iQSテルの四半期報告

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


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

	For the quarterly period ended September 30, 2025

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

	For the transition period from __________ to__________

	Commission File Number: 001-42644

IQSTEL Inc.

(Exact name of registrant as specified in its charter)


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

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

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol		Name of each exchange on which registered
Common Stock		IQST		The Nasdaq Stock Market LLC (The Nasdaq Capital Market)

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

[X] Yes [ ] No

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

☐ Large accelerated filer	☐ Accelerated filer
☒ Non-accelerated Filer	☒ Smaller reporting company
	☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

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

[ ] Yes [X] No

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 4,299,375 common shares as of November 14, 2025

Table of Contents

TABLE OF CONTENTS
		Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	13
Item 4:	Controls and Procedures	14
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	15
Item 1A:	Risk Factors	15
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3:	Defaults Upon Senior Securities	15
Item 4:	Mine Safety Disclosures	15
Item 5:	Other Information	15
Item 6:	Exhibits	16

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

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

F-1	Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024;
F-2	Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 (unaudited);
F-3	Consolidated Statements of Stockholder’s Equity for nine months ended September 30, 2025 and 2024 (unaudited).
F-4	Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (unaudited); and
F-5	Notes to Consolidated Financial Statements (unaudited).

These interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended September 30, 2025 are not necessarily indicative of the results that can be expected for the full year.

Table of Contents

IQSTEL INC

Consolidated Balance Sheets

	September 30, 2025 (Unaudited)			December 31, 2024
ASSETS
Current Assets
Cash	$	2,259,432		$	2,510,357
Accounts receivable, net		23,979,191			57,158,967
Inventory		30,658			30,658
Due from related parties		668,177			630,715
Prepaid and other current assets		2,900,271			2,684,349
Total Current Assets		29,837,729			63,015,046

Property and equipment, net		670,642			561,802
Intangible assets, net		7,077,715			7,438,654
Goodwill		7,958,601			6,750,045
Deferred tax assets		243,108			243,108
Other assets		1,098,405			999,083
TOTAL ASSETS	$	46,886,200		$	79,007,738

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	7,942,825		$	2,129,241
Accrued and other current liabilities		15,009,370			55,624,784
Contract liabilities		887,408			—
Due to related parties		65,829			26,613
Loans payable - net of discount of $105,323 and $62,898, respectively		2,674,548			2,455,641
Loans payable - related parties		211,050			720,485
Convertible notes - net of discount of $7,671 and $138,654, respectively		1,166,471			1,864,432
Contingent liability for acquisition of subsidiary		285,175			1,000,000
Stock payable for acquisition of subsidiary		500,000			—
Total Current Liabilities		28,742,676			63,821,196

Convertible notes - net of discount of $0 and $210,296		—			3,011,926
Loans payable, non-current		34,118			—
Employee benefits, non-current		256,130			274,353
TOTAL LIABILITIES		29,032,924			67,107,475

Stockholders' Equity
Preferred stock: 1,200,000 authorized; $0.001 par value
Series A Preferred stock: 10,000 designated; $0.001 par value, 10,000 shares issued and outstanding		10			10
Series B Preferred stock: 200,000 designated; $0.001 par value, 42,108 and 35,537 shares issued and outstanding, respectively		42			36
Series C Preferred stock: 200,000 designated; $0.001 par value, No shares issued and outstanding		—			—
Series D Preferred stock: 100,000 designated; $0.001 par value, 37,110 and 0 shares issued and outstanding, respectively		37			—
Common stock: 26,000,000 and 3,750,000 authorized; $0.001 par value 3,832,470 and 2,537,209 shares issued and outstanding, respectively		3,833			2,537
Additional paid in capital		52,140,091			39,943,924
Accumulated deficit		(38,945,805	)		(32,703,410	)
Accumulated other comprehensive loss		(25,340	)		(25,340	)
Equity attributed to stockholders of IQSTEL Inc.		13,172,868			7,217,757
Equity attributable to noncontrolling interests		4,680,408			4,682,506
TOTAL STOCKHOLDERS' EQUITY		17,853,276			11,900,263

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	46,886,200		$	79,007,738

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

F-1

Table of Contents

IQSTEL INC

Consolidated Statements of Operations

(Unaudited)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024

Revenues	$	102,867,553		$	54,249,614		$	232,683,605		$	184,346,412
Cost of revenue		100,126,838			52,229,695			226,136,445			178,737,687
Gross profit		2,740,715			2,019,919			6,547,160			5,608,725

Operating expenses
General and administration		3,299,798			2,076,472			8,366,698			6,144,677
Total operating expenses		3,299,798			2,076,472			8,366,698			6,144,677

Operating loss		(559,083	)		(56,553	)		(1,819,538	)		(535,952	)

Other income (expense)
Other income		48,739			7,006			94,253			88,151
Other expenses		(55,058	)		(5,770	)		(134,804	)		(6,620	)
Interest expense		(342,659	)		(672,266	)		(1,333,503	)		(1,533,820	)
Change in fair value of derivative liabilities		—			51,721			—			(1,063,789	)
Loss on settlement of debt		(1,345,889	)		(27,537	)		(2,224,481	)		(130,197	)
Loss on settlement of salary payable		—			—			(216,981	)		—
Total other expense		(1,694,867	)		(646,846	)		(3,815,516	)		(2,646,275	)

Net loss before provision for income taxes		(2,253,950	)		(703,399	)		(5,635,054	)		(3,182,227	)
Income taxes		(71,919	)		(69,605	)		(184,190	)		(134,880	)
Net loss		(2,325,869	)		(773,004	)		(5,819,244	)		(3,317,107	)
Less: Net income attributable to noncontrolling interests		140,961			150,784			212,522			424,600
Net loss attributed to IQSTEL Inc.	$	(2,466,830	)	$	(923,788	)	$	(6,031,766	)	$	(3,741,707	)

Comprehensive loss
Net loss	$	(2,325,869	)	$	(773,004	)	$	(5,819,244	)	$	(3,317,107	)
Total loss		(2,325,869	)	$	(773,004	)	$	(5,819,244	)	$	(3,317,107	)
Less: Comprehensive income attributable to noncontrolling interests		140,961			150,784			212,522			424,600
Net comprehensive loss attributed to IQSTEL Inc.	$	(2,466,830	)	$	(923,788	)	$	(6,031,766	)	$	(3,741,707	)

Basic and diluted loss per common share	$	(0.68	)	$	(0.40	)	$	(1.97	)	$	(1.67	)

Weighted average number of common shares outstanding - Basic and diluted		3,635,616			2,303,557			3,076,480			2,241,409

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

F-2

Table of Contents

IQSTEL INC

Consolidated Statements of Changes in Stockholders’ Equity

For the three and nine months ended September 30, 2025 and 2024

(Unaudited)


	Series A Preferred Stock				Series B Preferred Stock				Series D Preferred Stock				Common Stock
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Additional Paid in Capital			Accumulated Deficit			Accumulated Comprehensive Loss			Total			Non Controlling Interest			Total Stockholders' Equity
Balance - December 31, 2024		10,000	$	10		35,537	$	36		—	$	—		2,537,209	$	2,537	$	39,943,924		$	(32,703,410	)	$	(25,340	)	$	7,217,757		$	4,682,506		$	11,900,263

Common stock issued for compensation		—		—		—		—		—		—		1,875		2		32,813			—			—			32,815			—			32,815
Common stock issued for conversion of debt		—		—		—		—		—		—		94,981		95		835,739			—			—			835,834			—			835,834
Common stock issued for common stock payable		—		—		—		—		—		—		3,563		4		(4	)		—			—			—			—			—
Dividend to non-controlling interest		—		—		—		—		—		—		—		—		—			(68,645	)		—			(68,645	)		—			(68,645	)
Net income (loss)		—		—		—		—		—		—		—		—		—			(1,157,958	)		—			(1,157,958	)		13,497			(1,144,461	)
Balance - March 31, 2025		10,000	$	10		35,537	$	36		—	$	—		2,637,628	$	2,638	$	40,812,472		$	(33,930,013	)	$	(25,340	)	$	6,859,803		$	4,696,003		$	11,555,806

Series B Preferred stock issued for settlement of salary payable		—		—		6,571		6		—		—		—		—		848,475						—			848,481			—			848,481
Common stock issued for compensation		—		—		—		—		—		—		1,875		2		22,381			—			—			22,383			—			22,383
Common stock issued for conversion of debt		—		—		—		—		—		—		599,933		600		2,391,470			—			—			2,392,070			—			2,392,070
Common stock issued for settlement of debt		—		—		—		—		—		—		264,980		265		1,886,393			—			—			1,886,658			—			1,886,658
Reverse split adjustment		—		—		—		—		—		—		38		—		—			—			—			—			—			—
Dividend to non-controlling interest		—		—		—		—		—		—		—		—		—			(68,484	)		—			(68,484	)		—			(68,484	)
Net income (loss)		—		—		—		—		—		—		—		—		—			(2,406,978	)		—			(2,406,978	)		58,064			(2,348,914	)
Balance - June 30, 2025		10,000	$	10		42,108	$	42		—	$	—		3,504,454	$	3,505	$	45,961,191		$	(36,405,475	)	$	(25,340	)	$	9,533,933		$	4,754,067		$	14,288,000

Series D Preferred stock issued for settlement of debt		—		—		—		—		37,110		37		—		—		4,708,295			—			—			4,708,332			—			4,708,332
Common stock issued for conversion of debt		—		—		—		—		—		—		293,741		294		1,231,494			—			—			1,231,788			—			1,231,788
Common stock issued for compensation		—		—		—		—		—		—		1,875		2		15,943			—			—			15,945			—			15,945
Common stock issued for service		—		—		—		—		—		—		32,400		32		223,168			—			—			223,200			—			223,200
Dividend to non-controlling interest		—		—		—		—		—		—		—		—		—			(73,500	)		—			(73,500	)		—			(73,500	)
Acquisition of subsidiary		—		—		—		—		—		—		—		—		—			—			—			—			(214,620	)		(214,620	)
Net income (loss)		—		—		—		—		—		—		—		—		—			(2,466,830	)		—			(2,466,830	)		140,961			(2,325,869	)
Balance - September 30, 2025		10,000	$	10		42,108	$	42		37,110	$	37		3,832,470	$	3,833	$	52,140,091		$	(38,945,805	)	$	(25,340	)	$	13,172,868		$	4,680,408		$	17,853,276

	Series A Preferred Stock				Series B Preferred Stock						Common Stock
	Shares		Amount		Shares		Amount				Shares		Amount		Additional Paid in Capital		Accumulated Deficit			Accumulated Comprehensive Loss			Total			Non Controlling Interest			Total Stockholders' Equity
Balance - December 31, 2023		10,000	$	10		31,080		31	—	—		2,151,620	$	2,152	$	34,530,862	$	(26,084,133	)	$	(25,340	)	$	8,423,582		$	(377,710	)	$	8,045,872

Common stock issued for compensation		—		—		—		—	—	—		1,875		2		31,063		—			—			31,065			—			31,065
Common stock issued for settlement of debt		—		—		—		—	—	—		22,125		22		279,638		—			—			279,660			—			279,660
Common stock issued in conjunction with convertible notes		—		—		—		—	—	—		44,192		44		597,733		—			—			597,777			—			597,777
Net income (loss)		—		—		—		—	—	—		—		—		—		(809,767	)		—			(809,767	)		229,551			(580,216	)
Balance - March 31, 2024		10,000	$	10		31,080		31	—	—		2,219,812	$	2,220	$	35,439,296	$	(26,893,900	)	$	(25,340	)	$	8,522,317		$	(148,159	)	$	8,374,158

Common stock issued for compensation		—		—		—		—	—	—		1,875		2		46,598		—			—			46,600			—			46,600
Common stock issued for warrant exercises		—		—		—		—	—	—		22,778		23		399,977		—			—			400,000			—			400,000
Resolution of derivative liabilities upon exercise of warrant		—		—		—		—	—	—		—		—		239,323		—			—			239,323			—			239,323
Acquisition of subsidiary		—		—		—		—	—	—		—		—		—		—			—			—			475,685			475,685
Net income (loss)		—		—		—		—	—	—		—		—		—		(2,008,152	)		—			(2,008,152	)		44,265			(1,963,887	)
Balance - June 30, 2024		10,000	$	10		31,080		31	—	—		2,244,465	$	2,245	$	36,125,194	$	(28,902,052	)	$	(25,340	)	$	7,200,088		$	371,791		$	7,571,879

Common stock issued for conversion of debt		—		—		—		—	—	—		38,305		38		337,045		—			—			337,083			—			337,083
Common stock issued for compensation		—		—		—		—	—	—		1,875		2		31,818		—			—			31,820			—			31,820
Common stock issued for warrant exercises		—		—		—		—	—	—		42,563		43		174,957		—			—			175,000			—			175,000
Common stock payable		—		—		—		—	—	—		—		—		100,000		—			—			100,000			—			100,000
Resolution of derivative liabilities upon exercise of warrant		—		—		—		—	—	—		—		—		646,520		—			—			646,520			—			646,520
Net income (loss)		—		—		—		—	—	—		—		—		—		(923,788	)		—			(923,788	)		150,784			(773,004	)
Balance - September 30, 2024		10,000	$	10		31,080		31	—	—		2,327,208	$	2,328	$	37,415,534	$	(29,825,840	)	$	(25,340	)	$	7,566,723		$	522,575		$	8,089,298

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

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IQSTEL INC

Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
	2025			2024

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(5,819,244	)	$	(3,317,107	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation		294,343			109,485
Bad debt expense		4,536			1,801
Depreciation and amortization		450,142			104,061
Amortization of debt discount		385,721			856,922
Change in fair value of derivative liabilities		—			1,063,789
Loss on settlement of debt		2,224,481			130,197
Loss on settlement of salary payable		216,981			—
Changes in operating assets and liabilities:
Accounts receivable		44,188,082			11,789,409
Inventory		—			(3,537	)
Prepaid and other assets		(130,466	)		(434,217	)
Accounts payable		416,773			(8,331,945	)
Accrued and other current liabilities		(44,833,669	)		(4,495,509	)
Net cash used in operating activities		(2,602,320	)		(2,526,651	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of subsidiary, net of cash received of $129,531 and $769,879, respectively		(70,469	)		(2,730,121	)
Purchase of property and equipment		(111,400	)		(134,016	)
Payment of loan receivable - related party		(37,462	)		(119,832	)
Collection of amounts due from related parties		—			33,602
Net cash used in investing activities		(219,331	)		(2,950,367	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loans payable		5,465,000			2,011,100
Repayments of loans payable		(28,214	)		(669,121	)
Repayments of note payable issued for acquisition of subsidiary		(2,048,190	)		—
Proceeds from loans payable - related parties		—			1,000,000
Repayment of loans payable - related parties		(530,471	)		(333,378	)
Proceeds from common stock payable		—			100,000
Proceeds from exercise of warrants		—			575,000
Proceeds from stock purchase option		—			100,000
Proceeds from convertible notes		987,500			3,997,500
Repayment of convertible notes		(1,064,269	)		(541,612	)
Dividend paid to non-controlling interest		(210,630	)		—
Net cash provided by financing activities		2,570,726			6,239,489

Effect of exchange rate changes on cash		—			—

Net change in cash		(250,925	)		762,471
Cash, beginning of period		2,510,357			1,362,668
Cash, end of period	$	2,259,432		$	2,125,139

Supplemental cash flow information
Cash paid for interest	$	342,976		$	480,431
Cash paid for taxes	$	202,274		$	—

Non-cash transactions:
Series B Preferred stock issued for settlement of salary payable	$	848,480		$	—
Series D Preferred stock issued for settlement of debt	$	4,708,332		$	—
Common stock issued for settlement of debt	$	1,886,658		$	279,660
Common stock issued in connection with convertible notes	$	—		$	597,777
Common stock issued for conversion of debt	$	4,459,692		$	337,083
Cashless warrant exercised	$	—		$	1,815
Common stock issued for common stock payable	$	4		$	—
Resolution of derivative liabilities	$	—		$	885,843
Note payable issued for acquisition of subsidiary	$	1,100,000		$	2,000,000
Contingent liability for acquisition of subsidiary	$	285,175		$	1,000,000
Stock payable for acquisition of subsidiary	$	500,000		$	—
Purchase of vehicle with financing loan and a related party advance	$	86,643		$	—

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

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IQSTEL INC

Notes to the Unaudited Consolidated Financial Statements

September 30, 2025

NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization and Operations

IQSTEL Inc. (“IQSTEL”, “we”, “us”, or the “Company”) was incorporated under the laws of the State of Nevada on June 24, 2011 under the name of B-Maven Inc. The Company changed its name to PureSnax International, Inc. on September 18, 2015, and more recently it changed its name to IQSTEL Inc. on August 7, 2018.

The Company has been engaged in the business of telecommunication services as a wholesale carrier of voice, SMS and data for other telecom companies around the World with over 603 active interconnection agreements with mobile companies, fixed line companies and other wholesale carriers.

The Company is a technology company with a presence in 20 countries and approximately 100 employees that is offering leading-edge services through its four business divisions.

The Telecom Division, which represents the majority of current operations and which also represents 94% of all of the Company’s revenues, offers VoIP, SMS, proprietary Internet of Things (IoT) solutions, and international fiber-optic connectivity through its subsidiaries: Etelix.com USA, LLC, SwissLink Carrier AG, Smartbiz Telecom LLC, Whisl Telecom LLC, IoT Labs, LLC, QGlobal SMS, LLC, and QXTEL LIMITED.

Also under the Telecom Division, the Company’s developing Blockchain Platform Business Line offers our proprietary Mobile Number Portability Application (MNPA) to serve the in-country portability needs through its subsidiary, ItsBchain, LLC.

The Company’s developing Fintech Business Line offers a complete Fintech ecosystem MasterCard Debit Card, US Bank Account (No SSN Needed), Mobile App/Wallet (Remittances, Mobile Top Up). The Company’s Fintech subsidiary, Global Money One Inc., is to provide immigrants access to reliable financial services that makes it easier to manage their money and stay connected with their families back home. Additionally, Globetopper LLC (www.globetopper.com) our most recent acquisitions, plays a strategic role in supporting the expansion and integration of our business divisions. Through its operations, the Company continues to strengthen its global presence and enhance the synergy in Fintech segments through its solution for gift card programs, currently representing 6% of our revenues for the nine months ended September 30, 2025.

The Company’s developing Electric Vehicle (EV) Business Line offers electric motorcycles for work and recreational use in the USA, Spain, Portugal, Panama, Colombia, and Venezuela. EVOSS is also working on the development of an EV Mid Speed Car to serve the niche of the 2nd car in the family.

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

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

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In the opinion of the Company’s management, the accompanying unaudited interim consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2025 and the results of operations and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 31, 2025.

Consolidation Policy

The consolidated financial statements of the Company include the accounts of the Company and its owned subsidiaries, Etelix.com USA, LLC (“Etelix”), SwissLink Carrier AG (“Swisslink”), ITSBCHAIN, LLC (“ItsBchain”), QGLOBAL SMS, LLC (“QGlobal”), IoT Labs, LLC (“IoT Labs”), Global Money One Inc (“Global Money One”), Whisl Telecom LLC (“Whisl”), Smartbiz Telecom LLC (“Smartbiz”), QXTEL LIMITED (“QXTEL”) and Globetopper LLC (“Globetopper”). All significant intercompany balances and transactions have been eliminated in consolidation.

Business Combinations

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

Reverse stock split

The Company announced a reverse stock split effective on May 2, 2025 (the “Market Effective Date”). The Board of Directors of the Company approved a reverse stock split of the Company’s authorized, issued and outstanding shares of common stock, par value $0.001 per share (the “Common Stock”), at a ratio of 1-for-80. All issued and outstanding common stock, options and warrants to purchase common stock and per share amounts contained in this Report have been adjusted retroactively to reflect the change in capital structure for all periods presented.

All share and per share information in these financial statements retroactively reflect this reverse stock split.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had no cash equivalents at September 30, 2025 and December 31, 2024.

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Accounts Receivable and Allowance for Uncollectible Accounts

Substantially all of the Company’s accounts receivable balance is related to trade receivables. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company estimates expected credit losses related to accounts receivable balances based on a review of available and relevant information including current economic conditions, projected economic conditions, historical loss experience, account aging, and other factors that could affect collectability. During the nine months ended September 30, 2025 and 2024, the Company recorded bad debt expense of $4,536 and $1,801, respectively.

Net Income (Loss) Per Share of Common Stock

The Company has adopted Accounting Standards Codification ASC 260, ”Earnings per Share” which requires presentation of basic earnings per share on the face of the statements of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share computation. In the accompanying financial statements, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants unless the result would be antidilutive. Dilutive potential common shares include outstanding Series B Preferred stock and convertible notes, and these were excluded from the computation of diluted net loss per share as the result was anti-dilutive for the three and nine months ended September 30, 2025 and 2024.

The following represents a reconciliation of the numerators of the basic and diluted earnings per share computation for the three and nine months ended September 30, 2025 and 2024:

Net loss attributed to common stockholders of IQSTEL Inc.


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Net loss attributed to IQSTEL Inc.	$	(2,466,830	)	$	(923,788	)	$	(6,031,766	)	$	(3,741,707	)
Undeclared divided on Series D Preferred Stock		(13,916	)		—			(13,916	)		—
Net loss attributed to common stockholders of IQSTEL Inc.	$	(2,480,746	)	$	(923,788	)	$	(6,045,682	)	$	(3,741,707	)

Weighted average number of common shares outstanding - Basic and diluted		3,635,616			2,303,557			3,076,480			2,241,409

Basic and diluted loss per common share	$	(0.68	)	$	(0.40	)	$	(1.97	)	$	(1.67	)

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents, accounts receivable, and related party payables. The Company places its cash and cash equivalents with financial institutions of high creditworthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. Based on the Federal Deposit Insurance Corporation (FDIC) applicable in the United Sates, Switzerland’s deposit protection system (Esisuisse) and the Financial Services Compensation Scheme (FSCS) applicable in the U.K., 47.21% of our cash and cash equivalent are protected by the applicable government insurance limits.

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During the nine months ended September 30, 2025, we had 31 customers representing 87.4% of our revenue compared to 22 customers representing 87.7% of our revenue for the nine months ended September 30, 2024. This is a significant improvement in the revenue concentration. For the nine months ended September 30, 2025 and 2024, 37.6% and 38.3% of revenue, respectively, comes from customers under prepayment conditions, which means there are no credit or bad debt risks on that portion of the customers’ portfolio.

Approximately 80% of total accounts receivable are concentrated in balances from the Company’s top 25 customers as of September 30, 2025 compared to the same percentage concentrated in 11 companies as of December 31, 2024. The largest customer as of September 30, 2025 represented 8.75% of the total compared to 40.39% as of December 31, 2024. This concentration may expose the Company to a medium-to-low level of credit risk, as most of these customers are bilateral, meaning they also have accounts payable with the Company.

Financial Instruments

The Company follows ASC 820, “Fair Value Measurements and Disclosures,” which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The carrying values of our financial instruments, including, cash; accounts receivable; prepaid and other current assets; accounts payable; accrued liabilities and other current liabilities; and due from/to related parties approximate their fair values due to the short-term maturities of these financial instruments.

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due to related parties due to their related party nature.

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Revenue Recognition

The Company recognizes revenue related to monthly usage charges and other recurring charges during the period in which the telecommunication services are rendered, provided that persuasive evidence of a sales arrangement exists, and collection is reasonably assured. Management considers persuasive evidence of a sales arrangement to be a written interconnection agreement. The Company’s payment terms vary by client.

Usage charges refer to the fees that customers are billed based on their actual usage of the services. For voice services, this typically means charges are based on the duration of calls made. For SMS (text messaging), it usually means charges per message sent. Other recurring charges are referred to charges for services such as (1) Global DIDs, (2) Global Toll-Free Numbers, (3) PBX (Private Branch Exchange) for small businesses, and (4) SIP Trunking. The provision of these services usually has set-up fees and are offered on a subscription or month-to-month basis.

Revenue is reported on a gross basis since the Company acts as the principal in the transaction, meaning it has control over the goods or services before they are transferred to the customer. This includes having the primary responsibility for fulfilling the contract and determining the price.

With respect to the specific performance obligations of the Company in its contracts with its customers, our standard service agreement establishes the following:

	•	The Company agrees to furnish to Customer, and Customer agrees to purchase from the Company, International Long Distance telecommunication services and/or SMS services at the rates agreed to in writing by the Parties.

	•	The Company will provide, operate and maintain communications equipment, international links and network administration and support in the United States and other countries as may be agreed upon.

	•	The Company will be responsible for its own expenses and will provide, operate, and maintain transmission facilities required to link its domestic network with the other Party's nearest point of presence (POP).

	•	The Company shall provide Customer all required IP network addresses, Domain Name Server (DNS) information and, if necessary, the associated prefixes used to exchange voice traffic as provided on the provisioning form.

	•	The Company shall take all appropriate security measures to protect its network from fraudulent traffic coming from unknown or unauthorized sources. Any and all IP and network information received by the Company from Customer for the purposes of this agreement shall be strictly confidential, and disclosed only to those employees or personnel with a need to know.

The Company recognizes revenue from telecommunication services in accordance with ASC 606. Topic 606 establishes a comprehensive 5 step framework for determining revenue recognition. Under this framework, the Company considers each service a single performance obligation, since typically, the Company provides a series of distinct services.

Under ASC 606, voice and SMS termination services typically qualify for over time recognition because the customer receives and consumes the benefits as the entity performs

	•	Each call or message is terminated in real time.
	•	The customer cannot "stockpile" the service — it's consumed instantly.
	•	The service is indivisible and recurring, with no alternative use.

In the case of the services provided by Globetopper, the Company recognizes revenue in accordance with ASC 606, "Revenue from Contracts with Customers." Under this standard, revenue is recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration to which the Company expects to be entitled.

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The Company’s primary performance obligation is the transfer of digital prepaid products to customers upon purchase. Revenue is recognized at a point in time when the digital prepaid products are made available to the customer, as this is when the customer obtains control and can benefit from the use of the products. The Company has evaluated additional services, including API integration and technical support, and determined that these services are not distinct performance obligations. These services are highly interdependent and integrated with the primary obligation to deliver digital prepaid products. As such, revenue recognition for these services is bundled with the primary performance obligation and recognized at the same point in time.

The transaction price is determined based on the pricing appendix provided to customers at the time of contract signing, with the Company reserving the right to adjust prices with a three-day notice. Since the Company has only one primary performance obligation, there is no allocation of the transaction price across multiple obligations.

The application of the 5 step Topic 606 revenue recognition framework to the Company's operations is depicted as follows:

Topic 606 Conceptual Framework

Related Company Policy & Procedures

Step 1 Identify the contract(s) with customer

A contract is defined as an approved mutual agreement between the Company and a customer setting performance obligation, and criteria that must be met in accordance with the Company's customary commercial business practices and entered into with the probable expectation that all estimated consideration will be realized in the ordinary course of business.

Step 2 Identify the performance obligations

Performance obligations are identified in the customer agreement, and any subsequent amendments stated in per minute, time and message usage criteria; and digital prepaid products. The Company considers each service a single performance obligation, including instances where the Company provides a series of services that are substantially the same and have the same pattern of transfer.

Step 3 Determine the transaction price

The transaction price is determined at contract inception and is subsequently reviewed periodically to reflect applicable rate amendments, trends in regulatory, market conditions and usage of service and products by a customer. The transaction price excludes amounts collected on behalf of third parties such as sales taxes and regulatory fees.

Step 4 Allocate the transaction price to the performance obligations

The transaction price is allocated to each performance obligation based on the standalone contractual selling price of the time measured service, net of any related discount.

Step 5 Recognize revenue when the entity satisfies a performance obligation

The Company recognizes revenues from contracts with customers when control of the usage of the services and digital prepaid products has been transferred to the customer, as recorded and measured by the Company's internal information systems. Revenues are recognized at the probable amount of consideration expected in exchange for transferring control of usage.

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Cost of revenue

Costs of revenue represent direct charges from vendors that the Company incurs to deliver services to its customers. These costs primarily consist of usage charges for calls terminated in vendors’ networks.

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (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. 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 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 its financial statements.

NOTE 3 - GOING CONCERN

The Company's consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has suffered recurring losses from operations, negative working capital and does not have an established source of revenues sufficient to cover its operating costs. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its business plan and eventually attain profitable operations.

During the next year, the Company's foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing in the industry and continuing its marketing efforts. The Company may experience a cash shortfall and be required to raise additional capital.

Historically, the Company has relied upon funds from its stockholders, lines of credit, options and secured and unsecured loans from third parties. Management may raise additional capital through future public or private offerings of the Company's stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company's failure to do so could have a material and adverse effect upon its operations and its stockholders.

NOTE 4 – PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets at September 30, 2025 and December 31, 2024 consisted of the following:

	September 30,		December 31,
	2025		2024
Other receivable	$	228,169	$	115,685
Prepaid expenses		2,111,006		2,020,288
Advance payment		21,000		21,000
Tax receivable		53,893		42,673
Deposit for acquisition of asset		357,500		356,000
Security deposit		128,703		128,703
Total	$	2,900,271	$	2,684,349

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NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment at September 30, 2025 and December 31, 2024 consisted of the following:

	September 30,			December 31,
	2025			2024
Telecommunication equipment	$	709,417		$	709,417
Telecommunication software		800,247			690,742
Vehicle		86,643			—
Other equipment		157,831			155,935
Total property and equipment		1,754,138			1,556,094
Accumulated depreciation and amortization		(1,083,496	)		(994,292	)
Total property and equipment	$	670,642		$	561,802

Depreciation expense for the nine months ended September 30, 2025 and 2024 amounted to $89,204 and $104,061, respectively.

NOTE 6 – INTANGIBLE ASSETS

Intangible assets at September 30, 2025 and December 31, 2024 consisted of the following:


2025
	Useful life	Gross carrying amount		Accumulated amortization			Net carrying amount
New gas regulator intangible	Not yet in service	$	99,592	$	—			99,592
Interconnection agreements	16 years		7,700,000		(721,877	)		6,978,123
		$	7,799,592	$	(721,877	)	$	7,077,715

2024
	Useful life	Gross carrying amount		Accumulated amortization			Net carrying amount
New gas regulator intangible	Not yet in service	$	99,592	$	—			99,592
Interconnection agreements	16 years		7,700,000		(360,938	)		7,339,062
		$	7,799,592	$	(360,938	)	$	7,438,654

Amortization expense for the nine months ended September 30, 2025 and 2024 amounted to $360,938 and $0, respectively.

The following table outlines the estimated future amortization expense as of September 30, 2025:


2025 (3 months remaining)	$	120,312
2026		481,250
2027		481,250
2028		481,250
2029		481,250
Thereafter		4,932,811
	$	6,978,123

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NOTE 7 – ACCRUED AND OTHER CURRENT LIABILITIES

Accrued and other current liabilities at September 30, 2025 and December 31, 2024 consisted of the following

	September 30,		December 31,
	2025		2024
Accrued liabilities	$	1,148,363	$	928,858
Cost provision		13,276,570		53,939,336
Accrued interest		92,450		118,204
Salary payable - management		73,363		420,447
Salary payable and employee benefit		77,709		88,357
Other current liabilities		340,915		129,582
Total	$	15,009,370	$	55,624,784

NOTE 8 - LOANS PAYABLE

Loans payable at September 30, 2025 and December 31, 2024 consisted of the following:

	September 30,			December 31,				Interest
	2025			2024			Term	rate
Martus	$	97,401		$	103,738		Note was issued on October 23, 2018 and due on January 2, 2026		5.0	%
Darlene Covid19		60,703			80,019		Note was issued on April 1, 2020 and due on March 31, 2026		0.0	%
Promissory note payable		—			217,391		Note was issued June 11, 2024 and due on June 11, 2025		2.0	%
Promissory note payable - acquisition of QXTEL		—			1,275,000		Note was issued April 1, 2024 and due on June 30, 2025		4.9	%
Promissory note payable		—			271,739		Note was issued July 16, 2024 and due on July 16, 2025		2.0	%
Promissory note payable		—			271,739		Note was issued July 31, 2024 and due on July 31, 2025		2.0	%
Promissory note payable		—			190,217		Note was issued September 23, 2024 and due on September 23, 2025		2.0	%
Promissory note payable		—			108,696		Note was issued October 4, 2024 and due on September 23, 2025		2.0	%
Promissory note payable - acquisition of QXTEL		226,810			—		Note was issued February 3, 2025 and due on September 30, 2025		4.9	%
Promissory note payable		794,737			—		Note was issued July 16, 2025 and due on February 26, 2026		24.0	%
Promissory note payable		794,737			—		Note was issued August 8, 2025 and due on March 21, 2026		24.0	%
Promissory note payable		794,737			—		Note was issued September 11, 2025 and due on April 24, 2026		24.0	%
Financing loan		44,865			—		Loan was issued in July 2025 and the monthly payment amount is $1,149 for 48 months		7.87	%
Total		2,813,990			2,518,539
Less: Unamortized debt discount		(105,323	)		(62,898	)
Total loans payable		2,708,667			2,455,641
Less: Current portion of loans payable		(2,674,548	)		(2,455,641	)
Long-term loans payable	$	34,118		$	—

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Loans payable - related parties at September 30, 2025 and December 31, 2024 consisted of the following:

	September 30,		December 31,
	2025		2024
49% of Shareholder of SwissLink	$	21,606	$	21,606
49% of Shareholder of SwissLink		133,865		219,894
Minority Shareholder of QXTEL		55,579		478,985
Total		211,050		720,485
Less: Current portion of loans payable - related parties		211,050		720,485
Long-term loans payable - related parties	$	—	$	—

During the nine months ended September 30, 2025 and 2024, the Company borrowed from third parties totaling $5,825,583 and $2,011,100, which includes original issue discount and financing costs of $360,583 and $0 and repaid the principal amount of $2,076,404 and $669,121, respectively.

During the nine months ended September 30, 2025, the Company issued a note payable of $1,000,000 for the earn out payment related to the April 1, 2024 acquisition of a subsidiary. During the nine months ended September 30, 2025, the Company issued a note payable of $100,000 for the consideration related to the July 1, 2025 acquisition of a subsidiary. These notes were fully repaid during the nine months ended September 30, 2025.

During the nine months ended September 30, 2025 and 2024, the Company recorded interest expense of $353,964 and $121,806 and recognized amortization of discount, included in interest expense, of $106,770 and $163,406, respectively.

During the nine months ended September 30, 2025, the Company settled loans as follows;

	•	Principal amount and accrued interest of 5 notes payable issued in June through October 2024 by issuing 264,980 shares of common stock. As a result, the Company recorded a loss on settlement of debt of $801,255.
	•	Principal amount and accrued interest of 3 notes payable issued in June 2025 by issuing 22,131 shares of Series D Preferred Stock. As a result, the Company recorded a loss on settlement of debt of $804,599.
	•	Principal amount and accrued interest of 4 notes payable issued in January through May 2025 by issuing 14,979 shares of common stock. As a result, the Company recorded a loss on settlement of debt of $541,290.

During the nine months ended September 30, 2024, the Company settled 2 loans as follows:

	•	Principal amount and accrued interest of a note payable issued in April 2023 by issuing 1,770,000 shares of common stock. As a result, the Company recorded a loss on settlement of debt of $102,660.
	•	Principal amount of future receipts loan issued in April 2024 by early settlement. As a result, the Company recorded a loss on settlement of debt of $27,537.

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NOTE 9 - CONVERTIBLE LOANS

Convertible loans at September 30, 2025 and December 31, 2024 consisted of the following:


	September 30,			December 31,
	2025			2024
Issued in fiscal year 2024	$	753,090		$	5,225,308
Issued in fiscal year 2025		421,053			—
Total convertible notes payable		1,174,142			5,225,308
Less: Unamortized debt discount		(7,672	)		(348,950	)
Total convertible notes		1,166,470			4,876,358

Less: current portion of convertible notes		1,166,471			1,864,432
Long-term convertible notes	$	—		$	3,011,926

During the nine months ended September 30, 2025 and 2024, the Company recorded interest expense of $593,818 and $555,092 and recognized amortization of discount, included in interest expense, of $278,951 and $693,516, respectively.

Conversion

During the nine months ended September 30, 2025, one note holder converted notes with principal amounts of $4,153,343, debt discount of $129,570, accrued interest of $420,919 and conversion fee of $15,000 into 988,655 shares of common stock. During the three months ended September 30, 2025, one note holder converted notes with principal amounts of $931,121, debt discount of $1,918, accrued interest of $302,586 and conversion fee of $7,500 into 293,742 shares of common stock.

Settlement

During the nine months ended September 30, 2025, the Company settled the principal amount of convertible notes of $671,870, debt discount of $58,573 and accrued interest of $34,366 issued in June 2024 through February 2025 to two notes holders by paying cash of $725,000. As a result, the Company recorded a loss on settlement of debt of $77,337.

Issued in fiscal year 2025

During the nine months ended September 30, 2025, the Company borrowed amounts from third parties totaling $1,113,316, which includes original issue discount and financing costs of $125,816.

Principal

Issuance

Maturity

Interest

Payment

amount

date

Date

rate

schedule

471,000

February 26, 2025

December 30, 2025

14%

5 payments, one payment of $268,470 and four payments of $67,118, beginning in August 2025

116,000

February 26, 2025

December 30, 2025

14%

5 payments, one payment of $66,120 and four payments of $16,530, beginning in August 2025

526,316

March 4, 2025

December 5, 2025

24%

The outstanding balance shall be paid on December 5, 2025

The notes are convertible at the option of the holders at any time following an event of default, and the conversion price is 75% multiplied by the lowest trading price of Company’s common stock during the 10 trading days prior to the conversion date. Certain notes allow for the conversion price to be a fixed price of $8.80 per share.

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Issued in fiscal year 2024

In January 24, 2024, we entered into a securities purchase agreement (the “SPA”) with M2B Funding Corp., a Florida corporation, for it to purchase up to the principal amount of $3,888,889 in secured convertible promissory notes (the “Notes”) for an aggregate purchase price of $3,500,000 (the “Purchase Price”), which Notes are convertible into shares (“Conversion Shares”) of our common stock with an initial conversion price of $8.80 per share. Each noteholder received shares of common stock (“Kicker Shares”) in an amount equal to ten percent of the principal amount of any Note issued divided by $8.80. The Notes are secured by all of our assets under a Security Agreement signed with the SPA.

The initial tranche was executed in January 2024 for $2,222,222 in face value of Notes and 25,253 Kicker Shares, with an original issue discount of $222,222; second and third tranches were executed in March 2024 for $1,111,111 and $555,556, respectively, in face value of Notes and 12,627 and 6,314 Kicker Shares, with an original issue discount of $111,111 and $55,556, respectively. Each one year note bears interest at 18% per annum.

In October 2024, we entered into a Memorandum of Understanding (the “Agreement”) with M2B Funding Corp. to extend the maturity date on three promissory notes in exchange for stock consideration. Pursuant to the Agreement, the following promissory notes were extended by 12 months from their original date of maturity:

	•	First Note: Originally due January 1, 2025, with an outstanding amount of $1,888,889, extended to January 1, 2026.
	•	Second Note: Originally due March 12, 2025, with an outstanding amount of $1,111,111, extended to March 12, 2026.
	•	Third Note: Originally due March 25, 2025, with an outstanding amount of $555,556, extended to March 25, 2026.

In consideration for this extension, the Company issued 8,081 restricted common shares. As a result of the extension, the Company recognized the loss on debt extinguishment of $297,878 as debt extinguishment and debt discount of $61,818 as debt modification during the year ended December 31, 2024.

Additionally, during the year ended December 31, 2024, the Company borrowed amounts from a third party totaling $2,413,707, which includes original issue discount and financing costs of $248,707.

Principal

Issuance

Maturity

Interest

Payment

amount

date

Date

rate

schedule

146,900

March 7, 2024

January 15, 2025

12%

10 payments each in the amount of $16,453 beginning on April 15, 2024

177,100

March 7, 2024

January 15, 2025

14%

5 payments, one payment of $100,947 and four payments of $25,237, beginning in September 2024

179,400

July 10, 2024

April 30, 2025

14%

9 payments each in the amount of $22,724 beginning on August 30, 2024

151,960

September 16, 2024

July 15, 2025

14%

5 payments, one payment of $86,617 and four payments of $21,654, beginning in March 2025

179,400

October 15, 2024

July 15, 2025

14%

9 payments each in the amount of $22,724 beginning on November 30, 2024

1,578,947

December 6, 2024

June 4, 2025

24%

Outstanding balance shall be paid on June 4, 2025

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NOTE 10 – STOCKHOLDERS’ EQUITY

Common Stock

The Board of Directors of the Company approved a reverse stock split of the Company’s authorized, issued and outstanding shares of Common Stock at a ratio of 1-for-80, effective on May 2, 2025.

The Company amended its certificate of incorporation to reduce the number of authorized shares of Common Stock that it may issue from 300,000,000 shares to 3,750,000 shares and subsequently to 26,000,000 shares with a par value of $0.001 per share.

During the nine months ended September 30, 2025, the Company issued 1,295,261 shares of common stock, valued at fair market value on issuance as follows:

	•	5,625 shares for compensation to our directors valued at $71,143.
	•	988,655 shares for conversion of debt of $4,459,692.
	•	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.
	•	38 shares for reverse stock split adjustment.

At September 30, 2025 and December 31, 2024, 3,832,470 and 2,537,209 shares of common stock were issued and outstanding, respectively.

Series A Preferred Stock

On November 3, 2020, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series A Preferred Stock, consisting of up 10,000 shares, par value $0.001. Under the Certificate of Designation, holders of Series A Preferred Stock will participate on an equal basis per-share with holders of our common stock in any distribution upon winding up, dissolution, or liquidation. Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to stockholders at a rate of 51% of the total vote of stockholders.

The rights of the holders of Series A Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on November 3, 2020.

At September 30, 2025 and December 31, 2024, 10,000 shares of Series A Preferred Stock were issued and outstanding.

Series B Preferred Stock

On November 11, 2020, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series B Preferred Stock, consisting of up 200,000 shares, par value $0.001. Under the Certificate of Designation, holders of Series B Preferred Stock will receive a liquidation preference of $81 per share in any distribution upon winding up, dissolution, or liquidation of the Company before junior security holders, as provided in the designation. Holders of Series B Preferred Stock are entitled to receive as, when, and if declared by the Board of Directors, dividends in kind at an annual rate equal to twenty four percent (24%) of $81 per share for each of the then outstanding shares of Series B Preferred Stock, calculated on the basis of a 360-day year consisting of twelve 30-day months. Holders of Series B Preferred Stock do not have voting rights but may convert into common stock after twelve months from the issuance date, at a conversion rate of twelve point five (12.5) shares of Common Stock for every one (1) share of Series B Preferred Stock. Upon conversion, the shares are subject to a one-year restriction on sales into the market of no more than 5% previous month’s stock liquidity.

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During the nine months ended September 30, 2025, the Company issued 6,571 shares of Series B Preferred Stock to settle salary payable for our CEO and CFO of $631,500. As a result, the Company recorded a loss on settlement of salary payable of $216,981.

At September 30, 2025 and December 31, 2024, 42,108 and 35,537 shares of Series B Preferred Stock were issued and outstanding, respectively.

Series C Preferred Stock

On January 7, 2021, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series C Preferred Stock, consisting of up 200,000 shares, par value $0.001. Under the Certificate of Designation, holders of Series C Preferred Stock will rank junior to the Series B Preferred Stock, but on par with common stock and Series A Preferred Stock in any distribution upon winding up, dissolution, or liquidation of the company, as provided in the designation. The holders of shares of Series C Preferred Stock have no dividend rights except as may be declared by the Board in its sole and absolute discretion, out of funds legally available for that purpose. Holders of Series C Preferred Stock do not have voting rights but may convert into common stock after twenty four months from the issuance date, at a conversion rate of twelve point five (12.5) shares of Common Stock for every one (1) share of Series C Preferred Stock. Upon conversion, the shares are subject to a one-year restriction on sales into the market of no more than 5% previous month’s stock liquidity.

The rights of the holders of Series C Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on January 7, 2021.

At September 30, 2025 and December 31, 2024, no Series C Preferred Stock was issued or outstanding.

Series D Preferred Stock

On July 7, 2025, the Company filed a First Amended and Restated Certificate of Designation for the Series D Preferred Stock with the Secretary of State of Nevada to amend and restate the terms of its Series D Preferred Stock, originally established on November 3, 2023, increasing the authorized shares from 75,000 to 100,000 and revising the terms as described below.

	•	Dividend Rights: 12% cumulative dividend, payable as, when, and if declared by the Board of Directors, calculated on a 360-day year, accruing from the date of issuance and ceasing the day prior to conversion, with pro rata dividends for partial-year holdings.
	•	Conversion Rights: Following three months from the issuance date, the Series D Preferred Stock is convertible into common stock at a rate of 12.5 shares of common stock per share, subject to adjustment for stock splits, dividends, or reorganizations, removing the prior requirement for conversion only upon a note default.
	•	Redemption Provisions: Optional redemption by the Company at 105% of the price paid by the holder, upon not more than three trading days’ notice.
	•	Liquidation Preference: Senior to common stock, Series A Preferred Stock, and Series C Preferred Stock, and on parity with Series B Preferred Stock, in any liquidation, dissolution, or winding up of the Company.
	•	Voting Rights: No voting rights, except as required by law or for amendments to the Certificate of Designation or Articles of Incorporation that would alter the Series D Preferred Stock’s rights.
	•	Leak-Out Restriction: After three months, conversions to common stock and sales are limited to 10% of the average daily trading volume of the Company’s common stock per holder.

During the nine months ended September 30, 2025, the Company issued 37,110 shares of Series D Preferred Stock for settlement of debt of $4,708,332.

At September 30, 2025 and December 31, 2024, 37,110 and 0 shares of Series D Preferred Stock were issued or outstanding, respectively.

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NOTE 11 - RELATED PARTY TRANSACTIONS

Due from related party

During the nine months ended September 30, 2025 and 2024, the Company loaned $39,462 and $119,832 and collected $2,000 and $0, respectively to a related party.

At September 30, 2025 and December 31, 2024, the Company had amounts due from related parties of $668,177 and $630,715, respectively. The loans are unsecured, non-interest bearing and due on demand.

Due to related parties

At September 30, 2025 and December 31, 2024, the Company had amounts due to related parties of $65,829 and $26,613, respectively. For the nine months ended September 30, 2025, a related party paid $39,216 to purchase a vehicle on behalf of the Company. The amounts are unsecured, non-interest bearing and due on demand.

Employment agreements

On June 23, 2025, the board of directors of the Company approved amended employment agreements in favor of its Chief Executive Officer, Leandro Iglesias, and its Chief Financial Officer, Alvaro Quintana Cardona.

In case the monthly remuneration is not set in full on time , the amended agreements provide that Messrs. Iglesias and Quintana may convert their accrued salary/bonus into shares of common stock or Series B Preferred Stock of the Company. For common stock, the number of shares issuable is determined by considering the average price per share of common stock on the Nasdaq Capital Market during the last 10 days and applying a discount of 25% and then dividing the accrued salary by the average price per share. For Series B Preferred stock, the number of shares issuable is determined by considering the discounted average price per share of common stock on the Nasdaq Capital Market during the last 10 days, dividing the accrued salary by the discounted average price per share, and then dividing that number of shares by 12.5.

During the nine months ended September 30, 2025 and 2024, the Company recorded management salaries of $760,500 and $634,500, and stock-based compensation bonuses of $71,145 and $109,485, respectively. During the three months ended September 30, 2025 and 2024, the Company recorded management salaries of $211,500 and $211,500, and stock-based compensation bonuses of $15,945 and $31,820, respectively.

At September 30, 2025 and December 31, 2024, the Company recorded and accrued management salaries of $73,365 and $420,447, respectively.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

Leases and Long-term Contracts

The Company has not entered into any long-term leases, contracts or commitments. The Company leases facilities which the term is 12 months. For the nine months ended September 30, 2025 and 2024, the Company incurred rent expense of $24,328 and $21,335, respectively.

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NOTE 13 – ACQUISITION

On May 29, 2025, the Company entered into a Unit Purchase Agreement (the “Agreement”) with Craig Span (the “Seller”) and Globetopper, LLC, a Delaware limited liability company ( “Globetopper”), pursuant to which the Company agreed to acquire fifty-one percent (51%) of the membership interests of Globetopper (the “Transferred Membership Interest”) from the Seller.

Pursuant to the Agreement, the Company acquired the Transferred Membership Interests of Globetopper for a total purchase price consisting of $700,000, payable as follows: $50,000 upon execution of the Agreement; $50,000 in cash on the closing date; $50,000 in cash 30 days after the closing date, secured by a promissory note and pledge agreement; $50,000 in cash 60 days after the closing date, secured by a promissory note and pledge agreement; $500,000 in restricted common shares of the Company, calculated at a 20% discount to the volume weighted average price (VWAP) during the five days preceding the closing date.

Additional payments based on Globetopper’s EBITDA growth, payable in common shares of the Company at a 20% discount to the greater of the VWAP during the five days following the applicable period or preceding the payment date, will be payable as follows:

	•	September 30, 2026: 50% of the positive difference between EBITDA at acquisition and EBITDA 12 months post-Closing.
	•	September 30, 2027: 50% of the positive difference between EBITDA 12 months and 24 months post-Closing.

The acquisition was closed on July 1, 2025. Globetopper has been included in our consolidated results of operations since the acquisition date.

The Company will invest up to $1,200,000 in Globetopper over 24 months post-Closing in monthly installments of $50,000, subject to the achievement of specified quarterly financial targets.

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

	July 1,
Fair Value of Consideration:	2025
Cash	$	100,000
Promissory note		100,000
IQSTEL common stock		500,000
Contingent liability		285,175
Total Purchase Price	$	985,175

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


Total purchase price	$	985,175

Assets Acquired:
Cash		129,531
Prepaid expenses and other current assets		306,310

Total identifiable assets		435,841

Liabilities Assumed:
Other current liabilities		(71,580	)
Contract liabilities		(703,262	)
Line of credit		(99,000	)
Total liabilities assumed		(873,842	)
Net assets		(438,001	)

Non-controlling interest - 49%		214,620
Total net assets		(223,381	)
Goodwill	$	1,208,556

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Unaudited combined proforma results of operations for the three and nine months ended September 30, 2025 and 2024 as though the Company acquired Globetopper on January 1, 2024, are set forth below:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Revenues	$	102,867,553		$	62,183,464		$	258,349,274		$	212,841,207
Cost of revenues		100,126,838			59,991,984			251,263,440			206,623,461
Gross profit		2,740,715			2,191,480			7,085,834			6,217,746

Operating expenses		3,299,798			2,231,896			8,692,708			6,647,307
Operating loss		(559,083	)		(40,416	)		(1,606,874	)		(429,561	)

Other expense		(1,694,867	)		(651,416	)		(3,819,843	)		(2,648,705	)
Income tax		(71,919	)		(69,605	)		(184,190	)		(134,880	)
Net loss	$	(2,325,869	)	$	(761,437	)	$	(5,610,907	)	$	(3,213,146	)

NOTE 14 - SEGMENT

The Company operates in two industry segments, telecommunication services and fintech services, and three geographic segments, USA, UK and Switzerland, where current assets and equipment are located. The Company's chief operating decision maker ("CODM") is its chief financial officer, who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. The CODM uses operating activities and net assets to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating decisions, such as the determination of the rate at which the Company seeks to grow, the allocation of budget between cost of sales and operating expenses and the management of assets.

The following table shows reportable operating activities information by industrial segment for the three and nine months ended September 30, 2025. The Company has two industrial segments since the Company acquired Globetopper LLC in July 2025:

Three months ended September 30, 2025

NOTE 14 - SEGMENT - Operating Activities by Industrial and Geographic Segment (Details)
	Telecom			Fintech			Corporate			Elimination			Total
Revenues	$	104,223,026		$	14,290,694		$	51,000		$	(15,697,167	)	$	102,867,553
Cost of revenue		101,662,238			13,979,041			24,870			(15,539,311	)		100,126,838
Gross profit		2,560,788			311,653			26,130			(157,856	)		2,740,715

Operating expenses		1,813,617			234,069			1,415,967			(163,855	)		3,299,798

Operating income (loss)		747,171			77,584			(1,389,837	)		5,999			(559,083	)

Other expense		(10,287	)		(1,823	)		(1,600,257	)		(82,500	)		(1,694,867	)

Income tax expense		(71,919	)		—			—			—			(71,919	)

Net income (loss)	$	664,965		$	75,761		$	(2,990,094	)	$	(76,501	)	$	(2,325,869	)

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Nine months ended September 30, 2025


	Telecom			Fintech			Corporate			Elimination			Total
Revenues	$	259,271,211		$	14,290,694		$	152,511		$	(41,030,811	)	$	232,683,605
Cost of revenue		252,782,854			13,979,041			24,870			(40,650,320	)		226,136,445
Gross profit		6,488,357			311,653			127,641			(380,491	)		6,547,160

Operating expenses		5,022,836			234,069			3,508,630			(398,837	)		8,366,698

Operating income (loss)		1,465,521			77,584			(3,380,989	)		18,346			(1,819,538	)

Other expense		(49,625	)		(1,823	)		(3,541,722	)		(222,346	)		(3,815,516	)

Income tax expense		(184,190	)		—			—			—			(184,190	)

Net income (loss)	$	1,231,706		$	75,761		$	(6,922,711	)	$	(204,000	)	$	(5,819,244	)

The following table shows operating activities information by geographic segment for the three and nine months ended September 30, 2025 and 2024:

Three months ended September 30, 2025


	USA			Switzerland			UK			Elimination			Total
Revenues	$	63,220,535		$	10,692,833		$	44,651,352		$	(15,697,167	)	$	102,867,553
Cost of revenue		61,782,827			10,493,611			43,389,711			(15,539,311	)		100,126,838
Gross profit		1,437,708			199,222			1,261,641			(157,856	)		2,740,715

Operating expenses
Salaries, wages and benefits		575,876			98,486			706,728			—			1,381,090
Technology		290,571			86,937			140,277			(157,588	)		360,197
Professional fees		272,888			9,340			—			—			282,228
Legal and regulatory		104,000			3,539			—			—			107,539
Travel and events		(4,378	)		—			34,928			(6,268	)		24,282
Public cost		—			—			—			—			—
Advertising		606,627			—			—			—			606,627
Bank services and fees		30,054			(7,448	)		26,593			—			49,199
Depreciation and amortization		6,683			34,923			120,312			—			161,918
Office, facility and other		14,861			5,621			61,113			—			81,595
Insurance		5,980			—			—			—			5,980
Stock-based compensation		239,143			—			—			—			239,143
General and administration		2,142,305			231,398			1,089,951			(163,856	)		3,299,798

Operating income (loss)		(704,597	)		(32,176	)		171,689			6,000			(559,083	)

Other expense		(1,601,625	)		(6,390	)		(4,352	)		(82,500	)		(1,694,867	)

Income tax expense		—			—			(71,919	)		—			(71,919	)

Net income (loss)	$	(2,312,222	)	$	(38,566	)	$	95,419		$	(76,500	)	$	(2,325,869	)

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Three months ended September 30, 2024


	USA			Switzerland			UK			Elimination			Total
Revenues	$	36,604,753		$	1,048,201		$	17,202,173		$	(605,513	)	$	54,249,614
Cost of revenue		35,614,356			822,312			16,165,751			(372,724	)		52,229,695
Gross profit		990,397			225,889			1,036,422			(232,789	)		2,019,919

Operating expenses
Salaries, wages and benefits		653,839			92,180			461,761			—			1,207,780
Technology		272,428			104,299			116,855			(156,540	)		337,042
Professional fees		61,350			3,668			—			(56,249	)		8,769
Legal and regulatory		6,747			7,242			14,592			—			28,581
Travel and events		39,088			5,339			25,841			—			70,268
Public cost		8,268			—			—			—			8,268
Advertising		157,787			—			—			—			157,787
Bank services and fees		10,506			9,629			29,665			—			49,800
Depreciation and amortization		6,682			28,440			—			—			35,122
Office, facility and other		52,876			7,084			81,419			(20,000	)		121,379
Insurance		1,884			—			17,972			—			19,856
Stock-based compensation		31,820			—			—			—			31,820
General and administration		1,303,275			257,881			748,105			(232,789	)		2,076,472

Operating income (loss)		(312,878	)		(31,992	)		288,317			—			(56,553	)

Other income (expense)		(633,774	)		(6,544	)		(6,528	)		—			(646,846	)

Income tax expense		—			(162	)		(69,443	)		—			(69,605	)

Net income (loss)	$	(946,652	)	$	(38,698	)	$	212,346		$	—		$	(773,004	)

Nine months ended September 30, 2025


	USA			Switzerland			UK			Elimination			Total
Revenues	$	141,511,086		$	21,281,894		$	110,921,436		$	(41,030,811	)	$	232,683,605
Cost of revenue		138,464,533			20,621,929			107,700,303			(40,650,320	)		226,136,445
Gross profit		3,046,553			659,965			3,221,133			(380,491	)		6,547,160

Operating expenses
Salaries, wages and benefits		1,560,112			294,172			1,599,882			(6,038	)		3,448,128
Technology		707,054			281,790			435,862			(372,000	)		1,052,706
Professional fees		818,144			26,917			—			—			845,061
Legal and regulatory		295,259			13,736			—			—			308,995
Travel and events		56,687			7,999			—			(20,799	)		43,887
Public Cost		118,850			—			—			—			118,850
Advertising		1,243,894			—			162,906			—			1,243,894
Bank services and fees		54,596			(43,723	)		73,591			—			84,464
Depreciation and amortization		20,046			69,158			360,938						450,142
Office, facility and other		83,542			15,935			201,523			—			301,000
Insurance		7,786			—			—			—			7,786
Bad debt expense		4,536			—			—			—			4,536
Stock-based compensation		294,343			—			—			—			294,343
General and administration		5,264,849			665,984			2,834,702			(398,837	)		8,366,698

Operating income (loss)		(2,218,295	)		(6,019	)		386,430			18,346			(1,819,538	)

Other income (expense)		(3,582,684	)		6,942			(17,428	)		(222,346	)		(3,815,516	)

Income tax expense		—			—			(184,190	)		—			(184,190	)

Net income (loss)	$	(5,800,980	)	$	923		$	184,812		$	(204,000	)	$	(5,819,244	)

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Nine months ended September 30, 2024


	USA			Switzerland			UK			Elimination			Total
Revenues	$	135,649,542		$	3,157,073		$	48,676,228		$	(3,136,431	)	$	184,346,412
Cost of revenue		132,502,666			2,542,555			46,596,108			(2,903,642	)		178,737,687
Gross profit		3,146,876			614,518			2,080,120			(232,789	)		5,608,725

Operating expenses
Salaries, wages and benefits		1,293,992			170,457			887,021			—			2,351,470
Technology		607,752			211,972			215,998			(156,540	)		879,182
Professional fees		1,014,621			114,444			—			(56,249	)		1,072,816
Legal and regulatory		142,360			8,987			28,874			—			180,221
Travel and events		98,092			23,160			46,505			—			167,757
Public cost		93,646			—			—			—			93,646
Advertising		659,784			—			—			—			659,784
Bank services and fees		41,503			64,783			65,080			—			171,366
Depreciation and amortization		20,261			83,800			—			—			104,061
Office, facility and other		175,255			23,823			132,434			(20,000	)		311,512
Insurance		3,480			—			38,096			—			41,576
Bad debt expense		1,801			—			—			—			1,801
Stock-based compensation		109,485			—			—			—			109,485
General and administration		4,262,032			701,426			1,414,008			(232,789	)		6,144,677

Operating income (loss)		(1,115,156	)		(86,908	)		666,112			—			(535,952	)

Other income (expense)		(2,666,763	)		33,544			(13,056	)		—			(2,646,275	)

Income tax expense		—			(162	)		(134,718	)		—			(134,880	)

Net income (loss)	$	(3,781,919	)	$	(53,526	)	$	518,338		$	—		$	(3,317,107	)

Asset Information

The following table shows asset information by industrial segment at September 30, 2025:


September 30, 2025	Telecom		Fintech		Corporate		Elimination			Total
Assets
Current assets	$	29,044,630	$	695,187	$	4,780,619	$	(4,682,707	)	$	29,837,729
Non-current assets	$	8,642,371	$	191,646	$	21,534,191	$	(13,319,737	)	$	17,048,471
Liabilities
Current liabilities	$	27,225,082	$	1,354,096	$	4,846,205	$	(4,682,707	)	$	28,742,676
Non-current liabilities	$	256,130	$	34,118	$	—	$	—		$	290,248

F-24

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December 31, 2024	Telecom		Corporate		Elimination			Total
Assets
Current assets	$	75,098,705	$	4,594,060	$	(16,677,719	)	$	63,015,046
Non-current assets	$	9,097,736	$	19,079,518	$	(12,184,562	)	$	15,992,692
Liabilities
Current liabilities	$	74,461,579	$	6,037,337	$	(16,677,720	)	$	63,821,196
Non-current liabilities	$	274,353	$	3,011,926	$	—		$	3,286,279

The following table shows asset information by geographic segment at September 30, 2025 and December 31, 2024:


September 30, 2025	USA		Switzerland		UK		Elimination			Total
Assets
Current assets	$	10,375,189	$	2,286,128	$	19,365,772	$	(2,189,360	)	$	29,837,729
Non-current assets	$	21,988,756	$	609,837	$	7,769,615	$	(13,319,737	)	$	17,048,471
Liabilities
Current liabilities	$	9,515,081	$	3,185,837	$	18,231,118	$	(2,189,360	)	$	28,742,676
Non-current liabilities	$	34,118	$	169,599	$	86,531	$	—		$	290,248


December 31, 2024
	USA		Switzerland		UK		Elimination			Total
Assets
Current assets	$	19,885,086	$	8,055,475	$	48,182,373	$	(13,107,888	)	$	63,015,046
Non-current assets	$	19,447,105	$	633,491	$	8,096,658	$	(12,184,562	)	$	15,992,692
Liabilities
Current liabilities	$	21,386,520	$	8,415,705	$	47,126,859	$	(13,107,888		$	63,821,196
Non-current liabilities	$	3,012,066	$	169,599	$	104,614	$	—		$	3,286,279

NOTE 15 – SUBSEQUENT EVENTS.

Subsequent to September 30, 2025 and through the date that these financials were made available, the Company had the following subsequent events:

On October 10, 2025, the Company filed a Second Amended and Restated Certificate of Designation for the Series D Preferred Stock (the “Certificate of Designation”) with the Secretary of State of Nevada to amend and restate the terms of its Series D Preferred Stock, originally established on November 3, 2023, and first amended on July 7, 2025. The Second Amended and Restated Certificate of Designation maintains the number of authorized shares at 100,000 and revises the terms by introducing a True-Up Adjustment mechanism to the conversion rate, as described below. The amended terms include the following key provisions:

	•	Dividend Rights: 12% cumulative dividend, payable as, when, and if declared by the Board of Directors, calculated on a 360-day year, accruing from the date of issuance and ceasing the day prior to conversion, with pro rata dividends for partial-year holdings.
	•	Conversion Rights: Following three months from the issuance date, the Series D Preferred Stock is convertible into common stock at a rate of 12.5 shares of common stock per share (the “Base Shares”), subject to adjustment for stock splits, dividends, or reorganizations. Additionally, a True-Up Adjustment mechanism applies, whereby the conversion may include additional shares based on a comparison of the original conversion price (based on the 10-day VWAP with a 20% discount at the time of issuance) to the lowest daily VWAP during the five trading days preceding the conversion date with a further 20% discount applied to such lowest daily VWAP (the “Adjusted Conversion Price”), with a floor of $1.00 and a maximum True-Up Ratio of 2.5.
	•	Redemption Provisions: Optional redemption by the Company at 105% of the price paid by the holder, upon not more than three trading days’ notice.
	•	Liquidation Preference: Senior to common stock, Series A Preferred Stock, and Series C Preferred Stock, and on parity with Series B Preferred Stock, in any liquidation, dissolution, or winding up of the Company.
	•	Voting Rights: No voting rights, except as required by law or for amendments to the Certificate of Designation or Articles of Incorporation that would alter the Series D Preferred Stock’s rights.
	•	Leak-Out Restriction: After three months, conversions to common stock and sales are limited to 10% of the average daily trading volume of the Company’s common stock per holder.

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

Forward-Looking Statements

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

Overview

IQSTEL Inc. (www.IQSTEL.com) is a technology company with a presence in 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. 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. The company’s strategy focuses on leveraging synergies between its 10 subsidiaries to drive innovation and capture emerging opportunities.

Our Telecom Division, which represents the majority of current operations and which also represents the source for 86% and 94% of our revenues for the three months and for the nine months ended September 30, 2025 respectively, 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).

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). Our Fintech subsidiary, Global Money One, is to provide immigrants access to reliable financial services that makes it easier to manage their money and stay connected with their families back home. Additionally, Globetopper LLC (www.globetopper.com) our most recent acquisitions, plays a strategic role in supporting the expansion and integration of our business divisions. Through its operations, the Company continues to strengthen its global presence and enhance the synergy in Fintech segments through its solution for gift card programs, currently representing 14% and 6% of our revenues for the three months and for the nine months ended September 30, 2025 respectively.

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Our developing Electric Vehicle (EV) Business Line offers electric motorcycles for work and recreational use in the USA, Spain, Portugal, Panama, Colombia. EVOSS is also working on the development of an EV Mid Speed Car to serve the niche of the 2nd car in the family.

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

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. This AI-driven interaction allows NPCs to serve as sales and brand assistants, guiding users through immersive experiences that can extend to purchasing products from external websites. Furthermore, these intelligent agents can control access to gated spaces within the metaverse based on user interactions, showcasing a personalized approach to user experience.

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

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

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

The information contained on our websites is not incorporated by reference into this quarterly report and should not be considered part of this or any other report filed with the SEC.

Methods of Valuation

We use supplemental measures of our performance which are derived from our consolidated financial information but which are not presented in our consolidated financial statements prepared in accordance with GAAP. These non-GAAP financial measures include: Adjusted EBITDA and gross revenue.

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The Company derives these financial calculations on the basis of methodologies other than GAAP, primarily by excluding from a comparable GAAP measure certain items the Company does not consider to be representative of its actual operating performance. These financial calculations are “non-GAAP financial measures” as defined under the SEC rules. The Company uses these non-GAAP financial measures in operating its business because management believes they are less susceptible to variances in actual operating performance that can result from the excluded items, other infrequent charges and currency fluctuations. The Company presents these financial measures to investors because management believes they are useful to investors in evaluating the primary factors that drive the Company’s core operating performance and provide greater transparency into the Company’s results of operations. However, items that are excluded and other adjustments and assumptions that are made in calculating these non-GAAP financial measures are significant components in understanding and assessing the Company’s financial performance. These non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, the Company’s GAAP financial measures. Further, because these non-GAAP financial measures are not determined in accordance with GAAP, and are thus susceptible to varying calculations, the non-GAAP financial measures, as presented, may not be comparable to other similarly-titled measures of other companies.

Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity. It is presented here not as an alternative to net income, but rather as a measure of the Company's operating performance. 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.

The Company believes Adjusted EBITDA offers a clearer view of the cash-generating potential of its business, excluding non-recurring, non-cash, and non-operational impacts. Management believes that Adjusted EBITDA is useful in evaluating the Company's operating performance compared to that of other companies in its industry because the calculation of Adjusted EBITDA generally eliminates the effects of financing, income taxes, non-cash and certain other items that may vary for different companies for reasons unrelated to overall operating performance and also believes this information is useful to investors.

Gross revenue, which equals revenue before intercompany eliminations, represents a key performance metric that management uses to measure.

Results of Operations

Revenues

Our total revenue reported for the three months ended September 30, 2025 was $102,867,553, compared with $54,249,614 for the three months ended September 30, 2024. These numbers reflect an increase of 89.62% quarter over quarter on our consolidated revenues. Our total revenue reported for the nine months ended September 30, 2025 was $232,683,605, compared with $184,346,412 for the nine months ended September 30, 2024; which reflects an increase of 26.22%.

When looking at the numbers by companies, we have the following breakout for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024:

	Revenue for the Three Months Ended September 30,						Revenue for the Nine Months Ended September 30,
Company	2025			2024			2025			2024
IQSTEL Inc	$	51,000		$	—		$	152,511		$	—
Etelix.com USA, LLC		10,381,880			9,781,863			25,852,156			43,124,776
SwissLink Carrier AG		10,692,833			1,048,201			21,281,894			3,157,073
QGlobal LLC		334,622			290,256			1,359,003			1,119,332
IoT Labs LLC		33,871,983			21,738,854			87,586,615			70,525,343
Smartbiz Telecom		3,311,154			4,145,464			10,042,099			17,321,777
Whisl Telecom		979,202			648,316			2,228,009			3,558,314
QXTEL Limited		44,651,352			17,202,173			110,921,435			48,676,228
GlobeTopper LLC		14,290,694			—			14,290,694			—
	$	118,564,720		$	54,855,127		$	273,714,416		$	187,482,843
Intercompany eliminations		(15,697,167	)		(605,513	)		(41,030,811	)		(3,136,431	)
	$	102,867,553		$	54,249,614		$	232,683,605		$	184,346,412

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For the three and nine months ended September 30, 2025, total consolidated revenue increased compared to the same period in 2024.

The growth mainly reflects higher activity across most subsidiaries, particularly those engaged in VOIP Telecom services, due to a higher volume of intercompany transactions during both periods. The increase also includes the contribution from a newly acquired subsidiary, GlobeTopper LLC, which closed on July 1, 2025.

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. This synergy among our entities strengthens our position in the market and contributes to enhanced gross margin results.

The organic growth during the three and nine months ended September 30, 2025 was 70% of the total revenue for those periods. This reflects the solid foundation of our revenue and the growth capacity the Company has with its current operations. We consider organic growth the revenues reported by our existing subsidiaries once fully integrated to our operations. These subsidiaries include Etelix, SwissLink, QGlobal, IoT Labs, Smartbiz, Whisl, QXTEL.

GlobeTopper, acquired on July 1st, 2025 represented the rest of the increment, showing the potential this subsidiary has of creating value to the organization.

Cost of Revenue

Our total cost of revenue for the three months ended September 30, 2025 increased to $100,126,838, compared with $52,229,695 for the three months ended September 30, 2024. Our total cost of revenue for the nine months ended September 30, 2025 increased to $226,136,445, compared with $178,737,687 for the nine months ended September 30, 2024.

When looking at the numbers by subsidiary, we have the following breakout for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024:

	Cost of Revenue for the Three Months Ended September 30,						Cost of Revenue for the Nine Months Ended September 30,
Company	2025			2024			2025			2024
IQSTEL Inc	$	24,870		$	—		$	24,870		$	—
Etelix.com USA, LLC		10,164,248			9,628,111			25,324,055			42,690,403
SwissLink Carrier AG		10,493,612			822,313			20,621,929			2,542,555
QGlobal LLC		175,711			236,530			879,482			817,913
IoT Labs LLC		33,482,896			21,352,526			87,015,654			69,379,146
Smartbiz Telecom		3,077,831			3,894,823			9,392,303			16,622,745
Whisl Telecom		878,229			502,365			1,849,128			2,992,458
QXTEL Limited		43,389,711			16,165,751			107,700,303			46,596,109
GlobeTopper LLC		13,979,041			—			13,979,041			—
	$	115,666,149		$	52,602,419		$	266,786,765		$	181,641,329
Intercompany eliminations		(15,539,311	)		(372,724	)		(40,650,320	)		(2,903,642	)
	$	100,126,838		$	52,229,695		$	226,136,445		$	178,737,687

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Our cost of revenue consists of direct charges from vendors that the Company incurs to deliver services to its customers. These costs primarily consist of usage charges for calls and SMS terminated in vendor’s network, 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, as each additional unit sold (minutes and SMS) has its corresponding termination cost.

The inclusion of GlobeTopper in the consolidation process, along with the traffic volumes by QXTEL and the reorganizing of the portfolio among subsidiaries, reflects the synergies derived from the commercial and operational integration of all group companies. This integration has resulted in a significant volume of intercompany transactions, which are part of our strategic approach to optimizing routing and cost efficiency. We expect this to positively impact revenues and margins in the future.

Gross Margin

Our gross margin, which is simply the difference between our revenues and our cost of sales, discussed above, was $6,547,160 for the nine months ended September 30, 2025 compared to $5,608,725 for the nine months ended September 30, 2024, reflecting an increase of 16.73% quarter over quarter

This growth is the result of commercial and operational synergies achieved through intercompany collaboration. We expect this trend to strengthen as we continue aligning internal operations and leveraging our integrated service portfolio.

Operating Expenses

Operating expenses, which consist solely of general and administrative costs, increased by 58.91% for the three months ended September 30, 2025, compared to the same period in 2024. For the nine months ended September 30, 2025, general and administrative expenses rose to $8,366,698 from $6,144,677 reported in the same period of 2024, reflecting a 36.16% increase. A detailed breakdown by major category for the three and nine months ended September 30, 2025 and 2024 is presented in the table below:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Salaries, wages and benefits	$	1,381,090	$	1,207,781	$	3,448,128	$	2,351,470
Technology		360,197		337,042		1,052,706		879,182
Professional fees		282,228		8,769		845,061		1,072,816
Legal and regulatory		107,539		28,581		308,995		180,221
Travel and events		24,282		70,268		206,793		167,757
Public cost		—		8,268		118,850		93,646
Advertising		606,627		157,787		1,243,894		659,784
Bank services and fees		49,199		49,800		84,464		171,366
Depreciation and amortization		161,918		35,122		450,142		104,061
Office, facility and other		81,595		121,378		301,000		311,512
Insurance		5,980		19,856		7,786		41,576
Financial Expenses		—		43,772		—		43,772
Bad debt expense		—		—		4,536		1,801
	$	3,060,655	$	2,044,652	$	8,072,355	$	6,035,192
Stock-based compensation		239,143		31,820		294,343		109,485
Total Operating Expense	$	3,299,798	$	2,076,472	$	8,366,698	$	6,144,677

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When looking at the numbers by subsidiary, we have the following breakout for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024:

	Nine Months Ended September 30,
	2025			2024			Difference
IQSTEL Inc	$	3,147,692		$	2,024,621		$	1,123,071
Etelix.com USA, LLC		347,832			297,124			50,708
SwissLink Carrier AG		665,984			701,427			(35,443	)
ItsBchain		1,594			14,582			(12,988	)
QGlobal LLC		268,472			405,275			(136,803	)
IoT Labs LLC		219,282			190,179			29,103
Global Money One		729			550			179
Smartbiz Telecom		780,398			684,061			96,337
Whisl Telecom		265,508			645,639			(380,131	)
QXTEL Limited		2,473,764			1,414,008			1,059,756
GlobeTopper LLC		233,339			—			233,339
Intercompany Elimination		(37,896	)		(232,789	)		194,893
	$	8,366,698		$	6,144,677		$	2,222,021

The most significant differences are: (1) the increase in technology expenses related to the deployment and upgrade of the Switching platform to allocate all subsidiaries, which will result in tremendous cost reduction once all companies are migrated to the new platform; (2) the increases in other items such as salaries, wages and benefits; depreciation and amortization; and office, facility and other are largely the result of the addition of QXTEL and GlobeTopper to our consolidated financial statements.

For the nine months ended September 30, 2024, QXTEL consolidated only the expenses incurred between April and September 2024. In contrast, for the same period in 2025, expenses from January through September were included. This difference in the reporting periods explains the 75% increase in general and administrative expenses compared to the prior year.

Additionally, starting July 1, 2025, Globetopper’s expenses were incorporated, which were not considered in previous periods.

We are continually identifying operational synergies among all of our subsidiaries to be more cost efficient.

Operating Income/Loss

For the three months ended September 30, 2025, the Company reported an operating loss of $559,083, representing a significant increase compared to the operating loss of $56,553 for the same period in 2024. Similarly, for the nine months ended September 30, 2025, the operating loss widened to $1,819,538, up from $535,952 reported during the corresponding period in the prior year. These results reflect an overall rise in operating expenses, largely associated with ongoing investments in development and growth initiatives.

Our Telecom Division, currently the primary source of revenue for the Company, continued to generate positive Operating Income. Meanwhile, our pre-revenue companies are operating with minimal expenses, focused solely on completing product and service development prior to their market launch.

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A comparison of the tables below highlights the significant progress of our Telecom Division, as evidenced by the increase in revenue, gross profit, and operating income for both the three- and nine-month periods ended September 30, 2025. 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.

	Telecom Division				Fintech Division				Pre-revenue companies						IQSTEL						Consolidated
	Three Months Ended Sept 30, 2025		Nine Months Ended Sept 30, 2025		Three Months Ended Sept 30, 2025		Nine Months Ended Sept 30, 2025		Three Months Ended Sept 30, 2025			Nine Months Ended Sept 30, 2025			Three Months Ended Sept 30, 2025			Nine Months Ended Sept 30, 2025			Three Months Ended Sept 30, 2025			Nine Months Ended Sept 30, 2025
Revenues		88,525,859		218,240,400		14,290,694		14,290,694		—			—			51,000			152,511			102,867,553			232,683,605
Cost of revenue		86,122,927		212,132,534		13,979,041		13,979,041		—			—			24,870			24,870			100,126,838			226,136,445
Gross profit		2,402,932		6,107,866		311,653		311,653		—			—			26,130			127,641			2,740,715			6,547,160


Operating expenses
General and administration		2,010,974		4,983,344		233,339		233,339		453			2,323			1,055,032			3,147,692			3,299,798			8,366,698
Total Operating Expenses		2,010,974		4,983,344		233,339		233,339		453			2,323			1,055,032			3,147,692			3,299,798			8,366,698

Operating income/(loss)		391,958		1,124,522		78,314		78,314		(453	)		(2,323	)		(1,028,902	)		(3,020,051	)		(559,083	)		(1,819,538	)

	Telecom Division				Fintech Division				Pre-revenue companies						IQSTEL						Consolidated
	Three Months Ended Sept 30, 2024		Nine Months Ended Sept 30, 2024		Three Months Ended Sept 30, 2024		Nine Months Ended Sept 30, 2024		Three Months Ended Sept 30, 2024			Nine Months Ended Sept 30, 2024			Three Months Ended Sept 30, 2024			Nine Months Ended Sept 30, 2024			Three Months Ended Sept 30, 2024			Nine Months Ended Sept 30, 2024
Revenues		54,249,614		184,346,412		—		—		—			—			—			—			54,249,614			184,346,412
Cost of revenue		52,229,695		178,737,687		—		—		—			—			—			—			52,229,695			178,737,687
Gross profit		2,019,919		5,608,725		—		—		—			—			—			—			2,019,919			5,608,725


Operating expenses
General and administration		1,471,644		4,104,924		—		—		348			15,132			604,480			2,024,621			2,076,472			6,144,677
Total Operating Expenses		1,471,644		4,104,924		—		—		348			15,132			604,480			2,024,621			2,076,472			6,144,677

Operating income/(loss)		548,275		1,503,801		—		—		(348	)		(15,132	)		(604,480	)		(2,024,621	)		(56,553	)		(535,952	)

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Other Expenses/Other Income

We had other expenses of $1,694,867 for the three months ended September 30, 2025, as compared with other expenses of $646,846 for the same period ended 2024. We had other expenses of $3,815,516 for the nine months ended September 30, 2025, as compared with other expenses of $2,646,275 for the same period ended 2024. The increase in other expenses for the nine months ended September 30, 2025 is mainly due to the change in the loss on settlement of debt.

Net Loss

We finished the three months ended September 30, 2025 with a loss of $2,325,869, as compared to a loss of $773,004 during the three months ended September 30, 2024. We finished the nine months ended September 30, 2025 with a loss of $5,819,244, as compared to a loss of $3,317,107 during the nine months ended September 30, 2024.

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 and GlobeTopper LLC.

Our Telecom and Fintech Divisions, the divisions presently generating revenue, have a positive operating income when presented separately. 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. During this quarter, the Company began generating revenue in the Fintech area, marking an important step in diversifying its sources of income and expanding its business model.

	Telecom Division						Fintech Division						Pre-revenue companies						IQSTEL						Consolidated
	Three Months Ended Sept 30, 2025			Nine Months Ended Sept 30, 2025			Three Months Ended Sept30, 2025			Nine Months Ended Sept 30, 2025			Three Months Ended Sept 30, 2025			Nine Months Ended Sept 30, 2025			Three Months Ended Sept 30, 2025			Nine Months Ended Sept 30, 2025			Three Months Ended Sept 30, 2025			Nine Months Ended Sept 30, 2025
Revenues		88,525,859			218,240,400			14,290,694			14,290,694			—			—			51,000			152,511			102,867,553			232,683,605
Cost of revenue		86,122,927			212,132,534			13,979,041			13,979,041			—			—			24,870			24,870			100,126,838			226,136,445
Gross profit		2,402,932			6,107,866			311,653			311,653			—			—			26,130			127,641			2,740,715			6,547,160

Operating expenses
General and administration		2,010,974			4,983,344			233,339			233,339			453			2,323			1,055,032			3,147,692			3,299,798			8,366,698
Total Operating Expenses		2,010,974			4,983,344			233,339			233,339			453			2,323			1,055,032			3,147,692			3,299,798			8,366,698

Operating income/(loss)		391,958			1,124,522			78,314			78,314			(453	)		(2,323	)		(1,028,902	)		(3,020,051	)		(559,083	)		(1,819,538	)

Other income (expense)		(16,287	)		(67,971	)		(1,823	)		(1,823	)		—			—			(1,676,757	)		(3,745,722	)		(1,694,867	)		(3,815,516	)
Net income (loss) before income taxes		375,671			1,056,551			76,491			6,491			(453	)		(2,323	)		(2,705,659	)		(6,765,773	)		(2,253,950	)		(5,635,054	)
Income taxes		(71,919	)		(184,190	)		—			—			—			—			—			—			(71,919	)		(184,190	)
Net income (loss)		303,752			872,361			76,491			76,491			(453	)		(2,323	)		(2,705,659	)		(6,765,773	)		(2,325,869	)		(5,819,244	)

Depreciation and Amortization		161,918			450,142			—			—			—			—			—			—			161,918			450,142
Interest expense		8,952			26,373			2,191			2,191			—			—			330,868			1,304,260			342,011			1,332,824
FX Gains/Losses		(12,144	)		(45,435	)		(7	)		(7	)		—			—			(504	)		(1,501	)		(12,655	)		(46,943	)
Loss on settlement of debt		—			—			—			—			—			—			1,345,889			2,224,481			1,345,889			2,224,481
Loss on settlement of salary payable		—			—			—			—			—			—			—			216,981			—			216,981
Stock-based compensation		—			—			—			—			—			—			15,947			294,343			15,947			294,343
Other non-recurring		49,437			190,421			—			—			—			—			—			—			49,437			190,421
Taxes		92,599			216,966			—			—			—			—			—			—			92,599			216,966
Adjusted EBITDA		604,514			1,710,828			78,675			78,675			(453	)		(2,323	)		(1,013,459	)		(2,727,209	)		(330,723	)		(940,029	)

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In evaluating our financial performance, we utilize Adjusted EBITDA as a supplemental measure to provide insights into the profitability of our core operations. (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:

	•	FX Gains and Losses.
	•	Stock-Based Compensation: As a non-cash expense, this adjustment eliminates variability caused by equity-based incentives.
	•	Other non-recurrent expenses: Adjusted EBITDA removes one-time, irregular, or non-recurring expenses to reflect the Company's sustainable earnings.

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.

Based on the analysis of our Adjusted EBITDA our Telecom Division is a high-performing division that generates strong operational profits.

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. 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.

Liquidity and Capital Resources

As of September 30, 2025, we had total current assets of $29,837,729 and current liabilities of $28,742,676, resulting in a positive working capital of $ 1,095,053.

Our operating activities used $2,602,320 in the nine months ended September 30, 2025 as compared with $2,526,651 used in operating activities in the nine months ended September 30, 2024. Our negative operating cash flow for both periods is a result of our net loss and changes in operating assets and liabilities which varies depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable. Despite a larger net loss in 2025, cash used in operations only slightly increased. This is due to substantial non-cash adjustments and working capital changes:

	•	Stock-based compensation, depreciation, and amortization increased, reflecting higher non-cash expenses.
	•	Bad debt expense remained low, indicating stable receivables quality.
	•	Loss on settlement of debt and salary payable were significant in 2025, reflecting restructuring and settlements on debts.
	•	Accounts receivable: Large positive adjustment ($44.2M in 2025 vs. $11.8M in 2024), suggesting strong collections and reduced sales on credit.
	•	Accounts payable and accrued liabilities: Large negative adjustments, especially accrued liabilities ($44.8M outflow), indicating significant payments during the period.

The company’s operating cash flow is still negative, but the gap between net loss and cash used is bridged by non-cash charges and working capital management.

Investing activities used $219,331 for the nine months ended September 30, 2025 compared to $2,950,367 used during the same period of year 2024. Investing activities in 2024 were highly impacted by the acquisition of QXTEL. The Company reduced investing outflows in the nine months ended September 30, 2025, shifting from expansion to consolidation and cash preservation.

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Financing activities provided $2,570,726 in the nine months ended September 30, 2025 compared with $6,239,489 provided in the nine months ended September 30, 2024. Financing inflows dropped significantly, indicating a reduced reliance on equity and convertible debt. Additionally, note that proceeds from financing activities in 2024 were largely used in the acquisition of QXTEL. In 2025 financing inflows dropped sharply, indicating less reliance on new debt or equity. Proceeds from loans payable remained strong ($5.5M in 2025), but repayments and other outflows (e.g., repayments of acquisition notes, dividends to non-controlling interests) offset much of this. Convertible notes and equity-related inflows were lower than in 2024, reflecting a more mature capital structure and less aggressive fundraising.

The Company is shifting from aggressive expansion in 2024 with the acquisition of QXTEL to consolidation and cash preservation in these first nine months of 2025, with a heavy reliance on working capital management and non-cash financing tools. The Company’s debt repayments suggest a maturing capital structure. At the same time, the expansion of GlobeTopper during this quarter reflects the Company’s continued commitment to strengthening and scaling the operations of its other business divisions.

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

Inflation

Although our operations are influenced by general economic conditions, we do not believe that inflation had a material effect on our results of operations during the nine-month period ended September 30, 2025.

Critical Accounting Polices

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

Our accounting policies are discussed in detail in the footnotes to our financial statements included in this Quarterly Report on Form 10-Q for the nine months ended September 30, 2025; however, we consider our critical accounting policies to be those related to allowance for doubtful accounts, valuation of long-lived assets, and income taxes. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. See the Consolidated Financial Statements in this Quarterly Report for a complete discussion of our significant accounting policies.

Off Balance Sheet Arrangements

As of September 30, 2025, there were no off-balance sheet arrangements.

Recent Accounting Pronouncements

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operation, financial position, or cash flow.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

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Item 4. Controls and Procedures

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

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

Based on this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were ineffective as of September 30, 2025. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

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

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

Changes in Internal Control over Financial Reporting - There were no changes in our internal control over financial reporting during the nine-month period ended September 30, 2025, which were identified in conjunction with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A: Risk Factors

Our business faces many risks, a number of which are described in the section captioned “Risk Factors” in our Annual Report for the year ended December 31, 2024, filed with the SEC on March 31, 2025. The risks described may not be the only risks we face. Other risks of which we are not yet aware, or that we currently believe are not material, may also materially and adversely impact our business operations or financial results. If any of the events or circumstances described in the risk factors contained in our Annual Report occur, our business, financial condition or results of operations could be adversely impacted and the value of an investment in our securities could decline. Investors and prospective investors should consider the risks described in our Annual Report, and the information contained in the section captioned “Forward-Looking Statements” and elsewhere in this Quarterly Report before deciding whether to invest in our securities.

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

The information set forth below relates to our issuances of securities without registration under the Securities Act of 1933 in reliance on Section 4(a)(2) of the Securities Act, and/or Regulation D promulgated thereunder.

During the nine months ended September 30, 2025, the Company issued 1,295,261 shares of common stock, valued at fair market value on issuance as follows:

• 5,625 shares for compensation to our directors valued at $71,143.

• 988,655 shares for conversion of debt of $4,459,692.

• 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.

• 38 shares for reverse stock split adjustment.

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

N/A

Item 5. Other Information

None

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Item 6. Exhibits


Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 formatted in Extensible Business Reporting Language (XBRL).
	**Provided herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on November 14, 2025 on its behalf by the undersigned thereunto duly authorized.

IQSTEL INC.

/s/Leandro Iglesias
Leandro Iglesias Principal Executive Officer


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

EX-31.1 8 ex31_1.htm CERTIFICATION

CERTIFICATIONS

I, Leandro Iglesias, certify that;

I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2025 of IQSTEL Inc. (the “registrant”);

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

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

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

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

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

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

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

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

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

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

Date: November 14, 2025

/s/ Leandro Iglesias

By: Leandro Iglesias

Title: Chief Executive Officer

EX-31.2 9 ex31_2.htm CERTIFICATION

CERTIFICATIONS

I, Alvaro Quintana Cardona, certify that;

I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2025 of IQSTEL Inc. (the “registrant”);

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

Date: November 14, 2025

/s/ Alvaro Quintana Cardona

By: Alvaro Quintana Cardona

Title: Chief Financial Officer

EX-32.1 10 ex32_1.htm CERTIFICATION

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly Report of IQSTEL, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2025 filed with the Securities and Exchange Commission (the “Report”), I, Leandro Iglesias, Chief Executive Office, and I, Alvaro Quintana Cardona, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

By:	/s/ Leandro Iglesias
Name:	Leandro Iglesias
Title:	Principal Executive Officer
Date:	November 14, 2025

By:	/s/ Alvaro Quintana Cardona
Name:	Alvaro Quintana Cardona
Title:	Principal Financial Officer
Date:	November 14, 2025

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