What changed in this filing

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Item 1. Financial Statements

2022-11-14 compared with 2022-08-15 · 185 added, 158 removed, 492 unchanged (41% of the section changed)

2 unchanged sentences

in this Form 10-Q are as follows:

Consolidated Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021;

Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021 (unaudited);

Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021 (unaudited);

Consolidated Statements of Stockholder’s Equity as of June 30, 2022;

Consolidated Balance Sheets as of

September 30, 2022 (unaudited) and December 31, 2021;

Consolidated Statements of Operations for the three

and nine months ended September 30, 2022 and 2021 (unaudited);

Consolidated Statements of Cash Flows for the

nine months ended September 30, 2022 and 2021 (unaudited);

Consolidated Statements of Stockholder’s Equity

as of September 30, 2022;

Notes to Consolidated Financial Statements (unaudited).

These interim consolidated financial statements have been prepared

in accordance with accounting principles generally accepted in the United States of America for interim financial information and the

SEC instructions to Form 10-Q.

In the opinion of management, all adjustments considered necessary for a fair presentation have been included.

Operating results for the interim period ended June 30, 2022 are not necessarily indicative of the results that can be expected for the

These interim consolidated financial statements have been

prepared in accordance with accounting principles generally accepted in the United States of America for interim financial

information and the SEC instructions to Form 10-Q.

In the opinion of management, all adjustments considered necessary for a fair

presentation have been included.

Operating results for the interim period ended September 30, 2022 are not necessarily indicative of

the results that can be expected for the full year.

Balance Sheets

September 30,

Current Assets

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Other current liabilities

Stock payable

Total Current Liabilities

6 unchanged sentences

$ 0.001 par value

Series A Preferred stock:

10,000 designated;

$ 0.001 par value,

Series A Preferred

10,000 shares issued and outstanding, respectively

Series B Preferred stock:

200,000 designated;

$ 0.001 par value,

Series B Preferred

21,000 shares issued and outstanding

Series C Preferred stock:

200,000 designated;

$ 0.001 par value, No shares issued and outstanding

Series C Preferred

No shares issued and outstanding

Common stock:

14 unchanged sentences

Statements of Operations

Three Months Ended

Six Months Ended

September 30,

Cost of revenue

2 unchanged sentences

Total operating expenses

Operating loss

( 1,164,602 )

Operating income (loss)

( 2,291,486 )

3 unchanged sentences

Change in fair value of derivative liabilities

Gain (loss) on settlement of debt

Loss on settlement of debt

Total other income (expense)

Net loss before provision for income taxes

( 1,122,372 )

( 3,000,861 )

Net income (loss) before provision for income taxes

( 3,112,079 )

Net income (loss)

( 3,112,079 )

Net income (loss) attributable to noncontrolling interests

Net income attributable to noncontrolling interests

Net loss attributed to stockholders of iQSTEL Inc.

2 unchanged sentences

$ ( 3,128,721 )

$ ( 2,929,767 )

Comprehensive income (loss)

$ ( 285,457 )

Net income (loss)

$ ( 111,218 )

2 unchanged sentences

Foreign currency adjustment

Total comprehensive loss

Total comprehensive income (loss)

$ ( 107,812 )

1 unchanged sentence

$ ( 3,057,681 )

Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive income attributable to noncontrolling interests

Net comprehensive loss attributed to stockholders of iQSTEL Inc.

2 unchanged sentences

$ ( 3,100,978 )

$ ( 2,903,761 )

Basic and diluted loss per common share

Weighted average number of common shares outstanding - Basic and diluted

Basic income (loss) per common share

Diluted income (loss) per common share

Weighted average

number of common shares outstanding - Basic and diluted

Weighted average number of common

shares outstanding - Diluted

The accompanying

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For the three

and six months ended June 30, 2022 and 2021

and nine months ended September 30, 2022 and 2021

A Preferred Stock

3 unchanged sentences

Controlling Interest

Stockholders’ Deficit

Stockholders’ Equity

- December 31, 2021

12 unchanged sentences

stock payable

of common stock purchase option

currency translation adjustments

3 unchanged sentences

$ ( 933,796 )

stock issued for compensation

stock issued for settlement of debt

stock issued for asset acquisition

currency translation adjustments

income (loss)

- September 30, 2022

$ ( 19,511,934 )

$ ( 838,158 )

A Preferred Stock

B Preferred Stock

Paid in Capital

Comprehensive Loss

Controlling Interest

Shareholders’ Deficit

Balance - December 31, 2020

Comprehensive

Stockholders'

- December 31, 2020

$ ( 14,699,148 )

2 unchanged sentences

$ ( 2,395,036 )

Preferred stock

issued for conversion of common stock

stock issued for conversion of common stock

( 21,000,000 )

issued for cash

issued for service

issued for compensation

issued for forbearance of debt

issued for conversion of debt

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 unchanged sentence

of derivative liabilities

Foreign currency

translation adjustments

currency translation adjustments

income (loss)

( 1,942,391 )

1 unchanged sentence

( 1,878,489 )

Balance - March 31, 2021

- March 31, 2021

$ ( 16,641,539 )

1 unchanged sentence

stock issued for compensation

issued for settlement of debt

Debt forgiveness

Foreign currency

translation adjustments

stock issued for settlement of debt

currency translation adjustments

( 1,122,372 )

Balance - June 30, 2021

- June 30, 2021

$ ( 17,628,915 )

$ ( 1,052,569 )

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

stock issued for compensation

currency translation adjustments

income (loss)

- September 30, 2021

$ ( 17,827,869 )

$ ( 963,164 )

The accompanying

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

Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

3 unchanged sentences

Stock-based compensation

Write-off of due from related party

Depreciation and amortization

6 unchanged sentences

Prepaid and other current assets

Due from related party

Due from related parties

Accounts payable

4 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of subsidiaries, net

Acquisition of subsidiaries, net of cash acquired

( 1,814,132 )

Purchase of property and equipment

Payment of loan receivable - related party

Purchase of intangible assets

Payment of loan receivable - related parties

Collection of amounts due from related parties

19 unchanged sentences

Common stock issued for asset acquisition

Cmmon stock issued and to be issued for acquisition of suobsidiaries

Common stock issued and to be issued for acquisition of subsidiaries

Common stock issued for conversion of debt

2 unchanged sentences

Common stock issued for settlement of debt

Common stock issued for forbearance of debt

Preferred stock issued for conversion of common stock

3 unchanged sentences

Financial Statements

June 30, 2022

NOTE 1 -ORGANIZATION

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On June 1, 2022, we entered into a Company Acquisition

Agreement regarding the acquisition of 51 % of the shares in Smartbiz Telecom LLC (“Smartbiz”).

Agreement regarding the acquisition of 51 % of the shares in Smartbiz Telecom LLC

(“Smartbiz”).

Both acquisitions

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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, 2022 and the results of operations

and cash flows for the periods presented.

The results of operations for the six months ended June 30, 2022 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, 2021 filed with the SEC on April 15, 2022.

of the Company’s management, the accompanying unaudited interim consolidated financial statements contain all the adjustments necessary

(consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2022 and the results

of operations and cash flows for the periods presented.

The results of operations for the nine months ended September 30, 2022 are not

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

These unaudited consolidated financial

statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual

Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on April 15, 2022.

Consolidation

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SwissLink Carrier AG (“Swisslink”), ITSBCHAIN, LLC (“ItsBchain”), QGLOBAL SMS, LLC (“QGlobal”), IoT

Labs, LLC (“IoT Labs”), Global Money One Inc (“Global Money One”), Whisl telecom LLC and Smartbiz Telecom LLC.

Labs, LLC (“IoT Labs”), Global Money One Inc (“Global Money One”), Whisl telecom LLC (“Whisl”) and

Smartbiz Telecom LLC (“Smartbiz”).

All significant intercompany balances and transactions have been eliminated in consolidation.

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

During the six months ended June 30, 2022 and 2021,

the Company did not record bad debt expense.

During the nine months ended September 30, 2022 and

2021, the Company recorded bad debt expense of $26,299 and $0 respectively.

(Loss) Per Share of Common Stock

8 unchanged sentences

arrangements, stock options and warrants unless the result would be antidilutive.

There were no potentially dilutive shares of common

stock outstanding for the six months ended June 30, 2022 and 2021.

There were 4,800,000 warrants outstanding during the

nine months ended September 30, 2022, which were included in the calculation of the diluted earnings per share.

There were no other potentially

dilutive shares of common stock outstanding for the nine months ended September 30, 2021.

Concentrations

6 unchanged sentences

and cash equivalents with a particular financial institution may exceed any applicable government insurance limits.

During the six

months ended June 30, 2022, 8 customers represented 87 % of our revenues.

During the six months ended June 30, 2021, 5 customers

represented 87 % of our revenues.

During the nine

months ended September 30, 2022, 10 customers represented 87 % of our revenues.

During the nine months ended September 30, 2021,

6 customers represented 87 % of our revenues.

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

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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, a Texas limited liability company.

sale by Seller and the purchase by us of 51 % of the membership interests Seller held in Whisl, a Texas limited liability company.

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

1 unchanged sentence

C-Lec FCC License over next 12 months.

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

It has been 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.

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 was $ 1,800,000 , which consisted of $ 1,250,000 in cash and $ 550,000 in our restricted common stock to Seller,

which amounts to 1,461,653 shares of common stock.

Whisl is one of the premier Intermediate Voice Providers in the USA.

It has been a carrier since

2017 with billions of minutes traversing its network and 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.

Whisl 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 was $ 1,800,000 ,

which consisted of $ 1,250,000 in cash and $ 550,000 in our restricted common stock to Seller, which amounts to 1,461,653 shares

of common stock.

On June 1, 2022, we entered

34 unchanged sentences

Total net assets

Unaudited combined proforma results of operations for the six months ended

June 30, 2022 and 2021 as though the Company acquired Smartbiz and Whisl on January 1, 2020, are set forth below:

Six Months Ended

Unaudited combined proforma results of operations for the nine months ended

September 30, 2022 and 2021 as though the Company acquired Smartbiz and Whisl on January 1, 2021, are set forth below:

Nine Months Ended

September 30,

Cost of revenues

8 unchanged sentences

AND EQUIPMENT

equipment at June 30, 2022 and December 31, 2021 consisted of the following:

equipment at September 30, 2022 and December 31, 2021 consisted of the following:

September 30,

Telecommunication equipment

3 unchanged sentences

Accumulated depreciation and amortization

Total property and equipment

and amortization expense for the six months ended June 30, 2022 and 2021 amounted to $ 62,371 and $ 42,421 , respectively.

Property and equipment, net

and amortization expense for the nine months ended September 30, 2022 and 2021 amounted to $ 91,221 and $ 66,924 , respectively.

NOTE 6 –LOANS

Loans payable

at June 30, 2022 and December 31, 2021 consisted of the following:

at September 30, 2022 and December 31, 2021 consisted of the following:

September 30,

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

1 unchanged sentence

Swisspeers AG

Note was issued on April 8, 2019 and due on October 4, 2022

Note was issued on April 8, 2019 and originally due on October 4, 2022

Darlene Covid19

4 unchanged sentences

Long-term loans payable

During the six

months ended June 30, 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 $ 321,609 ,

During the nine

months ended September 30, 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 $ 331,150 ,

respectively.

During the six months ended June 30, 2022 and 2021,

During the nine months ended September 30, 2022 and

2021, the Company recorded interest expense of $ 22,417 and $ 179,504 and recognized

1 unchanged sentence

respectively.

In 2021, the Company recorded interest expense from convertible notes of $ 33,430 and recognized amortization of discount,

included in interest expense, of $ 372,290 .

In 2021, the Company recorded interest expense from convertible notes of $ 33,430 and recognized amortization of

discount, included in interest expense, of $ 372,290 .

During the nine months ended September 30, 2021, a related party loan of

$ 807,103 (Euro 735,000) was forgiven and the Company recorded it as additional paid in capital.

Loans payable to related parties

at June 30, 2022 and December 31, 2021 consisted of the following:

at September 30, 2022 and December 31, 2021 consisted of the following:

September 30,

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

Current portion of loans payable –related parties

Long-term loans payable – related parties

NOTE 7 – OTHER

1 unchanged sentence

Other current liabilities at

June 30, 2022 and December 31, 2021 consisted of the following:

September 30, 2022 and December 31, 2021 consisted of the following:

September 30,

Accrued liabilities

18 unchanged sentences

are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on November 3, 2020.

As of June 30, 2022 and December 31, 2021, 10,000 shares

As of September 30, 2022 and December 31, 2021, 10,000 shares

of Series A Preferred Stock were issued and outstanding.

14 unchanged sentences

5% previous month’s stock liquidity.

As of June 30,

As of September

30, 2022 and December 31, 2021, 21,000 shares of Series B Preferred Stock were issued and outstanding.

10 unchanged sentences

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 Stock.

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.

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

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 June 30, 2022 and December 31, 2021, no Series

As of September 30, 2022 and December 31, 2021, no Series

C Preferred Stock was issued or outstanding.

During the six

months ended June 30, 2022, the Company issued 4,081,653 shares of common stock, valued at fair market value on issuance as

During the nine

months ended September 30, 2022, the Company issued 4,353,020 shares of common stock, valued at fair market value on issuance

shares issued for cash of $ 1,000,000

· 120,000 shares for compensation to our directors valued

shares for compensation to our directors valued at $ 92,129

shares for acquisition of Whisl valued at $ 550,000

shares for asset acquisition valued at $ 357,500

As of June 30,

shares for settlement of debt valued at $ 80,674

As of September

30, 2022 and December 31, 2021, 151,830,378 and 147,477,358 shares of common stock were issued and outstanding, respectively.

2 unchanged sentences

Purchase Option Agreement with Apollo Management Group, Inc.

to subscribe for and purchase from the Company, 4,800,000 shares of Common

Stock with an exercise price per share of $ 2.00 ;

to subscribe for and purchase from the Company, 4,800,000 shares

of Common Stock with an exercise price per share of $ 2.00 ;

and an initial exercise date September 30, 2022.

The purchase price of this option is

The purchase price of

this option is $ 500,000 .

RELATED PARTY TRANSACTIONS

related parties

During the six months ended June 30, 2022 and 2021,

During the nine months ended September 30, 2022 and

2021, the Company advanced $ 1,000 and $ 35,674 to related parties and collected $ 100 and $ 226 , respectively.

As of June 30,

2022 and December 31, 2021, the Company had due from related parties of $ 375,955 and $ 424,086 .

The loans are unsecured,

non-interest bearing and due on demand.

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, 2022 and December 31, 2021, the Company had amounts due from related parties of $ 351,139 and $ 424,086 .

The loans are

unsecured, non-interest bearing and due on demand.

Due to related

During the six months ended June 30, 2022 and 2021,

the Company repaid $ 0 and $ 60,787 to certain members of Company management.

As of June 30,

During the nine months ended September 30, 2022 and

2021, the Company repaid $ 0 and $ 90,787 to certain members of Company

As of September

30, 2022 and December 31, 2021, the Company had amounts due to related parties of $ 26,613 .

the six months ended June 30, 2022 and 2021, the Company recorded management fees of $ 270,000 and $ 270,000 , bonus of $ 0 and $ 976,200 and

paid $ 281,000 and $ 301,300 , respectively.

the nine months ended September 30, 2022 and 2021, the Company recorded management fees of $ 405,000 and $ 414,000 , bonus

of $ 0 and $ 976,200 and paid $ 407,602 and $ 411,300 , respectively.

Additionally, management

received stock-based compensation of $ 92,130 and $ 34,538 during the nine months ended September 30, 2022 and 2021, respectively .

NOTE 10 – COMMITMENTS

3 unchanged sentences

The Company leases facilities which the term is 12 months .

the six months ended June 30, 2022 and 2021, the Company incurred $ 38,645 and $ 24,223 , 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 nine months ended September 30, 2022 and 2021, the Company incurred $ 56,405 and $ 32,023 , respectively.

30, 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 six months ended June 30, 2022 and 2021:

ended June 30, 2022

11 - SEGMENT - Schedule of Operating Activities by Geographic Segment

table shows operating activities information by geographic segment for the three and nine months ended September 30, 2022 and 2021:

ended September 30, 2022

11 - SEGMENTS - Schedule of Operating Activities by Geographic Segment

$ ( 1,719,255 )

Cost of revenue

( 1,719,255 )

Operating expenses

General and administration

Operating loss

Other income (expense)

$ ( 266,878 )

$ ( 285,457 )

Three months Ended June 30, 2021

Operating income

Other expense

Three months Ended September 30, 2021

Cost of revenue

2 unchanged sentences

Operating loss

( 1,107,142 )

( 1,164,602 )

Other income (expense)

$ ( 1,060,112 )

$ ( 1,122,372 )

ended June 30, 2022

ended September 30, 2022

$ ( 2,397,891 )

Cost of revenue

( 2,397,891 )

Operating expenses

4 unchanged sentences

$ ( 782,876 )

Six months Ended June 30, 2021

Nine months Ended September 30, 2021

Cost of revenue

7 unchanged sentences

$ ( 113,094 )

$ ( 3,112,079 )

The following

table shows asset information by geographic segment as of June 30, 2022 and December 31, 2021:

June 30, 2022

table shows asset information by geographic segment as of September 30, 2022 and December 31, 2021:

September 30, 2022

Current assets

16 unchanged sentences

evaluated subsequent events through the date these consolidated financial statements were available to be issued.

Based on our evaluation

no material events have occurred that require disclosure.

The following subsequent

event was identified:

· The Company issued 3,790,597

shares of common stock for cashless exercise of warrants.

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