10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X]	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended June 30, 2019
[  ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from __________ to__________
	Commission File Number: 000-55984

iQSTEL Inc.

(Exact name of registrant as specified in its charter)

Nevada	45-2808620
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
300 Aragon Avenue, Suite 375 Coral Gables, FL 33134
(Address of principal executive offices)
(954) 951-8191
(Registrant’s telephone number)
_______________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  [X] Yes [   ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  [X] Yes [   ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company.

[   ] Large accelerated filer	[   ] Accelerated filer
[   ] Non-accelerated filer	[X] Smaller reporting company
[   ] Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  [   ] Yes [X] No

Securities registered pursuant to Section 12(b) of the Act: None

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 15,627,364 common shares as of August 08, 2019

1

 

TABLE OF CONTENTS
		Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	19
Item 4:	Controls and Procedures	19
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	20
Item 1A:	Risk Factors	20
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3:	Defaults Upon Senior Securities	20
Item 4:	Mine Safety Disclosures	20
Item 5:	Other Information	20
Item 6:	Exhibits	20

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited consolidated financial statements included in this Form 10-Q are as follows:

Page
4	Consolidated Balance Sheets as of June 30, 2019 (unaudited) and December 31, 2018;
5	Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018 (unaudited);
6	Consolidated Statements of Stockholder’s Equity as of June 30, 2019 and 2018;
7	Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018 (unaudited); and
8	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.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  Operating results for the interim period ended June 30, 2019 are not necessarily indicative of the results that can be expected for the full year.

3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

iQSTEL INC

Consolidated Balance Sheets

(Unaudited)

			June 30,		December 31,
			2019		2018
ASSETS
Current Assets
	Cash	$	80,486	$	4,570
	Accounts receivable, net		1,596,925		1,825,854
	Due from related parties		272,121		258,020
	Prepaid and other current assets		109,079		17,503
Total Current Assets			2,058,611		2,105,947
Property and equipment, net			265,826		285,107
	TOTAL ASSETS	$	2,324,437	$	2,391,054
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
	Bank overdraft	$	-	$	82
	Accounts payable		1,038,781		1,390,048
	Due to related parties		40,631		23,193
	Loans payable		106,191		194,557
	Loans payable - related parties		90,787		90,787
	Current portion of convertible notes - net of discount of $597,124 and $158,696		508,876		63,205
	Other current liabilities		394,030		436,762
	Derivative liabilities		2,560,212		1,790,067
Total Current Liabilities			4,739,508		3,988,701
	Convertible notes - net of discount of $58,631 and $0		1,369		-
	TOTAL LIABILITIES		4,740,877		3,988,701
Stockholders’ Deficit
Preferred stock: 8,500,000 authorized; $0.0001 par value at June 30, 2019 and December 31, 2018 - no shares issued and outstanding			-		-
Common stock: 2,000,000,000 authorized; $0.001 par value at June 30, 2019 and December 31, 2018 - 15,475,916 and 15,022,650 shares issued and outstanding, respectively			15,476		15,023
Additional paid in capital			1,745,291		1,054,718
Accumulated deficit			(4,177,207)		(2,667,388)
Total Stockholder’s Deficit			(2,416,440)		(1,597,647)
	TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	2,324,437	$	2,391,054

 The accompanying notes are an integral part of these unaudited consolidated financial statements.  

4

iQSTEL INC

Consolidated Statements of Operations

(Unaudited)

			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2019		2018		2019		2018
Revenues		$	4,253,359	$	3,700,670	$	8,416,562	$	5,880,835
Cost of goods sold			4,345,087		3,223,540		8,072,713		5,190,699
Gross profit			(91,728)		477,130		343,849		690,136
Operating Expenses
	General and administration		341,553		334,749		532,060		458,725
	Total operating expenses		341,553		334,749		532,060		458,725
Operating income			(433,281)		142,381		(188,211)		231,411
Other income (expense)
	Other income		-		9,968		2,600		9,968
	Other expenses		(233)		-		(375)		(12,935)
	Interest expense		(511,125)		(100,515)		(776,162)		(157,569)
	Change in fair value of derivative liabilities		460,398		-		(547,671)		-
	Total other expense		(50,960)		(90,547)		(1,321,608)		(160,536)
Net loss before provision for income taxes			(484,241)		51,834		(1,509,819)		70,875
	Income taxes		-		-		-		-
Net income (loss)		$	(484,241)	$	51,834	$	(1,509,819)	$	70,875
Basic and dilutive loss per common share		$	(0.03)	$	0.00	$	(0.10)	$	0.01
Weighted average number of common shares outstanding			15,357,689		13,717,518		15,199,517		12,409,011

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

iQSTEL INC

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

(Unaudited)

		Common Stock				Additional Paid in Capital		Accumulated Deficit		Total
		Shares		Amount
Balance - December 31, 2018		15,022,650	$	15,023	$	1,054,718	$	(2,667,388)	$	(1,597,647)
	Common stock issued in conjunction with convertible notes	254,074		254		249,746		-		250,000
	Capital contribution	-		-		10,000		-		10,000
	Net loss	-		-		-		(1,025,578)		(1,025,578)
Balance - March 31, 2019		15,276,724	$	15,277	$	1,314,464	$	(3,692,966)	$	(2,363,225)
	Common stock issued for conversion of debt	76,335		76		4,924		-		5,000
	Resolution of derivative liabilities	-		-		181,326		-		181,326
	Common stock issued in conjunction with convertible notes	122,857		123		244,577		-		244,700
	Common stock issued for services	-		-		-		-		-
	Capital contribution	-		-		-		-		-
	Net loss	-		-		-		(484,241)		(484,241)
Balance - June 30, 2019		15,475,916	$	15,476	$	1,745,291	$	(4,177,207)	$	(2,416,440)

		Common Stock				Additional Paid in Capital		Subscription Receivable		Accumulated Deficit		Total
		Shares		Amount
Balance - December 31, 2017		11,085,965	$	11,086	$	737,429	$	-	$	(563,227)	$	185,288
	Common stock issued	1,184,849		1,185		58,615		-		-		59,800
	Debt forgiveness	-		-		45,200		-		-		45,200
	Net income	-		-		-		-		19,041		19,041
Balance - March 31, 2018		12,270,814	$	12,271	$	841,244	$	-	$	(544,186)	$	309,329
	Common stock issued	1,481,061		1,481		73,519		-		-		75,000
	Recapitalization	1,175,724		1,176		(77,450)		(8,750)		-		(85,024)
	Common stock issued for services	75,000		75		149,925		-		-		150,000
	Net income	-		-		-		-		51,834		51,834
Balance - June 30, 2018		15,002,599	$	15,003	$	987,238	$	(8,750)	$	(492,352)	$	501,139

The accompanying notes are an integral part of these unaudited consolidated financial statements. 

6

iQSTEL INC

Consolidated Statements of Cash Flows

(Unaudited)

			Six Months Ended
			June 30,
			2019		2018
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income (loss)	$	(1,509,819)	$	70,875
	Adjustments to reconcile net loss to net cash used in operating activities:
	Stock based compensation		-		150,000
	Depreciation and amortization		19,281		3,275
	Amortization of debt discount		541,894		-
	Change in fair value of derivative liabilities		547,671		-
	Changes in operating assets and liabilities:
	Accounts receivable		228,929		(835,834)
	Accounts receivable - related party		(10,701)		-
	Other current assets		(91,576)		(48,961)
	Accounts payable		(351,267)		527,742
	Other current liabilities		(42,149)		(5,504)
	Net cash used in operating activities		(667,737)		(138,407)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Payment of loan receivable - related party		(10,000)		-
	Collection from loan receivable - related party		10,000		-
	Net cash used in investing activities		-		-
CASH FLOWS FROM FINANCING ACTIVITIES:
	Bank overdraft		(82)		-
	Proceeds from loans payable		64,400		332,182
	Repayments of loans payable		(171,302)		(326,436)
	Proceeds from loans payable - related parties		46,438		800
	Repayment of loans payable - related parties		(32,400)		(850)
	Contribution		10,000		134,800
	Proceeds from convertible notes		1,048,500		-
	Repayment of convertible notes		(221,901)		-
	Net cash provided by financing activities		743,653		140,496
Net change in cash and cash equivalents			75,916		2,089
Cash and cash equivalents, beginning of period			4,570		23,266
Cash and cash equivalents, end of period		$	80,486	$	25,355
Supplemental cash flow information
	Cash paid for interest	$	208,557	$	148,406
	Cash paid for taxes	$	-	$	-
Non-cash transactions:
	Derivative liabilities recognized as debt discount	$	403,800	$	-
	Related party debt forgiveness	$	-	$	45,200
	Common stock issued in conjunction with convertible notes	$	494,700	$	-
	Common stock issued for conversion of debt	$	5,000	$	-

The accompanying notes are an integral part of these unaudited consolidated financial statements.

7

iQSTEL INC

Notes to the Unaudited Consolidated Financial Statements

June 30, 2019

NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization and Operations

iQSTEL Inc. (“iQSTEL”, “we”, “us”, or the “Company”) was incorporated under the laws of the State of Nevada on June 24, 2011 under the name of PureSnax International, Inc. and changed its name to iQSTEL Inc. on August 7, 2018.

The Company has been engaged in the business of telecommunication services as a wholesale carrier of voice and data for other telecom companies around the World with more than 150 active interconnection agreements with mobile companies, fix line companies and other wholesale carriers.

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

In the opinion of the company’s management, the accompanying unaudited interim financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the company as of June 30, 2019 and the results of operations and cash flows for the periods presented. The results of operations for the six months ended June 30, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited 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, 2018 filed with the SEC on April 10, 2019.

Consolidation Policy

For June 30, 2019, the consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiary, Etelix.com USA, LLC. All significant intercompany balances and transactions have been eliminated in consolidation. Prior to June 25, 2018, the financial statements presented are those of Etelix.

Use of Estimates

The preparation of financial statements in conformity with GAAP in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

Accounts Receivable and Allowance for Uncollectible Accounts

Substantially all of the Company’s accounts receivable balance is related to trade receivables. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company reviews its allowance for doubtful accounts daily, past due balances over 60 days and a specified amount are reviewed individually for collectability. Account balances are charged off after all means of collection have been exhausted and the potential for recovery is considered remote. As of June 30, 2019 the Company had no valuation allowance for doubtful accounts for the Company’s accounts receivable and recorded no bad debt expense.

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 and related party payables that it will likely incur in the near future. 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.

During the six months ended June 30, 2019 and 2018, eight customers represented 81% of our revenues and fourteen customers represented 81% of our revenues, respectively.

8

Revenue Recognition

The Company recognizes revenue from the sale of products in accordance with ASC 606, “Revenue from Contracts with Customers”. The Company recognizes revenue only when all of the following criteria have been met:

Identify the contract(s) with a customer   

Identify the performance obligations in the contract   

Determine the transaction price.   

Allocate the transaction price to the performance obligations in the contract.   

Recognize revenue when (or as) the entity satisfies a performance obligation.   

The Company recognizes revenue related to monthly usage charges and other recurring charges during the period in which the telecommunication services are rendered. Provided that persuasive evidence of a sales arrangement existed, and collection was reasonably assured. Persuasive evidence of a sales arrangement existed upon execution of a written interconnection agreement. The Company’s payment terms vary by clients.

Lease

The office lease meets the definition of a short-term lease because the lease term is 12 months or less. Consequently, consistent with Company’s accounting policy election, the Company does not recognize the right-of-use asset and the lease liability arising from this lease.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

NOTE 3 - GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company does not have significant cash, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. In addition, as of June 30, 2019, the Company had a net loss of $1,509,819. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its business plan and eventually attain profitable operations.

During the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and marketing expenses. The Company may experience a cash shortfall and be required to raise additional capital.

Historically, the Company has relied upon funds from its stockholders. 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.

9

NOTE 4 – PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets at June 30, 2019 and December 31, 2018 consist of the following:

	June 30,		December 31,
	2019		2018
Advance payment to suppliers	$	6,600	$	11,310
Other receivable		34,039		500
Prepaid expenses		17,840		5,093
Tax receivable		600		600
Prepayment for acquisition		50,000		-
	$	109,079	$	17,503

NOTE 5 – FIXED ASSETS, NET

Fixed assets, net at June 30, 2019 and December 31, 2018 consist of the following:

	June 30,		December 31,
	2019		2018
Telecommunication equipment	$	245,686	$	245,686
Telecommunication software		400,903		400,903
Total fixed assets		646,589		646,589
Accumulated depreciation and amortization		(380,763)		(361,482)
Total Fixed assets	$	265,826	$	285,107

Depreciation expense for the six months ended June 30, 2019 and 2018 amounted to $19,281 and $3,275, respectively.

NOTE 6 –LOANS PAYABLE

Loans payable at June 30, 2019 and December 31, 2018 consist of the following:

	June 30,		December 31,			Interest
	2019		2018		Term	rate
Complete Business Solutions_3	$	-	$	80,994	Note was issued on April 13, 2018 and due on March 9, 2019	33.3%
Green Capital Funding_2		89		89	Note was issued on October 1, 2018 and due on February 27, 2019	31.5%
Unique Funding Solutions_2		2,000		9,000	Note was issued on October 12, 2018 and due on January 17, 2019	28.6%
Green Note Capital Partner		11,135		18,278	Note was issued on October 22, 2018 and due on February 22, 2019	28.6%
Queen Funding LLC		-		17,083	Note was issued on November 29, 2018 and due on March 13, 2019	31.5%
Green Capital Funding_3		10,614		69,113	Note was issued on December 20, 2018 and due on May 15, 2019	31.5%
Leonite Capital LLC		82,353		-	Note was issued on May 22, 2019 and due on Demand.  Note is guaranteed by the Company’ CEO.	Higher of 14% and WSJ Prime rate plus 10%
Total		106,191		194,557
Less: Current portion of loans payable		106,191		194,557
Long-term loans payable	$	-	$	-

During the six months ended June 30, 2019 and 2018, the Company borrowed $82,353, and $332,182, which includes original issue discount and financing cost of $17,953 and $0, respectively, and repaid the principal amount of $171,302 and $326,436 and interest expense of $88,551 and $148,406, respectively.  

During the six months ended June 30, 2019 and 2018, the Company recognized amortization of discount, included in interest expense, of $17,953 and $0, respectively.

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NOTE 7 – OTHER CURRENT LIABILITIES

Other current liabilities at June 30, 2019 and December 31, 2018 consist of the following:

	June 30,		December 31,
	2019		2018
Accrued liabilities	$	237,427	$	361,779
Credit card		14,937		14,647
Accrued interest		30,435		4,905
Salary payable – management (see Note 11)		111,231		55,431
	$	394,030	$	436,762

NOTE 8 - CONVERTIBLE LOANS

At June 30, 2019 and December 31, 2018, convertible loans consisted of the following:

	June 30,		December 31,
	2019		2018
Promissory notes – Issued in fiscal year 2018, with variable conversion features	$	-	$	221,901
Promissory notes – Issued in fiscal year 2019, with variable conversion features		1,166,000		-
Total convertible notes payable		1,166,000		221,901
Less: Unamortized debt discount		(655,755)		(158,696)
Total convertible notes		510,245		63,205
Less: current portion of convertible notes		508,876		63,205
Long-term convertible notes	$	1,369	$	-

During the six months ended June 30, 2019 and 2018, the Company recognized amortization of discount, included in interest expense, of $523,941 and $0, respectively.

During the six months ended June 30, 2019 and 2018, the Company repaid notes of $221,901 and $0 and accrued interest including the prepayment penalty of $120,006 and $0, respectively.

Conversion

During the six months ended June 30, 2019, the Company converted notes with principal amounts of $5,000 into 76,335 shares of common stock. The corresponding derivative liability at the date of conversion of $181,326 was settled through additional paid in capital.

Promissory Notes - Issued in fiscal year 2018

During the year ended December 31, 2018, the Company issued a total of $213,750 in notes with the following terms:

Terms ranging from 9 months to 12 months.   

Annual interest rates ranging from of 10% to 12%.   

Convertible at the option of the holders at issuance.   

Conversion prices are typically based on the discounted (50% discount) lowest trading prices of the Company’s shares during various periods prior to conversion.   

Certain notes allow the Company to redeem the notes at rates ranging from 130% to 150% depending on the redemption date provided that no redemption is allowed after the 180th day. Likewise, the notes include financing costs totaling $12,250 and the Company received cash of $201,500.

11

Promissory Notes - Issued in fiscal year 2019

During the six months ended June 30, 2019, the Company issued a total of $1,171,000 in notes with the following terms:

Terms ranging from 6 months to 3 years.   

Annual interest rates ranging from of 8% to 12%.   

Convertible at the option of the holders at issuance or 180 days from issuance.   

Conversion prices are typically based on the discounted (39% or 50% discount) lowest trading prices of the Company’s shares during various periods prior to conversion.   

The convertible notes were also provided with a total of 376,931 common shares and warrant to purchase up to 92,000 shares of common stock at exercise price of $2.5 per share for 3 years.

Certain notes allow the Company to redeem the notes at rates ranging from 117% to 150% depending on the redemption date provided that no redemption is allowed after the 180th day. Likewise, the notes include financing costs totaling $122,500 and the Company received cash of $1,048,500.

Derivative liabilities

The Company determined that the conversion option in the note and the exercise feature of the warrants met the definition of a liability in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock. The Company will bifurcate the embedded conversion option in the note once the note becomes convertible and account for it as a derivative liability.

The Company valued the conversion features using the Black Scholes valuation model. The fair value of the derivative liability for all the note that became convertible for the year ended December 31, 2018 amounted to $896,593. $201,500 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $695,093 was recognized as a “day 1” derivative loss.

The Company valued the conversion features of convertible notes and warrant using the Black Scholes valuation model. The fair value of the derivative liability for all the note and warrant that became convertible for the six months ended June 30, 2019 amounted to $2,583,990. $403,800 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $2,180,190 was recognized as a “day 1” derivative loss.

Warrants

A summary of activity during the six months ended June 30, 2019 follows:

	Warrants Outstanding
		Weighted Average
	Shares	Exercise Price
Outstanding, December 31, 2018	-	$	-
Granted	92,000		2.50
Exercised	-		-
Forfeited/canceled	-		-
Outstanding, June 30, 2019	92,000	$	2.50

The following table summarizes information relating to outstanding and exercisable warrants as of June 30, 2019:

Warrants Outstanding				Warrants Exercisable
Number of Shares	Weighted Average Remaining Contractual life (in years)	Weighted Average Exercise Price		Number of Shares	Weighted Average Exercise Price
92,000	3.40	$	2.50	92,000	$	2.50

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NOTE 9 - DERIVATIVE LIABILITIES

The Company analyzed the conversion option for derivative accounting consideration under ASC 815, Derivatives and Hedging, and hedging, and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

Fair Value Assumptions Used in Accounting for Derivative Liabilities.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of June 30, 2019. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Black-Scholes valuation model.

For the six months ended June 30, 2019, the estimated fair values of the liabilities measured on a recurring basis are as follows:

	Six months ended	Year Ended
	June 30, 2019	December 31, 2018
Expected term	0.22 - 5.00 years	0.37 - 1.00 years
Expected average volatility	4% - 491%	405% - 528%
Expected dividend yield	-	-
Risk-free interest rate	1.71% - 2.57%	2.24 - 2.71%

The following table summarizes the changes in the derivative liabilities during the six months ended June 30, 2019:

Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance - December 31, 2018	$	1,790,067
Addition of new derivatives recognized as debt discounts		403,800
Addition of new derivatives recognized as loss on derivatives		2,180,190
Settled on issuance of common stock		(181,326)
Gain on change in fair value of the derivative		(1,632,519)
Balance - June 30, 2019	$	2,560,212

The aggregate loss on derivatives during the six months ended June 30, 2019 and 2018 was as follows;

	Six Months Ended
	June 30,
	2019		2018
Addition of new derivatives recognized as loss on derivatives	$	2,180,190	$	-
Gain on change in fair value of the derivative		(1,632,519)		-
	$	547,671	$	-

NOTE 10 – SHAREHOLDERS’ EQUITY

The Company’s authorized capital consists of 2,000,000,000 shares of common stock with a par value of $0.001 per share.

During the six months ended June 30, 2019, the Company issued 453,266 shares of common stock as follows;

376,931 shares in conjunction with convertible notes. 

76,335 shares for conversion of debt of $5,000 (see Note8) 

13

As of June 30, 2019 and December 31, 2018, 15,475,916 and 15,022,650 shares of common stock were issued and outstanding, respectively.

During the six months ended June 30, 2019, $10,000 was contributed to the Company and the Company recorded it as additional paid in capital.

NOTE 11 - RELATED PARTY TRANSACTIONS

Loans payable – related parties

	June 30,		December 31,			Interest
	2019		2018		Term	rate
Alonso Van Der Biest	$	80,200	$	80,200	Note was issued on June 12, 2015 and due on June 11, 2019	16.5%
Alvaro Quintana		10,587		10,587	Note was issue on September 30, 2016 and due on September 29, 2019	0%
Total		90,787		90,787
Less: Current portion of loans payable		90,787		90,787
Long-term loans payable	$	-	$	-

During the six months ended June 30, 2019, the Company repaid interest expense of $7,414.

Due from related parties

During the six months ended June 30, 2019, the Company loaned $10,000 to a related party and collected $10,000. As of June 30, 2019, the Company recorded accounts receivable from a related party of $10,701, included in due from related parties. As of June 30, 2019 and December 31, 2018, the Company had due from related parties of $288,908 and $278,207, respectively. The loans are unsecured, non-interest bearing and due on demand.

Due to related parties

During the six months ended June 30, 2019, the Company borrowed $46,438 from CEO of the Company and repaid $32,400. As of June 30, 2019 and December 31, 2018, the Company had due to related parties of $40,631 and $23,193, respectively. The loans are unsecured, non-interest bearing and due on demand.

Employment agreements

On June 25, 2018, the Company entered into Employment Agreements with the following persons: (i) Leandro Iglesias as President, CEO and Chairperson of the Company’s Board of Directors with an annual salary of $54,000; (ii) Juan Carlos Lopez Silva as Chief Commercial Officer with an annual salary of $54,000; and Alvaro Quintana Cardona as Chief Operating Officer and Chief Financial Officer with an annual salary of $30,000. The Employment Agreements have a term of 36 months, are renewable automatically for 24-month periods, unless the Company gives written notice at least 90 days prior to termination of the initial 36-month term. The Company shall have the right to terminate any of the employment agreements at any time without prior notice, but in that event, the Company shall pay these persons salaries and other benefits they are entitled to receive under their respective agreements for three years.

On May 2, 2019, the Company entered into Employment Agreements with the following persons: (i) Leandro Iglesias as President, CEO and Chairperson of the Company’s Board of Directors with an annual salary of $168,000 with an annual bonus of 3% of our net income; (ii) Juan Carlos Lopez Silva as Chief Commercial Officer with an annual salary of $120,000 with an annual bonus of 3% of our net income; and Alvaro Quintana Cardona as Chief Operating Officer and Chief Financial Officer with an annual salary of $144,000 with an annual bonus of 3% of our net income. The Employment Agreements have a term of 36 months, are renewable automatically for 24-month periods, unless the Company gives written notice at least 90 days prior to termination of the initial 36-month term. The Company shall have the right to terminate any of the employment agreements at any time without prior notice, but in that event, the Company shall pay these persons salaries and other benefits they are entitled to receive under their respective agreements for three years. The above executive officers agreed to two year non-compete and non-solicit restrictive covenants with the Company. If any of the executive officers are terminated for cause they shall forfeit any rights to severance.

During the six months ended June 30, 2019 and 2018, the Company recorded management fees of $118,000 and $0 and paid $62,200 and $0, respectively. As at June 30, 2019 and December 31, 2018, the Company accrued management salaries of $111,231 and $55,431, respectively.

14

NOTE 12 – COMMITMENTS AND CONTINGENCIES

Leases and Long-term Contracts

The Company has not entered into any long-term leases, contracts or commitments.

Rent

The Company leases office space at $1,200 per month with one-year term, starting July 1, 2018 and ending June 30, 2019. For the six months ended June 30, 2019 and 2018, the Company incurred $7,200 and $6,158, respectively.

The Company leases facilities which the term is 12 months. For the six months ended June 30, 2019 and 2018, the Company incurred $13,000 and $0, respectively.

NOTE 13 - SUBSEQUENT EVENTS

Subsequent to June 30, 2019 and through the date that these financials were made available, the Company had the following subsequent events:

On April 1, 2019, the Company entered into a Company Purchase Agreement (the “Purchase Agreement”) with Ralf Kohler (the “Seller”), which agreement provides for the Company’s purchase of 51% of the equity and certain assets of SwissLink Carrier AG (“SwissLink”), a Swiss corporation.

On August 7, 2019, having completed all conditions under the Purchase Agreement, the Company closed the transaction with Seller, and issued 187,500 shares to Seller for the 51% equity interest and certain assets in Swisslink and another 510 shares to Seller for 51% of the loan in Swisslink.

On July 11, 2019, the Company issued a convertible note in the principal amount of $282,000. The convertible note has a term of six months, accrues interest at 12% annually and the balance outstanding thereunder is convertible into the Company’s common stock at a price equal to 50% multiplied by the lowest trading price during the previous thirty days ending on the latest complete trading day prior to the conversion date.

On July 19, 2019, the Company issued a convertible note in the principal amount of $36,000. The convertible note has a term of twelve months, accrues interest at 10% annually and the balance outstanding thereunder is convertible into the Company’s common stock at a price equal to 50% multiplied by the lowest trading price during the previous twenty five days ending on the latest complete trading day prior to the conversion date.

On July 22, 2019, the Company issued a convertible note in the principal amount of $112,750. The convertible note has a term of nine months, accrues interest at 12% annually and the balance outstanding thereunder is convertible into the Company’s common stock at a price equal to 50% multiplied by the lowest trading price during the previous twenty five days ending on the latest complete trading day prior to the conversion date.

On July 23, 2019, the Company issued a convertible note in the principal amount of $125,000. The convertible note has a term of twelve months, accrues interest at 12% annually and the balance outstanding thereunder is convertible into the Company’s common stock at a price equal to 50% multiplied by the lowest trading price during the previous twenty five days ending on the latest complete trading day prior to the conversion date.

15

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.   These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions.  We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions.  Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.  Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.  We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.  Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Overview

We are a technology company offering a wide array of services to the telecommunications and internet industry. We currently offer, through our wholly owned subsidiary, Etelix.com USA LLC, international long-distance voice services for telecommunications operators (ILD Wholesale), and submarine fiber optic network capacity for Internet (4G and 5G).

Etelix.com USA LLC is based in the city of Miami, Florida; founded in 2008 and holder of an International Telecommunications Carrier 214-license issued by the Federal Telecommunications Commission (FCC).

In addition to pursuing the growth and development of the business of our subsidiary, Etelix.com USA LLC, we plan to expand our services to the retail market offering international long-distance voice communications to corporate, small business and individuals (ILD retail), supported in part on our current infrastructure.

We are also exploring opportunities in new business areas and markets, such as satellite communications; mobile services under the figure of a Mobile Virtual Network Operator (MVNO); Internet of Things (IoT) solutions and Data Centers. We expect that these new ventures will be developed either through mergers or acquisitions, or through strategic partnerships.

In addition, we are allocating resources to develop a Blockchain Payment Solution to facilitate the settlement of exchanged traffic among international carriers based on smart contracts.     

Our principal place of business is located at 300 Aragon Avenue, Suite 375 Coral Gables, FL 33134. General information about us can be found at www.iqstel.com. The information contained on or connected to our website is not incorporated by reference into this Quarterly Report on Form 10-Q and should not be considered part of this or any other report filed with the SEC.

Results of Operations

Revenues

Our total revenue reported for the three months ended June 30, 2019 was $4,253,359, compared with $3,700,670 for the three months ended June 30, 2018. Our total revenue reported for the six months ended June 30, 2019 was $8,416,562, compared with $5,880,835 for the six months ended June 30, 2018.

These numbers reflect an increase of 142% month over month primarily from the continuity of our commercial strategy put in place since the beginning of year 2018.

If net revenues continue growing at a similar rates for the next six months, we believe that the company will reach a total revenue of approximately $17 million by December 31, 2019.

16

Cost of Revenues

Our total cost of revenues for the three months ended June 30, 2019 increased to $4,345,087, compared with $3,223,540 for the three months ended June 30, 2018. Our total cost of revenues for the six months ended June 30, 2019 increased to $8,072,713, compared with $5,190,699 for the six months ended June 30, 2018.

Our cost of revenues consists of direct charges from vendors that the Company incurs to deliver services to its customers. These costs primarily consist of usage charges for calls terminated in vendor’s network.

The increase results from a higher volume of minutes of African destinations, which rates are on average 9 times higher compared to the average rates of the rest of the World. This behavior in the costs shows a logical correlation with the behavior of the revenue commented above.

Operating Expenses

Operating expenses increased to $341,553 for the three months ended June 30, 2019 from $334,749 for the three months ended June 30, 2018. Operating expenses increased to $532,060 for the six months ended June 30, 2019 from $458,725 for the six months ended June 30, 2018. The detail by major category for the six month ended June 30, 2019 and 2018 is reflected in the table below.

		Six Months Ended June 30
		2019		2018
Salaries, Wages and Benefits	$	162,242	$	116,182
Technology		94,847		81,220
Professional Fees		162,662		211,945
Legal & Regulatory		-		25
Trade Insurance		-		9,665
Travel & Events		3,375		12,015
Public Cost		19,432		-
Advertising		50,000		-
Depreciation and Amortization		19,281		3,274
Office, Facility and Other		20,221		24,399
Sub Total		532,060		458,725
Stock-based compensation		-		-
Lawsuit settlement		-		-
Total Operating Expense	$	532,060	$	458,725

The main reasons for the overall increase in operating expenses in 2019 were: (1) the Salaries, Wages and Benefits of $46,060; (2) Public cost of $19,432; and (3) Advertising and Promotion of $50,000.

On the other hand there was a significant reduction in the item Professional Fees of $49,283.

All other items were stable from one year to the other, which allows us to affirm that the cost structure of the company is under control and supervision.

Operating Income

The Company showed negative Operating Income for the three months ended June 30, 2019 of $433,281 compared with a positive result of $142,381 for the three months ended June 30, 2018. The Company showed negative Operating Income for the six months ended June 30, 2019 of $188,211 compared with a positive result of $231,411 for the six months ended June 30, 2018.

The increase of the numbers for the six month period above is primarily due to the costs associated to the operation of the public entity (iQSTEL, Inc.) estimated in the amount of $365,868. When we look at the results of our operating entity Etelix.com USA, LLC the Operating Income for the six months ended June 30, 2019 is $146,910.

It is important to remark that iQSTEL is in its first year of operations since the acquisition of Etelix.com USA, LLC; and during this period the company has incurred in high costs related to its reorganization, the preparation of the offering statement and due diligence activities related to the execution of the merge and acquisitions strategy.

17

Even though the Operating Expenses increases in absolute value when comparing the six months ended June 30, 2019 to the same period of 2018, those Operating Expenses experimented a reduction in terms of a percentage of Revenue from 7.80% as of June 30, 2018 to 6.32% for the same period of 2019.

Other Expenses/Other Income

We had other expenses of $50,960 for the three months ended June 30, 2019, as compared with other expenses of $90,547 for the same period ended 2018.  We had other expenses of $1,321,608 for the six months ended June 30, 2019, as compared with other expenses of $160,536 for the same period ended 2018. The increase in other expenses is a result of the change in fair value of derivative liabilities of $547,671, and the increase of interest expenses to $776,162 for the six months ended June 30, 2019 compared to $157,569 for the same period ended 2018.

Net Loss

We finished the three months ended June 30, 2019 with a loss of $484,241, as compared to a net income of $51,834 during the three months ended June 30, 2018. We finished the six months ended June 30, 2019 with a loss of $1,509,819, as compared to a net income of $70,875 during the six months ended June 30, 2018.

The reasons for specific components are discussed above. Overall, these are the main concepts impacting the net result: (1) a loss in the change in fair value of derivative liabilities of $547,671; (2) an increment in interest expenses of $618,593 year over year and (3) the Operating Expenses of the public entity of $365,868.

Liquidity and Capital Resources

As of June 30, 2019, we had total current assets of $2,058,611 and current liabilities of $4,739,508, resulting in a working capital deficit of $2,680,897. This compares with the working capital deficit of $1,882,754 at December 31, 2018. This increase in working capital deficit, as discussed in more detail below, is primarily the result of the increment in the derivative liabilities.

Our operating activities used $667,737 in the six months ended June 30, 2019 as compared with $138,407 used in operating activities in the six months ended June 30, 2018.

Financing activities provided $743,653 in the six months ended June 30, 2019 compared with $140,496 provided in the six months ended June 30, 2018. Our positive financing cash flow in 2018 was largely the result of the proceeds from loans, capital contributions and proceeds from convertible notes.

Based upon our current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve months. We intend to fund operations through increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements. We plan to seek additional financing in a 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. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

Inflation

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 June 30, 2019.

Critical Accounting Polices

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies are disclosed in Note 2 of our audited consolidated financial statements included in the Form 10-K filed with the Securities and Exchange Commission.

Off Balance Sheet Arrangements

As of June 30, 2019, there were no off balance sheet arrangements.

18

Recent Accounting Pronouncements

The recent accounting pronouncements that are material to our financial statements are disclosed in Note 2 of our consolidated audited financial statements included in the Form 10-K filed with the Securities and Exchange Commission and in Note 2 of our unaudited consolidated financial statements included herein.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company and are not required to provide the information under this item pursuant to Regulation S-K.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures - Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report.

These controls are designed to ensure that information required to be disclosed in the reports we file or submit pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Based on this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were effective as of June 30, 2019.

We believe that our financial statements presented in this quarterly report on Form 10-Q fairly present, in all material respects, our financial position, results of operations, and cash flows for all periods presented herein.

Inherent Limitations - Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake. In particular, many of our current processes rely upon manual reviews and processes to ensure that neither human error nor system weakness has resulted in erroneous reporting of financial data.

Changes in Internal Control over Financial Reporting - There were no changes in our internal control over financial reporting during the three month period ended June 30, 2019, which were identified in conjunction with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

19

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any material pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

Item 1A: Risk Factors

See Risk Factors contained in our Form 10-K filed with the SEC on April 10, 2019.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The information set forth below relates to our issuances of securities without registration under the Securities Act of 1933.

During the six months ended June 30, 2019, the Company converted notes with principal amounts of $5,000 into 76,335 shares of common stock.

During the six months ended June 30, 2019, the Company issued a total of $1,171,000 in convertible notes and the lenders were also provided with a total of 376,931 common shares and warrant to purchase up to 92,000 shares of common stock at exercise price of $2.5 per share for 3 years.

These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

N/A

Item 5. Other Information

None

Item 6. Exhibits

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 formatted in Extensible Business Reporting Language (XBRL).
	**Provided herewith

20

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on August 09, 2019 on its behalf by the undersigned thereunto duly authorized.

IQSTEL INC.

/s/ Leandro Iglesias

Leandro Iglesias

Principal Executive Officer

/s/ Alvaro Quintana Cardona

Alvaro Quintana Cardona

Principal Financial and Accounting Officer

21

EX-31.1

CERTIFICATIONS

I, Leandro Iglesias, certify that;

1.I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2019 of iQSTEL Inc. (the “registrant”); 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Date: August 09, 2019

/s/ Leandro Iglesias

By: Leandro Iglesias

Title: Chief Executive Officer

EX-31.2

CERTIFICATIONS

I, Alvaro Quintana Cardona, certify that;

1.I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2019 of iQSTEL Inc. (the “registrant”); 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Date: August 09, 2019

/s/ Alvaro Quintana Cardona

By: Alvaro Quintana Cardona

Title: Chief Financial Officer

EX-32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly Report of iQSTEL, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2019 filed with the Securities and Exchange Commission (the “Report”), I, Leandro Iglesias, Chief Executive Office, and I, Alvaro Quintana Cardona, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and 

2.The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented. 

By:	/s/ Leandro Iglesias
Name:	Leandro Iglesias
Title:	Principal Executive Officer
Date:	August 09, 2019
By:	/s/ Alvaro Quintana Cardona
Name:	Alvaro Quintana Cardona
Title:	Principal Financial Officer
Date:	August 09, 2019

This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 08, 2019
Details
Registrant CIK	0001527702
Fiscal Year End	--12-31
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2019
Document Transition Report	false
Entity File Number	000-55984
Entity Registrant Name	iQSTEL Inc
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	45-2808620
Entity Address, Address Line One	300 Aragon Avenue, Suite 375
Entity Address, City or Town	Coral Gables
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33134
Entity Address, Address Description	Address of principal executive offices
City Area Code	954
Local Phone Number	951-8191
Phone Fax Number Description	Registrant’s telephone number
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		15,627,364
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2

XML

Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Current Assets
Cash	$ 80,486	$ 4,570
Accounts receivable, net	1,596,925	1,825,854
Due from related parties	272,121	258,020
Prepaid and other current assets	109,079	17,503
Total Current Assets	2,058,611	2,105,947
Property and equipment, net	265,826	285,107
TOTAL ASSETS	2,324,437	2,391,054
Current Liabilities
Bank overdraft	0	82
Accounts payable	1,038,781	1,390,048
Due to related parties	40,631	23,193
Loans payable	106,191	194,557
Loans payable - related parties	90,787	90,787
Convertible notes	508,876	63,205
Other current liabilities	394,030	436,762
Derivative Liability, Current	2,560,212	1,790,067
Total Current Liabilities	4,739,508	3,988,701
Convertible notes - net of discount of $58,631 and $0	1,369	0
TOTAL LIABILITIES	4,740,877	3,988,701
Stockholders' Deficit
Preferred Stock, Value	0	0
Common Stock, Value	15,476	15,023
Additional paid in capital	1,745,291	1,054,718
Accumulated deficit	(4,177,207)	(2,667,388)
Total Stockholder's Deficit	(2,416,440)	(1,597,647)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 2,324,437	$ 2,391,054

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Consolidated Balance Sheets (Unaudited) - Parenthetical - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Details
Debt Instrument, Unamortized Discount, Current	$ 597,124	$ 158,696
Debt Instrument, Unamortized Discount, Noncurrent	$ 58,631	$ 0
Preferred Stock, Shares Authorized	8,500,000	8,500,000
Preferred Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Shares Authorized	2,000,000,000	2,000,000,000
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares, Issued	15,475,916	15,022,650
Common Stock, Shares, Outstanding	15,475,916	15,022,650

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Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Details
Revenues	$ 4,253,359	$ 3,700,670	$ 8,416,562	$ 5,880,835
Cost of goods sold	4,345,087	3,223,540	8,072,713	5,190,699
Gross profit	(91,728)	477,130	343,849	690,136
Operating Expenses
General and administration	341,553	334,749	532,060	458,725
Total operating expenses	341,553	334,749	532,060	458,725
Operating income	(433,281)	142,381	(188,211)	231,411
Other income (expense)
Other income	0	9,968	2,600	9,968
Other expenses	(233)	0	(375)	(12,935)
Interest expense	(511,125)	(100,515)	(776,162)	(157,569)
Total other expense	(50,960)	(90,547)	(1,321,608)	(160,536)
Change in fair value of derivative liabilities	460,398	0	(547,671)	0
Net loss before provision for income taxes	(484,241)	51,834	(1,509,819)	70,875
Income taxes	0	0	0	0
Net income (loss)	$ (484,241)	$ 51,834	$ (1,509,819)	$ 70,875
Basic and dilutive loss per common share	$ (0.03)	$ 0.00	$ (0.10)	$ 0.01
Weighted average number of common shares outstanding	15,357,689	13,717,518	15,199,517	12,409,011

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Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock	Additional Paid-in Capital	Retained Earnings	Total	Subscription Receivable
Equity Balance, Starting at Dec. 31, 2017	$ 11,086	$ 737,429	$ (563,227)	$ 185,288	$ 0
Shares Outstanding, Starting at Dec. 31, 2017	11,085,965
Common stock issued for conversion of debt, value	$ 1,185	58,615	0	59,800	0
Common stock issued for conversion of debt, shares	1,184,849
Debt forgiveness	$ 0	45,200	0	45,200	0
Net Income (Loss)	$ 0	0	19,041	19,041	0
Shares Outstanding, Ending at Mar. 31, 2018	12,270,814
Equity Balance, Ending at Mar. 31, 2018	$ 12,271	841,244	(544,186)	309,329	0
Common stock issued for conversion of debt, value	$ 1,481	73,519	0	75,000	0
Common stock issued for conversion of debt, shares	1,481,061
Stock Issued During Period, Value, Issued for Services	$ 75	149,925	0	150,000	0
Stock Issued During Period, Shares, Issued for Services	75,000
Stock issued for Recapitalization, value	$ 1,176	(77,450)	0	(85,024)	(8,750)
Stock issued for Recapitalization, shares	1,175,724
Net Income (Loss)	$ 0	0	51,834	51,834	0
Shares Outstanding, Ending at Jun. 30, 2018	15,002,599
Equity Balance, Ending at Jun. 30, 2018	$ 15,003	987,238	(492,352)	501,139	$ (8,750)
Equity Balance, Starting at Dec. 31, 2018	$ 15,023	1,054,718	(2,667,388)	(1,597,647)
Shares Outstanding, Starting at Dec. 31, 2018	15,022,650
Stock Issued During Period, Value, Conversion of Convertible Securities, Net of Adjustments	$ 254	249,746	0	250,000
Stock Issued During Period, Shares, Conversion of Convertible Securities	254,074
Capital contribution	$ 0	10,000	0	10,000
Net Income (Loss)	$ 0	0	(1,025,578)	(1,025,578)
Shares Outstanding, Ending at Mar. 31, 2019	15,276,724
Equity Balance, Ending at Mar. 31, 2019	$ 15,277	1,314,464	(3,692,966)	(2,363,225)
Equity Balance, Starting at Dec. 31, 2018	$ 15,023	1,054,718	(2,667,388)	(1,597,647)
Shares Outstanding, Starting at Dec. 31, 2018	15,022,650
Stock Issued During Period, Shares, Conversion of Convertible Securities	453,266
Shares Outstanding, Ending at Jun. 30, 2019	15,475,916
Equity Balance, Ending at Jun. 30, 2019	$ 15,476	1,745,291	(4,177,207)	(2,416,440)
Equity Balance, Starting at Mar. 31, 2019	$ 15,277	1,314,464	(3,692,966)	(2,363,225)
Shares Outstanding, Starting at Mar. 31, 2019	15,276,724
Stock Issued During Period, Value, Conversion of Convertible Securities, Net of Adjustments	$ 123	244,577	0	244,700
Stock Issued During Period, Shares, Conversion of Convertible Securities	122,857
Capital contribution	$ 0	0	0	0
Common stock issued for conversion of debt, value	$ 76	4,924	0	5,000
Common stock issued for conversion of debt, shares	76,335
Resolution of derivative liabilities	$ 0	181,326	0	181,326
Stock Issued During Period, Value, Issued for Services	$ 0	0	0	0
Stock Issued During Period, Shares, Issued for Services	0
Net Income (Loss)	$ 0	0	(484,241)	(484,241)
Shares Outstanding, Ending at Jun. 30, 2019	15,475,916
Equity Balance, Ending at Jun. 30, 2019	$ 15,476	$ 1,745,291	$ (4,177,207)	$ (2,416,440)

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (1,509,819)	$ 70,875
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation	0	150,000
Depreciation and amortization	19,281	3,275
Amortization of debt discount	541,894	0
Change in fair value of derivative liabilities	547,671	0
Changes in operating assets and liabilities:
Accounts receivable	228,929	(835,834)
Accounts receivable - related party	(10,701)	0
Other current assets	(91,576)	(48,961)
Accounts payable	(351,267)	527,742
Other current liabilities	(42,149)	(5,504)
Net cash used in operating activities	(667,737)	(138,407)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment of loan receivable - related party	(10,000)	0
Collection from loan receivable - related party	10,000	0
Net cash used in investing activities	0	0
CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft	(82)	0
Proceeds from loans payable	64,400	332,182
Repayments of loans payable	(171,302)	(326,436)
Proceeds from loans payable - related parties	46,438	800
Repayment of loans payable - related parties	(32,400)	(850)
Contribution	10,000	134,800
Proceeds from convertible notes	1,048,500	0
Repayment of convertible notes	(221,901)	0
Net cash provided by financing activities	743,653	140,496
Net change in cash and cash equivalents	75,916	2,089
Cash and Cash Equivalents, at Carrying Value, Beginning Balance	4,570	23,266
Cash and Cash Equivalents, at Carrying Value, Ending Balance	80,486	25,355
Supplemental cash flow information
Cash paid for interest	208,557	148,406
Cash paid for taxes	0	0
Non-cash transactions:
Derivative liabilities recognized as debt discount	403,800	0
Related party debt forgiveness	0	45,200
Common stock issued in conjunction with convertible notes	494,700	0
Common stock issued for conversion of debt	$ 5,000	$ 0

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NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS

6 Months Ended

Jun. 30, 2019

Notes

NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS

NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization and Operations

iQSTEL Inc. (“iQSTEL”, “we”, “us”, or the “Company”) was incorporated under the laws of the State of Nevada on June 24, 2011 under the name of PureSnax International, Inc. and changed its name to iQSTEL Inc. on August 7, 2018.

The Company has been engaged in the business of telecommunication services as a wholesale carrier of voice and data for other telecom companies around the World with more than 150 active interconnection agreements with mobile companies, fix line companies and other wholesale carriers.

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NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2019

Notes

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

In the opinion of the company’s management, the accompanying unaudited interim financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the company as of June 30, 2019 and the results of operations and cash flows for the periods presented. The results of operations for the six months ended June 30, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited 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, 2018 filed with the SEC on April 10, 2019.

Consolidation Policy

For June 30, 2019, the consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiary, Etelix.com USA, LLC. All significant intercompany balances and transactions have been eliminated in consolidation. Prior to June 25, 2018, the financial statements presented are those of Etelix.

Use of Estimates

The preparation of financial statements in conformity with GAAP in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

Accounts Receivable and Allowance for Uncollectible Accounts

Substantially all of the Company’s accounts receivable balance is related to trade receivables. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company reviews its allowance for doubtful accounts daily, past due balances over 60 days and a specified amount are reviewed individually for collectability. Account balances are charged off after all means of collection have been exhausted and the potential for recovery is considered remote. As of June 30, 2019 the Company had no valuation allowance for doubtful accounts for the Company’s accounts receivable and recorded no bad debt expense.

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 and related party payables that it will likely incur in the near future. 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.

During the six months ended June 30, 2019 and 2018, eight customers represented 81% of our revenues and fourteen customers represented 81% of our revenues, respectively.

Revenue Recognition

The Company recognizes revenue from the sale of products in accordance with ASC 606, “Revenue from Contracts with Customers”. The Company recognizes revenue only when all of the following criteria have been met:

·        Identify the contract(s) with a customer  

·        Identify the performance obligations in the contract  

·        Determine the transaction price.  

·        Allocate the transaction price to the performance obligations in the contract.  

·        Recognize revenue when (or as) the entity satisfies a performance obligation.  

The Company recognizes revenue related to monthly usage charges and other recurring charges during the period in which the telecommunication services are rendered. Provided that persuasive evidence of a sales arrangement existed, and collection was reasonably assured. Persuasive evidence of a sales arrangement existed upon execution of a written interconnection agreement. The Company’s payment terms vary by clients.

Lease

The office lease meets the definition of a short-term lease because the lease term is 12 months or less. Consequently, consistent with Company’s accounting policy election, the Company does not recognize the right-of-use asset and the lease liability arising from this lease.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

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NOTE 3 - GOING CONCERN

6 Months Ended

Jun. 30, 2019

Notes

NOTE 3 - GOING CONCERN

NOTE 3 - GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company does not have significant cash, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. In addition, as of June 30, 2019, the Company had a net loss of $1,509,819. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its business plan and eventually attain profitable operations.

During the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and marketing expenses. The Company may experience a cash shortfall and be required to raise additional capital.

Historically, the Company has relied upon funds from its stockholders. 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.

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NOTE 4 - PREPAID AND OTHER CURRENT ASSETS

6 Months Ended

Jun. 30, 2019

Notes

NOTE 4 - PREPAID AND OTHER CURRENT ASSETS

NOTE 4 – PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets at June 30, 2019 and December 31, 2018 consist of the following:

	June 30,		December 31,
	2019		2018
Advance payment to suppliers	$	6,600	$	11,310
Other receivable		34,039		500
Prepaid expenses		17,840		5,093
Tax receivable		600		600
Prepayment for acquisition		50,000		-
	$	109,079	$	17,503

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NOTE 5 - FIXED ASSETS, NET

6 Months Ended

Jun. 30, 2019

Notes

NOTE 5 - FIXED ASSETS, NET

NOTE 5 – FIXED ASSETS, NET

Fixed assets, net at June 30, 2019 and December 31, 2018 consist of the following:

	June 30,		December 31,
	2019		2018
Telecommunication equipment	$	245,686	$	245,686
Telecommunication software		400,903		400,903
Total fixed assets		646,589		646,589
Accumulated depreciation and amortization		(380,763)		(361,482)
Total Fixed assets	$	265,826	$	285,107

Depreciation expense for the six months ended June 30, 2019 and 2018 amounted to $19,281 and $3,275, respectively.

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NOTE 6 -LOANS PAYABLE

6 Months Ended

Jun. 30, 2019

Notes

NOTE 6 -LOANS PAYABLE

NOTE 6 –LOANS PAYABLE

Loans payable at June 30, 2019 and December 31, 2018 consist of the following:

	June 30,		December 31,			Interest
	2019		2018		Term	rate
Complete Business Solutions_3	$	-	$	80,994	Note was issued on April 13, 2018 and due on March 9, 2019	33.3%
Green Capital Funding_2		89		89	Note was issued on October 1, 2018 and due on February 27, 2019	31.5%
Unique Funding Solutions_2		2,000		9,000	Note was issued on October 12, 2018 and due on January 17, 2019	28.6%
Green Note Capital Partner		11,135		18,278	Note was issued on October 22, 2018 and due on February 22, 2019	28.6%
Queen Funding LLC		-		17,083	Note was issued on November 29, 2018 and due on March 13, 2019	31.5%
Green Capital Funding_3		10,614		69,113	Note was issued on December 20, 2018 and due on May 15, 2019	31.5%
Leonite Capital LLC		82,353		-	Note was issued on May 22, 2019 and due on Demand.  Note is guaranteed by the Company’ CEO.	Higher of 14% and WSJ Prime rate plus 10%
Total		106,191		194,557
Less: Current portion of loans payable		106,191		194,557
Long-term loans payable	$	-	$	-

During the six months ended June 30, 2019 and 2018, the Company borrowed $82,353, and $332,182, which includes original issue discount and financing cost of $17,953 and $0, respectively, and repaid the principal amount of $171,302 and $326,436 and interest expense of $88,551 and $148,406, respectively. 

During the six months ended June 30, 2019 and 2018, the Company recognized amortization of discount, included in interest expense, of $17,953 and $0, respectively.

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NOTE 7 - OTHER CURRENT LIABILITIES

6 Months Ended

Jun. 30, 2019

Notes

NOTE 7 - OTHER CURRENT LIABILITIES

NOTE 7 – OTHER CURRENT LIABILITIES

Other current liabilities at June 30, 2019 and December 31, 2018 consist of the following:

	June 30,		December 31,
	2019		2018
Accrued liabilities	$	237,427	$	361,779
Credit card		14,937		14,647
Accrued interest		30,435		4,905
Salary payable – management (see Note 11)		111,231		55,431
	$	394,030	$	436,762

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NOTE 8 - CONVERTIBLE LOANS

6 Months Ended

Jun. 30, 2019

Notes

NOTE 8 - CONVERTIBLE LOANS

NOTE 8 - CONVERTIBLE LOANS

At June 30, 2019 and December 31, 2018, convertible loans consisted of the following:

	June 30,		December 31,
	2019		2018
Promissory notes – Issued in fiscal year 2018, with variable conversion features	$	-	$	221,901
Promissory notes – Issued in fiscal year 2019, with variable conversion features		1,166,000		-
Total convertible notes payable		1,166,000		221,901
Less: Unamortized debt discount		(655,755)		(158,696)
Total convertible notes		510,245		63,205
Less: current portion of convertible notes		508,876		63,205
Long-term convertible notes	$	1,369	$	-

During the six months ended June 30, 2019 and 2018, the Company recognized amortization of discount, included in interest expense, of $523,941 and $0, respectively.

During the six months ended June 30, 2019 and 2018, the Company repaid notes of $221,901 and $0 and accrued interest including the prepayment penalty of $120,006 and $0, respectively.

Conversion

During the six months ended June 30, 2019, the Company converted notes with principal amounts of $5,000 into 76,335 shares of common stock. The corresponding derivative liability at the date of conversion of $181,326 was settled through additional paid in capital.

Promissory Notes - Issued in fiscal year 2018

During the year ended December 31, 2018, the Company issued a total of $213,750 in notes with the following terms:

·        Terms ranging from 9 months to 12 months.  

·        Annual interest rates ranging from of 10% to 12%.  

·        Convertible at the option of the holders at issuance.  

·        Conversion prices are typically based on the discounted (50% discount) lowest trading prices of the Company’s shares during various periods prior to conversion.  

Certain notes allow the Company to redeem the notes at rates ranging from 130% to 150% depending on the redemption date provided that no redemption is allowed after the 180th day. Likewise, the notes include financing costs totaling $12,250 and the Company received cash of $201,500.

Promissory Notes - Issued in fiscal year 2019

During the six months ended June 30, 2019, the Company issued a total of $1,171,000 in notes with the following terms:

·        Terms ranging from 6 months to 3 years.  

·        Annual interest rates ranging from of 8% to 12%.  

·        Convertible at the option of the holders at issuance or 180 days from issuance.  

·        Conversion prices are typically based on the discounted (39% or 50% discount) lowest trading prices of the Company’s shares during various periods prior to conversion.  

The convertible notes were also provided with a total of 376,931 common shares and warrant to purchase up to 92,000 shares of common stock at exercise price of $2.5 per share for 3 years.

Certain notes allow the Company to redeem the notes at rates ranging from 117% to 150% depending on the redemption date provided that no redemption is allowed after the 180th day. Likewise, the notes include financing costs totaling $122,500 and the Company received cash of $1,048,500.

Derivative liabilities

The Company determined that the conversion option in the note and the exercise feature of the warrants met the definition of a liability in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock. The Company will bifurcate the embedded conversion option in the note once the note becomes convertible and account for it as a derivative liability.

The Company valued the conversion features using the Black Scholes valuation model. The fair value of the derivative liability for all the note that became convertible for the year ended December 31, 2018 amounted to $896,593. $201,500 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $695,093 was recognized as a “day 1” derivative loss.

The Company valued the conversion features of convertible notes and warrant using the Black Scholes valuation model. The fair value of the derivative liability for all the note and warrant that became convertible for the six months ended June 30, 2019 amounted to $2,583,990. $403,800 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $2,180,190 was recognized as a “day 1” derivative loss.

Warrants

A summary of activity during the six months ended June 30, 2019 follows:

	Warrants Outstanding
		Weighted Average
	Shares	Exercise Price
Outstanding, December 31, 2018	-	$	-
Granted	92,000		2.50
Exercised	-		-
Forfeited/canceled	-		-
Outstanding, June 30, 2019	92,000	$	2.50

The following table summarizes information relating to outstanding and exercisable warrants as of June 30, 2019:

Warrants Outstanding				Warrants Exercisable
Number of Shares	Weighted Average Remaining Contractual life (in years)	Weighted Average Exercise Price		Number of Shares	Weighted  Average Exercise Price
92,000	3.40	$	2.50	92,000	$	2.50

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NOTE 9 - DERIVATIVE LIABILITIES

6 Months Ended

Jun. 30, 2019

Notes

NOTE 9 - DERIVATIVE LIABILITIES

NOTE 9 - DERIVATIVE LIABILITIES

The Company analyzed the conversion option for derivative accounting consideration under ASC 815, Derivatives and Hedging, and hedging, and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

Fair Value Assumptions Used in Accounting for Derivative Liabilities.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of June 30, 2019. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Black-Scholes valuation model.

For the six months ended June 30, 2019, the estimated fair values of the liabilities measured on a recurring basis are as follows:

	Six months ended	Year Ended
	June 30, 2019	December 31, 2018
Expected term	0.22 - 5.00 years	0.37 - 1.00 years
Expected average volatility	4% - 491%	405% - 528%
Expected dividend yield	-	-
Risk-free interest rate	1.71% - 2.57%	2.24 - 2.71%

The following table summarizes the changes in the derivative liabilities during the six months ended June 30, 2019:

Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance - December 31, 2018	$	1,790,067
Addition of new derivatives recognized as debt discounts		403,800
Addition of new derivatives recognized as loss on derivatives		2,180,190
Settled on issuance of common stock		(181,326)
Gain on change in fair value of the derivative		(1,632,519)
Balance - June 30, 2019	$	2,560,212

The aggregate loss on derivatives during the six months ended June 30, 2019 and 2018 was as follows;

	Six Months Ended
	June 30,
	2019		2018
Addition of new derivatives recognized as loss on derivatives	$	2,180,190	$	-
Gain on change in fair value of the derivative		(1,632,519)		-
	$	547,671	$	-

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NOTE 10 - SHAREHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2019

Notes

NOTE 10 - SHAREHOLDERS' EQUITY

NOTE 10 – SHAREHOLDERS’ EQUITY

The Company’s authorized capital consists of 2,000,000,000 shares of common stock with a par value of $0.001 per share.

During the six months ended June 30, 2019, the Company issued 453,266 shares of common stock as follows;

·        376,931 shares in conjunction with convertible notes.

·        76,335 shares for conversion of debt of $5,000 (see Note8)

As of June 30, 2019 and December 31, 2018, 15,475,916 and 15,022,650 shares of common stock were issued and outstanding, respectively.

During the six months ended June 30, 2019, $10,000 was contributed to the Company and the Company recorded it as additional paid in capital.

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NOTE 11 - RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2019

Notes

NOTE 11 - RELATED PARTY TRANSACTIONS

NOTE 11 - RELATED PARTY TRANSACTIONS

Loans payable – related parties

	June 30,		December 31,			Interest
	2019		2018		Term	rate
Alonso Van Der Biest	$	80,200	$	80,200	Note was issued on June 12, 2015 and due on June 11, 2019	16.5%
Alvaro Quintana		10,587		10,587	Note was issue on September 30, 2016 and due on September 29, 2019	0%
Total		90,787		90,787
Less: Current portion of loans payable		90,787		90,787
Long-term loans payable	$	-	$	-

During the six months ended June 30, 2019, the Company repaid interest expense of $7,414.

Due from related parties

During the six months ended June 30, 2019, the Company loaned $10,000 to a related party and collected $10,000. As of June 30, 2019, the Company recorded accounts receivable from a related party of $10,701, included in due from related parties. As of June 30, 2019 and December 31, 2018, the Company had due from related parties of $288,908 and $278,207, respectively. The loans are unsecured, non-interest bearing and due on demand.

Due to related parties

During the six months ended June 30, 2019, the Company borrowed $46,438 from CEO of the Company and repaid $32,400. As of June 30, 2019 and December 31, 2018, the Company had due to related parties of $40,631 and $23,193, respectively. The loans are unsecured, non-interest bearing and due on demand.

Employment agreements

On June 25, 2018, the Company entered into Employment Agreements with the following persons: (i) Leandro Iglesias as President, CEO and Chairperson of the Company’s Board of Directors with an annual salary of $54,000; (ii) Juan Carlos Lopez Silva as Chief Commercial Officer with an annual salary of $54,000; and Alvaro Quintana Cardona as Chief Operating Officer and Chief Financial Officer with an annual salary of $30,000. The Employment Agreements have a term of 36 months, are renewable automatically for 24-month periods, unless the Company gives written notice at least 90 days prior to termination of the initial 36-month term. The Company shall have the right to terminate any of the employment agreements at any time without prior notice, but in that event, the Company shall pay these persons salaries and other benefits they are entitled to receive under their respective agreements for three years.

On May 2, 2019, the Company entered into Employment Agreements with the following persons: (i) Leandro Iglesias as President, CEO and Chairperson of the Company’s Board of Directors with an annual salary of $168,000 with an annual bonus of 3% of our net income; (ii) Juan Carlos Lopez Silva as Chief Commercial Officer with an annual salary of $120,000 with an annual bonus of 3% of our net income; and Alvaro Quintana Cardona as Chief Operating Officer and Chief Financial Officer with an annual salary of $144,000 with an annual bonus of 3% of our net income. The Employment Agreements have a term of 36 months, are renewable automatically for 24-month periods, unless the Company gives written notice at least 90 days prior to termination of the initial 36-month term. The Company shall have the right to terminate any of the employment agreements at any time without prior notice, but in that event, the Company shall pay these persons salaries and other benefits they are entitled to receive under their respective agreements for three years. The above executive officers agreed to two year non-compete and non-solicit restrictive covenants with the Company. If any of the executive officers are terminated for cause they shall forfeit any rights to severance.

During the six months ended June 30, 2019 and 2018, the Company recorded management fees of $118,000 and $0 and paid $62,200 and $0, respectively. As at June 30, 2019 and December 31, 2018, the Company accrued management salaries of $111,231 and $55,431, respectively.

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NOTE 12 - COMMITMENTS AND CONTIGENCIES

6 Months Ended

Jun. 30, 2019

Notes

NOTE 12 - COMMITMENTS AND CONTIGENCIES

NOTE 12 – COMMITMENTS AND CONTINGENCIES

Leases and Long-term Contracts

The Company has not entered into any long-term leases, contracts or commitments.

Rent

The Company leases office space at $1,200 per month with one-year term, starting July 1, 2018 and ending June 30, 2019. For the six months ended June 30, 2019 and 2018, the Company incurred $7,200 and $6,158, respectively.

The Company leases facilities which the term is 12 months. For the six months ended June 30, 2019 and 2018, the Company incurred $13,000 and $0, respectively.

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NOTE 13 - SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2019

Notes

NOTE 13 - SUBSEQUENT EVENTS

NOTE 13 - SUBSEQUENT EVENTS

Subsequent to June 30, 2019 and through the date that these financials were made available, the Company had the following subsequent events:

On April 1, 2019, the Company entered into a Company Purchase Agreement (the “Purchase Agreement”) with Ralf Kohler (the “Seller”), which agreement provides for the Company’s purchase of 51% of the equity and certain assets of SwissLink Carrier AG (“SwissLink”), a Swiss corporation.

On August 7, 2019, having completed all conditions under the Purchase Agreement, the Company closed the transaction with Seller, and issued 187,500 shares to Seller for the 51% equity interest and certain assets in Swisslink and another 510 shares to Seller for 51% of the loan in Swisslink.

On July 11, 2019, the Company issued a convertible note in the principal amount of $282,000. The convertible note has a term of six months, accrues interest at 12% annually and the balance outstanding thereunder is convertible into the Company’s common stock at a price equal to 50% multiplied by the lowest trading price during the previous thirty days ending on the latest complete trading day prior to the conversion date.

On July 19, 2019, the Company issued a convertible note in the principal amount of $36,000. The convertible note has a term of twelve months, accrues interest at 10% annually and the balance outstanding thereunder is convertible into the Company’s common stock at a price equal to 50% multiplied by the lowest trading price during the previous twenty five days ending on the latest complete trading day prior to the conversion date.

On July 22, 2019, the Company issued a convertible note in the principal amount of $112,750. The convertible note has a term of nine months, accrues interest at 12% annually and the balance outstanding thereunder is convertible into the Company’s common stock at a price equal to 50% multiplied by the lowest trading price during the previous twenty five days ending on the latest complete trading day prior to the conversion date.

On July 23, 2019, the Company issued a convertible note in the principal amount of $125,000. The convertible note has a term of twelve months, accrues interest at 12% annually and the balance outstanding thereunder is convertible into the Company’s common stock at a price equal to 50% multiplied by the lowest trading price during the previous twenty five days ending on the latest complete trading day prior to the conversion date.

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NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Consolidation Policy (Policies)

6 Months Ended

Jun. 30, 2019

Policies

Consolidation Policy

Consolidation Policy

For June 30, 2019, the consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiary, Etelix.com USA, LLC. All significant intercompany balances and transactions have been eliminated in consolidation. Prior to June 25, 2018, the financial statements presented are those of Etelix.

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NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Use of Estimates (Policies)

6 Months Ended

Jun. 30, 2019

Policies

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

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NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Accounts Receivable and Allowance for Uncollectible Accounts (Policies)

6 Months Ended

Jun. 30, 2019

Policies

Accounts Receivable and Allowance for Uncollectible Accounts

Accounts Receivable and Allowance for Uncollectible Accounts

Substantially all of the Company’s accounts receivable balance is related to trade receivables. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company reviews its allowance for doubtful accounts daily, past due balances over 60 days and a specified amount are reviewed individually for collectability. Account balances are charged off after all means of collection have been exhausted and the potential for recovery is considered remote. As of June 30, 2019 the Company had no valuation allowance for doubtful accounts for the Company’s accounts receivable and recorded no bad debt expense.

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NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Concentrations of Credit Risk (Policies)

6 Months Ended

Jun. 30, 2019

Policies

Concentrations of Credit Risk

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 and related party payables that it will likely incur in the near future. 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.

During the six months ended June 30, 2019 and 2018, eight customers represented 81% of our revenues and fourteen customers represented 81% of our revenues, respectively.

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NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Revenue Recognition (Policies)

6 Months Ended

Jun. 30, 2019

Policies

Revenue Recognition

Revenue Recognition

The Company recognizes revenue from the sale of products in accordance with ASC 606, “Revenue from Contracts with Customers”. The Company recognizes revenue only when all of the following criteria have been met:

·        Identify the contract(s) with a customer  

·        Identify the performance obligations in the contract  

·        Determine the transaction price.  

·        Allocate the transaction price to the performance obligations in the contract.  

·        Recognize revenue when (or as) the entity satisfies a performance obligation.  

The Company recognizes revenue related to monthly usage charges and other recurring charges during the period in which the telecommunication services are rendered. Provided that persuasive evidence of a sales arrangement existed, and collection was reasonably assured. Persuasive evidence of a sales arrangement existed upon execution of a written interconnection agreement. The Company’s payment terms vary by clients.

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NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Lease (Policies)

6 Months Ended

Jun. 30, 2019

Policies

Lease

Lease

The office lease meets the definition of a short-term lease because the lease term is 12 months or less. Consequently, consistent with Company’s accounting policy election, the Company does not recognize the right-of-use asset and the lease liability arising from this lease.

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NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Reclassifications (Policies)

6 Months Ended

Jun. 30, 2019

Policies

Reclassifications

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

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NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Recent Accounting Pronouncements (Policies)

6 Months Ended

Jun. 30, 2019

Policies

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

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NOTE 4 - PREPAID AND OTHER CURRENT ASSETS: Schedule of Other Current Assets (Tables)

6 Months Ended

Jun. 30, 2019

Tables/Schedules

Schedule of Other Current Assets

	June 30,		December 31,
	2019		2018
Advance payment to suppliers	$	6,600	$	11,310
Other receivable		34,039		500
Prepaid expenses		17,840		5,093
Tax receivable		600		600
Prepayment for acquisition		50,000		-
	$	109,079	$	17,503

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NOTE 5 - FIXED ASSETS, NET: Schedule of Fixed Assets (Tables)

6 Months Ended

Jun. 30, 2019

Tables/Schedules

Schedule of Fixed Assets

	June 30,		December 31,
	2019		2018
Telecommunication equipment	$	245,686	$	245,686
Telecommunication software		400,903		400,903
Total fixed assets		646,589		646,589
Accumulated depreciation and amortization		(380,763)		(361,482)
Total Fixed assets	$	265,826	$	285,107

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NOTE 6 -LOANS PAYABLE: Schedule of Loans Payable (Tables)

6 Months Ended

Jun. 30, 2019

Tables/Schedules

Schedule of Loans Payable

	June 30,		December 31,			Interest
	2019		2018		Term	rate
Complete Business Solutions_3	$	-	$	80,994	Note was issued on April 13, 2018 and due on March 9, 2019	33.3%
Green Capital Funding_2		89		89	Note was issued on October 1, 2018 and due on February 27, 2019	31.5%
Unique Funding Solutions_2		2,000		9,000	Note was issued on October 12, 2018 and due on January 17, 2019	28.6%
Green Note Capital Partner		11,135		18,278	Note was issued on October 22, 2018 and due on February 22, 2019	28.6%
Queen Funding LLC		-		17,083	Note was issued on November 29, 2018 and due on March 13, 2019	31.5%
Green Capital Funding_3		10,614		69,113	Note was issued on December 20, 2018 and due on May 15, 2019	31.5%
Leonite Capital LLC		82,353		-	Note was issued on May 22, 2019 and due on Demand.  Note is guaranteed by the Company’ CEO.	Higher of 14% and WSJ Prime rate plus 10%
Total		106,191		194,557
Less: Current portion of loans payable		106,191		194,557
Long-term loans payable	$	-	$	-

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NOTE 7 - OTHER CURRENT LIABILITIES: Schedule of Other Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2019

Tables/Schedules

Schedule of Other Current Liabilities

	June 30,		December 31,
	2019		2018
Accrued liabilities	$	237,427	$	361,779
Credit card		14,937		14,647
Accrued interest		30,435		4,905
Salary payable – management (see Note 11)		111,231		55,431
	$	394,030	$	436,762

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NOTE 8 - CONVERTIBLE LOANS: Schedule of convertible loans (Tables)

6 Months Ended

Jun. 30, 2019

Tables/Schedules

Schedule of convertible loans

	June 30,		December 31,
	2019		2018
Promissory notes – Issued in fiscal year 2018, with variable conversion features	$	-	$	221,901
Promissory notes – Issued in fiscal year 2019, with variable conversion features		1,166,000		-
Total convertible notes payable		1,166,000		221,901
Less: Unamortized debt discount		(655,755)		(158,696)
Total convertible notes		510,245		63,205
Less: current portion of convertible notes		508,876		63,205
Long-term convertible notes	$	1,369	$	-

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NOTE 8 - CONVERTIBLE LOANS: Schedule of Warrants Activity (Tables)

6 Months Ended

Jun. 30, 2019

Tables/Schedules

Schedule of Warrants Activity

	Warrants Outstanding
		Weighted Average
	Shares	Exercise Price
Outstanding, December 31, 2018	-	$	-
Granted	92,000		2.50
Exercised	-		-
Forfeited/canceled	-		-
Outstanding, June 30, 2019	92,000	$	2.50

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NOTE 8 - CONVERTIBLE LOANS: Schedule of outstanding and exercisable warrants (Tables)

6 Months Ended

Jun. 30, 2019

Tables/Schedules

Schedule of outstanding and exercisable warrants

Warrants Outstanding				Warrants Exercisable
Number of Shares	Weighted Average Remaining Contractual life (in years)	Weighted Average Exercise Price		Number of Shares	Weighted  Average Exercise Price
92,000	3.40	$	2.50	92,000	$	2.50

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NOTE 9 - DERIVATIVE LIABILITIES: Schedule of Fair Value Measurement of Liabilities (Tables)

6 Months Ended

Jun. 30, 2019

Tables/Schedules

Schedule of Fair Value Measurement of Liabilities

	Six months ended	Year Ended
	June 30, 2019	December 31, 2018
Expected term	0.22 - 5.00 years	0.37 - 1.00 years
Expected average volatility	4% - 491%	405% - 528%
Expected dividend yield	-	-
Risk-free interest rate	1.71% - 2.57%	2.24 - 2.71%

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NOTE 9 - DERIVATIVE LIABILITIES: Schedule of Fair Value Measurements Using Significant Observable Inputs (Level 3) (Tables)

6 Months Ended

Jun. 30, 2019

Tables/Schedules

Schedule of Fair Value Measurements Using Significant Observable Inputs (Level 3)

Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance - December 31, 2018	$	1,790,067
Addition of new derivatives recognized as debt discounts		403,800
Addition of new derivatives recognized as loss on derivatives		2,180,190
Settled on issuance of common stock		(181,326)
Gain on change in fair value of the derivative		(1,632,519)
Balance - June 30, 2019	$	2,560,212

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NOTE 9 - DERIVATIVE LIABILITIES: Schedule of loss on derivative liability included in Income Statement (Tables)

6 Months Ended

Jun. 30, 2019

Tables/Schedules

Schedule of loss on derivative liability included in Income Statement

	Six Months Ended
	June 30,
	2019		2018
Addition of new derivatives recognized as loss on derivatives	$	2,180,190	$	-
Gain on change in fair value of the derivative		(1,632,519)		-
	$	547,671	$	-

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NOTE 11 - RELATED PARTY TRANSACTIONS: Schedule of Related Party Loans Payable (Tables)

6 Months Ended

Jun. 30, 2019

Tables/Schedules

Schedule of Related Party Loans Payable

	June 30,		December 31,			Interest
	2019		2018		Term	rate
Alonso Van Der Biest	$	80,200	$	80,200	Note was issued on June 12, 2015 and due on June 11, 2019	16.5%
Alvaro Quintana		10,587		10,587	Note was issue on September 30, 2016 and due on September 29, 2019	0%
Total		90,787		90,787
Less: Current portion of loans payable		90,787		90,787
Long-term loans payable	$	-	$	-

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NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS (Details)	6 Months Ended
	Jun. 30, 2019
Details
Entity Incorporation, State or Country Code	NV
Entity Incorporation, Date of Incorporation	Jun. 24, 2011
Entity Information, Former Legal or Registered Name	PureSnax International, Inc.

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NOTE 3 - GOING CONCERN (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Details
Net income (loss)	$ (484,241)	$ 51,834	$ (1,509,819)	$ 70,875

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NOTE 4 - PREPAID AND OTHER CURRENT ASSETS: Schedule of Other Current Assets (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Details
Other Current Assets, Advance payment to suppliers	$ 6,600	$ 11,310
Other Current Assets, Other receivable	34,039	500
Other Current Assets, Prepaid expenses	17,840	5,093
Other Current Assets, Tax receivable	600	600
Prepayment for acquisition	50,000	0
Other Current Assets	$ 109,079	$ 17,503

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NOTE 5 - FIXED ASSETS, NET: Schedule of Fixed Assets (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Details
Fixed Assets, Telecommunication equipment	$ 245,686	$ 245,686
Fixed Assets, Telecommunication software	400,903	400,903
Fixed Assets, Total fixed assets	646,589	646,589
Fixed Assets, Accumulated depreciation and amortization	(380,763)	(361,482)
Fixed Assets, Total Fixed assets	$ 265,826	$ 285,107

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NOTE 6 -LOANS PAYABLE: Schedule of Loans Payable (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Long-term Debt	$ 106,191	$ 194,557
Less: Current portion of loans payable	106,191	194,557
Long-term loans payable	0	0
Complete Business Solutions_3
Long-term Debt	$ 0	80,994
Term	Note was issued on April 13, 2018 and due on March 9, 2019
Debt Instrument, Interest Rate, Stated Percentage	33.30%
Green Capital Funding_2
Long-term Debt	$ 89	89
Term	Note was issued on October 1, 2018 and due on February 27, 2019
Debt Instrument, Interest Rate, Stated Percentage	31.50%
Unique Funding Solutions_2
Long-term Debt	$ 2,000	9,000
Term	Note was issued on October 12, 2018 and due on January 17, 2019
Debt Instrument, Interest Rate, Stated Percentage	28.60%
Green Note Capital Partner
Long-term Debt	$ 11,135	18,278
Term	Note was issued on October 22, 2018 and due on February 22, 2019
Debt Instrument, Interest Rate, Stated Percentage	28.60%
Queen Funding LLC
Long-term Debt	$ 0	17,083
Term	Note was issued on November 29, 2018 and due on March 13, 2019
Debt Instrument, Interest Rate, Stated Percentage	31.50%
Green Capital Funding_3
Long-term Debt	$ 10,614	69,113
Term	Note was issued on December 20, 2018 and due on May 15, 2019
Debt Instrument, Interest Rate, Stated Percentage	31.50%
Leonite Capital LLC
Long-term Debt	$ 82,353	$ 0
Term	Note was issued on May 22, 2019 and due on Demand. Note is guaranteed by the Company’ CEO.

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NOTE 6 -LOANS PAYABLE (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Details
Repayments of Other Debt	$ 171,302	$ 326,436
Interest Expense	$ 88,551	$ 148,406

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NOTE 7 - OTHER CURRENT LIABILITIES: Schedule of Other Current Liabilities (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Details
Other Current Liabilities, Accrued expenses	$ 237,427	$ 361,779
Credit card	14,937	14,647
Other Current Liabilities, Accrued interest	30,435	4,905
Other Current Liabilities, Salary payable - management	111,231	55,431
Other Current Liabilities	$ 394,030	$ 436,762

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NOTE 8 - CONVERTIBLE LOANS: Schedule of convertible loans (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Convertible Debt	$ 1,166,000	$ 221,901
Debt Instrument, Unamortized Discount	(655,755)	(158,696)
Total convertible notes	510,245	63,205
Less: current portion of convertible notes	508,876	63,205
Long-term convertible notes	1,369	0
Promissory notes - Issued in fiscal year 2018, with variable conversion features
Convertible Debt	0	221,901
Promissory notes - Issued in fiscal year 2019, with variable conversion features
Convertible Debt	$ 1,166,000	$ 0

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NOTE 8 - CONVERTIBLE LOANS: Schedule of Warrants Activity (Details)	6 Months Ended
	Jun. 30, 2019 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance | shares	92,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $ / shares	$ 2.50
Warrants
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | shares	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $ / shares	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares	92,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares	$ 2.50
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | shares	0
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ / shares	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | shares	0
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price | $ / shares	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance | shares	92,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $ / shares	$ 2.50

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NOTE 8 - CONVERTIBLE LOANS: Schedule of outstanding and exercisable warrants (Details)	Jun. 30, 2019 $ / shares shares
Details
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | shares	92,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	3 years 4 months 24 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ / shares	$ 2.50
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | shares	92,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ / shares	$ 2.50

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NOTE 9 - DERIVATIVE LIABILITIES: Schedule of Fair Value Measurement of Liabilities (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Expected dividend yield	0	0
Minimum
Expected term	2 months 19 days	4 months 13 days
Expected average volatility	0.0400	4.0500
Risk-free interest rate	0.0171	0.0224
Maximum
Expected term	5 years	1 year
Expected average volatility	4.9100	5.2800
Risk-free interest rate	0.0257	0.0271

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NOTE 9 - DERIVATIVE LIABILITIES: Schedule of Fair Value Measurements Using Significant Observable Inputs (Level 3) (Details)	6 Months Ended
	Jun. 30, 2019 USD ($)
Details
Derivative Liabilities, Starting Balance	$ 1,790,067
Addition of new derivatives recognized as debt discounts	403,800
Addition of new derivatives recognized as loss on derivatives	2,180,190
Gain on change in fair value of the derivative	(1,632,519)
Derivative Liabilities, Ending Balance	$ 2,560,212

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NOTE 9 - DERIVATIVE LIABILITIES: Schedule of loss on derivative liability included in Income Statement (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Details
Addition of new derivatives recognized as loss on derivatives	$ 2,180,190	$ 0
Gain on change in fair value of the derivative	(1,632,519)	0
Loss on derivative liability	$ 547,671	$ 0

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NOTE 10 - SHAREHOLDERS' EQUITY (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Common Stock, Shares Authorized	2,000,000,000		2,000,000,000	2,000,000,000
Common Stock, Par or Stated Value Per Share	$ 0.001		$ 0.001	$ 0.001
Common Stock, Shares, Issued	15,475,916		15,475,916	15,022,650
Common Stock
Stock Issued During Period, Shares, Conversion of Convertible Securities	122,857	254,074	453,266

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NOTE 11 - RELATED PARTY TRANSACTIONS: Schedule of Related Party Loans Payable (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Due to Related Parties	$ 90,787	$ 90,787
Less: Current portion of loans payable	90,787	90,787
Long-term loans payable - related parties	0	0
Alonso Van Der Biest
Due to Related Parties	$ 80,200	80,200
Term	Note was issued on June 12, 2015 and due on June 11, 2019
Debt Instrument, Interest Rate, Stated Percentage	16.50%
Alvaro Quintana
Due to Related Parties	$ 10,587	$ 10,587
Term	Note was issue on September 30, 2016 and due on September 29, 2019
Debt Instrument, Interest Rate, Stated Percentage	0.00%

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NOTE 11 - RELATED PARTY TRANSACTIONS (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Details
Due to related parties	$ 40,631	$ 23,193
Accrued Salaries, Current	$ 111,231	$ 55,431

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NOTE 12 - COMMITMENTS AND CONTIGENCIES (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Details
Payments for Rent	$ 7,200	$ 6,158

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NOTE 13 - SUBSEQUENT EVENTS (Details)	6 Months Ended
	Jun. 30, 2019 USD ($)
Event 1
Subsequent Event, Date	Apr. 01, 2019
Subsequent Event, Description	Company entered into a Company Purchase Agreement (the “Purchase Agreement”) with Ralf Kohler (the “Seller”)
Event 2
Subsequent Event, Date	Aug. 07, 2019
Subsequent Event, Description	Company closed the transaction with Seller, and issued 187,500 shares to Seller
Event 3
Subsequent Event, Date	Jul. 11, 2019
Subsequent Event, Description	Company issued a convertible note in the principal amount of $282,000
Debt Instrument, Face Amount	$ 282,000
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Event 4
Subsequent Event, Date	Jul. 19, 2019
Subsequent Event, Description	Company issued a convertible note in the principal amount of $36,000
Debt Instrument, Face Amount	$ 36,000
Debt Instrument, Interest Rate, Stated Percentage	10.00%
Event 5
Subsequent Event, Date	Jul. 22, 2019
Subsequent Event, Description	Company issued a convertible note in the principal amount of $112,750
Debt Instrument, Face Amount	$ 112,750
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Event 6
Subsequent Event, Date	Jul. 23, 2019
Subsequent Event, Description	Company issued a convertible note in the principal amount of $125,000
Debt Instrument, Face Amount	$ 125,000
Debt Instrument, Interest Rate, Stated Percentage	12.00%