What changed in iQSTEL Inc's 2025 10-K compared to 2024?

Across the narrative sections we track, iQSTEL Inc (IQST) added 254 paragraphs, removed 220, and edited 147 between the 2024 and 2025 10-K filings. The biggest movers are Item 1. Business (+71/−84), Item 7. Management's Discussion & Analysis (+91/−35), Item 1A. Risk Factors (+79/−83).

Did iQSTEL Inc add new Risk Factors in the 2025 10-K?

Yes — Item 1A Risk Factors shows 79 new/edited paragraphs and 83 removed paragraphs versus the 2024 10-K.

What changed in iQSTEL Inc's MD&A (Item 7) in 2025?

Item 7 Management's Discussion & Analysis shows 91 new/edited paragraphs and 35 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did iQSTEL Inc update its Cybersecurity disclosure (Item 1C) in 2025?

Item 1C Cybersecurity has 4 paragraph-level changes between the 2024 and 2025 filings.

Where does this IQST 10-K diff come from?

The source filings are iQSTEL Inc's official 2024 and 2025 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

iQSTEL IncIQSTEarnings & Financial Report

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What changed in iQSTEL Inc's 10-K — 2024 vs 2025

Top changes in iQSTEL Inc's 2025 10-K

254 paragraphs added · 220 removed · 147 edited across 6 sections

Item 1. Business+71 / −84 · 37 edited
Item 7. Management's Discussion & Analysis+91 / −35 · 27 edited
Item 1A. Risk Factors+79 / −83 · 71 edited
Item 5. Market for Registrant's Common Equity+8 / −14 · 8 edited
Item 1C. Cybersecurity+4 / −3 · 3 edited

Item 1. Business

Business — how the company describes what it does

37 edited+34 added−47 removed36 unchanged

2024 filing

2025 filing

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 .

Our objective is to offer the 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 .

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.

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 on the actual cost carriers and/or customers have to pay to get the lines ported.

On April 1, 2019, the Company entered into a Company Purchase Agreement by and between the Company and the Ralf Kohler (the “Seller”), which agreement provides for the purchase of 51% of the equity and certain assets of SwissLink Carrier AG (“SwissLink”) (www.swisslink-carrier.com), a Swiss corporation, by the Company.

On April 1, 2019, the Company entered into a Company Purchase Agreement by and between the Company and the Ralf Kohler, which agreement provides for the purchase of 51% of the equity and certain assets of SwissLink Carrier AG (“SwissLink”) (www.swisslink-carrier.com), a Swiss corporation, by the Company.

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.

Smartbiz is a US based company that provides international voice termination to niche markets. With this acquisition IQSTEL expanded 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.

The 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.

The 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. 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.

Global Money One is a Fintech company with a complete infrastructure to provide top-up services, international remittances and prepaid debit cards. On October 1, 2021, the Company entered into an agreement with Jesus Vega regarding the acquisition of the remaining 49% of the shares in QGlobal, LLC (“QGlobal”).

Global Money One is a Fintech company with a complete infrastructure to provide top-up services, international remittances and prepaid debit cards. 11 Table of Contents On October 1, 2021, the Company entered into an agreement with Jesus Vega regarding the acquisition of the remaining 49% of the shares in QGlobal, LLC (“QGlobal”).

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.

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. Corporate History IQSTEL, formerly known as PureSnax International, Inc., was incorporated under the laws of the State of Nevada on June 24, 2011.

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.

Our global presence includes 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.

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.

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, guaranteeing its customers high quality and low termination rates, in over more than 100 countries.

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.

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.

Universal Service and Other Regulatory Fees and Charges In 1997, the FCC issued an order, referred to as the Universal Service Order, which requires all telecommunications carriers providing interstate telecommunications services to contribute to universal service support programs administered by the FCC (known as the Universal Service Fund).

Regulation of Telecom by the Federal Communications Commission Universal Service and Other Regulatory Fees and Charges In 1997, the FCC issued an order, referred to as the Universal Service Order, which requires all telecommunications carriers providing interstate telecommunications services to contribute to universal service support programs administered by the FCC (known as the Universal Service Fund).

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.

Changes in our business (including growth in our fintech or AI operations) 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.

These periodic contributions are currently assessed based on a percentage of each contributor’s interstate and international end user telecommunications revenues reported to the FCC. Etelix also contributed to several other regulatory funds and programs, most notably Telecommunications Relay Service and FCC Regulatory Fees (collectively, the Other Funds).

These periodic contributions are currently assessed based on a percentage of each contributor’s interstate and international end user telecommunications revenues reported to the FCC. Etelix and our other US-based telecom subsidiaries also contribute to several other regulatory funds and programs, most notably Telecommunications Relay Service and FCC Regulatory Fees (collectively, the “Other Funds”).

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).

Also under the Telecom Division, our developing Blockchain Platform Business Line offers our proprietary Mobile Number Portability Application (MNPA) through our subsidiary, itsBchain (www.itsbchain.com). The Company’s developing Fintech Business Line offers a complete Fintech ecosystem including a MasterCard Debit Card, US Bank Account (No SSN Needed), and a Mobile App/Wallet for remittances and mobile top-up services.

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.

Whether these contribution factors will be stable in the future is unknown, but it is possible that we will be subject to significant increases. 9 Table of Contents Regulation of Telecom—International In connection with our international operations, we have obtained licenses or are otherwise authorized to provide telecommunications services in Switzerland and Italy (including SwissLink’s recent expansion of its regulatory footprint in Italy in February 2026).

Etelix is interconnected to the most important players in the industry, with a very strong focus on Asian and Latin-American markets, among which it is worth mentioning: China Telecom, PCCW, Hutchinson Telecom, Vodafone India, KDDI, Airtel, Reliance, Viettel, TATA Communications, Flow Jamaica (Cable and Wireless Caribbean), Cable and Wireless Panama, Millicom (TIGO), Telefonica de España (Movistar), Telecom Italia (TIM), Portugal Telecom (MEU), Optimus (NOS), Belgacom (BICS), Deutsche Telekom, iBasis, Orbitel and Entel.

Etelix provides International Long-Distance voice services for Telecommunications Operators (ILD Wholesale), and Submarine Fiber Optic Network capacity for internet (4G and 5G). 4 Table of Contents Etelix is interconnected to the most important players in the industry, with a very strong focus on Asian and Latin-American markets, among which it is worth mentioning: China Telecom, PCCW, Hutchinson Telecom, Vodafone India, KDDI, Airtel, Reliance, Viettel, TATA Communications, Flow Jamaica (Cable and Wireless Caribbean), Cable and Wireless Panama, Millicom (TIGO), Telefonica de España (Movistar), Telecom Italia (TIM), Portugal Telecom (MEU), Optimus (NOS), Belgacom (BICS), Deutsche Telekom, iBasis, Orbitel and Entel.

(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.

(the Company when making reference to consolidated company) is a technology company with operations 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 subsidiaries in the telecommunications, fintech, and AI-enhanced industries.

Money Transmitter and Payment Instrument Laws and Regulations The consumer payment services offerings, prepaid debit cards, remittances, Top Up, are heavily-regulated industries.

Money Transmitter and Payment Instrument Laws and Regulations Our consumer payment services offerings—including prepaid debit cards, remittances, and mobile top-up services provided through Global Money One and GlobeTopper—are heavily regulated industries.

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.

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.

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.

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).

Our strategy focuses on leveraging synergies among our subsidiaries to drive innovation, operational efficiency, and growth through organic development and strategic acquisitions. 3 Table of Contents Our Telecom Division, which represents the majority of current operations and accounted for 91% of our revenues for the year ended December 31, 2025, offers Voice over Internet Protocol (VoIP), SMS, proprietary Internet of Things (IoT) solutions, 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).

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.

Whisl Telecom’s capabilities contribute a comprehensive suite of services to IQSTEL’s telecom portfolio, including: (1) US/Canada Inbound/Origination, (2) US/Canada DIDs, (3) US/Canada Toll-Free Numbers, (4) Global DIDs, and (5) Global Toll-Free Numbers. Smartbiz Telecom LLC . Is a 51% owned subsidiary of IQSTEL Inc. acquired in June 2022.

Ralf Koehler ("Ralf"), SwissLink Carrier Ltd., ("SwissLink") and Impact Trading & Consulting LLC ("Impact") for the purpose of outlining the understanding regarding the exchange of 49% ownership in SwissLink for our shares. On March 10, 2025, the Company signed a non-binding memorandum of understanding (“MOU”) with Accredited Solutions, Inc.

On November 1, 2024, the Company entered into a binding Memorandum of Understanding (the “Agreement”) with Mr. Ralf Koehler ("Ralf"), SwissLink Carrier Ltd., ("SwissLink") and Impact Trading & Consulting LLC ("Impact") for the purpose of outlining the understanding regarding the exchange of 49% ownership in SwissLink for our shares.

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.

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 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.

(“Yukon River”), a corporation formed under the laws of the British Virgin Islands (“Seller”) concerning the contemplated sale by Seller and the purchase by us of 51% of the ordinary shares Seller holds in QXTEL LIMITED, a company incorporated in England and Wales. 11 Table of Contents On November 1, 2024, the Company entered into a binding Memorandum of Understanding (the “Agreement”) with Mr.

(“Yukon River”), a corporation formed under the laws of the British Virgin Islands concerning the contemplated sale by Yukon River and the purchase by us of 51% of the ordinary shares Yukon River holds in QXTEL LIMITED, a company incorporated in England and Wales.

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.

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.

Both companies specialize in international and domestic SMS termination, with emphasis on the Applications to Person (A2P), Person to Person (P2P) and OmniChannel Marketing Services for several markets: Wholesale Carrier, Government, Corporate, Enterprise, Small and Medium Companies. 6 Table of Contents 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.

Employees Attracting and retaining qualified personnel familiar with our businesses who head our different businesses units is critical to our success. As of December 31, 2024, we had a total of 100 employees, including all subsidiaries. Our human capital resources objectives include identifying, recruiting, retaining, incentivizing, and integrating employees, advisors, and consultants.

As of December 31, 2025, we had a total of 100 employees, including all subsidiaries. 10 Table of Contents Our human capital resources objectives include identifying, recruiting, retaining, incentivizing, and integrating employees, advisors, and consultants.

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.

These services include: • International Voice Termination for carriers : This service enables the routing of international voice calls to their final destinations across various countries.

Accordingly, we, and the products and services that we offer in consumer payment services, are subject to a variety of federal and state laws and regulations, including: • Banking laws and regulations; • Money transmitter and payment instrument laws and regulations; • Anti-money laundering laws;- • Privacy and data security laws and regulations; • Consumer protection laws and regulations; • Unclaimed property laws; and • Card association and network organization rules.

Accordingly, we, and the products and services that we offer in consumer payment services, are subject to a variety of federal and state laws and regulations, including: · Banking laws and regulations; · Money transmitter and payment instrument laws and regulations (which may require state licensing and ongoing compliance); · Anti-money laundering laws (including the Bank Secrecy Act and related know-your-customer (“KYC”) and customer due diligence requirements); · Privacy and data security laws and regulations (including applicable state and federal requirements and, where relevant, international frameworks such as GDPR for European operations); · Consumer protection laws and regulations; · Unclaimed property laws; and · Card association and network organization rules (including Mastercard rules applicable to our debit card offerings).

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.

The Federal Communications Commission (“FCC”) exercises jurisdiction over all telecommunications common carriers to the extent they provide interstate or international services, including the use of local networks to originate or terminate such traffic. State public utility commissions regulate these same carriers with respect to the provision of intrastate and local services.

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).

It connects a business’s PBX system to the telephone network, offering cost savings, scalability, and support for voice, video, and messaging services. Telecom services represented 100% of our consolidated revenue in 2024. In 2025, revenue from the telecom services represented 91% of the total revenue.

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.

Our Fintech subsidiary, Global Money One Inc., aims to provide immigrants access to reliable financial services that makes it easier to manage their money and stay connected with their families back home.

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.

We recognize that access to ubiquitous communications, virtual banking, and information/content is critical to the pursuit of human needs (physiological, safety, relationships, esteem, and self-actualization). IQSTEL operates through business divisions focused on telecommunications (communications), fintech (financial freedom), and AI services (information and content).

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.

Regulation of Telecom in the United States Telecommunications services in the United States are subject to comprehensive regulation at the federal, state, and local levels. Non-compliance with applicable requirements may result in enforcement actions, including the imposition of interest, fines, or other penalties.

An important milestone in the evolution of Etelix was in 2013, when the company become part of a consortium of major carriers for the upgrade of the Maya-1 submarine cable systems that runs from Hollywood, Florida to the city of Tolu in Colombia. This consortium is led by Orange Telecom and Orbitel, where Etelix participates with 10 Gbps of capacity.

In 2013, Etelix participated in a consortium of telecommunications carriers that upgraded the Maya-1 submarine cable system, which runs from Hollywood, Florida to Tolú, Colombia. As part of this arrangement, Etelix held 10 Gbps of capacity, which was subsequently sold to a third party customer.

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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.

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Additionally, GlobeTopper LLC (www.globetopper.com), our most recent acquisition, supports expansion and integration of our business divisions through its B2B digital gift card and incentives platform, which represented 9% and 0% of our revenues for the years ended December 31, 2025 and 2024. Our Artificial Intelligence (AI) division, Reality Border (www.realityborder.com), initially developed an AI-enhanced immersive digital experience platform.

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Delivering a full suite of immersive content services, creating a comprehensive virtual experience that can be accessed through the Web or our proprietary mobile apps. The features include up to four simultaneous video screens for versatile content presentation, various virtual halls such as the main hall, home hall, auditorium, exhibition space, shopping center, and meeting rooms.

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Building on that early development work—including conversational interfaces, multilingual models, and AI-driven workflows—Reality Border now develops practical AI software solutions for enterprise and telecommunications applications. Reality Border currently serves as IQSTEL’s AI innovation and product development platform.

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Stands for mobile application downloads, clickable gates for immediate purchasing, and direct communication tools are seamlessly integrated to foster collaboration, engagement, and interactivity. It goes beyond traditional virtual spaces by utilizing cutting-edge AI technology.

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Its activities include AI agents and related software solutions designed for web, voice, and contact center environments, as well as integration with telecommunications infrastructure, business systems, and security layers.

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This ensures video conferencing and real-time communication with other users within the Metaverse, offering our customers a collective and fully immersive experience that caters to diverse needs such as content acquisition, entertainment, and shared virtual experiences. It is a future-ready platform that encourages creativity, connectivity, and collaboration like never before.

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The Company’s AI strategy includes solutions such as Airweb.ai for AI-powered customer engagement across web and phone channels, IQ2Call.ai for AI-enabled call center and customer care applications, and IQCortex.ai for broader AI platform capabilities and enterprise use cases. Reality Border’s current development efforts include software functionality, workflow orchestration, multilingual interaction, system integration, and operational deployment models intended for business use.

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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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Reality Border’s earlier immersive platform work contributed to capabilities that are now being applied in its AI products; however, the current business emphasis is on AI solutions for enterprise and telecommunications operations rather than metaverse-based environments.

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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 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 91% of our 2025 revenues, fintech services represent 9%, while our other business lines (including blockchain and certain AI initiatives) are in a pre-revenue stage for the financial periods presented.

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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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This transaction expanded Etelix’s ability at that time to provide additional international connectivity capacity to support customer demand. SwissLink Carrier AG , a 51% owned subsidiary of IQSTEL Inc., strengthens the company’s international telecommunications portfolio as a Switzerland-based carrier with global VoIP connectivity and notable commercial presence across Europe, the CIS, and Latin America.

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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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In addition to its license as a Swiss-licensed operator, SwissLink expanded its regulatory footprint in February 2026 by obtaining two key licenses in Italy: (a) Network Infrastructure & Provision, which authorizes the management of network infrastructure, licensed spectrum applications, number-hosting, transit operations, and the support of third-party ISPs; and (b) Publicly Available Telephone Services, enabling the provision of fixed voice services and direct interconnection agreements for voice resellers and value-added services.

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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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These dual Italian licenses, alongside its Swiss authorization, position SwissLink as a full-cycle operator in Italy, granting end-to-end autonomy, technical sovereignty, enhanced reliability, cost optimization, operational agility, and complete regulatory compliance. Thanks to its strategic position in Europe, SwissLink enables the IQSTEL group to be highly competitive in capturing voice traffic destined for Asian and African markets.

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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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Notably, more than 50% of traffic terminating in Africa originates from European customers, while nearly 40% of traffic to Asia also flows from Europe, underscoring Europe’s crucial role as an international telecommunications hub. SwissLink’s robust interconnections with leading carriers—including Orange Wholesale International, CJC Global Connections & Consulting LLC, iBASIS Communications AG, U.S.

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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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South Communications, Inc., Belgacom International Carrier, Bell Canada Inc., and SWISSCOM (SCHWEIZ) AG—further extend IQSTEL’s reach and operational efficiency, supporting expansion in high-growth regions across Asia and Africa. Whisl Telecom LLC , a 51% owned subsidiary of IQSTEL Inc., significantly enhances the company’s telecom business through its provision of high-quality services and innovative, out-of-the-box solutions.

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Our telecommunication business currently represents 100% of our revenues, while our other business lines are in a pre-revenue stage.

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As a U.S.-based company, Whisl Telecom primarily serves the Carrier-to-Carrier Global industry, while also maintaining the network infrastructure necessary to deliver services directly to retail end users (endpoints). Distinguished as one of the few U.S. carriers with substantial Tier 1 capacity, Whisl offers true high-capacity voice termination, supporting high calls per second (CPS) and ensuring optimal call quality.

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Etelix provides International Long-Distance voice services for Telecommunications Operators (ILD Wholesale), and Submarine Fiber Optic Network capacity for internet (4G and 5G).

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Voice services accounted for 59.83% of the total revenue in 2025 ($189,605,526 out of the total $316,899,498) compared to 66.09% of the total revenue in 2024 ($187,194,236 out of the total $283,220,442). Telecom Subsidiaries for SMS services : QGlobal SMS LLC is a 100% owned subsidiary of IQSTEL Inc.

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The bulk of this contract was sold to Millicom (Tigo Costa Rica). This capacity considerably enhanced Tigo’s ability to deploy world-class 4G services to its customers in Costa Rica. SwissLink Carrier AG is a 51% owned subsidiary of IQSTEL Inc.

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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.

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SwissLink Carrier AG is a Switzerland based international Telecommunications Carrier founded in 2015 providing international VoIP connectivity worldwide, with commercial presence in Europe, CIS and Latin America. SwissLink Carrier AG is a Swiss licensed Operator. The acquisition of Swisslink strengthened the Company’s presence in Europe putting us in a very competitive position to capture traffic to Asian and African countries.

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The graphic below shows the path of a voice call or SMS, all parties involved and where the Company is situated in that ecosystem. 7 Table of Contents Fintech services: GlobeTopper, Inc. In July 2025, the Company acquired a 51% controlling interest in GlobeTopper, Inc., a global business-to-business (“B2B”) digital gift card and incentives platform.

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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%.

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GlobeTopper provides enterprises with the infrastructure, catalog access, and operational support required to design, source, and manage digital gift card programs across multiple geographies. Its platform enables clients to incorporate digital gift cards into customer acquisition, loyalty, rewards, employee incentives, and other promotional or payment-adjacent use cases.

Removed

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.

Added

The company continues to expand its catalog and geographic coverage of more than 4,000 merchant brands across multiple regions and industry categories, adding new brands and markets on an ongoing basis. Since 2024, GlobeTopper has processed over 1 million digital gift card transactions through its platform. GlobeTopper operations reported 9% of our revenues for the year ended December 31, 2025.

Removed

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).

Added

According to recent estimates from the World Bank, remittances to low- and middle-income countries continued their upward trajectory, approaching nearly $700 billion in 2025. Transfers to Latin America and the Caribbean reached record levels, driven largely by strong labor-market participation of regional migrants in the United States.

Removed

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.

Added

Within the region, remittances grew sharply in several countries: Nicaragua registered increases of over 22%, Guatemala saw growth of around 14%, and Colombia reported gains of more than 14% during the first half of the year. In contrast, Mexico experienced a decline of roughly 4.6% after more than a decade of uninterrupted growth.

Removed

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.

Added

As a share of GDP, the most recent data show remittances remaining highly significant across Central America and the Caribbean, with El Salvador and Honduras maintaining ratios above 24% and 25% respectively, while Jamaica and Haiti continue to depend heavily on inflows despite varying economic conditions.

Removed

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.

Added

These metrics show there are business opportunities in the remittances arena and Global Money One has a developed platform to take advantage of them. 8 Table of Contents Reality Border LLC initially developed an early proof-of-concept immersive digital platform for IQSTEL. Building on that early development work, Reality Border now develops AI software solutions for enterprise and telecommunications applications.

Removed

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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

71 edited+8 added−12 removed100 unchanged

2024 filing

2025 filing

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.

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 to grow, we may be subject to increased reporting requirements applicable to accelerated filers, which are more onerous than those applicable to smaller reporting companies.

Their interests may not necessarily be in the best interests of the shareholders in general. We do not expect to pay dividends in the foreseeable future. Any return on investment may be limited to the value of our common stock. We do not anticipate paying cash dividends on our common stock in the foreseeable future.

Their interests may not necessarily be in the best interests of the shareholders in general. We do not expect to pay cash dividends in the foreseeable future. Any return on investment may be limited to the value of our common stock. We do not anticipate paying cash dividends on our common stock in the foreseeable future.

Should any of the following problems, or others, occur as a result of our acquisition strategy, the impact could be material: • diversion of management time and focus from operating our business; • use of resources that are needed in other areas of our business; • in the case of an acquisition, implementation or remediation of controls, procedures and policies of the acquired company; • in the case of an acquisition, difficulty integrating the accounting systems and operations of the acquired company; • in the case of an acquisition, coordination of product, engineering and selling and marketing functions, including difficulties and additional expenses associated with supporting legacy services and products and hosting infrastructure of the acquired company and difficulty converting the customers of the acquired company onto our systems, platforms and contract terms, including disparities in the revenues, licensing, support or professional services model of the acquired company; • in the case of an acquisition, difficulty integrating, supporting or enhancing acquired product lines or services, including difficulty in transitioning acquired solutions developed with different source code architectures to our integrated platforms, difficulty in supporting feature development across our full suite of house-built and acquired solutions and strain on resources from marketing and supporting multiple platforms prior to integration; • in the case of an acquisition, retention and integration of employees from the acquired company, and preservation of our corporate culture; • in the case of an acquisition, reliance on certain existing executive teams of acquired companies in new industries; • in the case of an acquisition or divestiture, difficulty delivering on our product strategy, including building a platform that enables us to drive value across our full ecosystem of merchants, suppliers and consumers; • unforeseen costs or liabilities; • adverse effects to our existing business relationships with partners and customers as a result of the acquisition, investment or divestiture; • the possibility of adverse tax consequences; • in the case of an acquisition or divestiture, we may not be able to secure required regulatory approvals or otherwise satisfy closing conditions for a proposed transaction in a timely manner, or at all; • fluctuations in the value of our investments, impairment to the value of our investments, or the failure to realize a return on such investments; • regulatory risks, litigation or other claims inherited from or arising in connection with the acquired company, investment or divestiture; • in the case of a divestiture, unforeseen loss of institutional knowledge, resources, know-how, or other assets; • in the case of a divestiture, potential contractual obligations may trigger, such as change of control obligations, which may negatively impact our ability to execute on such divestiture, our business, our financial condition, or our operating results; and 17 Table of Contents • in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries. • We may not be able to identify acquisition or investment opportunities that meet our strategic objectives, or to the extent that such opportunities are identified, we may not be able to negotiate terms with respect to the acquisition or investment that are acceptable to us.

Should any of the following problems, or others, occur as a result of our acquisition strategy, the impact could be material: • diversion of management time and focus from operating our business; • use of resources that are needed in other areas of our business; • in the case of an acquisition, implementation or remediation of controls, procedures and policies of the acquired company; • in the case of an acquisition, difficulty integrating the accounting systems and operations of the acquired company; • in the case of an acquisition, coordination of product, engineering and selling and marketing functions, including difficulties and additional expenses associated with supporting legacy services and products and hosting infrastructure of the acquired company and difficulty converting the customers of the acquired company onto our systems, platforms and contract terms, including disparities in the revenues, licensing, support or professional services model of the acquired company; 18 Table of Contents • in the case of an acquisition, difficulty integrating, supporting or enhancing acquired product lines or services, including difficulty in transitioning acquired solutions developed with different source code architectures to our integrated platforms, difficulty in supporting feature development across our full suite of house-built and acquired solutions and strain on resources from marketing and supporting multiple platforms prior to integration; • in the case of an acquisition, retention and integration of employees from the acquired company, and preservation of our corporate culture; • in the case of an acquisition, reliance on certain existing executive teams of acquired companies in new industries; • in the case of an acquisition or divestiture, difficulty delivering on our product strategy, including building a platform that enables us to drive value across our full ecosystem of merchants, suppliers and consumers; • unforeseen costs or liabilities; • adverse effects to our existing business relationships with partners and customers as a result of the acquisition, investment or divestiture; • the possibility of adverse tax consequences; • in the case of an acquisition or divestiture, we may not be able to secure required regulatory approvals or otherwise satisfy closing conditions for a proposed transaction in a timely manner, or at all; • fluctuations in the value of our investments, impairment to the value of our investments, or the failure to realize a return on such investments; • regulatory risks, litigation or other claims inherited from or arising in connection with the acquired company, investment or divestiture; • in the case of a divestiture, unforeseen loss of institutional knowledge, resources, know-how, or other assets; • in the case of a divestiture, potential contractual obligations may trigger, such as change of control obligations, which may negatively impact our ability to execute on such divestiture, our business, our financial condition, or our operating results; and • in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries. • We may not be able to identify acquisition or investment opportunities that meet our strategic objectives, or to the extent that such opportunities are identified, we may not be able to negotiate terms with respect to the acquisition or investment that are acceptable to us.

Our results of operations may fluctuate as a result of a number of factors, some of which are beyond our control including but not limited to: • general economic conditions in the geographies and industries where we sell our services and conduct operations; legislative policies where we sell our services and conduct operations; • the budgetary constraints of our customers; seasonality; • the success of our strategic growth initiatives; • costs associated with the launching or integration of new or acquired businesses; • timing of new product introductions by us, our suppliers and our competitors; product and service mix, availability, utilization and pricing; • the mix, by state and country, of our revenues, personnel and assets; • movements in interest rates or tax rates; • changes in, and application of, accounting rules; • changes in the regulations applicable to us; • Litigation matters.

Our results of operations may fluctuate as a result of a number of factors, some of which are beyond our control including but not limited to: • general economic conditions in the geographies and industries where we sell our services and conduct operations; legislative and regulatory policies where we sell our services and conduct operations; • the budgetary constraints of our customers; seasonality; • the success of our strategic growth initiatives; • costs associated with the launching or integration of new or acquired businesses; • timing of new product introductions by us, our suppliers and our competitors; product and service mix, availability, utilization and pricing; • the mix, by state and country, of our revenues, personnel and assets; • movements in interest rates or tax rates; • changes in, and application of, accounting rules; • changes in the regulations applicable to us; and • litigation matters.

We are also a smaller reporting company, and we will remain a smaller reporting company until the fiscal year following the determination that our voting and non-voting common shares held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or our annual revenues are more than $100 million during the most recently completed fiscal year and our voting and non-voting common shares held by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter.

We are a smaller reporting company, and we will remain a smaller reporting company until the fiscal year following the determination that our voting and non-voting common shares held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or our annual revenues are more than $100 million during the most recently completed fiscal year and our voting and non-voting common shares held by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter.

As a result of these factors, we may not succeed in our business, and we could go out of business. The termination of our carrier agreements or our inability to enter into new carrier agreements in the future could materially and adversely affect our ability to compete, which could reduce our revenues and profits.

As a result of these factors, we may not succeed in our business, and we could go out of business. The termination of our carrier agreements and our inability to enter into new carrier agreements in the future could materially and adversely affect our ability to compete, which could reduce our revenues and profits.

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.

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. 22 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.

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.

The payment cash 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.

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.

These and other impacts can materially adversely affect our business, results of operations, financial condition and stock price. 14 Table of Contents We have substantial 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.

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.

As a critical infrastructure service provider, we transmit large amounts of data over our systems, and process and store highly sensitive customer data. Consequently we, our third-party service providers, and our customers operate in an industry that is prone to cyber-attacks.

As a critical infrastructure service provider in telecommunications and fintech, we transmit large amounts of data over our systems, and process and store highly sensitive customer data. Consequently we, our third-party service providers, and our customers operate in an industry that is prone to cyber-attacks.

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 certificate of incorporation has authorized issuance of up to 26,000,000 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 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.

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 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; 26 Table of Contents • 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.

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.

For example, we offer web-based e-mail services and fintech operations, which expose us to potential risks, such as liabilities or claims, by our users and third parties, resulting from unsolicited communications, 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 service.

We may be unable to anticipate all potential types of attacks or intrusions or to implement adequate security barriers or other preventative measures. Certain of our business units have been the subject of attempted and successful cyber-attacks in the past. We have researched the situations and do not believe any material internal or customer information has been compromised.

We may be unable to anticipate all potential types of attacks or intrusions or to implement adequate security barriers or other preventative measures. Certain of our business units have been the subject of attempted and successful cyber-attacks in the past. We have researched the situation and do not believe that any material internal or customer information has been compromised.

Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets. Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets. 24 Table of Contents Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

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.

Although we are somewhat insulated from nonpayment because approximately 30% 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.

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.

There can be no assurance that our business will grow through acquisitions, as anticipated. 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.

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.

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. 24 Table of Contents Risks 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.

If we do not pay cash dividends, our common stock may be less valuable because a return on your investment will occur only if our stock price appreciates. Risks 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.

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.

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, currency volatility, 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 tensions involving Iran and the Middle East) and/or public policy, including increased state, local or federal taxation, tariffs, sanctions or trade restrictions could adversely affect our operating results and financial condition.

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.

Major public health issues, including pandemics, have adversely affected, and could in the future materially adversely affect, us due to their impact on the global economy and demand for our telecommunications and fintech services; the imposition of protective public safety measures, such as shutdowns and restrictive health mandates; and disruptions in our operations, supply chain, network interconnections, and sales 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.

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 have continually operated at a loss with an accumulated deficit of $43,276,006 as of December 31, 2025. 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.

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.

In this instance, we could incur protracted and significant losses and holders of 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.

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.

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.

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 the Company has identified that substantial doubt exists within their ability to continue as a going concern, there is an increased risk associated with an investment in our Company.

We may be unable to achieve some, all or any of the benefits that we expect to achieve from our plan to expand our operations. In the future we may require additional financing for capital requirements and growth initiatives.

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.

Cardona holding 18,066 shares, which together accounts for just over 0.719% 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.

We are subject to audits by taxing and regulatory authorities with respect to certain of our income and operations. These audits can cover periods for several years prior to the date the audit is undertaken and could result in the imposition of liabilities, interest and penalties if our positions are not accepted by the auditing entity.

These audits can cover periods for several years prior to the date the audit is undertaken and could result in the imposition of liabilities, interest and penalties if our positions are not accepted by the auditing entity.

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.

While our most significant customers, from a revenue perspective, vary from quarter to quarter, our 37 largest customers (representing approximately 5.37% of our total customer base) collectively accounted for 90% of total consolidated revenues in fiscal year 2025.

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.

If one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline.

We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline.

The wholesale telecommunications market continues to feature many smaller, less financially stable companies. If weakness in the telecommunications industry or the global economy reduces our ability to collect our accounts receivable from our major customers our profitability may be substantially reduced.

If weakness in the telecommunications industry or the global economy reduces our ability to collect our accounts receivable from our major customers our profitability may be substantially reduced.

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.

A significant portion of our revenue comes from customers and traffic outside of the United States, including high volumes routed to Asia, Africa, and Latin America. 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.

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 and traffic outside the U.S. and our growth strategy is largely focused on emerging markets in Latin America, Asia, Africa, and the Middle East.

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.

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.

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.

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 5,070,743 shares of our common stock issued and outstanding as of the date of this Annual report, with Mr. Iglesias holding 18,436 shares and Mr.

The trading market for our common stock will, to some extent, depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts.

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. The trading market for our common stock will, to some extent, depend on the research and reports that securities or industry analysts publish about us or our business.

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.

These potential problems include, but are not limited to, unanticipated problems relating to the ability to generate sufficient cash flow to operate our business and additional costs and expenses that may exceed current estimates. We expect to continue to incur significant losses into the foreseeable future.

These potential problems include, but are not limited to, unanticipated issues relating to generating sufficient cash flow, managing rapid growth from acquisitions, integrating new business lines, and controlling costs that may exceed current estimates. We expect to continue to incur significant losses into the foreseeable future.

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.

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.

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 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.

In addition, the acquisitions and investments that we consummate may fail to achieve our strategic objectives, in which case we may shut down, divest, or otherwise exit the acquired business or investment, which could harm our reputation and adversely affect our financial position and results of operations. 19 Table of Contents 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.

In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could seriously hurt our business.

Risks Related to Legal Uncertainty We may be subject to securities litigation, which is expensive and could divert management attention. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future.

Investigating and defending these types of claims are expensive, even if the claims are without merit or do not ultimately result in liability and could subject us to significant monetary liability or cause a change in business practices that could negatively impact our ability to compete.

In addition, our customers, third parties, or government entities may assert claims or actions against us if our online services or technologies are used to spread or facilitate malicious or harmful code or applications. 21 Table of Contents Investigating and defending these types of claims are expensive, even if the claims are without merit or do not ultimately result in liability and could subject us to significant monetary liability or cause a change in business practices that could negatively impact our ability to compete.

Further, the barriers to entry in several of our lines of business are not so significant that we may be facing competition from others who see significant opportunities to enter the market and undercut our prices with products that possess superior technological attributes at prices that offer our customers a better value.

Further, the barriers to entry in several of our lines of business are relatively low, so we may face competition from new entrants who undercut our prices with products or services that possess superior technological attributes or offer better value to customers.

Our global operations subject us to many different and complex laws and rules, and we may face difficulty in compliance. Due to our global operations, we are subject to many laws governing international relations (including but not limited to the Foreign Corrupt Practices Act, the U.S. Export Administration Act the EU General Data Protection Regulation, and the U.K.

Due to our global operations across 20 countries and recent acquisitions (including QXTEL with offices in the UK, Argentina, Dubai, Serbia, and Turkey), we are subject to many laws governing international relations (including but not limited to the Foreign Corrupt Practices Act, the U.S. Export Administration Act the EU General Data Protection Regulation, and the U.K.

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.

Such terms could include, among others, preferences as to dividends and distributions on liquidation, conversion rights, voting rights and others, potentially diluting common stockholders or adversely affecting the market price of our common stock. 25 Table of Contents 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.

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.

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.

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.

As a result, our increased expenditures may not maintain or enhance market share and could result in lower profitability. 16 Table of Contents 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.

Any adverse determination in litigation could also subject us to significant liabilities. We may be subject to tax and regulatory audits which could subject us to liabilities. We are subject to tax and regulatory audits which could result in the imposition of liabilities that may or may not have been reserved.

We are subject to tax and regulatory audits which could result in the imposition of liabilities that may or may not have been reserved. We are subject to audits by taxing and regulatory authorities with respect to certain of our income and operations.

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.

There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us. Our failure to obtain future financing or to generate sufficient 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.

If our common stock shares are issued in return for additional funds, the price per share could be lower than that paid by our current shareholders. We anticipate continuing to rely on equity sales of our common stock shares in order to fund our business operations.

We will likely be required to conduct equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake. If our common stock shares are issued in return for additional funds, the price per share could be lower than that paid by our current shareholders.

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.

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 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.

Our customers could experience financial difficulties, which could adversely affect our revenues and profitability if we experience difficulties in collecting our receivables. As a provider of international long-distance services, we depend upon sales of transmission and termination of traffic to other long-distance providers and the collection of receivables from these customers.

As a provider of international long-distance services, we depend upon sales of transmission and termination of traffic to other long-distance providers and the collection of receivables from these customers. The wholesale telecommunications market continues to feature many smaller, less financially stable companies.

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.

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.

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 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. 23 Table of Contents As a smaller reporting company, we areexempt from certain disclosure requirements, which could make our Common Stock less attractive to potential investors.

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.

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.

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.

Our future is dependent upon our ability to obtain financing or upon future profitable operations. We may seek additional funds through private placements of our common stock and/or through debt financing; however, we have no formal commitments or arrangements for such funding, and there can be no assurance that financing will be available on acceptable terms or at all.

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 anticipate continuing to rely on equity sales of our common stock shares in order to fund our business operations. If we issue additional common stock shares or securities convertible into shares of our common stock, your percentage interest in us could become diluted.

We may also face purported consumer class actions or state actions relating to our online services, including our fee-based services. In addition, our customers, third parties, or government entities may assert claims or actions against us if our online services or technologies are used to spread or facilitate malicious or harmful code or applications.

We may also face purported consumer class actions or state actions relating to our online services, including our fee-based services.

For example, some countries are considering or have enacted laws mandating that user data regarding users in their country be maintained in their country.

For example, some countries are considering or have enacted laws mandating that user data regarding users in their country be maintained in their country (data localization requirements). In addition, the EU General Data Protection Regulation (GDPR) and similar frameworks impose operational and compliance requirements that differ from those currently in place in other jurisdictions and include significant penalties for non-compliance.

We expect this IP-based service, which offers voice communications for free to continue to increase, which may result in increased substitution on our service offerings. Our products face intense competitive challenges, including rapid technological changes, and pricing pressure from competitors, which could adversely affect our business.

We expect this IP-based service, which offers voice communications for free, to continue to increase, which may result in increased substitution on our service offerings. Our subsidiary GlobeTopper operates in a rapidly evolving digital payments and incentives market, and its business model may not continue to achieve market acceptance.

We will likely conduct further offerings of our equity securities in the future, in which case your proportionate interest may become diluted. We will likely be required to conduct equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake.

These requirements could reduce the level of trading activity in our stock and make it more difficult for investors to sell their shares if our securities become subject to the penny stock rules. We will likely conduct further offerings of our equity securities in the future, in which case your proportionate interest may become diluted.

The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any listed, trading equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions.

Although our common stock is currently listed on the Nasdaq Capital Market and therefore exempt from the SEC’s penny stock rules, any delisting could result in our securities being subject to those rules. The SEC generally defines a “penny stock” as an equity security with a market price of less than $5.00 per share, subject to certain exemptions.

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.

If our common stock were to be delisted from the Nasdaq Capital Market, we could become subject to the SEC’s “penny stock” rules, which could reduce the level of trading activity in our 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.

Limited liquidity may make it difficult for stockholders to sell their shares without adversely affecting the market price. Unless we are able to generate and maintain increased investor interest in our securities, the market price of our common stock may continue to experience significant volatility.

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.

Because we have a limited operating history, you may not be able to accurately evaluate our operations. We have a limited operating history upon which to evaluate the merits of investing in our Company, particularly with respect to our recent diversification into fintech and AI initiatives.

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. . 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.

Our common stock is listed on the Nasdaq Capital Market under the symbol “IQST.” Although our shares are listed on a national securities exchange, trading in our common stock has historically been limited, and there can be no assurance that an active or sustained trading market will develop.

As a smaller reporting company and will be exempt from certain disclosure requirements, which could make our Common Stock less attractive to potential investors.

These scaled disclosure requirements 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.

Removed

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.

Added

Our global operations subject us to many different and complex laws and rules, and we may face difficulty in compliance.

Removed

There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us.

Added

GlobeTopper’s services depend on continued adoption of digital gift cards, digital incentives, and related payment technologies by enterprises, distribution partners, and end users. Market preferences may shift toward alternative incentive mechanisms, new payment technologies, or competing platforms.

Removed

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

If GlobeTopper fails to adapt its offerings to evolving customer needs or technological changes, its growth prospects and financial performance could be adversely affected. Our products face intense competitive challenges, including rapid technological changes, and pricing pressure from competitors, which could adversely affect our business.

Removed

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.

Added

Our subsidiary GlobeTopper relies on access to a large catalog of merchant brands, and the loss of key merchant relationships could materially impact its business. GlobeTopper’s value proposition depends on maintaining access to more than 4,000 merchant brands across multiple geographies. Merchant partners may change their distribution strategies, impose new restrictions, or terminate relationships.

Removed

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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Cyber-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.

Cyber-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. 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.

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 (including carriers and network partners), (ii) our processing and storage of large amounts of sensitive customer data in our telecommunications and fintech operations, and (iii) the complexity of our multi-continent network composed of legacy and acquired systems.

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.

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, 2025, the Company has not identified any cybersecurity incidents that have materially affected, or are reasonably likely to materially affect, our business strategy, results of operations, or financial condition.

Added

The Company continues to monitor its systems and third-party environments for potential threats and to evaluate and enhance our cybersecurity controls as our business evolves, including following acquisitions and the expansion of fintech services.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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In the event that a dividend is declared, common stockholders on the record date are entitled to share ratably in any dividends that may be declared from time to time on the common stock by our board of directors from funds legally available. There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends.

In the event that a dividend is declared, common stockholders on the record date are entitled to share ratably in any dividends that may be declared from time to time on the common stock by our board of directors from funds legally available. 29 Table of Contents There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends.

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.

Holders of Our Common Stock As of March 31, 2026, we had 5,070,743 shares of our common stock issued and outstanding, held by approximately 82 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.

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.

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.

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is quoted under the symbol “IQST” on the OTCQX operated by OTC Markets Group, Inc. Only a limited market exists for our securities.

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on The Nasdaq Capital Market under the symbol “IQST”, where it has traded since May 14, 2025. Prior to that date, our common stock was quoted on the OTCQX marketplace.

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]

We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock. Item 6. [Reserved]

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.

Fiscal Year Ending December 31, 2025 Quarter Ended High $ Low $ December 31, 2025 3.050 2.840 September 30, 2025 6.850 6.200 June 30, 2025 9.825 9.550 March 31, 2025 12.000 11.760 Fiscal Year Ending December 31, 2024 Quarter Ended High $ Low $ December 31, 2024 24.752 21.200 September 30, 2024 14.320 13.040 June 30, 2024 22.624 19.760 March 31, 2024 31.600 28.000 On March 31, 2026, the last sales price per share of our common stock was $1.59.

These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

The Company did not repurchase any shares of its common stock during the fiscal year ended December 31, 2025. The following table sets forth the high and low sales prices per share of our common stock for the periods indicated. These prices reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions.

Recent 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.

Recent Sales of Unregistered Securities During the year ended December 31, 2025, the Company issued 2,130,808 shares of common stock valued at fair market value on issuance as follows: • 475,125 shares for conversion of Series D Preferred Stock; • 7,500 shares for compensation to our directors valued at $81,813; • 1,271,720 shares for conversion of debt of $5,640,893; • 264,980 shares for settlement of debt of $1,886,658; • 32,400 shares for service valued at $223,200; • 3,563 shares for common stock payable value at $82,194; • 75,529 shares for stock dividend valued at $500,000; • (9) shares for reverse stock split adjustment.

Removed

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.

Removed

Penny Stock The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.

Removed

Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system.

Removed

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

Removed

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.

Removed

These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Item 6. [ Reserved ] 30 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 8. Financial Statements and Supplementary Data 35 Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure 36 Item 9A. Controls and Procedures 36

Item 6. [ Reserved ] 30 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 8. Financial Statements and Supplementary Data 39 Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure 40 Item 9A. Controls and Procedures 40

Item 7. Management's Discussion & Analysis

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

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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.

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, 2025; 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.

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.

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.

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 $239,651 for the year ended December 31, 2025, as compared with $3,162,971 used in investing activities for the year ended December 31, 2024.

(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. · Impairment loss of Goodwill: This represents a non-cash, non-recurring charge related to the deterioration in the value of goodwill and does not impact the Company’s cash flow. · Tax Provision: This adjustment reflects the recognition of income tax expense, which may vary depending on jurisdictional results and does not directly reflect the Company’s core operating performance.

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.

Net Loss We finished the year ended December 31, 2025 with a net loss of $8,510,266 as compared to a loss of $5,180,036 during the year ended December 31, 2024.

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.

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 which is already generating revenue, Cybersecurity and AI.

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.

The results for the period were significantly impacted by expenses at the holding entity (IQSTEL), which include a high component of interest and other financial expenses related to the funds borrowed for the acquisition of QXTEL Limited.

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.

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.

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.

Following is a table with summary data from the consolidated statements of cash flows for the years ended December 31, 2025 and 2024, as presented. 2025 2024 Net cash used in operating activities $ (3,844,872 ) $ (2,930,306 ) Net cash used in investing activities (239,651 ) (3,162,971 ) Net cash provided by financing activities 3,729,525 7,240,966 Net change in cash $ (354,998 ) $ 1,147,689 Our operating activities used $3,844,872 in the year ended December 31, 2025, as compared with $2,930,306 used in operating activities in the year ended December 31, 2024.

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. 30 Table of Contents Results of Operations for the Years Ended December 31, 2025 and 2024 Net Revenue Our net revenue for the year ended December 31, 2025 was $316,899,498 as compared with $283,220,442 for the year ended December 31, 2024.

Critical Accounting Policies A “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

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, 2025. 37 Table of Contents Critical Accounting Policies A “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

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. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

Based upon our current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve months. We intend to fund operations through increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements.

We intend to fund operations through increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements.

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.

The ASU does not change the presentation of expense captions on the face of the income statement. This guidance will be effective for the Company on January 1, 2027, and the Company is currently evaluating the impact of adoption.

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.

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. According to our adjusted EBITDA analysis, our Telecommunications division continues to be a high-performing segment generating solid operating profits, as adjusted EBITDA for the current period increased by 2.35% compared to the prior period.

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.

The increase in Other Expenses in 2025 compared to 2024 is due largely to the loss on settlement of debt and salary payable of $2,441,462 for the year ended December 31, 2025 compared to $482,085 for the year ended December 31, 2024.

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.

The cash used in 2024 in investing activities is largely due to the acquisition of QXTEL, where the Company invested $2,955,121, while in 2025 the cash used in investing activities was largely purchases of property and equipment totaling $113,020.

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.

Consolidated figures show a negative Adjusted EBITDA; while this isn’t ideal, we are in a transitional period, scaling operations and investing heavily in growth initiatives with the execution of our M&A plan.

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.

We are continually identifying operational synergies among all of our subsidiaries to be more cost efficient. Other Income (Expenses) We had other expenses of $4,136,551 for the year ended December 31, 2025, as compared with other expense of $3,951,942 for the year ended December 31, 2024.

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.

These costs primarily consist of usage charges for calls and SMS terminated in vendor’s network, as well as the costs of the digital prepaid products related to Fintech (GlobeTopper) operations. The behavior in the costs shows a logical correlation with the behavior of the revenue commented above.

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.

Gross Margin Our gross margin, which is simply the difference between our revenues and our cost of sales, discussed above, increased from $8,271,749 in 2024 to $9,457,254 in 2025, which is an increase of 14% year-over-year. The Company’s traffic mix continues to shift toward higher-margin services, reinforcing the strategic evolution of its telecom portfolio.

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.

Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires public business entities to provide disaggregated disclosures of certain income statement expense captions in the notes to the financial statements.

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.

Telecom Division Fintech Division Pre-revenue companies IQSTEL Consolidated Year Ended Dec 31, 2025 Year Ended Dec 31, 2024 Year Ended Dec 31, 2025 Year Ended Dec 31, 2024 Year Ended Dec 31, 2025 Year Ended Dec 31, 2024 Year Ended Dec 31, 2025 Year Ended Dec 31, 2024 Year Ended Dec 31, 2025 Year Ended Dec 31, 2024 Revenues 288,723,642 283,220,442 27,955,101 — — — 220,755 — 316,899,498 283,220,442 Cost of revenue 279,986,243 274,948,693 27,403,231 — — — 52,770 — 307,442,244 274,948,693 Gross profit 8,737,399 8,271,749 551,870 — — — 167,985 — 9,457,254 8,271,749 Operating expenses General and administration 6,831,992 6,208,601 547,002 — 3,645 15,550 4,158,073 2,881,662 11,540,712 9,105,813 Impairment loss of goodwill — — — — — — 2,168,552 — 2,168,552 — Total Operating Expenses 6,831,992 6,208,601 547,002 — 3,645 15,550 6,326,625 2,881,662 13,709,264 9,105,813 Operating income/(loss) 1,905,407 2,063,148 4,868 — (3,645 ) (15,550 ) (6,158,640 ) (2,881,662 ) (4,252,010 ) (834,064 ) Other income (expense) (113,219 ) 41,124 (2,692 ) — (120 ) (4,020,640 ) (3,992,946 ) (4,136,551 ) (3,951,942 ) Net income (loss) before income taxes 1,792,188 2,104,272 2,176 — (3,645 ) (15,670 ) (10,179,280 ) (6,874,608 ) (8,388,561 ) (4,786,006 ) Income taxes (118,143 ) (394,030 ) — — — — (3,562 ) — (121,705 ) (394,030 ) Net income (loss) 1,674,045 1,710,242 2,176 — (3,645 ) (15,670 ) (10,182,842 ) (6,874,608 ) (8,510,266 ) (5,180,036 ) Depreciation and Amortization 619,253 499,535 8,414 — — — — — 627,667 499,535 Interest expense 31,147 41,611 2,692 — — — 1,120,567 2,117,814 1,154,406 2,159,425 FX Gains/Losses 43,461 — 6,701 — — — (1,501 ) 48,661 Loss on settlement of debt — — — — — — 2,224,481 482,085 2,224,481 482,085 Loss on settlement of salary payable — — — — — — 216,981 216,981 — Stock-based compensation — — — — — — 305,013 223,219 305,013 223,219 Impairment loss of goodwill — — 2,168,552 2,168,552 — Other non recurrent 153,786 — — — — — — — 153,786 — Taxes 189,365 394,030 0 — — — 3,562 — 192,927 394,030 Change in fair value of derivatives 1,393,046 1,393,046 Adjusted EBITDA 2,711,057 2,645,418 19,983 — (3,645 ) (15,670 ) (4,145,187 ) (2,658,444 ) (1,417,792 ) (28,696 ) 35 Table of Contents In evaluating our financial performance, we utilize Adjusted EBITDA as a supplemental measure to provide insights into the profitability of our core operations.

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.

Financing activities provided $3,729,525 for the year ended December 31, 2025, as compared to $7,240,966 provided for the year ended December 31, 2024. The cash provided in 2025 was largely from loans. We have financed our operations largely through private placements and secured and unsecured debt.

Years 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.

The detail by major category is reflected in the table below: Operating Expenses Year Ended December 31, Category 2025 2024 Salaries, Wages and Benefits $ 3,803,370 $ 3,639,319 Technology 1,617,232 1,192,185 Professional Fees 916,349 1,110,773 Legal & Regulatory 351,570 328,500 Travel & Events 286,176 234,295 Public Cost 120,945 102,773 Advertising 1,878,274 968,206 Bank Services and Fees 238,725 211,591 Depreciation and Amortization 627,667 499,535 Office, Facility and Other 1,370,092 529,892 Insurances 18,902 63,534 Bad debt expense 6,397 1991 $ 11,235,699 $ 8,882,594 Stock-based compensation 305,013 223,219 Impairment loss of goodwill 2,168,552 — $ 13,709,264 $ 9,105,813 When looking at the numbers by subsidiary, we have the following: Operating Expenses Year Ended December 31, Subsidiary 2025 2024 IQSTEL Inc $ 4,158,073 $ 2,881,662 Etelix.com USA, LLC 495,897 428,603 SwissLink Carrier AG 989,396 974,233 Itsbchain 2,639 14,788 QGlobal LLC 380,029 552,388 IoT Labs LLC 293,111 246,254 Global Money One 1,006 762 Smartbiz Telecom 960,303 800,922 Whisl Telecom 334,937 978,760 QXTEL Limited 3,883,944 2,227,441 GlobeTopper LLC 547,002 — $ 12,046,337 $ 9,105,813 Intercompany eliminations (505,625 ) — $ 11,540,712 $ 9,105,813 Impairment loss of goodwill 2,168,552 — $ 13,709,264 $ 9,105,813 33 Table of Contents General and administration expenses increased from $9,105,813 to $13,709,264 as of December 2025.

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.

When looking at the numbers by subsidiary, we have the following breakout for the years ended December 31, 2025 and 2024: Cost of Revenue Year Ended December 31, Subsidiary 2025 2024 IQSTEL Inc $ 52,770 $ — Etelix.com USA, LLC 31,097,001 74,848,503 SwissLink Carrier AG 21,568,250 12,541,394 QGlobal LLC 1,183,985 1,300,453 IoT Labs LLC 116,258,375 92,196,261 Smartbiz Telecom 11,801,401 20,508,454 Whisl Telecom 2,441,573 3,606,438 QXTEL Limited 136,995,565 92,486,843 GlobeTopper LLC 27,403,231 — $ 348,802,151 $ 297,488,346 Intercompany eliminations (41,359,907 ) (22,539,653 ) $ 307,442,244 $ 274,948,693 Our cost of revenue consists of direct charges from vendors that the Company incurs to deliver services to its customers.

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.

We have reached a higher volume of revenue and every additional unit sold (Telecom and Fintech) has its corresponding termination cost. Our cost of revenue for the year ended December 31, 2025 was $307,442,244 as compared with $ 274,948,693 for the year ended December 31, 2024. These numbers reflect an increase of 12% year over year.

Removed

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.

Added

These numbers reflect an increase of 12% year over year on our consolidated Revenues.

Removed

In fact, 38% of the increase was organic grow, while the remaining 62% was due to the acquisition of QXTEL Inc.

Added

When looking at the numbers by subsidiary, we have the following breakout for the years ended December 31, 2025 and 2024: Revenue Year Ended December 31, Subsidiary 2025 2024 IQSTEL Inc $ 220,755 $ — Etelix.com USA, LLC 31,748,230 75,405,682 SwissLink Carrier AG 22,394,346 13,349,998 QGlobal LLC 1,766,881 1,694,891 IoT Labs LLC 117,370,459 94,170,000 Smartbiz Telecom 12,743,474 21,435,486 Whisl Telecom 2,916,447 4,301,577 QXTEL Limited 141,624,991 95,681,790 GlobeTopper LLC 27,955,101 — $ 358,740,684 $ 306,039,424 Intercompany eliminations (41,841,186 ) (22,818,982 ) $ 316,899,498 $ 283,220,442 The continued growth in revenue is the result of the development of our commercial strategy, including the strengthening of our commercial and operational activities, as well as intercompany synergies developed throughout the year.

Removed

The detail by major category is reflected in the table below.

Added

The largest revenue concentration comes from IOT, which increased by 25% compared to last year, and QXTEL, which since its inclusion in mid-2024 continues to represent the highest share of revenue, accounting for 39% of the total volume for this period.

Removed

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.

Added

The increase also includes the contribution from the newly acquired subsidiary, GlobeTopper LLC, which was consolidated starting July 1, 2025. In 2024, our revenue was entirely derived from telecommunications services, with approximately 33.91% generated from SMS and 66.09% from voice.

Removed

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

In 2025, our revenue mix evolved meaningfully: SMS increased to 36.6%, voice represented 54.51%, and our newly launched fintech operations contributed 8.89% of total revenue. The continued expansion of SMS traffic is strategically beneficial, as SMS services generally carry higher gross margins than traditional voice offerings, supporting improvements in our overall profitability profile.

Removed

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.

Added

In addition, the introduction of fintech as a new revenue-generating segment reflects the early stages of a broader diversification strategy, reducing reliance on a single business line and positioning the Company with a more balanced and resilient revenue base over time.

Removed

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.

Added

Intercompany eliminations rose as well, driven by higher transactions among group entities, which are removed to avoid double counting at the consolidated level. These intercompany transactions are part of our strategy to optimize operations across subsidiaries by leveraging more efficient routing alternatives for our voice and SMS services, cost reductions, and improved service delivery.

Removed

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.

Added

This synergy among our entities strengthens our position in the market and contributes to enhanced gross margin results. 31 Table of Contents Cost of Revenue Our total cost of revenue for the year ended December 31, 2025 was $307,442,244 as compared with $274,948,693 for the year ended December 31, 2024.

Added

The consolidation of GlobeTopper, along with the traffic volumes generated by QXTEL and the portfolio reorganization among subsidiaries, highlights the synergies created through the group’s commercial and operational integration. As a result, intercompany transactions have increased, supporting our strategy to optimize routing and improve cost efficiency. This is expected to contribute positively to future revenue and margin performance.

Added

In 2025, the business carried 17.4 billion SMS and short-code messages, up from 13.9 billion in 2024, an increase of 3.5 billion messages or 25.18% year over year. While this growth follows an exceptional 32.94% expansion from 2023 to 2024, the sustained double-digit trajectory highlights the strengthening role of SMS within the Company’s service mix.

Added

Because SMS consistently delivers superior gross margins compared to traditional voice, this shift not only expands volumes but also enhances the overall profitability profile of the communications segment, signaling a deliberate and effective enrichment of the Company’s product offering 32 Table of Contents This trend is reflected in our quarterly performance: total gross margin increased from 2.74% in the fourth quarter of 2024 to 3.46% in the fourth quarter of 2025, representing a 26.17% year-over-year improvement.

Added

Cost of Revenue for the Three Months Ended December 31, Description 2025 2024 Revenue $ 84,215,893 $ 98,920,186 Cost of Revenue 81,305,798 96,211,006 $ 2,910,095 $ 2,709,180 Gross margin % 3.46 % 2.74 % Operating Expenses Operating expenses for the year ended December 31, 2025 were $13,709,264 as compared with $9,105,813 for the year ended December 31, 2024.

Added

IQSTEL represents the largest share of general and administration expenses for the period at 30%, followed by QXTEL with 28%. The increase compared to the prior year is mainly driven by the expansion of the group and the consolidation of QXTEL and GlobeTopper.

Added

The most significant variations include the increase in technology expenses related to the deployment and upgrade of the switching platform to support all subsidiaries, which is expected to generate cost efficiencies once the migration process is completed. Additionally, the Company recognized a non-cash goodwill impairment of $2,168,552.

Added

Including this effect, total operating expenses reached $13,709,264, representing an increase of 50.56% compared to the prior year. This adjustment is non-recurring in nature and does not impact cash flow.

Added

The underlying increase in operating expenses is primarily related to higher salaries, depreciation and amortization, and general administrative costs, in line with the growth of the business and the integration of newly consolidated subsidiaries. Advertising expenses also increased to support commercial expansion, while insurance expenses decreased during the period.

Added

Additionally, during 2025, the Company recognized a non-cash goodwill impairment of $2,168,552, which represents a material, non-recurring expense for the period and does not impact the Company’s cash flow. Excluding this effect, the variation in net loss would have been less pronounced. Our Telecom Division, currently the primary source of revenue for the Company, continued to generate positive Operating Income.

Added

Meanwhile, our pre-revenue companies are operating with minimal expenses, focused solely on completing product and service development prior to their market launch.

Added

A comparison of the tables below highlights the progress of our Telecom Division, as evidenced by the increase in revenue, gross profit, and operating income for both the three- and twelve-month periods ended December 31, 2025.

Added

As we have previously stated, our strategy remains centered on strengthening the telecommunications segment to serve as a growth engine for the development and expansion of new business lines. Our telecom division revenues have increased year over year. Additionally, its gross profit has risen by 6%, going from $8,271,749 to $8,737,399.

Added

On the other hand, our Fintech division continues to strengthen its position within the Group’s strategy.

Added

For the year ended 2025, the division reported revenues of $27,955,101 and operating expenses of $547,002, resulting in operating income of $4,868 and net income of $2,176. 34 Table of Contents This performance reflects the initial contribution from GlobeTopper, which was incorporated during 2025 and represents an important milestone for the development of this business line.

Added

While the division did not generate profits in 2024, the progress achieved in 2025 demonstrates the Company’s commitment to expanding its presence in the fintech segment and leveraging new opportunities that can also support the growth of our other business lines.

Added

Meanwhile, the contribution of our Fintech business, which debuted with an EBITDA of $19,983, representing a significant milestone in the diversification of our business lines and supporting the Company's long-term growth strategy.

Added

Management has also identified areas for cost-cutting and operational improvements and has acted in that direction Goodwill Impairment Analysis During the year ended December 31, 2025, the Company performed its annual goodwill impairment assessment in accordance with ASC 350, Intangibles—Goodwill and Other .

Added

Consistent with our policy, each reporting unit was evaluated by comparing its estimated fair value to its carrying amount. Management engaged an independent valuation firm to assist in the determination of fair value using a discounted cash flow approach and market participant assumptions.

Added

The analysis indicates, “the carrying value of SwissLink Carrier AG, IoT Labs, LLC, Smartbiz Telecom, LLC and Whisl Telecom are in excess of its fair value indicating impairment in the amount of $402,445, $81,782, $796,690, and $887,635, respectively.” Based on this analysis, the Company recorded total goodwill impairment charges of approximately $2.17 million for the year ended December 31, 2025.

Added

These non-cash charges reflect changes in the long-term financial outlook of the affected reporting units, including updated assumptions regarding revenue growth, margin performance, and discount rates. The impairment charges do not impact the Company’s liquidity, cash flows from operations, or compliance with debt covenants.

Added

Management will continue to monitor macroeconomic conditions, reporting-unit performance, and other triggering events that may require interim impairment testing. 36 Table of Contents Liquidity and Capital Resources As of December 31, 2025 we had total current assets of $36,162,424, compared with total current liabilities of $34,606,407, resulting in a positive working capital of $ 1,556,017 and a current ratio of approximately 1.04 to 1.

Added

Material Cash Requirements The Company’s material cash requirements include: Working capital needs associated with high-volume telecom traffic settlement cycles. Vendor and carrier payments, including interconnection fees, SMS termination costs, and network capacity charges. Debt service obligations, including interest and scheduled principal payments under existing credit facilities. Capital expenditures related to network infrastructure, platform development, and AI-driven software enhancements.

Added

Regulatory and compliance costs, including licensing, audits, and data protection requirements across multiple jurisdictions. Based upon our current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve months.

Added

Accounts Receivable and Allowance for Uncollectible Accounts Substantially all of the Company’s accounts receivable balance is related to trade receivables. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable.

Added

The Company estimates expected credit losses related to accounts receivable balances based on a review of available and relevant information including current economic conditions, projected economic conditions, historical loss experience, account aging, and other factors that could affect collectability. No allowance for doubtful accounts was recorded as of December 31, 2025 or 2024.

Added

During the years ended December 31, 2025 and 2024, the Company recorded bad debt expense of $6,397 and $1,991, respectively. Long-Lived Assets Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate.

Added

Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value. Intangible Assets Intangible assets represent mainly the interconnection agreements acquired from the acquisition of QXTEL.

Added

The acquired intangible asset was recognized and measured at fair value at the time of acquisition and is amortized on a straight-line basis over the estimated economic useful life of the respective asset. The estimated useful life of the acquired interconnection agreements is 16 years.

Added

Impairment of tangible and intangible assets Tangible and intangible assets (excluding goodwill) are assessed at each reporting date for indications that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset's recoverable amount.

Added

The asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs of disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.

Added

Where the carrying amount of an asset or a group of assets exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

Added

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or the group of assets. 38 Table of Contents Goodwill Impairment Goodwill represents the excess purchase consideration over the fair value of identifiable net assets acquired in business combinations.

Added

We test goodwill for impairment at least annually, or more frequently if events or changes in circumstances indicate that the carrying value of a reporting unit may not be recoverable. The impairment test requires significant judgment and the use of estimates, including projected future cash flows, long-term growth rates, discount rates, and market participant assumptions.

Added

For the annual impairment test performed as of December 31, 2025, the Company engaged an independent valuation specialist to assist in determining the fair value of each reporting unit. The valuation was performed under ASC 350 using a discounted cash flow methodology and fair value measurement concepts under ASC 820.

Added

As described in the analysis, fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The analysis concluded that four reporting units—SwissLink Carrier AG, IoT Labs, LLC, Smartbiz Telecom, LLC, and Whisl Telecom—had carrying values that exceeded their estimated fair values, resulting in goodwill impairments of $402,445, $81,782, $796,690, and $887,635, respectively.

Added

The determination of fair value is highly sensitive to changes in key assumptions. For example, variations in discount rates, long-term growth rates, or projected cash flows could materially affect the estimated fair value of a reporting unit and potentially result in additional impairment charges in future periods.

Added

Management believes the assumptions used in the impairment analysis are reasonable and consistent with those a market participant would apply. However, because these estimates involve inherent uncertainty, actual results may differ, and future impairment charges may be required if reporting-unit performance falls short of expectations or if macroeconomic conditions deteriorate.

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iQSTEL IncIQSTEarnings & Financial Report

Top changes in iQSTEL Inc's 2025 10-K

Item 1. Business

Item 1A. Risk Factors

Item 1C. Cybersecurity

Item 5. Market for Registrant's Common Equity

Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

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