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Item 1. Financial Statements

2022-05-16 compared with 2021-11-15 · 200 added, 464 removed, 322 unchanged (67% of the section changed)

2 unchanged sentences

in this Form 10-Q are as follows:

Consolidated Balance Sheets as of September 30, 2021

Consolidated Balance Sheets as of March

31, 2022 (unaudited) and December 31, 2021;

Consolidated Statements of Operations for the three and nine months ended

September 30, 2021 and 2020 (unaudited);

Consolidated Statements of Cash Flows for the nine months ended September

March 31, 2022 and 2021 (unaudited);

Consolidated Statements of Cash Flows for the three months ended March

31, 2022 and 2021 (unaudited);

Consolidated Statements of Stockholder’s Equity as of September 30,

Consolidated Statements of Stockholder’s Equity as of March 31, 2022 and 2021.

Notes to Consolidated Financial Statements (unaudited).

4 unchanged sentences

presentation have been included.

Operating results for the interim period ended September 30, 2021 are not necessarily indicative of

Operating results for the interim period ended March 31, 2022 are not necessarily indicative of

the results that can be expected for the full year.

Balance Sheets

September 30,

Current Assets

Cash and cash equivalents

Accounts receivable, net

11 unchanged sentences

Loans payable - related parties

Current portion of convertible notes - net of discount of $ 0 and $ 370,106

Other current liabilities

Derivative liabilities

Deposit for option

Total Current Liabilities

Convertible notes - net of discount of $ 0 and $ 2,184

Loans payable, non-current

2 unchanged sentences

Stockholders' Equity (Deficit)

Preferred stock:

1,200,000 authorized;

$ 0.001 par value

Series A Preferred

Series A Preferred stock:

10,000 designated;

15 unchanged sentences

( 19,091,891 )

( 18,536,921 )

Accumulated other comprehensive loss

Equity (Deficit) attributed to stockholders of iQSTEL Inc.

( 1,388,575 )

Deficit attributable to noncontrolling interests

( 1,006,461 )

Total stockholders' Equity (Deficit)

( 2,395,036 )

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

3 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Cost of revenue

4 unchanged sentences

( 1,010,741 )

( 2,457,150 )

Other income (expense)

1 unchanged sentence

Interest expense

( 2,368,107 )

Change in fair value of derivative liabilities

Loss on settlement of debt

Total other income (expense)

( 1,044,813 )

Total other expense

Net loss before provision for income taxes

1 unchanged sentence

( 1,878,489 )

( 3,112,079 )

( 3,501,963 )

Net income (loss) attributable to noncontrolling interests

Net income attributable to noncontrolling interests

Net loss attributed to stockholders of iQSTEL Inc.

1 unchanged sentence

$ ( 1,942,391 )

$ ( 3,128,721 )

$ ( 3,548,472 )

Comprehensive income (loss)

1 unchanged sentence

$ ( 1,878,489 )

$ ( 3,112,079 )

$ ( 3,501,963 )

Foreign currency adjustment

2 unchanged sentences

$ ( 1,770,833 )

$ ( 3,578,273 )

Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive income attributable to noncontrolling interests

Net comprehensive loss attributed to stockholders of iQSTEL Inc.

1 unchanged sentence

$ ( 1,887,486 )

$ ( 3,100,978 )

$ ( 3,587,390 )

Basic and diluted loss per common share

2 unchanged sentences

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

Statements of Changes in Stockholders’ (Deficit) Equity

For the three and nine months ended September 30, 2021 and 2020

A Preferred Stock

B Preferred Stock

Comprehensive

Stockholders'

Statements of Changes in Stockholders’ Equity (Deficit)

For the three

ended March 31, 2022 and 2021

Series A Preferred Stock

Series B Preferred Stock

Paid in Capital

Comprehensive Loss

Controlling Interest

Stockholders’ Deficit

- December 31, 2021

1 unchanged sentence

$ ( 996,013 )

$ ( 1,006,461 )

$ ( 2,395,036 )

stock issued for conversion of common stock

( 21,000,000 )

stock issued for cash

stock issued for service

stock issued for compensation

stock issued for forbearance of debt

stock issued for conversion of debt

of common stock

( 1,294,600 )

of derivative liabilities

currency translation adjustments

income (loss)

( 1,942,391 )

( 1,878,489 )

- March 31, 2022

1 unchanged sentence

$ ( 965,962 )

stock issued for compensation

stock issued for settlement of debt

currency translation adjustments

( 1,122,372 )

- June 30, 2021

$ ( 17,628,915 )

$ ( 1,052,569 )

stock issued for compensation

currency translation adjustments

income (loss)

- September 30, 2021

$ ( 17,827,869 )

Comprehensive

Stockholders’

$ ( 14,699,148 )

Paid in Capital

Comprehensive Loss

Controlling Interest

Stockholders' Deficit

- December 31, 2019

$ ( 1,388,575 )

1 unchanged sentence

$ ( 2,395,036 )

stock issued for conversion of common stock

( 21,000,000 )

stock issued for settlement of debt

stock issued for services

stock issued for cash

stock issued for service

stock issued for compensation

stock issued for forbearance of debt

stock issued for conversion of debt

stock issued for exercised cashless warrant

stock to be issued for acquisition of Itsbchain LLC

of derivative liabilities

currency translation adjustments

( 3,890,490 )

( 3,909,203 )

- March 31, 2020

$ ( 12,015,747 )

$ ( 5,212,314 )

$ ( 923,832 )

of common stock

( 1,294,600 )

stock issued for cash

stock issued for conversion of debt

stock issued for exercised cashless warrant

stock issued for settlement of debt

of derivative liabilities

currency translation adjustments

- June 30, 2020

( 1,942,391 )

2 unchanged sentences

$ ( 16,641,539 )

stock issued for cash

stock issued for conversion of debt

stock issued for settlement of debt

stock issued for service

of derivative liabilities

currency translation adjustments

- September 30, 2020

$ ( 889,808 )

$ ( 2,243,240 )

$ ( 800,030 )

$ ( 3,043,270 )

The accompanying

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

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

Statements of Cash Flows

Nine Months Ended

September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

3 unchanged sentences

Stock based compensation

Write-off of due from related party

Depreciation and amortization

1 unchanged sentence

Change in fair value of derivative liabilities

( 1,350,513 )

Loss on settlement of debt

3 unchanged sentences

Prepaid and other current assets

Due from related parties

Accounts payable

2 unchanged sentences

( 1,042,192 )

( 1,526,513 )

CASH FLOWS FROM INVESTING ACTIVITIES:

1 unchanged sentence

Purchase of property and equipment

Purchase of intangible assets

Payment of loan receivable - related party

Collection of due from related parties

Net cash used in investing activities

2 unchanged sentences

Repayments of loans payable

Proceeds from loans payable - related parties

Repayment of loans payable - related parties

Common stock issued

Proceeds from convertible notes

Proceeds from common stock issued

Deposit for option

Repayment of convertible notes

1 unchanged sentence

Effect of exchange rate changes on cash

Net change in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Net change in cash

Cash, beginning of period

Cash, end of period

Supplemental cash flow information

2 unchanged sentences

Non-cash transactions:

Derivative liabilities recognized as debt discount

Common stock issued for conversion of debt

Cashless warrant exercised

Resolution of derivative liabilities

Related party debt forgiveness

Common stock issued for settlement of debt

Amount owing for acquisition of IOT

Common stock issued for forbearance of debt

Replacement of convertible notes to note payable

Preferred stock issued for conversion of common stock

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under the laws of the state of Delaware, on November 16, 2020.

A novel strain

of coronavirus (COVID-19) was first identified in December 2019, and subsequently declared a global pandemic by the World Health Organization

on March 11, 2020.

As a result of the outbreak, many companies have experienced disruptions in their operations and in markets served.

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 September 30, 2021.

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 November 15, 2021, 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.

NOTE 2 -SUMMARY

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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.

generally accepted in the United States of America (“GAAP”) 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 September 30, 2021 and the results of operations

only of normal recurring accruals) to present the financial position of the Company as of March 31, 2022 and the results of operations

and cash flows for the periods presented.

The results of operations for the nine months ended September 30, 2021 are not necessarily indicative

The results of operations for the three months ended March 31, 2022 are not necessarily indicative

of the operating results for the full fiscal year or any future period.

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The consolidated

financial statements of the Company include the accounts of the Company and its owned subsidiaries, Etelix.com USA, LLC, SwissLink Carrier

AG, ITSBCHAIN, LLC, QGLOBAL SMS, LLC, IoT Labs, LLC and Global Money One Inc.

All significant intercompany balances and transactions have

been eliminated in consolidation.

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”) and Global Money One Inc (“Global Money One”).

All significant intercompany balances and

transactions have been eliminated in consolidation.

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.

of the consolidated financial statements in conformity with GAAP 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.

results could differ from these good faith estimates and judgments.

Currency Translation and Re-measurement

translates its foreign operations to U.S.

translates its foreign operations to the U.S.

dollar in accordance with ASC 830, “ Foreign Currency Matters ”.

The functional currency and reporting currency of

Etelix, QGlobal, ItsBchain, IoT Labs and Global Money One is the U.S.

dollar, while SwissLink’s

functional currency is the Swiss Franc (“CHF”).

Swisslink translates

their records into U.S.

dollars as follows:

The functional

currency and reporting currency of the Company, Etelix, QGlobal, Itsbchain, IoT Labs and Global Money One is the U.S.

dollar, while the

functional currency of SwissLink is the Swiss Franc (“CHF”).

The Company’s

subsidiaries, whose functional currency is not the U.S.

dollar, translate their records into U.S.

dollar as follows:

• Assets and liabilities at the rate of exchange

3 unchanged sentences

exchange prevailing during the period

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

arising from such translations are included in accumulated other comprehensive income (loss) in stockholders’ equity.

Receivable and Allowance for Uncollectible Accounts

5 unchanged sentences

credit losses in its existing accounts receivable.

The Company reviews its allowance for doubtful accounts daily, past due balances over

60 days and a specified amount are reviewed individually for collectability.

Account balances are charged off after all means of collection

have been exhausted and the potential for recovery is considered remote.

During the nine months ended September 30, 2021 and 2020, the

Company recorded bad debt expense of $0 and $92,875, respectively.

The Company reviews its allowance for doubtful accounts daily and past due balances

over 60 days and a specified amount are reviewed individually for collectability.

Account balances are charged off after all means of

collection have been exhausted and the potential for recovery is considered remote.

During the three months ended March 31, 2022 and 2021,

the Company did not record bad debt expense.

(Loss) Per Share of Common Stock

3 unchanged sentences

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.

dividing net loss by the weighted average number of shares of common stock outstanding during the period.

Diluted earnings per share is

3 unchanged sentences

There were no potentially dilutive shares of common

stock outstanding for the nine months ended September 30, 2021 and 2020.

stock outstanding for the three months ended March 31, 2022 and 2021.

Concentrations

2 unchanged sentences

financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related

party payables that it will likely incur in the near future.

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.

During the nine

months ended September 30, 2021 and 2020, 6 customers represented 87 % of our revenues and 29 customers represented 87 % of

our revenues, respectively.

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.

During the three

months ended March 31, 2022, 4 customers represented 86 % of our revenues.

During the three months ended March 31, 2021, 4 customers

represented 86 % of our revenues.

recognizes revenue from telecommunication services in accordance with ASC 606, “ Revenue from Contracts with Customers.”

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 existed, and collection was reasonably assured.

are rendered, provided that persuasive evidence of a sales arrangement existed, and collection is reasonably assured.

Management considers

1 unchanged sentence

The Company’s payment terms vary by clients.

Benefit Costs

defined contribution retirement benefit schemes are charged as an expense as they fall due.

Payments made to state-managed retirement

benefit schemes are dealt with as payments to defined contribution schemes where the Company’s obligations under the schemes are

equivalent to those arising in a defined contribution retirement benefit scheme.

benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being

carried out at each balance sheet date.

Actuarial gains and losses are recognized in full in the period in which they occur.

recognized outside the income statement and are presented in other comprehensive income.

Past service cost is recognized immediately in

the income statement in the period in which it occurs.

The retirement

benefit obligation recognized in the balance sheet represents the present value of the defined obligation as adjusted for unrecognized

past service cost, and as reduced by the fair value of the scheme assets.

Any asset resulting from this calculation is limited to past

service cost, plus the present value of available refunds and reductions in future contributions to the scheme.

Accounting Pronouncements

3 unchanged sentences

believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

Reclassifications

Certain amounts

in the financial statements of prior year periods have been reclassified to conform to the current period’s presentation.

GOING CONCERN

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 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.

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.

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

The Company's failure to do so could have a material and adverse effect upon its operations and its stockholders.

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 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.

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 – PROPERTY

AND EQUIPMENT

equipment at September 30, 2021 and December 31, 2020 consisted of the following:

September 30,

equipment at March 31, 2022 and December 31, 2021 consisted of the following:

Telecommunication equipment

4 unchanged sentences

Total property and equipment

and amortization expense for the nine months ended September 30, 2021 and 2020 amounted to $ 66,924 and $ 49,318 , respectively.

LOANS PAYABLE

and amortization expense for the three months ended March 31, 2022 and 2021 amounted to $ 33,547 and $ 20,560 , respectively.

NOTE 5 –LOANS

Loans payable

at September 30, 2021 and December 31, 2020 consisted of the following:

September 30,

Interest rate

Unique Funding Solutions_2

Note was issued on October 12, 2018 and due on January 17, 2019

YES LENDER LLC 3

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

Advance Service Group LLC

Note was issued on October 20, 2020, 2020 and due on February 19, 2021

Apollo Management Group, Inc

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 December 15, 2020

Apollo Management Group, Inc 3

Note was issued on April 1, 2020 and due on October 1, 2021

Apollo Management Group, Inc 4

Note was issued on April 2, 2020 and due on October 2, 2021

Apollo Management Group, Inc 5

Note was issued on April 7, 2020 and due on October 7, 2021

Apollo Management Group, Inc 6

Note was issued on April 15, 2020 and due on October 15, 2021

Apollo Management Group, Inc 7

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

Apollo Management Group, Inc 14

Note was issued on December 4, 2020 and due on January 4, 2021

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

M2B Funding Corp 1

Note was issued on December 10, 2020 and due on January 9, 2021

M2B Funding Corp 2

Note was issued on December 18, 2020 and due on January 17, 2021

M2B Funding Corp 3

Note was issued on December 24, 2020 and due on January 23, 2021

M2B Funding Corp 4

Note was issued on December 30, 2020 and due on January 29, 2021

at March 31, 2022 and December 31, 2021 consisted of the following:

Note was issued on November 1, 2020 and due on January 30, 2022

Note was issued on October 23, 2018 and due on January 3, 2023

6 unchanged sentences

Current portion of loans payable

( 1,332,612 )

Long-term loans payable

Loans payable

to related parties at September 30, 2021 and December 31, 2020 consisted of the following:

September 30,

Alonso Van Der Biest

Alvaro Quintana

During the three

months ended March 31, 2022 and 2021, the Company borrowed from third parties totaling $ 0 and $ 444,444 , which includes

original issue discount and financing costs of $ 0 and $ 44,444 and repaid the principal amount of $ 232,018 and $ 309,082 ,

respectively.

During the three months ended March 31, 2022 and 2021,

the Company recorded interest expense of $ 7,481 and $ 162,459 and recognized amortization

of discount, included in interest expense, of $ 7,407 and $ 63,666 , respectively.

Loans payable to related parties

at March 31, 2022 and December 31, 2021 consisted of the following:

49% of Shareholder of SwissLink

Note is due on demand

49% of Shareholder of SwissLink

Note is due on demand

Current portion of loans payable

Long-term loans payable

During the nine months ended September 30, 2021, the

related party loan of $ 807,103 (Euro 735,00 0) was forgiven and the Company recorded it

as additional paid in capital.

During the nine months ended September 30, 2021 and

2020, the Company borrowed from third parties totaling $ 444,444 and $ 967,596 , which includes original issue discount and financing costs

of $ 44,444 and $ 34,316 and repaid the principal amount of $ 331,150 and $ 607,447 , respectively.

During the nine months ended September 30, 2021 and

2020, the Company recorded interest expense of $ 179,504 and $ 180,843 and recognized amortization of discount, included in interest expense,

of $ 63,666 and $ 33,842 , respectively.

During the nine months ended September 30, 2021, the

Company settled loans payable of $ 1,516,667 by issuing 2,230,394 shares of common stock valued at $ 2,056,530 .

As a result, the Company

recorded loss on settlement of debt of $ 539,863 .

6 - CONVERTIBLE LOANS

30, 2021 and December 31, 2020, convertible loans consisted of the following:

September 30,

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

Promissory notes – Issued in fiscal year 2020, with variable conversion features

Total convertible notes payable

Unamortized debt discount

Total convertible notes

current portion of convertible notes

Long-term convertible notes

During the nine months ended September 30, 2021 and

2020, the Company recorded interest expense of $ 33,429 and $ 689,996 and recognized amortization of discount, included in interest expense,

of $ 372,290 and $ 1,463,426 , respectively.

During the nine months ended September 30, 2021 and

2020, the Company repaid notes of $ 250,000 and $ 492,190 and accrued interest including prepayment penalty of $ 6,027 and $ 552,631 , respectively.

During the nine

months ended September 30, 2021, the Company recorded gain on settlement of debt of $ 11,069 .

During the nine

months ended September 30, 2021, the Company converted notes with principal amounts and accrued interest of $ 422,295 into 6,080,632 shares

of common stock.

The corresponding derivative liability at the date of conversion of $ 708,611 was settled through additional

paid in capital.

NOTE 7 – DERIVATIVE

analyzed the conversion option for derivative accounting consideration under ASC 815, Derivatives and Hedging , and determined

that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being

no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

Assumptions Used in Accounting for Derivative Liabilities

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.

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, 2021.

The Black-Scholes model requires six basic data inputs:

the exercise or strike price, time to expiration,

the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate.

Changes to these inputs could produce a significantly higher or lower fair value measurement.

As of September 30, 2021 and December 31, 2020, the

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

Expected term

0.16 - 1.18 years

0.02 - 6.00 years

Expected average volatility

145 % - 241 %

Expected dividend yield

Risk-free interest rate

0.07 % - 0.09 %

0.05 % - 2.56 %

The following

table summarizes the changes in the derivative liabilities during the nine months ended September 30, 2021:

Value Measurements Using Significant Observable Inputs (Level 3)

Balance - December 31, 2020

Settled on issuance of common stock

Change in fair value of the derivative

Balance - September 30, 2021

The following

table summarizes the change in fair value of derivative liability included in the income statement for the nine months ended September

30, 2021 and 2020, respectively.

Nine months Ended

September 30,

Addition of new derivatives recognized as loss on derivatives

Revaluation of derivative liabilities

( 2,391,149 )

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

$ ( 317,080 )

$ ( 1,350,513 )

NOTE 6 – OTHER

CURRENT LIABILITIES

Other current liabilities at

March 31, 2022 and December 31, 2021 consisted of the following:

Accrued liabilities

Accrued interest

Salary payable - management

Employee benefits

Other current liabilities

NOTE 7 – STOCKHOLDERS’

The Company’s

authorized capital consists of 1,200,000 shares of preferred stock and 300,000,000 shares of common stock with a par

value of $ 0.001 per share.

During the nine

months ended September 30, 2021, the Company issued 45,878,526 shares of common stock, valued at fair market value on issuance

· 35,862,500 shares issued for

cash of $ 3,586,250

· 2,230,394 shares, valued at

$ 2,056,530 , issued for settlement of debt of $ 1,516,667

· 1,260,000 shares issued to our

management for compensation valued at $ 1,010,738

· 6,080,632 shares issued for

conversion of debt of $ 422,295

· 195,000 shares for services

valued at $ 284,700

· 250,000 shares for forbearance

of debt valued at $ 49,925

During the nine

months ended September 30, 2021, the Company terminated a placement agent and advisory services agreement with a FINRA member dated September

22, 2020, and cancelled 1,294,600 shares of common stock, which was issued for those services.

The termination agreement allowed

the FINRA member to retain 400,000 shares of the Company’s common stock in connection with the services.

As of September

30, 2021 and December 31, 2020, 141,717,358 and 118,133,432 shares of common stock were issued and outstanding, respectively.

Preferred Stock

The Company’s authorized capital consists of 300,000,000 shares

of common stock with a par value of $ 0.001 per share.

Series A Preferred Stock

3, 2020, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock

5 unchanged sentences

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

As of September

30, 2021 and December 31, 2020, 10,000 shares of Series A Preferred Stock were issued and outstanding, respectively.

Preferred Stock

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.

As of March 31, 2022 and December 31, 2021, 10,000 shares

of Series A Preferred Stock were issued and outstanding.

Series B Preferred Stock

11, 2020, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock

11 unchanged sentences

stock liquidity.

During the nine

months ended September 30, 2021, 21,000,000 shares of common stock were converted into 21,000 shares of Series B Preferred

Stock by our management.

As of September

30, 2021 and December 31, 2020, 21,000 and 0 shares of Series B Preferred Stock were issued and outstanding, respectively.

Preferred Stock

31, 2022 and December 31, 2021, 21,000 shares of Series B Preferred Stock were issued and outstanding.

Series C Preferred Stock

On January 7,

9 unchanged sentences

from the issuance date, at a conversion rate of one thousand (1,000) shares of Common Stock for every one (1) share of Series C Preferred

Upon conversion, the shares are subject to a one-year leak-out restriction on sales into the market of no more than 5% previous

Upon conversion, the shares are subject to a one-year lrestriction 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.

As of September 30, 2021 and December 31, 2020, no Series C Preferred Stock was issued or outstanding.

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.

As of March 31, 2022 and December 31, 2021, no Series

C Preferred Stock was issued or outstanding.

During the three

months ended March 31, 2022, the Company issued 2,060,000 shares of common stock, valued at fair market value on issuance as

· 2,000,000 shares issued for

cash of $ 1,000,000

· 60,000 shares for compensation

valued at $ 41,139

31, 2022 and December 31, 2021, 149,537,358 and 147,477,358 shares of common stock were issued and outstanding, respectively.

stock subscription

During the three

months ended March 31, 2022, the Company received $ 500,000 for options to purchase common stock, however, the option agreement was not

yet finalized.

RELATED PARTY TRANSACTIONS

related parties

During the nine

months ended September 30, 2021 and 2020, the Company loaned $ 35,674 and $ 17,187 to a related party who

is a shareholder and a former director, and collected $ 226 and $ 388 , respectively.

During the nine

months ended September 30, 2021, the Company loaned $ 180,000 to our CEO and wrote off amounts totaling $ 8,004 .

During the nine

months ended September 30, 2021, the Company wrote off due from related party of $ 7,648 .

As of September 30, 2021 and December 31, 2020, the

Company had due from related parties of $ 421,586 and $ 221,790 .

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

31, 2022 and December 31, 2021, the Company had due from related parties of $ 399,571 and $ 424,086 .

The loans are unsecured,

non-interest bearing and due on demand.

Due to related

During the nine months ended September 30, 2021 and

2020, the Company borrowed $ 0 and $ 182 from CEO and CFO of the Company, and repaid $ 0 and $ 197 to

the CEO and CFO, respectively.

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, 2021 and December 31, 2020, the

Company had amounts due to related parties of $ 26,613 and $ 94,616 , respectively.

During the nine months ended September 30, 2021, the

Company paid $ 60,000 for the rest of consideration of acquisition of IoT Labs in 2020.

The amounts are unsecured, non-interest bearing

and due on demand.

On July 1, 2021, the Company appointed three independent

Effective on July 1, 2021 and thereafter, all directors shall be compensated monthly up to 4,000 shares of common stock and

cash of $ 1,000 for their service as directors.

During the nine months ended September 30, 2021 and

2020, the Company recorded management salaries of $ 414,000 and $ 378,000 and bonuses of $ 976,200 and $ 0 .

Additionally, management

received stock-based compensation of $ 34,538 and $ 0 during the nine months ended September 30, 2021 and 2020, respectively.

During the three months ended March 31, 2022 and

2021, the Company repaid $ 0 and $ 10,587 to certain members of Company

31, 2022 and December 31, 2021, the Company had amounts due to related parties of $ 26,613 .

the three months ended March 31, 2022 and 2021, the Company recorded management fees of $ 135,000 and $ 135,000 , bonus of $ 0

and $ 564,000 and paid $ 147,000 and $ 143,221 , respectively.

NOTE 9 – COMMITMENTS

1 unchanged sentence

Long-term Contracts

has not entered into any long-term leases, contracts or commitments.

2020, we appointed Oscar Brito as an advisor to our Board of Directors and agreed to pay him $ 5,000 per month for such services.

Brito acted as an advisor to our Board of Directors.

On February 11, 2021, the Company paid $ 12,600 and the service was terminated.

On January 4,

2021, the Company terminated a placement agent and advisory services agreement with a FINRA member dated September 22, 2020, and cancelled 1,294,600 shares

of common stock, which was issued for those services.

The termination agreement allowed the FINRA member to retain 400,000 shares

of the Company’s common stock in connection with the services.

30, 2021, the Company operates in one industry segment, telecommunication services, and two geographic segments, USA and Switzerland,

where current assets and equipment are located .

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 three months ended

March 31, 2022 and 2021, the Company incurred $ 20,150 and $ 6,900 , respectively.

2022, the Company operates in one industry segment, telecommunication services, and two geographic segments, USA and Switzerland, where

current assets and equipment are located .

The following

table shows operating activities information by geographic segment for the three and nine months ended September 30, 2021 and 2020:

ended September 30, 2021

table shows operating activities information by geographic segment for the three months ended March 31, 2022 and 2021:

ended March 31, 2022

NOTE 11 - SEGMENT

4 unchanged sentences

Operating (loss)

$ ( 111,218 )

Three months Ended September 30, 2020

Cost of revenue

Operating expenses

General and administration

Operating income (loss)

Net income (loss)

$ ( 983,652 )

$ ( 970,225 )

ended September 30, 2021

Cost of revenue

Operating expenses

General and administration

Operating loss

( 2,159,669 )

( 2,291,486 )

Other income (expense)

$ ( 2,998,985 )

Other (expense) income

Net (loss) income

$ ( 529,980 )

$ ( 524,731 )

ended September 30, 2020

Three months Ended March 31, 2021

Cost of revenue

3 unchanged sentences

( 1,010,741 )

( 2,457,150 )

Other expense

( 1,022,167 )

( 1,044,813 )

Other income (expense)

$ ( 1,843,037 )

1 unchanged sentence

The following

table shows asset information by geographic segment as of September 30, 2021 and December 31, 2020:

September 30, 2021

table shows asset information by geographic segment as of March 31, 2022 and December 31, 2021:

March 31, 2022

Current assets

13 unchanged sentences

Non-current liabilities

12 – SUBSEQUENT EVENT

Subsequent to September 30, 2021 and through the date

11 – SUBSEQUENT EVENTS

Subsequent to March 31, 2022 and through the date

that these financials were made available, the Company had the following subsequent events:

October 1st, 2021, the Company executed the acquisition of the remaining 49% of QGlobal SMS from Jesus Vega.

As for the execution

of this Amendment, Jesus Vega will receive US $ 100,000.00 in iQSTEL shares, which could be sold after six months from its issuance date.

IQSTEL has up to 90 days to issue the shares.

This issuance is conditioned to the transfer of the business to iQSTEL.

On August 25, 2021, the Board

authorized the creation of an Audit Committee (the “Audit Committee”).

Raul Perez (chair), Italo Segnini and Jose Antonio

Barreto were appointed to serve on the Audit Committee.

Each of Messrs Perez, Segnini and Barreto have been determined by the Board to

be independent directors within the meaning of NASDAQ Rule 5605.

Perez was identified and designated by the Board as an “audit

committee financial expert,” as defined by the SEC in Item 407 of Regulation S-K.

The Board has also adopted a charter for the Audit

On April 21, 2022, we entered

into a Purchase Agreement for the purchase of 51 % of the membership interests in Smartbiz Telecom LLC, a Florida Corporation which provides

telecommunication services, dedicated to VoIP business for wholesale and retail markets.

The purchase price for the acquisition shall

be $ 1,800,000 and shall consist of $ 800,000 in cash and $ 1,000,000 in our common stock to Seller, which amounts to 2,378,059 shares of

common stock.

On April 25, 2022 we entered into a Common Stock Purchase

Option Agreement with Apollo Management Group, Inc.

to subscribe for and purchase from iQSTEL Inc., four million eight hundred thousand

( 4,800,000 ) shares of Common Stock with an exercise price per share of two dollars ( $ 2.00 );

and an initial exercise date September 30,

The purchase price of this option is five hundred thousand dollars ( $ 500,000 ).

On May 6, 2022, we entered into a Purchase Company

Agreement (Purchase Agreement) with US Acquisitions, LLC, a California limited liability company (Seller) concerning the contemplated

sale by Seller and the purchase by us of 51 % of the membership interests Seller holds in Whisl Telecom LLC, a Texas limited liability

Whisl Telecom provides local US termination for Voice through its FCC license of VoIP Service number 832742;

and is in the process

to obtain a C-Lec FCC License over next 12 months.

The Company is one of the premier Intermediate Voice Providers in the USA.

a carrier since 2017 with billions of minutes traversing its network.

The Company provides its customers with multiple levels of Redundancy,

Diversity, and Disaster Recovery for their applications and ability to make changes to underlying carrier configuration in real time.

The Company offers a single carrier solution for Voice Global services, and its customers benefit from hundreds of interconnection agreements

that the Company has cultivated since its inception.

Pursuant to the Purchase Agreement, the closing of the purchase of the 51 % membership

interests shall be no later than May 13, 2022.

The purchase price for the acquisition shall be $ 1,800,000 and shall consist of $ 1,250,000

in cash and $ 550,000 in our restricted common stock to Seller.

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