What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2024-11-14 · 476 added, 602 removed, 397 unchanged (73% 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, 2024 (unaudited) and December 31, 2023;

Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023 (unaudited);

Consolidated Statements of Stockholder’s Equity

for the three and nine months ended September 30, 2024 and 2023 (unaudited);

Consolidated Statements of Cash Flows for the nine

months ended September 30, 2024 and 2023 (unaudited);

Our unaudited consolidated financial statements included in this Form 10-Q

are as follows:

Consolidated Balance Sheets as of March 31, 2025 (unaudited) and December 31, 2024;

Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024 (unaudited);

Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024 (unaudited);

Consolidated Statements of Stockholder’s Equity for the three months ended March 31, 2025 and 2024 (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, 2024 are not necessarily indicative of the results that can be expected for

Operating results for the interim period ended March 31, 2025 are not necessarily indicative of the results that can be expected for

the full year.

Consolidated Balance Sheets

September 30,

Current Assets

Accounts receivable, net

Inventory, net

Due from related parties

2 unchanged sentences

Property and equipment, net

Intangible asset

Intangible assets, net

Deferred tax assets

8 unchanged sentences

Contingent liability for acquisition of subsidiary

Derivative liabilities

Total Current Liabilities

Loans payable, non-current

Convertible notes - net of discount of $ 0 and $ 210,296 , respectively

Employee benefits, non-current

28 unchanged sentences

Equity attributed to stockholders of IQSTEL Inc.

Equity (Deficit) attributable to noncontrolling interests

Equity attributable to noncontrolling interests

TOTAL STOCKHOLDERS' EQUITY

4 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

$ 184,346,412

Cost of revenue

2 unchanged sentences

Total operating expenses

Operating income (loss)

Operating loss

Other income (expense)

1 unchanged sentence

Interest expense

( 1,533,820 )

Change in fair value of derivative liabilities

( 1,063,789 )

Loss on settlement of debt

Total other income (expense)

( 2,646,275 )

Net income (loss) before provision for income taxes

Total other expense

Net loss before provision for income taxes

( 1,123,886 )

Net income (loss)

( 1,144,461 )

3 unchanged sentences

$ ( 809,767 )

$ ( 639,143 )

Dividend on Series B Preferred Stock

Net loss attributed to stockholders of iQSTEL Inc.

$ ( 923,788 )

$ ( 878,493 )

$ ( 3,741,707 )

$ ( 1,455,623 )

Comprehensive income (loss)

Net income (loss)

$ ( 773,004 )

Comprehensive loss

$ ( 1,144,461 )

$ ( 580,216 )

Foreign currency adjustment

Total comprehensive income (loss)

$ ( 1,144,461 )

4 unchanged sentences

$ ( 809,767 )

$ ( 639,071 )

Basic and diluted loss per common share

3 unchanged sentences

Consolidated Statements of Changes in Stockholders’

For the three and nine months ended September

30, 2024 and 2023

A Preferred Stock

B Preferred Stock

Paid in Capital

Comprehensive Loss

Controlling Interest

Stockholders' Equity

- December 31, 2023

$ ( 26,084,133 )

$ ( 377,710 )

stock issued for compensation

stock issued for settlement of debt

stock issued in conjunction with convertible notes

- March 31, 2024

$ ( 26,893,900 )

$ ( 148,159 )

stock issued for compensation

stock issued for warrant exercises

of derivative liabilities upon exercise of warrant

of subsidiary

Equity (Deficit)

For the three months ended March 31, 2025 and

Series A Preferred Stock

Series B Preferred Stock

Additional Paid in Capital

Accumulated Deficit

Accumulated Comprehensive Loss

Non Controlling Interest

Total Stockholders' Equity

Balance - December 31, 2024

$ ( 32,703,410 )

Common stock issued for compensation

Common stock issued for conversion of debt

Common stock issued for common stock payable

Dividend to non-controlling interest

Net income (loss)

( 1,157,958 )

- June 30, 2024

( 1,144,461 )

stock issued for conversion of debt

stock issued for compensation

stock issued for warrant exercises

stock payable

of derivative liabilities upon exercise of warrant

- September 30, 2024

Balance - March 31, 2025

$ ( 33,930,013 )

A Preferred Stock

B Preferred Stock

Paid in Capital

Comprehensive Loss

Controlling Interest

Stockholders' Equity

Series A Preferred Stock

Series B Preferred Stock

Additional Paid in Capital

Accumulated Deficit

Accumulated Comprehensive Loss

Non Controlling Interest

Total Stockholders' Equity

Balance - December 31, 2023

1 unchanged sentence

$ ( 377,710 )

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,

Common stock issued for compensation

Common stock issued for settlement of debt

Common stock issued in conjunction with convertible notes

Net income (loss)

Balance - March 31, 2024

$ ( 26,893,900 )

3 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended

September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

6 unchanged sentences

Amortization of debt discount

Change in fair value of derivative liabilities

Loss on settlement of debt

1 unchanged sentence

Accounts receivable

( 3,422,703 )

Prepaid and other assets

( 1,391,098 )

Due from related parties

Accounts payable

( 8,331,945 )

Accrued and other current liabilities

( 46,331,507 )

( 1,969,040 )

Net cash used in operating activities

1 unchanged sentence

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisitions of subsidiary

Deposit for acquisitions of subsidiary

( 1,500,000 )

Purchase of property and equipment

Purchase of intangible assets

Advances of loans receivable - related party

Collection of amounts due from related parties

Payment of loan receivable - related party

Net cash used in investing activities

3 unchanged sentences

Repayments of loans payable

Proceeds from loans payable - related parties

Repayments of note payable issued for acquisition of subsidiary

Repayment of loans payable - related parties

Proceeds from exercise of warrants

Proceeds from issuance of common stock payable

Proceeds from convertible notes

Proceeds from common stock purchase option

Repayment of convertible notes

Dividend paid to non-controlling interest

Net cash provided by financing activities

Effect of exchange rate changes on cash

Net change in cash

( 1,425,311 )

Cash, beginning of period

4 unchanged sentences

Non-cash transactions:

Series B Preferred stock issued as dividend

Common stock issued for settlement of debt

Common stock issued in connection with convertible notes

Common stock issued for conversion of debt

Common stock issued for settlement of debt

Cashless warrant exercised

Resolution of derivative liabilities

Note payable issued for acquisition of subsidiary

Contingent liability for acquisition of subsidiary

The accompanying notes are an integral part of

these unaudited consolidated financial statements.

Notes to the Consolidated Financial Statements

September 30, 2024

Notes to the Unaudited Consolidated Financial

March 31, 2025

NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS

and Operations

(“iQSTEL”, “we”, “us”, or the “Company”) was incorporated under the laws of the State

of Nevada on June 24, 2011 under the name of B-Maven Inc.

The Company changed its name to PureSnax International,

on September 18, 2015;

and more recently it changed its name to iQSTEL Inc.

Organization and Operations

(“IQSTEL”, “we”,

“us”, or the “Company”) was incorporated under the laws of the State of Nevada on June 24, 2011 under

the name of B-Maven Inc.

The Company changed its name to PureSnax International, Inc.

on September 18, 2015, and more recently it changed

its name to IQSTEL Inc.

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 20 countries and over 100 employees that is offering leading-edge services through its four business

Division, which represents the majority of current operations and which also represents the source for all of the Company’s revenues,

offers VoIP, SMS, proprietary Internet of Things (IoT) solutions (www.iotsmartgas.com and www.iotsmarttank.com), and international fiber-optic

connectivity through its subsidiaries:

Etelix.com USA, LLC, SwissLink Carrier AG, Smartbiz Telecom LLC, Whisl Telecom LLC, IoT Labs, LLC,

QGlobal SMS, LLC, and QXTEL LIMITED.

Also under the

Telecom Division, the Company’s developing BlockChain Platform Business Line offers our proprietary Mobile Number Portability Application

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

The Company’s

developing Fintech Business Line offers a complete Fintech ecosystem MasterCard Debit Card, US Bank Account (No SSN Needed), Mobile App/Wallet

(Remittances, Mobile Top Up).

The Company’s Fintech subsidiary, Global Money One Inc., 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.

The Company’s

developing Electric Vehicle (EV) Business Line offers electric motorcycles for work and recreational use in the USA, Spain, Portugal,

Panama, Colombia, and Venezuela.

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.

The Company 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

603 active interconnection agreements with mobile companies, fixed line companies and other wholesale carriers.

The Company is a technology company with a presence

in 20 countries and approximately 100 employees that is offering leading-edge services through its four business divisions.

The Telecom Division, which represents the majority

of current operations and which also represents the source for all of the Company’s revenues, offers VoIP, SMS, proprietary Internet

of Things (IoT) solutions (www.iotsmartgas.com and www.iotsmarttank.com), and international fiber-optic connectivity through its subsidiaries:

Etelix.com USA, LLC, SwissLink Carrier AG, Smartbiz Telecom LLC, Whisl Telecom LLC, IoT Labs, LLC, QGlobal SMS, LLC, and QXTEL LIMITED.

Also under the Telecom Division, the Company’s

developing BlockChain Platform Business Line offers our proprietary Mobile Number Portability Application (MNPA) to serve the in-country

portability needs through its subsidiary, itsBchain, LLC.

The Company’s developing Fintech Business

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

The Company’s Fintech subsidiary, Global Money One Inc., 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.

The Company’s developing Electric Vehicle

(EV) Business Line offers electric motorcycles for work and recreational use in the USA, Spain, Portugal, Panama, Colombia, and Venezuela.

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

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 OF SIGNIFICANT ACCOUNTING

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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, 2024 and the results of operations and cash

flows for the periods presented.

The results of operations for the nine months ended September 30, 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.

recurring accruals) to present the financial position of the Company as of March 31, 2025 and the results of operations and cash flows

for the periods presented.

The results of operations for the three months ended March 31, 2025 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, 2024 filed with the SEC on March 31, 2025.

Consolidation Policy

5 unchanged sentences

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

Reverse stock split

The Company announced a reverse stock split effective

on May 2, 2025 (the “Market Effective Date”).

The Board of Directors of the Company approved a reverse stock split of the

Company’s authorized, issued and outstanding shares of common stock, par value $0.001 per share (the “Common Stock”),

at a ratio of 1-for-80.

All issued and outstanding common stock, options and warrants to purchase common stock and per share amounts contained

in this Report have been adjusted retroactively to reflect the change in capital structure for all periods presented.

All share and per share information in these

financial statements retroactively reflect this reverse stock split.

Use of Estimates

4 unchanged sentences

results could differ from these good faith estimates and judgments.

Business Combinations

In accordance with ASC 805-10, “ Business

Combinations ”, the Company accounts for all business combinations using the acquisition method of accounting.

Under this method,

assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition.

excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests is recognized

Certain adjustments to the assessed fair values of the assets, liabilities, or non-controlling interests made subsequent

to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill.

Any adjustments

subsequent to the measurement period are recorded in income.

Any cost or equity method interest that the Company holds in the acquired

company prior to the acquisition is re-measured to fair value at acquisition with a resulting gain or loss recognized in income for the

difference between fair value and the existing book value.

Results of operations of the acquired entity are included in the Company’s

results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets.

Foreign Currency Translation and Re-measurement

The Company translates its foreign operations

dollars in accordance with ASC 830, “ Foreign Currency Matters ”.

The functional currency and reporting currency

of Etelix, QGlobal, ItsBchain, IoT Labs, Whisl, Smartbiz, Global Money One and QXTEL is the U.S.

dollar, while 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 and Cash Equivalents

2 unchanged sentences

to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.

had $ 2,125,139 and $ 1,362,668 in cash and cash equivalents at September 30, 2024 and December 31, 2023, respectively.

The Company had no cash

equivalents at March 31, 2025 and December 31, 2024.

Accounts Receivable and Allowance for Uncollectible

6 unchanged sentences

factors that could affect collectability.

During the nine months ended September 30, 2024 and 2023, the Company recorded bad debt

expense of $ 1,801 and $ 1,344 , respectively.

During the three months ended March 31, 2025 and 2024, the Company recorded bad debt expense

of $ 0 and $ 725 , respectively.

Net Income (Loss) Per Share of Common Stock

The Company 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

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 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 nine months ended September 30, 2024 and 2023.

The Company has adopted Accounting Standards

Codification 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 year.

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

Series B Preferred stock and convertible notes, and these were excluded from the computation of diluted net loss per share as the result

was anti-dilutive for the three months ended March 31, 2025 and 2024.

Concentrations of Credit Risk

The Company’s financial instruments that

are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables.

places its cash and cash equivalents with financial institutions of high creditworthiness.

At times, its cash and cash equivalents with

a particular financial institution may exceed any applicable government insurance limits.

During the nine months ended September 30, 2024,

22 customers represented 87.7 % of our revenue compared to 11 customers representing 87.8 % of our revenue for the nine

months ended September 30, 2023.

For the nine months ended September 30, 2024 and 2023, 38.3 % and 54.8 % 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.

are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents, accounts receivable, and related party

The Company places its cash and cash equivalents with financial institutions of high creditworthiness.

At times, its cash and

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

During the three months ended March 31, 2025,

we had 19 customers representing 86 % of our revenue compared to 8 customers representing 86 % of our revenue for the

three months ended March 31, 2024.

This is a significant improvement in the revenue concentration.

For the three months ended March 31,

2025 and 2024, 38 % and 47 % of revenue, respectively, comes from customers under prepayment conditions, which means

there are no credit or bad debt risks on that portion of the customers’ portfolio.

Financial Instruments

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accounts receivable;

deposit for acquisition, prepaid and other current assets;

prepaid and other current assets;

accounts payable;

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.

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.

Transactions involving related parties cannot

4 unchanged sentences

Revenue Recognition

The Company recognizes revenue from telecommunication

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

The Company recognizes revenue related to monthly

4 unchanged sentences

The Company’s payment terms vary by client.

Usage charges refer to the fees that customers

are billed based on their actual usage of the services.

For voice services, this typically means charges are based on the duration of

For SMS (text messaging), it usually means charges per message sent.

Other recurring charges are referred to charges for services

such as (1) Global DIDs, (2) Global Toll-Free Numbers, (3) PBX (Private Branch Exchange) for small businesses, and (4) SIP Trunking.

provision of these services usually has set-up fees and are offered on a subscription or month-to-month basis.

Revenue is reported on a gross basis since the

Company acts as the principal in the transaction, meaning it has control over the goods or services before they are transferred to the

This includes having the primary responsibility for fulfilling the contract and determining the price.

With respect to the specific performance obligations

of the Company in its contracts with its customers, our standard service agreement establishes the following:

The Company agrees to furnish to Customer, and Customer agrees to purchase from the Company, International Long Distance telecommunication services and/or SMS services at the rates agreed to in writing by the Parties.

The Company will provide, operate and maintain communications equipment, international links and network administration and support in the United States and other countries as may be agreed upon.

The Company will be responsible for its own expenses and will provide, operate, and maintain transmission facilities required to link its domestic network with the other Party's nearest point of presence (POP).

The Company shall provide Customer all required IP network addresses, Domain Name Server (DNS) information and, if necessary, the associated prefixes used to exchange voice traffic as provided on the provisioning form.

Company shall take all appropriate security measures to protect its network from fraudulent traffic coming from unknown or

unauthorized sources.

Any and all IP and network information received by the Company from Customer for the purposes of this

agreement shall be strictly confidential, and disclosed only to those employees or personnel with a need to know.

The Company recognizes revenue from telecommunication

services in accordance with ASC 606.

Topic 606 establishes a comprehensive 5 step framework for determining revenue recognition.

this framework, the Company considers each service a single performance obligation, since typically, the Company provides a series of

distinct services.

The application of the 5 step Topic 606 revenue

recognition framework to the Company's operations is depicted as follows:

Topic 606 Conceptual Framework

Related Company Policy & Procedures

Step 1 Identify the contract(s) with customer

A contract is defined as an approved mutual agreement

between the Company and a customer setting performance obligation, and criteria that must be met in accordance with the Company's customary

commercial business practices and entered into with the probable expectation that all estimated consideration will be realized in the

ordinary course of business.

Step 2 Identify the performance obligations

Performance obligations are identified in the

customer agreement, and any subsequent amendments stated in per minute, time and message usage criteria.

The Company considers each service

a single performance obligation, including instances where the Company provides a series of services that are substantially the same and

have the same pattern of transfer.

Step 3 Determine the transaction price

The transaction price is determined at contract

inception and is subsequently reviewed periodically to reflect applicable rate amendments, trends in regulatory, market conditions and

usage of service by a customer.

The transaction price excludes amounts collected on behalf of third parties such as sales taxes and regulatory

Step 4 Allocate the transaction price to the performance obligations

The transaction price is allocated to each performance

obligation based on the standalone contractual selling price of the time measured service, net of any related discount.

Step 5 Recognize revenue when the entity satisfies a performance obligation

The Company recognizes revenues from contracts

with customers when control of the usage of the services has been transferred to the customer, as recorded and measured by the Company's

internal information systems.

Revenues are recognized at the probable amount of consideration expected in exchange for transferring control

Cost of revenue

Costs of revenue represent direct charges from

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

These costs primarily consist of usage charges for calls terminated

in vendors’ networks.

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards

Board ("FASB") issued Accounting Standards Update ("ASU") No.

2023-07, " Segment Reporting (Topic

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.

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

Notes to Consolidated Financial Statements.

In December 2023, the FASB issued ASU No.

“ 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

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.

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.

Board issued Accounting Standards Update (ASU) 2024-03 Final Standard on Income Statement:

Disaggregation of Income Statement

Expenses , which requires disaggregated disclosure of income statement expenses for public business entities.

The ASU does not

change the expense captions an entity presents on the face of the income statement;

rather, it requires disaggregation of certain expense

captions into specified categories in disclosures within the footnotes to the financial statements.

This guidance will be effective for

us on January 1, 2027.

The Company is currently evaluating the impact of adopting ASU 2024-03.

The 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 its financial statements.

NOTE 3 - GOING CONCERN

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of liabilities in the normal course of business.

The Company has suffered recurring losses from operations and does not have an established

source of revenues sufficient to cover its operating costs.

These conditions raise substantial doubt about the Company’s ability

to continue as a going concern.

The consolidated financial statements do not include any adjustments that might result from the outcome

of this uncertainty.

The ability of the Company to continue

as a going concern is dependent upon its ability to successfully accomplish its business plan and eventually attain profitable operations.

the next year, the Company's foreseeable cash requirements will relate to continual development of the operations of its business, maintaining

its good standing in the industry and continuing its marketing efforts.

The Company may experience a cash shortfall and be required to

raise additional capital.

Historically, the Company has financed its operations

through private placements, Regulation A offerings, related party loans, convertible notes, and unsecured debt.

Management may raise additional

capital through future public or private offerings of the Company's stock or through loans from private investors, although there can

be no assurance that it will be able to obtain such financing.

The Company's failure to do so could have a material and adverse effect

upon its operations and its stockholders.

The Company has suffered recurring losses from operations, negative working capital

and does not have an established source of revenues sufficient to cover its operating costs.

These conditions raise substantial doubt

about the Company’s ability to continue as a going concern.

The consolidated financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

The ability of the Company to continue as a going

concern is dependent upon its ability to successfully accomplish its business plan and eventually attain profitable operations.

During the next year, the Company's foreseeable

cash requirements will relate to continual development of the operations of its business, maintaining its good standing in the industry

and continuing its marketing efforts.

The Company may experience a cash shortfall and be required to raise additional capital.

Historically, the Company has relied upon funds

from its stockholders, lines of credit, options and secured and unsecured loans from third parties.

Management may raise additional capital

through future public or private offerings of the Company's stock or through loans from private investors, although there can be no assurance

that it will be able to obtain such financing.

The Company's failure to do so could have a material and adverse effect upon its operations

and its stockholders.

NOTE 4 – PREPAID AND OTHER CURRENT

Prepaid and other current assets at September

Prepaid and other current assets at March 31,

2025 and December 31, 2024 consisted of the following:

September 30,

Other receivable

4 unchanged sentences

Security deposit

expenses and other current assets

5 – PROPERTY AND EQUIPMENT

Property and equipment at September 30,

2024 and December 31, 2023 consisted of the following:

September 30,

prepaid and other current assets

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment at March 31, 2025 and

December 31, 2024 consisted of the following:

Telecommunication equipment

3 unchanged sentences

Accumulated depreciation and amortization

Property and equipment, net

Depreciation expense for the nine months ended

September 30, 2024 and 2023 amounted to $ 104,061 and $ 103,246 , respectively.

( 1,000,974 )

Total property and equipment

Depreciation expense for the three months ended

March 31, 2025 and 2024 amounted to $6,682 and $35,161, respectively.

NOTE 6 – INTANGIBLE ASSETS

Intangible assets at March 31, 2025 and December

31, 2024 consisted of the following:

NOTE 6- INTANGIBLE ASSETS

- Schedule of Intangible Assets (Details)

carrying amount

gas regulator intangible

yet in service

Interconnection

$ ( 481,251 )

Gross carrying amount

Accumulated amortization

Net carrying amount

New gas regulator intangible

Not yet in service

Interconnection agreements

Amortization expense for the three months ended

March 31, 2025 and 2024 amounted to $ 120,313 and $ 0 , respectively.

The following table outlines the estimated future

amortization expense as of March 31, 2025:

Years ending December 31

2025 (9 months

NOTE 7 – ACCRUED AND OTHER CURRENT LIABILITIES

Accrued and other current liabilities at March

31, 2025 and December 31, 2024 consisted of the following

Accrued liabilities

Cost provision

Accrued interest

Salary payable - management

Salary payable and employee benefit

Other current liabilities

accrued and other current liabilities

NOTE 8 - LOANS PAYABLE

Loans payable at September 30, 2024 and December

Loans payable at March 31, 2025 and December

31, 2024 consisted of the following:

September 30,

Note was issued on October 23, 2018 and due on January 2, 2026

2 unchanged sentences

Promissory note payable

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

Promissory note payable

Note was issued June 11, 2024 and due on June 11, 2025

7 unchanged sentences

Note was issued September 23, 2024 and due on September 23, 2025

Future receipts loan

Loan was issued September 9, 2024 and due in August 2025

rate 92.2 % (1)

Promissory note payable

Note was issued October 4, 2024 and due on September 23, 2025

Promissory note payable

Note was issued January 15, 2025 and due on January 15, 2026

Promissory note payable - acquisition of QXTEL

Note was issued February 3, 2025 and due on September 30, 2025

Unamortized debt discount

2 unchanged sentences

( 3,537,307 )

( 2,455,641 )

Long-term loans payable

The purchase price is $ 665,000 , net of financing fee of $ 13,425 , and the amount to be paid is $ 651,575 .

The monthly payment amount is $ 81,009 .

monthly interest rate.

During the nine months ended September 30, 2024

and 2023, the Company repaid the principal amount of $ 669,121 and $ 9,006 , respectively.

During the nine months ended September 30, 2024,

the Company settled 2 loans as follows:

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 .

amount of future receipts loan issued in April 2024 by early settlement.

As a result, the

Company recorded a loss on settlement of debt of $ 27,537 .

Loans payable - related parties at September

Loans payable - related parties at March 31,

2025 and December 31, 2024 consisted of the following:

September 30,

49% of Shareholder of SwissLink

6 unchanged sentences

Long-term loans payable - related parties

During the nine months ended September 30, 2024

and 2023, the Company recorded interest expense of $ 121,806 and $ 22,417 , respectively, and recognized amortization

of discount, included in interest expense, of $ 163,406 and $ 7,406 , respectively.

NOTE 7 - CONVERTIBLE NOTES

Convertible notes at September 30, 2024

and December 31, 2023 consisted of the following:

September 30,

During the three months ended March 31, 2025

and 2024, the Company borrowed from third parties totaling $ 543,478 and $ 0 , which includes original issue discount and

financing costs of $ 48,478 and $ 0 and repaid the principal amount of $ 449,438 and $ 8,885 , respectively.

During the three months ended March 31, 2025,

the Company issued a note payable of $ 1,000,000 for the earn out payment related to the April 1, 2024 acquisition of a subsidiary.

During the three months ended March 31, 2025

and 2024, the Company recorded interest expense of $ 99,675 and $ 9,053 and recognized amortization of discount, included

in interest expense, of $ 36,105 and $ 3,750 , respectively.

NOTE 9 - CONVERTIBLE LOANS

Convertible loans at March 31, 2025 and

December 31, 2024 consisted of the following:

Issued in fiscal year 2024

5 unchanged sentences

Long-term convertible notes

During the nine months ended September 30, 2024

and 2023, the Company recorded interest expense of $ 555,092 and $ 13,668 , respectively, and recognized amortization of discount, included

in interest expense, of $ 693,516 and $ 13,904 , respectively.

During the three months ended March 31, 2025

and 2024, the Company recorded interest expense of $ 245,821 and $ 139,979 and recognized amortization of discount,

included in interest expense, of $ 150,125 and $ 203,992 , respectively.

During the three months ended March 31,

2025, one note holder converted notes with principal amounts of $ 833,334 and conversion fee of $ 2,500 into 94,981

shares of common stock.

Issued in fiscal year 2025

During 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, respectively.

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, 2025,

the Company borrowed amounts from third parties totaling $ 1,113,316 , which includes original issue discount and financing costs of $ 125,816 .

February 26, 2025

December 30, 2025

5 payments, one payment of $ 268,470 and four payments of $ 67,118 , beginning in August 2025

February 26, 2025

December 30, 2025

5 payments, one payment of $ 66,120 and four payments of $ 16,530 , beginning in August 2025

March 4, 2025

December 5, 2025

The outstanding balance shall be paid on December 5, 2025

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.

Certain notes allow for the conversion price to be a fixed price

of $8.80 per share.

Issued in fiscal year 2024

On January 24, 2024, we entered into a securities

In 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

2 unchanged sentences

conversion price of $ 8.80 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.

Each noteholder received shares of common stock (“Kicker Shares”) in an

amount equal to ten percent of the principal amount of any Note issued divided by $8.80.

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

3 unchanged sentences

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

Additionally, during the nine months ended September

In October 2024, we entered into a Memorandum

of Understanding (the “Agreement”) with M2B Funding Corp.

to extend the maturity date on three promissory notes in exchange

for stock consideration.

Pursuant to the Agreement, the following promissory notes were extended by 12 months from their original date

Originally due January 1, 2025, with an outstanding amount of $ 1,888,889 , extended to January 1, 2026.

Originally due March 12, 2025, with an outstanding amount of $ 1,111,111 , extended to March 12, 2026 .

Originally due March 25, 2025, with an outstanding amount of $ 555,556 , extended to March 25, 2026 .

In consideration for this extension, the Company

issued 8,081 restricted common shares.

As a result of the extension, the Company recognized the loss on debt extinguishment of $ 297,878

as debt extinguishment and debt discount of $ 61,818 as debt modification during the year ended December 31, 2024.

Additionally, during the year ended December

31, 2024, the Company borrowed amounts from a third party totaling $ 2,413,707 , which includes original issue discount and financing

1 unchanged sentence

March 7, 2024

January 15, 2025

10 payments each in the amount of $ 16,453 beginning on April 15, 2024

8 unchanged sentences

5 payments, one payment of $ 86,617 and four payments of $ 21,654 , beginning in March 2025

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

October 15, 2024

July 15, 2025

9 payments each in the amount of $ 22,724 beginning on November 30, 2024

December 6, 2024

Outstanding balance shall be paid on June 4, 2025

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 nine months ended September

30, 2024, the Company converted notes with principal amounts of $ 333,333 and conversion fee of $ 3,750 into 3,064,394 shares

of common stock.

Certain notes allow for the conversion price to be a fixed price

of $12.0 per share.

NOTE 10 – STOCK PURCHASE OPTION

On January 14, 2025, the Company issued a Common

Stock Purchase Option (the “Option”) to ADI Funding LLC (“ADI Funding”) under a stock purchase agreement for

$ 100,000 that expires on July 14, 2025, for the right to acquire up to 187,500 shares of common stock.

The exercise price per share of

the common stock under the Option shall be 70% of the VWAP of the common stock during the then 10 Trading Days immediately preceding

but not including the date of exercise.

The obligation to exercise each specified portion of the Option is subject to the exercise price,

being not less than $8.80 per share on the relevant Option exercise date .

As of March 31, 2025, the Company did not receive the

$ 100,000 and the options were not in effect, and the Options had no impact to the accompanying financial statements.

NOTE 11 – STOCKHOLDERS’ EQUITY

The Company’s authorized capital consists

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

During the nine months ended September 30, 2024,

The Board of Directors of the Company approved

a reverse stock split of the Company’s authorized, issued and outstanding shares of Common Stock at a ratio of 1-for-80, effective

on May 2, 2025.

The Company amended its certificate of incorporation

to reduce the number of authorized shares of Common Stock that it may issue from 300,000,000 shares to 3,750,000 shares with a par value

of $ 0.001 per share.

During the three months ended March 31, 2025,

the Company issued 100,419 shares of common stock, valued at fair market value on issuance as follows:

• 1,875 shares for compensation to our directors valued at $ 32,815 .

• 1,770,000 shares for settlement of debt valued at $ 279,660 ;

• 3,535,354 shares in conjunction with convertible notes valued at $ 597,777 ;

• 5,227,273 shares for exercise of warrants for $ 575,000 ;

• 94,981 shares for conversion of debt of $ 835,834 .

As of September 30, 2024 and December 31, 2023, 186,176,651 and 172,129,630 shares

of common stock were issued and outstanding, respectively.

Stock payable

During the nine months ended September

30, 2024, the Company received cash of $ 100,000 for 2,450,000 shares to be issued.

As of September 30, 2024 and December

31, 2023, the Company recorded stock payable of $ 171,061 and $ 71,061 under additional paid in capital for 2,586,452 and 136,452 shares

to be issued, respectively.

Preferred Stock

The Company’s authorized capital consists

of 1,200,000 shares of preferred stock with a par value of $ 0.001 per share.

3,563 shares for common stock payable value at $ 82,194 .

As of March 31, 2025 and December 31, 2024, 2,637,628

and 2,537,209 shares of common stock were issued and outstanding, respectively.

Series A Preferred Stock

9 unchanged sentences

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

As of September 30, 2024 and December 31, 2023, 10,000 shares

As of March 31, 2025 and December 31, 2024, 10,000 shares

of Series A Preferred Stock were issued and outstanding.

3 unchanged sentences

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, or liquidation

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, 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 .

As of September 30, 2024 and December 31, 2023, 31,080 shares

of Series B Preferred Stock were issued and outstanding.

after twelve months from the issuance date, at a conversion rate of twelve point five (12.5) 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.

As of March 31, 2025 and December 31, 2024, 35,537

shares of Series B Preferred Stock were issued and outstanding.

Series C Preferred Stock

2 unchanged sentences

consisting of up 200,000 shares, par value $ 0.001 .

Under the Certificate of Designation, holders of Series C Preferred

Stock will rank junior to the Series B Preferred Stock, but on par with common stock and Series A Preferred Stock in any distribution

Under the Certificate of Designation, holders of Series C

Preferred Stock will rank junior to the Series B Preferred Stock, but on par with common stock and Series A Preferred Stock in any distribution

upon winding up, dissolution, or liquidation of the company, as provided in the designation.

2 unchanged sentences

for that purpose .

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

twenty four 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 C Preferred Stock.

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

four months from the issuance date, at a conversion rate of twelve point five (12.5) shares of Common Stock for every one (1) share of

Series C Preferred Stock.

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

2 unchanged sentences

Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on January 7, 2021.

As of September 30, 2024 and December 31, 2023, no Series

As of March 31, 2025 and December 31, 2024, no Series

C Preferred Stock was issued or outstanding.

7 unchanged sentences

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

The holders of shares of Series

T he 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

1 unchanged sentence

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 .

at a conversion rate of twelve point five (12.5) 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.

As of September 30, 2024 and December 31, 2023, no Series

As of March 31, 2025 and December 31, 2024, no Series

D Preferred Stock was issued or outstanding.

1 unchanged sentence

Due from related party

As of September 30, 2024 and December 31, 2023,

the Company had amounts due from related parties of $ 635,715 and $ 340,515 , respectively.

The loans are unsecured, non-interest

bearing and due on demand.

During the three months ended March 31, 2025

and 2024, the Company loaned $ 9,462 and $ 51,230 to a related party, respectively.

As of March 31, 2025 and December 31, 2024, the

Company had amounts due from related parties of $ 638,177 and $ 630,715 , respectively.

The loans are unsecured, non-interest bearing

and due on demand.

Due to related parties

As of September 30, 2024 and December 31, 2023,

the Company had amounts due to related parties of $ 26,613 .

As of March 31, 2025 and December 31, 2024, the

Company had amounts due to related parties of $ 26,613 .

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

Employment agreements

During the nine months ended September 30, 2024

and 2023, the Company recorded management salaries of $ 634,500 and $ 402,000 , respectively, and stock-based compensation

bonuses of $ 109,485 and $ 30,945 , respectively.

As of September 30, 2024 and December 31, 2023,

the Company recorded and accrued management salaries of $ 316,448 and $ 100,128 , respectively.

During the three months ended March 31, 2025

and 2024, the Company recorded management salaries of $ 211,500 , and stock-based compensation bonuses of $32,815 and $31,065,

respectively.

As of March 31, 2025 and December 31, 2024, the

Company recorded and accrued management salaries of $ 518,947 and $ 420,447 , respectively.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

3 unchanged sentences

The Company leases facilities which the term is 12 months .

For the nine months ended September

For the three months ended March 31,

2025 and 2024, the Company incurred rent expense of $ 6,974 and $ 7,122 , respectively.

NOTE 11 – 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, which was credited against the Purchase Price.

At closing, in addition to the $ 1,500,000 with

the Escrow Agent that formed part of the Purchase Price, we were 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 to

Seller could decide the form of payment between the Promissory Note or the shares of iQSTEL, and if a Promissory Note was chosen,

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

On June 27, 2024, we entered into a second

amendment to the Purchase Agreement (the “Amendment”) that required us to issue an amended and restated promissory note to

We had paid down $ 200,000 of the note, so the amended and restated promissory note was issued in the principal amount

of US $ 1,800,000 .

The amended and restated promissory note also changed the payment structure, from installment payments of $ 200,000 for

each of the months of May through November ($1,400,000) with a balloon payment of $ 600,000 , to monthly installments of $ 75,000 plus

interest during 2024, and $ 212,500 plus interest during the first 6 months of 2025.

We also revised the Earnout Payment

due to the Seller.

The Earnout Payment was redefined at $ 721,035 net income, to be achieved in Q2, Q3 and Q4 of 2024 .

The $ 1,000,000 payment

that IQSTEL has to pay upon achievement of the Earnout Payment will be paid during the first half of 2025, in monthly installments.

During the nine months ended September 30, 2024,

the Company repaid $ 500,000 on the Promissory Note.

The acquisition was closed on April 1, 2024 .

has been included in our consolidated results of operations since the acquisition date.

The following table summarizes the fair value

of the consideration paid by the Company:

Fair Value of Consideration:

Promissory note

Contingent liability

Total Purchase Price

The following table summarizes the preliminary

identifiable assets acquired and liabilities assumed upon acquisition of QXTEL and the calculation of goodwill:

Total purchase price

Accounts receivable

Due from related party

Total identifiable assets

Accounts payable

( 14,796,505 )

Other current liabilities

Total liabilities assumed

( 15,200,089 )

Non-controlling interest - 49%

Total net assets

Unaudited combined proforma results of

operations for the nine months ended September 30, 2024 and 2023 as though the Company acquired QXTEL on January 1, 2023, are set forth

Nine Months Ended

September 30,

$ 212,029,873

$ 156,944,034

Cost of revenues

Operating expenses

Operating loss

Other income (expense)

( 2,646,275 )

Net income (loss)

$ ( 3,424,306 )

NOTE 14 - SEGMENT

At September 30, 2024 and December 31, 2023,

The Company operates in one industry segment, telecommunication services, and three geographic segments, USA, UK and Switzerland, where

current assets and equipment are located.

The Company's chief operating decision maker ("CODM") is its chief financial officer,

who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance.

The CODM uses operating activities and net assets to assess financial performance and allocate resources.

These financial metrics are

used by the CODM to make key operating decisions, such as the determination of the rate at which the Company seeks to grow, the allocation

of budget between cost of sales and operating expenses and the management of assets.

Operating Activities

The following table shows operating activities

information by geographic segment for the three and nine months ended September 30, 2024 and 2023:

Three months ended September 30, 2024

NOTE 12 - SEGMENT - Schedule of Operating Activities Information by Geographic Segment

$ ( 605,513 )

Cost of revenue

Operating expenses

General and administration

Operating income (loss)

Other expense

Income tax expense

Net income (loss)

$ ( 946,652 )

information by geographic segment for the three months ended March 31, 2025 and 2024:

Three months ended March 31, 2025

NOTE 14 - SEGMENT - Operating Activities by Geographic

Segment (Details)

$ ( 13,409,141 )

Three months ended September 30, 2023

( 13,397,244 )

Cost of revenue

Wages and Benefits

and Regulatory

Services and Fees

and Amortization

Facility and Other

and administration

income (loss)

income (expense)

income (loss)

$ ( 1,125,685 )

Operating expenses

General and administration

Operating income

Other expense

Nine months ended September 30, 2024

$ ( 171,313 )

$ ( 1,144,461 )

Three months ended March 31, 2024

$ ( 1,732,298 )

2 unchanged sentences

Operating expenses

Salaries, Wages and Benefits

Professional Fees

Legal and Regulatory

Travel and Events

Bank Services and Fees

Depreciation and Amortization

Office, Facility and Other

Bad Debt Expense

Stock-based compensation

General and administration

Operating income (loss)

( 1,115,156 )

Operating loss

Other income (expense)

( 2,666,763 )

( 2,646,275 )

Income tax expense

2 unchanged sentences

$ ( 580,216 )

Nine months ended September 30, 2023

$ ( 4,129,344 )

Cost of revenue

( 4,129,344 )

Operating expenses

General and administration

Operating income (loss)

Other income (expense)

Net income (loss)

$ ( 298,694 )

$ ( 274,557 )

Asset Information

The following table shows asset information

by geographic segment as of September 30, 2024 and December 31, 2023:

12 - SEGMENT - Schedule of Asset Information by Geographic Segment

September 30, 2024

by geographic segment as of March 31, 2025 and December 31, 2024:

March 31, 2025

Current assets

6 unchanged sentences

December 31, 2024

$ ( 693,424 )

$ ( 6,184,562 )

Current assets

$ ( 13,107,888 )

NOTE 13 – WARRANTS

On February 12, 2024, we issued a Common Stock

Purchase Option (the “Option”) to ADI Funding LLC (“ADI Funding”) for $ 100,000 that expires on

December 31, 2024, for the right to acquire up to 10,000,000 shares of common stock.

The exercise price per share of the

common stock under the Option shall be (i) 70% of the VWAP of the common stock during the then 10 Trading Days immediately preceding,

but not including the date of exercise if the VWAP is below $2.00 or (ii) seventy five percent (75%) of the VWAP of the common stock during

the then 10 Trading Days immediately preceding, but not including the date of exercise if the VWAP is equal or above $2.00 .

ADI Funding has the right and the obligation

to exercise, on a “cash basis”, not less than (i) 2,000,000 of the shares of common stock underlying the option not later

than the later of March 31, 2024 or the date on which there is an effective registration statement permitting the resale of the shares

by ADI Funding.

From and after the occurrence of the above-referenced exercise, each additional exercise of the Option shall be in an

amount not less than 1,000,000 shares, which shall occur every thirty (30) days and shall be exercised only on a cash basis.

ADI Funding’s

obligation to exercise each specified portion of the Option is subject to the exercise price being not less than $0.11

If the Company issues securities less than the

exercise price of the option, ADI Funding has a right to also use that lesser price in the exercise of its Option.

The Option also contains

rights to any Company distributions and consideration in fundamental transactions.

The Company accounts for warrants as either equity-classified

or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance

in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition

of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including

whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net

cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification.

assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly

period end date while the warrants are outstanding.

The Company determined that the warrants had

net cash settlement and categorized the warrants as a liability in the accompanying consolidated financial statements.

A summary of activity regarding warrants

issued as follows:

Weighted Average

Weighted Average Remaining

life (in years)

Outstanding, December 31, 2023

Non-current assets

$ ( 12,184,562 )

Forfeited/canceled

Outstanding, September 30, 2024

The intrinsic value of the warrants as of September

30, 2024 is approximately $ 253,000 .

All of the outstanding warrants are exercisable as of September 30, 2024;

however, each exercise

is subject to a beneficial ownership limitation of 4.99 % of the Company’s outstanding common stock, which, upon notice,

may be increased to 9.99 % .

Fair Value Assumptions Used in Accounting

for Derivative Liabilities

ASC 815 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.

The Company 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, 2024.

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.

As of September 30, 2024, the estimated

fair values of the liabilities measured on a recurring basis are as follows:

Expected term

0.25 - 0.65 years

Expected average volatility

Expected dividend yield

Risk-free interest rate

Current liabilities

$ ( 13,107,888 )

The following table summarizes the changes in

the derivative liabilities during the nine months ended September 30, 2024:

Fair Value Measurements Using Significant Observable

Inputs (Level 3)

Balance - December 31, 2023

Addition of new derivatives recognized as cash received

Exercise on issuance of common stock

Change in fair value of the warrant

Balance - September 30, 2024

Non-current liabilities

NOTE 15 – SUBSEQUENT EVENTS .

Subsequent to September 30, 2024, and through

the date that these financials were made available, the Company had the following subsequent events:

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

The Company subsequently

elected to halt the due diligence and there are no assurances that the proposed deal will close as planned.

On October 18, 2024, we entered into a Memorandum

of Understanding (the “Agreement”) with M2B Funding Corp.

to extend the maturity date on three promissory notes in exchange

for stock consideration.

Pursuant to the Agreement, the following promissory notes were extended by 12 months from their original date

Originally due January 1, 2025, with an outstanding amount of $1,888,888.89, now extended to January 1, 2026.

Originally due March 12, 2025, with an outstanding amount of $1,111,111.11, now extended to March 12, 2026.

Originally due March 25, 2025, with an outstanding amount of $555,555.56, now extended to March 25, 2026.

In consideration for this extension, we agreed

to issue 646,467 restricted common shares to M2B Funding Corp.

On November 1, 2024, we entered into a

binding Memorandum of Understanding (the “Agreement”) with Mr.

Ralf Koehler ("Ralf"), SwissLink Carrier Ltd., ("SwissLink")

and Impact Trading & Consulting LLC ("Impact") for the purpose of outlining the understanding regarding the exchange of

49% ownership in SwissLink for our shares.

Pursuant to the Agreement, the parties agreed that the execution of the final agreement will

be subject to mutual consent and negotiations based on the terms already agreed below:

• The agreed valuation to purchase

Ralf’s 49% ownership interest in SwissLink is set at $750,000 USD.

• The term of this agreement will

be for five (5) years plus six (6) months (“Termination Date”), commencing on the date of the execution of the final agreement

("Final Agreement").

• Ownership will be transferred

from Ralf to us in tranches, with each tranche comprising up to 10% of ownership per year.

• The option to execute each tranche

can be initiated by Ralf within each one-year period through the submission of a "trigger letter" by e-mail to us.

not exercise his right to trigger the agreement during any year, we reserve the right to initiate the tranche execution at any point thereafter.

• Share Calculation:

of iQSTEL shares to be provided in exchange for each tranche will be determined based on the lowest closing price of iQSTEL shares over

the 90 days preceding the delivery of the trigger letter.

Ralf will receive

a 20% discount on the above calculated share price;

provided however, that the above calculated share price, without the discount, shall

count toward the purchase price in determining whether Ralf has received the full $750,000 USD valuation for his 49% ownership interest

in SwissLink.

• If, after the execution of all

tranches, Ralf has not received the full $750,000 USD valuation, we or our legal successor will pay the difference in cash until the full

valuation is realized based on the Weighted Volume Average Price (WVAP) of our shares for the last 15 trading days prior to the Termination

Date for shares still in Ralf's possession, and/or the actual selling price for shares already sold by Ralf.

In addition, under the Agreement, Impact

agreed to render advisory services up to 60 hours per month to SwissLink and ETELIX, our wholly owned subsidiary, at 8,000 CHF per month

(excluding VAT) for a maximum of two years.

Next, SwissLink acknowledges a debt of

200,000 CHF owed to Ralf, which will be repaid in monthly installments of 8,000 CHF until the debt is fully repaid.

Finally, Ralf will continue to grant SwissLink

non-exclusive access to the VAMP platform, with the same cost and expense structure as outlined in the Share Purchase Agreement between

iQSTEL and Ralf, dated April 1, 2019.

Subsequent to March 31, 2025 and through the

date that these financials were made available, the Company had the following subsequent events:

On March 10, 2025, the Company signed a non-binding

memorandum of understanding (“MOU”) with Accredited Solutions, Inc.

(“ASII”) to set forth the preliminary terms

and mutual understanding between the parties regarding the Company’s potential sale of its 75% equity interest in ItsBchain, LLC

(the “Subsidiary”) to ASII, subject to the negotiation and execution of a definitive Purchase Agreement.

The parties have

agreed to execute the Purchase Agreement no later than June 1, 2025.

Under the MOU, in exchange for the 75% interest

in the Subsidiary, ASII proposes paying $1,000,000 to the Company as follows:

in restricted preferred shares of ASII, the terms and features of which will be available prior to execution of the Purchase Agreement,

but should contain preferential treatment on the stated value in any liquidation of ASII and a conversion price of the lowest stock price

with a 10 day look back at conversion (but with a conversion limitation of 4.99%, but no greater than 9.99%), ensuring IQSTEL’s

value is preserved regardless of fluctuations in ASII’s common stock price.

in restricted common shares of ASII, which are expected to be registered by ASII in a resale offering that is filed on Form S-1 with the

SEC within an agreed time from the close of the Purchase Agreement.

At some time in the future, the Company plans

to distribute the ASII common shares as dividends to its shareholders.

Further under the MOU, the Company will retain

a 1% lifetime royalty on the Subsidiary’s total sales.

The Company acknowledges a remaining investment commitment of $65,000 related

to the Subsidiary.

This amount will be paid in monthly installments of $2,500 directly to the Subsidiary.

On March 19, 2025, IQSTEL Inc.

(the “Company”)

signed a non-binding memorandum of understanding (“MOU”) with Craig Span (the “Seller”) to set forth the preliminary

terms and mutual understanding between the parties regarding the Company’s potential purchase a 51% equity interest in GlobeTopper,

LLC, a Delaware limited liability company (the “GlobeTopper”) held by the Seller, subject to the negotiation and execution

of a definitive Purchase Agreement.

The parties have agreed to execute the Purchase Agreement no later than July 1, 2025, or sooner.

Under the MOU, in exchange for the 51% interest

in the GlobeTopper, the Company proposes paying $700,000 to the Seller with $200,000 in cash over a period set forth in a schedule extending

to September 1, 2025, and $500,000 in common stock of the Company with a share price calculated at a 20% discount to the Volume Weighted

Average Price (VWAP) over the five days preceding execution of a definitive Purchase Agreement.

Further under the MOU, the Company will pay performance

bonuses in 2025 and 2026 based on EBITDA growth of GlobeTopper in shares of common stock of the Company using the same discounted VWAP

formula above.

To support GlobeTopper’s growth, the MOU

provides that the Company will provide up to $1,200,000 in structured financing across 24 months after execution, disbursed in monthly

installments of $50,000, contingent upon meeting quarterly financial targets.

To ensure stability and operational continuity,

the Seller will continue to serve as CEO to GlobeTopper, and 2 of the 3 board members will be selected by the Company.

The Board of Directors of the Company approved

a reverse stock split of the Company’s authorized, issued and outstanding shares of Common Stock at a ratio of 1-for-80, effective

on May 2, 2025.

The Company amended its certificate of incorporation to reduce the number of authorized shares of Common Stock that it

may issue from 300,000,000 shares to 3,750,000 shares of Common Stock with a par value of $0.001 per share.

All share and per share amounts

and related stockholders' equity balances presented herein have been retroactively adjusted to reflect the Reverse Stock Split.

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