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What changed in iQSTEL Inc's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of iQSTEL Inc's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+241 added−145 removedSource: 10-K (2025-03-31) vs 10-K (2024-04-01)

Top changes in iQSTEL Inc's 2024 10-K

241 paragraphs added · 145 removed · 127 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe information contained on our websites is not incorporated by reference into this Quarterly Report on Form 10-Q and should not be considered part of this or any other report filed with the SEC. 3 Operating Subsidiaries iQSTEL's mission is to serve basic human needs in today's modern world by making the necessary tools accessible regardless of race, ethnicity, religion, socioeconomic status, or identity. iQSTEL recognizes that in today’s modern world, the pursuit of the human hierarchy of needs (physiological, safety, relationship, esteem, and self-actualization) is marginalized without access to ubiquitous communications, the freedom of virtual banking, clean affordable mobility and information and content. iQSTEL has 4 Business Divisions delivering accessibly to the necessary tools in today's pursuit of basic human needs: 1) Telecommunications (communications). 2) Fintech (financial freedom). 3) Electric Vehicles (mobility). 4) Metaverse.
Biggest changeThe information contained on our websites is not incorporated by reference into this annual report and should not be considered part of this or any other report filed with the SEC. 4 Table of Contents Operating Subsidiaries IQSTEL's mission is to serve basic human needs in today's modern world by making the necessary tools accessible regardless of race, ethnicity, religion, socioeconomic status, or identity.
Telecom Subsidiaries for voice services: Etelix.com USA LLC , a wholly owned subsidiary of iQSTEL Inc., is US based international telecom carrier founded in 2008 that provides telecom and technology solutions worldwide, with commercial presence in North America, Latin America, and Europe.
Telecom Subsidiaries for voice services: Etelix.com USA LLC , a wholly owned subsidiary of IQSTEL Inc., is a US based international telecom carrier founded in 2008 that provides telecom and technology solutions worldwide, with commercial presence in North America, Latin America, and Europe.
By means of this transaction iQSTEL increased its ownership in QGlobal to 100%. On May 13, 2022, the Company entered into a Company Acquisition Agreement regarding the acquisition of 51% of the shares in Whisl telecom LLC (“Whisl”) .
By means of this transaction IQSTEL increased its ownership of QGlobal to 100%. On May 13, 2022, the Company entered into a Company Acquisition Agreement regarding the acquisition of 51% of the shares in Whisl telecom LLC (“Whisl”).
Our focus is to provide immigrants access to reliable financial services that make it easier to manage their money and stay connected with their families back home. All available services can be managed through our mobile App “GlobalMoneyOne” available for IOS and Android. A first non-commercial release of the Fintech suite was done in June 2022.
Our focus is to provide immigrants access to reliable financial services that make it easier to manage their money and stay connected with their families back home. All available services can be managed through our mobile App “GlobalMoneyOne” available for IOS and Android. The first non-commercial release of the Fintech suite was done in June 2022.
The Global A2P SMS Market is expected to grow at a CAGR of 4.1% to account for US$ 101 billion in 2030, according to Transparency Market Research. This market has experienced significant growth and adoption rate in the past few years and is expected to experience notable growth and adoption in years to come.
The Global A2P SMS Market is expected to grow at a CAGR of 4.1% to account for $101 billion in 2030, according to Transparency Market Research. This market has experienced significant growth and adoption rate in the past few years and is expected to experience notable growth and adoption in years to come.
Those 35 countries have a total of 3.3 billion population and 4.0 billion of phone lines that can be ported from one carrier to another. It is estimated that an average of 5% of the total phone lines are ported every year.
Those 35 countries have a total of 3.3 billion in population and 4.0 billion phone lines that can be ported from one carrier to another. It is estimated that an average of 5% of the total phone lines are ported every year.
In terms of dollar value, the number portability market in the countries under our analysis is estimated over $86 million per year. This is based in the actual cost carriers and/or customers have to pay to get the lines ported.
In terms of dollar value, the number portability market in the countries under our analysis is estimated at over $86 million per year. This is based in the actual cost carriers and/or customers have to pay to get the lines ported.
Regulation of Telecom by the Federal Communications Commission Telecommunication License Anyone seeking to conduct telecommunications business where the telecommunication services will transpire between the United States of America and an international destination must obtain a license from the Federal Communications Commission (FCC). This particular license is named a Section 214 license, after the section in the Communications Act of 1934.
Regulation of Telecom by the Federal Communications Commission Telecommunication License Anyone seeking to conduct telecommunications business where the telecommunication services will transpire between the United States of America and an international destination must obtain a license from the Federal Communications Commission (FCC). This particular license is named “a Section 214 license,” after the section in the Communications Act of 1934.
Africa continues to be the market with the higher contribution to margin and Asia concentrate one third of the termination traffic in the industry. Estimations show that more than 50% of the traffic terminating in Africa is originated from customers in Europe; while the corresponding percentage of traffic terminated in Asia is close to 40%.
Africa continues to be the market with the higher contribution to margin and Asia concentrates one third of the termination traffic in the industry. Estimations show that more than 50% of the traffic terminating in Africa - originated from customers in Europe; while the corresponding percentage of traffic terminated in Asia is close to 40%.
TuVolten is going to offer theirs EV Motorcycles and EV Cars in Spain, Portugal, USA, and some countries of Latin America. As recently announced, all previous electric motorcycle designs and tests have come together in a new electric motorcycle now rolling off the factory for the final validation tests under the European Union Standards E-Mark certification process.
TuVolten plans to offer theirs EV Motorcycles and EV Cars in Spain, Portugal, USA, and some countries of Latin America. As recently announced, all previous electric motorcycle designs and tests have come together in a new electric motorcycle now rolling off the factory for the final validation tests under the European Union Standards E-Mark certification process.
EVOSS is also working on the development of an EV Mid Speed Car to serve the niche of the 2nd car in the family. Our Artificial Intelligence (AI)-Enhanced Metaverse Division (information and content) is currently developing a groundbreaking white-label solution designed specifically for corporations, businesses, and the telecommunications industry.
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.
Changes in our business could eliminate our ability to qualify for some or all of these exemptions. Changes in regulation may also have an impact on the availability of some or all of these exemptions.
Changes in our business could eliminate our ability to qualify for some or all of these exemptions. Changes in regulations may also have an impact on the availability of some or all of these exemptions.
Due to the manner in which these contributions are calculated, we cannot be assured that we fully recover from our customers all of our contributions. In addition, based on the nature of our current business, we receive certain exemptions from federal Universal Service Fund contributions.
Due to the manner in which these contributions are calculated, we cannot be assured that we fully recover from our customers all of our contributions. 9 Table of Contents In addition, based on the nature of our current business, we receive certain exemptions from federal Universal Service Fund contributions.
Global Money One Inc . Is a 75% owned subsidiary of iQSTEL Inc. The company offers a complete Fintech ecosystem including a MasterCard Debit Card, US Bank Account (No SSN Needed), and a Mobile App/Wallet to manage Remittances and Mobile Top Up.
Is a 75% owned subsidiary of IQSTEL Inc. The company offers a complete Fintech ecosystem including a MasterCard Debit Card, US Bank Account (No SSN Needed), and a Mobile App/Wallet to manage Remittances and Mobile Top Up.
Number portability is executed and supervised by a third independent party, who act as a data-base administrator and has the responsibility to guarantee all transactions requested by the customers will be completed and his/her phone number will be ported from Carrier A to Carrier B. In the countries under our analysis there are 11 different data-base administrators.
Number portability is executed and supervised by a third independent party, who acts as a database administrator and has the responsibility to guarantee all transactions requested by the customers will be completed and his/her phone number will be ported from Carrier A to Carrier B. In the countries under our analysis there are 11 different database administrators.
Our objective is to offer the market conformed by data-based administrators a solution a much more cost effective solution; which will not only reduce the operating cost, but that will also make the transactions to complete faster without any additional CAPEX. Our mobile number portability solution is now being tested prior to its commercial release in June 2023.
Our objective is to offer market conformity by data-based administrators a much more cost-effective solution, which will not only reduce the operating cost, but that will also make the transactions to complete faster without any additional CAPEX. Our mobile number portability solution is now being tested prior to its commercial release. Global Money One Inc .
Both companies, IoT Labs and QGlobal carried 11.3 billion SMS and short codes in year 2022 compared to 8.5 billion in year 2022. This represents an increment of 2.8 billion SMS year over year or 32.94%. IoT Labs is also responsible for the development of our award-winning Internet of Things devices SmartGas and SmartTank.
IoT Labs, QGlobal and QXTEL carried 13.9 billion SMS and short codes in 2024 compared to 11.3 billion in 2023. This represents an increase of 2.8 billion SMS year over year or 32.94%. IoT Labs is also responsible for the development of our award-winning Internet of Things devices SmartGas and SmartTank.
Whisl Telecom is an US based Company that provides high quality services and “out of the box” solutions to its customers. Whisl predominantly serves the Carrier-to-Carrier Global industry but also has network infrastructure to provide services to the retail end users (endpoints).
Whisl Telecom LLC . is a 51% owned subsidiary of IQSTEL Inc., acquired in May 2022. Whisl Telecom is an US based Company that provides high quality services and “out of the box” solutions to its customers. Whisl predominantly serves the Carrier-to-Carrier Global industry but also has network infrastructure to provide services to the retail end users (endpoints).
However, since the end of 2022 we have expanded the list of certified suppliers and at this time we have a minimum inventory of parts, pieces and finished products to start the marketing process of both devices. 5 New businesses subsidiaries: ItsBchain LLC is a 75% owned subsidiary of iQSTEL Inc.
However, since the end of 2022, we have expanded the list of certified suppliers and at this time we have a minimum inventory of parts, pieces and finished products to start the marketing process of both devices.
Our Telecom Division, which represents the majority of current operations and which also represents the source for all of our revenues for the financial periods presented, offers VoIP, SMS, proprietary Internet of Things (IoT) solutions (www.iotsmartgas.com and www.iotsmarttank.com), and international fiber-optic connectivity through its subsidiaries: Etelix (www.etelix.com), SwissLink Carrier (www.swisslink-carrier.com), Smartbiz Telecom (www.smartbiztel.com), Whisl Telecom (www.whisl.com), IoT Labs (www.iotlabs.mx), and QGlobal SMS (www.qglobalsms.com).
The company’s strategy focuses on leveraging synergies between its 9 subsidiaries to drive innovation and capture emerging opportunities. 3 Table of Contents 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 Voice over Internet Protocol (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).
Since that date all services have been tested including the known-your-customer (KYC) process for the issuance of debits cards, the settlement process with the issuer bank, the intermediary entities handling the remittances, and the intermediaries and cellular operators for the Top Up, as well as the proper training of our customer care agents.
Since that date all services have been tested including the known-your-customer (KYC) process for the issuance of debits cards, the settlement process with the issuer bank, the intermediary entities handling the remittances, and the intermediaries and cellular operators for the Top Up, as well as the proper training of our customer care agents. 8 Table of Contents According to a World Bank Migration and Development brief, remittances to low- and middle-income countries reached $669 billion in 2023.
QGlobal SMS has commercial presence in Europe, USA and Latin America, with robust international interconnection with Tier-1 SMS Aggregators, guarantying to its customers high quality and low termination rates, in over more than 100 countries. IoT Labs LLC is a 51% owned subsidiary of iQSTEL Inc. IoT Labs is a SMS service provider based in Austin, TX.
QGlobal SMS is a USA based company founded in 2020 specializing in international and domestic SMS termination. QGlobal SMS has a commercial presence in Europe, USA and Latin America, with robust international interconnection with Tier-1 SMS Aggregators, guarantying to its customers high quality and low termination rates, in over more than 100 countries.
Any violations of the regulations may subject us to enforcement actions, including interest and penalties. The FCC has jurisdiction over all telecommunications common carriers to the extent they provide interstate or international communications services, including the use of local networks to originate or terminate such services.
The FCC has jurisdiction over all telecommunication common carriers to the extent they provide interstate or international communications services, including the use of local networks to originate or terminate such services.
ItsBchain is a blockchain technology developer and solution provider, with a strong focus on the telecom sector. The company has focused on the development of solutions aimed at using the blockchain ledger and smart contracts to enable more efficiency, quickness in execution and fraud-prevention in the telco industry.
The company has focused on the development of solutions aimed at using the blockchain ledger and smart contracts to enable more efficiency, quickness in execution and fraud-prevention in the telecommunications industry.
Our SMS services represented in year 2023 53.15% of the total revenue, while it was 57.50% in year 2022. Gross margin in the SMS business increases in 2023 to 0.62% from 0.40% in year 2022.
Our SMS services represented 33.91% of the total revenue in the 2024, while it was 53.15% in 2023. Gross margin in the SMS business increased 211% in 2024 to 1.93% from 0.62% in 2023.
Whisl Telecom is one of the few US carriers to have a significant Tier1 capacity (true capacity with high calls per second, CPS) to terminate calls with the highest quality. With the acquisition of Whisl Telecom, iQSTEL incorporated to its telecom portfolio the following services: (1) US/Canada Inbound/Origination. (2) US/Canada DIDs. (3) US/Canada Toll Free Numbers.
Whisl Telecom is one of the few US carriers to have a significant Tier1 capacity (true capacity with high calls per second, CPS) to terminate calls with the highest quality.
On August 30, 2018, PureSnax changed its name to “iQSTEL Inc.” and received a new CUSIP number: 46265G107, as well as a new trading symbol “IQST” in order to better resemble its new name. iQSTEL also changed the Standard Industrial Classification (SIC Code) to 4813, Telephone Communications, Except Radiotelephone.
The company left the healthy snacks and foods business to focus on the Telecommunications Business. On August 30, 2018, PureSnax changed its name to “IQSTEL Inc.” and received a new CUSIP number: 46265G107, as well as a new trading symbol “IQST” in order to better resemble its new name.
On June 1, 2022, the Company entered into a Company Acquisition Agreement regarding the acquisition of 51% of the shares in Smartbiz Telecom LLC (“Smartbiz”). 8
On June 1, 2022, the Company entered into a Company Acquisition Agreement regarding the acquisition of 51% of the shares in Smartbiz Telecom LLC (“Smartbiz”). On March 20, 2023, the Company entered into a Memorandum of Understanding (the “MOU”) with Got My Idol, Inc., a Delaware corporation (“GotMy”).
On March 8, 2017, PureSnax exited a previous License Agreement with a Canadian snack food Licensor.
PureSnax was previously a wellness brand focused on bringing healthy snacks and foods to consumers. On March 8, 2017, PureSnax exited a previous License Agreement with a Canadian snack food Licensor.
In line with GOTMY’s mission to offer universally accessible experiential spaces, the iQSTEL solution for telecom carriers is intended to accommodate all mobile phone users, not just those with high-end VR headsets.` Regulations Telecommunications services are subject to extensive government regulation in the United States of America.
The IQSTEL white label metaverse solution developed in partnership with GOTMY is tailored to provide telecom carriers with a distinctive and immersive customer experience. In line with GOTMY’s mission to offer universally accessible experiential spaces, the IQSTEL solution for telecom carriers is intended to accommodate all mobile phone users, not just those with high-end VR headsets.
But it is important to remark that the gross margin of the products deployed by QGlobal SMS was 21%, being the main objective in the SMS segment to increase the sales of those services due to its huge gross margins.
This is the result of a higher business volume of the products deployed by QGlobal SMS and QXTEL gross margin of which is greater than 20%, being the main objective in the SMS segment to increase the sales of those services due to its relatively higher gross margins.
Whether these contribution factors will be stable in the future is unknown, but it is possible that we will be subject to significant increases. Money Transmitter and Payment Instrument Laws and Regulations 7 The consumer payment services offerings, prepaid debit cards, remittances, Top Up, are industries heavily regulated.
Money Transmitter and Payment Instrument Laws and Regulations The consumer payment services offerings, prepaid debit cards, remittances, Top Up, are heavily-regulated industries.
Stronger employment of migrants from Latin America in the United States contributed to remittance flows. As a share of GDP, remittances exceed 20% in El Salvador, Honduras, Jamaica, and Haiti. The Electric Vehicle division (TuVolten) consist in an initiative to offer clean and affordable mobility through Electric Motorcycles, and Electric Mid Speed Cars.
As a share of GDP, remittances exceed 23.9% in El Salvador, 25% in Honduras, 19.1% in Jamaica and 21.4% in Haiti according to data published by the portal www.theglobaleconomy.com. The Electric Vehicle Division, through an entity named TuVolten to be formed in Europe, is an initiative to offer clean and affordable mobility through Electric Motorcycles, and Electric Mid Speed Cars.
(Information and content). The company continues to grow and expand its suite of products and services both organically and through mergers and acquisitions (M&A). Our telecommunication business currently represents 100% of our revenues, while our other business lines are in a pre-revenue stage.
Our telecommunication business currently represents 100% of our revenues, while our other business lines are in a pre-revenue stage.
(4) Global DIDs and (5) Global Toll-Free Numbers. Smartbiz Telecom LLC . Is a 51% owned subsidiary of iQSTEL Inc. acquired in June 2022. Smartbiz is an US based Company that provides international voice termination to niche markets.
With the acquisition of Whisl Telecom, IQSTEL has incorporated into its telecom portfolio the following services: (1) US/Canada Inbound/Origination, (2) US/Canada DIDs, (3) US/Canada Toll Free Numbers, (4) Global DIDs and (5) Global Toll-Free Numbers. 5 Table of Contents Smartbiz Telecom LLC . is a 51% owned subsidiary of IQSTEL Inc. acquired in June 2022.
This represents an increase of 56% year over year. Telecom Subsidiaries for SMS services : QGlobal SMS LLC is a 100% owned subsidiary of iQSTEL Inc. QGlobal SMS is a USA based company founded in 2020 specialized in international and domestic SMS termination.
Our subsidiaries carried 5.2 billion minutes of voice during 2024, compared to 4.2 billion in 2023. This represents an increase of 23.81% year over year. 6 Table of Contents Telecom Subsidiaries for SMS services : QGlobal SMS LLC is a 100% owned subsidiary of IQSTEL Inc.
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.
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 our 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).
Specialized in the SMS traffic exchange between US and Mexico. The Company has entered into the SMS business in 2020 through the acquisition of QGlobal and IoT Labs.
Main customers are Aztek Corporative Properties Inc, Bytescale C., Codek Connect LLC, and Nuvoteq LLC. The Company entered into the SMS business in 2020 through the acquisition of QGlobal and IoT Labs.
With this acquisition iQSTEL is expanding its telecommunication services offer to markets the company was not serving before. 4 With the combination of the technology capabilities of these four subsidiaries, iQSTEL has put together a complete portfolio of services for carriers and end user.
With the combination of the technology capabilities of these five subsidiaries, IQSTEL has put together a complete portfolio of services for carriers and end users. These services include: • International Voice Termination for carriers: This service enables the routing of international voice calls to their final destinations across various countries.
Employees iQSTEL, including all subsidiaries, has 70 employees as of December 31, 2023. Corporate History iQSTEL, formerly known as PureSnax International, Inc., was incorporated under the laws of the State of Nevada on June 24, 2011. PureSnax was previously a wellness brand focused on bringing healthy snacks and foods to consumers.
We respect the human rights of all employees and strive to treat them with dignity in accordance with standards and practices recognized by the international community. 10 Table of Contents Corporate History IQSTEL, formerly known as PureSnax International, Inc., was incorporated under the laws of the State of Nevada on June 24, 2011.
Once this certification is obtained, we will begin manufacturing the first units for sale to the public. 6 The Metaverse initiative , consist in a platform to offer our telecommunication carrier clients a white label solution enabling them to interact with their customers (end users, and enterprises) through the metaverse.
The app was released on the Google Play Store on June 28, 2023, on the Apple App Store on June 30, 2023, and on our website on August 28, 2023. The app offers our telecommunication carrier clients a white label solution enabling them to interact with their customers (end users, and enterprises) through the metaverse.
An important milestone to highlight is that the company has received the patent for the invention and development of these devices. We continue working closely with BASF Corporation to adapt the SmartTank device to their specifications. project that has suffered some delays due to limited inventories and the slowness of the global distribution chains of microchips.
An important milestone to highlight is that in 2018 the company received a patent in Mexico for the invention and development of these devices.
Based on these numbers the goal to expand the participation in the Asian and African traffic goes through establishing a strong presence in Europe. Whisl Telecom LLC . Is a 51% owned subsidiary of iQSTEL Inc., acquired in May 2022.
Based on these numbers the goal to expand the participation in the Asian and African traffic goes through establishing a strong presence in Europe. Main interconnections are with Orange Wholesale International, CJC Global Connections & Consulting LLC, iBASIS Communications AG, U.S. South Communications, Inc., Belgacom International Carrier, Bell Canada Inc., SWISSCOM (SCHWEIZ) AG among many other important carriers.
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Item 1. Business Company Description iQSTEL Inc. (the “Company”) (OTCQX: IQST) (www.iqstel.com) is a technology company with presence in 19 countries and 70 employees that is offering leading-edge services through its business divisions.
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(www.IQSTEL.com) is a technology company with a presence in 20 countries (Argentina, Armenia, Austria, Canada, Colombia, Germany, Greece, Guatemala, India, Italy, Pakistan, Romania, Serbia, Spain, Switzerland, Turkey, UAE, UK, USA and Venezuela) and over 100 employees that offers leading-edge services through its four business divisions in the telecommunications, electric vehicle (EV), fintech, and AI-enhanced metaverse industries.
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Our developing BlockChain Platform Business Line (www.itsbchain.com) offers our proprietary Mobile Number Portability Application (MNPA) to serve the in-country portability needs through its subsidiary, itsBchain. Our developing Electric Vehicle (EV) Business Line (www.evoss.net) offers electric motorcycles for work and recreational use in the USA, Spain, Portugal, Panama, Colombia, and Venezuela.
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Our presence is global, with offices in USA, Argentina, UK, Switzerland, Turkey, and Dubai, and we target diverse and high-growth markets. We maintain more than 603 high value network interconnections around the world, delivering international voice, SMS, and connectivity services that form the core of our business.
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These services include: • International Voice Termination for carriers. • US/Canada Inbound / Origination. • Global DIDs. • Global Toll-Free Numbers. • PBX (Private Branch Exchange) for small businesses. • SIP Trunking.
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Our Fintecsubsidiary, 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 offers electric motorcycles for work and recreational use in the USA, Spain, Portugal, Panama, Colombia.
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The voice services represented in year 2023 46.85% of the total revenue of the company ($67,698,574 out of the total $144,502,351) while in year 2022 voice services represented 42.50% of the total revenue ($39,614,081 out of the total $93,203,532). All our subsidiaries carried 4.2 billion minutes of voice during year 2023, compared to 2.7 billion in year 2022.
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Our developing 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.
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According to a World Bank Migration and Development brief, remittances to low- and middle-income countries reached $626 billion in 2022. The brief also stated the remittances to Latin America and the Caribbean are estimated to have grown 9.3% in 2022 to $142 billion; with increments of 45% for Nicaragua, 20% for Guatemala, 15% for Mexico, and 9% for Colombia.
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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.
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The iQSTEL white label metaverse solution developed in partnership with GOTMY will be tailored to provide telecom carriers with a distinctive and immersive customer experience.
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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.
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The company left the healthy snacks and foods business to focus on the Telecommunications Business.
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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.
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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.
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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.
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IQSTEL recognizes that in today’s modern world, the pursuit of the human hierarchy of needs (physiological, safety, relationship, esteem, and self-actualization) is marginalized without access to ubiquitous communications, the freedom of virtual banking, clean affordable mobility and information and content.
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IQSTEL has 4 Business Divisions delivering accessibly to the necessary tools in today's pursuit of basic human needs: 1) Telecommunications (communications), 2) Fintech (financial freedom), 3) Electric Vehicles (mobility), and 4) Metaverse (information and content). The Company continues to grow and expand its suite of products and services both organically and through mergers and acquisitions (M&A).
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Smartbiz is a US based Company that provides international voice termination to niche markets. With this acquisition IQSTEL is expanding its telecommunication services offer to markets the company was not serving before. Smartbiz has commercial relations with relevant players in the industry, among which it is worth mentioning the following: Telefonica Global Solutions.
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S.L, Telintel Ltd, Teliax, Inc Tf, Sistemas Satelitales de Colombia S.A. Esp, and IDT Global Limited. QXTEL Limited is a 51% owned subsidiary of IQSTEL Inc. acquired in April 2024.
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QXTEL is one of the most advanced and diversified telecommunications and technology services provider focused on platform services for wholesale, retail and cloud communications service providers, wholesale carrier voice, wholesale carrier messaging (A2P SMS) and carrier technology services with over 20 years in the telecom industry switching more than 5 billion voice and A2P SMS transactions over 200 interconnections worldwide.
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QXTEL is headquartered in London (UK) with regional offices in Florida (USA), Buenos Aires (Argentina), Dubai (UAE), Belgrade (Serbia) and Istanbul (Turkey).
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QXTEL maintains commercial relations with significant players in the industry such as BTS Business Telecommunications Service Inc., China Mobile International Limited, Deutsche Telekom AG, Digicel Jamaica Limited, Emirates Telecom Etisalat, Hutchison Global Communication, iBASIS Communications AG, IDT Global Limited, Messagebird, Orange Wholesale International, Tata Communications (Canada) Ltd, Telekom Deutschland Gmbh (T-Mobile), T-Mobile USA, Inc., and Vodafone US Inc.
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Telecom carriers use this to handle large volumes of cross-border voice traffic by connecting through intermediary providers or directly to in-country networks. • US/Canada Inbound / Origination: This refers to the ability to receive incoming calls originating in the United States or Canada.
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It ensures seamless connectivity for businesses or carriers looking to establish a local presence in these regions by offering local or toll-free numbers. • Global DIDs: These are virtual phone numbers that allow users to receive calls from specific geographic locations, regardless of where they are physically located.
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They are essential for businesses seeking global reach, providing local numbers for customers worldwide. • Global Toll-Free Numbers: Toll-free numbers work internationally, allowing customers to call businesses without incurring charges.
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These numbers are ideal for companies serving global clients, offering free and easy access to customer service or sales teams. • PBX (Private Branch Exchange) for small businesses: A PBX is a private telephone network used within an organization, enabling efficient internal and external communication.
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For small businesses, modern PBX systems often come as cloud-based or hosted solutions, offering affordability and advanced features like call routing and voicemail. • SIP Trunking: SIP Trunking enables voice communication over the internet rather than traditional phone lines.
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It connects a business’s PBX system to the telephone network, offering cost savings, scalability, and support for voice, video, and messaging services. Voice services in 2024 were 66.09% of the total revenue of the company ($187,194,236 out of the total $283,220,442) while in 2023 voice services represented 46.85% of the total revenue ($67,698,574 out of the total $144,502,351).
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Main customers are: Computer-Tel Inc., iBasis Communications AG, Telefonica Global Solutions. S.L, Telintel Ltd., and Twilio Ireland Limited. IoT Labs LLC is a 51% owned subsidiary of IQSTEL Inc. IoT Labs is an SMS service provider based in Austin, TX. Specialized in the SMS traffic exchange between US and Mexico.
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The Company’s role in these services is to ensure seamless voice and SMS communication across international borders by establishing peering agreements with other telecommunication entities.
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This is possible using sophisticated algorithms to determine the most cost-effective and reliable paths for voice/SMS traffic, managing media protocols such as SIP (Session Initiation Protocol) and RTP (Real-time Transport Protocol) to ensure smooth communication between different networks ensuring efficient call routing. 7 Table of Contents The Company acts as a transit network that allows the completion of voice calls, or SMSs connecting the network where the calls/SMSs are originated and the network where the calls/SMSs are intended to terminate.
Added
The graphic below shows the path of a voice call or SMS, all parties involved and where the Company is situated in that ecosystem. New businesses subsidiaries: ItsBchain LLC is a 75% owned subsidiary of IQSTEL Inc. ItsBchain is a blockchain technology developer and solution provider, with a strong focus on the telecom sector.
Added
The brief also stated the remittances to Latin America and the Caribbean grew 8% in 2023; with increments of 12.5% for Nicaragua, 8.6% for Guatemala, 2.3% for Mexico, and 17.4% for Colombia according to research done by BBVA Bank. Stronger employment of migrants from Latin America in the United States contributed to remittance flows.
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Once this certification is obtained, we will begin manufacturing the first units for sale to the public. Reality Border LLC developed the initial proof-of-concept for a white label, AI-Enhanced Metaverse tailored for IQSTEL.
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Regulations Telecommunications services are subject to extensive government regulation in the United States of America. Any violations of the regulations may subject us to enforcement actions, including interest and penalties.
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Whether these contribution factors will be stable in the future is unknown, but it is possible that we will be subject to significant increases. Regulation of Telecom—International In connection with our international operations, we have obtained licenses or are otherwise authorized to provide telecommunications services in Switzerland.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to the Market for our Securities If a market for our common stock does not develop, stockholders may be unable to sell their shares. Our common stock is quoted under the symbol “IQST” on the OTCQX operated by OTC Markets Group, Inc., an electronic inter-dealer quotation medium for equity securities.
Biggest changeOur common stock is quoted under the symbol “IQST” on the OTCQX operated by OTC Markets Group, Inc., an electronic inter-dealer quotation medium for equity securities. . Only a limited market exists for our securities. There is no assurance that a regular trading market will develop, or if developed, that it will be sustained.
The telecommunications industry is characterized by intense price competition, which has resulted in declines in both our average per-minute price realizations and our average per-minute termination costs. A reduction of our prices to compete with any other offers in the market will not always guarantee an increase in the traffic, which may result in a reduction of revenue.
The telecommunications industry is characterized by intense price competition, which has resulted in declines in both our average per-minute price realizations and our average per-minute termination costs. A reduction in our prices to compete with any other offers in the market will not always guarantee an increase in traffic, which may result in a reduction of revenue.
For example, we offer web-based e-mail services, which expose us to potential risks, such as liabilities or claims, by our users and third parties, resulting from unsolicited e-mail, lost or misdirected messages, illegal or fraudulent use of e-mail, alleged violations of policies, property interests, or privacy protections, including civil or criminal laws, or interruptions or delays in e-mail service.
For example, we offer web-based e-mail services, which expose us to potential risks, such as liabilities or claims, by our users and third parties, resulting from unsolicited e-mail, lost or misdirected messages, illegal or fraudulent use of e-mail, alleged violations of policies, property interests, privacy protections, including civil or criminal laws, or interruptions or delays in e-mail service.
Our certificate of incorporation has authorized issuance of up 300,000,000 shares of common stock and up to 1,200,000 shares of preferred stock in the discretion of our Board. The shares of authorized but unissued preferred stock may be issued upon Board of Directors approval; no further stockholder action is required.
Our certificate of incorporation has authorized issuance of up to 300,000,000 shares of common stock and up to 1,200,000 shares of preferred stock in the discretion of our Board. The shares of authorized but unissued preferred stock may be issued upon Board of Directors approval; no further stockholder action is required.
Our stock price is subject to a number of factors, including: • Technological innovations or new products and services by us or our competitors; • Government regulation of our products and services; • The establishment of partnerships with other telecom companies; • Intellectual property disputes; • Additions or departures of key personnel; • Sales of our common stock; • Our ability to integrate operations, technology, products and services; • Our ability to execute our business plan; • Operating results below or exceeding expectations; • Whether we achieve profits or not; • Loss or addition of any strategic relationship; • Industry developments; • Economic and other external factors; and • Period-to-period fluctuations in our financial results.
Our stock price is subject to a number of factors, including: • Technological innovations or new products and services by us or our competitors; • Government regulation of our products and services; • The establishment of partnerships with other telecom companies; • Intellectual property disputes; • Additions or departures of key personnel; • Sales of our common stock or preferred stock; • Our ability to integrate operations, technology, products and services; • Our ability to execute our business plan; • Operating results below or exceeding expectations; • Whether we achieve profits or not; • Loss or addition of any strategic relationship; • Industry developments; • Economic and other external factors; and • Period-to-period fluctuations in our financial results.
It has been twelve years since our first registered sale of common stock in 2012, so we are no longer eligible for the reduced disclosure requirements applicable to “emerging growth companies.” Emerging growth companies may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
It has been thirteen years since our first registered sale of common stock in 2012, so we are no longer eligible for the reduced disclosure requirements applicable to “emerging growth companies.” Emerging growth companies may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
If we issue additional common stock shares or securities convertible into shares of our common stock, your percentage interest in us could become diluted. 19 If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.
If we issue additional common stock shares or securities convertible into shares of our common stock, your percentage interest in us could become diluted. If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.
We rely upon our carrier agreements in order to provide our telecommunications services to our customers. These carrier agreements are, in most cases for finite terms and, therefore, there can be no guarantee that these agreements will be renewed at all or on favorable terms to us.
We rely upon our carrier agreements to provide our telecommunications services to our customers. These carrier agreements are, in most cases for finite terms and, therefore, there can be no guarantee that these agreements will be renewed at all or on favorable terms to us.
Although we are somewhat insulated from nonpayment because 52% of our revenue is prepaid, this concentration of revenues increases our exposure to non-payments and we may experience significant write-offs if any of our large customers fail to pay their outstanding balances, which could adversely affect our revenues and profitability.
Although we are somewhat insulated from nonpayment because 33% of our revenue is prepaid, this concentration of revenue increases our exposure to non-payments and we may experience significant write-offs if any of our large customers fail to pay their outstanding balances, which could adversely affect our revenues and profitability.
Our largest shareholders, officers and directors and related parties, Leandro Iglesias and Alvaro Cardona, have substantial control over us and our policies as a result of their holdings in Series A Preferred Stock, and will be able to influence all corporate matters, which might not be in other shareholders’ interests.
Our largest shareholders, officers and directors and related parties, Leandro Iglesias and Alvaro Quintana, have substantial control over us and our policies as a result of their holdings in Series A Preferred Stock, and will be able to influence all corporate matters, which might not be in other shareholders’ interests.
Our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. By virtue of their ownership of Series A Preferred Stock and common stock, they are able to vote at a rate of approximately 51.47% of the total vote of shareholders.
Our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. By virtue of their ownership of Series A Preferred Stock and common stock, they are able to vote at a rate of approximately 51.83% of the total vote of shareholders.
If issued, the rights, preferences, designations and limitations of such preferred stock would be set by our Board and could operate to the disadvantage of the outstanding common stock. Such terms could include, among others, preferences as to dividends and distributions on liquidation.
If issued, the rights, preferences, designations and limitations of such preferred stock would be set by our Board and could operate to the disadvantage of the outstanding common stock. Such terms could include, among others, preferences as to dividends and distributions on liquidation, conversion rights, voting rights and others.
In this instance, we could incur protracted and significant losses and persons who acquire our common stock would suffer losses thereby. From time to time, we may need to reduce our prices in response to competitive and customer pressures and to maintain our market share.
In this instance, we could incur protracted and significant losses and people who acquire our common stock would suffer losses thereby. From time to time, we may need to reduce our prices in response to competitive and customer pressures and to maintain our market share.
Risks Relating to Our Securities We have the right to issue additional common stock and preferred stock without consent of stockholders. This would have the effect of diluting investors’ ownership and could decrease the value of their investment.
Risks Relating to Our Securities We have the right to issue additional common stock and preferred stock without the consent of stockholders which would have the effect of diluting investors’ ownership and could decrease the value of their investment.
Our board presently does not intend to seek shareholder approval prior to the issuance of currently authorized stock, unless otherwise required by law or applicable stock exchange rules. We are no longer an “emerging growth company” and therefore no longer eligible for reduced reporting requirements applicable to emerging growth companies.
Our board presently does not intend to seek shareholder approval prior to the issuance of currently authorized stock, unless otherwise required by law or applicable stock exchange rules. 21 Table of Contents We are no longer an “emerging growth company” and therefore no longer eligible for reduced reporting requirements applicable to emerging growth companies.
Our failure to properly manage the growth that we or our industry might experience could negatively impact our ability to execute on our operating plan and, accordingly, could have an adverse impact on our business, our cash flow and results of operations, and our reputation with our current or potential customers. 12 Risks Related to Legal Uncertainty We may be subject to securities litigation, which is expensive and could divert management attention.
Our failure to properly manage the growth that we or our industry might experience could negatively impact our ability to execute on our operating plan and, accordingly, could have an adverse impact on our business, our cash flow and results of operations, and our reputation with our current or potential customers. 18 Table of Contents Risks Related to Legal Uncertainty We may be subject to securities litigation, which is expensive and could divert management attention.
If we are unsuccessful in addressing these risks, our business will most likely fail. We are dependent on outside financing for the continuation of our operations. Because we have generated limited revenues and currently operate at a loss, we are completely dependent on the continued availability of financing in order to continue our business operations.
If we are unsuccessful in addressing these risks, our business will most likely fail. We are dependent on outside financing for the continuation of our operations. Because we currently operate at a loss, we are completely dependent on the continued availability of financing in order to continue our business operations.
Cardona holding 1,121,842 shares, which together accounts for just over 0.9% of our outstanding common stock. Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to shareholders at a rate of 51% of the total vote of shareholders, including the election of directors.
Quintana holding 1,331,842 shares, which together accounts for just over 1.68% of our outstanding common stock. Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to shareholders at a rate of 51% of the total vote of shareholders, including the election of directors.
Our stock price may fluctuate widely as a result of any of the above. In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
Our stock price may fluctuate widely as a result of any of the above. In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.
While our most significant customers, from a revenue perspective, vary from quarter to quarter, our 12 largest customers (2.6% of our total customer base) collectively accounted for 89% of total consolidated revenues in fiscal year 2023.
While our most significant customers, from a revenue perspective, vary from quarter to quarter, our 27 largest customers (4.5% of our total customer base) collectively accounted for 89% of total consolidated revenues in fiscal year 2024.
Further, many of our competitors have a significantly larger industry presence and revenue stream but have yet to achieve profitability. Our ability to continue as a going concern is dependent upon raising capital from financing transactions, increasing revenue and keeping operating expenses below our revenue levels in order to achieve positive cash flows, none of which can be assured.
Our ability to continue as a going concern is dependent upon raising capital from financing transactions, increasing revenue and keeping operating expenses below our revenue levels in order to achieve positive cash flows, none of which can be assured.
Foreign Corrupt Practices Act, and other anti-bribery laws and regulations; • variations and changes in laws applicable to our operations in different jurisdictions, including enforceability of intellectual property and contract rights; and • compliance with export regulations, tariffs and other regulatory barriers. If we are unable to successfully manage growth, our operations could be adversely affected.
Foreign Corrupt Practices Act, and other anti-bribery laws and regulations; • variations and changes in laws applicable to our operations in different jurisdictions, including enforceability of intellectual property and contract rights; and • compliance with export regulations, tariffs and other regulatory barriers.
We may also need to increase spending on marketing, advertising and new product innovation to protect existing market share or increase market share. The success of our investments is subject to risks, including uncertainties about trade and consumer acceptance.
We may also need to increase spending on marketing, advertising and new product innovation to protect existing market share or increase market share. The success of our investments is subject to risks, including uncertainties about trade and consumer acceptance. As a result, our increased expenditures may not maintain or enhance market share and could result in lower profitability.
During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective. 16 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.
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.
In addition, there currently is a data protection regulation applicable to member states of the European Union that includes operational and compliance requirements that are different than those currently in place and that also includes significant penalties for non-compliance. 13 The interpretation and application of privacy, data protection, data transfer and data retention laws and regulations are often uncertain and in flux in the United States and internationally.
In addition, there currently is a data protection regulation applicable to member states of the European Union that includes operational and compliance requirements that are different than those currently in place and that also includes significant penalties for non-compliance.
If additional financing is not available when required or is not available on acceptable terms, we may be unable to operate our business as planned or at all, fund our expansion, successfully promote our business, develop or enhance our products and services, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results of operations Risk Factors Related to the Business of the Company Our telecommunications line of business is highly sensitive to declining prices, which may adversely affect our revenues and margins.
If additional financing is not available when required or is not available on acceptable terms, we may be unable to operate our business as planned or at all, fund our expansion, successfully promote our business, develop or enhance our products and services, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results of operations. 13 Table of Contents As a growing company, we have yet to achieve a profit and may not achieve a profit in the near future, if at all.
There were 10,000 shares of Series A Preferred Stock outstanding as of the date of this Annual Report, with Mr. Iglesias holding 7,000 shares and Mr. Cardona the other 3,000 shares. There were 176,329,933 shares of our common stock issued and outstanding as of the date of this Annual report, with Mr. Iglesias holding 542,932 shares and Mr.
There were 10,000 shares of Series A Preferred Stock outstanding as of the date of this Annual Report, with Mr. Iglesias holding 7,000 shares and Mr. Quintana the other 3,000 shares. There were 210,710,170 shares of our common stock issued and outstanding as of the date of this Annual report, with Mr. Iglesias holding 2,095,363 shares and Mr.
Unless we are successful in developing continued investor interest in our stock, sales of our stock could continue to result in major fluctuations in the price of the stock. 18 The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control.
The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control.
Potential investors should be aware of the difficulties normally encountered by new companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the operations that we plan to undertake.
The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the operations that we plan to undertake.
Similar to emerging growth companies, smaller reporting companies are able to provide simplified executive compensation disclosure, are exempt from the auditor attestation requirements of Section 404, and have certain other reduced disclosure obligations, including, among other things, being required to provide only two years of audited financial statements and not being required to provide selected financial data, supplemental financial information or risk factors. 15 Since we are no longer eligible for emerging growth company status, we will be subject to the reporting obligations of a smaller reporting company and, if we continue grow, we may be subject to increased reporting requirements applicable to accelerated filers, which are more onerous than those applicable to smaller reporting companies.
Similar to emerging growth companies, smaller reporting companies are able to provide simplified executive compensation disclosure, are exempt from the auditor attestation requirements of Section 404, and have certain other reduced disclosure obligations, including, among other things, being required to provide only two years of audited financial statements and not being required to provide selected financial data, supplemental financial information or risk factors.
There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us. 9 Our failure to obtain future financing or to produce levels of revenue to meet our financial needs could result in our inability to continue as a going concern, and, as a result, our investors could lose their entire investment.
Our failure to obtain future financing or to produce levels of revenue to meet our financial needs could result in our inability to continue as a going concern, and, as a result, our investors could lose their entire investment.
The design and effectiveness of our disclosure controls and procedures and our internal controls over financial reporting may not prevent all errors, misstatements or misrepresentations. Consistent with other entities in similar stages of development, we have a limited number of employees currently in the accounting group, limiting our ability to provide for segregation of duties and secondary review.
Consistent with other entities in similar stages of development, we have a limited number of employees currently in the accounting group, limiting our ability to provide for segregation of duties and secondary review.
The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your investment will occur only if our stock price appreciates.
The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant.
As a result, our increased expenditures may not maintain or enhance market share and could result in lower profitability. 10 Our operating results may fluctuate, which could have a negative impact on our ability to grow our client base, establish sustainable revenues and succeed overall.
Our operating results may fluctuate, which could have a negative impact on our ability to grow our client base, establish sustainable revenues and succeed overall.
We have not attained profitable operations and even though the company maintains a cash position very close to one third year's operating expenses, we dependent upon obtaining financing or generating revenue from operations to continue operations for the next twelve months. Our future is dependent upon our ability to obtain financing or upon future profitable operations.
We have continually operated at a loss with an accumulated deficit of $32,703,410 as of December 31, 2024. We have not attained profitable operations and even though the company maintains a cash position very close to one third year's operating expenses, we are dependent upon obtaining financing or generating revenue from operations to continue operations for the next twelve months.
We may fail to successfully integrate our acquisitions or otherwise be unable to benefit from pursuing acquisitions. We believe there are meaningful opportunities to grow through acquisitions and joint ventures across all product and service categories and we expect to continue a strategy of selectively identifying and acquiring businesses with complementary products and services.
There can be no assurance that our business will grow through acquisitions, as anticipated. 16 Table of Contents We believe there are meaningful opportunities to grow through acquisitions and joint ventures across all product and service categories and we expect to continue a strategy of selectively identifying and acquiring businesses with complementary products and services.
We have additional authorized, but unissued shares of our common stock that may be issued by us for any purpose without the consent or vote of our stockholders that would dilute stockholders’ percentage ownership of our company. 17 In addition, our certificate of incorporation authorizes the issuance of shares of preferred stock and/or the conversion of existing outstanding preferred stock into common stock, the rights, preferences, designations and limitations of which may be set by the Board of Directors.
We have additional authorized, but unissued shares of our common stock that may be issued by us for any purpose without the consent or vote of our stockholders that would dilute stockholders’ percentage ownership of our company.
Because of the following factors, as well as other variables affecting our operating results, past financial performance should not be considered as a reliable indicator of future performance and investors should not use historical trends to anticipate results or trends in future periods.
Because of the following factors, as well as other variables affecting our operating results, past financial performance should not be considered as a reliable indicator of future performance and investors should not use historical trends to anticipate results or trends in future periods. 12 Table of Contents Risks Relating to Business and Financial Condition Because our auditor has issued a going concern opinion regarding our company, there is an increased risk associated with an investment in our company.
Acquisitions of new businesses in new non-U.S. jurisdictions may also subject us to new regulations and laws, and we may face difficulties ensuring compliance with these new requirements. Changes in regulations or user concerns regarding privacy and protection of user data, or any failure to comply with such laws, could adversely affect our business.
Acquisitions of new businesses in new non-U.S. jurisdictions may also subject us to new regulations and laws, and we may face difficulties ensuring compliance with these new requirements.
We operate a global business that exposes us to currency, economic and regulatory risks. Our revenue comes primarily from sales outside the U.S. and our growth strategy is largely focused on emerging markets.
Our revenue comes primarily from sales outside the U.S. and our growth strategy is largely focused on emerging markets.
Provisions in the Nevada Revised Statutes and our Bylaws could make it very difficult for an investor to bring any legal actions against our directors or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in any such actions.
Nonetheless, we cannot assure you that future cyber incidents or events will not ultimately have a material adverse impact on our business, operations or financial results. 20 Table of Contents Provisions in the Nevada Revised Statutes and our Bylaws could make it very difficult for an investor to bring any legal actions against our directors or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in any such actions.
Because we are subject to the “Penny Stock” rules, the level of trading activity in our stock may be reduced.
These market fluctuations may also materially and adversely affect the market price of our common stock. 25 Table of Contents Because we are subject to the “Penny Stock” rules, the level of trading activity in our stock may be reduced.
We reserve the right to seek additional funds through private placements of our common stock and/or through debt financing. Our ability to raise additional financing is unknown. We do not have any formal commitments or arrangements for the advancement or loan of funds.
Our future is dependent upon our ability to obtain financing or upon future profitable operations. We reserve the right to seek additional funds through private placements of our common stock and/or through debt financing. Our ability to raise additional financing is unknown.
Accordingly, our indemnification obligations could divert needed financial resources and may adversely affect our business, financial condition, results of operations and cash flows, and adversely affect prevailing market prices for our common stock. 14 Nevada law and certain anti-takeover provisions of our corporate documents could entrench our management or delay or prevent a third party from acquiring us or a change in control even if it would benefit our shareholders.
Nevada law and certain anti-takeover provisions of our corporate documents could entrench our management or delay or prevent a third party from acquiring us or a change in control even if it would benefit our shareholders.
If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common shares.
We also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our Common Stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares. 22 Table of Contents If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common shares.
Because we have a limited operating history, you may not be able to accurately evaluate our operations. We have had limited operations to date. Therefore, we have a limited operating history upon which to evaluate the merits of investing in our company.
As a result, there is a risk that you could lose the entire amount of your investment in our company. Because we have a limited operating history, you may not be able to accurately evaluate our operations. We have had limited operations to date.
There can be no absolute assurance that management will be able to manage growth effectively. If we do not properly manage the growth of our business, we may experience significant strains on our management and operations and disruptions in our business. Various risks arise when companies and industries grow quickly.
If we do not properly manage the growth of our business, we may experience significant strains on our management and operations and disruptions in our business. Various risks arise when companies and industries grow quickly. If our business or industry grows too quickly, our ability to meet customer demand in a timely and efficient manner could be challenged.
As a growing company, we have yet to achieve a profit and may not achieve a profit in the near future, if at all. We have revenues but we are not profitable and may not be in the near future, if at all.
We have revenues but we are not profitable and may not be in the near future, if at all. Further, many of our competitors have a significantly larger industry presence and revenue stream but have yet to achieve profitability.
These laws may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices, complicating long-range business planning decisions.
The interpretation and application of privacy, data protection, data transfer and data retention laws and regulations are often uncertain and in flux in the United States and internationally. These laws may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices, complicating long-range business planning decisions.
Deficiencies in disclosure controls and procedures and internal control over financial reporting could result in a material misstatement in our financial statements. We could be adversely affected if there are deficiencies in our disclosure controls and procedures or in our internal controls over financial reporting.
We could be adversely affected if there are deficiencies in our disclosure controls and procedures or in our internal controls over financial reporting. The design and effectiveness of our disclosure controls and procedures and our internal controls over financial reporting may not prevent all errors, misstatements or misrepresentations.
Our progress is expected to require the full utilization of our management, financial and other resources, which to date has occurred with limited working capital. Our ability to manage growth effectively will depend on our ability to improve and expand operations, including our financial and management information systems, and to recruit, train and manage sales personnel.
If we are unable to successfully manage growth, our operations could be adversely affected. Our progress is expected to require the full utilization of our management, financial and other resources, which to date has occurred with limited working capital.
We may be subject to domestic or international actions alleging that certain content we have generated or third-party content that we have made available within our services violates laws in domestic and international jurisdictions.
We may be subject to domestic or international actions alleging that certain content we have generated or third-party content that we have made available within our services violates laws in domestic and international jurisdictions. 19 Table of Contents It is also possible that if any information provided directly by us contains errors or is otherwise wrongfully provided to users, third parties could make claims against us.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.
Many states have passed laws requiring notification to users where there is a security breach for personal data, such as California’s Information Practices Act. We face similar risks in international markets where our products and services are offered.
The use of consumer data by online service providers is a topic of active interest among federal, state, and international regulatory bodies, and the regulatory environment is unsettled. Many states have passed laws requiring notification to users where there is a security breach for personal data, such as California’s Information Practices Act.
We may not be able to complete our evaluation, testing and any required remediation in a timely fashion.
We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective.
If our business or industry grows too quickly, our ability to meet customer demand in a timely and efficient manner could be challenged. We may also experience development delays as we seek to meet increased demand for our products.
We may also experience development delays as we seek to meet increased demand for our products.
For these reasons, our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern. As a result, there is a risk that you could lose the entire amount of your investment in our company.
Aside from cash exercises as set forth under an outstanding option that expires on July 14, 2025, we do not have any formal commitments or arrangements for the advancement or loan of funds. For these reasons, our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.
Federal, state, and international laws and regulations govern the collection, use, retention, disclosure, sharing and security of data that we receive from and about our users. The use of consumer data by online service providers is a topic of active interest among federal, state, and international regulatory bodies, and the regulatory environment is unsettled.
Changes in regulations or user concerns regarding privacy and protection of user data, or any failure to comply with such laws, could adversely affect our business. Federal, state, and international laws and regulations govern the collection, use, retention, disclosure, sharing and security of data that we receive from and about our users.
Even though we currently have an active trading market, there can be no assurance that it will be sustained. Our securities are very thinly traded. Accordingly, it may be difficult to sell shares of our common stock without significantly depressing the value of the stock.
Accordingly, it may be difficult to sell shares of our common stock without significantly depressing the value of the stock. Unless we are successful in developing continued investor interest in our stock, sales of our stock could continue to result in major fluctuations in the price of the stock.
Removed
Risks Relating to Business and Financial Condition Because our auditor has issued a going concern opinion regarding our company, there is an increased risk associated with an investment in our company. We have continually operated at a loss with an accumulated deficit of $26,084,133 as of December 31, 2023.
Added
Therefore, we have a limited operating history upon which to evaluate the merits of investing in our company. Potential investors should be aware of the difficulties normally encountered by new companies and the high rate of failure of such enterprises.
Removed
We anticipate that we must raise for the next 12 months: $1,750,000 for acquisitions to fully implement our business plan to its fullest potential and achieve our growth plans.
Added
There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us.
Removed
Should any of the following problems, or others, occur as a result of our acquisition strategy, the impact could be material: • difficulties integrating personnel from acquired entities and other corporate cultures into our business; • difficulties integrating information systems; • the potential loss of key employees of acquired companies; • the assumption of liabilities and exposure to undisclosed or unknown liabilities of acquired companies; or • the diversion of management attention from existing operations. 11 Natural disasters, terrorist acts, acts of war, pandemics, cyber-attacks or other breaches of network or information technology security may cause equipment failures or disrupt our operations.
Added
Risk Factors Related to Our International Operations Our operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can adversely affect our business, results of operations and financial condition.
Removed
It is also possible that if any information provided directly by us contains errors or is otherwise wrongfully provided to users, third parties could make claims against us.
Added
A deterioration in economic conditions and related drivers of global uncertainty and change, such as reduced business activity, high unemployment, rising interest rates, housing prices, and energy prices (including the price of gasoline), increased consumer indebtedness, lack of available credit, the rate of inflation, and perceptions of the economy, as well as other factors, such as terrorist attacks, protests, looting, and other forms of civil unrest, cyber-attacks and data breaches, public health emergencies (such as the COVID-19 pandemic and other epidemics), extreme weather conditions and climate change, significant changes in the political environment, political instability, armed conflict (such as the ongoing military conflict between Ukraine and Russia and the emerging military conflict in Israel and Gaza) and/or public policy, including increased state, local or federal taxation, could adversely affect our operating results and financial condition.
Removed
We also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our Common Stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares.
Added
Major public health issues, including pandemics such as the COVID-19 pandemic, have adversely affected, and could in the future materially adversely affect, us due to their impact on the global economy and demand for our regenerative products; the imposition of protective public safety measures, such as shutdowns and restrictive health mandates; and disruptions in our operations, supply chain and sales and distribution channels, resulting in interruptions to our business and the supply of current products and offering of existing services, and delays in production ramps of new products and development of new services.
Added
In addition to an adverse impact on demand for our regenerative products and services, uncertainty about, or a decline in, global or regional economic conditions can have a significant impact on our suppliers, contract manufacturers, logistics providers, distributors, and other channel partners, and developers. Potential outcomes include financial instability; inability to obtain credit to finance business operations; and insolvency.
Added
As a result, our operating results may be impacted by the health of the global economy. Volatility and disruption in global capital and credit markets may lead to slowdowns or declines in client spending which could adversely affect our business and financial performance.
Added
Our business and financial performance, including new business bookings and collection of our accounts receivable, may be adversely affected by current and future economic conditions (including a reduction in the availability of credit, higher energy costs, rising interest rates, financial market volatility and lower than expected economic growth) that cause a slowdown or decline in client spending.
Added
Reduced purchases by our clients or changes in payment terms could adversely affect our revenue growth and cause a decrease in our cash flow from operations. Bankruptcies or similar events affecting clients may cause us to incur bad debt expenses at levels higher than historically experienced.
Added
Further, volatility and disruption in global financial markets may also limit our ability to access the capital markets at a time when we would like, or need, to raise capital, which could have an impact on our ability to react to changing economic and business conditions.
Added
Accordingly, if global financial and economic volatility continues or worsens, our business, results of operations and financial condition could be materially and adversely affected.
Added
Adverse economic conditions can also lead to increased credit and collectability risk on our trade receivables; the failure of derivative counterparties and other financial institutions; limitations on our ability to issue new debt; reduced liquidity; and declines in the fair values of our financial instruments.
Added
These and other impacts can materially adversely affect our business, results of operations, financial condition and stock price. 14 Table of Contents We have some revenue derived from customers outside of the United States, and we may lose revenues and market share due to exchange rate fluctuations and political and economic changes related to foreign business.
Added
Some of our revenue comes from customers outside of the United States. Any company conducting foreign business is always subject to economic, political and regulatory uncertainties and risks that are unique to each area of the world.
Added
Fluctuations in exchange rates may also affect the prices that foreign customers are willing to pay and may put us at a price disadvantage compared to other competitors. Potentially volatile shifts in exchange rates may negatively affect our financial position and results. We operate a global business that exposes us to currency, economic and regulatory risks.
Added
These challenges include: (1) compliance with complex and changing laws, regulations and policies of governments that may impact our operations, such as foreign ownership restrictions, import and export controls, tariffs, and trade restrictions; (2) compliance with U.S. and foreign laws that affect the activities of companies abroad, such as anti-corruption laws, competition laws, currency regulations, and laws affecting dealings with certain nations; (3) the difficulties involved in managing an organization doing business in many different countries; (4) rapid changes in government policy, acts of terrorism, or the threat of international boycotts or U.S. anti-boycott legislation; and (5) currency exchange rate fluctuations. 15 Table of Contents Risk Factors Related to the Business of the Company Our telecommunications line of business is highly sensitive to declining prices, which may adversely affect our revenues and margins.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+4 added−0 removed3 unchanged
Biggest changeItem 1C. Cybersecurity We have implemented cybersecurity risk management procedures, in accordance with our risk profile and business size. We rely on our information technology to operate our business.
Biggest changeCyber-attacks can take many forms, including computer hackings, computer viruses, ransomware, worms or other destructive or disruptive software, denial of service attacks, or other malicious activities. 26 Table of Contents We have implemented cybersecurity risk management procedures, in accordance with our risk profile and business size. We rely on our information technology to operate our business.
The Head of IT Department reports to our Chief Executive Officer who reports to the Audit Committee at the board-level, as appropriate. As of December 31, 2023, we have not identified an indication of a cybersecurity incident that would have a material impact on our business and consolidated financial statements.
The Head of IT Department reports to our Chief Executive Officer who reports to the Audit Committee at the board-level, as appropriate. As of December 31, 2024, we have not identified an indication of a cybersecurity incident that would have a material impact on our business and consolidated financial statements.
Added
Item 1C. Cybersecurity As a technology and communications company that globally transmits large amounts of information over our networks, we recognize the critical importance of maintaining the security and integrity of information and systems under our control.
Added
We view cybersecurity risk as one of our principal enterprise-wide risks, subject to control and monitoring at various levels of management throughout our company. We dedicate resources commensurate with our risk profile and business size to programs designed to identify, assess, manage, mitigate and respond to cybersecurity threats.
Added
As described in Item 1A “Risk Factors,” several features of our operations heighten our susceptibility to cyber-attacks, including (i) our material reliance on systems owned, operated or controlled by unaffiliated third-party operators and (ii) our processing and storage of large amounts of sensitive customer data.
Added
Cyber-attacks on our systems may be initiated by a wide variety of intruders, including employees, cyber-criminals, nation state actors and other advanced persistent threat actors, and may include attempts by outside parties to gain access to sensitive data that is stored in or transmitted across our network.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−0 removed9 unchanged
Biggest changeRecent Sales of Unregistered Securities During the year ended December 31, 2023, the Company issued 10,534,119 shares of common stock, valued at fair market value on issuance as follows: • 240,000 shares for compensation to our directors valued at $42,890; and • 10,294,119 shares for exercise of warrants for $1,400,000.
Biggest changeRecent Sales of Unregistered Securities During the year ended December 31, 2024, the Company issued 30,847,055 shares of common stock and had a stock payable of 285,000 shares at year end, valued at fair market value on issuance as follows: • 600,000 shares for compensation to our directors valued at $141,025; • 3,007,173 shares for settlement of debt valued at $483,670; • 3,535,354 shares in conjunction with convertible notes valued at $597,777; • 10,000,000 shares for exercise of warrants for $1,100,000; and • 6,106,061 shares for conversion of debt of $671,666 • 2,450,000 shares issued for cash of $100,000 • 646,467 shares for the extension of debt valued at $116,364 • 4,502,000 shares for conversion of Series B Preferred Stock • 285,000 shares of stock payable for service valued at $82,194 recorded as additional paid in capital as of December 31, 2024.
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer's account. 21 In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer's account. 28 Table of Contents In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.
Holders of Our Common Stock As of March 27, 2024, we had 176,329,933 shares of our common stock issued and outstanding, held by approximately 73 stockholders of record at our transfer agent, with additional stockholders holding our shares in street name. Dividends We currently intend to retain future earnings for the operation of our business.
Holders of Our Common Stock As of March 24, 2025, we had 210,710,170 shares of our common stock issued and outstanding, held by approximately 79 stockholders of record at our transfer agent, with additional stockholders holding our shares in street name. Dividends We currently intend to retain future earnings for the operation of our business.
Fiscal Year Ending December 31, 2023 Quarter Ended High $ Low $ December 31, 2023 0.1550 0.1440 September 30, 2023 0.2250 0.2160 June 30, 2023 0.1340 0.1130 March 31, 2023 0.1549 0.1425 Fiscal Year Ending December 31, 2022 Quarter Ended High $ Low $ December 31, 2022 0.37 0.16 September 30, 2022 0.40 0.22 June 30, 2022 0.71 0.32 March 31, 2022 1.03 0.45 On March 26, 2024, the last sales price per share of our common stock was $0.3372.
Fiscal Year Ending December 31, 2024 Quarter Ended High $ Low $ December 31, 2024 0.3094 0.2650 September 30, 2024 0.1790 0.1630 June 30, 2024 0.2828 0.2470 March 31, 2024 0.3950 0.3500 Fiscal Year Ending December 31, 2023 Quarter Ended High $ Low $ December 31, 2023 0.1550 0.1440 September 30, 2023 0.2250 0.2160 June 30, 2023 0.1340 0.1130 March 31, 2023 0.1549 0.1425 On March 24, 2025, the last sales price per share of our common stock was $0.1477.
There is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Therefore, a stockholder may be unable to resell his securities in our company.
There is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Therefore, a stockholder may be unable to resell his securities in our company. The following tables set forth the range of high and low bid information for our common stock for each of the periods indicated as reported by the OTCQX.
These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising.
Shares were issued on January 16, 2025. 29 Table of Contents These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution.
The following tables set forth the range of high and low bid information for our common stock for the each of the periods indicated as reported by the OTCQX. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.
The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock. Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

15 edited+20 added−6 removed3 unchanged
Biggest changeYears Ended December 31 2023 2022 Salaries, Wages and Benefits $ 1,560,366 $ 1,662,192 Technology 328,710 291,348 Professional Fees 1,283,351 901,082 Legal and Regulatory 256,537 511,598 Travel & Events 136,051 93,769 Public Cost 36,349 31,750 Bad Debt Expense 8,815 34,376 Depreciation and Amortization 128,737 120,117 Advertising 595,298 617,559 Bank Services and Fees 77,292 37,950 Office, Facility and Other 309,376 324,167 Sales Commissions 211,830 239,550 Insurance 11,914 10,118 Subtotal 4,944,626 4,875,576 Stock-based compensation 42,890 107,600 Total Operating Expenses $ 4,987,516 $ 4,983,176 Operating Expenses by subsidiary are as follows: Years Ended December 31, 2023 2022 Difference iQSTEL $ 1,692,056 $ 1,762,904 $ -70,848 Etelix 322,932 472,291 -149,359 SwissLink 723,712 767,069 -43,357 ItsBchain 41,955 22,693 19,262 QGlobal 253,160 202,933 50,227 Global Money One 55,710 157,382 -101,672 IoT Labs 172,709 264,091 -91,382 Whisl 614,617 821,979 -207,362 Smartbiz 1,110,665 511,834 598,831 $ 4,987,516 $ 4,983,176 $ 4,340 24 Other Income (Expenses) We had other income of $96,067 for the year ended December 31, 2023, as compared with other expenses of $2,674,101 for the year ended December 31, 2022.
Biggest changeYears Ended December 31, 2024 2023 Salaries, Wages and Benefits $ 2,963,714 $ 1,560,366 Technology 1,192,185 328,710 Professional Fees 1,110,773 1,283,351 Legal and Regulatory 328,500 256,537 Travel & Events 234,295 136,051 Public Cost 102,773 36,349 Bad Debt Expense 1,991 8,815 Depreciation and Amortization 499,535 128,737 Advertising 968,206 595,298 Bank Services and Fees 211,591 77,292 Office, Facility and Other 529,892 309,376 Sales Commissions 675,605 211,830 Insurance 63,534 11,914 Subtotal 8,882,594 4,944,626 Stock-based compensation 223,219 42,890 Total Operating Expenses $ 9,105,813 $ 4,987,516 31 Table of Contents Operating Expenses by subsidiary are as follows: Years Ended December 31, 2024 2023 Difference IQSTEL $ 2,881,662 $ 1,692,056 $ 1,189,606 Etelix 428,603 322,932 105,671 SwissLink 974,233 723,712 250,521 ItsBchain 14,788 41,955 -27,167 QGlobal 552,388 253,160 299,228 Global Money One 762 55,710 -54,948 IoT Labs 246,254 172,709 73,545 Whisl 800,922 614,617 186,305 Smartbiz 978,760 1,110,665 -131,905 QXTEL 2,227,441 - 2,227,441 Total Operating Expenses $ 9,105,813 $ 4,987,516 $ 4,118,297 There is a significant increase of 82.57% in Operating Expenses for 2024 when compared with 2023; however, more than half of that increase (54%) is due to the inclusion of QXTEL in the consolidated financial statements in the year 2024.
Our accounting policies are discussed in detail in the footnotes to our financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2023; however, we consider our critical accounting policies to be those related to the allowance for doubtful accounts, valuation of assets, significant estimates in the valuation of financial instruments and income taxes.
Our accounting policies are discussed in detail in the footnotes to our financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2024; however, we consider our critical accounting policies to be those related to the allowance for doubtful accounts, valuation of assets, significant estimates in the valuation of financial instruments and income taxes.
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 twelve-month period ended December 31, 2023.
There can be no assurance that such additional financing will be available to us on acceptable terms or at all. 34 Table of Contents 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 twelve-month period ended December 31, 2024.
Our cash flow from operations varies depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable. 25 Investing activities used $332,550 for the year ended December 31, 2023, as compared with $2,001,506 used in investing activities for the year ended December 31, 2022.
Our cash flow from operations varies depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable. Investing activities used $3,162,971 for the year ended December 31, 2024, as compared with $332,550 used in investing activities for the year ended December 31, 2023.
Following is a table with summary data from the consolidated statement of cash flows for the year ended December 31, 2023 and 2022, as presented. 2023 2022 Net cash used in operating activities $ (1,483,801 ) $ (1,765,060 ) Net cash used in investing activities (332,550 ) (2,001,506 ) Net cash provided by financing activities 1,833,965 1,767,982 Effect of exchange rate changes on cash 15,665 (6,840 ) Net change in cash and cash equivalents $ 33,279 $ (2,005,424) Our operating activities used $1,483,801 in the year ended December 31, 2023, as compared with $1,765,060 used in operating activities in the year ended December 31, 2022.
Following is a table with summary data from the consolidated statements of cash flows for the years ended December 31, 2024 and 2023, as presented. 2024 2023 Net cash used in operating activities $ (2,930,306 ) $ (1,483,801 ) Net cash used in investing activities (3,162,971 ) (332,550 ) Net cash provided by financing activities 7,240,966 1,833,965 Effect of exchange rate changes on cash — 15,665 Net change in cash $ 1,147,689 $ 33,279 Our operating activities used $2,930,306 in the year ended December 31, 2024, as compared with $1,483,801 used in operating activities in the year ended December 31, 2023.
These costs primarily consist of usage charges for calls and SMS terminated in our vendors’ networks. The behavior in the costs shows a logical correlation with the behavior of the revenue commented above.
These costs primarily consist of usage charges for calls and SMS terminated in our vendors’ networks. The behavior in the costs shows a logical correlation with the behavior of the revenue commented above. We have reached a higher volume of revenue and every additional unit sold (minutes and SMS) has its corresponding termination cost.
When looking at the numbers by subsidiary, we have the following breakout for the years ended December 31, 2023 and 2022: Subsidiary Revenue Year Ended December 31, 2023 Revenue Year Ended December 31, 2022 Etelix.com USA, LLC $ 44,026,288 $ 22,301,110 SwissLink Carrier AG 5,250,141 4,705,031 QGlobal LLC 1,228,865 350,050 IoT Labs LLC 75,574,912 53,239,401 Whisl 1,855,816 4,318,762 Smartbiz 16,566,329 8,289,178 $ 144,502,351 $ 93,203,532 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.
When looking at the numbers by subsidiary, we have the following breakout for the years ended December 31, 2024 and 2023: Subsidiary Revenue Year Ended December 31, 2024 Revenue Year Ended December 31, 2023 Etelix.com USA, LLC $ 69,833,265 $ 44,026,288 SwissLink Carrier AG 8,317,281 5,250,141 QGlobal LLC 1,539,434 1,228,865 IoT Labs LLC 94,170,000 75,574,912 Whisl 2,826,276 1,855,816 Smartbiz 20,499,830 16,566,329 QXTEL 86,034,356 — $ 283,220,442 $ 144,502,351 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.
When looking at the numbers by subsidiary, we have the following breakout for the years ended December 31, 2023 and 2022: Subsidiary Cost of revenue Year Ended December 31, 2023 Cost of revenue Year Ended December 31, 2022 Etelix.com USA, LLC $ 41,505,472 $ 23,360,923 SwissLink Carrier AG 4,359,141 3,949,751 QGlobal LLC 832,282 243,493 IoT Labs LLC 74,662,656 52,842,202 Whisl 2,033,529 2,760,807 Smartbiz 16,437,258 8,254,840 $ 139,830,338 $ 91,412,016 Our cost of revenues consists of direct charges from vendors that the Company incurs to deliver services to its customers.
Cost of Revenue Our total cost of revenue for the year ended December 31, 2024 was $274,948,693 as compared with $139,830,338 for the year ended December 31, 2023. 30 Table of Contents When looking at the numbers by subsidiary, we have the following breakout for the years ended December 31, 2024 and 2023: Subsidiary Cost of revenue Year Ended December 31, 2024 Cost of revenue Year Ended December 31, 2023 Etelix.com USA, LLC $ 69,334,112 $ 41,505,472 SwissLink Carrier AG 7,663,815 4,359,141 QGlobal LLC 1,144,324 832,282 IoT Labs LLC 92,196,261 74,662,656 Whisl 2,130,645 2,033,529 Smartbiz 19,572,904 16,437,258 QXTEL 82,906,632 — $ 274,948,693 $ 139,830,338 Our cost of revenues consists of direct charges from vendors that the Company incurs to deliver services to its customers.
The positive change in Other Income (Expenses) in 2023 compared to 2022 is due to the positive Change in fair value of derivative liabilities of $381,848 for the year ended December 31, 2023 from a negative value of $2,650,369 for the year ended December 31, 2022.
The increase in Other Expenses in 2024 compared to 2023 is due to (1) the negative change in fair value of derivative liabilities of $1,393,046 for the year ended December 31, 2024 from a positive value of $381,848 for the year ended December 31, 2023; (2) the increase of interest expenses to $2,159,425 in 2024 from $94,908 in 2023 and (3) a loss on settlement of debt of $482,085 in 2024.
Net Loss We finished the year ended December 31, 2023 with a loss of $219,436 as compared to a loss of $5,865,761 during the year ended December 31, 2022. These two figures compared result in an important improvement in the Company’s performance during 2023 versus the previous year.
Net Loss We finished the year ended December 31, 2024 with a loss of $5,180,036 as compared to a loss of $219,436 during the year ended December 31, 2023.
We also plan to seek additional financing in a private equity offering to secure funding for operations. There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired.
If we are not able to secure additional funding, the implementation of our business plan will be impaired.
Our negative investing cash flow for 2023 is largely due to the purchase of property and equipment. Financing activities provided $1,833,965 for the year ended December 31, 2023, as compared to $1,767,982 provided for the year ended December 31, 2022. Our positive financing cash flow in 2023 was largely the result of the $1,400,000 from the exercise of warrants.
The cash used in investing activities is largely due to the acquisition of QXTEL, where the Company invested $2,955,121, and the purchase of $151,620 of property and equipment. Financing activities provided $7,240,966 for the year ended December 31, 2024, as compared to $1,833,965 provided for the year ended December 31, 2023.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Results of Operations for the Years Ended December 31, 2023 and 2022 Net Revenue Our net revenue for the year ended December 31, 2023 was $144,502,351 as compared with $93,203,532 for the year ended December 31, 2022.
Results of Operations for the Years Ended December 31, 2024 and 2023 Net Revenue Our net revenue for the year ended December 31, 2024 was $283,220,442 as compared with $144,502,351 for the year ended December 31, 2023. These numbers reflect an increase of 96% year over year on our consolidated Revenues.
Liquidity and Capital Resources As of December 31, 2023 we had total current assets of $15,719,172, compared with current liabilities of $13,840,944, resulting in a positive working capital of $1,878,228 and a current ratio of approximately 1.14 to 1 which represent an important improvement compared to a ratio of 0.99 to 1 as of December 31, 2022.
Liquidity and Capital Resources As of December 31, 2024 we had total current assets of $63,015,046, compared with total current liabilities of $63,821,196, resulting in a negative working capital of $ 806,150 and a current ratio of approximately 0.99 to 1. The negative working capital is due largely to loans payable of $2,455,641.
We have reached a higher volume of sales and every additional unit sold (minutes and SMS) has its corresponding termination cost. 23 Gross Margin Our gross margin, which is simply the difference between our revenues and our cost of sales, discussed above, increased from $1,791,516 in 2022 to $4,672,013 in 2023; represented an increase of 161% year over year.
Gross Margin Our gross margin, which is simply the difference between our revenues and our cost of sales, discussed above, increased from $4,672,013 in 2023 to $8,271,749 in 2024, which is an increase of 77.05% year-over-year. Operating Expenses Operating expenses for the year ended December 31, 2024 were $9,105,813, as compared with $4,987,516 for the year ended December 31, 2023.
Removed
These numbers reflect an increase of 55% year over year on our consolidated Revenues.
Added
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Certain statements in this Annual Report constitute forward-looking statements.
Removed
Cost of Revenue Our total cost of sales for the year ended December 31, 2023 was $139,830,338 as compared with $91,412,016 for the year ended December 31, 2022.
Added
See " Forward-Looking Statements" immediately prior to Item 1 of Part I of this report for factors relating to these statements and "Risk Factors" in Item 1A of Part I of this report for a discussion of certain risk factors applicable to our business, financial condition, results of operations, liquidity or prospects.
Removed
Gross margins were 3.23% and 1.92% of revenues, respectively. This is a clear sign the Company is improving it sales margin. Operating Expenses Operating expenses for the year ended December 31, 2023 were $4,987,516, as compared with $4,983,176 for the year ended December 31, 2022. The detail by major category is reflected in the table below.
Added
In fact, 38% of the increase was organic grow, while the remaining 62% was due to the acquisition of QXTEL Inc.
Removed
This can be perfectly noted when looking at the evolution of the Operating Income and the Net Income by quarter in 2023.
Added
The detail by major category is reflected in the table below.
Removed
The Company has received the qualification of an Offering Statement under Form S-1 for the sale of up to 15,000,000 common stocks. This offering is being conducted on a “best efforts” basis, which means that there is no guarantee that any minimum amount will be sold.
Added
Another 29% of that increase is due to an increment in IQSTEL's operating expenses concentrated in the categories of Salaries, Wages and Benefits ($442,003 higher than in 2023), Advertising ($372,908 higher than in 2023) and Stock-based compensation ($180,329 higher than in 2023) Finally, the third largest expense item contributing to the increase of Operating Expanses is related to technology.
Removed
Off Balance Sheet Arrangements As of December 31, 2023, there were no off-balance sheet arrangements. Recently Issued Accounting Pronouncements We do not expect the adoption of these or other recently issued accounting pronouncements to have a significant impact on our results of operation, financial position or cash flow.
Added
Other Income (Expenses) We had other expenses of $3,951,942 for the year ended December 31, 2024, as compared with other income of $96,067 for the year ended December 31, 2023.
Added
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.
Added
Our Telecom Division, the division presently generating revenue, has positive operating income when presented separately from the rest of our Company. 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, such as Fintech and Cybersecurity.
Added
Our telecom division revenues have increased by 96% from $144,502,351 in 2023 to $283,220,442 in 2024. Additionally, its gross profit has risen by 77%, going from $4,672,013 to $8,271,749; operating income has grown by 40% from $1,474,218 to $2,063,148; and net income has increased by 33%, rising from $1,290,646 to $1,710,241.
Added
These double-digit growth figures demonstrate the strong performance of our telecommunications division. 32 Table of Contents Telecom Division Pre-revenue companies iQSTEL Consolidated Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2024 Year Ended December 31, 2023 Revenues 283,220,442 144,502,351 — — — — 283,220,442 144,502,351 Cost of revenue 274,948,693 139,830,338 — — — — 274,948,693 139,830,338 Gross profit 8,271,749 4,672,013 — — — — 8,271,749 4,672,013 Operating expenses General and administration 6,208,601 3,197,795 15,550 97,665 2,881,662 1,692,056 9,105,813 4,987,516 Total operating expenses 6,208,601 3,197,795 15,550 97,665 2,881,662 1,692,056 9,105,813 4,987,516 Operating income/(loss) 2,063,148 1,474,218 (15,550 ) (97,665 ) (2,881,662 ) (1,692,056 ) (834,064 ) (315,503 ) Other income (expense) 41,123 (183,572 ) (120 ) (100 ) (3,992,945 ) 279,740 (3,951,942 ) 96,067 Net income (loss) before income taxes 2,104,271 1,290,646 (15,670 ) (97,765 ) (6,874,607 ) (1,412,316 ) (4,786,006 ) (219,436 ) Income taxes (394,030 ) — — — — — (394,030 ) — Net income (loss) 1,710,241 1,290,646 (15,670 ) (97,765 ) (6,874,607 ) (1,412,316 ) (5,180,036 ) (219,436 ) Depreciation and amortization 499,535 128,737 — — — — 499,535 128,737 Interest expense 41,611 — — — 2,117,814 94,908 2,159,425 94,908 Change in fair value of derivative liabilities — — — — 1,393,046 (381,848 ) 1,393,046 (381,848 ) Loss on settlement of debt — — — — 482,085 — 482,085 — Stock-based compensation — — — — 223,219 42,890 223,219 42,890 Income taxes 394,030 — — — — — 394,030 — Adjusted EBITDA 2,645,417 1,419,383 (15,670 ) (97,765 ) (2,658,452 ) (1,656,366 ) (28,705 ) (334,749 ) In evaluating our financial performance, we utilize Adjusted EBITDA as a supplemental measure to provide insights into the profitability of our core operations.
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(Please see Adjusted EBITDA, which is reconciled to the Net Income in the table above.) Adjusted EBITDA excludes, in addition to non-operational expenses like interest expenses, taxes, depreciation and amortization; items that we believe are not indicative of our operating performance, such as: • Change in Fair Value of Derivative Liabilities: These adjustments reflect unrealized gains or losses that are non-operational and subject to market volatility. • Loss on Settlement of Debt: This represents non-recurring expenses associated with specific financing activities and does not impact ongoing business operations. • Stock-Based Compensation: As a non-cash expense, this adjustment eliminates variability caused by equity-based incentives.
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We believe Adjusted EBITDA offers a clearer view of the cash-generating potential of our business, excluding non-recurring, non-cash, and non-operational impacts. 33 Table of Contents Based on the analysis of our Adjusted EBITDA our Telecom Division is a high-performing division that generates strong operational profits.
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Adjusted EBITDA has increased 86% from $1,419,383 as of December 31, 2023 to $2,645,417 as of December 31, 2024. Consolidated figures show a slightly negative Adjusted EBITDA; while this isn’t ideal, in our opinion it implies the Company is close to breaking even and might achieve positive Adjusted EBITDA with small improvements in efficiency or revenue growth.
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We are in a transitional period, scaling operations and investing heavily in growth initiatives with the execution of our M&A plan. Management has also identified areas for cost-cutting and operational improvements and has acted in that direction.
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The cash provided in 2024 was largely from loans, convertible debt and warrant exercises, offset by repayments on loans. We have financed our operations through private placements, convertible notes, and unsecured debt, and we have also issued debt in our company secured by all of our assets.
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We have not attained profitable operations and even though the company maintains a cash position very close to one third year's operating expenses, we are dependent upon obtaining financing or generating revenue from operations to continue operations for the next twelve months. Our future is dependent upon our ability to obtain financing or upon future profitable operations.
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We reserve the right to seek additional funds through private placements of our common stock and/or through debt financing. Our ability to raise additional financing is unknown. Aside from cash exercises as set forth under an outstanding option that expires on July 14, 2025, we do not have any formal commitments or arrangements for the advancement or loan of funds.
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Off Balance Sheet Arrangements As of December 31, 2024, there were no off-balance sheet arrangements. Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03 final standard on Income Statement: Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses for public business entities.
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The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This guidance will be effective for us on January 1, 2027. The Company is currently evaluating the impact of adopting ASU 2024-03.
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The Company has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial statements.

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