iQSTEL Inc 10-K

Item 8. Financial Statements and Supplementary Data Index to Financial Statements Required by Article 8 of Regulation S-X: Audited Financial Statements: F-1 Report of Independent Registered Public Accounting Firm (PCAOB ID 1013 ); F-3 Consolidated Balance Sheets as of December 31, 2025 and 2024; F-4 Consolidated Statements of Operations for the years ended December 31, 2025 and 2024; F-5 Consolidated Statement of Stockholders’ Equity (Deficit) for the years ended December 31, 2025 and 2024; F-6 Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024; and F-7 Notes to Consolidated Financial Statements. 41 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors iQSTEL, Inc. Coral Gables, FL Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of iQSTEL, Inc. (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years then ended , in conformity with accounting principles generally accepted in the United States of America. Going Concern Uncertainty – See Also Critical Audit Matters Section Below The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring losses from operations, negative working capital, and does not have established sources of revenue sufficient to cover its operating costs, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Revenue Recognition Critical Audit Matter Description The Company recognizes revenue upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services. F- 1 Table of Contents Significant judgment is exercised by the Company in determining revenue recognition for customer agreements, and includes the pattern of delivery (i.e., timing of when revenue is recognized) for each distinct performance obligation. The related audit effort in evaluating management’s judgments in determining revenue recognition for customer agreements required a high degree of auditor judgment. How the Critical Audit Matter was Addressed in the Audit Our principal audit procedures related to the Company’s revenue recognition for customer agreements included the following: • We gained an understanding of internal controls related to revenue recognition. • We evaluated management’s significant accounting policies for compliance with accounting principles generally accepted in the United States of America. • We selected a sample of revenues recognized and performed the following procedures: o Obtained and read contract source documents for each selection and other documents that were part of the agreement, if applicable. o Assessed the terms in the customer agreement and evaluated the appropriateness of management’s application of their accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions. o We tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the financial statements. o We confirmed significant customer balances. Going Concern Critical Audit Matter Description As described further in Note 3 to the consolidated financial statements, 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. 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. Accordingly, the Company has determined that these factors raise substantial doubt as to the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. Management intends to continue to fund its business by way of public or private offerings of the Company’s stock or through loans from private investors, in order satisfy the Company’s obligations as they come due for at least one year from the financial statement issuance date. However, the Company has not concluded that these plans alleviate the substantial doubt related to its ability to continue as a going concern. How the Critical Audit Matter was Addressed in the Audit We determined the Company’s ability to continue as a going concern is a critical audit matter due to the estimation and uncertainty regarding the Company’s available capital and the risk of bias in management’s judgments and assumptions in their determination. Our audit procedures related to the Company’s assertion on its ability to continue as a going concern included the following, among others: • We performed testing procedures such as analytical procedures to identify conditions and events that indicate that there could be substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time. • We reviewed and evaluated management's plans for dealing with adverse effects of these conditions and events. • We inquired of Company management and reviewed company records to assess whether there are additional factors that contribute to the uncertainties disclosed. • We assessed whether the Company’s determination that there is substantial doubt about its ability to continue as a going concern was adequately disclosed. Goodwill Impairment Critical Audit Matter Description As described in Note 2 to the consolidated financial statements, the Company recorded $2,168,552 of goodwill impairment during the year ended December 31, 2025. The Company evaluates its goodwill and intangible assets annually or when events or circumstances, such as declines in operating results or sustained market capitalization below the Company’s carrying value, require. How the Critical Audit Matter was Addressed in the Audit Our principal audit procedures related to the Company’s goodwill impairment analysis included the following: • We evaluated the design of certain internal controls over the Company’s goodwill impairment process • We evaluated the Company’s assessment of the value of reporting units under the discounted cash flow method. • We involved valuation professionals with specialized skills and knowledge who assisted in evaluating the reasonableness of the valuation methodologies and significant assumptions selected by management. /s/ Urish Popeck & Co., LLC We have served as the Company's auditor since 2020. Pittsburgh, Pittsburgh, Pennsylvania April 6, 2026 F- 2 Table of Contents IQSTEL INC Consolidated Balance Sheets December 31, December 31, 2025 2024 ASSETS Current Assets Cash $ 2,155,359 $ 2,510,357 Accounts receivable, net 30,259,020 57,158,967 Inventory 30,658 30,658 Due from related parties 639,519 630,715 Prepaid and other current assets 3,077,868 2,684,349 Total Current Assets 36,162,424 63,015,046 Property and equipment, net 615,048 561,802 Intangible asset, net 6,957,404 7,438,654 Goodwill 5,790,049 6,750,045 Deferred tax assets 459,472 243,108 Other assets 1,103,538 999,083 TOTAL ASSETS $ 51,087,935 $ 79,007,738 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 9,167,288 $ 2,129,241 Accrued and other current liabilities 19,050,496 55,624,784 Contract liabilities 1,391,377 — Due to related parties 65,829 26,613 Loans payable - net of discount of $ 127,170 and $ 62,898 , respectively 4,020,833 2,455,641 Loans payable - related parties 125,409 720,485 Convertible notes - net of discount of $ 0 and $ 138,654 , respectively — 1,864,432 Contingent liability for acquisition of subsidiary 285,175 1,000,000 Stock payable for acquisition of subsidiary 500,000 — Total Current Liabilities 34,606,407 63,821,196 Convertible notes - net of discount of $ 0 and $ 210,296 — 3,011,926 Loans payable, non-current 31,302 — Employee benefits, non-current 169,599 274,353 TOTAL LIABILITIES 34,807,308 67,107,475 Stockholders' Equity Preferred stock: 1,200,000 authorized; $ 0.001 par value Series A Preferred stock: 10,000 designated; $ 0.001 par value, 10,000 shares issued and outstanding 10 10 Series B Preferred stock: 200,000 designated; $ 0.001 par value, 59,276 and 35,537 shares issued and outstanding, respectively 59 36 Series C Preferred stock: 200,000 designated; $ 0.001 par value, No shares issued and outstanding — — Series D Preferred stock: 100,000 designated; $ 0.001 par value, 18,020 and 0 shares issued and outstanding, respectively 18 — Common stock: 26,000,000 authorized; $ 0.001 par value 4,668,017 and 2,537,209 shares issued and outstanding, respectively 4,668 2,537 Additional paid in capital 54,455,615 39,943,924 Accumulated deficit ( 43,276,006 ) ( 32,703,410 ) Accumulated other comprehensive loss ( 25,340 ) ( 25,340 ) Equity attributed to stockholders of IQSTEL Inc. 11,159,024 7,217,757 Equity attributable to noncontrolling interests 5,121,603 4,682,506 TOTAL STOCKHOLDERS' EQUITY 16,280,627 11,900,263 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 51,087,935 $ 79,007,738 The accompanying notes are an integral part of these consolidated financial statements. F- 3 Table of Contents IQSTEL INC Consolidated Statements of Operations Years Ended December 31, 2025 2024 Revenues $ 316,899,498 $ 283,220,442 Cost of revenue 307,442,244 274,948,693 Gross profit 9,457,254 8,271,749 Operating expenses General and administration 11,540,712 9,105,813 Impairment loss of goodwill 2,168,552 — Total operating expenses 13,709,264 9,105,813 Operating loss ( 4,252,010 ) ( 834,064 ) Other income (expense) Other income 118,833 94,974 Other expenses ( 199,523 ) ( 12,360 ) Interest expense ( 1,614,399 ) ( 2,159,425 ) Change in fair value of derivative liabilities — ( 1,393,046 ) Loss on settlement of debt ( 2,224,481 ) ( 482,085 ) Loss on settlement of salary payable ( 216,981 ) — Total other expense ( 4,136,551 ) ( 3,951,942 ) Net loss before provision for income taxes ( 8,388,561 ) ( 4,786,006 ) Income taxes ( 121,705 ) ( 394,030 ) Net loss ( 8,510,266 ) ( 5,180,036 ) Less: Net income attributable to noncontrolling interests 653,717 811,531 Net loss attributed to IQSTEL Inc. $ ( 9,163,983 ) $ ( 5,991,567 ) Dividend on Series B Preferred Stock ( 624,486 ) ( 627,710 ) Undeclared dividend on Series D Preferred Stock ( 70,570 ) — Net loss attributed to stockholders of IQSTEL Inc. $ ( 9,859,039 ) $ ( 6,619,277 ) Comprehensive loss Net loss $ ( 8,510,266 ) $ ( 5,180,036 ) Foreign currency adjustment — — Total loss $ ( 8,510,266 ) $ ( 5,180,036 ) Less: Comprehensive income attributable to noncontrolling interests 653,717 811,531 Net comprehensive loss attributed to IQSTEL Inc. $ ( 9,163,983 ) $ ( 5,991,567 ) Basic and diluted loss per common share $ ( 2.86 ) $ ( 2.86 ) Weighted average number of common shares outstanding - Basic and diluted 3,452,198 2,314,413 The accompanying notes are an integral part of these consolidated financial statements. F- 4 Table of Contents IQSTEL INC Consolidated Statements of Changes in Stockholders’ Equity (Deficit) For the years ended December 31, 2025 and 2024 Series A Preferred Stock Series B Preferred Stock Series D Preferred Stock Common Stock Shares Amount Shares Amount Shares Amount Shares Amount Additional Paid in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Non Controlling Interest Total Stockholders' Equity Balance - December 31, 2023 10,000 $ 10 31,080 $ 31 — $ — 2,151,620 $ 2,152 $ 34,530,862 $ ( 26,084,133 ) $ ( 25,340 ) $ 8,423,582 $ ( 377,710 ) $ 8,045,872 Series B Preferred stock issued as dividend — — 8,959 10 — — — — 627,700 ( 627,710 ) — — — — Common stock issued for compensation — — — — — — 7,500 8 141,017 — — 141,025 — 141,025 Common stock issued for settlement of debt — — — — — — 37,590 38 483,632 — — 483,670 — 483,670 Common stock issued for conversion of debt — — — — — — 76,326 76 671,590 — — 671,666 — 671,666 Common stock issued in conjunction with convertible notes — — — — — — 44,192 44 597,733 — — 597,777 — 597,777 Common stock issued for the extension of debt — — — — — — 8,081 8 116,356 — — 116,364 — 116,364 Common stock issued for warrant exercises — — — — — — 125,000 125 1,099,875 — — 1,100,000 — 1,100,000 Common stock issued for conversion of series B preferred stock — — ( 4,502 ) ( 5 ) — — 56,275 56 ( 51 ) — — — — — Common stock issued for cash — — — — — — 30,625 31 99,969 — — 100,000 — 100,000 Resolution of derivative liabilities upon exercise of warrant — — — — — — — — 1,493,046 — — 1,493,046 — 1,493,046 Common stock payable — — — — — — — — 82,194 — — 82,194 — 82,194 Acquisition of subsidiary — — — — — — — — — — — — 4,248,685 4,248,685 Net income (loss) — — — — — — — — — ( 5,991,567 ) — ( 5,991,567 ) 811,531 ( 5,180,036 ) Balance - December 31, 2024 10,000 $ 10 35,537 $ 36 — $ — 2,537,209 $ 2,538 $ 39,943,923 $ ( 32,703,410 ) $ ( 25,340 ) $ 7,217,757 $ 4,682,506 $ 11,900,263 Series B Preferred stock issued as dividend — — 17,168 17 — — — — 624,469 ( 624,486 ) — — — — Series B Preferred stock issued for settlement of salary payable — — 6,571 6 — — — — 848,475 — — 848,481 — 848,481 Series D Preferred stock issued for settlement of debt — — — — 37,110 37 — — 4,708,295 — — 4,708,332 — 4,708,332 Common stock issued for conversion of series D preferred stock — — — — ( 19,090 ) ( 19 ) 475,125 475 ( 456 ) — — — — — Common stock issued for compensation — — — — — — 7,500 8 81,805 — — 81,813 — 81,813 Common stock issued for conversion of debt — — — — — — 1,271,720 1,271 5,639,622 — — 5,640,893 — 5,640,893 Common stock issued for settlement of debt — — — — — — 264,980 265 1,886,393 — — 1,886,658 — 1,886,658 Common stock issued for service — — — — — — 32,400 32 223,168 — — 223,200 — 223,200 Common stock issued for common stock payable — — — — — — 3,563 4 ( 4 ) — — — — — Common stock dividend — — — — — — 75,529 75 499,925 ( 500,000 ) — — — — Stock split adjustment — — — — — — ( 9 ) — — — — — — — Dividend to non-controlling interest — — — — — — — — — ( 284,127 ) — ( 284,127 ) — ( 284,127 ) Acquisition of subsidiary — — — — — — — — — — — — ( 214,620 ) ( 214,620 ) Net income (loss) — — — — — — — — — ( 9,163,983 ) — ( 9,163,983 ) 653,717 ( 8,510,266 ) Balance - December 31, 2025 10,000 $ 10 59,276 $ 59 18,020 $ 18 4,668,017 $ 4,668 $ 54,455,615 $ ( 43,276,006 ) $ ( 25,340 ) $ 11,159,024 $ 5,121,603 $ 16,280,627 The accompanying notes are an integral part of these consolidated financial statements. F- 5 Table of Contents IQSTEL INC Consolidated Statements of Cash Flows December 31, Years Ended 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 8,510,266 ) $ ( 5,180,036 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock based compensation 305,013 223,219 Bad debt expense 6,397 1,991 Depreciation and amortization 627,667 499,535 Impairment loss 2,168,552 — Amortization of debt discount 458,610 1,096,725 Change in fair value of derivative liabilities — 1,393,046 Loss on settlement of debt 2,224,481 482,085 Loss on settlement of salary payable 216,981 — Deferred income tax (benefit) expense ( 216,364 ) 138,808 Changes in operating assets and liabilities: Accounts receivable 38,087,145 ( 56,091,437 ) Inventory — ( 3,537 ) Prepaid and other assets ( 282,574 ) ( 1,235,127 ) Due from related parties — ( 20,000 ) Accounts payable 2,023,127 4,448,542 Accrued and other current liabilities ( 40,953,641 ) 51,315,880 Net cash used in operating activities ( 3,844,872 ) ( 2,930,306 ) CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions of subsidiary, net of cash received ( 70,469 ) ( 2,955,121 ) Purchase of property and equipment ( 113,020 ) ( 151,620 ) Payment of loan receivable - related party ( 56,162 ) ( 89,832 ) Collection of amounts due from related parties — 33,602 Net cash used in investing activities ( 239,651 ) ( 3,162,971 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from loans payable 6,965,000 2,494,852 Repayments of loans payable ( 30,825 ) ( 1,846,139 ) Repayments of note payable issued for acquisition of subsidiary ( 2,275,000 ) — Proceeds from loans payable - related parties — 1,000,000 Repayment of loans payable - related parties ( 568,754 ) ( 538,961 ) Proceeds from common stock payable — 100,000 Proceeds from exercise of warrants — 1,100,000 Proceeds from common stock issued — 100,000 Proceeds from convertible notes 987,500 5,612,499 Repayment of convertible notes ( 1,064,269 ) ( 781,285 ) Dividend paid to non-controlling interest ( 284,127 ) — Net cash provided by financing activities 3,729,525 7,240,966 Effect of exchange rate changes on cash — — Net change in cash ( 354,998 ) 1,147,689 Cash, beginning of period 2,510,357 1,362,668 Cash, end of period $ 2,155,359 $ 2,510,357 Supplemental cash flow information Cash paid for interest $ 534,163 $ 879,783 Non-cash transactions: Series B Preferred stock issued as dividend $ 624,486 $ 627,710 Series B Preferred stock issued for settlement of salary payable $ 848,480 $ — Series D Preferred stock issued for settlement of debt $ 4,708,332 $ — Common stock issued for settlement of debt $ 1,886,658 $ 279,660 Common stock issued in connection with convertible notes $ — $ 597,777 Common stock issued for conversion of debt $ 5,640,893 $ 671,666 Common stock issued for modification of debts $ — $ 600,034 Cashless warrant exercised $ — $ 1,814 Common stock issued for conversion of preferred stock $ 475 $ 4,502 Common stock issued for common stock payable $ 4 $ — Common stock dividend $ 500,000 $ — Resolution of derivative liabilities $ — $ 1,493,046 Note payable issued for acquisition of subsidiary $ 1,100,000 $ 2,000,000 Contingent liability for acquisition of subsidiary $ 285,175 $ 1,000,000 Stock payable for acquisition of subsidiary $ 500,000 $ — Purchase of vehicle with financing loan and a related party advance $ 86,643 $ — Stock split adjustment $ 75 $ — The accompanying notes are an integral part of these consolidated financial statements. F- 6 Table of Contents IQSTEL INC Notes to the Consolidated Financial Statements December 31, 2025 NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS Organization and Operations IQSTEL Inc. (“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. 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 three business divisions. The Telecom Division, which represents the majority of current operations and which also represents 91% of all of the Company’s revenues, offers VoIP, SMS, proprietary Internet of Things (IoT) solutions, 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. Additionally, GlobeTopper LLC (www.GlobeTopper.com) our most recent acquisition, plays a strategic role in supporting the expansion and integration of our business divisions. Through its operations, the Company continues to strengthen its global presence and enhance the synergy in Fintech segments through its solution for gift card programs, representing 9% of our revenues for the year ended December 31, 2025. Our developing Artificial Intelligence (AI) division, Reality Border (www.realityborder.com), initially developed an AI-enhanced immersive digital experience platform intended to support customer interaction and content presentation in virtual environments. Building on that early development work, including conversational interfaces, multilingual interaction models, and AI-driven workflow design, Reality Border now develops practical AI software solutions for enterprise and telecommunications applications. NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States of America. The Company’s fiscal year end is December 31. F- 7 Table of Contents Consolidation Policy The consolidated financial statements of the Company include the accounts of the Company and its owned subsidiaries, Etelix.com USA, LLC (“Etelix”), SwissLink Carrier AG (“Swisslink”), ITSBCHAIN, LLC (“ItsBchain”), QGLOBAL SMS, LLC (“QGlobal”), IoT Labs, LLC (“IoT Labs”), Global Money One Inc (“Global Money One”), Whisl Telecom LLC (“Whisl”), Smartbiz Telecom LLC (“Smartbiz”), QXTEL LIMITED (“QXTEL”) and GlobeTopper LLC (“GlobeTopper”). 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. Prior to the Reverse Stock Split, the Company was authorized to issue 300,000,000 shares of Common Stock. As a result of the Reverse Stock Split, the Company is authorized to issue 3,750,000 shares of Common Stock. As of December 31, 2024, there were 202,976,685 shares of Common Stock outstanding and there were 182,211,063 weighted average number of common shares outstanding for the year ended December 31, 2024. As a result of the Reverse Stock Split, there were 2,537,209 shares of Common Stock outstanding at December 31, 2024 and there were 2,314,413 weighted average number of common shares outstanding for the year ended December 31, 2024. 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 The preparation of the consolidated financial statements in conformity with GAAP in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments. 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. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests is recognized as goodwill. 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 to U.S. dollars in accordance with ASC 830, “ Foreign Currency Matters ”. F- 8 Table of Contents The functional currency and reporting currency of Etelix, QGlobal, ItsBchain, IoT Labs, Whisl, Smartbiz, Global Money One, QXTEL and GlobeTopper is the U.S. dollar, while SwissLink’s functional currency was the Swiss Franc (“CHF”). At 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. For the years ended December 31, 2025 and 2024, the Company recorded exchange loss of $ 41,964 and $ 0 , respectively, recorded in General and administrative expense. Cash and Cash Equivalents Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had no cash equivalents at December 31, 2025 and 2024. Accounts Receivable and Allowance for Uncollectible Accounts 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 receivable. 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. During the years ended December 31, 2025 and 2024, the Company recorded bad debt expense of $ 6,397 and $ 1,991 , respectively. Inventory Inventories, consisting of smart gas parts, are primarily accounted for using the first-in-first-out (“FIFO”) method of accounting. Inventories are measured at the lower of cost and net realizable value. The Company estimates the net realizable value of inventories based on an assessment of expected sales prices. 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. Fixed Assets Fixed assets, consisting of telecommunications equipment and software, are recorded at cost reduced by accumulated depreciation and amortization. Depreciation and amortization expense is recognized over the assets’ estimated useful lives of 3 - 4 years for computers and laptops; 4 - 5 years for telecommunications equipment and switches; and 5 years for software using the straight-line method. Major additions and improvements are capitalized as additions to the property and equipment accounts, while replacements, maintenance and repairs that do not improve or extend the life of the respective assets are expensed as incurred. Estimated useful lives are periodically reviewed and, when appropriate, changes are made prospectively. When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts. F- 9 Table of Contents 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. Where 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 We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The fair value of each reporting unit is estimated primarily through the use of a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit. As a result of the evaluation of goodwill, the Company recognized $ 2,168,552 impairment loss of goodwill for the year ended December 31, 2025. The following table provides a summary of changes in the carrying amounts of goodwill. Balance at December 31, 2023 $ 5,172,146 Additions 1,577,899 Balance at December 31, 2024 $ 6,750,045 Additions 1,208,556 Impairment loss ( 2,168,552 ) Balance at December 31, 2025 $ 5,790,049 F- 10 Table of Contents Retirement Benefit Costs Payments to defined contribution retirement benefit schemes for SwissLink are charged as an expense as they fall due. Payments made to state-managed retirement benefit schemes are dealt with as payments to defined contribution schemes where the Company’s obligations under the schemes are equivalent to those arising in a defined contribution retirement benefit scheme. For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the period in which they occur. They are recognized outside the income statement and are presented in other comprehensive income. Past service cost is recognized immediately in the income statement in the period in which it occurs. The retirement benefit obligation recognized in the balance sheet represents the present value of the defined obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of the scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the scheme. 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 computation. In the accompanying financial statements, basic loss per share is computed by dividing net loss to common stockholders less the cumulative undeclared preferred stock dividend 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 Series D Preferred stock and they were excluded from the computation of diluted net loss per share as the result was anti-dilutive for the years ended December 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, accounts receivable, and related party payables. 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. Based on the Federal Deposit Insurance Corporation (FDIC) applicable in the United Sates, Switzerland’s deposit protection system (Esisuisse) and the Financial Services Compensation Scheme (FSCS) applicable in the U.K., 58.55% of our cash and cash equivalent are protected by the applicable government insurance limits. During the year ended December 31, 2025, we had 37 customers representing 90 % of our revenue compared to 28 customers representing 90 % of our revenue for the year ended December 31, 2024. For the years ended December 31, 2025 and 2024, 30 % and 33 % 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. Approximately 80 % of total accounts receivable are concentrated in balances from the Company’s top 17 customers as of December 31, 2025 compared to the same percentage concentrated in 11 companies as of December 31, 2024. The largest customer as of December 31, 2025 represented 15.06% of the total compared to 40.39% as of December 31, 2024. This concentration may expose the Company to a medium-to-low level of credit risk, as most of these customers are bilateral, meaning they also have accounts payable with the Company. F- 11 Table of Contents 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). The fair 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 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 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 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 liabilities. The carrying values of our financial instruments, including, cash; accounts receivable; prepaid and other current assets; goodwill; 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. 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. It is not, however, practical to determine the fair value of amounts due to related parties due to their related party nature. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. F- 12 Table of Contents Income Taxes 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. Related Parties The Company follows ASC 850, “Related Party Disclosures” for the identification of related parties and disclosure of related party transactions (see Note 15). Revenue Recognition Telecommunications The Company recognizes revenue related to monthly usage charges and other recurring charges during the period in which the telecommunication services are rendered, provided that persuasive evidence of a sales arrangement exists, and collection is reasonably assured. Management considers persuasive evidence of a sales arrangement to be a written interconnection agreement. 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 calls made. 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. The 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 customer. 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. • The 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. F- 13 Table of Contents The Company recognizes revenue from telecommunication services in accordance with ASC 606. Topic 606 establishes a comprehensive 5 step framework for determining revenue recognition. Under this framework, the Company considers each service a single performance obligation, since typically, the Company provides a series of distinct services. Under ASC 606, voice and SMS termination services typically qualify for over time recognition because the customer receives and consumes the benefits as the entity performs • Each call or message is terminated in real time. • The customer cannot "stockpile" the service — it's consumed instantly. • The service is indivisible and recurring, with no alternative use. Fintech The Company’s primary performance obligation is the transfer of digital prepaid products to customers upon purchase. Revenue is recognized at a point in time when the digital prepaid products are made available to the customer, as this is when the customer obtains control and can benefit from the use of the products. The Company has evaluated additional services, including API integration and technical support, and determined that these services are not distinct performance obligations. These services are highly interdependent and integrated with the primary obligation to deliver digital prepaid products. As such, revenue recognition for these services is bundled with the primary performance obligation and recognized at the same point in time. The transaction price is determined based on the pricing appendix provided to customers at the time of contract signing, with the Company reserving the right to adjust prices with a three-day notice. Since the Company has only one primary performance obligation, there is no allocation of the transaction price across multiple obligations. 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; and digital prepaid products. 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 and products by a customer. The transaction price excludes amounts collected on behalf of third parties such as sales taxes and regulatory fees. 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 and digital prepaid products 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 of usage. F- 14 Table of Contents Cost of revenue Costs of revenue represent direct charges from vendors that the Company incurs to deliver services to its customers. These costs include usage charges for voice and SMS termination services, which are recognized over time consistent with the Company’s revenue-recognition pattern for these services, as well as the acquisition cost of digital prepaid products purchased from issuing partners for resale, which is recognized at a point in time when the products are made available to customers. Lease The Company leases office space for corporate and network monitoring activities and to house telecommunications equipment. In accordance with ASC 842, “ Leases, ” we determine if an arrangement is a lease at inception. The office lease meets the definition of a short-term lease because the lease term is 12 months or less. Consequently, consistent with Company’s accounting policy election, the Company does not recognize the right-of-use asset and the lease liability arising from this lease. Reclassification Certain amounts in the consolidated financial statements of prior year periods have been reclassified to conform to the current period’s presentation. Recently Issued Accounting Pronouncements In 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. The Company is currently evaluating the impact of adopting ASU 2024-03. 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. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11. In December 2025, the FASB issued ASU No. 2025-12, 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 15, 2026. 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. F- 15 Table of Contents Recently adopted accounting pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements prospectively to the current annual period. NOTE 3 - GOING CONCERN The Company's consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has suffered recurring losses from operations, minimal or 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, and 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 - ACQUISITIONS On May 29, 2025, the Company entered into a Unit Purchase Agreement (the “Agreement”) with Craig Span (the “Seller”) and GlobeTopper, LLC, a Delaware limited liability company, pursuant to which the Company agreed to acquire fifty-one percent ( 51 % ) of the membership interests of GlobeTopper (the “Transferred Membership Interest”) from the Seller. Pursuant to the Agreement, the Company acquired the Transferred Membership Interests of GlobeTopper for a total purchase price consisting of $ 700,000 , payable as follows: $50,000 upon execution of the Agreement; $50,000 in cash on the closing date; $50,000 in cash 30 days after the closing date, secured by a promissory note and pledge agreement; $50,000 in cash 60 days after the closing date, secured by a promissory note and pledge agreement; $500,000 in restricted common shares of the Company, calculated at a 20% discount to the volume weighted average price (VWAP) during the five days preceding the closing date. Additional payments based on GlobeTopper’s EBITDA growth, payable in common shares of the Company at a 20% discount to the greater of the VWAP during the five days following the applicable period or preceding the payment date, will be payable as follows: • September 30, 2026: 50% of the positive difference between EBITDA at acquisition and EBITDA 12 months post-Closing. • September 30, 2027: 50% of the positive difference between EBITDA 12 months and 24 months post-Closing. The acquisition was closed on July 1, 2025. GlobeTopper has been included in our consolidated results of operations since the acquisition date. F- 16 Table of Contents The Company will invest up to $1,200,000 in GlobeTopper over 24 months post-Closing in monthly installments of $50,000, subject to the achievement of specified quarterly financial targets. The following table summarizes the fair value of the consideration paid by the Company: July 1, Fair Value of Consideration: 2025 Cash $ 100,000 Promissory note 100,000 IQSTEL common stock 500,000 Contingent liability 285,175 Total Purchase Price $ 985,175 The following table summarizes the preliminary identifiable assets acquired and liabilities assumed upon acquisition of GlobeTopper and the calculation of goodwill: Total purchase price $ 985,175 Assets Acquired: Cash 129,531 Prepaid expenses and other current assets 306,310 Total identifiable assets 435,841 Liabilities Assumed: Other current liabilities ( 71,580 ) Contract liabilities ( 703,262 ) Line of credit ( 99,000 ) Total liabilities assumed ( 873,842 ) Net assets ( 438,001 ) Non-controlling interest - 49% 214,620 Total net assets ( 223,381 ) Goodwill $ 1,208,556 QXTEL 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, a company incorporated in England and Wales. The purchase price (the “Purchase Price”) payable to the Seller for the shares was $ 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. F- 17 Table of Contents 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. 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 the Seller. 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 had to pay upon achievement of the Earnout Payment was paid in monthly installments during the first half of 2025. During the years ended December 31, 2025 and 2024, the Company repaid $ 2,275,000 and $ 725,000 on the Promissory Note, respectively. The Company included $ 725,000 repayment in 2024 in acquisition of subsidiary under investing activities. The acquisition was closed on April 1, 2024. QXTEL 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: April 1, Fair Value of Consideration: 2024 Cash $ 3,000,000 Promissory note 2,000,000 Contingent liability 1,000,000 Total Purchase Price $ 6,000,000 The following table summarizes the identifiable assets acquired and liabilities assumed upon acquisition of QXTEL and the calculation of goodwill: Total purchase price $ 6,000,000 Cash 769,879 Accounts receivable 14,946,919 Due from related party 208,550 Other asset 214,564 Equipment 30,963 Intangible assets recognized 7,700,000 Total identifiable assets 23,870,875 Accounts payable ( 14,796,505 ) Other current liabilities ( 403,584 ) Total liabilities assumed ( 15,200,089 ) Net assets 8,670,786 Non-controlling interest - 49 % ( 4,248,685 ) Total net assets 4,422,101 Goodwill $ 1,577,899 F- 18 Table of Contents Unaudited combined proforma results of operations for the years ended December 31, 2025 and 2024 as though the Company acquired QXTEL and GlobeTopper on January 1, 2024, are set forth below: Years Ended December 31, 2025 2024 Revenues $ 342,565,167 $ 350,392,337 Cost of revenues 332,569,239 340,754,714 Gross profit 9,995,928 9,637,623 Operating expenses 14,035,274 10,392,695 Operating loss ( 4,039,346 ) ( 755,072 ) Other expense ( 4,140,878 ) ( 3,934,773 ) Income tax ( 121,705 ) ( 394,030 ) Net loss $ ( 8,301,929 ) $ ( 5,083,875 ) NOTE 5 – PREPAID AND OTHER CURRENT ASSETS Prepaid and other current assets at December 31, 2025 and 2024 consisted of the following: December 31, December 31, 2025 2024 Other receivable $ 298,461 $ 115,685 Prepaid expenses 2,192,508 2,020,288 Advance payment 21,000 21,000 Tax receivable 63,284 42,673 Deposit for acquisition of asset 356,000 356,000 Security deposit 146,615 128,703 Prepaid Expenses $ 3,077,868 $ 2,684,349 NOTE 6 – PROPERTY AND EQUIPMENT Property and equipment at December 31, 2025 and 2024 consisted of the following: December 31, December 31, 2025 2024 Telecommunication equipment $ 700,417 $ 709,417 Telecommunication software 800,247 690,742 Vehicle 86,643 — Other equipment 159,451 155,935 Total property and equipment 1,746,758 1,556,094 Accumulated depreciation and amortization ( 1,131,710 ) ( 994,292 ) Total property and equipment $ 615,048 $ 561,802 Depreciation expense for the years ended December 31, 2025 and 2024 amounted to $ 146,417 and $ 138,597 , respectively. F- 19 Table of Contents NOTE 7 – INTANGIBLE ASSETS Intangible assets at December 31, 2025 and 2024 consisted of the following: 2025 Useful life Gross carrying amount Accumulated amortization Net carrying amount New gas regulator intangible Not yet in service $ 99,592 $ — 99,592 Interconnection agreements 16 years 7,700,000 ( 842,188 ) 6,857,812 $ 7,799,592 $ ( 842,188 ) $ 6,957,404 2024 Useful life Gross carrying amount Accumulated amortization Net carrying amount New gas regulator intangible Not yet in service $ 99,592 $ — $ 99,592 Interconnection agreements 16 years 7,700,000 ( 360,938 ) 7,339,062 $ 7,799,592 $ ( 360,938 ) $ 7,438,654 Amortization expense for the years ended December 31, 2025 and 2024 amounted to $ 481,250 and $ 360,938 , respectively. The following table outlines the estimated future amortization expense at December 31, 2025: 2026 $ 481,250 2027 481,250 2028 481,250 2029 481,250 2030 481,250 Thereafter 4,451,562 $ 6,857,812 NOTE 8 – ACCRUED AND OTHER CURRENT LIABILITIES Accrued and other current liabilities at December 31, 2025 and 2024 consisted of the following December 31, December 31, 2025 2024 Accrued liabilities $ 1,242,848 $ 928,858 Cost provision 17,190,827 53,939,336 Accrued interest 84,174 118,204 Salary payable - management 68,364 420,447 Salary payable and employee benefit 71,956 88,357 Other current liabilities 241,492 129,582 Income tax payable 150,835 104,614 Total accrued and other current liabilities $ 19,050,496 $ 55,729,398 F- 20 Table of Contents NOTE 9 - LOANS PAYABLE Loans payable at December 31, 2025 and 2024 consisted of the following: December 31, December 31, Interest 2025 2024 Term rate Martus $ 97,401 $ 103,738 Note was issued on October 23, 2018 and due on January 2, 2026 5.0 % Darlene Covid19 60,703 80,019 Note was issued on April 1, 2020 and due on March 31, 2026 0.0 % Promissory note payable — 217,391 Note was issued June 11, 2024 and due on June 11, 2025 2.0 % Promissory note payable - acquisition of QXTEL — 1,275,000 Note was issued April 1, 2024 and due on June 30, 2025 4.9 % Promissory note payable — 271,739 Note was issued July 16, 2024 and due on July 16, 2025 2.0 % Promissory note payable — 271,739 Note was issued July 31, 2024 and due on July 31, 2025 2.0 % Promissory note payable — 190,217 Note was issued September 23, 2024 and due on September 23, 2025 2.0 % Promissory note payable — 108,696 Note was issued October 4, 2024 and due on September 23, 2025 2.0 % Promissory note payable 794,737 — Note was issued July 16, 2025 and due on February 26, 2026 24.0 % Promissory note payable 794,737 — Note was issued August 8, 2025 and due on March 21, 2026 24.0 % Promissory note payable 794,737 — Note was issued September 11, 2025 and due on April 24, 2026 24.0 % Promissory note payable 531,579 — Note was issued October 14, 2025 and due on May 27, 2026 24.0 % Promissory note payable 531,579 — Note was issued November 10, 2025 and due on June 23, 2026 24.0 % Promissory note payable 531,579 — Note was issued December 22, 2025 and due on August 4, 2026 24.0 % Financing loan 42,253 — $1,148.94 monthly payment for 48 months through January 2029 7.87 % Total 4,179,305 2,518,539 Less: Unamortized debt discount ( 127,170 ) ( 62,898 ) Total loans payable 4,052,135 2,455,641 Less: Current portion of loans payable ( 4,020,833 ) ( 2,455,641 ) Long-term loans payable $ 31,302 $ — F- 21 Table of Contents Loans payable - related parties at December 31, 2025 and 2024 consisted of the following: December 31, December 31, Interest 2025 2024 Term rate 49% of Shareholder of SwissLink $ 21,606 $ 21,606 Note is due on demand 0.0 % 49% of Shareholder of SwissLink 103,803 237,841 Note is due on demand 5.0 % Minority Shareholder of QXTEL — 461,038 Note was due on October 1, 2025 4.9 % Total 125,409 720,485 Less: Current portion of loans payable - related parties 125,409 720,485 Long-term loans payable - related parties $ — $ — During the years ended December 31, 2025 and 2024, the Company borrowed from third parties totaling $ 7,420,322 and $ 5,041,532 , which includes original issue discount and financing costs of $ 455,322 and $ 546,680 and repaid the principal amount of $ 2,305,825 , including repayments of payable issued for acquisition of subsidiary of $2,275,000 and $2,571,139, respectively. During the year ended December 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 year ended December 31, 2025, the Company issued a note payable of $ 100,000 for consideration related to the July 1, 2025 acquisition of a subsidiary. These notes were fully repaid during the year ended December 31, 2025. During the years ended December 31, 2025 and 2024, the Company recorded interest expense of $ 556,051 and $ 293,671 and recognized amortization of discount, included in interest expense, of $ 179,659 and $ 300,303 , respectively. During the year ended December 31, 2025, the Company settled loans as follows; • Principal amount and accrued interest of 5 notes payable issued in June through October 2024 by issuing 264,980 shares of common stock. As a result, the Company recorded a loss on settlement of debt of $ 801,255 . • Principal amount and accrued interest of 3 notes payable issued in June 2025 by issuing 22,131 shares of Series D Preferred Stock. As a result, the Company recorded a loss on settlement of debt of $ 804,599 . • Principal amount and accrued interest of 4 notes payable issued in January through May 2025 by issuing 14,979 shares of common stock. As a result, the Company recorded a loss on settlement of debt of $ 541,290 . During the year ended December 31, 2024, the Company settled 2 loans as follows: • Principal amount and accrued interest of a note payable issued in April 2023 by issuing 22,125 shares of common stock. As a result, the Company recorded a loss on settlement of debt of $ 102,660 . • Principal 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 . F- 22 Table of Contents NOTE 10 - CONVERTIBLE LOANS Convertible loans at December 31, 2025 and 2024 consisted of the following: December 31, December 31, 2025 2024 Issued in fiscal year 2024 $ — $ 5,225,308 Total convertible notes payable — 5,225,308 Less: Unamortized debt discount — ( 348,950 ) Total convertible notes — 4,876,358 Less: current portion of convertible notes — 1,864,432 Long-term convertible notes $ — $ 3,011,926 During the years ended December 31, 2025 and 2024, the Company recorded interest expense of $ 599,738 and $ 769,027 and recognized amortization of discount, included in interest expense, of $ 278,951 and $ 796,422 , respectively. Conversion During the year ended December 31, 2025, one note holder converted notes with principal amounts of $ 5,327,485 , debt discount of $ 137,242 , accrued interest of $ 434,150 and conversion fee of $ 16,500 into 1,271,720 shares of common stock. During the year ended December 31, 2024, one note holder converted notes with principal amounts of $ 666,666 and conversion fee of $ 5,000 into 76,326 shares of common stock. Settlement During the year ended December 31, 2025, the Company settled the principal amount of convertible notes of $ 671,870 , debt discount of $ 58,573 and accrued interest of $ 34,366 issued in June 2024 through February 2025 to two notes holders by paying cash of $ 725,000 . As a result, the Company recorded a loss on settlement of debt of $ 77,337 . Issued in fiscal year 2025 During the year ended December 31, 2025, the Company borrowed amounts from third parties totaling $ 1,113,316 , which includes original issue discount and financing costs of $ 125,816 . Principal Issuance Maturity Interest Payment amount date Date rate schedule $ 471,000 February 26, 2025 December 30, 2025 14 % 5 payments , one payment of $ 268,470 and four payments of $ 67,118 , beginning in August 2025 $ 116,000 February 26, 2025 December 30, 2025 14 % 5 payments , one payment of $ 66,120 and four payments of $ 16,530 , beginning in August 2025 $ 526,316 March 4, 2025 December 5, 2025 24 % The outstanding balance was paid on December 5, 2025 The notes were convertible at the option of the holders at any time following an event of default, and the conversion price was 75% multiplied by the lowest trading price of Company’s common stock during the 10 trading days prior to the conversion date. Certain notes allowed for the conversion price to be a fixed price of $8.80 per share. F- 23 Table of Contents Issued in fiscal year 2024 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 of $ 3,888,889 in secured convertible promissory notes (the “Notes”) for an aggregate purchase price of $ 3,500,000 (the “Purchase Price”), which Notes were convertible into shares (“Conversion Shares”) of our common stock with an initial conversion price of $ 8.8 per share. 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 $8.8. The Notes were secured by all of our assets under a Security Agreement signed with the SPA . The initial tranche was executed in January 2024 for $ 2,222,222 in face value of Notes and 25,252 Kicker Shares, with an original issue discount of $ 222,222 ; second and third tranches were executed in March 2024 for $ 1,111,111 and $ 555,556 , respectively, in face value of Notes and 12,626 and 6,314 Kicker Shares, with an original issue discount of $ 111,111 and $ 55,556 , respectively. Each one year note bore interest at 18 % per annum. 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 of maturity: • First Note: Originally due January 1, 2025, with an outstanding amount of $ 1,888,889 , extended to January 1, 2026 . • Second Note: Originally due March 12, 2025, with an outstanding amount of $ 1,111,111 , extended to March 12, 2026 . • Third Note: 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. 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 costs of $ 248,707 . Principal Issuance Maturity Interest Payment amount date date rate schedule $ 146,900 March 7, 2024 January 15, 2025 12 % 10 payments each in the amount of $ 16,453 beginning on April 15, 2024 $ 177,100 March 7, 2024 January 15, 2025 14 % 5 payments , one payment of $ 100,947 and four payments of $ 25,237 , beginning in September 2024 $ 179,400 July 10, 2024 April 30, 2025 14 % 9 payments each in the amount of $ 22,724 beginning on August 30, 2024 $ 151,960 September 16, 2024 July 15, 2025 14 % 5 payments , one payment of $ 86,617 and four payments of $ 21,654 , beginning in March 2025 $ 179,400 October 15, 2024 July 15, 2025 14 % 9 payments each in the amount of $ 22,724 beginning on November 30, 2024 $ 1,578,947 December 6, 2024 June 4, 2025 24 % Outstanding balance was paid on June 4, 2025 The notes were convertible at the option of the holders at any time following an event of default, and the conversion price was 75% multiplied by the lowest trading price of Company’s common stock during the 10 trading days prior to the conversion date. F- 24 Table of Contents NOTE 11 – WARRANTS On February 12, 2024, we issued a Common Stock Purchase Option (the “Option”) to ADI Funding LLC (“ADI Funding”) for $ 100,000 that expired on December 31, 2024, for the right to acquire up to 125,000 shares of common stock. The exercise price per share of the common stock under the Option was (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 $160.00 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 had the right and the obligation to exercise, on a “cash basis”, not less than (i) 25,000 of the shares of common stock underlying the option no 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 could be in an amount not less than 12,500 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 was subject to the exercise price being not less than $8.8. If the Company issued securities less than the exercise price of the option, ADI Funding had a right to also use that lesser price in the exercise of its Option. The Option also contained 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 815”). 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. This 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: Warrants Outstanding Weighted Average Weighted Average Remaining Shares Exercise Price Contractual life (in years) Outstanding, December 31, 2023 — $ — — Granted 125,000 0.88 0.88 Exercised ( 125,000 ) 0.11 — Forfeited/canceled — — — Outstanding, December 31, 2024 — $ — — The intrinsic value of the warrants at December 31, 2024 was $ 0 . No warrants were outstanding as of and for the year ended December 31, 2025. F- 25 Table of Contents NOTE 12 – DERIVATIVE LIABILITIES 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 at December 31, 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. For the year ended December 31, 2024, the estimated fair values of the liabilities measured on a recurring basis were as follows: Year ended December 31, 2024 Expected term 0.04 - 0.65 years Expected average volatility 78 % - 194 % Expected dividend yield — Risk-free interest rate 4.44 % - 4.73 % The following table summarizes the changes in the derivative liabilities during the years ended December 31, 2024: Fair Value Measurements Using Significant Observable Inputs (Level 3) Balance - December 31, 2023 $ — Addition of new derivatives recognized as cash received 100,000 Exercise on issuance of common stock ( 1,493,046 ) Change in fair value of the warrant 1,393,046 Balance - December 31, 2024 $ — The following table summarizes the change in fair value of derivative liabilities included in the income statement for the years ended December 31, 2025 and 2024, respectively. Year ended December 31, 2025 2024 Addition of new derivatives recognized as loss on derivatives $ — $ — Revaluation of derivative liabilities — 1,393,046 Change in fair value of derivative liability $ — $ 1,393,046 There were no derivative liabilities outstanding as of and for the year ended December 31, 2025. F- 26 Table of Contents NOTE 13 – STOCKHOLDERS’ EQUITY Common Stock The Company’s authorized capital consists of 26,000,000 shares of common stock with a par value of $ 0.001 per share. During the year ended December 31, 2025, the Company issued 2,130,808 shares of common stock, valued at fair market value on issuance as follows: • 475,125 shares for conversion of Series D Preferred Stock • 7,500 shares for compensation to our directors valued at $ 81,813 • 1,271,720 shares for conversion of debt of $ 5,640,893 • 264,980 shares for settlement of debt of $ 1,886,658 • 32,400 shares for service valued at $ 223,200 • 3,563 shares for common stock payable value at $ 82,194 • 75,529 shares for stock dividend valued at $ 500,000 • ( 9 ) shares for reverse stock split adjustment During the year ended December 31, 2024, the Company issued 385,589 shares of common stock and 3,563 shares payable, valued at fair market value on issuance as follows: • 7,500 shares for compensation to our directors valued at $ 141,025 • 37,590 shares for settlement of debt valued at $ 483,670 • 44,192 shares in conjunction with convertible notes valued at $ 597,777 • 125,000 shares for exercise of warrants for $ 1,100,000 • 76,326 shares for conversion of debt of $ 671,666 • 30,625 shares issued for cash of $ 100,000 • 8,081 shares for the extension of debt valued at $ 116,364 • 56,275 shares for conversion of Series B Preferred Stock • 3,563 shares of stock payable for service valued at $ 82,194 recorded as additional paid in capital at December 31, 2024. Shares were issued on January 16, 2025 At December 31, 2025 and 2024, 4,668,017 and 2,537,209 shares of common stock were issued and outstanding, respectively. Series A Preferred Stock On November 3, 2020, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series A Preferred Stock, consisting of up 10,000 shares, par value $ 0.001 . Under the Certificate of Designation, holders of Series A Preferred Stock will participate on an equal basis per-share with holders of our common stock in any distribution upon winding up, dissolution, or liquidation . Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to stockholders at a rate of 51% of the total vote of stockholders. The rights of the holders of Series A Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on November 3, 2020 At December 31, 2025 and 2024, 10,000 shares of Series A Preferred Stock were issued and outstanding. F- 27 Table of Contents Series B Preferred Stock On November 11, 2020, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series B Preferred Stock, consisting of up 200,000 shares, par value $ 0.001 . Under the Certificate of Designation, holders of Series B Preferred Stock will receive a liquidation preference of $81 per share in any distribution upon winding up, dissolution, or liquidation of the Company before junior security holders, as provided in the designation . Holders of Series B Preferred Stock are entitled to receive as, when, and if declared by the Board of Directors, dividends in kind at an annual rate equal to twenty four percent (24%) of $81 per share for each of the then outstanding shares of Series B Preferred Stock, calculated on the basis of a 360-day year consisting of twelve 30-day months . Holders of Series B Preferred Stock do not have voting rights but may convert into common stock after twelve months from the issuance date, at a conversion rate of one thousand (1,000) shares of Common Stock for every one (1) share of Series B Preferred Stock. Upon conversion, the shares are subject to a one-year restriction on sales into the market of no more than 5% previous month’s stock liquidity. In December 2025, the Company declared and issued 17,168 shares Series B stock to our management as dividends, valued at $ 624,469 . In June 2025, the Company issued 6,571 shares of Series B Preferred Stock to settle salary payable for our CEO and CFO of $ 631,500 . As a result, the Company recorded a loss on settlement of salary payable of $ 216,981 . In December 2024, a member of Company management converted 4,502 shares of Series B Preferred Stock into 56,275 shares of common stock. In November 2024, the Company declared and issued 8,959 shares Series B stock to our management as dividends, valued at $ 627,710 . As of December 31, 2025 and 2024, 59,276 and 35,537 shares of Series B Preferred Stock were issued and outstanding, respectively. Series C Preferred Stock On January 7, 2021, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series C Preferred Stock, 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 upon winding up, dissolution, or liquidation of the Company, as provided in the designation. The holders of shares of Series C Preferred Stock have no dividend rights except as may be declared by the Board in its sole and absolute discretion, out of funds legally available for that purpose . Holders of Series 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% previous month’s stock liquidity. The rights of the holders of Series C Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on January 7, 2021. At December 31, 2025 and 2024, no Series C Preferred Stock was issued or outstanding. F- 28 Table of Contents Series D Preferred Stock On October 10, 2025, the Company filed a Second Amended and Restated Certificate of Designation for the Series D Preferred Stock (the “Certificate of Designation”) with the Secretary of State of Nevada to amend and restate the terms of its Series D Preferred Stock, originally established on November 3, 2023, and first amended on July 7, 2025. The Second Amended and Restated Certificate of Designation maintains the number of authorized shares at 100,000 and revises the terms by introducing a True-Up Adjustment mechanism to the conversion rate, as described below. The amended terms include the following key provisions: Dividend Rights: 12% cumulative dividend, payable as, when, and if declared by the Board of Directors, calculated on a 360-day year, accruing from the date of issuance and ceasing the day prior to conversion, with pro rata dividends for partial-year holdings. Conversion Rights: Following three months from the issuance date, the Series D Preferred Stock is convertible into common stock at a rate of 12.5 shares of common stock per share (the “Base Shares”), subject to adjustment for stock splits, dividends, or reorganizations. Additionally, a True-Up Adjustment mechanism applies, whereby the conversion may include additional shares based on a comparison of the original conversion price (based on the 10-day VWAP with a 20% discount at the time of issuance) to the lowest daily VWAP during the five trading days preceding the conversion date with a further 20% discount applied to such lowest daily VWAP (the “Adjusted Conversion Price”), with a floor of $1.00 and a maximum True-Up Ratio of 2.5. Redemption Provisions: Optional redemption by the Company at 105% of the price paid by the holder, upon not more than three trading days’ notice. Liquidation Preference: Senior to common stock, Series A Preferred Stock, and Series C Preferred Stock, and on parity with Series B Preferred Stock, in any liquidation, dissolution, or winding up of the Company. Voting Rights: No voting rights, except as required by law or for amendments to the Certificate of Designation or Articles of Incorporation that would alter the Series D Preferred Stock’s rights. Leak-Out Restriction: After three months, conversions to common stock and sales are limited to 10% of the average daily trading volume of the Company’s common stock per holder. During the year ended December 31, 2025, the Company issued 37,110 shares of Series D Preferred Stock for settlement of debt of $ 4,708,332 . During the year ended December 31, 2025, 19,090 shares of Series D Preferred Stock were converted into 475,125 shares of common stock. At December 31, 2025 and 2024, 18,020 and 0 shares Series D Preferred Stock was issued or outstanding. NOTE 14 – PROVISION FOR INCOME TAXES Income (loss) before provision for income taxes consisted of the following for the years ended December 31, 2025 and 2024: 2025 2024 United States $ ( 8,955,346 ) $ ( 5,587,111 ) Foreign 566,785 801,105 Total loss before income taxes $ ( 8,388,561 ) $ ( 4,786,006 ) F- 29 Table of Contents The following table presents a reconciliation of the income taxes presented in the Statements of Operations for the years ended December 31, 2025 and 2024: 2025 2024 The federal and state income tax provision (benefit) is summarized as follows: Current: U.S. federal $ 10,785 $ — State and local 3,562 — Foreign 323,722 255,222 Total current provision for income taxes $ 338,069 $ 255,222 Deferred: U.S. federal $ ( 517,250 ) $ — State and local — — Foreign 300,886 138,808 Total deferred provision for income taxes $ ( 216,364 ) $ 138,808 Total: U.S. federal $ ( 506,465 ) $ — State and local 3,562 — Foreign 624,608 394,030 Total provision for income taxes $ 121,705 $ 394,030 The Company paid income taxes as follows for the years ended December 31, 2025 and 2024: Income taxes paid: 2025 2024 Federal $ — $ — Foreign - UK 289,968 279,578 State 4,485 — Total paid during the year $ 294,453 $ 279,578 The tax effects of temporary differences that give rise to significant components of the Company’s deferred tax assets and liabilities are as follows: 2025 2024 Deferred tax assets Interest carryforward $ 796,380 $ — Other 17,181 — Net operating losses 6,199,209 3,215,563 Total deferred tax assets 7,012,770 3,215,563 Valuation allowance ( 6,484,923 ) ( 2,972,455 ) Total deferred tax assets, net $ 527,847 $ 243,108 Deferred tax liabilities Intangibles $ ( 10,598 ) $ — Property and equipment ( 57,777 ) — Total deferred tax liabilities ( 68,375 ) — Net deferred tax assets $ 459,472 $ 243,108 F- 30 Table of Contents The Change in the valuation allowance for the years ended December 31, was as follows: 2025 2024 Balance at beginning of year $ 2,972,455 $ 2,392,012 Additions charged to tax expense 3,512,468 580,443 Balance at end of year $ 6,484,923 $ 2,972,455 ASC 740 requires a valuation allowance to reduce deferred tax assets if it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The Company performed a comprehensive review of its uncertain tax positions and determined that no adjustments were necessary relating to unrecognized tax benefits as of December 31, 2025 and 2024. The Company’s federal and state income tax returns are subject to examination for three years after filing and remain open to examination for those periods. The components of the Company’s provision for income taxes and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded at December 31, 2025, are as follows: December 31, 2025 U.S. federal statutory tax benefit on pretax loss $ ( 1,761,598 ) 21.0 % State and local income taxes, net of federal benefit 3,562 0.0 % Foreign tax effects 505,581 (6.0 )% Switzerland Changes in Valuation Allowance 147,839 (1.8 )% Other 128,678 (1.6 )% United Kingdom Other 229,064 (2.7 )% Changes in Valuation Allowance 3,147,091 (37.5 )% Nontaxable or nondeductible items 860,927 (10.3 )% Tax effect of income not subject to entity level federal income tax ( 109,282 ) 1.3 % Equity Debt Settlement 512,707 (6.1 )% Goodwill Impairment 455,396 (5.4 )% Other 2,106 0.0 % Other ( 2,633,857 ) 31.4 % Change in 163j Interest Limitation ( 2,189,057 ) 26.1 % Change in Net Operating Losses ( 444,800 ) 5.3 % Total provision for income taxes $ 121,705 (1.5 )% F- 31 Table of Contents The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of December 31, 2024, are as follows: December 31, 2024 Net Operating loss carryforward $ 15,392,658 Effective tax rate 21 % Deferred tax asset 3,232,458 Foreign taxes ( 16,895 ) Less: valuation allowance ( 2,972,455 ) Net deferred tax asset $ 243,108 At December 31, 2025, the Company has approximately $15,400,000 of net operating losses (“NOL”) generated to December 31, 2025 carried forward to offset taxable income in future years which began to expire in 2023. The Company’s net operating loss carry forwards may be subject to annual limitations, which could eliminate, reduce or defer the utilization of the losses because of an ownership change as defined in Section 382 of the Internal Revenue Code. U.S. Federal tax returns are closed by statute for years through 2018. The status of state and non-U.S. tax examinations varies due to the numerous legal entities and jurisdictions in which the Company operates. NOTE 15 - RELATED PARTY TRANSACTIONS Due from related party During the years ended December 31, 2025 and 2024, the Company loaned $ 56,162 and $ 89,832 to a related party and collected $ 0 and $ 33,602 , respectively. At December 31, 2025 and 2024, the Company had amounts due from related parties of $ 639,519 and $ 630,715 , respectively. The loans are unsecured, non-interest bearing and due on demand. Due to related parties At December 31, 2025 and 2024, the Company had amounts due to related parties of $ 65,829 and $ 26,613 , respectively. The amounts are unsecured, non-interest bearing and due on demand. During the years ended December 31, 2025, a related party paid $ 39,216 to purchase a vehicle on behalf of the Company. The amounts are unsecured, non-interest bearing and due on demand. Employment agreements During the years ended December 31, 2025 and 2024, the Company recorded management salaries and bonus of $ 972,000 and $ 846,000 , respectively, and stock-based compensation bonuses of $ 81,813 and $ 223,219 , respectively. On June 23, 2025, the board of directors of the Company approved amended employment agreements in favor of its Chief Executive Officer, Leandro Iglesias, and its Chief Financial Officer, Alvaro Quintana Cardona. In case the monthly remuneration is not set in full on time , the amended agreements provide that Messrs. Iglesias and Quintana may convert their accrued salary/bonus into shares of common stock or Series B Preferred Stock of the Company. For common stock, the number of shares issuable is determined by considering the average price per share of common stock on the Nasdaq Capital Market during the last 10 days and applying a discount of 25% and then dividing the accrued salary by the average price per share. For Series B Preferred stock, the number of shares issuable is determined by considering the discounted average price per share of common stock on the Nasdaq Capital Market during the last 10 days, dividing the accrued salary by the discounted average price per share, and then dividing that number of shares by 12.5. In June 2025, the Company issued 6,571 shares of Series B Preferred Stock to settle salary payable for our CEO and CFO of $ 631,500 . As a result, the Company recorded a loss on settlement of salary payable of $ 216,981 . At December 31, 2025 and 2024, the Company recorded and accrued management salaries of $ 68,365 and $ 420,447 , respectively. F- 32 Table of Contents NOTE 16 – COMMITMENTS AND CONTINGENCIES Leases and Long-term Contracts The Company has not entered into any long-term leases, contracts or commitments. The Company leases facilities which the term is 12 months . For the years ended December 31, 2025 and 2024, the Company incurred rent expense of $ 34,366 and $ 28,539 , respectively. NOTE 17 - SEGMENT The Company operates in two industry segments, telecommunication services and fintech 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. The following tables show reportable operating activities information by industrial segment for the years ended December 31, 2025 and 2024. The Company has two industrial segments since the Company acquired GlobeTopper LLC in July 2025: Year ended December 31, 2025 NOTE 17 - SEGMENT - Industrial Segment (Details) Telecom Fintech Corporate Elimination Total Revenues $ 330,564,828 $ 27,955,101 $ 220,755 $ ( 41,841,186 ) $ 316,899,498 Cost of revenue 321,346,150 27,403,231 52,770 ( 41,359,907 ) 307,442,244 Gross profit 9,218,678 551,870 167,985 ( 481,279 ) 9,457,254 Operating expenses 6,859,006 548,008 6,326,625 ( 24,375 ) 13,709,264 Operating income (loss) 2,359,672 3,862 ( 6,158,640 ) ( 456,904 ) ( 4,252,010 ) Other income (expense) ( 88,873 ) ( 2,693 ) ( 3,740,139 ) ( 304,846 ) ( 4,136,551 ) Income tax expense ( 118,143 ) — ( 3,562 ) — ( 121,705 ) Net income (loss) $ 2,152,656 $ 1,169 $ ( 9,902,341 ) $ ( 761,750 ) $ ( 8,510,266 ) Year ended December 31, 2024 Telecom Corporate Elimination Total Revenues $ 306,039,424 $ — $ ( 22,818,982 ) $ 283,220,442 Cost of revenue 297,488,346 — ( 22,539,653 ) 274,948,693 Gross profit 8,551,078 — ( 279,329 ) 8,271,749 Operating expenses 6,224,151 2,800,053 81,609 9,105,813 Operating income (loss) 2,326,927 ( 2,800,053 ) ( 360,938 ) ( 834,064 ) Other income (expense) 41,003 ( 3,763,535 ) ( 229,410 ) ( 3,951,942 ) Income tax expense ( 394,030 ) — — ( 394,030 ) Net income (loss) $ 1,973,900 $ ( 6,563,588 ) $ ( 590,348 ) $ ( 5,180,036 ) F- 33 Table of Contents The following tables show operating activities information by geographic segment for the years ended December 31, 2025 and 2024: Year ended December 31, 2025 USA Switzerland UK Elimination Total Revenues $ 194,721,347 $ 22,394,346 $ 141,624,991 $ ( 41,841,186 ) $ 316,899,498 Cost of revenue 190,238,336 21,568,250 136,995,565 ( 41,359,907 ) 307,442,244 Gross profit 4,483,011 826,096 4,629,426 ( 481,279 ) 9,457,254 Operating expenses Salaries, wages and benefits 1,573,805 — 2,229,565 — 3,803,370 Technology 1,086,739 407,201 585,947 ( 462,655 ) 1,617,232 Professional fees 880,058 36,293 — — 916,349 Legal and regulatory 334,258 17,312 — — 351,570 Travel and events 85,959 12,878 218,149 ( 30,810 ) 286,176 Public cost 120,945 — — — 120,945 Advertising 1,878,274 — — — 1,878,274 Bank services and fees 150,476 ( 6,942 ) 95,191 — 238,725 Depreciation and amortization 35,140 103,974 488,553 — 627,667 Office, facility and other 697,031 418,681 266,540 ( 12,160 ) 1,370,092 Insurance 18,902 — — — 18,902 Bad debt expense 6,397 — — — 6,397 Stock-based compensation 305,013 — — — 305,013 General and administration 7,172,995 989,397 3,883,945 ( 505,625 ) 11,540,712 Impairment loss of goodwill 2,168,552 — — — 2,168,552 Operating income (loss) ( 4,858,536 ) ( 163,301 ) 745,481 24,346 ( 4,252,010 ) Other income (expense) ( 3,816,310 ) 4,209 ( 19,604 ) ( 304,846 ) ( 4,136,551 ) Income tax benefit (expense) 502,901 ( 243,108 ) ( 381,498 ) — ( 121,705 ) Net income (loss) $ ( 8,171,945 ) $ ( 402,200 ) $ 344,379 $ ( 280,500 ) $ ( 8,510,266 ) F- 34 Table of Contents Year ended December 31, 2024 USA Switzerland UK Elimination Total Revenues $ 197,007,636 $ 13,349,998 $ 95,681,790 $ ( 22,818,982 ) $ 283,220,442 Cost of revenue 192,460,109 12,541,394 92,486,843 ( 22,539,653 ) 274,948,693 Gross profit 4,547,527 808,604 3,194,947 ( 279,329 ) 8,271,749 Operating expenses Salaries, Wages and Benefits 1,699,833 238,334 1,025,547 — 2,963,714 Technology 683,620 331,149 370,725 ( 193,309 ) 1,192,185 Professional Fees 1,110,773 — — — 1,110,773 Legal and Regulatory 273,840 11,399 43,261 — 328,500 Travel & Events 126,623 29,962 77,710 — 234,295 Public Cost 102,773 — — — 102,773 Bad Debt Expense 1,991 — — — 1,991 Depreciation and Amortization 26,943 111,654 — 360,938 499,535 Advertising 968,206 — — — 968,206 Bank Services and Fees 59,848 72,246 79,497 — 211,591 Office, Facility and Other 309,278 29,550 211,064 ( 20,000 ) 529,892 Sales Commissions 231,125 149,939 360,561 ( 66,020 ) 675,605 Insurance 4,458 — 59,076 — 63,534 Stock-based compensation 223,219 — — — 223,219 General and administration 5,822,530 974,233 2,227,441 81,609 9,105,813 Operating income (loss) ( 1,275,003 ) ( 165,629 ) 967,506 ( 360,938 ) ( 834,064 ) Other income (expense) ( 3,961,170 ) 28,801 ( 19,573 ) — ( 3,951,942 ) Income tax expense — ( 183,808 ) ( 210,222 ) — ( 394,030 ) Net income (loss) $ ( 5,236,173 ) $ ( 320,636 ) $ 737,711 $ ( 360,938 ) $ ( 5,180,036 ) Asset Information The following table shows asset and liability information by industrial segment at December 31, 2025 and 2024: December 31, 2025 Telecom Fintech Corporate Elimination Total Assets Current assets $ 34,685,859 $ 1,203,613 $ 4,913,268 $ ( 4,640,316 ) $ 36,162,424 Non-current assets $ 8,676,244 $ 153,229 $ 19,465,775 $ ( 13,369,737 ) $ 14,925,511 Liabilities Current liabilities $ 32,336,073 $ 1,851,514 $ 5,059,136 $ ( 4,640,316 ) $ 34,606,407 Non-current liabilities $ 169,599 $ 31,302 $ — $ — $ 200,901 December 31, 2024 Telecom Corporate Elimination Total Assets Current assets $ 75,098,705 $ 4,594,060 $ ( 16,677,719 ) $ 63,015,046 Non-current assets $ 9,097,736 $ 19,079,518 $ ( 12,184,562 ) $ 15,992,692 Liabilities Current liabilities $ 74,461,579 $ 6,037,337 $ ( 16,677,720 ) $ 63,821,196 Non-current liabilities $ 274,353 $ 3,011,926 $ — $ 3,286,279 F- 35 Table of Contents The following table shows asset and liability information by geographic segment at December 31, 2025 and December 31, 2024: December 31, 2025 USA Switzerland UK Elimination Total Assets Current assets $ 15,281,322 $ 1,538,421 $ 21,638,782 $ ( 2,296,101 ) $ 36,162,424 Non-current assets $ 20,377,490 $ 331,914 $ 7,585,844 $ ( 13,369,737 ) $ 14,925,511 Liabilities Current liabilities $ 13,941,863 $ 2,563,328 $ 20,397,317 $ ( 2,296,101 ) $ 34,606,407 Non-current liabilities $ 31,302 $ 169,599 $ — $ — $ 200,901 Net Asset 21,685,647 ( 862,592 ) 8,827,309 ( 13,369,737 ) 16,280,627 December 31, 2024 USA Switzerland UK Elimination Total Assets Current assets $ 19,885,086 $ 8,055,475 $ 48,182,373 $ ( 13,107,888 ) $ 63,015,046 Non-current assets $ 19,447,105 $ 633,491 $ 8,096,658 $ ( 12,184,562 ) $ 15,992,692 Liabilities Current liabilities $ 21,386,520 $ 8,415,705 $ 47,126,859 $ ( 13,107,888 $ 63,821,196 Non-current liabilities $ 3,012,066 $ 169,599 $ 104,614 $ — $ 3,286,279 NOTE 18 – SUBSEQUENT EVENTS . Subsequent to December 31, 2025 and through the date that these financials were made available, the Company had no subsequent events. F- 36 Table of Contents Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure There were no changes or disagreements with our accountants on accounting and financial disclosure.