What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-20 compared with 2025-11-14 · 258 added, 354 removed, 139 unchanged (81% of the section changed)

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

Management’s Discussion and

Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

23 unchanged sentences

other filings with the SEC.

(www.IQSTEL.com) is a technology company

with a presence in 20 countries (Argentina, Armenia, Austria, Canada, Colombia, Germany, Greece, Guatemala, India, Italy, Pakistan, Romania,

Serbia, Spain, Switzerland, Turkey, UAE, UK, USA and Venezuela) and over 100 employees that offers leading-edge services through its four

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

Our presence is global,

with offices in USA, Argentina, UK, Switzerland, Turkey, and Dubai, and we target diverse and high-growth markets.

We maintain more than

603 high value network interconnections around the world, delivering international voice, SMS, and connectivity services that form the

core of our business.

The company’s strategy focuses on leveraging synergies between its 10 subsidiaries to drive innovation and

capture emerging opportunities.

(the Company when making reference to

consolidated company) is a technology company with operations in 20 countries (Argentina, Armenia, Austria, Canada, Colombia, Germany,

Greece, Guatemala, India, Italy, Pakistan, Romania, Serbia, Spain, Switzerland, Turkey, UAE, UK, USA and Venezuela) and over 100 employees

that offers leading-edge services through its subsidiaries in the telecommunications, fintech, and AI-enhanced industries.

presence includes offices in USA, Argentina, UK, Switzerland, Turkey, and Dubai, and we target diverse and high-growth markets.

more than 603 high value network interconnections around the world, delivering international voice, SMS, and connectivity services that

form the core of our business.

Our strategy focuses on leveraging synergies among our subsidiaries to drive innovation, operational efficiency,

and growth through organic development and strategic acquisitions.

Our Telecom Division, which represents the majority

of current operations and which also represents the source for 86% and 94% of our revenues for the three months and for the nine months

ended September 30, 2025 respectively, offers Voice over Internet Protocol (VoIP), SMS, proprietary Internet of Things (IoT) solutions

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

Etelix (www.etelix.com),

SwissLink Carrier (www.swisslink-carrier.com), Smartbiz Telecom (www.smartbiztel.com), Whisl Telecom (www.whisl.com), IoT Labs (www.iotlabs.mx),

QGlobal SMS (www.qglobalsms.com), and QXTEL Limited (www.qxtel.com).

of current operations and accounted for 87% of our revenues for the three months ended March 31, 2026, offers Voice over Internet Protocol

(VoIP), SMS, proprietary Internet of Things (IoT) solutions, and international fiber-optic connectivity through its subsidiaries:

(www.etelix.com), SwissLink Carrier (www.swisslink-carrier.com), Smartbiz Telecom (www.smartbiztel.com), Whisl Telecom (www.whisl.com),

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

Also under the Telecom Division, our developing Blockchain

Platform Business Line (www.itsbchain.com) offers our proprietary Mobile Number Portability Application (MNPA) to serve the in-country

portability needs through our subsidiary, ItsBchain.

Our developing Fintech Business Line (www.globalmoneyone.com)

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

Mobile Top Up).

Our Fintech subsidiary, Global Money One, is to provide immigrants access to reliable financial services that makes it

easier to manage their money and stay connected with their families back home.

Platform Business Line offers our proprietary Mobile Number Portability Application (MNPA) through our subsidiary, itsBchain (www.itsbchain.com).

The Company’s developing Fintech Business Line

offers a complete Fintech ecosystem including a MasterCard Debit Card, US Bank Account (No SSN Needed), and a Mobile App/Wallet for remittances

and mobile top-up services.

Our Fintech subsidiary, Global Money One Inc., aims 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 acquisitions, 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 14% and 6% of our revenues for the three months and for the nine months ended September 30,

2025 respectively.

Our developing Electric Vehicle (EV) Business Line

offers electric motorcycles for work and recreational use in the USA, Spain, Portugal, Panama, Colombia.

EVOSS is also working on the

development of an EV Mid Speed Car to serve the niche of the 2nd car in the family.

Our developing Artificial Intelligence (AI)-Enhanced

Metaverse Division (information and content) (www.realityborder.com) is currently developing a groundbreaking white-label solution designed

specifically for corporations, businesses, and the telecommunications industry.

Delivering a full suite of immersive content services,

creating a comprehensive virtual experience that can be accessed through the Web or our proprietary mobile apps.

The features include

up to four simultaneous video screens for versatile content presentation, various virtual halls such as the main hall, home hall, auditorium,

exhibition space, shopping center, and meeting rooms.

Stands for mobile application downloads, clickable gates for immediate purchasing,

and direct communication tools are seamlessly integrated to foster collaboration, engagement, and interactivity.

It goes beyond traditional

virtual spaces by utilizing cutting-edge AI technology.

This ensures video conferencing and real-time communication with other users within

the Metaverse, offering our customers a collective and fully immersive experience that caters to diverse needs such as content acquisition,

entertainment, and shared virtual experiences.

It is a future-ready platform that encourages creativity, connectivity, and collaboration

like never before.

Our developing metaverse leverages advanced AI to

introduce Non-Player Characters (NPCs) that significantly enhance user engagement and functionality within virtual environments.

NPCs are not mere static elements;

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

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

to purchasing products from external websites.

Furthermore, these intelligent agents can control access to gated spaces within the metaverse

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

A key innovation in our AI implementation is the NPCs'

ability to autonomously make decisions based on their understanding of user interactions.

This is achieved through state-of-the-art natural

language processing and understanding capabilities, which are supported in seven languages.

Additionally, our NPCs utilize advanced text-to-speech

and speech-to-text technologies to facilitate seamless communication with users across diverse linguistic backgrounds.

The incorporation

of "function call" features further enhances the NPCs' ability to perform complex tasks and interact meaningfully with the environment

and the users.

Our reference to our technology as "cutting-edge"

is grounded in our commitment to continuous improvement and innovation.

We consistently integrate the latest advancements in AI, particularly

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

This ensures that our metaverse remains at the forefront

of AI application in virtual spaces, offering an unparalleled user experience that goes beyond traditional virtual environments.

We are currently in an advanced phase of development,

with ongoing enhancements to AI functionalities and user interaction models.

Our team is dedicated to exploring and implementing the latest

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

The information contained on our websites is

not incorporated by reference into this quarterly report and should not be considered part of this or any other report filed with the

our most recent acquisition, supports expansion and integration of our business divisions through its B2B digital gift card and incentives

platform, which represented 13% of our revenues for the three months ended March 31, 2026.

Our Artificial Intelligence (AI) division, Reality

Border (www.realityborder.com), initially developed an AI-enhanced immersive digital experience platform.

Building on that early development

work—including conversational interfaces, multilingual models, and AI-driven workflows—Reality Border now develops practical

AI software solutions for enterprise and telecommunications applications.

Reality Border currently serves as IQSTEL’s AI innovation and product development platform.

Its activities include AI agents and

related software solutions designed for web, voice, and contact center environments, as well as integration with telecommunications infrastructure,

business systems, and security layers.

The Company’s AI strategy includes solutions such as Airweb.ai for AI-powered customer engagement

across web and phone channels, IQ2Call.ai for AI-enabled call center and customer care applications, and IQCortex.ai for broader AI platform

capabilities and enterprise use cases.

Reality Border’s current development efforts include software functionality, workflow orchestration, multilingual interaction, system

integration, and operational deployment models intended for business use.

Reality Border’s earlier immersive platform work contributed

to capabilities that are now being applied in its AI products;

however, the current business emphasis is on AI solutions for enterprise

and telecommunications operations rather than metaverse-based environments.

The information contained on our websites is not incorporated

by reference into this quarterly report and should not be considered part of this or any other report filed with the SEC.

Methods of Valuation

We use supplemental measures of our performance which

are derived from our consolidated financial information but which are not presented in our consolidated financial statements prepared

in accordance with GAAP.

are derived from our consolidated financial information but are not presented in our consolidated financial statements prepared in accordance

These non-GAAP financial measures include:

23 unchanged sentences

• Change in Fair Value of Derivative Liabilities:

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

These adjustments reflect unrealized gains or losses that are non-operational and subject

to market volatility.

Loss on Settlement of Debt:

This represents non-recurring

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

This represents non-recurring expenses associated with specific financing activities and does not impact

ongoing business operations.

Stock-Based Compensation:

8 unchanged sentences

Gross revenue, which equals revenue before intercompany

eliminations, represents a key performance metric that management uses to measure.

eliminations, represents a key performance metric that management uses to measure the aggregate scale and commercial activity of the Company’s

operating segments prior to consolidation adjustments.

Gross Revenue is particularly useful in evaluating:

Total transactional volume

Growth trends across business units

Underlying demand and commercial activity independent

of consolidation structure

Gross Revenue is a non-GAAP measure and should be

evaluated together with the Company’s GAAP revenue, which includes the effect of intercompany eliminations required under consolidation

Non-GAAP financial measures have inherent limitations

and should not be considered superior to, or a substitute for, GAAP results.

The Company provides reconciliations of each non-GAAP financial

measure to the most directly comparable GAAP measure in the accompanying tables.

Management believes these reconciliations provide investors

with transparency into the adjustments made and enhance the overall understanding of the Company’s operating performance.

Results of Operations

Our total revenue reported for the three months ended

September 30, 2025 was $102,867,553, compared with $54,249,614 for the three months ended September 30, 2024.

These numbers reflect an

increase of 89.62% quarter over quarter on our consolidated revenues.

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

2025 was $232,683,605, compared with $184,346,412 for the nine months ended September 30, 2024;

which reflects an increase of 26.22%.

When looking at the numbers by companies,

we have the following breakout for the three and nine months ended September 30, 2025 compared to the three and nine months ended September

Revenue for the Three Months Ended September 30,

Revenue for the Nine Months Ended September 30,

March 31, 2026 was $97,919,836, compared with $57,632,816 for the three months ended March 31, 2025.

These numbers reflect an increase

of 70% year over year on our consolidated revenues.

When looking at the numbers by subsidiary, we have

the following breakout for the three months ended March 31, 2026 compared to the three months ended March 31, 2025:

Revenue for the Three Months Ended March 31,

Etelix.com USA, LLC

4 unchanged sentences

GlobeTopper LLC

$ 118,564,720

$ 273,714,416

$ 187,482,843

Intercompany eliminations

(13,409,141 )

(41,030,811 )

$ 102,867,553

$ 232,683,605

$ 184,346,412

For the three and nine months ended September 30,

2025, total consolidated revenue increased compared to the same period in 2024.

The growth mainly reflects higher activity across

most subsidiaries, particularly those engaged in VOIP Telecom services, due to a higher volume of intercompany transactions during both

The continued growth of our revenue is the result

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

the synergies among our subsidiaries, particularly those engaged in VOIP Telecom services, due to a higher volume of intercompany transactions.

The increase also includes the contribution from a newly acquired subsidiary, GlobeTopper LLC, which closed on July 1, 2025.

Intercompany eliminations rose as well, driven by

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

These intercompany transactions are part of our strategy

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

and improved service delivery.

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

margin results.

The organic growth during the three and nine months

ended September 30, 2025 was 70% of the total revenue for those periods.

This reflects the solid foundation of our revenue and the growth

capacity the Company has with its current operations.

We consider organic growth the revenues reported by our existing subsidiaries once

fully integrated to our operations.

A significant reduction in intercompany transactions

is also observed for the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025, which did not impact the overall position.

This reflects the joint efforts of the companies to strengthen their position with third parties through new commercial agreements.

The organic growth during the three months ended March

31, 2026 was 87% of the total revenue for those periods.

This reflects the solid foundation of our revenue and the growth capacity the

Company has with its current operations.

We consider organic growth the revenues reported by our existing subsidiaries once fully integrated

to our operations.

These subsidiaries include Etelix, SwissLink, QGlobal, IoT Labs, Smartbiz, Whisl, QXTEL.

GlobeTopper, acquired on July 1 st , 2025

represented the rest of the increment, showing the potential this subsidiary has of creating value to the organization.

Cost of Revenue

Our total cost of revenue for the three months ended

September 30, 2025 increased to $100,126,838, compared with $52,229,695 for the three months ended September 30, 2024.

Our total cost

of revenue for the nine months ended September 30, 2025 increased to $226,136,445, compared with $178,737,687 for the nine months ended

September 30, 2024.

When looking at the numbers by subsidiary, we have

the following breakout for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30,

Cost of Revenue for the Three Months Ended September 30,

Cost of Revenue for the Nine Months Ended September 30,

GlobeTopper, acquired on July 1st, 2025 represented

the rest of the increment increase, showing the potential this subsidiary has of creating value to the organization.

Cost of Revenues

Our total cost of revenues for the three months ended

March 31, 2026 increased to $95,839,138, compared with $55,697,858 for the three months ended March 31, 2025.

When looking at the numbers by subsidiary,

we have the following breakout for the three months ended March 31, 2026 compared to the three months ended March 31, 2025:

Cost of Revenue for the Three Months Ended March 31,

Etelix.com USA, LLC

4 unchanged sentences

GlobeTopper LLC

$ 115,666,149

$ 266,786,765

$ 181,641,329

Intercompany eliminations

(13,397,244 )

(40,650,320 )

$ 100,126,838

$ 226,136,445

$ 178,737,687

Our cost of revenue consists of direct charges from

4 unchanged sentences

with the behavior of the revenue commented above, as each additional unit sold (minutes and SMS) has its corresponding termination cost.

A similar pattern is observed in the virtual gift-card business, where each incremental digital prepaid product delivered to customers

includes the associated wholesale acquisition cost payable to the issuing partner.

As a result, cost of revenue moves directionally in

line with transactional volume across both business lines, reflecting the variable-cost nature of these operations.

The inclusion of GlobeTopper in the consolidation

process, along with the traffic volumes by QXTEL and the reorganizing of the portfolio among subsidiaries, reflects the synergies derived

from the commercial and operational integration of all group companies.

This integration has resulted in a significant volume of intercompany

transactions, which are part of our strategic approach to optimizing routing and cost efficiency.

We expect this to positively impact

revenues and margins in the future.

Our gross margin, which is simply the difference between

our revenues and our cost of sales, discussed above, was $6,547,160 for the nine months ended September 30, 2025 compared to $5,608,725

for the nine months ended September 30, 2024, reflecting an increase of 16.73% quarter over quarter

This growth is the result of commercial and operational

synergies achieved through intercompany collaboration.

We expect this trend to strengthen as we continue aligning internal operations

and leveraging our integrated service portfolio.

process, along with the traffic volumes by QXTEL, Etelix and Swisslink, and the reorganizing of the portfolio among subsidiaries, reflects

the synergies derived from the commercial and operational integration of all group companies.

This quarter, compared to 2025, reflects the positive

impact of the portfolio restructuring.

While intercompany transactions decreased, traffic shifted toward third parties, strengthening

external relationships.

This transition helped maintain growth and is expected to continue supporting revenue and margins going forward.

Our gross margin, which is simply the difference

between our revenues and our cost of sales, discussed above, was $2,080,698 for the three months ended March 31, 2026 compared to $1,934,958

for the three months ended March 31, 2025.

This represents an increase of 8% in the gross margin year over year.

Gross Margin % for the Three Months Ended March 31,

Etelix.com USA, LLC

SwissLink Carrier AG

Smartbiz Telecom

Whisl Telecom

QXTEL Limited

GlobeTopper LLC

Operating Expenses

Operating expenses, which consist solely of general

and administrative costs, increased by 58.91% for the three months ended September 30, 2025, compared to the same period in 2024.

the nine months ended September 30, 2025, general and administrative expenses rose to $8,366,698 from $6,144,677 reported in the same

period of 2024, reflecting a 36.16% increase.

A detailed breakdown by major category for the three and nine months ended September 30,

2025 and 2024 is presented in the table below:

Three Months Ended September 30,

Nine Months Ended September 30,

Operating expenses increased to $3,038,707 for the

three months ended March 31, 2026 from $2,539,184 for the three months ended March 31, 2025.

The detail by major category is reflected

in the table below.

Operating Expenses for the Three Months Ended

Salaries, Wages and Benefits

Professional Fees

Legal and regulatory

Travel and events

Legal & Regulatory

Travel & Events

Bank Services and Fees

1 unchanged sentence

Office, Facility and Other

Financial Expenses

Bad debt expense

Stock-based compensation

Total Operating Expense

When looking at the numbers by subsidiary, we have

the following breakout for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024:

Nine Months Ended September 30,

The most significant differences are:

(1) the increase

in technology expenses related to the deployment and upgrade of the Switching platform to allocate all subsidiaries, which will result

in tremendous cost reduction once all companies are migrated to the new platform;

(2) the increases in other items such as technology;

depreciation and amortization;

and office, facility and other are largely the result of the addition of QXTEL and GlobeTopper to our consolidated

financial statements.

When looking at the numbers by subsidiary, we have the following breakout

for the three months ended March 31, 2026 compared to the three months ended March 31, 2025:

Operating Expenses for the Three Months Ended

Etelix.com USA, LLC

5 unchanged sentences

GlobeTopper LLC

Intercompany Elimination

The most significant differences are:

(1) the increase

in technology expenses related to the deployment and upgrade of the Switching platform to allocate all subsidiaries, which will result

in tremendous cost reduction once all companies are migrated to the new platform;

(2) the increases in other items such as salaries, wages

and benefits;

depreciation and amortization;

and office, facility and other are largely the result of the addition of QXTEL and GlobeTopper

to our consolidated financial statements.

For the nine months ended September 30, 2024, QXTEL

consolidated only the expenses incurred between April and September 2024.

In contrast, for the same period in 2025, expenses from January

through September were included.

This difference in the reporting periods explains the 75% increase in general and administrative expenses

compared to the prior year.

Additionally, starting July 1, 2025, Globetopper’s

expenses were incorporated, which were not considered in previous periods.

Intercompany eliminations

The largest portion of the increase comes from IQSTEL,

which is currently bearing most of the technology-related expenses, and from QXTEL, which since its incorporation has maintained a higher

cost structure compared to the other subsidiaries, although it has remained consistent over time.

Additionally, starting July 1, 2025,

Globetopper’s expenses were incorporated, which were not included in previous periods.

We are continually identifying operational synergies

among all of our subsidiaries to be more cost efficient.

Operating Income/Loss

For the three months ended September 30, 2025, the

Company reported an operating loss of $559,083, representing a significant increase compared to the operating loss of $56,553 for the

same period in 2024.

Similarly, for the nine months ended September 30, 2025, the operating loss widened to $1,819,538, up from $535,952

reported during the corresponding period in the prior year.

These results reflect an overall rise in operating expenses, largely associated

with ongoing investments in development and growth initiatives.

Operating Income

The Company showed negative Operating Income for the

three months ended March 31, 2026 of $958,009 compared with $604,226 for the three months ended March 31, 2025.

These results reflect

an overall rise in operating expenses, largely associated with ongoing investments in development and growth initiatives.

Our Telecom Division, currently the primary source

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

Meanwhile, our pre-revenue companies are operating with minimal

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

A comparison of the tables below highlights the significant

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

nine-month periods ended September 30, 2025.

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

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

Months Ended Sept 30, 2025

and administration

Operating Expenses

income/(loss)

Months Ended Sept 30, 2024

and administration

Operating Expenses

income/(loss)

of revenue for the Company, shows continued progress, as evidenced by the increase in revenue and gross profit.

However, it reported a

negative operating income for the three months ended March 30, 2026, mainly driven by the increase in general and administrative expenses.

This contrasts with the period ended March 31, 2025, which showed a positive operating income.

The Fintech Division also reflects its

current position following the inclusion of Globetopper.

In addition, our pre-revenue companies continue to

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

Other Expenses/Other Income

We had other expenses of $1,694,867 for the three

months ended September 30, 2025, as compared with other expenses of $646,846 for the same period ended 2024.

We had other expenses of

$3,815,516 for the nine months ended September 30, 2025, as compared with other expenses of $2,646,275 for the same period ended 2024.

The increase in other expenses for the nine months ended September 30, 2025 is mainly due to the change in the loss on settlement of debt.

We finished the three months ended September 30, 2025

with a loss of $2,325,869, as compared to a loss of $773,004 during the three months ended September 30, 2024.

We finished the nine months

ended September 30, 2025 with a loss of $5,819,244, as compared to a loss of $3,317,107 during the nine months ended September 30, 2024.

We had total other expenses of $412,424 for the three

months ended March 31, 2026, as compared with other expenses of $519,660 for the same period ended 2025.

The other expenses are largely

due to $350,998 and $531,726 of Interest Expense for the three months ended March 31, 2026 and 2025, respectively.

A significant portion

of the 2026 interest expense was associated with the financing for the acquisition of Globetopper, which allowed us to drive the organic

growth of the Company.

We finished the three months ended March 31, 2026

with a net loss of $1,385,936, as compared to a loss of $1,144,461 during the three months ended March 31, 2025.

The 2026 net loss is

highly impacted by interest expense incurred in the acquisition of Globetopper;

however, the increase in the Company's value and the beneficial

effects of this acquisition could be observed in the $829,064 of gross profit added to our operations for the three months ended March

31, 2026, which represents 43% of the total consolidated gross profit.

The net results of the periods reported are highly

1 unchanged sentence

the funds borrowed for the acquisition of QXTEL Limited and GlobeTopper LLC.

Our Telecom and Fintech Divisions, the divisions presently

generating revenue, have a positive operating income when presented separately.

As we have indicated on several occasions, our strategy

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

Fintech and Cybersecurity.

During this quarter, the Company began generating revenue in the Fintech area, marking an important step in

diversifying its sources of income and expanding its business model.

Telecom Division

Fintech Division

Pre-revenue companies

Ended Sept 30, 2025

Ended Sept30, 2025

Ended Sept 30, 2025

Cost of revenue

Operating expenses

General and administration

Total Operating Expenses

Operating income/(loss)

Other income (expense)

Net income (loss) before income taxes

Net income (loss)

Depreciation and Amortization

Interest expense

FX Gains/Losses

Loss on settlement of debt

Loss on settlement of salary payable

Stock-based compensation

Other non-recurring

Adjusted EBITDA

In evaluating our financial performance, we utilize

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

(Please see Adjusted EBITDA,

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

expenses, taxes, depreciation and amortization;

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

As previously stated, our strategy remains focused

on strengthening the telecommunications segment as the main growth engine to support the development and expansion of new business lines,

including our Fintech Division with the inclusion of Globetopper, which we expect to contribute positively to future performance and enhance

our market positioning.

In evaluating our financial performance,

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

(Please see Adjusted

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

interest expenses, taxes, depreciation and amortization, items that we believe are not indicative of our operating performance, such as:

- FX Gains and Losses.

- Stock-Based Compensation:

As a non-cash expense, this adjustment eliminates variability caused by

equity-based incentives.

As a non-cash

expense, this adjustment eliminates variability caused by equity-based incentives.

- Other non-recurrent expenses:

Adjusted EBITDA removes one-time, irregular, or non-recurring expenses

to reflect the Company's sustainable earnings.

We believe Adjusted EBITDA offers a clearer view of

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

Based on the analysis of our Adjusted EBITDA our Telecom

Division is a high-performing division that generates strong operational profits.

Consolidated figures show a slightly negative Adjusted

while this isn’t ideal, in our opinion it implies the Company is close to breaking even and might achieve positive Adjusted

EBITDA with small improvements in efficiency or revenue growth.

We are in a transitional period, scaling operations and investing heavily

in growth initiatives with the execution of our M&A plan.

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

and has acted in that direction.

EBITDA removes one-time, irregular, or non-recurring expenses to reflect the company's sustainable earnings.

We believe Adjusted EBITDA offers a clearer

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

Based on the analysis of our Adjusted EBITDA,

our Telecom Division is a high-performing division that generates strong operational profits.

Consolidated figures show a slightly negative

Adjusted EBITDA;

while this isn’t ideal, in our opinion it implies the Company is close to breaking even and might achieve positive

Adjusted EBITDA with small improvements in efficiency or revenue growth.

We are in a transitional period, scaling operations and investing

heavily in growth initiatives with the execution of our M&A plan.

Management has also identified areas for cost-cutting and operational

improvements and has acted in that direction.

Months Ended March 31, 2026

Months Ended March 31, 2025

Months Ended March 31, 2026

Months Ended March 31, 2025

Months Ended March 31, 2026

Months Ended March 31, 2025

Months Ended March 31, 2026

Months Ended March 31, 2025

Months Ended March 31, 2026

Months Ended March 31, 2025

and administration

Total Operating

Operating income/(loss)

income (expense)

(loss) before income taxes

income (loss)

and Amortization

FX Gains/Losses

Liquidity and Capital Resources

As of September 30, 2025, we had total current assets

of $29,837,729 and current liabilities of $28,742,676, resulting in a positive working capital of $ 1,095,053.

Our operating activities used $2,602,320

in the nine months ended September 30, 2025 as compared with $2,526,651 used in operating activities in the nine months ended September

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

which varies depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable

and trade accounts payable.

Despite a larger net loss in 2025, cash used in operations only slightly increased.

This is due to substantial

non-cash adjustments and working capital changes:

Stock-based compensation, depreciation, and amortization increased, reflecting higher non-cash expenses.

As of March 31, 2026, we had total current assets

of $29,726,482 and current liabilities of $30,028,395, resulting in a negative working capital of $301,913.

Our operating activities used $175,447 in the

three months ended March 31, 2026 as compared with $1,906,969 used in operating activities in the three months ended March 31, 2025.

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

depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and

trade accounts payable.

This is due to substantial non-cash adjustments and working capital changes:

Depreciation and amortization increased, reflecting higher non-cash expenses.

Bad debt expense remained low, indicating stable receivables quality.

Loss on settlement of debt and salary payable were significant in 2025, reflecting restructuring

and settlements on debts.

Accounts receivable:

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Large negative adjustments, especially accrued liabilities,

($44.8M outflow), indicating significant payments during the period.

The company’s operating cash flow is still negative, but the gap

between net loss and cash used is bridged by non-cash charges and working capital management.

Investing activities used $219,331 for

the nine months ended September 30, 2025 compared to $2,950,367 used during the same period of year 2024.

Investing activities in 2024

were highly impacted by the acquisition of QXTEL.

The Company reduced investing outflows in the nine months ended September 30, 2025,

shifting from expansion to consolidation and cash preservation.

Financing activities provided $2,570,726

in the nine months ended September 30, 2025 compared with $6,239,489 provided in the nine months ended September 30, 2024.

inflows dropped significantly, indicating a reduced reliance on equity and convertible debt.

Additionally, note that proceeds from financing

activities in 2024 were largely used in the acquisition of QXTEL.

In 2025 financing inflows dropped sharply, indicating less reliance

on new debt or equity.

Proceeds from loans payable remained strong ($5.5M in 2025), but repayments and other outflows (e.g., repayments

of acquisition notes, dividends to non-controlling interests) offset much of this.

Convertible notes and equity-related inflows were

lower than in 2024, reflecting a more mature capital structure and less aggressive fundraising.

The Company is shifting from aggressive expansion

in 2024 with the acquisition of QXTEL to consolidation and cash preservation in these first nine months of 2025, with a heavy reliance

on working capital management and non-cash financing tools.

The Company’s debt repayments suggest a maturing capital structure.

At the same time, the expansion of GlobeTopper during this quarter reflects the Company’s continued commitment to strengthening

and scaling the operations of its other business divisions.

We intend to fund operations through increased sales

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

We also plan to seek additional financing

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

There can be no assurance that we will be successful in raising

additional funding.

If we are not able to secure additional funding, the implementation of our business plan will be impaired.

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

indicating significant payments during the period.

The Company’s operating cash flow is still

negative, but the gap between net loss and cash used is bridged by non-cash charges and working capital management.

Investing activities used $8,400 for the three

months ended March 31, 2026, compared to $58,645 in the same period of 2025.

The higher outflows in 2025 were mainly driven by the acquisition

of QXTEL and Globetopper.

The decrease in 2026 reflects lower investment activity compared to the prior period.

Financing activities provided $626,075 in the

current period, compared to $540,304 in the prior period.

The increase reflects higher net inflows from financing activities.

is mainly due to increased proceeds from financing sources, partially offset by repayments and related outflows.

Financing activities

during the period include funding associated with the acquisition of Globetopper, as the Company continues to support its growth and investment

The Company is transitioning from an expansion phase

in 2026, marked by the acquisition of Globetopper, to a more consolidated approach during the first nine months of 2026, with a greater

focus on cash preservation, working capital management, and non-cash financing tools.

The Company’s debt repayments reflect a maturing

capital structure.

At the same time, the expansion of Globetopper during the year ended December 31, 2025 demonstrates the Company’s

continued commitment to strengthening and scaling its other business divisions.

These conditions, including our recurring losses from

operations, negative working capital, and negative operating cash flows, raise substantial doubt about the Company’s ability to

continue as a going concern.

See Note 3 to the consolidated financial statements for additional discussion.

We intend to fund our operations through increased

sales, as well as debt and/or equity financing arrangements, to support liquidity and capital resources.

We also plan to seek additional

funding through public and private equity offerings.

However, there can be no assurance that we will be successful in raising additional

If we are unable to secure such funding, our business plan and operations could be adversely affected.

Additionally, there can

be no assurance that such financing will be available on acceptable terms, or at all.

Although our operations are influenced by general

economic conditions, we do not believe that inflation had a material effect on our results of operations during the nine-month period

ended September 30, 2025.

economic conditions, we do not believe that inflation had a material effect on our results of operations during the three-month period

ended March 31, 2026.

Critical Accounting Polices

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matters that are inherently uncertain.

Our accounting

policies are discussed in detail in the footnotes to our financial statements included in this Quarterly Report on Form 10-Q for the nine

months ended September 30, 2025;

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

valuation of long-lived assets, and income taxes.

Management bases its estimates and judgments on historical experience and other factors

that are believed to be reasonable under the circumstances.

Actual results may differ from these estimates under different assumptions

or conditions.

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

accounting policies are discussed in detail in the footnotes to our financial statements included in this Quarterly Report on Form 10-Q

for the three months ended March 31, 2026;

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

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

bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances.

Actual results may differ from these estimates under different assumptions or conditions.

See the Consolidated Financial Statements in

this Quarterly Report for a complete discussion of our significant accounting policies.

Off Balance Sheet Arrangements

As of September 30, 2025, there were no off-balance

sheet arrangements.

As of March 31, 2026, there were no off-balance sheet

arrangements.

Recent Accounting Pronouncements

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What changed 10-Q

Item 2. Management’s Discussion and Analysis