What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-04-06 compared with 2025-03-31 · 456 added, 157 removed, 31 unchanged (95% of the section changed)

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

statements in this Annual Report constitute forward-looking statements.

See " Forward-Looking Statements" immediately prior

to Item 1 of Part I of this report for factors relating to these statements and "Risk Factors" in Item 1A of Part I of this

report for a discussion of certain risk factors applicable to our business, financial condition, results of operations, liquidity or

of Operations for the Years Ended December 31, 2024 and 2023

net revenue for the year ended December 31, 2024 was $283,220,442 as compared with $144,502,351 for the year ended December 31, 2023.

These numbers reflect an increase of 96% year over year on our consolidated Revenues.

looking at the numbers by subsidiary, we have the following breakout for the years ended December 31, 2024 and 2023:

Discussion and Analysis of Financial Condition and Results of Operations

Certain statements in this Annual Report constitute

forward-looking statements.

See " Forward-Looking Statements" immediately prior to Item 1 of Part I of this report for factors

relating to these statements and "Risk Factors" in Item 1A of Part I of this report for a discussion of certain risk factors

applicable to our business, financial condition, results of operations, liquidity or prospects.

Results of Operations for the Years Ended December

31, 2025 and 2024

Our net revenue for the year ended December 31, 2025

was $316,899,498 as compared with $283,220,442 for the year ended December 31, 2024.

These numbers reflect an increase of 12% year over

year on our consolidated Revenues.

When looking at the numbers by subsidiary, we have

the following breakout for the years ended December 31, 2025 and 2024:

Year Ended December 31,

Etelix.com USA, LLC

SwissLink Carrier AG

Smartbiz Telecom

Whisl Telecom

QXTEL Limited

GlobeTopper LLC

$ 358,740,684

$ 306,039,424

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.

In fact, 38% of the increase was organic grow, while the remaining 62% was due to the

acquisition of QXTEL Inc.

total cost of revenue for the year ended December 31, 2024 was $274,948,693 as compared with $139,830,338 for the year ended December

looking at the numbers by subsidiary, we have the following breakout for the years ended December 31, 2024 and 2023:

(41,841,186 )

(22,818,982 )

$ 316,899,498

$ 283,220,442

The continued growth in revenue is the

result of the development of our commercial strategy, including the strengthening of our commercial and operational activities, as well

as intercompany synergies developed throughout the year.

The largest revenue concentration comes from IOT, which increased by 25% compared

to last year, and QXTEL, which since its inclusion in mid-2024 continues to represent the highest share of revenue, accounting for 39%

of the total volume for this period.

The increase also includes the contribution from the newly acquired subsidiary, GlobeTopper LLC,

which was consolidated starting July 1, 2025.

In 2024, our revenue was entirely derived

from telecommunications services, with approximately 33.91% generated from SMS and 66.09% from voice.

In 2025, our revenue mix evolved

meaningfully:

SMS increased to 36.6%, voice represented 54.51%, and our newly launched fintech operations contributed 8.89% of total

The continued expansion of SMS traffic is strategically beneficial, as SMS services generally carry higher gross margins than

traditional voice offerings, supporting improvements in our overall profitability profile.

In addition, the introduction of fintech as

a new revenue-generating segment reflects the early stages of a broader diversification strategy, reducing reliance on a single business

line and positioning the Company with a more balanced and resilient revenue base over time.

Intercompany eliminations rose as well,

driven by higher transactions among group entities, which are removed to avoid double counting at the consolidated level.

These intercompany transactions are part of our strategy

to optimize operations across subsidiaries by leveraging more efficient routing alternatives for our voice and SMS services, cost reductions,

and improved service delivery.

This synergy among our entities strengthens our position in the market and contributes to enhanced gross

margin results.

Cost of Revenue

Our total cost of revenue for the year ended

December 31, 2025 was $307,442,244 as compared with $274,948,693 for the year ended December 31, 2024.

When looking at the numbers by subsidiary, we have

the following breakout for the years ended December 31, 2025 and 2024:

Revenue Year Ended December 31,

Etelix.com USA, LLC

SwissLink Carrier AG

Smartbiz Telecom

Whisl Telecom

QXTEL Limited

GlobeTopper LLC

$ 348,802,151

$ 297,488,346

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 our vendors’ networks.

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

We have reached a higher volume of revenue

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

margin, which is simply the difference between our revenues and our cost of sales, discussed above, increased from $4,672,013 in 2023

to $8,271,749 in 2024, which is an increase of 77.05% year-over-year.

expenses for the year ended December 31, 2024 were $9,105,813, as compared with $4,987,516 for the year ended December 31, 2023.

detail by major category is reflected in the table below.

(41,359,907 )

(22,539,653 )

$ 307,442,244

$ 274,948,693

Our 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, as well as the costs of the digital prepaid products related to Fintech (GlobeTopper) operations.

The behavior in the costs shows a logical correlation

with the behavior of the revenue commented above.

We have reached a higher volume of revenue and every additional unit sold (Telecom

and Fintech) has its corresponding termination cost.

Our cost of revenue for the year ended December 31,

2025 was $307,442,244 as compared with $ 274,948,693 for the year ended December 31, 2024.

These numbers reflect an increase of 12% year

The consolidation of GlobeTopper, along with the

traffic volumes generated by QXTEL and the portfolio reorganization among subsidiaries, highlights the synergies created through the

group’s commercial and operational integration.

As a result, intercompany transactions have increased, supporting our strategy

to optimize routing and improve cost efficiency.

This is expected to contribute positively to future revenue and margin performance.

Our gross margin, which is simply the difference

between our revenues and our cost of sales, discussed above, increased from $8,271,749 in 2024 to $9,457,254 in 2025, which is an increase

of 14% year-over-year.

The Company’s traffic mix continues to shift

toward higher-margin services, reinforcing the strategic evolution of its telecom portfolio.

In 2025, the business carried 17.4 billion

SMS and short-code messages, up from 13.9 billion in 2024, an increase of 3.5 billion messages or 25.18% year over year.

While this growth

follows an exceptional 32.94% expansion from 2023 to 2024, the sustained double-digit trajectory highlights the strengthening role of

SMS within the Company’s service mix.

Because SMS consistently delivers superior gross margins compared to traditional voice, this

shift not only expands volumes but also enhances the overall profitability profile of the communications segment, signaling a deliberate

and effective enrichment of the Company’s product offering

This trend is reflected in our quarterly performance:

total gross margin increased from 2.74% in the fourth quarter of 2024 to 3.46% in the fourth quarter of 2025, representing a 26.17% year-over-year

Cost of Revenue for the Three Months

Ended December 31,

Cost of Revenue

Gross margin %

Operating Expenses

Operating expenses for the year ended December 31, 2025 were $13,709,264

as compared with $9,105,813 for the year ended December 31, 2024.

The detail by major category is reflected in the table below:

Expenses Year Ended December 31,

Salaries, Wages and Benefits

Professional Fees

Legal and Regulatory

Legal & Regulatory

Travel & Events

Bad Debt Expense

Depreciation and Amortization

Bank Services and Fees

Depreciation and Amortization

Office, Facility and Other

Sales Commissions

Bad debt expense

Stock-based compensation

Total Operating Expenses

Expenses by subsidiary are as follows:

Impairment loss

When looking at the numbers by subsidiary, we have

the following:

Expenses Year Ended December 31,

Etelix.com USA, LLC

SwissLink Carrier AG

Global Money One

Operating Expenses

is a significant increase of 82.57% in Operating Expenses for 2024 when compared with 2023;

however, more than half of that increase

(54%) is due to the inclusion of QXTEL in the consolidated financial statements in the year 2024.

Another 29% of that increase is

due to an increment in IQSTEL's operating expenses concentrated in the categories of Salaries, Wages and Benefits ($442,003 higher

than in 2023), Advertising ($372,908 higher than in 2023) and Stock-based compensation ($180,329 higher than in 2023) Finally, the

third largest expense item contributing to the increase of Operating Expanses is related to technology.

Income (Expenses)

had other expenses of $3,951,942 for the year ended December 31, 2024, as compared with other income of $96,067 for the year ended December

The increase in Other Expenses in 2024 compared to 2023 is due to (1) the negative change in fair value of derivative liabilities

of $1,393,046 for the year ended December 31, 2024 from a positive value of $381,848 for the year ended December 31, 2023;

(2) the increase

of interest expenses to $2,159,425 in 2024 from $94,908 in 2023 and (3) a loss on settlement of debt of $482,085 in 2024.

finished the year ended December 31, 2024 with a loss of $5,180,036 as compared to a loss of $219,436 during the year ended December

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.

Telecom Division, the division presently generating revenue, has positive operating income when presented separately from the rest of

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, such as Fintech and Cybersecurity.

telecom division revenues have increased by 96% from $144,502,351 in 2023 to $283,220,442 in 2024.

Additionally, its gross profit has

risen by 77%, going from $4,672,013 to $8,271,749;

operating income has grown by 40% from $1,474,218 to $2,063,148;

and net income has

increased by 33%, rising from $1,290,646 to $1,710,241.

These double-digit growth figures demonstrate the strong performance of our telecommunications

Telecom Division

Pre-revenue companies

Year Ended December 31, 2024

Year Ended December 31, 2023

Year Ended December 31, 2024

Year Ended December 31, 2023

Year Ended December 31, 2024

Year Ended December 31, 2023

Year Ended December 31, 2024

Year Ended December 31, 2023

Cost of revenue

Operating expenses

General and administration

Smartbiz Telecom

Whisl Telecom

QXTEL Limited

GlobeTopper LLC

Impairment loss

General and administration expenses increased

from $9,105,813 to $13,709,264 as of December 2025.

IQSTEL represents the largest share of general and administration expenses for the

period at 30%, followed by QXTEL with 28%.

The increase compared to the prior year

is mainly driven by the expansion of the group and the consolidation of QXTEL and GlobeTopper.

The most significant variations include

the increase in technology expenses related to the deployment and upgrade of the switching platform to support all subsidiaries, which

is expected to generate cost efficiencies once the migration process is completed.

Additionally, the Company recognized a

non-cash goodwill impairment of $2,168,552.

Including this effect, total operating expenses reached $13,709,264, representing an increase

of 50.56% compared to the prior year.

This adjustment is non-recurring in nature and does not impact cash flow.

The underlying increase in operating expenses is

primarily related to higher salaries, depreciation and amortization, and general administrative costs, in line with the growth of the

business and the integration of newly consolidated subsidiaries.

Advertising expenses also increased to support commercial expansion,

while insurance expenses decreased during the period.

We are continually identifying operational synergies

among all of our subsidiaries to be more cost efficient.

Other Income (Expenses)

We had other expenses of $4,136,551 for

the year ended December 31, 2025, as compared with other expense of $3,951,942 for the year ended December 31, 2024.

The increase in

Other Expenses in 2025 compared to 2024 is due largely to the loss on settlement of debt and salary payable of $2,441,462 for the year

ended December 31, 2025 compared to $482,085 for the year ended December 31, 2024.

We finished the year ended December

31, 2025 with a net loss of $8,510,266 as compared to a loss of $5,180,036 during the year ended December 31, 2024.

The results for the

period were significantly impacted by expenses at the holding entity (IQSTEL), which include a high component of interest and other financial

expenses related to the funds borrowed for the acquisition of QXTEL Limited.

Additionally, during 2025, the Company

recognized a non-cash goodwill impairment of $2,168,552, which represents a material, non-recurring expense for the period and does not

impact the Company’s cash flow.

Excluding this effect, the variation in net loss would have been less pronounced.

Our Telecom Division, currently the primary

source of revenue for the Company, continued to generate positive Operating Income.

Meanwhile, our pre-revenue companies are operating

with minimal expenses, focused solely on completing product and service development prior to their market launch.

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, such as Fintech which is already generating revenue, Cybersecurity and AI.

A comparison of the tables below highlights the progress

of our Telecom Division, as evidenced by the increase in revenue, gross profit, and operating income for both the three- and twelve-month

periods ended December 31, 2025.

As we have previously stated, our strategy remains centered on strengthening the telecommunications

segment to serve as a growth engine for the development and expansion of new business lines.

Our telecom division revenues have increased

year over year.

Additionally, its gross profit has risen by 6%, going from $8,271,749 to $8,737,399.

On the other hand, our Fintech division

continues to strengthen its position within the Group’s strategy.

For the year ended 2025, the division reported revenues of $27,955,101

and operating expenses of $547,002, resulting in operating income of $4,868 and net income of $2,176.

This performance reflects the initial contribution

from GlobeTopper, which was incorporated during 2025 and represents an important milestone for the development of this business line.

While the division did not generate profits in 2024, the progress achieved in 2025 demonstrates the Company’s commitment to expanding

its presence in the fintech segment and leveraging new opportunities that can also support the growth of our other business lines.

Ended Dec 31, 2025

Ended Dec 31, 2024

Ended Dec 31, 2025

Ended Dec 31, 2024

Ended Dec 31, 2025

Ended Dec 31, 2024

Ended Dec 31, 2025

Ended Dec 31, 2024

Ended Dec 31, 2025

Ended Dec 31, 2024

and administration

loss of goodwill

Total Operating Expenses

Operating income/(loss)

Other income (expense)

Net income (loss) before income taxes

Net income (loss)

Depreciation and amortization

Interest expense

Change in fair value of derivative liabilities

Loss on settlement of debt

Stock-based compensation

Adjusted EBITDA

evaluating our financial performance, we utilize Adjusted EBITDA as a supplemental measure to provide insights into the profitability

of our core operations.

(Please see Adjusted EBITDA, which is reconciled to the Net Income in the table above.) Adjusted EBITDA excludes,

in addition to non-operational expenses like interest expenses, taxes, depreciation and amortization;

items that we believe are not indicative

of our operating performance, such as:

income (expense)

(loss) before income taxes

(10,179,280 )

income (loss)

(10,182,842 )

and Amortization

FX Gains/Losses

on settlement of debt

on settlement of salary payable

loss of goodwill

non recurrent

in fair value of derivatives

In evaluating our financial performance, we utilize

Adjusted EBITDA as a supplemental measure to provide insights into the profitability of our core operations.

(Please see Adjusted EBITDA,

which is reconciled to the Net Income in the table above.) Adjusted EBITDA excludes, in addition to non-operational expenses like interest

expenses, taxes, depreciation and amortization;

items that we believe are not indicative of our operating performance, such as:

Change in Fair Value of Derivative Liabilities:

These adjustments reflect unrealized gains or losses that are non-operational and subject to market volatility.

adjustments reflect unrealized gains or losses that are non-operational and subject to market volatility.

Loss on Settlement of Debt:

This represents non-recurring expenses associated with specific financing activities and does not impact ongoing business operations.

This represents non-recurring

expenses associated with specific financing activities and does not impact ongoing business operations.

Stock-Based Compensation:

As a non-cash expense, this adjustment eliminates variability caused by equity-based incentives.

believe Adjusted EBITDA offers a clearer view of the cash-generating potential of our business, excluding non-recurring, non-cash, and

non-operational impacts.

on the analysis of our Adjusted EBITDA our Telecom Division is a high-performing division that generates strong operational profits.

Adjusted EBITDA has increased 86% from $1,419,383 as of December 31, 2023 to $2,645,417 as of December 31, 2024.

figures show a slightly negative Adjusted EBITDA;

while this isn’t ideal, in our opinion it implies the Company is close to breaking

even and might achieve positive Adjusted EBITDA with small improvements in efficiency or revenue growth.

We are in a transitional period,

scaling operations and investing heavily in growth initiatives with the execution of our M&A plan.

Management has also identified

areas for cost-cutting and operational improvements and has acted in that direction.

and Capital Resources

of December 31, 2024 we had total current assets of $63,015,046, compared with total current liabilities of $63,821,196, resulting in

a negative working capital of $ 806,150 and a current ratio of approximately 0.99 to 1.

The negative working capital is due largely to

loans payable of $2,455,641.

is a table with summary data from the consolidated statements of cash flows for the years ended December 31, 2024 and 2023, as presented.

As a non-cash expense, this

adjustment eliminates variability caused by equity-based incentives.

Impairment loss of Goodwill:

This represents a non-cash,

non-recurring charge related to the deterioration in the value of goodwill and does not impact the Company’s cash flow.

Tax Provision:

This adjustment reflects the recognition

of income tax expense, which may vary depending on jurisdictional results and does not directly reflect the Company’s core operating

We believe Adjusted EBITDA offers a clearer view

of the cash-generating potential of our business, excluding non-recurring, non-cash, and non-operational impacts.

According to our adjusted EBITDA analysis, our Telecommunications

division continues to be a high-performing segment generating solid operating profits, as adjusted EBITDA for the current period increased

by 2.35% compared to the prior period.

Meanwhile, the contribution of our Fintech business, which debuted with an EBITDA of $19,983,

representing a significant milestone in the diversification of our business lines and supporting the Company's long-term growth strategy.

Consolidated figures show a negative Adjusted EBITDA;

while this isn’t ideal, we are in a transitional period, scaling operations and investing heavily in growth initiatives with the

execution of our M&A plan.

Management has also identified areas for cost-cutting and operational improvements and has acted in that

Goodwill Impairment Analysis

During the year ended December 31, 2025, the Company

performed its annual goodwill impairment assessment in accordance with ASC 350, Intangibles—Goodwill and Other .

with our policy, each reporting unit was evaluated by comparing its estimated fair value to its carrying amount.

Management engaged an

independent valuation firm to assist in the determination of fair value using a discounted cash flow approach and market participant

The analysis indicates, “the carrying value of SwissLink Carrier AG, IoT Labs, LLC, Smartbiz Telecom, LLC and Whisl

Telecom are in excess of its fair value indicating impairment in the amount of $402,445, $81,782, $796,690, and $887,635, respectively.”

Based on this analysis, the Company recorded total

goodwill impairment charges of approximately $2.17 million for the year ended December 31, 2025.

These non-cash charges reflect changes

in the long-term financial outlook of the affected reporting units, including updated assumptions regarding revenue growth, margin performance,

and discount rates.

The impairment charges do not impact the Company’s liquidity, cash flows from operations, or compliance with

debt covenants.

Management will continue to monitor macroeconomic conditions, reporting-unit performance, and other triggering events

that may require interim impairment testing.

Liquidity and Capital Resources

As of December 31, 2025 we had total current assets

of $36,162,424, compared with total current liabilities of $34,606,407, resulting in a positive working capital of $ 1,556,017 and a

current ratio of approximately 1.04 to 1.

Following is a table with summary data from the consolidated statements

of cash flows for the years ended December 31, 2025 and 2024, as presented.

Net cash used in operating activities

3 unchanged sentences

Net cash provided by financing activities

Effect of exchange rate changes on cash

Net change in cash

operating activities used $2,930,306 in the year ended December 31, 2024, as compared with $1,483,801 used in operating activities in

the year ended December 31, 2023.

Our cash flow from operations varies depending on our operating results and the timing of operating

cash receipts and payments, specifically trade accounts receivable and trade accounts payable.

activities used $3,162,971 for the year ended December 31, 2024, as compared with $332,550 used in investing activities for the year

ended December 31, 2023.

The cash used in investing activities is largely due to the acquisition of QXTEL, where the Company invested

$2,955,121, and the purchase of $151,620 of property and equipment.

activities provided $7,240,966 for the year ended December 31, 2024, as compared to $1,833,965 provided for the year ended December 31,

The cash provided in 2024 was largely from loans, convertible debt and warrant exercises, offset by repayments on loans.

financed our operations through private placements, convertible notes, and unsecured debt, and we have also issued debt in our company

secured by all of our assets.

Based upon our current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve

We intend to fund operations through increased sales and debt and/or equity financing arrangements, which may be insufficient

to fund expenditures or other cash requirements.

We have not attained profitable operations and even though the company maintains a cash

position very close to one third year's operating expenses, we are dependent upon obtaining financing or generating revenue from operations

to continue operations for the next twelve months.

Our future is dependent upon our ability to obtain financing or upon future profitable

We reserve the right to seek additional funds through private placements of our common stock and/or through debt financing.

Our ability to raise additional financing is unknown.

Aside from cash exercises as set forth under an outstanding option that expires

on July 14, 2025, we do not have any formal commitments or arrangements for the advancement or loan of funds.

Our operating activities used $3,844,872 in the year

ended December 31, 2025, as compared with $2,930,306 used in operating activities in the year ended December 31, 2024.

Our cash flow

from operations varies depending on our operating results and the timing of operating cash receipts and payments, specifically trade

accounts receivable and trade accounts payable.

Investing activities used $239,651 for the year ended

December 31, 2025, as compared with $3,162,971 used in investing activities for the year ended December 31, 2024.

The cash used in 2024

in investing activities is largely due to the acquisition of QXTEL, where the Company invested $2,955,121, while in 2025 the cash used

in investing activities was largely purchases of property and equipment totaling $113,020.

Financing activities provided $3,729,525 for the

year ended December 31, 2025, as compared to $7,240,966 provided for the year ended December 31, 2024.

The cash provided in 2025 was

largely from loans.

We have financed our operations largely through private placements and secured and unsecured debt.

Material Cash Requirements

The Company’s material cash requirements include:

Working capital needs associated with high-volume

telecom traffic settlement cycles.

Vendor and carrier payments, including interconnection

fees, SMS termination costs, and network capacity charges.

Debt service obligations, including interest and

scheduled principal payments under existing credit facilities.

Capital expenditures related to network infrastructure,

platform development, and AI-driven software enhancements.

Regulatory and compliance costs, including licensing,

audits, and data protection requirements across multiple jurisdictions.

Based upon our current financial condition, we do

not have sufficient cash to operate our business at the current level for the next twelve months.

We intend to fund operations through

increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements.

We have not attained profitable operations and even though the Company maintains a cash position very close to one third year's operating

expenses, we are dependent upon obtaining financing or generating revenue from operations to continue operations for the next twelve

Our future is dependent upon our ability to obtain financing or upon future profitable operations.

We reserve the right to seek

additional funds through private placements of our common stock and/or through debt financing.

Our ability to raise additional financing

We do not have any formal commitments or arrangements for the advancement or loan of funds.

If we are not able to secure

2 unchanged sentences

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 twelve-month period ended December 31, 2024.

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 twelve-month period

ended December 31, 2025.

Critical Accounting Policies

A “critical accounting policy” is one

which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult,

subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Our accounting policies are discussed in detail in

the footnotes to our financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2025;

we consider our critical accounting policies to be those related to the allowance for doubtful accounts, valuation of assets, significant

estimates in the valuation of financial instruments 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 Annual Report for a complete discussion of our significant

accounting policies.

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

results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates

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 Annual Report on Form 10-K

for the year ended December 31, 2024;

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

doubtful accounts, valuation of assets, significant estimates in the valuation of financial instruments and income taxes.

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 Annual Report for a complete discussion of our significant accounting policies.

Balance Sheet Arrangements

of December 31, 2024, there were no off-balance sheet arrangements.

Issued Accounting Pronouncements

November 2024, the FASB issued 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.

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

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

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

Accounts Receivable and Allowance for Uncollectible

Substantially all of the Company’s accounts

receivable balance is related to trade receivables.

Trade accounts receivable are recorded at the invoiced amount and do not bear interest.

The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts

The Company estimates expected credit losses related to accounts receivable balances based on a review of available and relevant

information including current economic conditions, projected economic conditions, historical loss experience, account aging, and other

factors that could affect collectability.

No allowance for doubtful accounts was recorded as of December 31, 2025 or 2024.

years ended December 31, 2025 and 2024, the Company recorded bad debt expense of $6,397 and $1,991, respectively.

Long-Lived Assets

Long-lived assets are evaluated for impairment whenever

events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the

useful lives of these assets are no longer appropriate.

Each impairment test is based on a comparison of the undiscounted future cash

flows to the recorded value of the asset.

If impairment is indicated, the asset is written down to its estimated fair value.

Intangible Assets

Intangible assets represent mainly the interconnection

agreements acquired from the acquisition of QXTEL.

The acquired intangible asset was recognized and measured at fair value at the time

of acquisition and is amortized on a straight-line basis over the estimated economic useful life of the respective asset.

The estimated

useful life of the acquired interconnection agreements is 16 years.

Impairment of tangible and intangible assets

Tangible and intangible assets (excluding goodwill)

are assessed at each reporting date for indications that an asset may be impaired.

If any such indication exists, or when annual impairment

testing for an asset is required, the Company makes an estimate of the asset's recoverable amount.

The asset's recoverable amount is

the higher of an asset's or cash-generating unit's fair value less costs of disposal and its value in use and is determined for an individual

asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.

the carrying amount of an asset or a group of assets exceeds its recoverable amount, the asset is considered impaired and is written

down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using

a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or the

group of assets.

Goodwill Impairment

Goodwill represents the excess purchase consideration

over the fair value of identifiable net assets acquired in business combinations.

We test goodwill for impairment at least annually,

or more frequently if events or changes in circumstances indicate that the carrying value of a reporting unit may not be recoverable.

The impairment test requires significant judgment and the use of estimates, including projected future cash flows, long-term growth rates,

discount rates, and market participant assumptions.

For the annual impairment test performed as of December

31, 2025, the Company engaged an independent valuation specialist to assist in determining the fair value of each reporting unit.

valuation was performed under ASC 350 using a discounted cash flow methodology and fair value measurement concepts under ASC 820.

described in the analysis, fair value is defined as “the price that would be received to sell an asset or paid to transfer a

liability in an orderly transaction between market participants at the measurement date.”

The analysis concluded that four reporting units—SwissLink

Carrier AG, IoT Labs, LLC, Smartbiz Telecom, LLC, and Whisl Telecom—had carrying values that exceeded their estimated fair values,

resulting in goodwill impairments of $402,445, $81,782, $796,690, and $887,635, respectively.

The determination of fair value is highly

sensitive to changes in key assumptions.

For example, variations in discount rates, long-term growth rates, or projected cash flows could

materially affect the estimated fair value of a reporting unit and potentially result in additional impairment charges in future periods.

Management believes the assumptions used in the impairment

analysis are reasonable and consistent with those a market participant would apply.

However, because these estimates involve inherent

uncertainty, actual results may differ, and future impairment charges may be required if reporting-unit performance falls short of expectations

or if macroeconomic conditions deteriorate.

Financial Instruments

The Company follows ASC 820, “Fair Value Measurements

and Disclosures,” which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability

(an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants

on the measurement date.

ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions

developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about

market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).

value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical

assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

The three levels of the fair value hierarchy

are described below:

Level 1 applies to assets or liabilities for which

there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which

there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or

liabilities in active markets;

quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions

(less active markets);

or model-derived valuations in which significant inputs are observable or can be derived principally from, or

corroborated by, observable market data.

Level 3 applies to assets or liabilities for which

there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or

The carrying values of our financial instruments,

including, cash;

accounts receivable;

prepaid and other current assets;

accounts payable;

accrued liabilities and other current

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 be

presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist.

Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated

on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

not, however, practical to determine the fair value of amounts due to related parties due to their related party nature.

The Company uses the liability method of accounting

for income taxes.

Under the liability method, deferred tax assets and liabilities are determined based on differences between financial

reporting and the tax basis of assets, liabilities, the carry forward of operating losses and tax credits, and are measured using the

enacted tax rates and laws that will be in effect when the differences are expected to reverse.

An allowance against deferred tax assets

is recorded when it is more likely than not that such tax benefits will not be realized.

Off Balance Sheet Arrangements

As of December 31, 2025, there were no off-balance

sheet arrangements.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income

Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement

Expenses , which requires public business entities to provide disaggregated disclosures of certain income statement expense captions

in the notes to the financial statements.

The ASU does not change the presentation of expense captions on the face of the income statement.

This guidance will be effective for the Company on January 1, 2027, and the Company is currently evaluating the impact of adoption.

In December 2023, the FASB issued ASU 2023-09, Income

Taxes (Topic 740):

Improvements to Income Tax Disclosures , which enhances the transparency and decision-usefulness of income tax

disclosures, including expanded rate reconciliation categories and disaggregation of income taxes paid.

This guidance is effective for

annual periods beginning after December 15, 2024.

The adoption of the ASU had an impact on our annual income tax disclosures in our consolidated

financial statements.

We added disclosures for income/(loss) before tax by jurisdiction.

We expanded our rate reconciliation disclosures

to include disaggregated reconciling items by nature utilizing the 5% threshold and added applicable percentages for each item disclosed.

Additionally, we added expanded disclosures for income taxes paid, by jurisdiction utilizing a quantitative threshold of 5% of total

income taxes paid.

The new standard allows for prospective or retrospective adoption of these disclosure items, and management adopted

the ASU on a prospective basis.

In December 2025, the FASB issued ASU 2025-11, Interim

Reporting (Topic 270):

Narrow-Scope Improvements , which clarifies the guidance in Topic 270 to improve the consistency of interim

financial reporting.

The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring

entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption

The Company is currently evaluating the impact of adopting ASU 2025-11.

In December 2025, the FASB issued ASU No.

Codification Improvements .

The ASU addresses thirty-three items, representing the changes to the Codification that (1) clarify,

(2) correct errors, or (3) make minor improvements.

Generally, the amendments in this Update are not intended to result in significant

changes for most entities.

The ASU is effective for interim reporting periods within annual reporting periods beginning after December

The adoption method of this ASU may vary, on an issue-by-issue basis.

Early adoption is permitted.

We are currently evaluating

the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.

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 our financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis