What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-14 compared with 2024-08-14 · 238 added, 218 removed, 66 unchanged (87% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking

statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives,

and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements”

within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E

of the Securities Exchange Act of 1934.

These forward-looking statements generally are identified by the words “believes,”

“project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,”

“plan,” “may,” “will,” “would,” “will be,” “will continue,” “will

likely result,” and similar expressions.

We intend such forward-looking statements to be covered by the safe-harbor provisions

for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for

purposes of complying with those safe-harbor provisions.

Forward-looking statements are based on current expectations and assumptions

that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements.

Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.

Factors which could have a

material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to:

changes in economic

conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles.

These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed

on such statements.

We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new

information, future events or otherwise.

Further information concerning our business, including additional factors that could materially

affect our financial results, is included herein and in our other filings with the SEC.

(www.iqstel.com) is a technology company

with a presence in 20 countries and over 100 employees that is offering leading-edge services through its four business divisions.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

Forward-Looking Statements

This quarterly report contains forward-looking statements.

Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives

for our future operations.

In some cases, you can identify forward-looking statements by terminology such as “may”, “should”,

“expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”,

“potential” or “continue” or the negative of these terms or other comparable terminology.

These statements are

only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk

Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance

or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied

by these forward-looking statements.

These risks include, by way of example and not in limitation:

uncertainty of profitability based upon our history of losses;

• legislative

or regulatory changes concerning telecommunications;

related to failure to obtain adequate financing on a timely basis and on acceptable terms;

related to our operations and uncertainties related to our business plan and business strategy;

in economic conditions;

• uncertainty

with respect to intellectual property rights, protecting those rights and claims of infringement

of other’s intellectual property;

• competition;

• cybersecurity

This list is not an exhaustive list of the factors

that may affect any of our forward-looking statements.

These and other factors should be considered carefully, including those contained

in our Annual Report on Form 10-K under “Risk Factors” for the year ended December 31, 2023, and readers should not place

undue reliance on our forward-looking statements.

Forward looking statements are made based on management’s beliefs, estimates and

opinions on the date the statements are made, and we undertake no obligation to update forward-looking statements if these beliefs, estimates

and opinions or other circumstances should change.

Although we believe that the expectations reflected in the forward-looking statements

are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Except as required by applicable

law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these

statements to actual results.

(www.iqstel.com) is a technology company with a presence in 20 countries and over 100 employees that offers leading-edge services

through its four business divisions in the telecommunications, electric vehicle (EV), fintech, and AI-enhanced metaverse industries.

presence is global, with offices in Miami, Venezuela, Argentina, UK, Switzerland, Turkey, and Dubai, we target diverse and high-growth

We maintain more than 400 high value network interconnections around the world, delivering international voice, SMS, and connectivity

services that form the core of our business.

The company’s strategy focuses on leveraging synergies between its 11 subsidiaries

to drive innovation and capture emerging opportunities.

Our Telecom Division, which

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Whisl Telecom (www.whisl.com), IoT Labs (www.iotlabs.mx), QGlobal SMS (www.qglobalsms.com), and QXTEL Limited (www.qxtel.com).

Also under the Telecom

Division, our developing BlockChain Platform Business Line (www.itsbchain.com) offers our proprietary Mobile Number Portability Application

(MNPA) to serve the in-country portability needs through its subsidiary, itsBchain.

Our developing Fintech

Business Line (www.globalmoneyone.com) (www.maxmo.vip) offers a complete Fintech ecosystem MasterCard Debit Card, US Bank Account (No

SSN Needed), Mobile App/Wallet (Remittances, Mobile Top Up).

Our Fintech subsidiary, Global Money One, is to provide immigrants access

to reliable financial services that makes it easier to manage their money and stay connected with their families back home.

Also under the Telecom Division,

our developing BlockChain Platform Business Line (www.itsbchain.com) offers our proprietary Mobile Number Portability Application (MNPA)

to serve the in-country portability needs through its subsidiary, itsBchain.

Our developing Fintech Business

Line (www.globalmoneyone.com) (www.maxmo.vip) offers a complete Fintech ecosystem MasterCard Debit Card, US Bank Account (No SSN Needed),

Mobile App/Wallet (Remittances, Mobile Top Up).

Our Fintech subsidiary, Global Money One, is to provide immigrants access to reliable

financial services that makes it easier to manage their money and stay connected with their families back home.

Our developing Electric Vehicle

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connectivity, and collaboration like never before.

metaverse leverages advanced AI to introduce Non-Player Characters (NPCs) that significantly enhance user engagement and functionality

within virtual environments.

Our developing metaverse

leverages advanced AI to introduce Non-Player Characters (NPCs) that significantly enhance user engagement and functionality within virtual

environments.

These NPCs are not mere static elements;

rather, they are powered by OpenAI's latest language models, enabling

dynamic interaction with users.

This AI-driven interaction allows NPCs to serve as sales and brand assistants, guiding users through

immersive experiences that can extend to purchasing products from external websites.

Furthermore, these intelligent agents can control

access to gated spaces within the metaverse based on user interactions, showcasing a personalized approach to user experience.

key innovation in our AI implementation is the NPCs' ability to autonomously make decisions based on their understanding of user interactions.

This is achieved through state-of-the-art natural language processing and understanding capabilities, which are supported in seven languages.

Additionally, our NPCs utilize advanced text-to-speech and speech-to-text technologies to facilitate seamless communication with users

across diverse linguistic backgrounds.

The incorporation of "function call" features further enhances the NPCs' ability to

perform complex tasks and interact meaningfully with the environment and the users.

reference to our technology as "cutting-edge" is grounded in our commitment to continuous improvement and innovation.

We consistently

integrate the latest advancements in AI, particularly in the areas of chatbots, language understanding, and user interaction technologies.

This ensures that our metaverse remains at the forefront of AI application in virtual spaces, offering an unparalleled user experience

that goes beyond traditional virtual environments.

are currently in an advanced phase of development, with ongoing enhancements to AI functionalities and user interaction models.

is dedicated to exploring and implementing the latest AI technologies to ensure that our metaverse remains a leading example of innovation

in virtual space technology.

information contained on our websites is not incorporated by reference into this prospectus and should not be considered part of this

or any other report filed with the SEC.

of Operations

total revenue reported for the three months ended June 30, 2024 was $78,635,764, compared with $32,824,829 for the three months ended

June 30, 2023.

These numbers reflect an increase of 139.56% quarter over quarter on our consolidated revenues.

Our total revenue reported

for the six months ended June 30, 2024 was $130,050,642, compared with $57,491,358 for the six months ended June 30, 2023;

looking at the numbers by subsidiary, we have the following breakout for the three and six months ended June 30, 2024 compared to the

three and six months ended June 30, 2023:

Revenue for the Three Months Ended June

Revenue for the Six Months Ended June

rather, they are powered by OpenAI's latest language models, enabling dynamic interaction

This AI-driven interaction allows NPCs to serve as sales and brand assistants, guiding users through immersive experiences

that can extend to purchasing products from external websites.

Furthermore, these intelligent agents can control access to gated spaces

within the metaverse based on user interactions, showcasing a personalized approach to user experience.

A key innovation in our AI

implementation is the NPCs' ability to autonomously make decisions based on their understanding of user interactions.

This is achieved

through state-of-the-art natural language processing and understanding capabilities, which are supported in seven languages.

Additionally,

our NPCs utilize advanced text-to-speech and speech-to-text technologies to facilitate seamless communication with users across diverse

linguistic backgrounds.

The incorporation of "function call" features further enhances the NPCs' ability to perform complex

tasks and interact meaningfully with the environment and the users.

Our reference to our technology

as "cutting-edge" is grounded in our commitment to continuous improvement and innovation.

We consistently integrate the latest

advancements in AI, particularly in the areas of chatbots, language understanding, and user interaction technologies.

This ensures that

our metaverse remains at the forefront of AI application in virtual spaces, offering an unparalleled user experience that goes beyond

traditional virtual environments.

We are currently in an advanced

phase of development, with ongoing enhancements to AI functionalities and user interaction models.

Our team is dedicated to exploring

and implementing the latest AI technologies to ensure that our metaverse remains a leading example of innovation in virtual space technology.

The information contained

on our websites is not incorporated by reference into this prospectus and should not be considered part of this or any other report filed

with the SEC.

Results of Operations

Our total revenue reported for the three months ended

September 30, 2024 was $54,249,614, compared with $39,757,203 for the three months ended September 30, 2023.

These numbers reflect an

increase of 36.45% quarter over quarter on our consolidated revenues.

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

2024 was $184,346,412, compared with $97,248,561 for the nine months ended September 30, 2023.

These numbers reflect an increase of 89.56%

year over year on our consolidated revenues.

When looking at the numbers by subsidiary, we have

the following breakout for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30,

Revenue for the Three Months Ended September

Revenue for the Nine Months Ended September

Etelix.com USA, LLC

3 unchanged sentences

QXTEL Limited

Inter-company sales

$ 184,346,412

The increase in revenue is due to an increment

in the commercial efforts and the result of commercial synergies amongst all companies.

The organic growth during the three-months ended

June 30, 2024 was 60% of the total revenue for that period, while the newly acquired company QXTEL Limited contributed with 40% of the

total revenue.

When looking at the figures for the six months

ended June 30, 2024, the organic growth was 76%, while QXTEL Limited contributed 24%.

We consider organic growth the revenues reported

by our existing subsidiaries;

including Etelix, SwissLink, QGlobal, IoT Labs, Smartbiz and Whisl.

continued growth of our revenue is the result of the development of our business strategy, which includes the strengthening of our commercial

and operating activities and new acquisitions.

total cost of revenue for the three months ended June 30, 2024 increased to $76,472,140, compared with $32,040,363 for the three months

ended June 30, 2023.

Our total cost of revenue for the six months ended June 30, 2024 increased to $126,507,992, compared with $55,490,156

for the six months ended June 30, 2023.

looking at the numbers by subsidiary, we have the following breakout for the three and six months ended June 30, 2024 compared to the

three and six months ended June 30, 2023:

Cost of Revenue for the Three Months Ended June

Cost of Revenue for the Six Months Ended June

The continued growth of our revenue is the result

of the development of our business strategy, which includes the strengthening of our commercial and operating activities and the synergies

among all our subsidiaries.

Cost of Revenues

Our total cost of revenues for the three months ended

September 30, 2024 increased to $52,229,695, compared with $38,728,682 for the three months ended September 30, 2023.

Our total cost of

revenues for the nine months ended September 30, 2024 increased to $178,737,687, compared with $94,218,838 for the nine months ended September

When looking at the numbers by subsidiary, we have

the following breakout for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30,

Cost of Revenue for the Three Months Ended September

Cost of Revenue for the Nine Months Ended September

Etelix.com USA, LLC

3 unchanged sentences

QXTEL Limited

Inter-company sales

$ 178,737,687

cost of revenue consists of direct charges from vendors that the Company incurs to deliver services to its customers.

These costs primarily

consist of usage charges for calls and SMS terminated in vendor’s network.

behavior in the costs shows a logical correlation with the behavior of the revenue commented above.

We have reached a higher volume of

sales and every additional unit sold (minutes and SMS) has its corresponding termination cost.

The Consolidated Gross Margin for the three months

ended June 30, 2024 was 2.75%, which compared to 2.39% for the three months ended June 30, 2023 represents an increase in our consolidated

Gross Margin of 15.13%.

Consolidated Gross Margin for the six months ended June 30, 2024 was 2.72%, which compared to 3.48% for the six months ended June 30,

The decrease in the Gross Margin is due to the

decrease in the margins of voice services, which is an expected trend in the industry.

To offset this trend, the Company has implemented

a plan to modify the composition of the product portfolio by increasing SMS businesses that have increasing margins.

As an example, we

can indicate that for the six months ended on June 30, 2024, the contribution to the margin of the SMS business with respect to the total

was 24% compared to only 8% for the same period in 2023.

With the incorporation of QXTEL and the increase in the QGlobal SMS business,

the gross margin of our SMS services portfolio increased by 297% when comparing the figures of June 2024 vs.

Operating expenses, consisting entirely of general

and administrative expenses, increased to $2,505,727 for the three months ended June 30, 2024 from $1,037,184 for the three months ended

June 30, 2023.

Operating expenses, consisting entirely of general and administrative expenses, increased to $4,068,205 for the six months

ended June 30, 2024 from $2,571,450 for the six months ended June 30, 2023.

The detail by major category for the six months ended June

30, 2024 and 2023 is reflected in the table below.

Six Months Ended June 30,

Our cost of revenues consists of direct charges

from vendors that the Company incurs to deliver services to its customers.

These costs primarily consist of usage charges for calls and

SMS terminated in vendor’s network.

The behavior in the costs shows a logical correlation

with the behavior of the revenue commented above.

We have reached a higher volume of sales and every additional unit sold (minutes and

SMS) has its corresponding termination cost.

The gross profit for the three months ended September

30, 2024 increased to $2,019,919 from $1,028,521 for the same period of year 2023.

For the nine months ended September 30, 2024 the gross

profit increased to $5,608,725 from $3,029,723 for the same period of year 2023.

It is important to remark on the evolution of the

Gross Profit expressed as a percentage of Revenue.

It went up to 3.72% for the three months ended September 2024 from 2.58% for the same

period of 2023, but also from 2.75% for the three months ended June 30, 2024.

Operating Expenses

Operating expenses increased to $2,076,472 for the

three months ended September 30, 2024 from $957,768 for the three months ended September 30, 2023.

Operating expenses increased to $6,144,677 for the

nine months ended September 30, 2024 from $3,529,218 for the nine months ended September 30, 2023.

The details by major category for the

nine months ended September 30, 2024 and 2023 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 Costs

Depreciation and Amortization

Office, Facility and Other

Bad debt expense

Stock-based compensation

Total Operating Expense

looking at the numbers by subsidiary, we have the following breakout for the six months ended June 30, 2024 compared to the six months

ended June 30, 2023:

Six Months Ended June 30,

The main reasons for the overall increase in operating

expenses for the nine months ended September 30, 2024 compared to the same period of 2023 is due to the increase in salaries, wages and

the professional fees;

office, facilities and other.

As it can be seen in the table below, where

operating expenses are shown by subsidiary, 56% of the total increase in operating expenses is due to the inclusion of QXTEL, which was

not part of the group of companies in year 2023.

When looking at the numbers by subsidiary,

we have the following breakout for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023:

Nine Months Ended

September 30,

Global Money One

2 unchanged sentences

QXTEL Limited

the three months ended June 30, 2024 we were consolidating QXTEL from April 1 to June 30.

This new subsidiary was not present before

the mentioned period which explains 44% of the total $1,496,755 expense increase in the total consolidated figures for 2024 compared

to the same period in 2023.

The Company had an operating loss for the three

months ended June 30, 2024 of $342,103 compared with an operating loss of $252,718 for the three months ended June 30, 2023.

The Company had an operating loss for the six

months ended June 30, 2024 of $525,555 compared with an operating loss of $570,248 for the six months ended June 30, 2023.

Inter-company eliminations

Operating Income

The Company had an operating loss of $56,553 for the

three months ended September 30, 2024 compared with operating income of $70,753 for the three months ended September 30, 2023.

The Company had an operating loss of $535,952 for

the nine months ended September 30, 2024 compared with an operating loss of $499,495 for the nine months ended September 30, 2023

Our Telecom Division, the division presently generating

revenue, has operating income when presented separately from the rest of our Company.

The expenses of our pre-revenue companies are set

at the minimum required to finish the development of the product/services prior to market launch.

When comparing the tables below, we

can see a tremendous evolution of our telecom division comparing the revenues, gross profit and operating income for the three and six

months ended June 30, 2024 versus the same periods of year 2023.

As we have indicated on several occasions, our strategy is to strengthen

our telecommunications division so that it can serve as a lever for the development of new lines of business.

Telecom Division

Pre-revenue companies

Three Months Ended June 30, 2024

Six Months Ended June 30, 2024

Three Months Ended June 30, 2024

Six Months Ended June 30, 2024

Three Months Ended June 30, 2024

Six Months Ended June 30, 2024

Three Months Ended June 30, 2024

Six Months Ended June 30, 2024

revenue, has positive operating income when presented separately from the rest of our Company.

The expenses of our pre-revenue companies

are set at the minimum required to finish the development of the product/services prior to market launch.

When comparing the tables below,

we can see a tremendous evolution of our telecom division comparing the revenues, gross profit and operating income for the three and

nine months ended September 30, 2024 versus the same periods of year 2023.

As we have indicated on several occasions, our strategy is

to strengthen our telecommunications division so that it can serve as a lever for the development of new lines of business.

Months Ended September 30, 2024

Cost of revenue

3 unchanged sentences

Operating income/(loss)

Telecom Division

Pre-revenue companies

Three Months Ended June 30, 2023

Six Months Ended June 30, 2023

Three Months Ended June 30, 2023

Six Months Ended June 30, 2023

Three Months Ended June 30, 2023

Six Months Ended June 30, 2023

Three Months Ended June 30, 2023

Six Months Ended June 30, 2023

Months Ended September 30, 2023

Cost of revenue

3 unchanged sentences

Operating income/(loss)

Expenses/Other Income

We had other expenses of $1,556,509 for the three

months ended June 30, 2024, as compared with other income of $91,074 for the same period ended 2023.

We had other expenses of $1,953,273

for the six months ended June 30, 2024, as compared with other income of $249,782 for the same period ended 2023.

The increase in other

expenses is mainly due to the change in the fair value of derivative liabilities, and the interest expenses incurred.

Both concept are

related to the financing structure put in place for the acquisition of QXTEL Limited, which has had a positive impact in the revenues

and operating income of the Telecom Division, and also a positive impact in our balance sheet.

We finished the three months ended June 30, 2024 with

a loss of $1,963,887, as compared to a loss of $161,644 during the three months ended June 30, 2023.

We finished the six months ended

June 30, 2024 with a loss of $2,544,103, as compared to a loss of $320,466 during the six months ended June 30, 2023.

Other Expenses/Other Income

We had other expenses of $2,646,275 for the nine months

ended September 30, 2024, as compared with other income of $224,938 for the same period ended 2023.

The difference between the compared

periods is primarily in due to a change in fair value of derivative liabilities of $(1,063,789);

and Interest Expense of $(1,533,820).

Net Income/Loss

The Company finished the three months ended September

30, 2024 with a net loss of $773,004, as compared to a net income $45,909 during the three months ended September 30, 2023.

finished the nine months ended September 30, 2024 with a loss of $3,317,107, as compared to a loss of $274,557 during the nine months

ended September 30, 2023.

The net results of the periods reported are highly

impacted by the expenses in the holding entity (iQSTEL), which has a high component of interest and other financial expenses related

to the funds borrowed for the acquisition of QXTEL Limited.

impacted by the expenses in the holding entity (iQSTEL), which has a high component of interest and other financial expenses related to

the funds borrowed for the acquisition of QXTEL Limited.

Liquidity and Capital Resources

As of June 30, 2024, we had total current assets

As of September 30, 2024, we had total current assets

of $19,664,986 and current liabilities of $24,066,234, resulting in a negative working capital of $4,401,248.

This negative working capital

is driven largely by the $3,555,006 of current convertible notes, derivative liabilities of $976,187 and contingent liability for the

acquisition of QXTEL of $1,000,000.

Our operating activities used $3,151,688 in the six

months ended June 30, 2024 as compared with $721,400 used in operating activities in the six months ended June 30, 2023.

operating cash flow for both periods is a result of our net loss and changes in operating assets and liabilities.

Investing activities used $2,720,197 for

the six months ended June 30, 2024 compared to $279,086 used during the same period of year 2023.

For the six months ended June 30, 2024

the use of funds in investing activities consisted primarily of the acquisition of QXTEL Limited.

Financing activities provided $5,306,444 in the six

months ended June 30, 2024 compared with $790,994 provided in the six months ended June 30, 2023.

Our positive financing cash flow in

2024 is mainly the result of proceeds from loans, and proceeds from convertible notes.

We intend to fund operations through increased sales

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

We also plan to seek additional financing

in public and private equity offering to secure funding for operations.

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.

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

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, 2024.

Accounting Polices

This compares with a positive

working capital of $1,878,228 at December 31, 2023.

Our operating activities used $2,526,651 in the nine

months ended September 30, 2024 as compared with $434,701 used in operating activities in the nine months ended September 30, 2023.

Investing activities used $2,950,367 for the

nine months ended September 30, 2024 as compared with $340,583 used in investing activities in the nine months ended September 30, 2023.

Use of funds in investing activities were primarily for the acquisition of subsidiary (QXTEL) for $2,730,121.

Financing activities provided $6,239,489 in the nine

months ended September 30, 2024 compared with $1,454,756 provided in the nine months ended September 30, 2023.

Our positive financing

cash flow in 2024 was largely the result of the proceeds from convertible notes of $3,997,500, funds used in the acquisition of QXTEL.

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

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

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 nine-month period

ended September 30, 2024.

Critical Accounting Polices

“critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and

1 unchanged sentence

about the effect of matters that are inherently uncertain.

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, 2024;

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

assumptions or conditions.

See the Consolidated Financial Statements in this Quarterly Report for a complete discussion of our significant

accounting policies.

Balance Sheet Arrangements

of June 30, 2024, there were no off-balance sheet arrangements.

Accounting Pronouncements

do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operation, financial

position, or cash flow.

Quantitative and Qualitative Disclosures About Market Risk

are a smaller reporting company and are not required to provide the information under this item pursuant to Regulation S-K.

Our accounting policies are discussed in detail in the footnotes to our Annual Report on Form 10-K for the year ended December

31, 2023 and in the footnotes to our financial statements included in this Quarterly Report on Form 10-Q for the nine months ended September

We consider our critical accounting policies to be those related to warrant accounting and complex debt instruments,

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 assumptions or conditions.

See the Consolidated Financial Statements in this Quarterly Report for a complete discussion

of our significant accounting policies.

Off Balance Sheet Arrangements

As of September 30, 2024, there were no off-balance

sheet arrangements.

Recent Accounting Pronouncements

We do not expect the adoption of recently issued accounting

pronouncements to have a significant impact on our results of operation, financial position, or cash flow.

Quantitative and Qualitative Disclosures

About Market Risk

We are a smaller reporting company and are not required

to provide the information under this item pursuant to Regulation S-K.

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