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Item 1. Financial Statements

2026-05-20 compared with 2025-11-14 · 393 added, 731 removed, 539 unchanged (68% of the section changed)

Financial Statements

Our unaudited consolidated financial statements included

in this Form 10-Q are as follows:

Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024;

Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 (unaudited);

Consolidated Statements of Stockholder’s Equity for nine months ended September 30, 2025 and 2024 (unaudited).

Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (unaudited);

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

are as follows:

Consolidated Balance Sheets as of March 31, 2026 (unaudited) and December 31, 2025;

Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025 (unaudited);

Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 (unaudited);

Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2026 and 2025 (unaudited);

Notes to Consolidated Financial Statements (unaudited).

These interim consolidated financial statements have been prepared

in accordance with accounting principles generally accepted in the United States of America for interim financial information and the

SEC instructions to Form 10-Q.

These interim consolidated financial statements have been prepared in accordance

with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions

to Form 10-Q.

In the opinion of management, all adjustments considered necessary for a fair presentation have been included.

Operating results for the interim period ended September 30, 2025 are not necessarily indicative of the results that can be expected for

the full year.

results for the interim period ended March 31, 2026 are not necessarily indicative of the results that can be expected for the full year.

Consolidated Balance Sheets

September 30,

Current Assets

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Property and equipment, net

Intangible assets, net

Intangible asset, net

Deferred tax assets

7 unchanged sentences

Loans payable - related parties

Convertible notes - net of discount of $ 7,671 and $ 138,654 , respectively

Contingent liability for acquisition of subsidiary

1 unchanged sentence

Total Current Liabilities

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

Loans payable, non-current

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$ 0.001 par value,

42,108 and 35,537 shares issued and outstanding, respectively

59,276 shares issued and outstanding, respectively

Series C Preferred stock:

6 unchanged sentences

Common stock:

26,000,000 and 3,750,000 authorized;

26,000,000 authorized;

$ 0.001 par value 5,076,368 and 4,668,017 shares issued and outstanding, respectively

11 unchanged sentences

Consolidated Statements of Operations

Three Months Ended

Nine Months Ended

September 30,

$ 102,867,553

$ 232,683,605

$ 184,346,412

Three Months Ended March 31,

Cost of revenue

3 unchanged sentences

Operating loss

( 1,819,538 )

Other income (expense)

1 unchanged sentence

Interest expense

( 1,333,503 )

( 1,533,820 )

Change in fair value of derivative liabilities

( 1,063,789 )

Loss on settlement of debt

( 1,345,889 )

( 2,224,481 )

Loss on settlement of salary payable

Total other expense

( 1,694,867 )

( 3,815,516 )

( 2,646,275 )

Net loss before provision for income taxes

3 unchanged sentences

( 1,144,461 )

( 5,819,244 )

( 3,317,107 )

Net income attributable to noncontrolling interests

Net (loss) / income attributable to noncontrolling interests

Net loss attributed to IQSTEL Inc.

1 unchanged sentence

$ ( 1,157,958 )

Undeclared dividends on Series D Preferred Stock

Net loss attributed to stockholders of IQSTEL Inc.

$ ( 1,403,435 )

5 unchanged sentences

$ ( 1,144,461 )

( 2,325,869 )

$ ( 773,004 )

$ ( 5,819,244 )

$ ( 3,317,107 )

Comprehensive income attributable to noncontrolling interests

Comprehensive (loss) income attributable to noncontrolling interests

Net comprehensive loss attributed to IQSTEL Inc.

1 unchanged sentence

$ ( 1,157,958 )

$ ( 6,031,766 )

$ ( 3,741,707 )

Basic and diluted loss per common share

3 unchanged sentences

Consolidated Statements of Changes in Stockholders’

For the three and nine months ended September

30, 2025 and 2024

Series A Preferred Stock

Series B Preferred Stock

Series D Preferred Stock

Additional Paid in Capital

Accumulated Deficit

Accumulated Comprehensive Loss

Non Controlling Interest

Total Stockholders' Equity

Balance - December 31, 2024

$ ( 32,703,410 )

Common stock issued for compensation

Common stock issued for conversion of debt

Common stock issued for common stock payable

Dividend to non-controlling interest

Net income (loss)

( 1,157,958 )

( 1,144,461 )

Balance - March 31, 2025

$ ( 33,930,013 )

Series B Preferred stock issued for settlement of salary payable

Common stock issued for compensation

Common stock issued for conversion of debt

Common stock issued for settlement of debt

Reverse split adjustment

Dividend to non-controlling interest

Net income (loss)

( 2,406,978 )

( 2,348,914 )

Balance - June 30, 2025

$ ( 36,405,475 )

Series D Preferred stock issued for settlement of debt

Common stock issued for conversion of debt

Common stock issued for compensation

Common stock issued for service

Dividend to non-controlling interest

Acquisition of subsidiary

Net income (loss)

( 2,466,830 )

( 2,325,869 )

Balance - September 30, 2025

For the three months ended March 31, 2026 and

A Preferred Stock

B Preferred Stock

D Preferred Stock

Paid in Capital

Comprehensive Loss

Controlling Interest

Stockholders' Equity

- December 31, 2025

$ ( 42,991,879 )

Series A Preferred Stock

Series B Preferred Stock

Additional Paid in Capital

Accumulated Deficit

Accumulated Comprehensive Loss

Non Controlling Interest

Total Stockholders' Equity

Balance - December 31, 2023

stock issued for conversion of series D preferred stock

stock issued for compensation

to non-controlling interest

( 1,357,593 )

Common stock issued for compensation

Common stock issued for settlement of debt

Common stock issued in conjunction with convertible notes

Net income (loss)

Balance - March 31, 2024

( 1,385,936 )

- March 31, 2026

$ ( 44,349,472 )

Common stock issued for compensation

Common stock issued for warrant exercises

Resolution of derivative liabilities upon exercise of warrant

Acquisition of subsidiary

Net income (loss)

A Preferred Stock

B Preferred Stock

Paid in Capital

Comprehensive Loss

Controlling Interest

Stockholders' Equity

- December 31, 2024

$ ( 32,703,410 )

stock issued for compensation

stock issued for conversion of debt

stock issued for common stock payable

to non-controlling interest

income (loss)

( 1,157,958 )

Balance - June 30, 2024

( 1,144,461 )

Common stock issued for conversion of debt

Common stock issued for compensation

Common stock issued for warrant exercises

Common stock payable

Resolution of derivative liabilities upon exercise of warrant

Net income (loss)

Balance - September 30, 2024

- March 31, 2025

$ ( 33,930,013 )

2 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended

September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

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Amortization of debt discount

Change in fair value of derivative liabilities

Loss on settlement of debt

Loss on settlement of salary payable

Changes in operating assets and liabilities:

1 unchanged sentence

Prepaid and other assets

( 1,391,098 )

Accounts payable

3 unchanged sentences

( 46,331,507 )

Contract liabilities

Net cash used in operating activities

( 1,906,969 )

( 2,526,651 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisitions of subsidiary, net of cash received of $129,531 and $769,879, respectively

( 2,730,121 )

Purchase of property and equipment

2 unchanged sentences

Net cash used in investing activities

( 2,950,367 )

CASH FLOWS FROM FINANCING ACTIVITIES:

2 unchanged sentences

Repayments of note payable issued for acquisition of subsidiary

( 2,048,190 )

Proceeds from loans payable - related parties

Repayment of loans payable - related parties

Proceeds from common stock payable

Proceeds from exercise of warrants

Proceeds from stock purchase option

Proceeds from convertible notes

Repayment of convertible notes

( 1,064,269 )

Dividend paid to non-controlling interest

Net cash provided by financing activities

Effect of exchange rate changes on cash

Net change in cash

( 1,425,310 )

Cash, beginning of period

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Non-cash transactions:

Series B Preferred stock issued for settlement of salary payable

Series D Preferred stock issued for settlement of debt

Common stock issued for settlement of debt

Common stock issued in connection with convertible notes

Common stock issued for conversion of debt

Cashless warrant exercised

Common stock issued for common stock payable

Resolution of derivative liabilities

Note payable issued for acquisition of subsidiary

Contingent liability for acquisition of subsidiary

Stock payable for acquisition of subsidiary

Purchase of vehicle with financing loan and a related party advance

Non-cash dividend paid

The accompanying notes are an integral part of

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Notes to the Unaudited Consolidated Financial

September 30, 2025

March 31, 2026

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

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The Company is a technology company with a presence

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

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 94% 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.

of current operations and which also represents 87% of all of the Company’s revenues for the three months ended March 31, 2026,

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

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Additionally, GlobeTopper LLC (www.GlobeTopper.com),

our most recent acquisitions, plays a strategic role in supporting the expansion and integration of our business divisions.

our most recent acquisition, plays a strategic role in supporting the expansion and integration of our business divisions.

operations, the Company continues to strengthen its global presence and enhance the synergy in Fintech segments through its solution for

gift card programs, currently representing 6% of our revenues for the nine months ended September 30, 2025.

The Company’s developing Electric Vehicle

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

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

The Company’s developing Artificial

Intelligence (AI)-Enhanced Metaverse Division offers a white-label solution designed specifically for corporations, businesses, and the

telecommunications industry.

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

be accessed through the Web or our proprietary mobile apps.

gift card programs, representing 13% of our revenues for the three months ended March 31, 2026.

Our developing Artificial Intelligence (AI) division,

Reality Border (www.realityborder.com), was initially developed as 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

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the accompanying unaudited interim consolidated financial statements contain all the adjustments necessary (consisting only of normal

recurring accruals) to present the financial position of the Company as of September 30, 2025 and the results of operations and cash flows

recurring accruals) to present the financial position of the Company as of March 31, 2026 and the results of operations and cash flows

for the periods presented.

The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative

of the operating results for the full fiscal year or any future period.

These unaudited consolidated financial statements should be read

in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for

the year ended December 31, 2024 filed with the SEC on March 31, 2025.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the operating

results for the full fiscal year or any future period.

These unaudited consolidated financial statements should be read in conjunction

with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended

December 31, 2025 filed with the SEC on April 6, 2026, and amended on April 23, 2026.

Reclassification

Certain amounts in the consolidated financial

statements of prior year periods have been reclassified to conform to the current period’s presentation.

Consolidation Policy

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have been eliminated in consolidation.

Business Combinations

In accordance with Accounting Standards Codification

(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.

Reverse stock split

The Company announced a reverse stock

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

The Board of Directors of the Company approved a reverse

stock split of the Company’s authorized, issued and outstanding shares of common stock, par value $ 0.001 per share

(the “Common Stock”), at a ratio of 1-for-80.

All issued and outstanding common stock, options and warrants to purchase

common stock and per share amounts contained in this Report have been adjusted retroactively to reflect the change in capital

structure for all periods presented.

All share and per share information in these

financial statements retroactively reflect this reverse stock split.

Use of Estimates

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The Company had no cash

equivalents at September 30, 2025 and December 31, 2024.

equivalents at March 31, 2026 and December 31, 2025.

Accounts Receivable and Allowance for Uncollectible

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factors that could affect collectability.

During the nine months ended September 30, 2025 and 2024, the Company recorded bad debt

expense of $ 4,536 and $ 1,801 , respectively.

No allowance for doubtful accounts was recorded as of March 31, 2026 and December 31, 2025.

During the three months ended March 31, 2026 and 2025, the Company recorded bad debt expense of $ 14,364 and $ 0 , respectively.

Allowance for Credit Losses Rollforward:

Balance, at beginning of period

Provision for credit losses

Balance at end of period

Net Income (Loss) Per Share of Common Stock

4 unchanged sentences

In the accompanying financial statements, basic loss per share is computed by

dividing net loss by the weighted average number of shares of common stock outstanding during the year.

Diluted earnings per share is

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

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

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

Dilutive potential common shares include outstanding

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

was anti-dilutive for the three and nine months ended September 30, 2025 and 2024.

The following represents a reconciliation of

the numerators of the basic and diluted earnings per share computation for the three and nine months ended September 30, 2025 and 2024:

Net loss attributed

to common stockholders of IQSTEL Inc.

Three Months Ended

Nine Months Ended

Net loss attributed to IQSTEL Inc.

$ ( 2,466,830 )

$ ( 923,788 )

$ ( 6,031,766 )

$ ( 3,741,707 )

Undeclared divided on Series D Preferred Stock

Net loss attributed to common stockholders of IQSTEL Inc.

$ ( 2,480,746 )

$ ( 923,788 )

$ ( 6,045,682 )

$ ( 3,741,707 )

Weighted average number of common shares outstanding - Basic and diluted

Basic and diluted loss per common share

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 period.

Diluted earnings per share is computed by dividing net income by the weighted average number

of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution

that could occur from common shares issuable through contingent share arrangements, stock options and warrants unless the result would

be antidilutive.

Dilutive potential common shares include outstanding Series B Preferred stock and 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 three months ended March 31, 2026

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

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., 47.21% of our cash and cash equivalent are protected by the applicable government

insurance limits.

During the nine months ended September 30, 2025,

we had 31 customers representing 87.4 % of our revenue compared to 22 customers representing 87.7 % of our revenue for

the nine months ended September 30, 2024.

This is a significant improvement in the revenue concentration.

For the nine months ended September

30, 2025 and 2024, 37.6 % and 38.3 % 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 25 customers as of September 30, 2025 compared to the same percentage

concentrated in 11 companies as of December 31, 2024.

The largest customer as of September 30, 2025 represented 8.75 % 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.

The Company’s financial instruments subject

to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and related party payables.

maintains its cash and cash equivalents with financial institutions that management believes to be of high credit quality.

At times, balances

maintained with a single financial institution may exceed applicable governmental insurance limits.

Based on Federal Deposit Insurance

Corporation coverage in the United States, Switzerland’s deposit protection system (Esisuisse), and the Financial Services Compensation

Scheme applicable in the United Kingdom, 47.16% and 58.55% of cash and cash equivalents as of March 31, 2026 and December 31, 2025, respectively,

were covered by applicable governmental insurance limits.

As of March 31, 2026, approximately 80% of total

accounts receivable was concentrated among the Company’s top 23 customers, compared with the same percentage concentrated among

17 customers as of December 31, 2025.

The largest customer represented 20.33% of total accounts receivable as of March 31, 2026, compared

with 15.06% as of December 31, 2025.

In each such period, 12 of these customers were repeat customers and accounted for 58% and 75% of

total accounts receivable as of March 31, 2026 and December 31, 2025, respectively.

This concentration may expose the Company to a moderate

to low level of credit risk, as most of these customers are bilateral counterparties that also maintain accounts payable with the Company.

During the three months ended March 31, 2026,

we had 20 customers representing 85% of our revenue compared to 19 customers representing 86% of our revenue for the

three months ended March 31, 2025.

For the three months ended March 31, 2026 and 2025, 31% and 38% 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’

Financial Instruments

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accounts payable;

accrued liabilities and other current liabilities;

accrued liabilities and other current

and due from/to related parties approximate their fair values due to the short-term maturities of these financial instruments.

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Revenue Recognition

Telecommunications

The Company recognizes revenue related to monthly

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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:

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.

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Any and all IP and network information received by the Company from Customer for the purposes of this agreement shall be strictly confidential, and disclosed only to those employees or personnel with a need to know.

The Company recognizes revenue from

telecommunication services in accordance with ASC 606.

Topic 606 establishes a comprehensive 5 step framework for determining revenue

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

a series of distinct services.

The Company recognizes revenue from telecommunication

services in accordance with ASC 606.

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

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

distinct services.

Under ASC 606, voice and SMS termination services

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The customer cannot "stockpile" the service — it's consumed instantly.

The service is indivisible and recurring, with no alternative use.

In the case of the services provided by Globetopper,

the Company recognizes revenue in accordance with ASC 606, "Revenue from Contracts with Customers."

Under this standard, revenue is recognized when control of the promised goods or services is transferred to the customer in an amount

that reflects the consideration to which the Company expects to be entitled.

The service is indivisible and recurring, with no alternative

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.

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

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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:

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

Topic 606 Conceptual Framework

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

These costs primarily consist of usage charges for calls terminated

in vendors’ networks.

Recent Accounting Pronouncements

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.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards

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

Disaggregation of Income Statement

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

The ASU does not

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

rather, it requires disaggregation of certain expense

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

This guidance will be effective for

us on January 1, 2027.

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

Disaggregation of Income

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

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

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.

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 its financial statements.

cause a material impact on our financial statements.

NOTE 3 - GOING CONCERN

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of liabilities in the normal course of business.

The Company has suffered recurring losses from operations, 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 Company has suffered recurring losses from operations, has 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

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Historically, the Company has relied upon funds

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

Management may raise additional capital

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

that it will be able to obtain such financing.

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

and its stockholders.

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

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

NOTE 4 – PREPAID AND OTHER CURRENT

Prepaid and other current assets at September

Prepaid and other current assets at March 31,

2026 and December 31, 2025 consisted of the following:

September 30,

Other receivable

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Security deposit

Prepaid Expenses

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment at September 30, 2025

and December 31, 2024 consisted of the following:

September 30,

Property and equipment at March 31, 2026 and

December 31, 2025 consisted of the following:

Telecommunication equipment

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( 1,185,677 )

( 1,131,710 )

Total property and equipment

Depreciation expense for the nine months ended

September 30, 2025 and 2024 amounted to $ 89,204 and $ 104,061 , respectively.

Depreciation expense for the three months ended

March 31, 2026 and 2025 amounted to $ 52,333 and $ 6,682 , respectively.

NOTE 6 – INTANGIBLE ASSETS

Intangible assets at September 30, 2025

and December 31, 2024 consisted of the following:

Gross carrying

Intangible assets at March 31, 2026 and December

31, 2025 consisted of the following:

March 31, 2026

carrying amount

New gas regulator intangible

2 unchanged sentences

$ ( 962,501 )

Gross carrying

December 31, 2025

Gross carrying amount

Net carrying amount

New gas regulator intangible

2 unchanged sentences

$ ( 842,188 )

Amortization expense for the nine months ended

September 30, 2025 and 2024 amounted to $360,938 and $0, respectively.

The following table outlines the estimated

future amortization expense as of September 30, 2025:

Amortization expense for the three months ended

March 31, 2026 and 2025 amounted to $ 120,313 .

The following table outlines the estimated future

amortization expense at March 31, 2026:

2026 (9 months remaining)

NOTE 7 – ACCRUED AND OTHER CURRENT LIABILITIES

Accrued and other current liabilities at September

Accrued and other current liabilities at March

31, 2026 and December 31, 2025 consisted of the following

September 30,

Accrued liabilities

4 unchanged sentences

Other current liabilities

Income tax payable

Dividend payable

Total accrued and other current liabilities

NOTE 8 - LOANS PAYABLE

Loans payable at September 30, 2025 and December

Loans payable at March 31, 2026 and December

31, 2025 consisted of the following:

September 30,

Note was issued on October 23, 2018 and due on January 2, 2027

2 unchanged sentences

Promissory note payable

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

Promissory note payable - acquisition of QXTEL

Note was issued April 1, 2024 and due on June 30, 2025

Note was issued July 16, 2025 and due on March 31, 2026

Promissory note payable

Note was issued July 16, 2024 and due on July 16, 2025

Note was issued August 8, 2025 and due on March 31, 2026

Promissory note payable

Note was issued July 31, 2024 and due on July 31, 2025

Note was issued September 11, 2025 and due on April 24, 2026

Promissory note payable

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

Note was issued October 14, 2025 and due on May 27, 2026

Promissory note payable

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

Promissory note payable - acquisition of QXTEL

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

Note was issued November 10, 2025 and due on June 23, 2026

Promissory note payable

Note was issued July 16, 2025 and due on February 26, 2026

Note was issued December 22, 2025 and due on August 4, 2026

Promissory note payable

Note was issued August 8, 2025 and due on March 21, 2026

Note was issued February 9, 2026 and due on September 22, 2026

Promissory note payable

Note was issued September 11, 2025 and due on April 24, 2026

was issued in July 2025 and the monthly payment amount is $ 1,149 for 48 months

Note was issued March 26, 2026 and due on November 6, 2026

Financing loan

$1,148.94 monthly payment for 48 months

Unamortized debt discount

4 unchanged sentences

Long-term loans payable

Loans payable - related parties at September

Loans payable - related parties at March 31,

2026 and December 31, 2025 consisted of the following:

September 30,

49% of Shareholder of SwissLink

Note is due on demand

49% of Shareholder of SwissLink

Minority Shareholder of QXTEL

Note is due on demand

Current portion of loans payable - related parties

Long-term loans payable - related parties

During the nine months ended September 30, 2025

and 2024, the Company borrowed from third parties totaling $ 5,825,583 and $ 2,011,100 , which includes original issue discount

and financing costs of $ 360,583 and $ 0 and repaid the principal amount of $ 2,076,404 and $ 669,121 ,

respectively.

During the nine months ended September 30, 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 nine months ended September 30, 2025, the Company issued a note payable of $ 100,000 for the consideration related

to the July 1, 2025 acquisition of a subsidiary.

These notes were fully repaid during the nine months ended September 30, 2025.

During the nine months ended September 30, 2025

During the three months ended March 31, 2026

and 2025, the Company borrowed from third parties totaling $ 797,368 and $ 543,478 , respectively, which includes original

issue discount and financing costs of $ 47,368 and $ 48,478 , respectively, and repaid the principal amount of $ 1,769

and $ 449,438 (consisting of $9,438 of payments on loans payable and $440,000 of payments on a note payable issued for the acquisition

of a subsidiary), respectively.

Additionally, during the three months ended March 31, 2026 and 2025, the Company repaid the principal

amount of notes payable to related parties totaling $30,698 and $190,864, respectively.

During the three months ended March 31, 2026

and 2025, the Company recorded interest expense of $ 259,512 and $ 99,675 and recognized amortization of discount, included

in interest expense, of $ 91,486 and $ 36,105 , respectively.

During the nine months ended September 30, 2025,

the Company settled loans as follows;

amount and accrued interest of 5 notes payable issued in June through October 2024 by issuing 264,980 shares of common

As a result, the Company recorded a loss on settlement of debt of $ 801,255 .

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 nine months ended September

30, 2024, the Company settled 2 loans as follows:

Principal amount and accrued interest of a note payable

issued in April 2023 by issuing 1,770,000 shares of common stock.

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

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 .

NOTE 9 - CONVERTIBLE LOANS

Convertible loans at September 30,

2025 and December 31, 2024 consisted of the following:

September 30,

Issued in fiscal year 2024

Issued in fiscal year 2025

Total convertible notes payable

Unamortized debt discount

Total convertible notes

current portion of convertible notes

Long-term convertible notes

During the nine months ended September 30, 2025

and 2024, the Company recorded interest expense of $ 593,818 and $ 555,092 and recognized amortization of discount,

included in interest expense, of $ 278,951 and $ 693,516 , respectively.

During the nine months ended September 30,

2025, one note holder converted notes with principal amounts of $ 4,153,343 , debt discount of $ 129,570 , accrued interest of $ 420,919 and

conversion fee of $ 15,000 into 988,655 shares of common stock.

During the three months ended September 30, 2025,

one note holder converted notes with principal amounts of $ 931,121 , debt discount of $ 1,918 , accrued interest of $ 302,586 and

conversion fee of $ 7,500 into 293,742 shares of common stock.

During the nine months ended September 30, 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 nine months ended September 30, 2025,

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

February 26, 202 5

December 30, 2025

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

February 26, 2025

December 30, 2025

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

March 4, 2025

December 5, 2025

The outstanding balance shall be paid on December 5, 2025

The notes are convertible at the option of the

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

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

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

of $8.80 per share.

Issued in fiscal year 2024

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 are convertible into shares (“Conversion Shares”) of our common stock with an initial

conversion price of $ 8.80 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 $8.80.

The Notes are secured by all of our assets under

a Security Agreement signed with the SPA.

The initial tranche was executed in January 2024

for $ 2,222,222 in face value of Notes and 25,253 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 12,627 and 6,314 Kicker Shares, with an original issue discount of $ 111,111 and $ 55,556 , respectively.

Each one year note bears 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

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

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

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

In consideration for this extension, the Company

issued 8,081 restricted common shares.

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

of $ 297,878 as debt extinguishment and debt discount of $ 61,818 as debt modification during the year ended December

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 .

March 7, 2024

January 15, 2025

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

March 7, 2024

January 15, 2025

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

July 10, 2024

April 30, 2025

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

September 16, 2024

July 15, 2025

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

October 15, 2024

July 15, 2025

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

December 6, 2024

Outstanding balance shall be paid on June 4, 2025

The notes are convertible at the option of the

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

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

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

of $12.0 per share.

NOTE 9 – STOCKHOLDERS’ EQUITY

The Board of Directors of the Company approved

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

on May 2, 2025.

The Company amended its certificate of incorporation

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

and subsequently to 26,000,000 shares with a par value of $ 0.001 per share.

During the nine months ended September 30, 2025,

The Company’s authorized common stock consists

of 26,000,000 shares of common stock with a par value of $ 0.001 per share.

During the three months ended March 31, 2026,

the Company issued 408,351 shares of common stock, valued at fair market value on issuance as follows:

5,625 shares for compensation to our directors valued at $ 71,143 .

988,655 shares for conversion of debt of $ 4,459,692 .

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 .

38 shares for reverse stock split adjustment.

At September 30, 2025 and December 31, 2024, 3,832,470 and 2,537,209 shares

of common stock were issued and outstanding, respectively.

406,476 shares for conversion of Series D Preferred

1,875 shares for compensation to our directors valued

At March 31, 2026 and December 31, 2025, 5,076,368

and 4,668,017 shares of common stock were issued and outstanding, respectively.

Preferred Stock

The Company’s authorized preferred stock

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

Series A Preferred Stock

9 unchanged sentences

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

At September 30, 2025 and December 31, 2024, 10,000 shares

At March 31, 2026 and December 31, 2025, 10,000 shares

of Series A Preferred Stock were issued and outstanding.

6 unchanged sentences

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

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 twelve point five (12.5) shares of Common Stock for every one (1)

share of Series B Preferred Stock.

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

than 5% previous month’s stock liquidity.

During the nine months ended September 30, 2025,

the Company issued 6,571 shares of Series B Preferred Stock to settle salary payable for our CEO and CFO of $ 631,500 .

a result, the Company recorded a loss on settlement of salary payable of $ 216,981 .

At September 30, 2025 and December 31, 2024, 42,108 and 35,537 shares

of Series B Preferred Stock were issued and outstanding, respectively.

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

of Series B Preferred Stock.

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

5% previous month’s stock liquidity.

As of March 31, 2026 and December 31, 2025, 59,276

shares of Series B Preferred Stock were issued and outstanding.

Series C Preferred Stock

15 unchanged sentences

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

At September 30, 2025 and December 31, 2024, no Series

At March 31, 2026 and December 31, 2025, no Series

C Preferred Stock was issued or outstanding.

Series D Preferred Stock

On July 7, 2025, the Company filed a First

Amended and Restated Certificate of Designation for the Series D Preferred Stock 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, increasing the authorized shares from 75,000 to

100,000 and revising the terms as described below.

On November 3, 2023, pursuant to Article III

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

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

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

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

distribution out of the assets of the Corporation before the holders of the Common Stock, Series A Preferred Stock and Series C Preferred

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

The holders of shares

of Series D Preferred Stock have no dividend rights except as may be declared by the Board in its sole and absolute discretion,

out of funds legally available for that purpose.

Holders of Series D Preferred Stock do not have voting rights but may

convert into common stock at a conversion rate of one thousand (1,000) shares of Common Stock for every one (1) share of Series D

Preferred Stock .

On July 7, 2025, the Company filed a First Amended

and Restated Certificate of Designation for the Series D Preferred Stock 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.

On October 10, 2025, the Company filed a Second Amended

and Restated Certificate of Designation for the Series D Preferred Stock 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.

On February 3, 2026,

the Company filed a Third Amended and Restated Certificate of Designation, which includes the following key terms.

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.

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, subject to adjustment

for stock splits, dividends, or reorganizations, removing the prior requirement for conversion only upon a note default.

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 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.

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.

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

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

Leak-Out Restriction:

1 unchanged sentence

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 nine months ended September

30, 2025, the Company issued 37,110 shares of Series D Preferred Stock for settlement of debt of $ 4,708,332 .

At September 30, 2025 and December 31, 2024, 37,110

and 0 shares of Series D Preferred Stock were issued or outstanding, respectively.

During the three months ended March 31, 2026,

8,631 shares of Series D

Preferred Stock were converted into 406,476 shares

of common stock.

At March 31, 2026 and December 31, 2025, 9,389

and 18,020 shares Series D Preferred Stock were issued and outstanding, respectively.

NOTE 10 - RELATED PARTY TRANSACTIONS

Due from related party

During the nine months ended September 30, 2025

and 2024, the Company loaned $ 39,462 and $ 119,832 and collected $ 2,000 and $ 0 , respectively to a related party.

At September 30, 2025 and December 31, 2024,

the Company had amounts due from related parties of $ 668,177 and $ 630,715 , respectively.

The loans are unsecured, non-interest

bearing and due on demand.

Due from related parties

During the three months ended March 31, 2026

and 2025, the Company loaned $ 13,701 and $ 9,462 to a related party and collected $ 6,700 and $ 0 , respectively.

At March 31, 2026 and December 31, 2025, the

Company had amounts due from related parties of $ 496,520 and $ 639,519 , respectively.

The loans are unsecured, non-interest bearing

and due on demand.

Due to related parties

At September 30, 2025 and December 31, 2024,

the Company had amounts due to related parties of $ 65,829 and $ 26,613 , respectively.

For the nine months ended September 30, 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

At March 31, 2026 and December 31, 2025, the

Company had amounts due to related parties of $ 65,829 .

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

Employment agreements

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.

During the nine months ended September 30, 2025,

the Company issued 6,571 shares of Series B Preferred Stock to settle salary payable for our CEO and CFO of $ 631,500 .

a result, the Company recorded a loss on settlement of salary payable of $ 216,981 .

During the nine months ended September 30, 2025

and 2024, the Company recorded management salaries of $ 760,500 and $ 634,500 , and stock-based compensation bonuses of $ 71,145 and $ 109,485 ,

During the three months ended March 31, 2026

and 2025, the Company recorded management salaries and bonus of $ 211,500 , and stock-based compensation bonuses of $ 4,920 and $ 32,815 ,

respectively.

During the three months ended September 30, 2025 and 2024, the Company recorded management salaries of $ 211,500 and $ 211,500 ,

and stock-based compensation bonuses of $ 15,945 and $ 31,820 , respectively.

At September 30, 2025 and December 31, 2024,

the Company recorded and accrued management salaries of $ 73,365 and $ 420,447 , respectively.

At March 31, 2026 and December 31, 2025, the

Company recorded and accrued management salaries of $ 71,364 and $ 68,364 , respectively.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

leases, contracts or commitments.

The Company leases facilities which the term is 12 months .

For the nine months ended September

The Company leases facilities, the term of which is 12 months .

For the three months ended March

31, 2026 and 2025, the Company incurred rent expense of $ 11,324 and $ 6,974 , respectively.

NOTE 13 – ACQUISITION

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 ( “Globetopper”), 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 ,

$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.

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

The following table summarizes the fair value

of the consideration paid by the Company:

Fair Value of Consideration:

Promissory note

IQSTEL common stock

Contingent liability

Total Purchase Price

The following table summarizes the preliminary

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

Total purchase price

Assets Acquired:

Prepaid expenses and other current assets

Total identifiable assets

Liabilities Assumed:

Other current liabilities

Contract liabilities

Line of credit

Total liabilities assumed

Non-controlling interest - 49%

Total net assets

Unaudited combined proforma results of

operations for the three and nine months ended September 30, 2025 and 2024 as though the Company acquired Globetopper on January 1, 2024,

are set forth below:

Three Months Ended

Nine Months Ended

September 30,

$ 102,867,553

$ 258,349,274

$ 212,841,207

Cost of revenues

Operating expenses

Operating loss

( 1,606,874 )

Other expense

( 1,694,867 )

( 3,819,843 )

( 2,648,705 )

$ ( 2,325,869 )

$ ( 761,437 )

$ ( 5,610,907 )

$ ( 3,213,146 )

NOTE 14 - SEGMENT

NOTE 12 - SEGMENTS

The Company operates in two industry segments, telecommunication services and fintech services, and three geographic segments, USA, UK

6 unchanged sentences

seeks to grow, the allocation of budget between cost of sales and operating expenses and the management of assets.

The following table shows reportable operating

activities information by industrial segment for the three and nine months ended September 30, 2025.

The Company has two industrial segments

since the Company acquired Globetopper LLC in July 2025:

Three months ended September 30, 2025

14 - SEGMENT - Operating Activities by Industrial and Geographic Segment (Details)

$ 104,223,026

$ ( 15,697,167 )

$ 102,867,553

Cost of revenue

( 15,539,311 )

Operating expenses

Operating income (loss)

( 1,389,837 )

Other expense

( 1,600,257 )

( 1,694,867 )

Income tax expense

Net income (loss)

$ ( 2,990,094 )

$ ( 2,325,869 )

Nine months ended September 30, 2025

$ 259,271,211

$ ( 41,030,811 )

$ 232,683,605

Cost of revenue

( 40,650,320 )

Operating expenses

Operating income (loss)

( 3,380,989 )

( 1,819,538 )

Other expense

( 3,541,722 )

( 3,815,516 )

Income tax expense

Net income (loss)

$ ( 6,922,711 )

$ ( 204,000 )

$ ( 5,819,244 )

The following table shows operating activities

information by geographic segment for the three and nine months ended September 30, 2025 and 2024:

Three months ended September 30, 2025

$ ( 15,697,167 )

The following tables show operating activities

information by geographic segment for the three months ended March 31, 2026 and 2025:

Three months ended March 31, 2026

NOTE 12 - SEGMENT - Operating Activities by Geographic Segment (Details)

$ ( 692,808 )

Cost of revenue

( 15,539,311 )

Operating expenses

6 unchanged sentences

Office, facility and other

Bad debt expense

Stock-based compensation

General and administration

Impairment loss of goodwill

Operating income (loss)

Other expense

( 1,601,625 )

( 1,694,867 )

Income tax expense

2 unchanged sentences

$ ( 136,567 )

Three months ended September 30, 2024

$ ( 1,385,936 )

Three months ended March 31, 2025

$ ( 13,409,141 )

Cost of revenue

( 13,397,244 )

Operating expenses

2 unchanged sentences

Legal and Regulatory

Travel and events

Travel & Events

Bank Services and Fees

9 unchanged sentences

$ ( 1,144,461 )

Nine months ended September 30, 2025

$ 141,511,086

$ 110,921,436

$ ( 41,030,811 )

The following tables show reportable operating

activities information by industrial segment for the three months ended March 31, 2026 and 2025.

The Company has two industrial segments

since the Company acquired GlobeTopper LLC in July 2025:

Three months ended March 31, 2026

$ ( 692,808 )

Cost of revenue

( 40,650,320 )

Operating expenses

Salaries, wages and benefits

Professional fees

Legal and regulatory

Travel and events

Bank services and fees

Depreciation and amortization

Office, facility and other

Bad debt expense

Stock-based compensation

General and administration

Operating income (loss)

( 1,007,359 )

( 1,819,538 )

Other income (expense)

( 3,582,684 )

( 3,815,516 )

Other expense

Income tax expense

3 unchanged sentences

$ ( 1,385,936 )

Nine months ended September 30, 2024

$ 135,649,542

$ ( 3,136,431 )

Three months ended March 31, 2025

$ ( 13,409,141 )

2 unchanged sentences

Operating expenses

Salaries, wages and benefits

Professional fees

Legal and regulatory

Travel and events

Bank services and fees

Depreciation and amortization

Office, facility and other

Bad debt expense

Stock-based compensation

General and administration

Operating income (loss)

( 1,115,156 )

Other income (expense)

( 2,666,763 )

( 2,646,275 )

Income tax expense

2 unchanged sentences

$ ( 171,313 )

$ ( 1,144,461 )

Asset Information

The following table shows asset information

by industrial segment at September 30, 2025:

September 30, 2025

The following table shows asset and liability

information by industrial segment at March 31, 2026 and December 31, 2025:

March 31, 2026

Current assets

13 unchanged sentences

Non-current liabilities

The following table shows asset information

by geographic segment at September 30, 2025 and December 31, 2024:

September 30, 2025

The following table shows asset and liability

information by geographic segment at March 31, 2026 and December 31, 2025:

March 31, 2026

Current assets

5 unchanged sentences

Non-current liabilities

( 12,952,465 )

December 31, 2025

6 unchanged sentences

Non-current liabilities

( 13,369,737 )

NOTE 13 – INCOME TAX

The Company regularly evaluates the realizability

of its deferred tax assets by considering all available positive and negative evidence, including consideration of future taxable income.

Primarily due to the Company’s history of incurred net losses, the Company maintains a full valuation allowance against its US deferred

tax assets, as it is not more likely than not that these assets will be realized.

Thus, the Company has not recognized material provisions

or benefits for income taxes.

The Company’s tax provision and resulting

effective tax rate for interim periods are determined using the estimated annual effective tax rate (“AETR”), which is updated

each quarter and adjusted for discrete items recognized in the period.

For the three months ended March 31, 2026, the AETR reflects expected

taxable income of UK, and select US entities.

The forecast is consistent with year-to-date actual results through March 31, 2026, and

excludes any mark-to-market adjustments.

While the overall tax provision remains immaterial due to the Company’s partial valuation

allowance, the tax effect of the expected taxable entity income has been reflected in the AETR.

The Company's income tax provision reflects an

estimate of federal, state, and foreign income taxes based on enacted tax rates in the jurisdictions in which we operate.

The provision

is adjusted for the impact of allowable tax credits and deductions, uncertain tax positions, changes in deferred tax assets and liabilities,

and changes in tax law.

On July 4, 2025, the One Big Beautiful Bill Act

(“OBBBA”) was signed into law in the United States.

The OBBBA introduces various corporate and international tax law changes

with staggered effective dates through 2027.

Key provisions include immediate R&D expensing, permanent bonus depreciation, modifications

to interest expense limitations, and changes to certain international tax rules.

While the Company continues to evaluate the potential

impact of the OBBBA on its consolidated financial statements, due to its partial valuation allowance position on U.S.

and Swiss deferred

tax assets, immaterial current tax liabilities, and insignificant foreign earnings from the UK, the Company does not expect the OBBBA

to have a material impact on its financial position, results of operations, or effective tax rate.

NOTE 14 – SUBSEQUENT EVENTS .

Subsequent to September 30, 2025 and through

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

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.

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

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.

Subsequent to March 31, 2026 and through the

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

On April 30, 2026, the Company entered into (i) an

Equity Purchase Agreement (the “Purchase Agreement”) and (ii) a Registration Rights Agreement (the “Registration Rights

Agreement”) with M2B Funding Corp.

(the “Investor”).

Pursuant to the Purchase Agreement, the Company may,

from time to time during the Commitment Period, require the Investor to purchase up to $50,000,000 of the Company’s common stock,

par value $0.0001 per share (“Common Stock”), at a per-share price equal to 94% of the lowest daily volume-weighted average

price during the six Trading Days following delivery of a Put Notice, subject to volume-based caps, a daily maximum of $500,000, and an

Exchange Cap of 19.99% of shares outstanding on the Execution Date (unless stockholder approval is obtained).

The Investor is subject

to a Beneficial Ownership Limitation (initially 4.99%, increasable to 9.99%).

The Commitment Period begins on the date the Registration

Statement (as defined below) is declared effective by the SEC (the “Effective Date”) and ends on the earlier of:

the Investor has purchased the full $50,000,000, (ii) the date that is sixty (60) months after the Effective Date, (iii) written termination

notice by the Company (subject to the terms of the Purchase Agreement), or (iv) termination by the Investor as provided in the Purchase

As consideration for the commitment, the Company will issue Commitment

Shares valued at $1,000,000 (half on the Execution Date;

half on the 12-month anniversary or earlier termination), subject to a 20% daily

volume leak-out restriction.

The Registration Rights Agreement requires the Company

to file a resale S-1 registration statement covering all Registrable Securities within 90 days and to use best efforts to have it declared

effective within 180 days, with customary liquidated damages (0.25% per month, capped at 12% of the Maximum Commitment Amount) for delays.

The Investor has customary review and comment rights on the registration statement and related prospectuses.

The agreements contain customary representations,

warranties, covenants, conditions, and indemnification provisions.

The Purchase Agreement may be terminated by the Company upon 30 days’

notice (subject to a termination fee) or upon certain other events.

Proceeds will be used for general corporate purposes.

material relationship between the Company and the Investor other than as contemplated by the agreements.

On April 30, 2026, the Company issued the Initial Commitment Shares to the Investor pursuant to the Purchase Agreement.

The shares were

issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation

The Investor represented that it is an accredited investor.

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

What changed 10-Q

Item 1. Financial Statements