SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
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(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code:
________________________________________________ (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: None.
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. [ ]
SECTION 2 – Financial Information
Item 2.02 | Results of Operations and Financial Condition. |
On April 17, 2023, we issued a shareholder letter concerning our commercial operations and financial results for the year ended December 31, 2022.
On April 19, 2023, we issued a press release concerning our anticipated revenue results for March 31, 2023.
The shareholder letter and press release are furnished with this Current Report on Form 8-K as Exhibits 99.1 and 99.2, respectively. The information furnished under this Item 2.02 and Item 9.01 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any registration statement or other filing under the Securities Act of 1933, as amended, regardless of any general incorporation by reference language in such filing, except as shall be expressly set forth by specific reference in any such filing.
SECTION 9 – Financial Statements and Exhibits
Item 9.01 | Financial Statements and Exhibits. |
Exhibit No. | Description |
99.1 | Shareholder letter, dated April 17, 2023 |
99.2 | Press Release, dated April 19, 2023 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
iQSTEL Inc.
/s/ Leandro Iglesias
Leandro Iglesias
Chief Executive Officer
Date April 20, 2023
4 |
IQST - iQSTEL Issues April Letter To Shareholders
PR Newswire
NEW YORK, April 17, 2023
NEW YORK, April 17, 2023 /PRNewswire/ -- iQSTEL Inc. (OTCQX: IQST) today released a letter to Shareholders from CEO Leandro Iglesias addressing the most relevant issues related to its commercial operations and financial results for the year ended December 31, 2022.
Dear Shareholders,
On behalf of our management team, I would like to present this letter to the shareholders of our company to review the most relevant issues related to our commercial operations and financial results for the year ended December 31, 2022, disclosed in the recently filed SEC Form 10-K.
We are sure, that at the first glance, the financial statement may be the cause of some frustration, but we believe, if read carefully, the financial results include information that shows a positive evolution of the company moving us toward the achievement of one of the objectives that we have set for this year, 2023 - reaching a consolidated positive net income for our overall operations.
With that idea in mind, I will share our analysis of the information included in the financial statements that gives our management a very positive outlook in regard to our present performance and the future of the company.
Our balance sheet has strengthened year over year. Total assets have grown consistently over the past few years, and even when the total liabilities significantly increased this last year, the overall financial ratios related to these components of the balance sheet still show a healthy company.
For example, the current ratio and the acid-test ratio are 1.00 and 0.99 respectively. This indicates the company has the financial resources to remain solvent. The average acid-test ratio in the telecommunications industry is 1.01.
The debt ratio, which measures the relative amount of the company's assets that are provided from debt is equal to 0.54. In general terms a debt ratio between 0.3 and 0.6 could be considered adequate, while the average in the telecommunications industry is 0.69.
It is also important to remark that our stockholders' equity remains above the minimum required to qualify for a Nasdaq up listing.
In relation to the profit and loss statement, which is where the greatest challenges of the company and the greatest expectations of our shareholders converge, we must say that even though the results certainly still do not meet the expectations of our shareholders and are still far from where the company wants to be, there still remain a number of good signs to be highlighted.
Our revenue has not stopped growing. Revenue grew by 44% each of the last two years and if we look back in time, it has grown 577% from the $13,775,361 reported in 2018 to the $93,203,532 reported at the end of 2022. The 2023 year-end forecast is $105 million.
Our 2022 gross profit increased by 16.81% compared to 2021. In addition to our revenue and gross profit growth, we must also talk about the operating expenses.
In terms of percentage of revenue, the operating expenses have reduced from 6.98% in year 2021 to 5.35% in year 2022. This is a decrease of 23.43% year over year. The best part here is that when we compare the operating expenses of the companies consolidated in year 2021 (Etelix, Swisslink, IoT Labs, QGlobal SMS, ItsBchain, Global Money One and the corporate expenses of iQSTEL) to the amount these same companies totaled in 2022, the percentage goes from 6.98% to 4.53%. In absolute value, it was $4,517,631 in 2021 versus $3,649,363 in 2022 experiencing a reduction equivalent to 19.22% year over year. The increase in the overall operating expenses in 2022 compared to 2021 results from costs incurred from the Whisl and Smartbiz acquisitions executed in 2022.
The increase in the revenue, combined with the increase in the gross revenue and the proportional decrease in the operating expenses are not yet reflected in the operating income. Nevertheless, they certainly show the proper behavior necessary to achieve a positive operating income.
1 |
When looking at the profit and loss statement, it is important to remark on the change in fair value of derivative liabilities. We will use adjusted EBITDA to better show the impact of these non-cash components of the profit and loss statement in the results of operations.
As of December 31, | |||||
2020 | 2021 | 2022 | |||
Revenues | $ | 44,910,006 | 64,702,018 | 93,203,532 | |
Cost of revenue | 43,947,654 | 63,168,303 | 91,412,016 | ||
Gross profit | 962,352 | 1,533,715 | 1,791,516 | ||
Operating expenses | |||||
General and administration | 4,174,367 | 4,517,631 | 4,983,176 | ||
Total operating expenses | 4,174,367 | 4,517,631 | 4,983,176 | ||
Operating income/(loss) | -3,212,015 | -2,983,916 | -3,191,660 | ||
Other income (expense) | |||||
Other income | 38,585 | 4,426 | 118,871 | ||
Other expenses | -117,562 | 2,684 | -112,962 | ||
Interest expense | -3,509,323 | -675,481 | -29,641 | ||
Change in fair value of derivative liabilities | 255,614 | 317,080 | -2,650,369 | ||
Loss on settlement of debt | -154,629 | -528,794 | - | ||
Total other expense | -3,487,315 | -880,085 | -2,674,101 | ||
Net loss before provision for income taxes | -6,699,330 | -3,864,001 | -5,865,761 | ||
Income taxes | 152 | - | - | ||
Net (loss) income | $ | -6,699,482 | -3,864,001 | -5,865,761 | |
Net loss | -6,699,482 | -3,864,001 | -5,865,761 | ||
Depreciation and Amortization | 68,602 | 91,474 | 120,117 | ||
Interest expense | 3,509,323 | 675,481 | 29,641 | ||
Income taxes | 152 | - | - | ||
Change in fair value of derivative liabilities | -255,614 | -317,080 | 2,650,369 | ||
Adjusted EBITDA | -3,377,019 | -3,414,126 | -3,065,634 |
2 |
The reconciled adjusted EBITDA in the table above shows the positive evolution of our operations when comparing the results of year 2022 with the previous two years. Once again, while the current EBITDA is negative, management believes the improvement in the results of 2022 compared to the previous years demonstrates an alignment with our recurring message - "the company is improving all the time and we are on track to achieve a positive operating income in 2023."
A remarkable fact we also want to bring to our shareholders' attention is the effect that our M&A campaign has had in the process of creating value. From 2018 to the end of 2022, we have completed the acquisition of 8 companies, with a total cash investment of $2,204,429 adding goodwill of $5,172,146 in turn generating a positive net effect in our assets of $2,967,717.
A company that is in the process of formation should not be analyzed based only on one variable or one indicator, and much less so if that variable is only the net income. Amazon was founded in 1990 and reported its first quarter with net income in 2001. Tesla was founded in 2003 and reported its first quarter with net income in 2013.
Could we imagine what the future of these two companies would have been if after five years of operations they had only been evaluated by their net profits? Amazon's stock price was $18 in 1997 and Tesla's was $17 in 2010 when each IPO'd. Today the respective shares are trading at $102.51 and $185.
The objective of every company is to report profits (the sooner the better) for its shareholders and even more so that these profits are sustainable in the long term. What makes this possible is that the company is founded on a clear definition of its business vision and that each step it takes be aligned with that business vision.
iQSTEL's mission is to serve basic human needs in today's modern world by making the necessary tools accessible regardless of race, ethnicity, religion, socioeconomic status, or identity. iQSTEL recognizes that in today's modern world, the pursuit of the human hierarchy of needs (physiological, safety, relationship, esteem, and self-actualization) is marginalized without access to ubiquitous communications, the freedom of virtual banking, clean affordable mobility and information and content.
All steps we have taken in the last 4 years have been done with the purpose of creating an ecosystem for delivering accessibility to our customers the necessary tools in today's pursuit of basic human needs: telecommunications, financial inclusion, mobility and access to technology. Strengthening what has been until today our core business, telecommunications, while we develop in parallel the new business areas in fintech, blockchain, internet of things and electric mobility.
We are realistic about our present situation and very optimistic about our immediate and long-term future. We know where we are and where we want to go. iQSTEL is doing better today than yesterday, and we invite all our shareholders to share our optimism. The best is yet to come.
Sincerely yours,
Leandro Iglesias
President/CEO
3 |
About IQSTEL updated:
iQSTEL Inc. (OTC-QX: IQST) (www.iQSTEL.com) is a US-based, multinational public company preparing for a Nasdaq up-listing with an FY2023 $105 million revenue forecast. iQSTEL's mission is to serve basic human needs in today's modern world by making the necessary tools accessible regardless of race, ethnicity, religion, socioeconomic status, or identity. iQSTEL recognizes that in today's modern world, the pursuit of the human hierarchy of needs (physiological, safety, relationship, esteem and self-actualization) is marginalized without access to ubiquitous communications, the freedom of virtual banking, clean affordable mobility and information and content. iQSTEL has 4 Business Divisions delivering accessibly to the necessary tools in today's pursuit of basic human needs: Telecommunications, Fintech, Electric Vehicles and Metaverse.
The company continues to grow and expand its suite of products and services both organically and through mergers and acquisitions (M&A). iQSTEL has completed 10 acquisitions since June 2018 and continues to develop an active pipeline of potential future acquisitions.
Safe Harbor Statement: Statements in this news release may be "forward-looking statements". Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions, or any other information relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates, and projections about our business based partly on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual outcomes and results may and are likely to differ materially from what is expressed or forecasted in forward-looking statements due to numerous factors. Any forward-looking statements speak only as of the date of this news release, and iQSTEL Inc. undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this news release. This press release does not constitute a public offer of any securities for sale. Any securities offered privately will not be or have not been registered under the Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
iQSTEL Inc.
IR US Phone: 646-740-0907
IR Email: investors@iqstel.com
Contact Details
iQSTEL Inc.
+1 646-740-0907
investors@iqstel.com
Company Website
https://www.iqstel.com/
4 |
IQST - iQSTEL Announces 36% Gross Profit Increase On Q1 Revenue Of $22.9 Million
PR Newswire
NEW YORK, April 19, 2023
NEW YORK, April 19, 2023 /PRNewswire/ -- iQSTEL Inc. (OTCQX: IQST) today announced the company's Q1 2023 revenue reached $22.9 million based on preliminary accounting. Revenue grew in Q1 2023 by 18% compared to the same period last year. The company's gross profit of approximately $780,000 based on preliminary accounting increased by 36% in Q1 2023 compared to the same period last year.
The company recently published its 2022 annual report on SEC Form 10K, and a Shareholders Letter explaining the details.
Revenue for the year ended December 31, 2022 was $93,203,532 compared to $64,702,018 recorded in the previous year representing an increase of 44% from 2021 to 2022.
The company reported a gross profit of nearly $1.8 million for the year ended December 31, 2022. The Q1 2023 gross profit of $780,000 is already 43% the gross profit reported for the entire year in 2023.
The table below summarizes iQSTEL's gross profit growth through Q1-FY2023:
EOY-FY2022 | Q1 - FY2022 | Q1-FY2023 | ||
Revenue (US$ Million) | 93.2 | 19.42 | 22.9 | |
Gross Profit (US$ Thousand) | 1791 | 484 | 780 | Note 1 |
% of Gross Profit | 1.92 % | 2.49 % | 3.41 % | |
% of Gross Profit Growth Vs Q1 -FY2022 | 36 % | |||
% of Gross Profit Growth Vs EOY-FY2022 | 77.25 % | |||
Note 1: This value represents 43.55% of the Gross Profit of EOY-FY2022 |
"With iQSTEL's maturing operations we are seeing improved profit margins," commented Leandro Iglesias, CEO of iQSTEL. "Revenue growth remains high with the company on track to meet or exceed its $105 million 2023 forecast. Historically the second half of the year is better in terms of commercial activity. Therefore, we feel confident about reaching or exceeding our revenue objective of $105 million. Now we are tuning the operational engine that drives our monster growth and seeing better fuel efficiency through our profit margin improvements. iQSTEL has a very sound operation running under its hood. I expect our track record highlights for 2023 to be breaking $105 million in revenue and reporting our first annual positive operating income. The Q1 2023 gross profit performance bolsters our confidence."
About IQSTEL updated:
iQSTEL Inc. (OTC-QX: IQST) (www.iQSTEL.com) is a US-based, multinational public company preparing for a Nasdaq up-listing with an FY2023 $105 million revenue forecast. iQSTEL's mission is to serve basic human needs in today's modern world by making the necessary tools accessible regardless of race, ethnicity, religion, socioeconomic status, or identity. iQSTEL recognizes that in today's modern world, the pursuit of the human hierarchy of needs (physiological, safety, relationship, esteem and self actualization) is marginalized without access to ubiquitous communications, the freedom of virtual banking, clean affordable mobility and information and content. iQSTEL has 4 Business Divisions delivering accessibly to the necessary tools in today's pursuit of basic human needs: Telecommunications, Fintech, Electric Vehicles and Metaverse.
The company continues to grow and expand its suite of products and services both organically and through mergers and acquisitions (M&A). iQSTEL has completed 10 acquisitions since June 2018 and continues to develop an active pipeline of potential future acquisitions.
Safe Harbor Statement: Statements in this news release may be "forward-looking statements". Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions, or any other information relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates, and projections about our business based partly on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual outcomes and results may and are likely to differ materially from what is expressed or forecasted in forward-looking statements due to numerous factors. Any forward-looking statements speak only as of the date of this news release, and iQSTEL Inc. undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this news release. This press release does not constitute a public offer of any securities for sale. Any securities offered privately will not be or have not been registered under the Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
iQSTEL Inc.
IR US Phone: 646-740-0907
IR Email: investors@iqstel.com
Contact Details
iQSTEL Inc.
+1 646-740-0907
investors@iqstel.com
Company Website
https://www.iqstel.com/
2 |
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Cover |
Apr. 17, 2023 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Amendment Flag | false |
Document Period End Date | Apr. 17, 2023 |
Entity File Number | 000-55984 |
Entity Registrant Name | iQSTEL Inc. |
Entity Central Index Key | 0001527702 |
Entity Tax Identification Number | 45-2808620 |
Entity Incorporation, State or Country Code | NV |
Entity Address, Address Line One | 300 Aragon Avenue |
Entity Address, Address Line Two | Suite 375 |
Entity Address, City or Town | Coral Gables |
Entity Address, State or Province | FL |
Entity Address, Postal Zip Code | 33134 |
City Area Code | (954) |
Local Phone Number | 951-8191 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Entity Emerging Growth Company | false |
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