iQSTEL Inc

Previous wording

Our Telecom Division, which represents the majority 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: 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).

Current wording

Our Telecom Division, which represents the majority of current operations and accounted for 87% of our revenues for the six months ended June 30, 2026, offers Voice over Internet Protocol (VoIP), SMS, proprietary Internet of Things (IoT) solutions, 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).

Previous wording

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 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.

Current wording

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 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 six months ended June 30, 2026.

Previous wording

Our total revenue reported for the three months ended 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.

Current wording

Our total revenue reported for the three months ended June 30, 2026 was $109,068,246, compared with $72,183,236 for the three months ended June 30, 2025. These numbers reflect an increase of 51.10% quarter over quarter on our consolidated revenues. Our total revenue reported for the six months ended June 30, 2026 was $206,988,082, compared with $129,816,052 for the six months ended June 30, 2025; which reflect an increase of 59.45%.

Previous wording

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.

Current wording

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

Previous wording

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.

Current wording

A significant reduction in intercompany transactions is also observed for the three and six months ended June 30, 2026 compared to the quarter ended June 30, 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.

Previous wording

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.

Current wording

The organic growth during the three and six months ended June 30, 2026 was 65% and 65% respectively, of the total revenue increase 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.

Previous wording

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.

Current wording

GlobeTopper, acquired on July 1st, 2025, represented the rest of the increase, showing the potential this subsidiary has of creating value to the organization.

Previous wording

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.

Current wording

This quarter, compared to same period of 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.

Previous wording

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.

Current wording

Our gross margin, which is simply the difference between our revenues and cost of sales, was $4,827,503 for the six months ended June 30, 2026, compared to $3,806,445 for the six months ended June 30, 2025, representing an increase of 26.82%. For the three months ended June 30, 2026, our gross margin was $2,746,805, compared to $1,871,487 for the three months ended June 30, 2025, representing an increase of 46.77%.

Previous wording

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.

Current wording

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 significant cost reductions once all companies are migrated to the new platform; (2) the increase in advertising expenses, mainly related to marketing and promotional activities; and (3) the increases in other items such as depreciation and amortization, office, facility and other expenses are largely the result of the addition of QXTEL and GlobeTopper to our consolidated financial statements.

Previous wording

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.

Current wording

For the three months ended June 30, 2026, the Company reported an operating loss of $1,120,819, representing a significant increase compared to the operating loss of $656,229 for the same period in 2025. Similarly, for the six months ended June 30, 2026, the operating loss widened to $2,078,828, up from $1,260,455 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.

Previous wording

In addition, our pre-revenue companies continue to operate with minimal expenses, focused solely on completing product and service development prior to market launch.

Current wording

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.

Previous wording

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.

Current wording

We had other expenses of $1,222,693 for the three months ended June 30, 2026, as compared with other expenses of $1,600,989 for the same period ended 2025. We had other expenses of $1,635,117 for the six months ended June 30, 2026, as compared with other expenses of $2,120,649 for the same period ended 2025. A significant portion of the 2026 interest expense was associated with the financing for the acquisition of GlobeTopper, which allowed us to drive the growth of the Company.

Previous wording

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.

Current wording

The 2026 net loss is highly impacted by interest expense incurred in the last acquisitions (QXTEL and GlobeTopper); however, the increase in the Company's value and the beneficial effects of these acquisitions could be observed in the $2,872,337 of gross profit added to our operations for the six months ended June 30, 2026, which represents 59.50% of the total consolidated gross profit.

Previous wording

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.

Current wording

As of June 30, 2026, we had total current assets of $33,525,038 and current liabilities of $30,816,253, resulting in a positive working capital of $2,708,785.

Previous wording

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

Current wording

Our operating activities used $1,667,174 in the six months ended June 30, 2026 as compared with $1,649,283 used in operating activities in the six months ended June 30, 2025. 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. This is due to substantial non-cash adjustments and working capital changes:

Previous wording

Accounts receivable: Large positive adjustment ($6.3M in 2026 vs. $45.9M in 2025), suggesting strong collections and reduced sales on credit.

Current wording

Accounts receivable: Large positive adjustment ($3.5M in 2026 vs. $33.4M in 2025) suggesting strong collections and reduced sales on credit.

Previous wording

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.

Current wording

Investing activities used $22,584 for the six months ended June 30, 2026, compared to $173,812 in the same period of 2025. The decrease in 2026 reflects lower investment activity compared to the prior period.

Previous wording

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. This change 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 strategy.

Current wording

Financing activities provided $1,626,281 in the current period, compared to $1,351,026 in the prior year. The increase reflects higher net inflows from financing activities. This change 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 strategy.

Previous wording

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.

Current wording

The Company is transitioning from an expansion phase in 2025, marked by the acquisition of GlobeTopper, to a more consolidated approach during the first six 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.

Previous wording

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.

Current wording

These conditions, including our recurring losses from operations, 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.

Previous wording

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 three-month period ended March 31, 2026.

Current wording

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 six-month period ended June 30, 2026.

Previous wording

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 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. 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 policies.

Current wording

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 six months ended June 30, 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. 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 policies.