom   482,470    328,345    154,125 
QXTEL Limited   665,903    —      665,903 
   $4,068,205   $2,571,450   $1,496,755 

 

During the three months ended June 30, 2024 we were consolidating QXTEL from April 1 to June 30. This new subsidiary was not present before the mentioned period which explains 44% of the total $1,496,755 expense increase in the total consolidated figures for 2024 compared to the same period in 2023.

 

Operating Income

 

The Company had an operating loss for the three months ended June 30, 2024 of $342,103 compared with an operating loss of $252,718 for the three months ended June 30, 2023.

 

The Company had an operating loss for the six months ended June 30, 2024 of $525,555 compared with an operating loss of $570,248 for the six months ended June 30, 2023.

 

 7 

 

Our Telecom Division, the division presently generating revenue, has operating income when presented separately from the rest of our Company. 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. When comparing the tables below, we can see a tremendous evolution of our telecom division comparing the revenues, gross profit and operating income for the three and six months ended June 30, 2024 versus the same periods of year 2023. As we have indicated on several occasions, our strategy is to strengthen our telecommunications division so that it can serve as a lever for the development of new lines of business.

 

   Telecom Division  Pre-revenue companies  iQSTEL  Consolidated
   Three Months Ended June 30, 2024  Six Months Ended June 30, 2024  Three Months Ended June 30, 2024  Six Months Ended June 30, 2024  Three Months Ended June 30, 2024  Six Months Ended June 30, 2024  Three Months Ended June 30, 2024  Six Months Ended June 30, 2024
Revenues   78,635,764    130,050,642    —      —      —      —      78,635,764    130,050,642 
Cost of revenue   76,472,140    126,507,992    —      —      —      —      76,472,140    126,507,992 
Gross profit   2,163,624    3,542,650    —      —      —      —      2,163,624    3,542,650 
                                         
Operating expenses                                        
General and administration   1,738,878    2,633,280    4,118    14,784    762,731    1,420,141    2,505,727    4,068,205 
Total Operating Expenses   1,738,878    2,633,280    4,118    14,784    762,731    1,420,141    2,505,727    4,068,205 
                                         
Operating  income/(loss)   424,746    909,370    (4,118)   (14,784)   (762,731)   (1,420,141)   (342,103)   (525.555)

 

 

   Telecom Division  Pre-revenue companies  iQSTEL  Consolidated
   Three Months Ended June 30, 2023  Six Months Ended June 30, 2023  Three Months Ended June 30, 2023  Six Months Ended June 30, 2023  Three Months Ended June 30, 2023  Six Months Ended June 30, 2023  Three Months Ended June 30, 2023  Six Months Ended June 30, 2023
Revenues   32,824,829    57,491,358    —     —     —     —     32,824,829    57,491,358 
Cost of revenue   32,040,363    55,490,156    —      —     —     —     32,040,363    55,490,156 
Gross profit   784,466    2,001,202    —     —     —     —     784,466    2,001,202 
                                         
Operating expenses                                        
General and administration   646,362    1,460,839    27,580    82,818    363,240    1,027,793    1,037,182    2,571,450 
Total Operating Expenses   646,362    1,460,839    27,580    82,818    363,240    1,027,793    1,037,182    2,571,450 
                                         
Operating  income/(loss)   138,104    540,363    (27,580)   (82,818)   (363,240)   (1,027,793)   (252,716)   (570,248)

 

 8 

 

Other Expenses/Other Income

 

We had other expenses of $1,556,509 for the three months ended June 30, 2024, as compared with other income of $91,074 for the same period ended 2023. We had other expenses of $1,953,273 for the six months ended June 30, 2024, as compared with other income of $249,782 for the same period ended 2023. The increase in other expenses is mainly due to the change in the fair value of derivative liabilities, and the interest expenses incurred. Both concept are related to the financing structure put in place for the acquisition of QXTEL Limited, which has had a positive impact in the revenues and operating income of the Telecom Division, and also a positive impact in our balance sheet.

 

Net Loss

 

We finished the three months ended June 30, 2024 with a loss of $1,963,887, as compared to a loss of $161,644 during the three months ended June 30, 2023. We finished the six months ended June 30, 2024 with a loss of $2,544,103, as compared to a loss of $320,466 during the six months ended June 30, 2023.

 

The net results of the periods reported are highly impacted by the expenses in the holding entity (iQSTEL), which has a high component of interest and other financial expenses related to the funds borrowed for the acquisition of QXTEL Limited.

 

Liquidity and Capital Resources

 

As of June 30, 2024, we had total current assets of $17,220,260 and current liabilities of $22,200,638, resulting in a negative working capital of $4,980,378. This negative working capital is driven largely by the $3,555,006 of current convertible notes, derivative liabilities of $976,187 and contingent liability for the acquisition of QXTEL of $1,000,000.

 

Our operating activities used $3,151,688 in the six months ended June 30, 2024 as compared with $721,400 used in operating activities in the six months ended June 30, 2023. Our negative operating cash flow for both periods is a result of our net loss and changes in operating assets and liabilities.

 

Investing activities used $2,720,197 for the six months ended June 30, 2024 compared to $279,086 used during the same period of year 2023. For the six months ended June 30, 2024 the use of funds in investing activities consisted primarily of the acquisition of QXTEL Limited.

Financing activities provided $5,306,444 in the six months ended June 30, 2024 compared with $790,994 provided in the six months ended June 30, 2023. Our positive financing cash flow in 2024 is mainly the result of proceeds from loans, and proceeds from convertible notes.

 

We intend to fund operations through increased sales and debt and/or equity financing arrangements to strengthen our liquidity and capital resources. We also plan to seek additional financing in public and private equity offering to secure funding for operations. There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

 

Inflation

 

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

 

 9 

 

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 six months ended June 30, 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.

 

Off Balance Sheet Arrangements

 

As of June 30, 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 June 30, 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 six-month period ended June 30, 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. 

 

 10 

 

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 in reliance on Section 4(a)(2) of the Securities Act, and/or Regulation D promulgated thereunder.

 

During the six months ended June 30, 2024, the Company issued 7,427,570 shares of common stock, valued at fair market value on issuance as follows:

 

300,000 shares for compensation to our directors valued at $77,665
1,770,000 shares for settlement of debt valued at $279,660 
3,535,354 shares in connection with convertible notes valued at $597,777; and
1,822,216 shares for exercise of warrants for $400,000 

 

Item 3. Defaults upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

N/A

 

Item 5. Other Information

 

None

 

 11 

 

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 June 30, 2023 formatted in Extensible Business Reporting Language (XBRL).
 

 

**Provided herewith

 12 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on August 14, 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

 

 

 13 

 

 

 

 

CERTIFICATIONS

 

I, Leandro Iglesias, certify that;

 

1.   I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 of iQSTEL Inc. (the “registrant”);

 

2.   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;

 

3.   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;

 

4.   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:

 

a.   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;

 

b.   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;

 

c.   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

 

d.   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

 

5.   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):

 

a.   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

 

b.   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: August 14, 2024

 

/s/ Leandro Iglesias

By: Leandro Iglesias

Title: Chief Executive Officer

CERTIFICATIONS

 

I, Alvaro Quintana Cardona, certify that;

 

1.   I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 of iQSTEL Inc. (the “registrant”);

 

2.   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;

 

3.   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;

 

4.   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:

 

a.   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;

 

b.   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;

 

c.   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

 

d.   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

 

5.   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):

 

a.   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

 

b.   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: August 14, 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 June 30, 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:

 

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

 

2.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: August 14, 2024
   
By: /s/ Alvaro Quintana Cardona
Name: Alvaro Quintana Cardona
Title: Principal Financial Officer
Date: August 14, 2024

 

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

v3.24.2.u1
Cover - shares
6 Months Ended
Jun. 30, 2024
Aug. 14, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Jun. 30, 2024  
Document Fiscal Period Focus Q2  
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   183,532,742
v3.24.2.u1
Consolidated Balance Sheets (Unaudited) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Current Assets    
Cash $ 797,227 $ 1,362,668
Accounts receivable, net 13,765,855 12,539,774
Inventory 26,936 27,121
Due from related parties 661,087 340,515
Prepaid and other current assets 1,969,155 1,449,094
Total Current Assets 17,220,260 15,719,172
Property and equipment, net 583,314 522,997
Intangible asset 99,592 99,592
Goodwill 10,677,045 5,172,146
Deferred tax assets 426,755 426,755
Other asset 979,694 214,991
TOTAL ASSETS 29,986,660 22,155,653
Current Liabilities    
Accounts payable 7,507,182 2,966,279
Accrued and other current liabilities 5,498,006 9,993,585
Due to related parties 26,613 26,613
Loans payable - net of discount of $143,197 and $3,750, respectively 2,544,878 264,988
Loans payable - related parties 1,092,766 259,447
Convertible note - net of discount of $726,900 and $39,012, respectively 3,555,006 330,032
Contingent liability for acquisition of subsidiary 1,000,000
Warrant liability 976,187
Total Current Liabilities 22,200,638 13,840,944
Loans payable, non-current 99,099
Employee benefits, non-current 214,143 169,738
TOTAL LIABILITIES 22,414,781 14,109,781
Stockholders' Equity    
Common stock: 300,000,000 authorized; $0.001 par value 179,557,200 and 172,129,630 shares issued and outstanding, respectively 179,557 172,130
Additional paid in capital 35,947,882 34,360,884
Accumulated deficit (28,902,052) (26,084,133)
Accumulated other comprehensive loss (25,340) (25,340)
Equity attributed to stockholders of iQSTEL Inc. 7,200,088 8,423,582
Equity (Deficit) attributable to noncontrolling interests 371,791 (377,710)
TOTAL STOCKHOLDERS' EQUITY 7,571,879 8,045,872
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 29,986,660 22,155,653
Series A Preferred Stock [Member]    
Stockholders' Equity    
Preferred stock: 1,200,000 authorized; $0.001 par value 10 10
Series B Preferred Stock [Member]    
Stockholders' Equity    
Preferred stock: 1,200,000 authorized; $0.001 par value 31 31
Series C Preferred Stock [Member]    
Stockholders' Equity    
Preferred stock: 1,200,000 authorized; $0.001 par value
Series D Preferred Stock [Member]    
Stockholders' Equity    
Preferred stock: 1,200,000 authorized; $0.001 par value
v3.24.2.u1
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Jan. 07, 2021
Nov. 11, 2020
Debt Instrument, Unamortized Discount $ 143,197 $ 3,750    
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net $ 726,900 $ 39,012    
Preferred Stock, Shares Authorized 1,200,000 1,200,000    
Preferred Stock, Par or Stated Value Per Share $ 0.001 $ 0.001    
Common Stock, Shares Authorized 300,000,000 300,000,000    
Common Stock, Par or Stated Value Per Share $ 0.001 $ 0.001    
Common Stock, Shares, Issued 179,557,200 172,129,630    
Common Stock, Shares, Outstanding 179,557,200 172,129,630    
Series A Preferred Stock [Member]        
Preferred Stock, Shares Authorized 10,000 10,000    
Preferred Stock, Par or Stated Value Per Share $ 0.001 $ 0.001    
Series B Preferred Stock [Member]        
Preferred Stock, Shares Authorized 200,000 200,000   200,000
Preferred Stock, Par or Stated Value Per Share $ 0.001 $ 0.001   $ 0.001
Series C Preferred Stock [Member]        
Preferred Stock, Shares Authorized 200,000 200,000 200,000  
Preferred Stock, Par or Stated Value Per Share $ 0.001 $ 0.001 $ 0.001  
Series D Preferred Stock [Member]        
Preferred Stock, Shares Authorized 75,000 75,000    
Preferred Stock, Par or Stated Value Per Share $ 0.001 $ 0.001    
v3.24.2.u1
Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Income Statement [Abstract]        
Revenues $ 78,635,764 $ 32,824,829 $ 130,050,642 $ 57,491,358
Cost of revenue 76,472,140 32,040,363 126,507,992 55,490,156
Gross profit 2,163,624 784,466 3,542,650 2,001,202
Operating expenses        
General and administration 2,505,727 1,037,184 4,068,205 2,571,450
Total operating expenses 2,505,727 1,037,184 4,068,205 2,571,450
Operating income (loss) (342,103) (252,718) (525,555) (570,248)
Other income (expense)        
Other income 55,524 4,164 127,301 519
Other expenses (443) (39,255) (850) (73,209)
Interest expense (496,080) (20,103) (861,554) (20,103)
Change in fair value of derivative liabilities (1,115,510) 146,268 (1,115,510) 342,575
Gain (loss) on settlement of debt (102,660)
Total other income (expense) (1,556,509) 91,074 (1,953,273) 249,782
Net loss before provision for income taxes (1,898,612) (161,644) (2,478,828) (320,466)
Income taxes (65,275) (65,275)
Net loss (1,963,887) (161,644) (2,544,103) (320,466)
Less: Net income attributable to noncontrolling interests 44,265 52,301 273,816 256,664
Net loss attributed to iQSTEL Inc. (2,008,152) (213,945) (2,817,919) (577,130)
Comprehensive income (loss)        
Foreign currency adjustment 2,993 4,570
Total comprehensive loss (1,963,887) (158,651) (2,544,103) (315,896)
Less: Comprehensive income attributable to noncontrolling interests 44,265 53,767 273,816 258,903
Net comprehensive loss attributed to iQSTEL Inc. $ (2,008,152) $ (212,418) $ (2,817,919) $ (574,799)
Basic and diluted loss per common share $ (0.01) $ (0.00) $ (0.02) $ (0.00)
Weighted average number of common shares outstanding - Basic and diluted 178,445,909 164,636,688 176,799,415 164,346,860
v3.24.2.u1
Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($)
Preferred Stock [Member]
Series A Preferred Stock [Member]
Preferred Stock [Member]
Series B Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Comprehensive Income [Member]
AOCI Including Portion Attributable to Noncontrolling Interest [Member]
Noncontrolling Interest [Member]
Total
Balance - March 31, 2023 at Dec. 31, 2022 $ 10 $ 21 $ 161,595 $ 31,136,120 $ (24,504,395) $ (33,557) $ 6,759,794 $ (924,377) $ 5,835,417
Shares, Issued at Dec. 31, 2022 10,000 21,000 161,595,511            
Common stock issued for compensation $ 60 11,170 11,230 11,230
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture 60,000            
Common stock issued for warrant exercises $ 2,942 397,058 400,000 400,000
Stock Issued During Period, Shares, Conversion of Convertible Securities 2,941,177            
Net income (loss) (363,185) (363,185) 204,363 (158,822)
Resolution of derivative liabilities upon exercise of warrant 240,258 240,258 240,258
[custom:ResolutionOfDerivativeLiabilitiesShares]            
Foreign currency translation adjustments 804 804 773 1,577
Balance - June 30, 2023 at Mar. 31, 2023 $ 10 $ 21 $ 164,597 31,784,606 (24,867,580) (32,753) 7,048,901 (719,241) 6,329,660
Shares, Issued at Mar. 31, 2023 10,000 21,000 164,596,688            
Balance - March 31, 2023 at Dec. 31, 2022 $ 10 $ 21 $ 161,595 31,136,120 (24,504,395) (33,557) 6,759,794 (924,377) 5,835,417
Shares, Issued at Dec. 31, 2022 10,000 21,000 161,595,511            
Common stock issued for settlement of debt                
Common stock issued for warrant exercises                
Net income (loss)                 (320,466)
Resolution of derivative liabilities upon exercise of warrant                 240,258
Balance - June 30, 2023 at Jun. 30, 2023 $ 10 $ 21 $ 164,657 31,791,446 (25,081,525) (31,226) 6,843,383 (665,474) 6,177,909
Shares, Issued at Jun. 30, 2023 10,000 21,000 164,656,688            
Balance - March 31, 2023 at Mar. 31, 2023 $ 10 $ 21 $ 164,597 31,784,606 (24,867,580) (32,753) 7,048,901 (719,241) 6,329,660
Shares, Issued at Mar. 31, 2023 10,000 21,000 164,596,688            
Common stock issued for compensation $ 60 6,840 6,900 6,900
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture 60,000            
Net income (loss) (213,945) (213,945) 52,301 (161,644)
Foreign currency translation adjustments 1,527 1,527 1,466 2,993
Balance - June 30, 2023 at Jun. 30, 2023 $ 10 $ 21 $ 164,657 31,791,446 (25,081,525) (31,226) 6,843,383 (665,474) 6,177,909
Shares, Issued at Jun. 30, 2023 10,000 21,000 164,656,688            
Balance - March 31, 2023 at Dec. 31, 2023 $ 10 $ 31 $ 172,130 34,360,884 (26,084,133) (25,340) 8,423,582 (377,710) 8,045,872
Shares, Issued at Dec. 31, 2023 10,000 31,080 172,129,630            
Common stock issued for compensation $ 150 30,915 31,065 31,065
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture 150,000            
Common stock issued for settlement of debt $ 1,770 277,890 279,660 279,660
Stock Issued During Period, Shares, Other 1,770,000            
Common stock issued for warrant exercises $ 3,535 594,242 597,777 597,777
Stock Issued During Period, Shares, Conversion of Convertible Securities 3,535,354            
Net income (loss) (809,767) (809,767) 229,551 (580,216)
Balance - June 30, 2023 at Mar. 31, 2024 $ 10 $ 31 $ 177,585 35,263,931 (26,893,900) (25,340) 8,522,317 (148,159) 8,374,158
Shares, Issued at Mar. 31, 2024 10,000 31,080 177,584,984            
Balance - March 31, 2023 at Dec. 31, 2023 $ 10 $ 31 $ 172,130 34,360,884 (26,084,133) (25,340) 8,423,582 (377,710) 8,045,872
Shares, Issued at Dec. 31, 2023 10,000 31,080 172,129,630            
Common stock issued for settlement of debt                 279,660
Common stock issued for warrant exercises                 597,777
Net income (loss)                 (2,544,103)
Resolution of derivative liabilities upon exercise of warrant                 239,323
Balance - June 30, 2023 at Jun. 30, 2024 $ 10 $ 31 $ 179,557 35,947,882 (28,902,052) (25,340) 7,200,088 371,791 7,571,879
Shares, Issued at Jun. 30, 2024 10,000 31,080 179,557,200            
Balance - March 31, 2023 at Mar. 31, 2024 $ 10 $ 31 $ 177,585 35,263,931 (26,893,900) (25,340) 8,522,317 (148,159) 8,374,158
Shares, Issued at Mar. 31, 2024 10,000 31,080 177,584,984            
Common stock issued for compensation $ 150 46,450 46,600 46,600
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture 150,000            
Net income (loss) (2,008,152) (2,008,152) 44,265 (1,963,887)
Common stock issued for warrant exercises $ 1,822 398,178 400,000 400,000
Stock Issued During Period, Shares, Conversion of Units 1,822,216            
Resolution of derivative liabilities upon exercise of warrant 239,323 239,323 239,323
[custom:ResolutionOfDerivativeLiabilitiesShares]            
Acquisition of subsidiary 475,685 475,685
Stock Issued During Period, Shares, Acquisitions            
Balance - June 30, 2023 at Jun. 30, 2024 $ 10 $ 31 $ 179,557 $ 35,947,882 $ (28,902,052) $ (25,340) $ 7,200,088 $ 371,791 $ 7,571,879
Shares, Issued at Jun. 30, 2024 10,000 31,080 179,557,200            
v3.24.2.u1
Consoolidated Statements of Cash Flows - USD ($)
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
 CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (2,544,103) $ (320,466)
Adjustments to reconcile net loss to net cash used in operating activities:    
Stock based compensation 77,665 18,130
Bad debt expense 1,801
Depreciation and amortization 68,939 68,488
Amortization of debt discount 468,797 7,226
Change in fair value of derivative liabilities 1,115,510 (342,575)
Loss on settlement of debt 102,660
Changes in operating assets and liabilities:    
Accounts receivable 12,944,081 (589,928)
Inventory 185 (1,995)
Prepaid and other assets (500,544) (75,867)
Due from related parties 46,631
Accounts payable (9,519,447) 1,144,422
Accrued and other current liabilities (5,367,232) (675,466)
Net cash used in operating activities (3,151,688) (721,400)
 CASH FLOWS FROM INVESTING ACTIVITIES:    
Acquisitions of subsidiary, net of cash received (2,505,121)
Purchase of property and equipment (103,474) (132,249)
Purchase of intangible assets (149,537)
Advances of loan receivable - related party (111,602)
Collection of amounts due from related parties 2,700
Net cash used in investing activities (2,720,197) (279,086)
 CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from loans payable 699,525 150,000
Repayments of loans payable (147,253) (9,006)
Proceeds from loans payable - related parties 1,000,000
Repayment of loans payable - related parties (166,681)
Proceeds from exercise of warrants 400,000 400,000
Proceeds from convertible notes 3,722,500 250,000
Repayment of convertible notes (301,647)
Net cash provided by financing activities 5,306,444 790,994
 Effect of exchange rate changes on cash 6,873
 Net change in cash (565,441) (202,619)
 Cash, beginning of period 1,362,668 1,329,389
 Cash, end of period 797,227 1,126,770
 Supplemental cash flow information    
Cash paid for interest 289,493 6,600
Cash paid for taxes
 Non-cash transactions:    
Common stock issued for settlement of debt 279,660
Resolution of derivative liabilities upon exercise of warrants 239,323 240,258
Common stock issued in connection with convertible notes 597,777
Note payable issued for acquisition of subsidiary 2,000,000
Contingent liability for acquisition of subsidiary $ 1,000,000
v3.24.2.u1
NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS
6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS

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 20 countries and over 100 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, QGlobal SMS, LLC, and QXTEL LIMITED.

 

Also under the Telecom Division, 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 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 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.

 

v3.24.2.u1
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

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

 

 

In the opinion of the Company’s management, the accompanying unaudited interim consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2024 and the results of operations and cash flows for the periods presented. The results of operations for the six months ended June 30, 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”), Smartbiz Telecom LLC (“Smartbiz”) and QXTEL LIMITED (“QXTEL”). 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.

 

Business Combinations

 

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

   

Foreign Currency Translation and Re-measurement

 

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

 

The functional currency and reporting currency of Etelix, QGlobal, ItsBchain, IoT Labs, Whisl, Smartbiz, Global Money One and QXTEL 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 $797,227 and $1,362,668 in cash and cash equivalents at June 30, 2024 and December 31, 2023, respectively.

 

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 six months ended June 30, 2024 and 2023, the Company recorded bad debt expense of $1,801 and $0, respectively.

 

Net Income (Loss) Per Share of Common Stock

 

The Company has adopted ASC 260, ”Earnings per Share” which requires presentation of basic earnings per share on the face of the statements of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share computation. In the accompanying financial statements, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants unless the result would be antidilutive. 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 six months ended June 30, 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 six months ended June 30, 2024, 15 customers represented 86% of our revenue compared to 23 customers representing 87% of our revenue for the six months ended June 30, 2023. For the six months ended June 30, 2024 and 2023, 38% and 39% 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.

 

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.

  

 

v3.24.2.u1
NOTE 3 - GOING CONCERN
6 Months Ended
Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
NOTE 3 - GOING CONCERN

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 financed its operations through private placements, Regulation A offerings, related party loans, convertible notes, and unsecured debt. 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.

 

v3.24.2.u1
NOTE 4 – PREPAID AND OTHER CURRENT ASSETS
6 Months Ended
Jun. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
NOTE 4 – PREPAID AND OTHER CURRENT ASSETS

NOTE 4 – PREPAID AND OTHER CURRENT ASSETS

 

Prepaid and other current assets at June 30, 2024 and December 31, 2023 consisted of the following:

                 
   June 30,  December 31,
   2024  2023
Other receivable  $150,726   $312,116 
Prepaid expenses   1,285,619    738,050 
Advance payment   21,000    21,000 
Tax receivable   25,607    428 
Deposit for acquisition of asset   357,500    357,500 
Security deposit   128,703    20,000 
 Prepaid Expenses and Other Current Assets  $1,969,155   $1,449,094 

 

v3.24.2.u1
NOTE 5 – PROPERTY AND EQUIPMENT
6 Months Ended
Jun. 30, 2024
Property, Plant and Equipment [Abstract]  
NOTE 5 – PROPERTY AND EQUIPMENT

NOTE 5 – PROPERTY AND EQUIPMENT

 

Property and equipment at June 30, 2024 and December 31, 2023 consisted of the following:

                 
   June 30,  December 31,
   2024  2023
Telecommunication equipment  $709,417   $386,700 
Telecommunication software   645,861    836,840 
Other equipment   150,940    99,892 
Total property and equipment   1,506,218    1,323,432 
Accumulated depreciation and amortization   (922,904)   (800,435)
Total property and equipment  $583,314   $522,997 

 

Depreciation expense for the six months ended June 30, 2024 and 2023 amounted to $68,939 and $68,488, respectively.

 

 

v3.24.2.u1
NOTE 6 –LOANS PAYABLE
6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
NOTE 6 –LOANS PAYABLE

NOTE 6 –LOANS PAYABLE

 

Loans payable at June 30, 2024 and December 31, 2023 consisted of the following:

 

   June 30,  December 31,     Interest
   2024  2023  Term  rate
Martus  $103,738   $103,738   Note was issued on October 23, 2018 and due on January 2, 2025   5.0%
Darlene Covid19   89,866    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 due on April 4, 2024   24.0%
Future receipts loan   552,080         Loan was issued April 23, 2023 and due in February 26, 2025   Effective rate (1) 98.9% 
Promissory note payable   217,391         Note was issued June 11, 2024 and due on June 11, 2025   2.0%
Promissory note payable - acquisition of QXTEL   1,725,000         Note was issued April 1, 2024 and due on June 30, 2025   4.89%
Total   2,688,075    367,837         
Less: Unamortized debt discount   (143,197)   (3,750)        
Total loans payable   2,544,878    364,087         
Less: Current portion of loans payable   (2,544,878)   (264,988)        
Long-term loans payable  $     $99,099       

 

 

 

 

(1)The purchase price is $504,575, net of financing fee of $10,425, and the amount to be paid is $690,100. The monthly payment amount is $69,010.

 

During the six months ended June 30, 2024 and 2023, the Company repaid the principal amount of $147,253 and $9,006, respectively.

 

During the six months ended June 30, 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 June 30, 2024 and December 31, 2023 consisted of the following:

 

   June 30,  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%
Minority Shareholder of QXTEL   833,319         Note is due on October 1, 2025   4.89%
Total   1,092,766    259,447         
Less: Current portion of loans payable - related parties   1,092,766    259,447         

Long-term loans payable - related

parties

  $     $           

 

 

During the six months ended June 30, 2024 and 2023, the Company recorded interest expense of $47,665 and $9,460 and recognized amortization of discount, included in interest expense, of $68,519 and $3,750, respectively.

  

v3.24.2.u1
NOTE 7 - CONVERTIBLE NOTES
6 Months Ended
Jun. 30, 2024
Note 7 - Convertible Notes  
NOTE 7 - CONVERTIBLE NOTES

NOTE 7 - CONVERTIBLE NOTES

 

Convertible notes at June 30, 2024 and December 31, 2023 consisted of the following:

 

   June 30,  December 31,
   2024  2023
Issued in fiscal year 2023  $109,494   $369,044 
Issued in fiscal year 2024   4,172,412       
Total convertible notes payable   4,281,906    369,044 
Less: Unamortized debt discount   (726,900)   (39,012)
Total convertible notes   3,555,006    330,032 
           
Less: current portion of convertible notes   3,555,006    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 $111,111 and $55,556, respectively. Each one year note bears interest at 18% per annum.

 

During the three months ended June 30, 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 six months ended June 30, 2024 and 2023, the Company recorded interest expense of $345,092 and $3,417 and recognized amortization of discount, included in interest expense, of $400,278 and $3,476, respectively.

 

v3.24.2.u1
NOTE 8 – STOCKHOLDERS’ EQUITY
6 Months Ended
Jun. 30, 2024
Equity [Abstract]  
NOTE 8 – STOCKHOLDERS’ EQUITY

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 six months ended June 30, 2024, the Company issued 7,427,570 shares of common stock, valued at fair market value on issuance as follows:

 

300,000 shares for compensation to our directors valued at $77,665
1,770,000 shares for settlement of debt valued at $279,660 
3,535,354 shares in connection with convertible notes valued at $597,777; and
1,822,216 shares for exercise of warrants for $400,000 

 

As of June 30, 2024 and December 31, 2023, 179,557,200 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 liquidationHolders 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 June 30, 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 $0.001Under 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 designationHolders 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 monthsHolders 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 June 30, 2024 and December 31, 2023, 31,080 shares of Series B Preferred Stock were issued and outstanding.

 

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 $0.001Under 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 designationThe 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 purposeHolders 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 June 30, 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 StockholdersThe 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 June 30, 2024 and December 31, 2023, no Series D Preferred Stock was issued or outstanding.

 

 

v3.24.2.u1
NOTE 9 - RELATED PARTY TRANSACTIONS
6 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
NOTE 9 - RELATED PARTY TRANSACTIONS

NOTE 9 - RELATED PARTY TRANSACTIONS

 

Due from related party

 

As of June 30, 2024 and December 31, 2023, the Company had amounts due from related parties of $661,087 and $340,515, respectively. The loans are unsecured, non-interest bearing and due on demand.

  

Due to related parties

 

As of June 30, 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 six months ended June 30, 2024 and 2023, the Company recorded management salaries of $423,000 and $270,000, respectively, and stock-based compensation bonuses of $77,665 and $18,130, respectively.

 

As of June 30, 2024 and December 31, 2023, the Company recorded and accrued management salaries of $205,627 and $100,128, respectively.

 

v3.24.2.u1
NOTE 10 – COMMITMENTS AND CONTINGENCIES
6 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
NOTE 10 – COMMITMENTS AND CONTINGENCIES

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 six months ended June 30, 2024 and 2023, the Company incurred rent expense of $14,028 and $2,137, respectively.

 

v3.24.2.u1
NOTE 11 – ACQUISITION
6 Months Ended
Jun. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
NOTE 11 – ACQUISITION

NOTE 11 – 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, which was credited against the Purchase Price.

 

At closing, in addition to the $1,500,000 with the Escrow Agent that formed part of the Purchase Price, we were 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 could decide the form of payment between the Promissory Note or the shares of iQSTEL, and if a Promissory Note was chosen, we agreed to allow Seller the option to exchange the Promissory Note for shares of iQSTEL. On June 27, 2024, we entered into a second amendment to the Purchase Agreement (the “Amendment”) that required us to issue an amended and restated promissory note to the Seller. We have paid down $200,000 of the note, so the amended and restated promissory note was issued in the principal amount of US $1,800,000. The amended and restated promissory note also changed the payment structure, from installment payments of $200,000 for each of the months of May through November ($1,400,000) with a balloon payment of $600,000, to monthly installments of $75,000 plus interest during 2024, and $212,500 plus interest during the first 6 months of 2025.  We also revised the Earnout Payment due to the Seller. The Earnout Payment was redefined at $721,035 net income, to be achieved in Q2, Q3 and Q4 of 2024. The $1,000,000 payment that IQSTEL has to pay upon achievement of the Earnout Payment will be paid during the first half of 2025, in monthly installments.

 

 

During the six months ended June 30, 2024, the Company repaid a note payable of $275,000.

 

The acquisition was closed on April 1, 2024. QXTEL has been included in our consolidated results of operations since the acquisition date.

 

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

 

   April 1,
Fair Value of Consideration:  2024
Cash  $3,000,000 
Promissory note   2,000,000 
Contingent liability   1,000,000 
Total Purchase Price  $6,000,000 

 

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

 

Total purchase price  $6,000,000 
      
Cash   769,879 
Accounts receivable   14,946,919 
Due from related party   208,550 
Other asset   214,564 
Equipment   30,963 
Total identifiable assets   16,170,875 
      
Accounts payable   (14,796,505)
Other current liabilities   (403,584)
Total liabilities assumed   (15,200,089)
Net assets   970,786 
      
Non-controlling interest - 49%   475,685 
Total net assets   495,101 
Goodwill  $5,504,899 

 

Unaudited combined proforma results of operations for the six months ended June 30, 2024 and 2023 as though the Company acquired QXTEL on January 1, 2023, are set forth below:

                 
   Six Months Ended
   June 30,
   2024  2023
Revenues  $157,734,103   $97,988,300 
Cost of revenues   153,669,990    94,185,602 
Gross profit   4,064,113    3,802,698 
           
Operating expenses   4,696,867    3,992,419 
Operating loss   (632,754)   (189,721)
           
Other income (expense)   (1,953,273)   249,782 
Income tax   (65,275)   (94,225)
Net Loss  $(2,651,302)  $(34,164)

 

 

v3.24.2.u1
NOTE 12 - SEGMENT
6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
NOTE 12 - SEGMENT

NOTE 12 - SEGMENT

 

At June 30, 2024 and December 31, 2023, the Company operates in one industry segment, telecommunication services, and three geographic segments, USA, UK and Switzerland, where current assets and equipment are located.

 

Operating Activities

 

The following table shows operating activities information by geographic segment for the three and six months ended June 30, 2024 and 2023:

 

Three months ended June 30, 2024

 

                                       
   USA  Switzerland  UK  Elimination  Total
Revenues  $46,933,532    1,026,797    31,474,055   $(798,620)  $78,635,764 
Cost of revenue   45,956,484    883,919    30,430,357    (798,620)   76,472,140 
Gross profit   977,048    142,878    1,043,698          2,163,624 
                          
Operating expenses                         
General and administration   1,602,751    237,073    665,903          2,505,727 
                          
Operating income (loss)   (625,703)   (94,195)   377,795          (342,103)
                          
Other income (expense)   (1,597,506)   47,525    (6,528)         (1,556,509)
                          
Income tax expense               (65,275)         (65,275)
                          
Net income (loss)  $(2,223,209)  $(46,670)  $305,992   $     $(1,963,887)

 

Three months ended June 30, 2023

                                 
   USA  Switzerland  Elimination  Total
Revenues  $32,960,138    1,334,080   $(1,469,389)  $32,824,829 
Cost of revenue   32,359,937    1,149,815    (1,469,389)   32,040,363 
Gross profit   600,201    184,265          784,466 
                     
Operating expenses                    
General and administration   845,485    191,699          1,037,184 
                     
Operating loss   (245,284)   (7,434)         (252,718)
                     
Other income (expense)   98,224    (7,150)         91,074 
                     
Net loss  $(147,060)  $(14,584)  $     $(161,644)

 

 

Six months ended June 30, 2024

                                         
   USA  Switzerland  UK  Elimination  Total
Revenues  $99,044,789    2,062,716    31,474,055   $(2,530,918)  $130,050,642 
Cost of revenue   96,888,310    1,720,243    30,430,357    (2,530,918)   126,507,992 
Gross profit   2,156,479    342,473    1,043,698          3,542,650 
                          
Operating expenses                         
General and administration   2,958,757    443,545    665,903          4,068,205 
                          
Operating income (loss)   (802,278)   (101,072)   377,795          (525,555)
                          
Other income (expense)   (2,032,989)   86,244    (6,528)         (1,953,273)
                          
Income tax expense               (65,275)         (65,275)
                          
Net income (loss)  $(2,835,267)  $(14,828)  $305,992   $     $(2,544,103)

 

Six months ended June 30, 2023

                                 
   USA  Switzerland  Elimination  Total
Revenues  $57,807,809    2,681,515   $(2,997,966)  $57,491,358 
Cost of revenue   56,185,823    2,302,299    (2,997,966)   55,490,156 
Gross profit   1,621,986    379,216          2,001,202 
                     
Operating expenses                    
General and administration   2,196,441    375,009          2,571,450 
                     
Operating (loss) income   (574,455)   4,207          (570,248)
                     
Other income (expense)   273,179    (23,397)         249,782 
                     
Net loss  $(301,276)  $(19,190)  $     $(320,466)

 

Asset Information

 

The following table shows asset information by geographic segment as of June 30, 2024 and December 31, 2023:

                                         
June 30, 2024  USA  Switzerland  UK  Elimination  Total
Assets                         
Current assets  $9,072,423   $763,359   $7,997,811   $(613,333)  $17,220,260 
Non-current assets  $23,368,080   $828,551   $754,331   $(12,184,562)  $12,766,400 
Liabilities                         
Current liabilities  $13,806,116   $1,576,897   $7,430,958   $(613,333)  $22,200,638 
Non-current liabilities  $139   $169,599   $44,405   $     $214,143 

 

                                 
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 

  

 

v3.24.2.u1
NOTE 13 – WARRANTS
6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
NOTE 13 – WARRANTS

NOTE 13 – WARRANTS

 

On February 12, 2024, we issued a Common Stock Purchase Option (the “Option”) to ADI Funding LLC (“ADI Funding”) for $100,000 that expires on December 31, 2024, for the right to acquire up to 10,000,000 shares of common stock. The exercise price per share of the common stock under the Option shall be (i) 70% of the VWAP of the common stock during the then 10 Trading Days immediately preceding, but not including the date of exercise if the VWAP is below $2.00 or (ii) seventy five percent (75%) of the VWAP of the common stock during the then 10 Trading Days immediately preceding, but not including the date of exercise if the VWAP is equal or above $2.00.

 

ADI Funding has the right and the obligation to exercise, on a “cash basis”, not less than (i) 2,000,000 of the shares of common stock underlying the option not later than the later of March 31, 2024 or the date on which there is an effective registration statement permitting the resale of the shares by ADI Funding. From and after the occurrence of the above-referenced exercise, each additional exercise of the Option shall be in an amount not less than 1,000,000 shares, which shall occur every thirty (30) days and shall be exercised only on a cash basis. ADI Funding’s obligation to exercise each specified portion of the Option is subject to the exercise price being not less than $0.11

 

If the Company issues securities less than the exercise price of the option, ADI Funding has a right to also use that lesser price in the exercise of its Option. The Option also contains rights to any company distributions and consideration in fundamental transactions.

 

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

 

The Company determined that the warrants had net cash settlement and categorized the warrants as a liability in the accompanying consolidated financial statements.

 

A summary of activity regarding warrants issued as follows:

                   
     Weighted Average Remaining
   Warrants outstanding  Contractual life (in years)
       
Outstanding, December 31, 2023             
Granted    10,000,000    0.88 
Exercised    (1,822,216)      
Forfeited/canceled             
Outstanding, June 30, 2024    8,177,784    0.50 

 

The intrinsic value of the warrants as of June 30, 2024 is approximately $680,000. All of the outstanding warrants are exercisable as of June 30, 2024; however, each exercise is subject to a beneficial ownership limitation of 4.99% of the Company’s outstanding common stock, which, upon notice, may be increased to 9.99%.

 

Fair Value Assumptions Used in Accounting for Derivative Liabilities

 

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

 

 

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of June 30, 2024. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. 

As of June 30, 2024, the estimated fair values of the liabilities measured on a recurring basis are as follows:

 

    As of June 30, 2024
Expected term   0.50 - 0.65 years  
Exercise price  $0.17$0.23 
Expected average volatility   108% - 117%  
Expected dividend yield     
Risk-free interest rate   5.33% - 5.44%  

 

The following table summarizes the changes in the derivative liabilities during the six months ended June 30, 2024:

 

Fair Value Measurements Using Significant Observable Inputs (Level 3)
    
Balance - December 31, 2023  $   
      
Addition of new derivatives recognized as cash received   100,000 
Settled on issuance of common stock   (239,323)
Change in fair value of derivative liabilities   1,115,510 
Balance - June 30, 2024  $976,187 

 

v3.24.2.u1
NOTE 14 – SUBSEQUENT EVENTS
6 Months Ended
Jun. 30, 2024
Subsequent Events [Abstract]  
NOTE 14 – SUBSEQUENT EVENTS

NOTE 14 – SUBSEQUENT EVENTS

 

Subsequent to June 30, 2024, and through the date that these financials were made available, the Company had the following subsequent events:

  

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, once due diligence has been completed, during the third quarter of fiscal year 2024, although there are no assurances that the deal will close as planned.

 

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.

v3.24.2.u1
NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS (Policies)
6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Organization and Operations

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 20 countries and over 100 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, QGlobal SMS, LLC, and QXTEL LIMITED.

 

Also under the Telecom Division, 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 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 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.

v3.24.2.u1
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

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

 

 

In the opinion of the Company’s management, the accompanying unaudited interim consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2024 and the results of operations and cash flows for the periods presented. The results of operations for the six months ended June 30, 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

Reclassification

 

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

 

Consolidation Policy

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”), Smartbiz Telecom LLC (“Smartbiz”) and QXTEL LIMITED (“QXTEL”). All significant intercompany balances and transactions have been eliminated in consolidation.

 

Use of Estimates

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.

 

Business Combinations

Business Combinations

 

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

   

Foreign Currency Translation and Re-measurement

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, Global Money One and QXTEL 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

 

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 $797,227 and $1,362,668 in cash and cash equivalents at June 30, 2024 and December 31, 2023, respectively.

 

Accounts Receivable and Allowance for Uncollectible Accounts

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 six months ended June 30, 2024 and 2023, the Company recorded bad debt expense of $1,801 and $0, respectively.

 

Net Income (Loss) Per Share of Common Stock

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 six months ended June 30, 2024 and 2023.

 

Concentrations of Credit Risk

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 six months ended June 30, 2024, 15 customers represented 86% of our revenue compared to 23 customers representing 87% of our revenue for the six months ended June 30, 2023. For the six months ended June 30, 2024 and 2023, 38% and 39% 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

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.

 

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

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

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.

v3.24.2.u1
NOTE 4 – PREPAID AND OTHER CURRENT ASSETS (Tables)
6 Months Ended
Jun. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
NOTE 4 - PREPAID AND OTHER CURRENT ASSETS - Schedule of Prepaid and Other Current Assets
                 
   June 30,  December 31,
   2024  2023
Other receivable  $150,726   $312,116 
Prepaid expenses   1,285,619    738,050 
Advance payment   21,000    21,000 
Tax receivable   25,607    428 
Deposit for acquisition of asset   357,500    357,500 
Security deposit   128,703    20,000 
 Prepaid Expenses and Other Current Assets  $1,969,155   $1,449,094 
v3.24.2.u1
NOTE 5 – PROPERTY AND EQUIPMENT (Tables)
6 Months Ended
Jun. 30, 2024
Property, Plant and Equipment [Abstract]  
NOTE 5 - PROPERTY AND EQUIPMENT - Schedule of Propery Plant and Equipment
                 
   June 30,  December 31,
   2024  2023
Telecommunication equipment  $709,417   $386,700 
Telecommunication software   645,861    836,840 
Other equipment   150,940    99,892 
Total property and equipment   1,506,218    1,323,432 
Accumulated depreciation and amortization   (922,904)   (800,435)
Total property and equipment  $583,314   $522,997 
v3.24.2.u1
NOTE 6 –LOANS PAYABLE (Tables)
6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
NOTE 6 - LOANS PAYABLE - Schedule of Loans Payable
   June 30,  December 31,     Interest
   2024  2023  Term  rate
Martus  $103,738   $103,738   Note was issued on October 23, 2018 and due on January 2, 2025   5.0%
Darlene Covid19   89,866    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 due on April 4, 2024   24.0%
Future receipts loan   552,080         Loan was issued April 23, 2023 and due in February 26, 2025   Effective rate (1) 98.9% 
Promissory note payable   217,391         Note was issued June 11, 2024 and due on June 11, 2025   2.0%
Promissory note payable - acquisition of QXTEL   1,725,000         Note was issued April 1, 2024 and due on June 30, 2025   4.89%
Total   2,688,075    367,837         
Less: Unamortized debt discount   (143,197)   (3,750)        
Total loans payable   2,544,878    364,087         
Less: Current portion of loans payable   (2,544,878)   (264,988)        
Long-term loans payable  $     $99,099       

 

 

 
v3.24.2.u1
NOTE 7 - CONVERTIBLE NOTES (Tables)
6 Months Ended
Jun. 30, 2024
Note 7 - Convertible Notes  
NOTE 7 - CONV ERTIBLE NOTES - Schedule of Convertible Notes
   June 30,  December 31,
   2024  2023
Issued in fiscal year 2023  $109,494   $369,044 
Issued in fiscal year 2024   4,172,412       
Total convertible notes payable   4,281,906    369,044 
Less: Unamortized debt discount   (726,900)   (39,012)
Total convertible notes   3,555,006    330,032 
           
Less: current portion of convertible notes   3,555,006    330,032 
Long-term convertible notes  $     $   
v3.24.2.u1
NOTE 11 – ACQUISITION (Tables)
6 Months Ended
Jun. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
NOTE 11 - ACQUISITIONS - QXTEL Consideration
   April 1,
Fair Value of Consideration:  2024
Cash  $3,000,000 
Promissory note   2,000,000 
Contingent liability   1,000,000 
Total Purchase Price  $6,000,000 
NOTE 11 - ACQUISITIONS - QXTEL Assets and Liabilities Acquired
Total purchase price  $6,000,000 
      
Cash   769,879 
Accounts receivable   14,946,919 
Due from related party   208,550 
Other asset   214,564 
Equipment   30,963 
Total identifiable assets   16,170,875 
      
Accounts payable   (14,796,505)
Other current liabilities   (403,584)
Total liabilities assumed   (15,200,089)
Net assets   970,786 
      
Non-controlling interest - 49%   475,685 
Total net assets   495,101 
Goodwill  $5,504,899 
NOTE 11 - ACQUISITIONS - Unaudited Pro Forma Results of Operations QXTEL
                 
   Six Months Ended
   June 30,
   2024  2023
Revenues  $157,734,103   $97,988,300 
Cost of revenues   153,669,990    94,185,602 
Gross profit   4,064,113    3,802,698 
           
Operating expenses   4,696,867    3,992,419 
Operating loss   (632,754)   (189,721)
           
Other income (expense)   (1,953,273)   249,782 
Income tax   (65,275)   (94,225)
Net Loss  $(2,651,302)  $(34,164)
v3.24.2.u1
NOTE 12 - SEGMENT (Tables)
6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
NOTE 12 - SEGMENT - Operating Activities by Geographic Segment

 

                                       
   USA  Switzerland  UK  Elimination  Total
Revenues  $46,933,532    1,026,797    31,474,055   $(798,620)  $78,635,764 
Cost of revenue   45,956,484    883,919    30,430,357    (798,620)   76,472,140 
Gross profit   977,048    142,878    1,043,698          2,163,624 
                          
Operating expenses                         
General and administration   1,602,751    237,073    665,903          2,505,727 
                          
Operating income (loss)   (625,703)   (94,195)   377,795          (342,103)
                          
Other income (expense)   (1,597,506)   47,525    (6,528)         (1,556,509)
                          
Income tax expense               (65,275)         (65,275)
                          
Net income (loss)  $(2,223,209)  $(46,670)  $305,992   $     $(1,963,887)

 

Three months ended June 30, 2023

                                 
   USA  Switzerland  Elimination  Total
Revenues  $32,960,138    1,334,080   $(1,469,389)  $32,824,829 
Cost of revenue   32,359,937    1,149,815    (1,469,389)   32,040,363 
Gross profit   600,201    184,265          784,466 
                     
Operating expenses                    
General and administration   845,485    191,699          1,037,184 
                     
Operating loss   (245,284)   (7,434)         (252,718)
                     
Other income (expense)   98,224    (7,150)         91,074 
                     
Net loss  $(147,060)  $(14,584)  $     $(161,644)

 

 

Six months ended June 30, 2024

                                         
   USA  Switzerland  UK  Elimination  Total
Revenues  $99,044,789    2,062,716    31,474,055   $(2,530,918)  $130,050,642 
Cost of revenue   96,888,310    1,720,243    30,430,357    (2,530,918)   126,507,992 
Gross profit   2,156,479    342,473    1,043,698          3,542,650 
                          
Operating expenses                         
General and administration   2,958,757    443,545    665,903          4,068,205 
                          
Operating income (loss)   (802,278)   (101,072)   377,795          (525,555)
                          
Other income (expense)   (2,032,989)   86,244    (6,528)         (1,953,273)
                          
Income tax expense               (65,275)         (65,275)
                          
Net income (loss)  $(2,835,267)  $(14,828)  $305,992   $     $(2,544,103)

 

Six months ended June 30, 2023

                                 
   USA  Switzerland  Elimination  Total
Revenues  $57,807,809    2,681,515   $(2,997,966)  $57,491,358 
Cost of revenue   56,185,823    2,302,299    (2,997,966)   55,490,156 
Gross profit   1,621,986    379,216          2,001,202 
                     
Operating expenses                    
General and administration   2,196,441    375,009          2,571,450 
                     
Operating (loss) income   (574,455)   4,207          (570,248)
                     
Other income (expense)   273,179    (23,397)         249,782 
                     
Net loss  $(301,276)  $(19,190)  $     $(320,466)

 

Asset Information

 

The following table shows asset information by geographic segment as of June 30, 2024 and December 31, 2023:

                                         
June 30, 2024  USA  Switzerland  UK  Elimination  Total
Assets                         
Current assets  $9,072,423   $763,359   $7,997,811   $(613,333)  $17,220,260 
Non-current assets  $23,368,080   $828,551   $754,331   $(12,184,562)  $12,766,400 
Liabilities                         
Current liabilities  $13,806,116   $1,576,897   $7,430,958   $(613,333)  $22,200,638 
Non-current liabilities  $139   $169,599   $44,405   $     $214,143 

 

                                 
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 
v3.24.2.u1
NOTE 13 – WARRANTS (Tables)
6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
NOTE 13 - WARRANTS - Schedule of Warrant Summary
                   
     Weighted Average Remaining
   Warrants outstanding  Contractual life (in years)
       
Outstanding, December 31, 2023             
Granted    10,000,000    0.88 
Exercised    (1,822,216)      
Forfeited/canceled             
Outstanding, June 30, 2024    8,177,784    0.50 
NOTE 13 - WARRANTS - Schedule of Fair Value Measurement of Liabilities
    As of June 30, 2024
Expected term   0.50 - 0.65 years  
Exercise price  $0.17$0.23 
Expected average volatility   108% - 117%  
Expected dividend yield     
Risk-free interest rate   5.33% - 5.44%  
NOTE 13 - WARRANTS - Fair Value Measurements Using Significant Observable Inputs
Fair Value Measurements Using Significant Observable Inputs (Level 3)
    
Balance - December 31, 2023  $   
      
Addition of new derivatives recognized as cash received   100,000 
Settled on issuance of common stock   (239,323)
Change in fair value of derivative liabilities   1,115,510 
Balance - June 30, 2024  $976,187 
v3.24.2.u1
NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative)
6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Entity Incorporation, State or Country Code NV
Entity Incorporation, Date of Incorporation Jun. 24, 2011
v3.24.2.u1
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Cash Equivalents, at Carrying Value $ 797,227   $ 1,362,668
Allowance for Loan and Lease Loss, Recovery of Bad Debts $ 1,801 $ 0  
Fifteen Customers [Member]      
Concentration Risk, Percentage 86.00%    
Twenty Three Customers [Member]      
Concentration Risk, Percentage   87.00%  
No Bad Debt Risk Customers [Member]      
Concentration Risk, Percentage 38.00% 39.00%  
v3.24.2.u1
NOTE 4 - PREPAID AND OTHER CURRENT ASSETS - Schedule of Prepaid and Other Current Assets (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]    
Other receivable $ 150,726 $ 312,116
Prepaid expenses 1,285,619 738,050
Advance payment 21,000 21,000
Tax receivable 25,607 428
Deposit for acquisition of asset 357,500 357,500
Security deposit 128,703 20,000
 Prepaid Expenses and Other Current Assets $ 1,969,155 $ 1,449,094
v3.24.2.u1
NOTE 5 - PROPERTY AND EQUIPMENT - Schedule of Propery Plant and Equipment (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Property, Plant and Equipment [Line Items]    
Total property and equipment $ 1,506,218 $ 1,323,432
Accumulated depreciation and amortization (922,904) (800,435)
Total property and equipment 583,314 522,997
Technology Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Total property and equipment 709,417 386,700
Software Development [Member]    
Property, Plant and Equipment [Line Items]    
Total property and equipment 645,861 836,840
Other Machinery and Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Total property and equipment $ 150,940 $ 99,892
v3.24.2.u1
NOTE 5 – PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Property, Plant and Equipment [Abstract]    
Depreciation, Depletion and Amortization, Nonproduction $ 68,939 $ 68,488
v3.24.2.u1
NOTE 6 - LOANS PAYABLE - Schedule of Loans Payable (Details) - USD ($)
6 Months Ended
Apr. 23, 2023
Jun. 30, 2024
Dec. 31, 2023
Short-Term Debt [Line Items]      
Long-Term Debt, Gross   $ 2,688,075 $ 367,837
Debt Instrument, Unamortized Discount   143,197 3,750
Long-Term Debt   2,544,878 364,087
Long-Term Debt, Current Maturities   2,544,878 264,988
Long-Term Debt, Excluding Current Maturities   99,099
Loans Payable   1,092,766 259,447
Other Loans Payable, Current   1,092,766 259,447
Loans Payable, Noncurrent  
Martus      
Short-Term Debt [Line Items]      
Long-Term Debt, Gross   $ 103,738 103,738
Debt Instrument, Issuance Date   Oct. 23, 2018  
Debt Instrument, Maturity Date   Jan. 02, 2025  
Debt Instrument, Interest Rate, Stated Percentage   500.00%  
Darlene Covi 19 [Member]      
Short-Term Debt [Line Items]      
Long-Term Debt, Gross   $ 89,866 99,099
Debt Instrument, Issuance Date   Apr. 01, 2020  
Debt Instrument, Maturity Date   Mar. 31, 2025  
Debt Instrument, Interest Rate, Stated Percentage   0.00%  
Promissory Note One [Member]      
Short-Term Debt [Line Items]      
Long-Term Debt, Gross   165,000
Debt Instrument, Issuance Date   Apr. 04, 2023  
Debt Instrument, Maturity Date   Apr. 04, 2024  
Debt Instrument, Interest Rate, Stated Percentage   2400.00%  
Future Receipts Loan [Member]      
Short-Term Debt [Line Items]      
Long-Term Debt, Gross   $ 552,080
Debt Instrument, Issuance Date   Apr. 23, 2023  
Debt Instrument, Maturity Date   Feb. 26, 2025  
Debt Instrument, Interest Rate, Stated Percentage   9890.00%  
Debt Instrument, Repurchase Amount $ 504,575    
Debt Instrument, Unused Borrowing Capacity, Fee 10,425    
Debt Instrument, Face Amount 690,100    
Debt Instrument, Periodic Payment $ 69,010    
Promissory Note Two [Member]      
Short-Term Debt [Line Items]      
Long-Term Debt, Gross   $ 217,391
Debt Instrument, Issuance Date   Jun. 11, 2024  
Debt Instrument, Maturity Date   Jun. 11, 2025  
Debt Instrument, Interest Rate, Stated Percentage   200.00%  
Promissory Note Q X T E L [Member]      
Short-Term Debt [Line Items]      
Long-Term Debt, Gross   $ 1,725,000
Debt Instrument, Issuance Date   Apr. 01, 2024  
Debt Instrument, Maturity Date   Jun. 30, 2025  
Debt Instrument, Interest Rate, Stated Percentage   489.00%  
49% of Shareholder of SwissLink 1      
Short-Term Debt [Line Items]      
Debt Instrument, Interest Rate, Stated Percentage   0.00%  
Loans Payable   $ 21,606 21,606
Debt Instrument, Maturity Date, Description   Note is due on demand  
49% of Shareholder of SwissLink 2      
Short-Term Debt [Line Items]      
Debt Instrument, Interest Rate, Stated Percentage   500.00%  
Loans Payable   $ 237,841 237,841
Debt Instrument, Maturity Date, Description   Note is due on demand  
Minority Shareholder Of Q X T E L [Member]      
Short-Term Debt [Line Items]      
Debt Instrument, Maturity Date   Oct. 01, 2025  
Debt Instrument, Interest Rate, Stated Percentage   489.00%  
Loans Payable   $ 833,319
v3.24.2.u1
NOTE 6 –LOANS PAYABLE (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Short-Term Debt [Line Items]        
Repayments of Other Debt     $ 147,253 $ 9,006
Debtor Reorganization Items, Gain (Loss) on Settlement of Other Claims, Net 102,660
Loans Payable [Member]        
Short-Term Debt [Line Items]        
Interest Expense, Operating and Nonoperating     47,665 9,460
Amortization of Debt Discount (Premium)     $ 68,519 $ 3,750
Settlement Of Note Payable [Member]        
Short-Term Debt [Line Items]        
Stock Issued During Period, Shares, Other     1,770,000  
v3.24.2.u1
NOTE 7 - CONV ERTIBLE NOTES - Schedule of Convertible Notes (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Short-Term Debt [Line Items]    
Less: current portion of convertible notes $ 3,555,006 $ 330,032
Total convertible notes payable 4,281,906 369,044
Less: Unamortized debt discount 143,197 3,750
Long-term convertible notes
Convertible Notes Payable 2023 [Member]    
Short-Term Debt [Line Items]    
Less: current portion of convertible notes 109,494 369,044
Convertible Notes Payable 2024 [Member]    
Short-Term Debt [Line Items]    
Less: current portion of convertible notes 4,172,412
Convertible Notes [Member]    
Short-Term Debt [Line Items]    
Less: Unamortized debt discount $ (726,900) $ (39,012)
v3.24.2.u1
NOTE 7 - CONVERTIBLE NOTES (Details Narrative) - USD ($)
6 Months Ended 12 Months Ended
Mar. 01, 2024
Jan. 24, 2024
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Short-Term Debt [Line Items]          
Long-Term Debt, Gross     $ 2,688,075   $ 367,837
Stock Issued During Period, Shares, New Issues     7,427,570    
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net     $ 726,900   39,012
Convertible Note One [Member]          
Short-Term Debt [Line Items]          
Long-Term Debt, Gross         $ 284,760
Debt Instrument, Maturity Date         Jun. 01, 2024
Debt Instrument, Periodic Payment     31,893    
Convertible Note Two [Member]          
Short-Term Debt [Line Items]          
Long-Term Debt, Gross         $ 256,760
Debt Instrument, Maturity Date         Oct. 15, 2024
Debt Instrument, Periodic Payment     $ 28,757    
Convertible Note Third Party Total [Member]          
Short-Term Debt [Line Items]          
Long-Term Debt, Gross         $ 541,520
Interest on Convertible Debt, Net of Tax         $ 66,520
Debt Instrument, Convertible, Terms of Conversion Feature     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.    
M 2 B S P A [Member]          
Short-Term Debt [Line Items]          
Long-Term Debt, Gross   $ 3,888,889      
Debt Instrument, Convertible, Terms of Conversion Feature   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      
Debt Instrument, Face Amount   $ 3,500,000      
Debt Instrument, Convertible, Conversion Price   $ 0.11      
Debt Instrument, Term   1 year      
Debt Instrument, Interest Rate, Effective Percentage   18.00%      
M 2 B S P A Tranche 1 [Member]          
Short-Term Debt [Line Items]          
Debt Instrument, Face Amount   $ 2,222,222      
Stock Issued During Period, Shares, New Issues   2,020,200      
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net   $ 222,222      
M 2 B S P A Tranche 2 [Member]          
Short-Term Debt [Line Items]          
Debt Instrument, Face Amount $ 1,111,111        
Stock Issued During Period, Shares, New Issues 1,010,101        
[custom:DebtInstrumentOriginalIssueDiscount]   111,111      
M 2 B S P A Tranche 3 [Member]          
Short-Term Debt [Line Items]          
Debt Instrument, Face Amount $ 555,556        
Stock Issued During Period, Shares, New Issues 505,051        
[custom:DebtInstrumentOriginalIssueDiscount]   $ 55,556      
Third Party Loan Note 1 [Member]          
Short-Term Debt [Line Items]          
Debt Instrument, Periodic Payment     $ 16,453    
Debt Instrument, Face Amount     $ 146,900    
Debt Instrument, Interest Rate, Effective Percentage     12.00%    
Third Party Loan Note 2 [Member]          
Short-Term Debt [Line Items]          
Debt Instrument, Face Amount     $ 177,100    
Debt Instrument, Interest Rate, Effective Percentage     14.00%    
Third Party Loans Total [Member]          
Short-Term Debt [Line Items]          
Debt Instrument, Maturity Date     Jan. 15, 2025    
Debt Instrument, Convertible, Terms of Conversion Feature     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    
Debt Instrument, Face Amount     $ 324,000    
[custom:DebtInstrumentOriginalIssueDiscount]     49,000    
Interest Expense, Operating and Nonoperating     345,092 $ 3,417  
Amortization of Debt Discount (Premium)     400,278 $ 3,476  
Third Party Loan Note 2 Payment 1 [Member]          
Short-Term Debt [Line Items]          
Debt Instrument, Periodic Payment     100,947    
Third Party Loan Note 2 Payment 2 [Member]          
Short-Term Debt [Line Items]          
Debt Instrument, Periodic Payment     $ 25,237    
v3.24.2.u1
NOTE 8 – STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Nov. 03, 2023
Jan. 07, 2021
Nov. 11, 2020
Nov. 03, 2020
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Common Stock, Shares Authorized         300,000,000       300,000,000   300,000,000
Common Stock, Par or Stated Value Per Share         $ 0.001       $ 0.001   $ 0.001
Stock Issued During Period, Shares, New Issues                 7,427,570    
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture         $ 46,600 $ 31,065 $ 6,900 $ 11,230      
Stock Issued During Period, Value, Other           279,660     $ 279,660  
Stock Issued During Period, Value, Conversion of Convertible Securities           $ 597,777   $ 400,000 $ 597,777  
Stock Issued During Period, Value, Conversion of Units         $ 400,000            
Common Stock, Shares, Issued         179,557,200       179,557,200   172,129,630
Common Stock, Shares, Outstanding         179,557,200       179,557,200   172,129,630
Preferred Stock, Shares Authorized         1,200,000       1,200,000   1,200,000
Preferred Stock, Par or Stated Value Per Share         $ 0.001       $ 0.001   $ 0.001
Preferred Class A [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Preferred Stock, Shares Authorized       10,000              
Preferred Stock, Par or Stated Value Per Share       $ 0.001              
Series A Preferred Stock [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Preferred Stock, Shares Authorized         10,000       10,000   10,000
Preferred Stock, Par or Stated Value Per Share         $ 0.001       $ 0.001   $ 0.001
Preferred Stock, Participation Rights       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              
Preferred Stock, Voting Rights       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              
Preferred Stock, Shares Issued         10,000       10,000   10,000
Preferred Stock, Shares Outstanding         10,000       10,000   10,000
Series B Preferred Stock [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Preferred Stock, Shares Authorized     200,000   200,000       200,000   200,000
Preferred Stock, Par or Stated Value Per Share     $ 0.001   $ 0.001       $ 0.001   $ 0.001
Preferred Stock, Participation Rights     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                
Preferred Stock, Voting Rights     Holders of Series B Preferred Stock do not have voting rights                
Preferred Stock, Shares Issued         31,080       31,080   31,080
Preferred Stock, Shares Outstanding         31,080       31,080   31,080
Preferred Stock, Redemption Terms   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                  
Debt Instrument, Convertible, Terms of Conversion Feature     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                
Series C Preferred Stock [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Preferred Stock, Shares Authorized   200,000     200,000       200,000   200,000
Preferred Stock, Par or Stated Value Per Share   $ 0.001     $ 0.001       $ 0.001   $ 0.001
Preferred Stock, Redemption Terms   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                  
Series D Preferred Stock [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Preferred Stock, Shares Authorized         75,000       75,000   75,000
Preferred Stock, Par or Stated Value Per Share         $ 0.001       $ 0.001   $ 0.001
Preferred Stock, Shares Issued         0       0   0
Preferred Stock, Shares Outstanding         0       0   0
Preferred Stock, Redemption Terms   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                  
Preferred Class D [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Preferred Stock, Shares Authorized 75,000                    
Preferred Stock, Par or Stated Value Per Share $ 0.001                    
Directors Issuance [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture                 300,000    
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture                 $ 77,665    
Debt Settlement Issuance [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Stock Issued During Period, Shares, Other                 1,770,000    
Stock Issued During Period, Value, Other                 $ 279,660    
Convertible Notes Issuance [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Stock Issued During Period, Shares, Conversion of Convertible Securities                 3,535,354    
Stock Issued During Period, Value, Conversion of Convertible Securities                 $ 597,777    
Stock Issued During Period, Shares, Conversion of Units                 1,822,216    
Stock Issued During Period, Value, Conversion of Units                 $ 400,000    
Preferred Stock [Member] | Series A Preferred Stock [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture              
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture              
Stock Issued During Period, Shares, Other                    
Stock Issued During Period, Value, Other                    
Stock Issued During Period, Shares, Conversion of Convertible Securities                  
Stock Issued During Period, Value, Conversion of Convertible Securities                  
Stock Issued During Period, Shares, Conversion of Units                    
Stock Issued During Period, Value, Conversion of Units                    
Preferred Stock [Member] | Series B Preferred Stock [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture              
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture              
Stock Issued During Period, Shares, Other                    
Stock Issued During Period, Value, Other                    
Stock Issued During Period, Shares, Conversion of Convertible Securities                  
Stock Issued During Period, Value, Conversion of Convertible Securities                  
Stock Issued During Period, Shares, Conversion of Units                    
Stock Issued During Period, Value, Conversion of Units                    
Preferred Stock [Member] | Series C Preferred Stock [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Preferred Stock, Participation Rights   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                  
Preferred Stock, Voting Rights   Holders of Series C Preferred Stock do not have voting rights                  
Debt Instrument, Convertible, Terms of Conversion Feature   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                  
Preferred Stock [Member] | Series D Preferred Stock [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Preferred Stock, Participation Rights 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                    
Preferred Stock, Voting Rights Holders of Series D Preferred Stock do not have voting rights                    
Debt Instrument, Convertible, Terms of Conversion Feature 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                    
v3.24.2.u1
NOTE 9 - RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Related Party Transactions [Abstract]      
Loans and Leases Receivable, Related Parties $ 661,087   $ 340,515
Notes and Loans Payable, Current 26,613   26,613
Management Fee Expense 423,000 $ 270,000  
Increase (Decrease) in Employee Related Liabilities 77,665 $ 18,130  
Financial Guarantee Insurance Contracts, Risk Management Activities, Mitigating Claim Liabilities, Accrued Liabilities $ 205,627   $ 100,128
v3.24.2.u1
NOTE 10 – COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]    
Lessee, Operating Lease, Term of Contract 12 months  
Operating Lease, Expense $ 14,028 $ 2,137
v3.24.2.u1
NOTE 11 - ACQUISITIONS - QXTEL Consideration (Details) - USD ($)
Jun. 30, 2024
Apr. 01, 2024
Jan. 19, 2024
Dec. 31, 2023
Business Acquisition [Line Items]        
Asset Acquisition, Contingent Consideration, Liability $ 1,000,000    
Q X T E L [Member]        
Business Acquisition [Line Items]        
Business Acquisition, Transaction Costs   $ 3,000,000    
Asset Acquisition, Contingent Consideration, Liability   1,000,000    
Oil and Gas, Full Cost Method, Capitalized Cost Excluded from Amortization, Acquisition Cost   $ 6,000,000    
Yukon River Holdings [Member]        
Business Acquisition [Line Items]        
Notes Payable     $ 2,000,000  
v3.24.2.u1
NOTE 11 - ACQUISITIONS - QXTEL Assets and Liabilities Acquired (Details) - USD ($)
Jun. 30, 2024
Apr. 01, 2024
Dec. 31, 2023
Business Acquisition [Line Items]      
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents $ 357,500   $ 357,500
Q X T E L [Member]      
Business Acquisition [Line Items]      
Oil and Gas, Full Cost Method, Capitalized Cost Excluded from Amortization, Acquisition Cost   $ 6,000,000  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents   769,879  
Business Combination, Acquired Receivable, Fair Value   14,946,919  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables   208,550  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other   214,564  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory   30,963  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets   16,170,875  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable   14,796,505  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities   403,584  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities   15,200,089  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net   970,786  
Business Combination, Acquisition of Less than 100 Percent, Noncontrolling Interest, Fair Value   475,685  
Business Combination, Assets and Liabilities Arising from Contingencies, Amount Recognized, Net   495,101  
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest   $ 5,504,899  
v3.24.2.u1
NOTE 11 - ACQUISITIONS - Unaudited Pro Forma Results of Operations QXTEL (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Business Acquisition [Line Items]            
Revenues $ 78,635,764   $ 32,824,829   $ 130,050,642 $ 57,491,358
Cost of revenues 76,472,140   32,040,363   126,507,992 55,490,156
Gross profit 2,163,624   784,466   3,542,650 2,001,202
Operating expenses 2,505,727   1,037,184   4,068,205 2,571,450
Operating loss (342,103)   (252,718)   (525,555) (570,248)
Other income (expense) (1,556,509)   91,074   (1,953,273) 249,782
Net Loss $ (1,963,887) $ (580,216) $ (161,644) $ (158,822) (2,544,103) (320,466)
Pro Forma Acquisitions [Member]            
Business Acquisition [Line Items]            
Revenues         157,734,103 97,988,300
Cost of revenues         153,669,990 94,185,602
Gross profit         4,064,113 3,802,698
Operating expenses         4,696,867 3,992,419
Operating loss         (632,754) (189,721)
Other income (expense)         (1,953,273) 249,782
Income tax         (65,275) (94,225)
Net Loss         $ (2,651,302) $ (34,164)
v3.24.2.u1
NOTE 11 – ACQUISITION (Details Narrative) - USD ($)
6 Months Ended
Jun. 27, 2024
Jan. 19, 2024
Jun. 30, 2024
Jun. 28, 2024
Yukon River Holdings [Member]        
Business Acquisition [Line Items]        
Business Acquisition, Date of Acquisition Agreement   Jan. 19, 2024    
Asset Acquisition, Price of Acquisition, Expected   $ 5,000,000    
Other Payments to Acquire Businesses   1,500,000    
Noncash or Part Noncash Acquisition, Description     At closing, in addition to the $1,500,000 with the Escrow Agent that formed part of the Purchase Price, we were 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 could decide the form of payment between the Promissory Note or the shares of iQSTEL, and if a Promissory Note was chosen, we agreed to allow Seller the option to exchange the Promissory Note for shares of iQSTEL  
Oil and Gas, Full Cost Method, Capitalized Cost Excluded from Amortization, Acquisition Cost, Period Cost   1,500,000    
Notes Payable   2,000,000    
Repayments of Notes Payable   200,000    
Debt Instrument, Periodic Payment   200,000    
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid   $ 600,000    
Yukon River Holdings Second Amendment [Member]        
Business Acquisition [Line Items]        
Notes Payable $ 1,800,000      
Debt Instrument, Payment Terms The amended and restated promissory note also changed the payment structure, from installment payments of $200,000 for each of the months of May through November ($1,400,000) with a balloon payment of $600,000, to monthly installments of $75,000 plus interest during 2024, and $212,500 plus interest during the first 6 months of 2025      
Debt Instrument, Periodic Payment $ 75,000      
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid 212,500      
[custom:EarnestMoneyRedefinedAsNetIncome-0] $ 721,035      
Yukon River Holdings Balloon Achievement [Member]        
Business Acquisition [Line Items]        
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid       $ 1,000,000
Note Payable Repaid Q 2 [Member]        
Business Acquisition [Line Items]        
Repayments of Notes Payable     $ 275,000  
v3.24.2.u1
NOTE 12 - SEGMENT - Operating Activities by Geographic Segment (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Segment Reporting Information [Line Items]              
Revenues $ 78,635,764   $ 32,824,829   $ 130,050,642 $ 57,491,358  
Cost of revenue 76,472,140   32,040,363   126,507,992 55,490,156  
Gross profit 2,163,624   784,466   3,542,650 2,001,202  
Operating expenses              
General and administration 2,505,727   1,037,184   4,068,205 2,571,450  
Operating (loss) income (342,103)   (252,718)   (525,555) (570,248)  
Other income (expense) (1,556,509)   91,074   (1,953,273) 249,782  
Income tax expense (65,275)     (65,275)  
Net loss (1,963,887) $ (580,216) (161,644) $ (158,822) (2,544,103) (320,466)  
Assets              
Current assets 17,220,260       17,220,260   $ 15,719,172
Non-current assets 12,766,400       12,766,400   6,436,481
Liabilities              
Current liabilities 22,200,638       22,200,638   13,840,944
Non-current liabilities 214,143       214,143   268,837
U S A [Member]              
Segment Reporting Information [Line Items]              
Revenues 46,933,532   32,960,138   99,044,789 57,807,809  
Cost of revenue 45,956,484   32,359,937   96,888,310 56,185,823  
Gross profit 977,048   600,201   2,156,479 1,621,986  
Operating expenses              
General and administration 1,602,751   845,485   2,958,757 2,196,441  
Operating (loss) income (625,703)   (245,284)   (802,278) (574,455)  
Other income (expense) (1,597,506)   98,224   (2,032,989) 273,179  
Income tax expense          
Net loss (2,223,209)   (147,060)   (2,835,267) (301,276)  
Assets              
Current assets 9,072,423       9,072,423   14,537,969
Non-current assets 23,368,080       23,368,080   11,810,606
Liabilities              
Current liabilities 13,806,116       13,806,116   11,978,244
Non-current liabilities 139       139   139
Switzerland [Member]              
Segment Reporting Information [Line Items]              
Revenues 1,026,797   1,334,080   2,062,716 2,681,515  
Cost of revenue 883,919   1,149,815   1,720,243 2,302,299  
Gross profit 142,878   184,265   342,473 379,216  
Operating expenses              
General and administration 237,073   191,699   443,545 375,009  
Operating (loss) income (94,195)   (7,434)   (101,072) 4,207  
Other income (expense) 47,525   (7,150)   86,244 (23,397)  
Income tax expense          
Net loss (46,670)   (14,584)   (14,828) (19,190)  
Assets              
Current assets 763,359       763,359   1,874,627
Non-current assets 828,551       828,551   810,437
Liabilities              
Current liabilities 1,576,897       1,576,897   2,556,124
Non-current liabilities 169,599       169,599   268,698
United Kingdom [Member]              
Segment Reporting Information [Line Items]              
Revenues 31,474,055       31,474,055    
Cost of revenue 30,430,357       30,430,357    
Gross profit 1,043,698       1,043,698    
Operating expenses              
General and administration 665,903       665,903    
Operating (loss) income 377,795       377,795    
Other income (expense) (6,528)       (6,528)    
Income tax expense (65,275)       (65,275)    
Net loss 305,992       305,992    
Assets              
Current assets 7,997,811       7,997,811    
Non-current assets 754,331       754,331    
Liabilities              
Current liabilities 7,430,958       7,430,958    
Non-current liabilities 44,405       44,405    
Elimination [Member]              
Segment Reporting Information [Line Items]              
Revenues (798,620)   (1,469,389)   (2,530,918) (2,997,966)  
Cost of revenue (798,620)   (1,469,389)   (2,530,918) (2,997,966)  
Gross profit      
Operating expenses              
General and administration      
Operating (loss) income      
Other income (expense)      
Income tax expense          
Net loss      
Assets              
Current assets (613,333)       (613,333)   (693,424)
Non-current assets (12,184,562)       (12,184,562)   (6,184,562)
Liabilities              
Current liabilities (613,333)       (613,333)   (693,424)
Non-current liabilities        
v3.24.2.u1
NOTE 13 - WARRANTS - Schedule of Warrant Summary (Details) - shares
6 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Accounting Policies [Abstract]    
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding, Number 8,177,784
Warrants and Rights Outstanding, Term 6 months
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Granted 10,000,000  
[custom:WeightedAverageRemainingLifeOfWarrantsGrantedInPeriod] 10 months 17 days  
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Exercised 1,822,216  
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms  
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Forfeitures  
[custom:ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageRemainingContractualTermsOfForfeited]  
v3.24.2.u1
NOTE 13 - WARRANTS - Schedule of Fair Value Measurement of Liabilities (Details)
Jun. 30, 2024
USD ($)
$ / shares
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Payments | $
Minimum [Member]  
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term 6 months
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Exercise Price $ 0.17
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum 108.00%
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum 5.33%
Maximum [Member]  
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term 7 months 24 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Exercise Price $ 0.23
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum 117.00%
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum 5.44%
v3.24.2.u1
NOTE 13 - WARRANTS - Fair Value Measurements Using Significant Observable Inputs (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Accounting Policies [Abstract]          
Derivative, Fair Value, Net $ 976,187   $ 976,187  
Debtor Reorganization Items, Debt Issuance Cost and Debt Discount, Writeoff     100,000    
[custom:ResolutionOfDerivativeLiabilitiesValue] $ 239,323 $ 240,258 239,323 $ 240,258  
Debt Securities, Held-to-Maturity, Transfer, Derivative Hedge, Gain (Loss)     $ 1,115,510    
v3.24.2.u1
NOTE 13 – WARRANTS (Details Narrative) - USD ($)
6 Months Ended
Feb. 12, 2024
Jun. 30, 2024
Short-Term Debt [Line Items]    
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Granted   10,000,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding   $ 680,000
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage   4.99%
A D I Funding L L C [Member]    
Short-Term Debt [Line Items]    
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value $ 100,000  
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Granted 10,000,000  
Debt Instrument, Call Feature The exercise price per share of the common stock under the Option shall be (i) 70% of the VWAP of the common stock during the then 10 Trading Days immediately preceding, but not including the date of exercise if the VWAP is below $2.00 or (ii) seventy five percent (75%) of the VWAP of the common stock during the then 10 Trading Days immediately preceding, but not including the date of exercise if the VWAP is equal or above $2.00.  
Option Indexed to Issuer's Equity, Settlement Alternatives ADI Funding has the right and the obligation to exercise, on a “cash basis”, not less than (i) 2,000,000 of the shares of common stock underlying the option not later than the later of March 31, 2024 or the date on which there is an effective registration statement permitting the resale of the shares by ADI Funding. From and after the occurrence of the above-referenced exercise, each additional exercise of the Option shall be in an amount not less than 1,000,000 shares, which shall occur every thirty (30) days and shall be exercised only on a cash basis. ADI Funding’s obligation to exercise each specified portion of the Option is subject to the exercise price being not less than $0.11  
Beneficial Ownership Limitation Upon Notice [Member]    
Short-Term Debt [Line Items]    
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage   9.99%

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