What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-15 compared with 2021-08-16 · 107 added, 86 removed, 128 unchanged (60% of the section changed)

19 unchanged sentences

Factors which could have a material adverse effect on our operations and

future prospects on a consolidated basis include, but are not limited to:

future prospects on a consolidated basis include;

but are not limited to:

changes in economic conditions, legislative/regulatory changes,

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majority-owned subsidiaries SwissLink Carrier AG ( www.swisslink-carrier.com );

QGlobal SMA (https://www.qglobalsms.com/), Smart Gas (http://iotsmartgas.com/) and ItsBChain (http://itsbchain.com/).

The information

contained on our websites is not incorporated by reference into this Quarterly Report on Form 10-Q and should not be considered part of

this or any other report filed with the SEC.

QGlobal SMS, LLC (https://www.qglobalsms.com/);

IoT Labs, LLC (http://www.iotlabs.mx/);

Global Money One Inc.

(https://www.globalmoneyone.com/);

and ItsBChain (http://itsbchain.com/).

The information contained on our websites is not incorporated by reference into this Quarterly

Report on Form 10-Q and should not be considered part of this or any other report filed with the SEC.

Results of Operations

Our total revenue reported for the three months ended

June 30, 2021 was $16,128,367, compared with $11,130,086 for the three months ended June 30, 2020.

These numbers reflect an increase of

44.91% quarter over quarter on our consolidated revenues.

Our total revenue reported for the six months ended June 30, 2021 was $30,325,978,

compared with $16,147,498 for the six months ended June 30, 2020.

When looking at the numbers

by subsidiary, we have the following breakout for the six months ended June 30, 2021 compared to the six months ended June 30, 2020:

Our total revenue reported for the three months

ended September 30, 2021 was $16,516,739, compared with $13,291,698 for the three months ended September 30, 2020.

These numbers

reflect an increase of 24.26% quarter over quarter on our consolidated revenues.

Our total revenue reported for the nine months

ended September 30, 2021 was $46,842,717, compared with $29,439,196 for the nine months ended September 30, 2020.

These numbers

reflect an increase of 59.12% year over year on our consolidated revenues

When looking at the numbers by subsidiary, we have the

following breakout for the nine months ended September 30, 2021:

Months Ended September 30, 2021

Etelix.com USA, LLC

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Our total cost of revenues for the three months ended

June 30, 2021 increased to $16,083,802, compared with $10,397,778 for the three months ended June 30, 2020.

Our total cost of revenues

for the six months ended June 30, 2021 increased to $29,794,043, compared with $15,576,331 for the six months ended June 30, 2020.

September 30, 2021 increased to $15,675,687, compared with $13,158,685 for the three months ended September 30, 2020.

Our total cost of

revenues for the nine months ended September 30, 2021 increased to $45,469,730, compared with $28,735,016 for the nine months ended September

When looking at the numbers

by subsidiary, we have the following breakout for the six months ended June 30, 2021 compared to the six months ended June 30, 2020:

by subsidiary, we have the following breakout for the nine months ended September 30, 2021 compared to the nine months ended September

Cost of Revenue

Six Months Ended

June 30, 2021

Nine Months Ended

September 30, 2021

Cost of Revenue

Six Months Ended

June 30, 2020

Nine Months Ended

September 30, 2020

Etelix.com USA, LLC

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Operating Expenses

Operating expenses increased to $1,209,167 for the

three months ended June 30, 2021 from $905,016 for the three months ended June 30, 2020.

Operating expenses increased to $2,707,278 for

the six months ended June 30, 2021 from $2,202,543 for the six months ended June 30, 2020.

The detail by major category for the six months

ended June 30, 2021 and 2020 is reflected in the table below.

Six Months Ended June 30,

Operating expenses decreased to $957,195 for the three

months ended September 30, 2021 from $958,787 for the three months ended September 30, 2020.

Operating expenses increased to $3,664,473

for the nine months ended September 30, 2021 from $3,161,330 for the nine months ended September 30, 2020.

The detail by major category

for the nine months ended September 30, 2021 and 2020 is reflected in the table below.

Nine Months Ended September 30,

Salaries, Wages and Benefits

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The main reasons for the overall increase in operating

expenses for the six months ended June 30, 2021 compared to the same period of 2020 is due to the following:

(1) Technology as a result

of the development of the blockchain solutions, the IoT devices, and the fintech platform;

(2) Legal & Regulatory expenses due to

the IoT devices certification process;

expenses for the nine months ended September 30, 2021 compared to the same period of 2020 is due to the following:

(1) Technology as a

result of the development of the blockchain solutions, the IoT devices, and the fintech platform;

(2) Legal & Regulatory expenses

due to the IoT devices certification process;

(3) Other expenses associated to new interconnection deployments;

and (3) Stock-based compensation.

Six Months Ended June 30,

When looking at the numbers

by subsidiary, we have the following breakout for the nine months ended September 30, 2021 compared to the nine months ended September

Nine Months Ended September 30,

Global Money One

The most significant difference is generated by iQSTEL

which is due to the following:

(1) the Salaries, Wages and Benefits as a result of the Management Team and Board members compensation;

(2) Advertising corresponds to the third-party consultancy for the design and implementation of a Social Media communication strategy

oriented to build and enhance our companies and brand image;

and (3) Stock-based compensation.

Operating Income

The Company showed negative Operating Income for the

three months ended June 30, 2021 of $1,164,602 compared with a negative result of $172,708 for the three months ended June 30, 2020.

three months ended September 30, 2021 of $116,143 compared with a negative result of $825,774 for the three months ended September 30,

The Company showed negative Operating Income for the

six months ended June 30, 2021 of $2,175,343 compared with a negative result of $1,631,376 for the six months ended June 30, 2020.

The increase of the numbers for the six month period

above is primarily due to the costs associated with the operation of the public entity (iQSTEL, Inc.) that increases in $405,972 year

nine months ended September 30, 2021 of $2,291,486 compared with a negative result of $2,457,150 for the nine months ended September 30,

Even when the company presents an operating loss,

the numbers reflect a positive evolution process that places us close to the breakeven point in operations.

Other Expenses/Other Income

We had other income of $4,925 for the three months

ended June 30, 2021, as compared with other income of $1,550,173 for the same period ended 2020.

We had other expenses of $825,518 for

the six months ended June 30, 2021, as compared with other expenses of $900,362 for the same period ended 2020.

The decrease in other

expenses is mainly due to the reduction in the interest expenses.

We finished the three months ended June 30, 2021 with

a loss of $1,122,372, as compared to a net income of $1,377,465 during the three months ended June 30, 2020.

We finished the six months

ended June 30, 2021 with a loss of $3,000,861, as compared to a loss of $2,531,738 during the six months ended June 30, 2020.

ended September 30, 2021, as compared with other expenses of $144,451 for the same period ended 2020.

We had other expenses of $820,593

for the nine months ended September 30, 2021, as compared with other expenses of $1,044,813 for the same period ended 2020.

in other expenses is a consequence of not having interest expenses and other expenses related to derivatives.

We finished the three months ended September 30, 2021

with a net loss of $111,218, as compared to a loss of $970,225 during the three months ended September 30, 2020.

We also finished the

nine months ended September 30, 2021 with a loss of $3,112,079, as compared to a loss of $3,501,963 during the nine months ended September

The reasons for specific components are discussed

Overall, these are the main concepts impacting the net result:

(1) a reduction in the gross profit during the three months ended

June 30, 2021;

and (2) the increase of the Operating Expenses of the public entity.

(1) the Operating Expenses of the public entity of $2,395,047;

a loss in settlement of debt of $528,794;

and (3) interest expenses of $648,889.

It is important to remark the important reduction

in interest expenses when comparing the amount corresponding to the nine months ended September 30, 2021 ($648,889) versus the amount

corresponding to the same period of year 2020 ($2,368,107).

Liquidity and Capital Resources

As of June 30, 2021, we had total current assets of

$5,563,449 and current liabilities of $4,187,907, resulting in a positive working capital of $1,375,542.

As of September 30, 2021, we had total current assets

of $5,202,360 and current liabilities of $3,916,317, resulting in a positive working capital of $1,286,043.

This compares with the working

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This increase in working capital, as discussed in more detail below, is primarily

the result of the increase of $1,096,154 in the cash position and a reduction of $3,433,224 in the liabilities (loans, convertible notes

and derivatives).

Our operating activities used $2,093,398 in the six

months ended June 30, 2021 as compared with $1,126,307 used in operating activities in the six months ended June 30, 2020.

the result of the increase of $437,488 in the cash position;

the increase of $879,498 in account receivable from the sales of services;

and a reduction of $3,995,622 in the liabilities (loans, convertible notes and derivatives).

Our operating activities used $2,486,045 in the nine

months ended September 30, 2021 as compared with $1,526,513 used in operating activities in the nine months ended September 30, 2020.

Investing activities used $378,071 for

the six months ended June 30, 2021.

Uses of funds on investing activities were the purchase of property and equipment for value of $68,844

and net payment of loans between related parties of $24,220, and acquisition of subsidiary of $60,000.

Financing activities provided $3,353,854 in the six

months ended June 30, 2021 compared with $1,626,500 provided in the six months ended June 30, 2020.

Our positive financing cash flow in

2021 was largely the result of the proceed from the subscription of new common stocks under our Regulation A offering of $3,586,250.

The working capital and the cash position

of the company has improved significantly;

but based upon our current financial condition, we do not have sufficient cash to operate our

business at the current level for the next twelve months.

We intend to fund operations through increased sales and debt and/or equity

financing arrangements, which may be insufficient to fund expenditures or other cash requirements.

The Company has received the qualification

of an Offering Statement under Regulation A for the sale of up to 20,200,000 common shares.

This offering is being conducted on a “best

efforts” basis, which means that there is no guarantee that any minimum amount will be sold.

We also plan to seek additional financing

in a private equity offering to secure funding for operations.

There can be no assurance that we will be successful in raising additional

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.

the nine months ended September 30, 2021.

Uses of funds on investing activities were for acquisition of subsidiary of $60,000;

of property and equipment for value of $102,623 and Payment of loan receivable - related party of $215,674.

Financing activities provided $3,314,313 in the nine

months ended September 30, 2021 compared with $1,968,632 provided in the nine months ended September 30, 2020.

Our positive financing

cash flow in 2021 was largely the result of the proceed from the subscription of new common stocks under our Regulation A offering of

The working capital and the cash position of the company

has improved significantly;

but based upon our current financial condition, we do not have sufficient cash to operate our business at

the current level for the next twelve months.

We intend to fund operations through increased sales and debt and/or equity financing arrangements,

which may be insufficient to fund expenditures or other cash requirements.

The Company has received the qualification of an Offering Statement

under Regulation A for the sale of up to 20,200,000 common shares.

This offering is being conducted on a “best efforts” basis,

which means that there is no guarantee that any minimum amount will be sold.

We also plan to seek additional financing in a private equity

offering to secure funding for operations.

There can be no assurance that we will be successful in raising additional funding.

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.

Although our operations are influenced by general

economic conditions, we do not believe that inflation had a material effect on our results of operations during the six-month period ended

June 30, 2021.

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, 2021.

Critical Accounting Polices

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Our accounting

policies are discussed in detail in the footnotes to our financial statements included in this Quarterly Report on Form 10-Q for the six

months ended June 30, 2021;

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, 2021;

however, we consider our critical accounting policies to be those related to allowance for doubtful accounts,

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Off Balance Sheet Arrangements

As of June 30, 2021, there were no off-balance sheet

arrangements.

As of September 30, 2021, there were no off-balance

sheet arrangements.

Recent Accounting Pronouncements

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periods within those fiscal years, beginning after December 15, 2020 on a prospective basis, with early adoption permitted.

the new standard effective January 1, 2021 and did not have a material impact on our consolidated financial statements.

We will adopt

the new standard effective January 1, 2021 and do not expect the adoption of this guidance to have a material impact on our consolidated

financial statements.

In August 2020, the FASB issued ASU 2020-06, ASC Subtopic

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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 2. Management’s Discussion and Analysis