What changed in this filing

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Item 1. Financial Statements

2020-11-13 compared with 2020-08-13 · 185 added, 144 removed, 471 unchanged (41% of the section changed)

1 unchanged sentence

Consolidated Balance Sheets

September 30,

Current Assets

27 unchanged sentences

300,000,000 authorized;

$0.001 par value 68,295,300 and 18,008,591 shares issued and outstanding, respectively

$0.001 par value

78,186,210 and 18,008,591 shares issued and outstanding, respectively

Additional paid in capital

Accumulated deficit

Accumulated other comprehensive income

Accumulated other comprehensive loss

Deficit attributed to stockholders of iQSTEL Inc.

3 unchanged sentences

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

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Loss

( Unaudited )

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Cost of revenue

7 unchanged sentences

Change in fair value of derivative liabilities

Gain on settlement of debt

Loss on settlement of debt

Total other income (expense)

Net Income (loss) before provision for income taxes

Net income (loss)

Net loss before provision for income taxes

Net income attributable to noncontrolling interests

Net income (loss) attributed to stockholders of iQSTEL Inc.

Net loss attributed to stockholders of iQSTEL Inc.

Comprehensive income (loss)

Net income (loss)

Foreign currency adjustment

Total comprehensive income (loss)

Comprehensive income attributable to noncontrolling interests

Net comprehensive income (loss)

attributed to stockholders of iQSTEL Inc.

Basic income (loss) per common share

Diluted loss per common share

Weighted average number of common shares outstanding - Basic

Weighted average number of common shares outstanding - Diluted

Total comprehensive loss

Comprehensive income (loss) attributable to noncontrolling interests

Net comprehensive loss attributed to stockholders of iQSTEL Inc.

Basic and Diluted loss per common share

Weighted average number of common shares outstanding – Basic and Diluted

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

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

For the Three and Six Months Ended June 30, 2020 and 2019

For the Three and Nine Months Ended September 30, 2020 and 2019

( Unaudited )

16 unchanged sentences

Resolution of derivative liabilities

Acquisition of loT Labs

Acquisition of IOT Lab

Foreign currency translation adjustments

Balance - June 30, 2020

Stockholders'

Common stock issued for cash

Common stock issued for conversion of debt

Common stock issued for settlement of debt

Common stock issued for service

Resolution of derivative liabilities

Foreign currency translation adjustments

Balance - September 30, 2020

Comprehensive

Shareholders'

Balance - December 31, 2018

6 unchanged sentences

Balance - June 30, 2019

Common stock issued for acquisition

Common stock issued in conjunction with convertible notes

Debt forgiveness

Foreign currency translation adjustments

Balance - September 30, 2019

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

1 unchanged sentence

( Unaudited )

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

13 unchanged sentences

Other current liabilities

Deferred tax asset

Net cash used in operating activities

28 unchanged sentences

Resolution of derivative liabilities

Debt forgiveness

Common stock issued for settlement of debt

Amounts due for acquisition of IOT Labs

Amount owing for acquisition of IOT

Common stock issued for forbearance of debt

2 unchanged sentences

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

September 30, 2020

NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS

9 unchanged sentences

The Company has instituted some and may take additional temporary precautionary measures intended to help ensure the well-being of its employees and minimize business disruption.

The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse impacts on the Company’s results of operations and financial position at June 30, 2020.

The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain.

A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company, including the timing and ability of the Company to collect accounts receivable and the ability of the Company to continue to provide high quality services to its clients.

The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of August 13, 2020, the date of issuance of this Quarterly Report on Form 10-Q.

The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of November 13 2020, the date of issuance of this Quarterly Report on Form 10-Q.

These estimates may change, as new events occur and additional information is obtained.

2 unchanged sentences

Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

In the opinion of the Company’s management, the accompanying unaudited interim financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2020 and the results of operations and cash flows for the periods presented.

The results of operations for the six months ended June 30, 2020 are not necessarily indicative of the operating results for the full fiscal year or any future period.

In the opinion of the Company’s management, the accompanying unaudited interim 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, 2020 and the results of operations and cash flows for the periods presented.

The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the operating results for the full fiscal year or any future period.

These unaudited 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, 2019 filed with the SEC on April 15, 2020.

3 unchanged sentences

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

September 30, 2020

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

14 unchanged sentences

Adjustments arising from such translations are included in accumulated other comprehensive income in stockholders’ equity.

September 30,

USD exchange rate

6 unchanged sentences

Account balances are charged off after all means of collection have been exhausted and the potential for recovery is considered remote.

As of June 30, 2020 and December 31, 2019, the Company had no valuation allowance for doubtful accounts for the Company’s accounts receivable and recorded no bad debt expense for the six months ended June 30, 2020 and 2019.

As of September 30, 2020 and December 31, 2019, the Company had no valuation allowance for doubtful accounts for the Company’s accounts receivable and recorded no bad debt expense for the nine months ended September 30, 2020 and 2019.

Concentrations of Credit Risk

3 unchanged sentences

however, management believes that there is no unusual risk present, as the Company places its cash with financial institutions which management considers being of high quality.

During the six months ended June 30, 2020, twelve customers represented 83% of our consolidated revenues.

During the six months ended June 30, 2019, eight customers represented 81% of our consolidated revenues.

During the nine months ended September 30, 2020, fourteen customers represented 80% of our consolidated revenues.

During the nine months ended September 30, 2019, six customers represented 79% of our consolidated revenues.

39% of the revenue comes from customers under prepayment conditions which means there is no credit or bad debt risk on that portion of the customers portfolio.

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

September 30, 2020

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

25 unchanged sentences

The Company does not have significant cash, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern.

In addition, the Company incurred a net loss of $2,531,738 for the six months ended June 30, 2020 and has negative working capital as of June 30, 2020.

In addition, the Company incurred a net loss of $3,501,963 for the nine months ended September 30, 2020 and has negative working capital as of September 30, 2020.

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.

1 unchanged sentence

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

September 30, 2020

NOTE 3 - GOING CONCERN (Continued)

30 unchanged sentences

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

NOTE 4 - ACQUISITION

Unaudited combined proforma results of operations for the six months ended June 30, 2020 and 2019 as though the Company acquired loT Labs on January 1, 2019, are set forth below:

Six Months Ended

September 30, 2020

NOTE 4 – ACQUISITION (Continued)

Unaudited combined proforma results of operations for the nine months ended September 30, 2020 and 2019 as though the Company acquired loT Labs on January 1, 2019, are set forth below:

Nine Months Ended

September 30,

Cost of revenues

3 unchanged sentences

NOTE 5 – PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets at June 30, 2020 and December 31, 2019 consist of the following:

Prepaid and other current assets at September 30, 2020 and December 31, 2019 consist of the following:

September 30,

Advance payment to suppliers

3 unchanged sentences

NOTE 6 – PROPERTY AND EQUIPMENT

Property and equipment at June 30, 2020 and December 31, 2019 consist of the following:

Property and equipment at September 30, 2020 and December 31, 2019 consist of the following:

September 30,

Telecommunication equipment

4 unchanged sentences

Total property and equipment

Depreciation expense for the six months ended June 30, 2020 and 2019 amounted to $31,140 and $19,281, respectively.

Depreciation expense for the nine months ended September 30, 2020 and 2019 amounted to $49,318 and $26,473, respectively.

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

September 30, 2020

NOTE 7 –LOANS PAYABLE

Loans payable at June 30, 2020 and December 31, 2019 consist of the following:

Loans payable at September 30, 2020 and December 31, 2019 consist of the following:

September 30,

Unique Funding Solutions_2

3 unchanged sentences

Complete Business Solutions_8

December 24, 2010 and due on August 20, 2020

December 24, 2010 and due on June 09, 2020

Nicolas Arvelo

6 unchanged sentences

Apollo Management Group, Inc

Note was issued on March 18, 2020 and due on August 18, 2020

Note was issued on March 18, 2020 and due on December 15, 2020

Apollo Management Group, Inc 2

Note was issued on March 25, 2020 and due on August 25, 2020

Note was issued on March 25, 2020 and due on December 15, 2020

Apollo Management Group, Inc 3

7 unchanged sentences

Apollo Management Group, Inc 7

Note was issued on April 20, 2020 and due on May 20, 2021

Note was issued on April 20, 2020 and due on December 15, 2020

Apollo Management Group, Inc 11

Note was issued on July 1, 2020 and due on December 15, 2020

Apollo Management Group, Inc 12

Note was issued on August 7, 2020 and due on December 15, 2020

Note was issued on June 26, 2020 and due on April 1, 2021

M2B Funding Corp

Note was issued on September 1, 2020 and due on September 1, 2021

YES LENDER LLC 3

Note was issued on January 8, 2020 and due on August 12, 2020

Note was issued on August 3, 2020 and due on January 12, 2021

Darlene Covi19

4 unchanged sentences

Long-term loans payable

Loans payable to related parties at June 30, 2020 and December 31, 2019 consist of the following:

Notes to the Unaudited Consolidated Financial Statements

September 30, 2020

NOTE 7 –LOANS PAYABLE (Continued)

Loans payable to related parties at September 30, 2020 and December 31, 2019 consist of the following:

September 30,

Alonso Van Der Biest

4 unchanged sentences

Long-term loans payable

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

NOTE 7 –LOANS PAYABLE (CONTINUED)

During the six months ended June 30, 2020 and 2019, the Company borrowed amounts from third parties totaling $760,139 and $82,353, which includes original issue discount and financing costs of $28,579 and $17,953, respectively, and repaid the principal amount of $247,855 and $171,302, respectively.

During the six months ended June 30, 2020 and 2019, the Company recorded interest expense of $85,172 and $90,096 and recognized amortization of discount, included in interest expense, of $18,877 and $17,953, respectively.

During the nine months ended September 30, 2020 and 2019, the Company borrowed amounts from third parties totaling $933,280 and $446,824, which includes original issue discount and financing costs of $34,316 and $17,953, respectively, and repaid the principal amount of $607,447 and $534,651, respectively.

During the nine months ended September 30, 2020 and 2019, the Company recorded interest expense of $180,843 and $154,507 and recognized amortization of discount, included in interest expense, of $33,842 and $17,953, respectively.

NOTE 8 – OTHER CURRENT LIABILITIES

Other current liabilities at June 30, 2020 and December 31, 2019 consist of the following:

Other current liabilities at September 30, 2020 and December 31, 2019 consist of the following:

September 30,

Accrued liabilities

5 unchanged sentences

NOTE 9 - CONVERTIBLE NOTES

At June 30, 2020 and December 31, 2019, convertible notes consist of the following:

At September 30, 2020 and December 31, 2019, convertible notes consist of the following:

September 30,

Promissory notes – Issued in fiscal year 2019, with variable conversion features

5 unchanged sentences

Long-term convertible notes

During the six months ended June 30, 2020 and 2019, the Company recorded interest expense of $643,693 and $144,172 and recognized amortization of discount, included in interest expense, of $706,773 and $523,941, respectively.

During the six months ended June 30, 2020 and 2019, the Company repaid notes of $477,190 and $221,901 and accrued interest including prepayment penalty of $138,415 and $120,006.

During the six months ended June 30, 2020, the Company converted notes with principal amounts of $616,118 and accrued interest of $85,383 into 33,821,613 shares of common stock.

The corresponding derivative liability at the date of conversion of $3,661,588 was settled through additional paid in capital.

During the nine months ended September 30, 2020 and 2019, the Company recorded interest expense of $689,996 and $349,027 and recognized amortization of discount, included in interest expense, of $1,463,426 and $1,255,815, respectively.

During the nine months ended September 30, 2020 and 2019, the Company repaid notes of $492,190 and $660,401 and accrued interest including prepayment penalty of $552,631 and $295,000.

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

September 30, 2020

NOTE 9 - CONVERTIBLE NOTES (Continued)

During the nine months ended September 30, 2020, the Company converted notes with principal amounts of $681,118 and accrued interest of $86,313 into 35,813,477 shares of common stock.

The corresponding derivative liability at the date of conversion of $3,742,060 was settled through additional paid in capital.

On June 10, 2020, the Company settled a convertible note with accrued interest of $64,230 with a total of 650,000 share issuances.

The Company issued 200,000 shares in June, 225,000 shares in July and 503,571 shares in August, which included 278,571 true-up shares.

As a result, the Company recognized a loss on settlement of debt of $24,699.

On June 26, 2020, the Company issued a loan payable of $700,000 to Labrys Fund to settle the previously-outstanding convertible notes with accrued interest of $986,340.

As a result, the Company recognized a gain on settlement of debt of $286,340 (Note 7).

On June 10, 2020, the Company settled a convertible note with accrued interest of $64,230 with a total of 650,000 share issuances.

As of June 30, 2020, the Company issued 200,000 shares and shall issue 225,000 shares each in July and August 2020.

On July 22, 2020, the Company settled a convertible note with accrued interest of $ 64,363 and an original common stock purchase warrant to purchase 20,000 shares of common stock with a total of 650,000 share issuances.

During the period ended September 30, 2020, the Company issued 1,038,375 shares which included 388,375 true-up shares.

As a result, the Company recognized a loss on settlement of debt of $9,886.

On September 1, 2020, the Company entered into a Multipurpose agreement and issued a new note which a principal balance of $1,045,327 to replace the 15 notes issued from January 2020 to May 2020 which an aggregate principal amount was $985,556 and an aggregate accrued interest was $59,771.

The Company also issued another promissory note of $300,000 (Note 7).

As a result, the Company recognized a loss on settlement of debt of $300,000.

Promissory Notes - Issued in fiscal year 2019

8 unchanged sentences

Promissory Notes - Issued in fiscal year 2020

During the six months ended June 30, 2020, the Company issued a total of $1,449,444 in notes with the following terms:

During the nine months ended September 30, 2020, the Company issued a total of $2,708,771 in notes with the following terms:

· Terms 12 months.

· Annual interest rates 5% or 12%.

· Convertible at the option of the holders 180 days from issuance.

· Conversion prices are typically based on the discounted (60% discount) lowest trading prices of the Company’s shares during 30 trading day periods prior to conversion.

· Convertible at the option of the holders 90 or 180 days from issuance.

· Conversion prices are typically based on the discounted (25% or 60% discount) lowest trading prices of the Company’s shares during 30 trading day periods prior to conversion.

Certain note has a capped conversion price of $0.025.

Notes allow the Company to redeem the notes at 125% provided that no redemption is allowed after the 180th day.

Notes to the Unaudited Consolidated Financial Statements

September 30, 2020

NOTE 9 - CONVERTIBLE NOTES (Continued)

Notes allow the Company to redeem the notes at a range from 120% to 125% provided that no redemption is allowed after the 180 th or 185 th day.

Likewise, the notes include original issue discount and financing costs totaling $229,444 and the Company received cash of $1,420,000.

4 unchanged sentences

The Company valued the conversion features of convertible notes and warrants using the Black Scholes valuation model.

The fair value of the derivative liability for all the note and warrants that became convertible for the six months ended June 30, 2020, amounted to $426,390.

The fair value of the derivative liability for all the note and warrants that became convertible for the nine months ended September 30, 2020, amounted to $2,047,278.

$1,006,642 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $1,040,636 was recognized as a “day 1” derivative loss.

1 unchanged sentence

$1,313,350 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $3,603,121 was recognized as a “day 1” derivative loss.

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

NOTE 9 - CONVERTIBLE NOTES (CONTINUED)

A summary of activity during the six months ended June 30, 2020 follows:

A summary of activity during the nine months ended September 30, 2020 follows:

Warrants Outstanding

4 unchanged sentences

Forfeited/canceled

Outstanding, June 30, 2020

Outstanding, September 30, 2020

The reset feature of warrants associated with the convertible notes was effective at the time that a separate convertible note with lower exercise price was issued.

1 unchanged sentence

We accounted for the issuance of the warrants as a liability and recognized the derivative liability.

The following table summarizes information relating to outstanding and exercisable warrants as of June 30, 2020:

The following table summarizes information relating to outstanding and exercisable warrants as of September 30, 2020:

Warrants Outstanding

Warrants Exercisable

Weighted Average

Contractual life

Weighted Average Remaining

Weighted Average

2 unchanged sentences

Exercise Price

The intrinsic value of the warrants as of June 30, 2020 is $667,600.

Contractual life

The intrinsic value of the warrants as of September 30, 2020 is $303,250.

Notes to the Unaudited Consolidated Financial Statements

September 30, 2020

NOTE 10 - DERIVATIVE LIABILITIES

2 unchanged sentences

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

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of June 30, 2020 and December 31, 2019.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of September 30, 2020 and December 31, 2019.

The Black-Scholes model requires six basic data inputs:

2 unchanged sentences

The fair value of each convertible note is estimated using the Black-Scholes valuation model.

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

NOTE 10 - DERIVATIVE LIABILITIES (CONTINUED)

The estimated fair values of the liabilities measured on a recurring basis are as follows:

Six Months Ended

Nine Months Ended

September 30,

Expected term

6 unchanged sentences

1.44% - 2.57%

The following table summarizes the changes in the derivative liabilities during the six months ended June 30, 2020:

The following table summarizes the changes in the derivative liabilities during the nine months ended September 30, 2020:

Fair Value Measurements Using Significant Observable Inputs (Level 3)

4 unchanged sentences

Change in fair value of the derivative

Balance - June 30, 2020

The aggregate (gain) loss on derivatives during the six months ended June 30, 2020 and 2019 was as follows:

Six Months Ended

Balance - September 30, 2020

The aggregate (gain) loss on derivatives during the nine months ended September 30, 2020 and 2019 was as follows:

Nine Months Ended

September 30,

Addition of new derivatives recognized as loss on derivatives

Change in fair value of derivatives

(Gain) loss on change in fair value of the derivative

Notes to the Unaudited Consolidated Financial Statements

September 30, 2020

NOTE 11 – STOCKHOLDERS’ EQUITY

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

During the six months ended June 30, 2020, the Company issued 50,286,709 shares of common stock, valued at fair market value on issuance as follows;

During the nine months ended September 30, 2020, the Company issued 60,177,619 shares of common stock, valued at fair market value on issuance as follows;

· 8,937,500 shares issued for cash of $715,004

4 unchanged sentences

· 3,233,586 shares issued for cashless exercised warrant

As of June 30, 2020 and December 31, 2019, 68,295,300 and 18,008,591 shares of common stock were issued and outstanding, respectively.

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

As of September 30, 2020 and December 31, 2019, 78,186,210 and 18,008,591 shares of common stock were issued and outstanding, respectively.

NOTE 12 - RELATED PARTY TRANSACTIONS

Due from related party

During the six months ended June 30, 2020, the Company loaned $14,787 to related parties who are a shareholder and a former director, collected $388 and wrote off amounts totaling $43,375.

As of June 30, 2020 and December 31, 2019, the Company had due from related parties of $287,884 and $316,860, respectively.

During the nine months ended September 30, 2020, the Company loaned $17,187 to related parties who are a shareholder and a former director, collected $388 and wrote off amounts totaling $43,375.

As of September 30, 2020, and December 31, 2019, the Company had due from related parties of $290,284 and $316,860, respectively.

The amounts are unsecured, non-interest bearing and due on demand.

Due to related parties

During the six months ended June 30, 2020, the Company borrowed $182 from the CFO of the Company and repaid $197 to the CEO and CFO.

As of June 30, 2020, the Company owed $120,000 to Francisco Bunt who owns 49% of loT Labs (Note 4).

As of June 30, 2020 and December 31, 2019, the Company had amounts due to related parties of $154,616 and $34,631, respectively.

During the nine months ended September 30, 2020, the Company borrowed $182 from the CFO of the Company and repaid $197 to the CEO and CFO.

During the nine months ended September 30, 2020, the Company borrowed $20,000 from Francisco Bunt who owns 49% of loT Labs and repaid $20,000.

As of September 30, 2020, and December 31, 2019, the Company had amounts due to related parties of $94,616, which included $60,000 to Francisco Bunt (Note 4) and $34,631, respectively.

The amounts are unsecured, non-interest bearing and due on demand.

6 unchanged sentences

The Company shall have the right to terminate any of the employment agreements at any time without prior notice, but in that event, the Company shall pay these persons salaries and other benefits they are entitled to receive under their respective agreements for three years.

Notes to the Unaudited Consolidated Financial Statements

September 30, 2020

NOTE 12 - RELATED PARTY TRANSACTIONS (Continued)

On May 2, 2019, the Company entered into Employment Agreements with the following persons:

16 unchanged sentences

Brito as an advisor to our Board of Directors and agreed to pay him $5,000 per month for such services.

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

NOTE 12 - RELATED PARTY TRANSACTIONS (CONTINUED)

On March 16, 2020, our Board of Directors adopted a Director Compensation Plan that applies to members of our Board of Directors.

4 unchanged sentences

· Directors Alvaro Cardona and Leandro Iglesias shall each receive 1,000,000 shares of the Company’s Common Stock, valued at $70,000 each, for their service as members of the Board of Directors for the period from June 2018 to December 2019.

During the six months ended June 30, 2020 and 2019, the Company recorded management fees of $252,000 and $118,000 and paid $62,300 and $62,200, respectively.

During the six months ended June 30, 2020, the Company settled accrued salary – management of $202,500 and issued 4,308,510 shares.

As at June 30, 2020 and December 31, 2019, the Company accrued management salaries of $255,431 and $268,231, respectively.

During the nine months ended September 30, 2020 and 2019, the Company recorded management fees of $378,000 and $226,000 and paid $91,600 and $116,200, respectively.

During the nine months ended September 30, 2020, the Company settled accrued salary – management of $202,500 and issued 4,308,510 shares.

As at September 30, 2020 and December 31, 2019, the Company accrued management salaries of $352,131 and $268,231, respectively.

NOTE 13 – COMMITMENTS AND CONTIGENCIES

2 unchanged sentences

The Company leases facilities which the term is 12 months.

For the six months ended June 30, 2020 and 2019, the Company incurred $16,100 and $0, respectively.

For the nine months ended September 30, 2020 and 2019, the Company incurred $16,100 and $17,600, respectively.

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

NOTE 14 – EARNING PER SHARE

Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the periods.

Diluted net income per common share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the periods.

Common equivalent shares consist of stock options, unvested restricted shares, and outstanding warrants that are computed using the treasury stock method.

Antidilutive stock awards consist of stock options that would have been antidilutive in the application of the treasury stock method.

Three Months Ended

Six Months Ended

Net Income (Loss)

Change in fair value of derivatives

Interest on convertible debt

Net Loss - diluted

Weighted average common shares outstanding

Effect of dilutive shares

Net income per common share:

For the six months ended June 30, 2020 and three and six months ended June 30, 2019, the convertible instruments are anti-dilutive and therefore, have been excluded from earnings (loss) per share.

September 30, 2020

NOTE 14 – SEGMENT

At June 30, 2020, the Company operates in one industry segment, telecommunication services, and two geographic segments, USA and Switzerland, where current assets and equipment are located .

At September 30, 2020, the Company operates in one industry segment, telecommunication services, and two geographic segments, USA and Switzerland, where current assets and equipment are located .

Operating Activities

The following table shows operating activities information by geographic segment for the three and six months ended June 30, 2020 and 2019:

Three months Ended June 30, 2020

The following table shows operating activities information by geographic segment for the three and nine months ended September 30, 2020 and 2019:

Three months Ended September 30, 2020

Cost of revenue

3 unchanged sentences

Other income (expense)

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

NOTE 15 – SEGMENT (CONTINUED)

Three months Ended June 30, 2019

Three months Ended September 30, 2019

Cost of revenue

3 unchanged sentences

Other income (expense)

Six months Ended June 30, 2020

Income credit

Notes to the Unaudited Consolidated Financial Statements

September 30, 2020

NOTE 14 – SEGMENT (Continued)

Nine months Ended September 30, 2020

Cost of revenue

3 unchanged sentences

Other income (expense)

Six months Ended June 30, 2019

Nine months Ended September 30, 2019

Cost of revenue

3 unchanged sentences

Other income (expense)

Income credit

As of August 7, 2019, having completed all conditions under the Purchase Agreement, the Company acquired SwissLink located in Switzerland.

Notes to the Unaudited Consolidated Financial Statements

June 30, 2020

September 30, 2020

NOTE 14 – SEGMENT (Continued)

Asset Information

The following table shows asset information by geographic segment at June 30, 2020 and December 31, 2019:

June 30, 2020

The following table shows asset information by geographic segment at September 30, 2020 and December 31, 2019:

September 30, 2020

Current assets

8 unchanged sentences

NOTE 15 - SUBSEQUENT EVENTS

Subsequent to June 30, 2020 and through the date that these financials were made available, the Company had the following subsequent events:

On July 14, 2020, we entered into a Subscription Agreement with Alpha Capital Anstalt (“Purchaser”), pursuant to which we issued and sold to the Purchaser 2,000,000 shares of our common stock (the “Shares”) for total proceeds of $160,000.

The Shares were sold at $0.08 per share, after applying a 20% discount to the purchase price of $0.10 per share.

The Shares were offered and sold pursuant to qualified offering circular on Form 1-A (File No.

024-10950) and related supplement, in each case filed with the Securities and Exchange Commission.

A copy of the form of Subscription Agreement used in the offer and sale is attached as Exhibit 13.1 to the Form 1-A/A filed with the SEC on June 3, 2019.

Also on July 14, 2020, we entered into a Securities Purchase Agreement (“SPA”) with Purchaser for the sale of a convertible promissory note, executed on July 15, 2019, in the principal amount of $200,000 (the “Note”).

We received $160,000 after paying a $40,000 original issue discount on the Note.

The Note bears interest at 5% per annum and matures one year from the date of issuance.

After 180 days from issuance, the Note may be converted by purchaser into shares of our common stock at a conversion price of the lesser of (i) $0.025 or (ii) 40% of the lowest trading price of our common stock in the 20 days preceding the issuance date of the Note.

As additional consideration for the Note, we issued to Purchaser a warrant (the “Warrant”) to purchase 2,000,000 shares of common stock at an exercise price of $0.02 per share (subject to adjustment as set forth in the Warrant) expiring six months from the date of issuance.

On July 01, 2020, we entered into a 60-day term bridge loan with Apollo Management Group for the principal amount of $73,684.21 bearing interest at the rate of Twelve (12%) percent per annum, commencing on the date such Loan is funded until the date the Loan is paid in full.

On July 22, 2020, we entered into an Exchange Agreement with Jefferson Street Capital LLC, whereby we agreed to exchange a February 22, 2019 Common Stock Purchase Warrant and June 27, 2019 Convertible Promissory Note in the principal amount of $35,000 into a total of 650,000 shares of our common stock.

Subsequent to September 30, 2020 and through the date that these financials were made available, the Company had the following subsequent events:

On November 1, 2020, our board of directors approved amended employments in favor of our Chief Executive Officer, Leandro Iglesias, our Chief Financial Officer, Alvaro Quintana, and our Chief Commercial Officer, Juan Carlos Lopez Silva.

The amended employment agreement in favor of Mr.

Iglesias extended the term of employment from 36 months to 60 months.

The now five year employment agreement with Mr.

Iglesias provides that we will compensate him with a salary of $17,000 monthly and he is eligible for quarterly bonus of 250,000 shares of our common stock.

If we do not have the cash available, the agreement provides that Mr.

Iglesias may convert his accrued salary/bonus into shares of our common stock or newly created Series A Preferred Stock.

For common shares, the amount of accrued salary to be converted into shares must be determined by considering the average price per share of the Company’s common stock on the OTC Markets during the last 10 days and applying a discount of 25%.” For Series A Preferred Shares, the amount of accrued salary to be converted into shares is the per share conversion price for common shares multiplied by ten US Dollars ($10).

Iglesias has a further right to convert any common shares under his control into Series A Preferred shares at any time at a rate of ten (10) common shares for each Series A Preferred share.

The amended employment agreement in favor of Mr.

Quintana extended the term of employment from 36 months to 60 months.

The now five year employment agreement with Mr.

Quintana provides that he is eligible for quarterly bonus of 200,000 shares of our common stock.

If we do not have the cash available, the agreement provides that Mr.

Quintana may convert his accrued salary/bonus into shares of our common stock or newly created Series A Preferred Stock.

Quintana has a further right to convert any common shares under his control into Series A Preferred shares at any time at a rate of ten (10) common shares for each Series A Preferred share.

The amended employment agreement in favor of Mr.

Silva extended the term of employment from 36 months to 60 months.

Silva is eligible for quarterly bonuses of 150,000 shares of our common stock.

If we do not have the cash available, the agreement provides that Mr.

Iglesias may convert his accrued salary/bonus into shares of our common stock at the average price of our common stock during the last 10 days after applying a discount of 25%.

Notes to the Unaudited Consolidated Financial Statements

September 30, 2020

NOTE 15 - SUBSEQUENT EVENTS (Continued)

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 shareholders at a rate of 51% of the total vote of shareholders.

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

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements