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NOTE 14 - SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2020

NOTE 14 - SUBSEQUENT EVENTS

NOTE 14 - SUBSEQUENT EVENTS

Subsequent to March 31, 2020 and through the date that these financials were made available, the Company had the following subsequent events:

Between April 01, 2020 and May 06, 2020 issued several promissory notes. These notes are non-convertible have different terms, accrues interest at 12% annually, which details are shown below.

Issue Date	Principal Amount	Maturity Date
4/1/2020	66,315.79	10/1/2020
4/2/2020	73,684.21	10/2/2020
4/7/2020	36,842.11	10/7/2020
4/15/2020	84,210.53	10/14/2020
4/20/2020	94,736.84	5/20/2020
4/22/2020	31,578.95	5/22/2020
5/6/2020	52,631.58	5/20/2020

On April 15, 2020, we entered into a Company Acquisition Agreement (the “Agreement”) with Francisco Bunt regarding the acquisition of 51% of the shares in loT Labs, LLC (“The Company”). The Company’s principal business activity is the sale of Short Messages (SMS) between USA and Mexico.

We have agreed to pay a total of $180,000 for the 51% interest in the Company. The consideration shall occur with an installment of $60,000 on the date of the execution of the Agreement, followed by a second payment of $60,000 at Closing and a final payment of $60,000 that is set to occur 60 days following the Closing Date. Under the Agreement, Mr. Bunt has the right to request that any of the aforementioned payments be made in shares of our common stock, which the parties have agreed to value at $2.00 per share. The shares are subject to adjustment after 180 days and up to 360 days after issuance if our stock trades at less than $2.00 per share. The Agreement provides for a right of return to Mr. Bunt of the shares in the Company if we fail to make timely payments.

We have also agreed to invest in the Company the sum of $500,000 that will be used by the Company to acquire loT Labs MX SAPI to make it a wholly owned subsidiary of the Company. In addition, we and Mr. Bunt have further agreed to finance the Company in order to cover its budget with $300,000, with us responsible for 51% of and Mr. Bunt responsible for 49% of that amount.

On April 28, 2020, the Company issued a convertible note in the principal amount of $44,444.44. 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 40% multiplied by the lowest trading price during the previous thirty days ending on the latest complete trading day prior to the conversion date.

On April 28, 2020, our majority owned subsidiary, QGlobal SMS, LLC (the “Buyer”), entered into a Company Acquisition Agreement (the “Purchase Agreement”) by and between the Buyer and the Jesus Vega (the “Seller”), which agreement provides for the purchase of 100% of the equity and certain assets of Alcyon Cloud SMS, S.a.S., registered with the Secretary of Information and Communication Technology in Colombia (the “Company”).

The Company’s principal business activity is the sale of short messages (SMS) for the retail market. The parties plan to expand services from SMS to offer onmichannel products and services such as SMS, Emails, Rich Communications Services (RCS), Social Media Channels (WhatsApp Messenger, etc.), Web Real-Time Communication (WebRTC), VoIP (IP-PBX, SIP Trunking), ChatBots (Artificial Intelligence Based), SMS to Email and Email to SMS.

The consideration for the acquisition consists of $25,000 USD, payable as follows:

·$15,000 USD shall be paid in cash within a year to be used for the development of the retail marketing plan; and

·The balance of $10,000 USD shall be paid in cash to Seller within a year.

The Purchase Agreement may be terminated if either the Buyer or the Company are deemed economically unviable or bankrupt; if during due diligence process there is discovered a material impact on the valuation of the Company or the parties mutually agreed to terminate the Purchase Agreement.

The Closing of the Purchase Agreement is scheduled for 90 days from execution, and is subject to conditions, which include the following:

·Buyer’s board of directors approving the transaction;

·Satisfactory due diligence by Buyer;

·Buyer has prepared financial statements that are auditable by a PCAOB auditor.

The Purchase Agreement contains customary representations and warranties of the parties, including, among others, with respect to corporate organization, capitalization, corporate authority, financial statements and compliance with applicable laws. The representations and warranties of each party set forth in the Purchase Agreement were made solely for the benefit of the other parties to the Purchase Agreement, and investors are not third-party beneficiaries of the Purchase Agreement. In addition, such representations and warranties (a) are subject to materiality and other qualifications contained in the Purchase Agreement, which may differ from what may be viewed as material by investors, (b) were made only as of the date of the Purchase Agreement or such other date as is specified in the Purchase Agreement and (c) may have been included in the Purchase Agreement for the purpose of allocating risk between the parties rather than establishing matters as facts. Accordingly, the Purchase Agreement is included with this filing only to provide investors with information regarding the terms of the Purchase Agreement, and not to provide investors with any other factual information regarding any of the parties or their respective businesses.

On May 6, 2020, our majority owned subsidiary, loT Labs, LLC (the “Buyer”), entered into a Company Acquisition Agreement (the “Purchase Agreement”) by and between the Buyer and the Francisco Bunt (the “Seller”), which agreement provides for the purchase of 100% of the equity and certain assets of loT Labs MX SAPI., a Mexican corporation domiciled at Hegel 207, Col. Polanco CDMX 11570 Mexico (the “Company”).

The Company has developed a technological solution in loT (“Smart Gas IoT Platform”), which consist of equipment (Hardware) and complete administration platforms (Software), mobile users’ platforms and intellectual property, internet domains among others. The “Smart Gas IoT Platform” device will be installed in the propane gas vessels, and will transmit on real time the pressure that the tank has, and collecting that information into the smart gas software platform, providing to users a very efficient way to manage the propane refill trunks.

The consideration for the acquisition consists of $550,000 USD, payable as follows:

·$100,000 USD payable at closing;

·$150,000 USD payable 90 days from closing;

·$150,000 USD payable 180 days from closing; and

·$150,000 USD payable 270 days from closing.

All payments shall have a maximum tolerance of 15 days, from which will generate interests 3% monthly. After 90 days of delay of the established dates, Seller will have the right to dissolve the acquisition and will return only 50% of Buyer's payment for the acquisition affected by the payment delay.

Seller agrees that he will have the right to request that any of the $150,000 USD payments be made in shares of iQSTEL at a value of $2.00 USD per share. Seller will have the right, after 180 days and up to 360 days of issuance of the iQSTEL shares, to adjust the number of shares if the stock at that time has a value below $2.00 USD per share.

The Purchase Agreement may be terminated if either the Buyer or the Company are deemed economically unviable or bankrupt; if during due diligence process there is discovered a material impact on the valuation of the Company, or the parties mutually agreed to terminate the Purchase Agreement.

The Closing of the Purchase Agreement is scheduled for 90 days from execution, and is subject to conditions, which are included in the Purchase Agreement.

The Purchase Agreement contains customary representations and warranties of the parties, including, among others, with respect to corporate organization, capitalization, corporate authority, financial statements and compliance with applicable laws. The representations and warranties of each party set forth in the Purchase Agreement were made solely for the benefit of the other parties to the Purchase Agreement, and investors are not third-party beneficiaries of the Purchase Agreement. In addition, such representations and warranties (a) are subject to materiality and other qualifications contained in the Purchase Agreement, which may differ from what may be viewed as material by investors, (b) were made only as of the date of the Purchase Agreement or such other date as is specified in the Purchase Agreement and (c) may have been included in the Purchase Agreement for the purpose of allocating risk between the parties rather than establishing matters as facts. Accordingly, the Purchase Agreement is included with this filing only to provide investors with information regarding the terms of the Purchase Agreement, and not to provide investors with any other factual information regarding any of the parties or their respective businesses.

On May 07, 2020, the Company issued a convertible note in the principal amount of $55,000.00. 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 40% multiplied by the lowest trading price during the previous thirty days ending on the latest complete trading day prior to the conversion date.

On May 20, 2020, we entered into a Subscription Agreement with Alpha Capital Anstalt (“Purchaser”), pursuant to which we issued and sold to the Purchaser 2,000,000 shares of our common stock (the “Shares”) for total proceeds of $160,000. The Shares were sold at $0.08 per share, after applying a 20% discount to the purchase price of $0.10 per share.

The Shares were offered and sold pursuant to qualified offering circular on Form 1-A (File No. 024-10950) and related supplement, in each case filed with the Securities and Exchange Commission. A copy of the form of Subscription Agreement used in the offer and sale is attached as Exhibit 13.1 to the Form 1-A/A filed with the SEC on June 3, 2019 and is incorporated herein by reference.

Also on May 20, 2020, we entered into a Securities Purchase Agreement (“SPA”) with Purchaser for the sale of a convertible promissory note, executed on March 20, 2019, in the principal amount of $200,000 (the “Note”). We received $160,000 after paying a $40,000 original issue discount on the Note. The Note bears interest at 5% per annum and matures one year from the date of issuance. After 180 days from issuance, the Note may be converted by purchaser into shares of our common stock at a conversion price of the lesser of (i) $0.025 or (ii) 40% of the lowest trading price of our common stock in the 20 days preceding the issuance date of the Note.

As additional consideration for the Note, we issued to Purchaser a warrant (the “Warrant”) to purchase 2,000,000 shares of common stock at an exercise price of $0.02 per share (subject to adjustment as set forth in the Warrant) expiring six months from the date of issuance.

On May 22, 2020, we entered into an amendment (the “Amendment”) to the convertible promissory note, executed on December 3, 2019 in the principal amount of $235,000 (the “Note”) with Labrys Fund, LP, a Delaware limited partnership (“Purchaser”). Purchaser agreed to waive all existing events of default under the Note provided that we fulfill all of our obligations under the Amendment. If we fail to do so, any default existing as of May 22, 2020 shall be reinstated. Under the Amendment, we agreed to amend Section 1.9 of the Note in order to pay the Purchaser in installments until the Note is paid in full. There shall be 9 total monthly installment payments for an aggregate of $308,660.80. The first payment of $35,000 is due on or before June 19, 2020 and the final payment of $28,660.80 is due on or before February 19, 2021.

On June 3, 2020, we entered into a Subscription Agreement with Alpha Capital Anstalt (“Purchaser”), pursuant to which we issued and sold to the Purchaser 2,500,000 shares of our common stock (the “Shares”) for total proceeds of $200,000. The Shares were sold at $0.08 per share, after applying a 20% discount to the purchase price of $0.10 per share.

The Shares were offered and sold pursuant to qualified offering circular on Form 1-A (File No. 024-10950) and related supplement, in each case filed with the Securities and Exchange Commission. A copy of the form of Subscription Agreement used in the offer and sale is attached as Exhibit 13.1 to the Form 1-A/A filed with the SEC on June 3, 2019 and is incorporated herein by reference.

Also on June 3, 2020, we entered into a Securities Purchase Agreement (“SPA”) with Purchaser for the sale of a convertible promissory note, executed on June 3, 2019, in the principal amount of $250,000 (the “Note”). We received $200,000 after paying a $50,000 original issue discount on the Note. The Note bears interest at 5% per annum and matures one year from the date of issuance. After 180 days from issuance, the Note may be converted by purchaser into shares of our common stock at a conversion price of the lesser of (i) $0.035 or (ii) 40% of the lowest trading price of our common stock in the 20 days preceding the issuance date of the Note.

As additional consideration for the Note, we issued to Purchaser a warrant (the “Warrant”) to purchase 2,500,000 shares of common stock at an exercise price of $0.03 per share (subject to adjustment as set forth in the Warrant) expiring six months from the date of issuance.

On June 08, 2020, we entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Triton Funds, LP, a Delaware limited partnership (the “Investor”), whereby we shall have the right to require the Investor to purchase up to $1,042,157 of shares of our common stock (the “Investment Amount”), par value $0.001 per share (“Common Stock”) during the commitment period (the “Commitment Period” commencing on June 08, 2020, and terminating on the earlier of (i) December 31, 2020, or (iii) the date that the Investor has purchased the Investment Amount).

The purchase price for the shares to be paid by the Investor at each closing shall be 80% of the lowest trading price of our Common Stock during the 7 business days prior to closing.

The obligation of the Investor to purchase the shares is subject to several conditions, including, among other thing, (i) that the Company has filed a registration statement with the United States Securities and Exchange Commission registering the shares, and (ii) that the purchase of the shares shall not cause the Investor to own more than 9.99% of the outstanding shares of the Company’s common stock.