What changed in this filing

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Item 1. Financial Statements

2024-05-15 compared with 2023-11-14 · 351 added, 351 removed, 394 unchanged (64% of the section changed)

Financial Statements

Our unaudited consolidated financial statements included

in this Form 10-Q are as follows:

Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022;

Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022 (unaudited);

Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (unaudited);

Consolidated Statements of Stockholder’s Equity as for the three and nine months ended September 30, 2023;

Our unaudited consolidated financial statements included in this Form

10-Q are as follows:

Consolidated Balance Sheets as of

March 31, 2024 (unaudited) and December 31, 2023;

Consolidated Statements of Operations for the three

months ended March 31, 2024 and 2023 (unaudited);

Consolidated Statements of Cash Flows for the three

months ended March 31, 2024 and 2023 (unaudited);

Consolidated Statements of Stockholder’s Equity

as of March 31, 2024 and 2023 (unaudited)

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.

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, 2023 are not necessarily indicative of the results that can be expected for

Operating results for the interim period ended March 31, 2024 are not necessarily indicative of the results that can be expected for

the full year.

Consolidated Balance Sheets

September 30,

Current Assets

1 unchanged sentence

Due from related parties

Deposit for acquisition

Prepaid and other current assets

10 unchanged sentences

Loans payable - related parties

Convertible note - net of discount of $20,856 and $0, respectively

Derivative liabilities

Convertible notes - net of discount of $ 923,185 and $ 39,012 , respectively

Total Current Liabilities

9 unchanged sentences

$ 0.001 par value,

10,000 shares issued and outstanding, respectively

10,000 shares issued and outstanding

Series B Preferred stock:

1 unchanged sentence

$ 0.001 par value,

31,080 and 21,000 shares issued and outstanding, respectively

31,080 shares issued and outstanding

Series C Preferred stock:

1 unchanged sentence

$ 0.001 par value, No shares issued and outstanding

Series D Preferred stock:

75,000 designated;

$ 0.001 par value, No shares issued and outstanding

Common stock:

16 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Cost of revenue

Cost of revenues

Operating expenses

1 unchanged sentence

Total operating expenses

Operating income (loss)

Operating loss

Other income (expense)

2 unchanged sentences

Change in fair value of derivative liabilities

Gain (loss) on settlement of debt

Total other income (expense)

Net income (loss) before provision for income taxes

Net income (loss)

Net loss before provision for income taxes

Net income attributable to noncontrolling interests

attributed to iQSTEL Inc.

$ ( 639,143 )

$ ( 975,013 )

Dividend on Series

B Preferred Stock

Net loss attributed to stockholders of iQSTEL Inc.

$ ( 878,493 )

Net loss attributed to iQSTEL Inc.

$ ( 809,767 )

1 unchanged sentence

Comprehensive income (loss)

Net income (loss)

$ ( 580,216 )

1 unchanged sentence

Foreign currency adjustment

Total comprehensive income (loss)

Total comprehensive loss

$ ( 580,216 )

10 unchanged sentences

of Changes in Stockholders’ Equity (Deficit)

For the three and nine

months ended September 30, 2023 and 2022

For the three months ended

March 31, 2024 and 2023

A Preferred Stock

4 unchanged sentences

Stockholders' Deficit

Balance - December

$ ( 24,504,395 )

$ ( 924,377 )

issued for warrant exercises

issued for compensation

of derivative liabilities upon exercise of warrant

currency translation adjustments

income (loss)

- March 31, 2023

$ ( 24,867,580 )

$ ( 719,241 )

issued for compensation

currency translation adjustments

income (loss)

- June 30, 2023

$ ( 25,081,525 )

$ ( 665,474 )

B Preferred stock issued as dividend

stock issued for compensation

stock issued for warrant exercises

of derivative liabilities upon exercise of warrant

to non-controlling interest

currency translation adjustments

income (loss)

Balance - September 30,

$ ( 25,960,018 )

$ ( 564,771 )

A Preferred Stock

B Preferred Stock

Paid in Capital

Comprehensive Loss

Controlling Interest

Stockholders’ Equity

- December 31, 2023

1 unchanged sentence

$ ( 377,710 )

stock issued for cash

stock issued for compensation

currency translation adjustments

stock issued for settlement of debt

stock issued in conjunction with convertible notes

income (loss)

2 unchanged sentences

$ ( 148,159 )

stock issued for compensation

stock issued and to be issued for acquisition of subsidiaries

stock issued for asset acquisition

stock payable

currency translation adjustments

income (loss)

- June 30, 2022

Series A Preferred Stock

Series B Preferred Stock

Additional Paid in Capital

Accumulated Deficit

Accumulated Comprehensive Loss

Non Controlling Interest

Total Stockholders' Deficit

- December 31, 2022

$ ( 24,504,395 )

$ ( 924,377 )

stock issued for warrant exercises

stock issued for compensation

stock issued for settlement of debt

stock issued for asset acquisition

of derivative liabilities upon exercise of warrants

currency translation adjustments

income (loss)

- September 30, 2022

- March 31, 2023

$ ( 24,867,580 )

$ ( 719,241 )

The accompanying notes are

an integral part of these unaudited consolidated financial statements.

The accompanying notes are an integral part of these

unaudited consolidated financial statements.

Consolidated Statements

of Cash Flows

Nine Months Ended

September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

1 unchanged sentence

$ ( 158,822 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Stock-based compensation

3 unchanged sentences

Change in fair value of derivative liabilities

Loss on settlement of debt

Changes in operating assets and liabilities:

Accounts receivable

( 3,422,703 )

Prepaid and other current assets

( 1,057,311 )

Due from related parties

1 unchanged sentence

Accrued and other current liabilities

Net cash used in operating activities

( 1,969,040 )

Net cash (used in)

provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisitions of subsidiaries, net of cash acquired

Deposit for acquisitions of subsidiary

( 1,500,000 )

Purchase of property and equipment

Advances of amounts due from related parties

Purchase of intangible assets

Advances of loans receivable - related party

Collection of amounts due from related parties

2 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from loans payable

Repayments of loans payable

Proceeds from common stock issued

Proceeds from exercise of warrants

Proceeds from convertible notes

Deposit for option

Repayment of convertible

Repayment of convertible notes

Net cash provided by financing activities

1 unchanged sentence

Net change in cash

( 2,039,832 )

Cash, beginning of period

4 unchanged sentences

Non-cash transactions:

Series B Preferred

stock issued as dividend

Common stock issued for asset acquisition

Common stock issued for acquisitions of subsidiaries

Common stock issued

for conversion of debt

Common stock issued for settlement of debt

Resolution of derivative liabilities upon exercise of warrants

Common stock issued in connection with convertible notes

The accompanying notes are

an integral part of these unaudited consolidated financial statements.

Notes to the Unaudited

Consolidated Financial Statements

September 30, 2023

Notes to the Consolidated

Financial Statements

March 31, 2024

NOTE 1 -ORGANIZATION

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on August 7, 2018.

has been engaged in the business of telecommunication services as a wholesale carrier of voice, SMS and data for other telecom companies

around the World with over 400 active interconnection agreements with mobile companies,

fixed line companies and other wholesale carriers.

is a technology company with presence in 19 countries and 70 employees that is offering leading-edge services through its four business

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EVOSS is also working on the development of an EV Mid Speed Car to serve the niche of the 2nd car in

The Company’s

developing Artificial Intelligence (AI)-Enhanced Metaverse Division offers a white-label solution designed specifically for corporations,

businesses, and the telecommunications industry.

Delivering a full suite of immersive content services, creating a comprehensive virtual

experience that can be accessed through the Web or our proprietary mobile apps.

NOTE 2 -SUMMARY

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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, 2023 and the results

of operations and cash flows for the periods presented.

The results of operations for the nine months ended September 30, 2023 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, 2022 filed with the SEC on April 14, 2023.

(consisting only of normal recurring accruals) to present the financial position of the Company as of March 31, 2024 and the results of

operations and cash flows for the periods presented.

The results of operations for the three months ended March 31, 2024 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, 2023 filed with the SEC on April 1, 2024.

Reclassification

Certain accounts

from prior periods have been reclassified to conform to the current period presentation.

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 (“Whisl”) and

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

Smartbiz Telecom LLC (“Smartbiz”).

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The preparation

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.

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.

Currency Translation and Re-measurement

4 unchanged sentences

dollar, while

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

SwissLink translates

their records into U.S.

dollars as follows:

and liabilities at the rate of exchange in effect at the balance sheet date;

at historical rate;

and expense items at the average rate of exchange prevailing during the period.

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

SwissLink’s functional currency was the Swiss Franc (“CHF”).

As of January 1, 2024, we changed the functional currency

of SwissLink from their respective local currency to the US dollar.

The change in functional currency is due to increased exposure to

the US dollar as a result of a change in facts and circumstances in the primary economic environment in which this subsidiary operates.

The effects of the change in functional currency were not significant to our consolidated financial statements.

Cash Equivalents

3 unchanged sentences

risk of loss in value.

The Company had no cash equivalents at September 30, 2023 and December 31, 2022.

The Company had no cash equivalents at March 31, 2024 and December 31, 2023.

Receivable and Allowance for Uncollectible Accounts

5 unchanged sentences

credit losses in its existing accounts receivable .

Under the expected credit loss model, the Company reviews its allowance for doubtful

accounts daily and past due balances over 60 days and a specified amount is 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, 2023 and 2022, the Company recorded bad debt expense of $1,344 and $26,299, respectively.

The Company estimates expected credit losses related to accounts receivable

balances based on a review of available and relevant information including current economic conditions, projected economic conditions,

historical loss experience, account aging, and other factors that could affect collectability.

the three months ended March 31, 2024 and 2023, the Company recorded bad debt expense of $ 725 and $ 0 , respectively.

(Loss) Per Share of Common Stock

has adopted ASC 260, ”Earnings per Share , ” which requires presentation of basic earnings per share

on the face of the statements of operations for all entities with complex capital structures and requires a reconciliation of the numerator

and denominator of the basic earnings per share computation.

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 period.

Diluted earnings per share

is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares

of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share

has adopted ASC 260, ”Earnings per Share” which requires presentation of basic earnings per share on the

face of the statements of operations for all entities with complex capital structures and requires a reconciliation of the numerator and

denominator of the basic earnings per share computation.

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 period.

Diluted earnings per share is

computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares of

common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share

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

Dilutive potential common shares include outstanding

warrants and Series B Preferred stock, and these were excluded from the computation of diluted net loss per share as the result was anti-dilutive

for the nine months ended September 30, 2023 and 2022.

Series B Preferred stock, and it was excluded from the computation of diluted net loss per share as the result was anti-dilutive for the

three months ended March 31, 2024 and 2023.

Concentrations

6 unchanged sentences

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

During the nine

months ended September 30, 2023, 11 customers represented 87.8 % of our revenue compared to 10 customers represented 87 % of our

revenues for the nine months ended September 30, 2022.

During the three months ended March 31, 2024, 8 customers

represented 86 % of our revenue compared to 12 customers representing 86 % of our revenue for the three months ended March 31, 2023.

the three months ended March 31, 2024 and 2023, 47 % and 62 % of the revenue comes from customers under prepayment conditions which means

there is no credit or bad debt risk on that portion of the customers portfolio.

follows ASC 820, “ Fair Value Measurements and Disclosures, ” which defines fair value as the exchange price that would

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accounts receivable;

prepaid and other current assets;

deposit for acquisition, prepaid and other current assets;

accounts payable;

liabilities and other current liabilities;

and due from/to related parties approximate their fair values due to the short-term maturities

of these financial instruments.

accrued liabilities and other current liabilities;

and due from/to related parties approximate their fair values due

to the short-term maturities of these financial instruments.

involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive,

5 unchanged sentences

party nature.

Financial Instruments

does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks.

We evaluate all of our financial

instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.

For derivative

financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is

then re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

For stock-based derivative

financial instruments, the Company used a Black-Scholes valuation model to value the derivative instruments at inception and on subsequent

valuation dates.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or

as equity, is evaluated at the end of each reporting period.

Derivative liabilities are classified in the balance sheet as current or

non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance

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

4 unchanged sentences

The Company’s payment terms vary by client.

Accounting Pronouncements

In June 2022,

the FASB issued ASU 2022-03, ASC Subtopic “ Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject

to Contractual Sale Restrictions.

” These amendments clarify that a contractual restriction on the sale of an equity security

is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

The amendments

in this update are effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning

after December 15, 2023.

Early adoption is permitted.

The Company is currently assessing the impact of the adoption of this standard on

its consolidated financial statements.

In June 2016,

Recent Accounting Pronouncements

2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

" Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures "

which allows disclosure of one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources

and assess performance.

Additionally, the standard requires enhanced disclosures of significant segment expenses and other segment items,

as well as incremental qualitative disclosures on both an annual and interim basis.

This guidance is effective for annual reporting periods

beginning after December 15, 2023, and interim reporting periods after December 15, 2024.

Early adoption is permitted and retrospective

application is required for all periods presented.

The Company is currently evaluating the impact of adopting this guidance on its Consolidated

Financial Statements and disclosures included within Notes to Consolidated Financial Statements.

2023, the FASB issued ASU No.

2016-13, “ Financial Instruments Credit Losses —Measurement of Credit Losses on Financial Instruments .”

ASU 2016-13 requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount

expected to be collected, which includes the Company’s accounts receivable.

This ASU is effective for the Company for reporting

periods beginning after December 15, 2022.

The Company adopted this accounting pronouncement on January 1, 2023 and it did not have

any impact to its financial statements.

Company has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption

of any such pronouncements may be expected to cause a material impact on our financial statements.

2023-09, “ Income Taxes (Topic 740):

Improvements to Income Tax Disclosures ” which requires

enhanced disclosures, including specific categories and disaggregation of information in the effective tax rate reconciliation, disaggregated

information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax

expense or benefit from continuing operations.

This guidance is effective for annual reporting periods beginning after December 15, 2024.

Early adoption is permitted and should be applied on a prospective basis;

however, retrospective application is permitted.

is currently evaluating the impact of adopting this guidance on its Consolidated Financial Statements and disclosures included within

Notes to Consolidated Financial Statements.

GOING CONCERN

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AND OTHER CURRENT ASSETS

other current assets as of September 30, 2023 and December 31, 2022 consisted of the following:

September 30,

other current assets at March 31, 204 and December 31, 2023 consisted of the following:

Other receivable

3 unchanged sentences

Deposit for acquisition of asset

Subscription receivable

Security deposit

2 unchanged sentences

AND EQUIPMENT

equipment as of September 30, 2023 and December 31, 2022 consisted of the following:

September 30,

equipment at March 31, 204 and December 31, 2023 consisted of the following:

Telecommunication equipment

4 unchanged sentences

Total property and equipment

expense for the nine months ended September 30, 2023 and 2022 amounted to $ 103,246 and $ 91,221 , respectively.

expense for the three months ended March 31, 2024 and 2023 amounted to $ 35,161 and $ 34,060 , respectively.

NOTE 6 –LOANS

Loans payable

as of September 30, 2023 and December 31, 2022 consisted of the following:

September 30,

Note was issued on October 23, 2018 and due on January 2, 2024

at March 31, 204 and December 31, 2023 consisted of the following:

Note was issued on October 23, 2018 and due on June 30, 2024

Darlene Covid19

1 unchanged sentence

Promissory note payable

Note was issued April 4, 2023 and due on April 4, 2024

Note was issued April 4, 2023 and paid in full in March 2024

Unamortized debt discount

2 unchanged sentences

Long-term loans payable

During the three

months ended March 31, 2024 and 2023, the Company repaid the principal amount of $ 8,885 and $ 9,006 , respectively.

three months ended March 31, 2024, the Company settled principal amount and accrued interest of a note payable issued in April 2023 by

issuing 1,770,000 shares of common stock.

As a result, the Company recorded a loss on settlement of debt of $ 102,660 .

Loans payable

- related parties as of September 30, 2023 and December 31, 2022 consisted of the following:

September 30,

- related parties at March 31, 204 and December 31, 2023 consisted of the following:

49% of Shareholder of SwissLink

2 unchanged sentences

Note is due on demand

Current portion of loans payable

Long-term loans payable

During the nine

months ended September 30, 2023, the Company borrowed from a third party totaling $165,000, which includes original issue discount

and financing costs of $ 15,000 .

During the nine

months ended September 30, 2023 and 2022, the Company recorded interest expense of $ 19,250 and $ 22,417 and recognized

amortization of discount, included in interest expense, of $ 7,500 and $ 7,406 , respectively.

NOTE 7 – CONVERTIBLE

During the nine

months ended September 30, 2023, the Company borrowed from a third party totaling $ 284,760 , which includes original issue discount

Current portion of loans payable - related parties

Long-term loans payable - related parties

During the three

months ended March 31, 2024 and 2023, the Company recorded interest expense of $ 9,053 and $ 3,645 and recognized amortization

of discount, included in interest expense, of $ 3,750 and $ 0 , respectively.

CONVERTIBLE NOTES

notes at March 31, 2024 and December 31, 2023 consisted of the following:

Issued in fiscal year 2023

Issued in fiscal year 2024

Total convertible notes payable

Unamortized debt discount

Total convertible notes

current portion of convertible notes

Long-term convertible notes

Issued in fiscal year 2023

the year ended December 31, 2023, the Company borrowed $ 284,760 and $ 256,760 from a third party totaling $ 541,520 , which includes

original issue discount and financing costs of $ 66,520 .

The notes are due on June 1, 2024 and October 15, 2024 , and a one-time interest

charge of 12 % shall be applied.

Accrued, unpaid interest and outstanding principal shall be paid in 10 payments each in

the amount of $ 31,893 and $ 28,757 beginning on July 16, 2023 and January 15, 2024 .

The notes are convertible at the option

of the holders at any time following an event of default, and the conversion price is 75% multiplied by the lowest trading price of Company’s

common stock during the 10 trading days prior to the conversion date .

Issued in fiscal year

On January 24, 2024, we

entered into a securities purchase agreement (the “SPA”) with M2B Funding Corp., a Florida corporation, for it to purchase

up to the principal amount of $ 3,888,889 in secured convertible promissory notes (the “Notes”) for an aggregate purchase

price of $ 3,500,000 (the “Purchase Price”), which Notes are convertible into shares (“Conversion Shares”) of

our common stock with an initial conversion price of $ 0.11 per share.

Each noteholder shall receive shares of common stock (“Kicker

Shares”) in an amount equal to ten percent of the principal amount of any Note issued divided by $0.11.

The Notes are secured by

all of our assets under a Security Agreement signed with the SPA .

The initial tranche was

executed in January 2024 for $ 2,222,222

in face value of Notes and 2,020,200

Kicker Shares, with an original issue discount of $ 222,222 ;

second and third tranches were executed in March 2024 for $ 1,111,111

and $ 555,556 ,

respectively, in face value of Notes and 1,010,101

Kicker Shares, with an original issue discount of US $ 111,111

and $ 55,556 ,

respectively.

Each one year note bears interest at 18 % per annum.

During the period ended

March 31, 2024, the Company borrowed $ 146,900 and $ 177,100 from a third party totaling $ 324,000 , which includes original issue discount

and financing costs of $ 49,000 .

The note is due on June 1, 2024 and a one-time interest charge of 12 % shall be applied.

unpaid interest and outstanding principal shall be paid in 10 payments each in the amount of $ 31,893 beginning on July 16, 2023 .

note is convertible at the option of the holders at any time following an event of default, and the conversion price is 75% multiplied

by the lowest trading price of Company’s common stock during the 10 trading days prior to the conversion date.

During the nine

months ended September 30, 2023, the Company recorded interest expense of $ 13,668 and recognized amortization of discount, included

in interest expense, of $ 13,904 .

NOTE 8 – WARRANTS

April 5, 2022, we entered into a Common Stock Purchase Option Agreement with Apollo Management Group, Inc (Holder) 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 exercisable

date on September 30, 2022 .

The purchase price of this option was $ 500,000 .

The Company determined that the warrants had a fixed

monetary value with a variable number of shares at inception and categorized the warrants as a liability in the accompanying consolidated

financial statements.

The Holder and

the Company agreed that the Holder had the right and the obligation to exercise, on a cashless basis, $1,000,000 of the Options not later

than October 15, 2022.

Thereafter, the Holder shall undertake to exercise not less than (i) $400,000 of the Options on a “cash

basis” not later than the later of (y) November 14, 2022 or (z) the date on which there is an effective registration statement

permitting the issuance of the Option Shares to or resale of the Option Shares by the Holder and (ii) an additional $ 400,000 of

the Options on a “cash basis” not later than the latest of (x) thirty (30) days following the exercise of the Option under

subsection (i), above, (y) December 14, 2022, or (z) the date on which there is an effective registration statement permitting the issuance

of the Option Shares to or resale of the Option Shares by the Holder.

From and after the occurrence of the three above-referenced exercises,

each additional exercise of Options hereunder shall be in an amount not less than $ 200,000 and exercised only on a cash basis.

obligation to exercise each specified portion of this option on the specific dates above is subject to the volume-weighted average price

(“VWAP”, market value), being not less than $0.20 per share on the relevant option exercise date.

Adjusted option shares at

VWAP of $0.20 shall be 48,000,000 shares.

activity regarding warrants issued as follows:

Average Exercise Price

Average Remaining Contractual life (in years)

Outstanding, December 31, 2022

Increase in number of warrants by VWAP

( 10,294,119 )

( 18,080,921 )

Outstanding, September 30, 2023

NOTE 9 – DERIVATIVE

Assumptions Used in Accounting for Derivative Liabilities

ASC 815, “ Derivatives

and Hedging ,” requires we assess the fair market value of derivative liabilities at the end of each reporting period and recognize

any change in the fair market value as other income or expense.

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, 2023.

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.

months ended September 30, 2023 and year ended December 31, 2022, the estimated fair values of the liabilities measured on a recurring

basis are as follows:

Expected term

0.00 - 0.75 years

0.75 - 1.49 years

Expected average volatility

Expected dividend yield

Risk-free interest rate

4.67 % - 5.55 %

0.06 % - 4.73 %

The following

table summarizes the changes in the derivative liabilities during the nine months ended September 30, 2023:

Fair Value Measurements Using Significant Observable

Inputs (Level 3)

Balance - December 31, 2022

Settled on issuance of common stock

Change in fair value of the warrant

Balance - September 30, 2023

The following

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

30, 2023 and 2022, respectively.

Nine months ended

September 30,

Addition of new derivatives recognized as loss on derivatives

Revaluation of derivative liabilities

(Gain) on change in fair value of derivative liability

$ ( 381,848 )

The notes are due on January 15, 2025 , and a one-time interest charge of 12 % and 14 % , respectively, shall

Accrued, unpaid interest and outstanding principal on the $146,900 note shall be paid in 10 payments each in the amount

of $ 16,453 beginning on April 15, 2024;

accrued, unpaid interest and outstanding principal on the $177,100 note shall be paid in

5 payments, one payment of $ 100,947 and four payments of $ 25,237 , beginning in September 2024 .

The notes are convertible at the

option of the holders at any time following an event of default, and the conversion price is 75% multiplied by the lowest trading price

of Company’s common stock during the 10 trading days prior to the conversion date.

During the three months

ended March 31, 2024 and 2023, the Company recorded interest expense of $ 139,979 and $ 0 and recognized amortization

of discount, included in interest expense, of $ 203,992 and $ 0 , respectively.

NOTE 8 – STOCKHOLDERS’

1 unchanged sentence

authorized capital consists of 300,000,000 shares of common stock with a par value of $ 0.001 per share.

the three months ended March 31, 2024, the Company issued 5,455,354 shares of common stock, valued at fair market value on issuance

shares for compensation to our directors valued at 31,065

shares in connection with convertible notes valued at $ 597,777 ;

shares for settlement of debt valued at $ 279,660

31, 2024 and December 31, 2023, 177,584,984 and 172,129,630 shares of common stock were issued and outstanding, respectively.

Company’s authorized capital consists of 1,200,000 shares of preferred stock with a par value

of $ 0.001 per share.

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

entitled Series A Preferred Stock, consisting of up 10,000 shares, par value $ 0.001 .

Under the Certificate of Designation, holders

entitled Series A Preferred Stock, consisting of up 10,000 shares,

par value $ 0.001 .

the Certificate of Designation, holders

of Series A Preferred Stock will participate on an equal basis per-share with holders of our common stock in any distribution upon winding

5 unchanged sentences

on November 3, 2020

As of September

31, 2024 and December 31, 2023, 10,000 shares of Series A Preferred Stock were issued and outstanding.

1 unchanged sentence

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

entitled Series B Preferred Stock, consisting of up 200,000 shares, par value $ 0.001 .

Under the Certificate of Designation,

holders of Series B Preferred Stock will receive a liquidation preference of $81 per share in any distribution upon winding up, dissolution,

entitled Series B Preferred Stock, consisting of up 200,000 shares,

par value $ 0.001 .

the Certificate of Designation, holders

of Series B Preferred Stock will receive a liquidation preference of $ 81 per share in any distribution upon winding up, dissolution,

or liquidation of the Company before junior security holders, as provided in the designation.

4 unchanged sentences

Holders of Series B Preferred Stock do not have voting rights but may convert into common stock after

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

B Preferred Stock.

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 liquidity.

In August 2023,

the Company declared and issued 10,080 shares Series B stock to our management as dividends, valued at $816,480.

As of September

30, 2023 and December 31, 2022, 31,080 and 21,000 shares of Series B Preferred Stock were issued and outstanding, respectively.

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

Series B Preferred Stock.

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 liquidity.

31, 2024 and December 31, 2023, 31,080 shares of Series B Preferred Stock were issued and outstanding.

Preferred Stock

16 unchanged sentences

on January 7, 2021.

As of September

31, 2024 and December 31, 2023, no Series C Preferred Stock was issued or outstanding.

During the nine

months ended September 30, 2023, the Company issued 8,635,884 shares of common stock, valued at fair market value on issuance

shares for compensation to our directors valued at $ 30,945 ;

shares for exercise of warrants for $ 1,150,000 .

As of September

30, 2023 and December 31, 2022, 170,231,395 and 161,595,511 shares of common stock were issued and outstanding, respectively.

29, 2023, 1,838,235 warrants were exercised;

however, the Company received cash of $ 250,000 and issued 1,838,235 shares in October 2023.

As of September 30, 2023, the Company recorded subscription receivable of $ 250,000 in prepaid and other current assets.

Preferred Stock

On November 3, 2023, pursuant to Article III of our

Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series D Preferred Stock, consisting

of up 75,000 shares, par value $ 0.001 .

Under the Certificate of Designation, in the event of any dissolution, liquidation

or winding up of the Corporation, the Holders of Series D Preferred Stock shall be entitled to participate in any distribution out of

the assets of the Corporation before the holders of the Common Stock, Series A Preferred Stock and Series C Preferred Stock, but shall

be considered on parity to the liquidation rights of the Series B Preferred Stockholders.

The holders of shares of Series D Preferred

Stock have no dividend rights except as may be declared by the Board in its sole and absolute discretion, out of funds legally available

for that purpose .

Holders of Series D Preferred Stock do not have voting rights but may convert into common stock at a conversion

rate of one thousand (1,000) shares of Common Stock for every one (1) share of Series D Preferred Stock.

The rights of

the holders of Series D Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State

on November 3, 2023.

31, 2024 and December 31, 2023, no Series D Preferred Stock was issued or outstanding.

RELATED PARTY TRANSACTIONS

related parties

As of September

related party

31, 2024 and December 31, 2023, the Company had amounts due from related parties of $ 391,745 and $ 340,515 , respectively.

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

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

Due to related

As of September

31, 2024 and December 31, 2023, the Company had amounts due to related parties of $ 26,613 .

1 unchanged sentence

bearing and due on demand.

During the nine

months ended September 30, 2023 and 2022, the Company recorded management salaries of $ 402,000 and $ 405,000 and stock-based

compensation bonuses of $ 30,945 and $ 92,130 , respectively.

As of September

During the three

months ended March 31, 2024 and 2023, the Company recorded management salaries of $ 211,500 and $ 144,000 , respectively,

and stock-based compensation bonuses of $ 31,065 and $ 11,230 , respectively.

31, 2024 and December 31, 2023, the Company recorded and accrued management salaries of $ 137,127 and $ 100,128 , respectively.

2 unchanged sentences

Long-term Contracts

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

The Company leases facilities which the term is 12

For the nine months ended September 30, 2023 and 2022, the Company incurred rent expense

of $ 4,048 and $ 56,405 , respectively.

30, 2023 and December 31, 2022, the Company operates in one industry segment, telecommunication services, and two geographic segments,

USA and Switzerland, where current assets and equipment are located .

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

The Company leases facilities which the term is 12 months .

the three months ended March 31, 2024 and 2023, the Company incurred rent expense of $ 7,122 and $ 900 , respectively.

DEPOSIT FOR ACQUISITION

On January 19, 2024 , we entered

into a Share Purchase Agreement (“Purchase Agreement”) with Yukon River Holdings, Ltd.

(“Yukon River”), a corporation

formed under the laws of the British Virgin Islands (“Seller”) concerning the contemplated sale by Seller and the purchase

by us of 51% of the ordinary shares Seller holds in QXTEL LIMITED (“QXTEL”), a company incorporated in England and Wales.

The purchase price (the “Purchase

Price”) payable to the Seller for the shares is $ 5,000,000 .

Upon the execution of the Purchase Agreement, we agreed to deposit $ 1,500,000

of the Purchase Price into the trust account of a law firm acting as escrow agent (the “Escrow Agent”) as a nonrefundable

deposit to evidence our good faith intention to purchase the shares.

If the Purchase Agreement does not close before April 30, 2024, the

deposit is non-refundable.

If the Purchase Agreement closes, the deposit will be credited against the Purchase Price.

At closing, in addition to

the $ 1,500,000 with the Escrow Agent that will form part of the Purchase Price, we are required to pay $ 1,500,000 in cash and $2,000,000

to the Seller, either (A) in the form of a promissory note (the “Promissory Note”), or (B) by the delivery of iQSTEL shares

Seller may decide the form of payment between the Promissory Note or the share of iQSTEL, and if a Promissory Note is chosen,

we have agreed to allow Seller the option to exchange the Promissory Note for shares of iQSTEL .

31, 2024, the acquisition was not closed yet.

The acquisition was closed on April 1, 2024 , please refer to Note 13 – Subsequent

Events for more details.

2024 and December 31, 2023, 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, 2023 and 2022:

ended September 30, 2023

NOTE 13 - SEGMENT

- Schedule of Operating Activities by Geographic Segment

$ ( 1,131,378 )

Cost of revenue

( 1,131,378 )

Operating expenses

General and administration

Operating income

Other expense

months ended September 30, 2022

$ ( 1,719,255 )

Cost of revenue

( 1,719,255 )

Operating expenses

General and administration

Operating income

Other expense

months ended September 30, 2023

table shows operating activities information by geographic segment for the three months ended March 31, 2024 and 2023:

Three months ended March 31, 2024

NOTE 12 - SEGMENTS - Operating Activities by

Geographic Segment (Details)

$ ( 1,732,298 )

3 unchanged sentences

General and administration

Operating income (loss)

Operating loss

Other income (expense)

2 unchanged sentences

$ ( 580,216 )

months ended September 30, 2022

Three months ended March 31, 2023

$ ( 1,528,577 )

3 unchanged sentences

General and administration

Operating loss

Operating (loss) income

Other income (expense)

2 unchanged sentences

The following

table shows asset information by geographic segment as of September 30, 2023 and December 31, 2022:

September 30, 2023

table shows asset information by geographic segment as of March 31, 204 and December 31, 2023:

March 31, 2024

Current assets

14 unchanged sentences

SUBSEQUENT EVENTS

Management has

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.

Subsequent to

March 31, 2024 and through the date that these financials were made available, the Company had the following subsequent events:

April 1, 2024 the Company closed the acquisition of 51% of the issued ordinary shares of QXTEL Limited as it was established in the Shares

Purchase Agreement executed and disclosed in a Form 8-K on January 19, 2024 .

At closing, the Company acquired 51% of the issued ordinary shares of QXTEL Limited.

The purchase price (the “Purchase Price”)

payable to the Seller for the shares is US $5,000,000.

Upon the execution of the Purchase Agreement, on January 19, 2024 we deposited

US $1,500,000 of the Purchase Price into the trust account of a law firm acting as escrow agent (the “Escrow Agent”) as a

nonrefundable deposit to evidence our good faith intention to purchase the shares.

At closing on April 1, 2024, in addition to the US

$1,500,000 with the Escrow Agent that will form part of the Purchase Price, we paid US $1,500,000 in cash and US $2,000,0000 to the Seller,

in the form of a promissory note (the “Promissory Note”).

We have agreed to allow Seller the option to exchange the Promissory

Note for shares of iQSTEL under a formula discounted by 20% of the average closing sales price

for 5 consecutive days on the trading market.

If the Promissory Note is not exchanged for shares, the $2,000,000 will be paid with no

interest in 7 monthly payments of $200,000 each and an eighth payment of $600,000.

On May 10, 2024, the Company entered into a Purchase

Company Agreement (“Purchase Company Agreement”) with Omar Luna and Lynk Holding LLC (together, the “Seller”)

concerning the sale by Seller and the purchase by us of 51% of the membership interests the Seller holds in Lynk Telecom, LLC, a Virginia

limited liability company (“Lynk Telecom”).

The closing of the Purchase Company Agreement is expected to occur no later than

July 1, 2024, once due diligence has been completed.

Lynk Telecom provides certified business telephone,

SMS, connectivity, and networking services across various sectors in the United States.

Lynk Holding LLC recently acquired selected assets

from a company known as Voyce Telecom, and Lynk Holding LLC has the obligation to pay the shareholders of Voyce Telecom the purchase price

in that acquisition, which is outstanding.

The Purchase Price for 51% of the membership interests

of Lynk Telecom is US $1,500,000, and this amount will be paid by the Seller to the Buyer in 12 consecutive monthly cash payments of US$

125,000 each.

The Seller agrees to use these funds for the amortization of the payments that it owes to Voyce in relation to the contract

between Lynk Holding and Voyce Telecom.

Once we have paid the $1,500,000 for the acquisition

of Lynk Telecom, and Lynk Telecom has achieved the business goals outlined in the Purchase Company Agreement, under what we refer to as

“Phase I,” we have agreed to lend up to US$1,500,000 to Lynk Telecom, in installments of up to US$100,000 per month, to be

used solely for marketing campaigns, promotion and development of the retail services, according to a business plan that has to be approved

by Lynk Telecom’s board of directors.

The disbursements of this loan will be subject to

the achievements of the quarterly goals set in the business plan of Lynk Telecom.

This retail business plan will have the aim of achieving

the objective of generating a minimum of US$200,000 in operating income per month, with intermediate staggered quarterly goals.

Upon the completion of Phase I, and the business goals

in the Purchase Company Agreement have been achieved, we have agreed to lend Lynk Telecom up to US$1,500,000 in at least three stages,

each of up to US$500,000 per year to help accelerate the amortization of the debt Lynk Holding LLC has with the Voyce Telecom shareholders.

These loans would be linked to compliance with the financial statements for fiscal years 2026, 2027, 2028, 2029 and 2030.

The goals for

these years will be defined posteriori by the parties and approved by Lynk Telecom’s Board of Directors.

The payment of this loan

will be guaranteed with the portion of dividends that correspond to Lynk Holding LLC when Lynk Telecom makes a dividend distribution.

If, as a result of operations, Lynk Telecom does not

reach the projections in the Purchase Company Agreement, and the business plan for the years 2026, 2027, 2028, 2029 and 2030 approved

by Lynk Telecom´s Board of Directors, we may retain the stipulated loan.

If Lynk Telecom surpassed the projections in the Purchase

Company Agreement, we have agreed to true up the purchase price, with details of the true up contained in the Purchase Company Agreement.

Once this Purchase Company Agreement is signed, the

manager of Lynk Telecom, Omar Luna, is expected to enter into a 3-year employment agreement with Lynk Telecom, that will be executed before

the closing date, renewable for a 2-year period to guarantee the operational continuity of Lynk Telecom and the implementation of a business

plan that will lead Lynk Telecom into a productive company with positive net income as established in the Purchase Company Agreement.

Lynk Telecom shall have a Board of Directors composed

of 3 members:

2 of the members shall be appointed by us and the remaining member shall be appointed by the Seller.

The position of President

and Secretary will be reserved for us.

The closing of the Purchase Agreement is subject to,

among other things, Lynk Telecom having prepared all accounting information in accordance with SEC standards in such a manner that any

audit of the Company, if required, may be performed.

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