What changed in this filing

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Item 1. Business

2023-04-14 compared with 2022-04-15 · 228 added, 66 removed, 80 unchanged (79% of the section changed)

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(the “Company”) (OTC Pink:

(www.iqstel.com) is a technology company offering a wide array of services to global telecommunications and technology industries with

presence in 13 countries.

The Company has an extensive portfolio of products and

services for its clients such as:

SMS, VoIP, 4G & 5G international infrastructure connectivity, Cloud-PBX, OmniChannel Marketing,

IoT services, blockchain and payment solutions.

These services are grouped within three business divisions:

Telecom, Technology and Fintech.

IQST) (www.iqstel.com)

is a technology company offering a wide array of services to global telecommunications and technology industries with presence in 13 countries.

The Company has an extensive portfolio of products and services for its

clients such as:

SMS, VoIP, 4G & 5G international infrastructure connectivity, Cloud-PBX, OmniChannel Marketing, IoT services, blockchain

and payment solutions.

These services are grouped within four business divisions:

Telecom, Fintech, Electric vehicles and Metaverse

The company operates its business through its wholly-owned subsidiary Etelix.com

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and its 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/).

information contained on our websites is not incorporated by reference into this Annual Report, and such information should not be considered

to be part of this Annual Report.

Carrier AG (www.swisslink-carrier.com), QGlobal SMS (https://www.qglobalsms.com/), Smart Gas (http://iotsmartgas.com/) and ItsBChain (http://itsbchain.com/),

Whisl Telecom LLC (www.whisl.com), and Smartbiz Telecom LLC (www.smartbiztel.com).

The information contained on our websites is not incorporated

by reference into this Annual Report, and such information should not be considered to be part of this Annual Report.

iQSTEL, formerly known as PureSnax International, Inc., was incorporated

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The company left the healthy snacks and foods business to focus on the Telecommunications

In August 30, 2018, PureSnax changed its name to “iQSTEL Inc.”

On August 30, 2018, PureSnax changed its name to “iQSTEL Inc.”

and received a new CUSIP number:

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iQSTEL also changed the Standard Industrial Classification (SIC Code) to 4813, Telephone Communications, Except Radiotelephone.

The transformative process is an ongoing effort.

However, in the last year

the Company achieved the restructuring of its revenue from a 100% VoIP business to one where currently VoIP represents half of overall

Company revenue, while SMS and value-added SMS services account for the other half.

SMS and value-added SMS is a much higher gross profit

thus the Company’s bottom line has increased in tandem.

On April 1, 2019, the Company entered into a Company

Purchase Agreement (the “Purchase Agreement”) by and between the Company and the Ralf Kohler (the “Seller”), which

agreement provides for the purchase of 51% of the equity and certain assets of SwissLink Carrier AG (“SwissLink”) (www.swisslink-carrier.com),

a Swiss corporation, by the Company.

On February 10, 2020, the Company entered into a Company

Acquisition Agreement (the “Agreement”) with Jesus Vega regarding the acquisition of 51% of the shares in QGlobal, LLC (“QGlobal”).

QGlobal is a company with the capacity to provide Short Messages (SMS), A2P and P2P messaging services.

On February 21, 2020, the Company entered into a Company

Acquisition Agreement (the “Agreement”) with Miguel Scavo regarding the acquisition of 75% of the shares in ItsBchain, LLC

(“ItsBchain”) a company specialized in the development of Blockchain applications for telecommunications.

On April 15, 2020, the Company entered into a Company

Acquisition Agreement (the “Agreement”) with Francisco Bunt regarding the acquisition of 51% of the shares in loT Labs, LLC

(“loT Labs”).

The loT Labs’ principal business activity is the sale of SMS between USA and Mexico.

On November 12, 2020, the Company entered into partnership

Agreement (the “Agreement”) with PAYMENT VIRTUAL MOBILE SOLUTIONS, LLC (PayVMS), a Delaware Corporation regarding the incorporation

of Global Money One Inc, in which iQSTEL owns 75% of the shares and PayVMS owns the remaining 25%.

Global Money One is a Fintech company

with a complete infrastructure to provide top-up services, international remittances and prepaid debit cards.

On October 1, 2021, the Company entered into an agreement

with Jesus Vega regarding the acquisition of the remaining 49% of the shares in QGlobal, LLC (“QGlobal”).

By means of this

transaction iQSTEL increased its ownership in QGlobal to 100%.

On May 13, 2022, the Company entered into a Company

Acquisition Agreement regarding the acquisition of 51% of the shares in Whisl telecom LLC (“Whisl”) .

On June 1, 2022, the Company entered into a Company

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

Operating Subsidiaries

Based on our current business infrastructure, the Company has expanded

from its original VoIP services into new business areas:

Short Message Service (SMS) for Applications to Person (A2P) and Person to Person

Internet of Things (IoT) solutions and Blockchain-based platforms.

Etelix.com USA LLC, a wholly owned subsidiary of iQSTEL Inc., is a Miami,

Florida-based international telecom carrier founded in 2008 that provides telecom and technology solutions worldwide, with commercial

presence in North America, Latin America, and Europe.

Etelix provides International Long-Distance voice services for Telecommunications

Operators (ILD Wholesale), and Submarine Fiber Optic Network capacity for internet (4G and 5G).

iQSTEL's mission is to serve basic human needs in today's modern world

by making the necessary tools accessible regardless of race, ethnicity, religion, socioeconomic status, or identity.

iQSTEL recognizes

that in today’s modern world, the pursuit of the human hierarchy of needs (physiological, safety, relationship, esteem, and self-actualization)

is marginalized without access to ubiquitous communications, the freedom of virtual banking, clean affordable mobility and information

iQSTEL has 4 Business Divisions delivering accessibly to the necessary tools in today's pursuit of basic human needs:

Telecommunications (communications).

2) Fintech (financial freedom).

3) Electric Vehicles (mobility).

4) Metaverse.

(Information and content).

The company continues to grow and expand its suite of products and services both organically and through mergers and acquisitions (M&A).

Our telecommunication business currently represents 100% of our revenues,

while our other business lines are in a pre-revenue stage.

Telecom Subsidiaries for voice services:

Etelix.com USA LLC , a wholly owned subsidiary of iQSTEL Inc., is

US based international telecom carrier founded in 2008 that provides telecom and technology solutions worldwide, with commercial presence

in North America, Latin America, and Europe.

Etelix provides International Long-Distance voice services for Telecommunications Operators

(ILD Wholesale), and Submarine Fiber Optic Network capacity for internet (4G and 5G).

Etelix is interconnected to the most important players in the industry,

with a very strong focus on Asian markets, among which it is worth mentioning:

China Telecom, PCCW, Hutchinson Telecom, Vodafone India,

KDDI, Airtel, Reliance, Viettel, TATA Communications, Flow Jamaica (Cable and Wireless Caribbean), Cable and Wireless Panama, Millicom

(TIGO), Telefonica de España (Movistar), Telecom Italia (TIM), Portugal Telecom (MEU), Optimus (NOS), Belgacom (BICS), Deutsche

Telekom, iBasis, Orbitel and Entel.

with a very strong focus on Asian and Latin-American markets, among which it is worth mentioning:

China Telecom, PCCW, Hutchinson Telecom,

Vodafone India, KDDI, Airtel, Reliance, Viettel, TATA Communications, Flow Jamaica (Cable and Wireless Caribbean), Cable and Wireless

Panama, Millicom (TIGO), Telefonica de España (Movistar), Telecom Italia (TIM), Portugal Telecom (MEU), Optimus (NOS), Belgacom

(BICS), Deutsche Telekom, iBasis, Orbitel and Entel.

An important milestone in the evolution of Etelix was in 2013, when the

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SwissLink Carrier AG is a Swiss licensed Operator.

One of Company’s strategic line of actions is to expand the participation

in Asian and African traffic.

Africa is currently the market with the higher contribution to margin and Asia concentrate one third of

the termination traffic in the industry.

Estimations show that 56% (International Telecommunication Union) of the traffic terminating

in Africa is originated from customers in Europe;

while the corresponding percentage of traffic terminated in Asia is 37% (International

Telecommunication Union).

Based on these numbers the goal to expand the participation in the Asian and African traffic goes through establishing

a strong presence in Europe.

The acquisition of Swisslink strengthened the Company’s presence

in Europe putting us in a very competitive position to capture traffic to Asian and African countries;

however, it will also give us the

opportunity to compete in the European traffic, where we currently have a low participation.

The acquisition of Swisslink

strengthened the Company’s presence in Europe putting us in a very competitive position to capture traffic to Asian and African

Africa continues to be the market with the higher contribution to margin and Asia concentrate one third of the termination

traffic in the industry.

Estimations show that more than 50% of the traffic terminating in Africa is originated from customers in Europe;

while the corresponding percentage of traffic terminated in Asia is close to 40%.

Based on these numbers the goal to expand the participation

in the Asian and African traffic goes through establishing a strong presence in Europe.

Whisl Telecom LLC .

Is a 51% owned

subsidiary of iQSTEL Inc., acquired in May 2022.

Whisl Telecom is an US based Company that provides high quality services and “out

of the box” solutions to its customers.

Whisl predominantly serves the Carrier-to-Carrier Global industry but also has network infrastructure

to provide services to the retail end users (endpoints).

Whisl Telecom is one of the few US carriers to have a significant Tier1 capacity

(true capacity with high calls per second, CPS) to terminate calls with the highest quality.

With the acquisition of Whisl Telecom,

iQSTEL incorporated to its telecom portfolio the following services:

(1) US/Canada Inbound/Origination.

(2) US/Canada DIDs.

(3) US/Canada

Toll Free Numbers.

(4) Global DIDs and (5) Global Toll-Free Numbers.

Smartbiz Telecom LLC .

Is a 51% owned subsidiary of iQSTEL Inc.

in June 2022.

Smartbiz is an US based Company that provides international voice termination to niche markets.

With this acquisition iQSTEL

is expanding its telecommunication services offer to markets the company was not serving before.

With the combination of the technology capabilities of these four subsidiaries,

iQSTEL has put together a complete portfolio of services for carriers and end user.

These services include:

• International

Voice Termination for carriers.

Inbound / Origination.

Toll-Free Numbers.

(Private Branch Exchange) for small businesses.

The voice services represented in year 2022 42.50% of the total revenue

of the company ($39,614,081 out of the total $93,203,532) while in year 2021 voice services represented 31.11% of the total revenue ($20,127,139

out from a total of $64,702,018).

Gross Margin in the voice services increased from 4.72% in year 2021 to

5.81% in year 2022.

This is the result of the incorporation to our portfolio of product with higher gross margins.

We expect this gross

margin to increase in year 2023.

All our subsidiaries carried 2.7 billion minutes of voice during year 2022,

compared to 670 million in year 2021.

This represents an increase of 268% year over year.

Telecom Subsidiaries for SMS services :

QGlobal SMS LLC is a 100% owned subsidiary of iQSTEL Inc.

QGlobal SMS is

a USA based company founded in 2020 specialized in international and domestic SMS termination.

SMS is a USA based company founded in 2020 specialized in international and domestic SMS termination.

QGlobal SMS has commercial presence

in Europe, USA and Latin America, with robust international interconnection with Tier-1 SMS Aggregators, guarantying to its customers

high quality and low termination rates, in over more than 100 countries.

IoT Labs LLC is a 51% owned subsidiary of iQSTEL Inc.

IoT Labs is a SMS

service provider based in Austin, TX.

a SMS service provider based in Austin, TX.

Specialized in the SMS traffic exchange between US and Mexico.

The Company has entered into the SMS business in 2020 through the acquisition

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Enterprise, Small and Medium Companies.

QGlobal SMS has commercial presence in Europe, USA and Latin America, with

robust international interconnection with Tier-1 SMS Aggregators, guarantying to its customers’ high quality and low termination

rates, in over more than 100 countries, while IoT Labs is specialized in the SMS traffic exchange between US and Mexico.

With the acquisition of these two SMS providers, we quickly began to cross-sell

services to our existing client base.

The Global A2P SMS Market is expected to grow at a CAGR of 4.1% during

the forecast period 2018 – 2030, to account for US$ 101 billion in 2030, according to Transparency Market Research.

has experienced significant growth and adoption rate in the past few years and is expected to experience notable growth and adoption in

years to come

The Global A2P SMS Market is expected to grow at a CAGR of 4.1% to account

for US$ 101 billion in 2030, according to Transparency Market Research.

This market has experienced significant growth and adoption rate

in the past few years and is expected to experience notable growth and adoption in years to come.

Our SMS services represented in year 2022 57.50% of the total revenue,

while it was 68.89% in year 2021.

Gross margin in the SMS business decreases in 2022 to 0.40% from 0.54% in year 2021.

But it is important

to remark that the gross margin of the products deployed by QGlobal SMS was 21%, being the main objective in the SMS segment to increase

the sales of those services due to its huge gross margins.

Both companies, IoT Labs and QGlobal carried 8.5 billion SMS and short

codes in year 2022 compared to 7.1 billion in year 2021.

This represents an increment of 1.4 billion SMS year over year or 19.72%.

IoT Labs is also responsible for the development of our award-winning Internet

of Things devices SmartGas and SmartTank.

The SmartGas device is perfectly focused on retail households using traditional LP gas tanks,

while the SmartTank device is more oriented for industrial purposes.

The Company’s product is a sensor and control chip that can

be mounted on gas tanks in less than one minute, that converts the gas tank into an IoT connected device through the Company’s proprietary

web portal and phone apps, allowing for constant monitoring, alerting, and refilling through the Company’s gas partners.

milestone to highlight is that the company has received the patent for the invention and development of these devices.

We continue working

closely with BASF Corporation to adapt the SmartTank device to their specifications.

project that has suffered some delays due to limited

inventories and the slowness of the global distribution chains of microchips.

However, since the end of 2022 we have expanded the list

of certified suppliers and at this time we have a minimum inventory of parts, pieces and finished products to start the marketing process

of both devices.

New businesses subsidiaries:

ItsBchain LLC is a 75% owned subsidiary of iQSTEL Inc.

a blockchain technology developer and solution provider, with a strong focus on the telecom sector.

The company is in the final stage

of development of a series of blockchain solutions aimed at using the blockchain ledger and smart contract solutions to enable more

efficiency, quickness in execution and fraud-prevention in the telco industry.

Specifically, the company is developing a solution that

will enable users and carriers to transfer mobile phone numbers with just a few clicks, allowing users and carriers the ability to transfer

retail users from one mobile carrier to another instantly.

is a blockchain technology developer and solution provider, with a strong focus on the telecom sector.

The company has focused on the

development of solutions aimed at using the blockchain ledger and smart contracts to enable more efficiency, quickness in execution and

fraud-prevention in the telco industry.

Specifically, the company has developed a solution that will enable users and carriers to transfer

mobile phone numbers with just a few clicks, allowing users and carriers the ability to transfer retail users from one mobile carrier

to another instantly.

The Company has done research covering

35 countries where number portability is mandatory by law.

Those 35 countries have a total of 3.3 billion population and 4.0 billion of

phone lines that can be ported from one carrier to another.

It is estimated that an average of 5% of the total phone lines are ported

Number portability is executed and supervised

by a third independent party, who act as a data-base administrator and has the responsibility to guarantee all transactions requested

by the customers will be completed and his/her phone number will be ported from Carrier A to Carrier B.

In the countries under our analysis

there are 11 different data-base administrators.

In terms of dollar value, the number portability

market in the countries under our analysis is estimated over $86 million per year.

This is based in the actual cost carriers and/or customers

have to pay to get the lines ported.

Revenues of the Data Base Administrators comes from a monthly fee charged to all participant carriers,

plus a fee for every transaction completed over the platform.

The monthly fee and the transactions fee vary from country to country.

Our objective is to offer the market conformed

by data-based administrators a solution a much more cost effective solution;

which will not only reduce the operating cost, but that will

also make the transactions to complete faster without any additional CAPEX.

Our mobile number portability solution is now being tested prior

to its commercial release in June 2023.

Global Money One Inc .

Is a 75% owned subsidiary of iQSTEL Inc.

company offers a complete Fintech ecosystem including a MasterCard Debit Card, US Bank Account (No SSN Needed), and a Mobile App/Wallet

to manage Remittances and Mobile Top Up.

Our focus is to provide immigrants access to reliable financial services that make it easier

to manage their money and stay connected with their families back home.

All available services can be managed through our mobile App

“GlobalMoneyOne” available for IOS and Android.

A first non-commercial release of the Fintech suite was done in June 2022.

Since that date all services have been tested including the known-your-customer (KYC) process for the issuance of debits cards, the settlement

process with the issuer bank, the intermediary entities handling the remittances, and the intermediaries and cellular operators for the

Top Up, as well as the proper training of our customer care agents.

According to a World Bank Migration and Development brief,

remittances to low- and middle-income countries reached $626 billion in 2022.

The brief also stated the remittances to Latin America

and the Caribbean are estimated to have grown 9.3% in 2022 to $142 billion;

with increments of 45% for Nicaragua, 20% for Guatemala,

15% for Mexico, and 9% for Colombia.

Stronger employment of migrants from Latin America in the United States contributed to remittance

As a share of GDP, remittances exceed 20% in El Salvador, Honduras, Jamaica, and Haiti.

The Electric Vehicle division (TuVolten)

consist in an initiative to offer clean and affordable mobility through Electric Motorcycles, and Electric Mid Speed Cars.

going to offer theirs EV Motorcycles and EV Cars in Spain, Portugal, USA, and some countries of Latin America.

As recently announced,

all previous electric motorcycle designs and tests have come together in a new electric motorcycle now rolling off the factory for the

final validation tests under the European Union Standards E-Mark certification process.

Once this certification is obtained, we will begin

manufacturing the first units for sale to the public.

The Metaverse initiative , consist in a

platform to offer our telecommunication carrier clients a white label solution enabling them to interact with their customers (end users,

and enterprises) through the metaverse.

The iQSTEL white label metaverse solution developed in partnership with GOTMY will be tailored

to provide telecom carriers with a distinctive and immersive customer experience.

In line with GOTMY’s mission to offer universally

accessible experiential spaces, the iQSTEL solution for telecom carriers is intended to accommodate all mobile phone users, not just those

with high-end VR headsets.

Telecommunications services are subject to extensive government regulation

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Whether these contribution factors will be stable in the future is unknown, but it is possible that we will be subject to significant

Money Transmitter and Payment Instrument Laws and Regulations

The consumer payment services offerings, prepaid debit cards, remittances,

Top Up, are industries heavily regulated.

Accordingly, we, and the products and services that we offer in consumer payment services, are

subject to a variety of federal and state laws and regulations, including:

laws and regulations;

transmitter and payment instrument laws and regulations;

laundering laws;-

and data security laws and regulations;-

protection laws and regulations;

property laws;

association and network organization rules.

iQSTEL, including all subsidiaries, has 56 employees as of December 31,

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-K

Item 1. Business