S-1/A: iQSTEL Files Amendment No. 1 to S-1 Registration Statement, Updates Financials and Corporate Information

iQSTEL Inc. has filed an amendment to its S-1 registration statement, updating financials and other corporate information for a proposed offering of up to 15,000,000 shares of common stock.

Summary

• iQSTEL Inc. filed Amendment No. 1 to its Form S-1 registration statement on April 2, 2025.
• The amendment includes updated financial information for the year ended December 31, 2024.
• The registration statement covers the resale of up to 15,000,000 shares of common stock by a selling shareholder, ADI Funding LLC, upon exercise of a common stock purchase option.
• iQSTEL intends to use the cash received from the sale of the option, if exercised, as working capital.
• The company's common stock is quoted on the OTCQX Market under the symbol IQST, with the last reported sale price on March 31, 2025, at $0.15 per share.
• iQSTEL operates in the telecommunications, electric vehicle (EV), fintech, and AI-enhanced metaverse industries.
• The company's telecom division represents the majority of current operations and revenues.
• iQSTEL's revenue for the year ended December 31, 2024, was $283,220,442, compared to $144,502,351 for the year ended December 31, 2023.
• The company reported a net loss of $5,180,036 for the year ended December 31, 2024, compared to a net loss of $219,436 for the year ended December 31, 2023.
• As of December 31, 2024, iQSTEL had cash of $2,510,357, total assets of $79,007,738, total liabilities of $67,107,475, and total stockholders' equity of $11,900,263.
• The company's auditor has issued a going concern opinion.
• iQSTEL is involved in several recent transactions, including extending promissory notes with M2B Funding Corp. and a memorandum of understanding with Accredited Solutions, Inc. for the potential sale of itsBChain, LLC.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While revenue growth is positive, the increased net loss and going concern warning from the auditor raise significant concerns. The potential capital raise is a necessity, not a strength. Overall, the sentiment is cautiously negative.

Positives

• Revenue increased significantly from $144.5 million in 2023 to $283.2 million in 2024, indicating substantial growth in the company's operations.
• The company has a presence in 20 countries and maintains over 603 high-value network interconnections around the world.
• The company is exploring new business lines in Fintech, Electric Vehicles and AI-Enhanced Metaverse.

Negatives

• The company reported a net loss of $5.18 million in 2024, a significant increase from the $219,436 loss in 2023.
• The company's auditor has expressed substantial doubt about its ability to continue as a going concern.
• The company has an accumulated deficit of $32,703,410 as of December 31, 2024.

Risks

• The company's auditor has issued a going concern opinion, indicating significant uncertainty about its ability to continue operating.
• The company has a limited operating history and has incurred significant losses.
• The company is dependent on outside financing for the continuation of its operations.
• The telecommunications industry is highly sensitive to declining prices, which may adversely affect revenues and margins.
• The company faces intense competitive challenges, including rapid technological changes and pricing pressure.
• The company may fail to successfully integrate its acquisitions or otherwise be unable to benefit from pursuing acquisitions.
• Natural disasters, terrorist acts, acts of war, pandemics, cyber-attacks or other breaches of network or information technology security may cause equipment failures or disrupt operations.
• The company may be subject to securities litigation, which is expensive and could divert management attention.
• Changes in regulations or user concerns regarding privacy and protection of user data could adversely affect the business.

Future Outlook

The company's ability to continue as a going concern is dependent upon raising capital from financing transactions, increasing revenue, and keeping operating expenses below revenue levels in order to achieve positive cash flows, none of which can be assured.

Industry Context

iQSTEL operates in the telecommunications, electric vehicle (EV), fintech, and AI-enhanced metaverse industries, which are all subject to rapid technological changes and intense competition.

Comparison to Industry Standards

• The document does not provide enough information to make a detailed comparison to industry standards.
• A thorough analysis would require comparing iQSTEL's financial metrics (revenue growth, profitability, debt levels, etc.) to those of its direct competitors and industry benchmarks.
• Comparable companies in the telecommunications sector could include companies like Vodafone, Telefonica, or smaller regional players.
• In the EV sector, comparisons could be made to companies like Workhorse Group or other electric motorcycle manufacturers.
• For the fintech and metaverse divisions, comparisons would depend on the specific products and services offered and the competitive landscape in those areas.

Related Party Transactions

• During the years ended December 31, 2024 and 2023, the Company loaned $89,832 and $192,154 to a related party and collected $33,602 and $79,649, respectively.
• As of December 31, 2024 and 2023, the Company had amounts due from related parties of $630,715 and $340,515, respectively.
• As of December 31, 2024 and 2023, the Company had amounts due to related parties of $26,613.

Stakeholder Impact

• Shareholders face the risk of dilution from the potential issuance of 15,000,000 shares of common stock.
• The going concern warning raises concerns about the long-term viability of the company and the potential loss of investment for shareholders.
• Employees may be affected by the company's financial situation and potential cost-cutting measures.
• Customers may be impacted if the company's financial difficulties affect its ability to provide services or invest in new technologies.
• Creditors face increased risk due to the company's financial situation and going concern warning.

Next Steps

• The selling shareholder may offer and sell the shares of common stock described in this prospectus in a number of different ways and at varying prices.
• The parties have agreed to execute the Purchase Agreement no later than June 1, 2025, or sooner regarding the potential sale of itsBChain, LLC to ASII.
• The parties have agreed to execute the Purchase Agreement no later than July 1, 2025, or sooner regarding the potential purchase a 51% equity interest in GlobeTopper, LLC.

Key Dates

Keywords

iQSTEL, common stock, registration statement, telecommunications, fintech, electric vehicles, metaverse, revenue, net loss, going concern, ADI Funding LLC, OTCQX, S-1, offering