What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-15 · 105 added, 96 removed, 113 unchanged (64% of the section changed)

45 unchanged sentences

Our total revenue reported for the three months ended

June 30, 2022 was $23,699,716, compared with $16,128,367 for the three months ended June 30, 2021.

September 30, 2022 was $21,936,634, compared with $16,516,739 for the three months ended September 30, 2021.

These numbers reflect an

increase of 32.81% quarter over quarter on our consolidated revenues.

Our total revenue reported for the nine months ended September 30,

2022 was $65,055,661, compared with $46,842,717 for the nine months ended September 30, 2021.

These numbers reflect an increase of 38.88%

46.94% quarter over quarter on our consolidated revenues.

Our total revenue reported for the six months ended June 30, 2022 was $43,119,027,

compared with $30,325,978 for the six months ended June 30, 2021;

an increase of 42.19%.

year over year on our consolidated revenues.

When looking at the numbers

by subsidiary, we have the following breakout for the six months ended June 30, 2022 compared to the six months ended June 30, 2021:

Six Months Ended

June 30, 2022

Six Months Ended

June 30, 2021

by subsidiary, we have the following breakout for the nine months ended September 30, 2022 compared to the nine months ended September

Nine Months Ended

September 30, 2022

Nine Months Ended

September 30, 2021

Etelix.com USA, LLC

2 unchanged sentences

Whisl Telecom

Inter-company sales

The continued growth of our

3 unchanged sentences

Our total cost of revenues for the three months ended

June 30, 2022 increased to $22,853,442, compared with $16,083,802 for the three months ended June 30, 2021.

Our total cost of revenues

for the six months ended June 30, 2022 increased to $41,788,693, compared with $29,794,043 for the six months ended June 30, 2021.

September 30, 2022 increased to $20,621,674, compared with $15,675,687 for the three months ended September 30, 2021.

Our total cost of

revenues for the nine months ended September 30, 2022 increased to $62,410,367, compared with $45,469,730 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, 2022 compared to the six months ended June 30, 2021:

by subsidiary, we have the following breakout for the nine months ended September 30, 2022 compared to the nine months ended September

Cost of Revenue

Six Months Ended

June 30, 2022

Nine Months Ended

September 30, 2022

Cost of Revenue

Six Months Ended

June 30, 2021

Nine Months Ended

September 30, 2021

Etelix.com USA, LLC

2 unchanged sentences

Whisl Telecom

Inter-company sales

Our cost of revenues consists of direct charges from

6 unchanged sentences

SMS) has its corresponding termination cost.

The Consolidated Gross Margin for the six months ended

June 30, 2022 was 3.09%, which compared to 1.75% for the six months ended June 30, 2021 represents an increase in our consolidated Gross

Margin of 76.57%.

The gross profit for the three months ended September

30, 2022 increased to $1,314,960 from $841,052 for the same period of year 2021.

For the nine months ended September 30, 2022 the gross

profit increased to $2,645,294 from $1,372,987 for the same period of year 2021.

When we analyze the numbers expressed in percentages,

the gross profit for the nine months ended September 30, 2022 was 4.07%, which compared to 2.93% for the nine months ended September 30,

2021, an increase in the consolidated gross profit of 38.91%.

When looking at the numbers

by subsidiary, we have the following breakout for the six months ended June 30, 2022 compared to the six months ended June 30, 2021:

Six Months Ended

June 30, 2022

Six Months Ended

June 30, 2021

Etelix.com USA, LLC

SwissLink Carrier AG

Smartbiz Telecom

Whisl Telecom

by subsidiary, we have the following breakout for the nine months ended September 30, 2022 compared to the nine months ended September

Nine Months Ended

September 30, 2022

Nine Months Ended

September 30, 2021

The increase of our consolidated gross margin is the

result of the improvement of the gross margin of Etelix, SwissLink and QGlobal;

combined with the relatively high gross margin of our

most recent acquisitions Smartbiz and Whisl.

Operating Expenses

Operating expenses decreased to $1,144,452 for the

three months ended June 30, 2022 from $1,209,167 for the three months ended June 30, 2021.

Operating expenses increased to $1,256,147 for the

three months ended September 30, 2022 from $957,195 for the three months ended September 30, 2021.

Operating expenses decreased to $3,390,097

for the six months ended June 30, 2022 from $2,707,278 for the six months ended June 30, 2021.

The detail by major category for the six

months ended June 30, 2022 and 2021 is reflected in the table below.

Six Months Ended June 30,

for the nine months ended September 30, 2022 from $3,664,473 for the nine months ended September 30, 2021.

The detail by major category

for the nine months ended September 30, 2022 and 2021 is reflected in the table below.

Nine Months Ended September 30,

Salaries, Wages and Benefits

Professional Fees

Legal & Regulatory

Travel & Events

Legal and Regulatory

Bad Debt Expense

Travel and Events

Bank Services and Fees

Financial Expenses

Depreciation and Amortization

Penalties and Settlements

Office, Facility and Other

2 unchanged sentences

The main reasons for the overall decrease in operating

expenses for the six months ended June 30, 2022 compared to the same period of 2021 is due to the a significant reduction in Stock-based

expenses for the nine months ended September 30, 2022 compared to the same period of 2021 is due to the significant decrease in Stock-based

compensation.

at the numbers by subsidiary, we have the following breakout for the six months ended June 30, 2022 compared to the six months ended June

Six Months Ended June 30,

When looking at the numbers

by subsidiary, we have the following breakout for the nine months ended September 30, 2022 compared to the nine months ended September

Nine Months Ended September 30,

Global Money One

1 unchanged sentence

Whisl Telecom

The most significant difference is generated by iQSTEL

which is due to the reduction in Stock-based compensation.

Operating Income

The Company showed negative Operating Income for the

three months ended June 30, 2022 of $298,178 compared with a negative result of $1,164,602 for the three months ended June 30, 2021.

The Company showed positive Operating Income for the

three months ended September 30, 2022 of $58,813 compared with a negative result of $116,143 for the three months ended September 30,

The Company showed negative Operating Income for the

six months ended June 30, 2022 of $803,616 compared with a negative result of $2,175,343 for the six months ended June 30, 2021.

The decrease of the numbers for the six month period

above is primarily due to a reduction in the costs associated with the operation of the public entity (iQSTEL, Inc.) that decreased by

$954,665 year over year.

nine months ended September 30, 2022 of $744,803 compared with a negative result of $2,291,486 for the nine months ended September 30,

Despite the operating loss incurred during the nine

months ended September 30, 2022, the numbers compared with the same period of year 2021 reflect a positive evolution process as shown

by the positive operating income during the three months ended September 30, 2022.

Other Expenses/Other Income

We had other income of $12,721 for the three months

ended June 30, 2022, as compared with other income of $42,230 for the same period ended 2021.

We had other expenses of $6,572 for the

six months ended June 30, 2022, as compared with other expenses of $825,518 for the same period ended 2021.

The decrease in other expenses

is mainly due to the reduction in interest expense.

We finished the three months ended June 30, 2022 with

a loss of $285,457, as compared to a loss of $1,122,372 during the three months ended June 30, 2021.

We finished the six months ended

June 30, 2022 with a loss of $810,188, as compared to a loss of $3,000,861 during the six months ended June 30, 2021.

When comparing the

results year over year, these numbers show a significant improvement, as the fundamentals of the Company are getting stronger quarter

after quarter leading to our goal of generating positive net income.

We had other expenses of $38,073 for the nine months

ended September 30, 2022, as compared with other expenses of $820,593 for the same period ended 2021.

The decrease in other expenses is

a consequence of a significant reduction in interest expenses and other expenses related to derivatives.

We finished the three months ended September 30, 2022

with a net income of $27,312, as compared to a loss of $111,218 during the three months ended September 30, 2021.

We also finished the

nine months ended September 30, 2022 with a loss of $782,876, as compared to a loss of $3,112,079 during the nine months ended September

The decreased loss for the nine-month period above

is primarily due to a $1,012,346 year over year reduction in the costs associated with the operation of the public entity (iQSTEL, Inc.).

Liquidity and Capital Resources

As of June 30, 2022, we had total current assets of

$6,818,441 and current liabilities of $3,607,416, resulting in a positive working capital of $3,211,025.

As of September 30, 2022, we had total current assets

of $6,141,182 and current liabilities of $2,769,981, resulting in a positive working capital of $3,371,201.

This compares with the working

1 unchanged sentence

This decrease in working capital, as discussed in more detail below, is primarily the result

of the cash used in the acquisition of subsidiaries.

Our operating activities used $1,435,292 in the six

months ended June 30, 2022 as compared with $2,093,398 used in operating activities in the six months ended June 30, 2021.

Investing activities used $1,612,255 for

the six months ended June 30, 2021.

Uses of funds in investing activities consisted primarily of the acquisition of subsidiaries for $1,564,132

and purchases of property and equipment for $47,223.

Financing activities provided $1,367,982 in the six

months ended June 30, 2022 compared with $3,353,854 provided in the six months ended June 30, 2021.

Our positive financing cash flow in

2022 was largely the result of the proceeds from the subscription of new common stocks under our Regulation A offering of $1,100,000.

financial condition has improved significantly with a positive working capital and a cash position as of June 30, 2022 that represents

4.69 times the loss recognized during the three-month period then ended.

However, we intend to fund operations through increased sales

and debt and/or equity financing arrangements, to strengthen our liquidity and capital resources.

The Company has received the qualification

of an Offering Statement under Regulation A for the sale of up to 80,000,000 common stocks of which are available 12,500,000.

This offering

has been conducted on a “best efforts” basis, which means that there is no guarantee that any minimum amount will be sold

from the available shares.

of the decrease of $2,039,832 in the cash position due to the funds used in the acquisitions of Smartbiz and Whisl.

Our operating activities used $1,488,901 in the nine

months ended September 30, 2022 as compared with $2,486,045 used in operating activities in the nine months ended September 30, 2021.

Investing activities used $1,901,223 for the

nine months ended September 30, 2022.

Uses of funds in investing activities were primarily for the acquisition of subsidiaries of $1,814,132

and the purchase of property and equipment for $86,491.

Financing activities provided $1,367,982 in the nine

months ended September 30, 2022 compared with $3,314,313 provided in the nine months ended September 30, 2021.

Our positive financing

cash flow in 2022 was largely the result of the proceeds from common stock issued of $1,100,000 and the common stock purchase option of

financial condition has improved significantly with a positive working capital of $3,371,201 and

a cash position of $ 1,294,981 as of September 30, 2022.

However, we intend to fund operations

through increased sales and debt and/or equity financing arrangements to strengthen our liquidity and capital resources.

The Company has

received the qualification of a S-1 Offering Statement for the sale of up to 10,000,000 common stocks.

This offering will be conducted

on a “best efforts” basis, which means that there is no guarantee that any minimum amount will be sold from the available

We also plan to seek additional financing in a private equity offering to secure funding for operations.

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

If we are not able to secure additional funding, the implementation

of our business plan will be impaired.

There can be no assurance that such additional financing will be available to us on acceptable

terms or at all.

There can be no assurance

that we will be successful in raising additional funding.

If we are not able to secure additional funding, the implementation of our business

plan will be impaired.

There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

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, 2022.

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, 2022.

Critical Accounting Polices

3 unchanged sentences

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, 2022;

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

accounts, valuation of long-lived assets, and income taxes.

Management bases its estimates and judgments on historical experience and

other factors that are believed to be reasonable under the circumstances.

for the nine months ended September 30, 2022;

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

doubtful accounts, valuation of long-lived assets, and income taxes.

Management bases its estimates and judgments on historical experience

and other factors that are believed to be reasonable under the circumstances.

Actual results may differ from these estimates under different

3 unchanged sentences

Off Balance Sheet Arrangements

As of June 30, 2022, there were no off-balance sheet

arrangements.

As of September 30, 2022, there were no off-balance

sheet arrangements.

Recent Accounting Pronouncements

6 unchanged sentences

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