Attached files
file | filename |
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EX-99.3 - EXHIBIT 99.3 IQSTEL PROFOMA FINANCIALS - iQSTEL Inc | f8ka121018_ex99z3.htm |
EX-99.1 - EXHIBIT 99.1 AUDITED FINANCIAL INFORMATION FOR ETELIX - iQSTEL Inc | f8ka121018_ex99z1.htm |
8-K/A - FORM 8-K/A AMENDED CURRENT REPORT - iQSTEL Inc | f8ka121018_8kz.htm |
EXHIBIT 99.2
ETELIX,COM USA LLC
Index to Interim Unaudited Financial Statements
|
| Page |
|
|
|
|
|
Balance Sheets as of March 31, 2018 and December 31, 2017 |
| 2 |
|
|
|
|
|
Statements of Operations for the three months ended March 31, 2018 and 2017 |
| 3 |
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|
|
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Statements of Cash Flows for the three months ended March 31, 2018 and 2017 |
| 4 |
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Notes to the Unaudited Financial Statements |
| 5 |
|
1
ETELIX.COM USA LLC
Balance Sheets
(Unaudited)
|
| March 31, |
| December 31, | ||
|
| 2018 |
| 2017 | ||
ASSETS |
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
Cash and cash equivalent |
| $ | 27,784 |
| $ | 23,266 |
Accounts receivable |
|
| 1,996,611 |
|
| 1,099,533 |
Other current assets |
|
| - |
|
| 132,576 |
Total Current Assets |
|
| 2,024,395 |
|
| 1,255,375 |
|
|
|
|
|
|
|
Fixed assets, net |
|
| 286,170 |
|
| 305,031 |
TOTAL ASSETS |
| $ | 2,310,565 |
| $ | 1,560,406 |
|
|
|
|
|
|
|
|
|
|
|
|
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|
LIABILITIES AND MEMBERS´S EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
Accounts payable |
| $ | 1,119,951 |
| $ | 748,542 |
Loans payable |
|
| 239,542 |
|
| 227,958 |
Other current liabilities |
|
| 550,906 |
|
| 262,581 |
Total Current Liabilities |
|
| 1,910,399 |
|
| 1,239,081 |
|
|
|
|
|
|
|
Long-term loans payable – related parties |
|
| 90,837 |
|
| 136,037 |
TOTAL LIABILITIES |
|
| 2,001,236 |
|
| 1,375,118 |
|
|
|
|
|
|
|
MEMBERS' EQUITY |
|
|
|
|
|
|
Membership equity |
|
| 853,515 |
|
| 748,515 |
Accumulated deficit |
|
| (544,186) |
|
| (563,227) |
Total Members’ Equity |
|
| 309,329 |
|
| 185,288 |
|
|
|
|
|
|
|
TOTAL LIABILITIES AND MEMBERS´ EQUITY |
| $ | 2,310,565 |
| $ | 1,560,406 |
The accompanying notes are an integral part of these unaudited financial statements.
2
ETELIX.COM USA LLC
Statements of Operations
(Unaudited)
|
| Three months ended | ||||
|
| March 31, | ||||
|
| 2018 |
| 2017 | ||
|
|
|
|
|
|
|
Revenue |
| $ | 2,180,165 |
| $ | 1,874,154 |
Cost of revenue |
|
| (1,967,159) |
|
| (1,684,264) |
Gross profit |
|
| 213,006 |
|
| 189,890 |
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
General and administrative |
|
| 123,976 |
|
| 160,205 |
Total operating expenses |
|
| 123,976 |
|
| 160,205 |
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
Other income |
|
| - |
|
| - |
Other expense |
|
| (12,935) |
|
| - |
Interest expense |
|
| (57,054) |
|
| (18,324) |
Total other income (expense) |
|
| (69,989) |
|
| (18,324) |
|
|
|
|
|
|
|
Net income before taxes |
|
| 19,041 |
|
| 11,361 |
Income tax expense |
|
| - |
|
| - |
Net income |
| $ | 19,041 |
| $ | 11,361 |
The accompanying notes are an integral part of these unaudited financial statements.
3
ETELIX.COM USA LLC
Statements of Cash Flows
(Unaudited)
|
| Three months ended | ||||
|
| March 31, | ||||
|
| 2018 |
| 2017 | ||
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income (loss) |
| $ | 19,041 |
| $ | 11,361 |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
Depreciation and Amortization |
|
| 18,861 |
|
| 18,861 |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
| (897,078) |
|
| (378,721) |
Other current assets |
|
| 132,576 |
|
| 83,365 |
Accounts payable |
|
| 371,409 |
|
| 76,956 |
Other current liabilities |
|
| 288,325 |
|
| 112,161 |
Net cash used in operating activities |
|
| (66,866) |
|
| (76,017) |
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
Purchase of fixed assets |
|
| - |
|
| - |
Net cash used in investing activities |
|
| - |
|
| - |
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITY: |
|
|
|
|
|
|
Capital contribution |
|
| 59,800 |
|
| - |
Loan payable |
|
| 133,000 |
|
| 82,625 |
Repayment of loan payable |
|
| (121,416) |
|
| (15,998) |
Net cash provided by financing activity |
|
| 71,384 |
|
| 66,627 |
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
| 4,518 |
|
| (9,390) |
Cash and cash equivalents - Beginning of period |
|
| 23,266 |
|
| 17,885 |
Cash and Cash Equivalents - end of Period |
| $ | 27,784 |
| $ | 8,495 |
|
|
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SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
Cash paid for income taxes |
| $ | - |
| $ | - |
Cash paid for interest |
| $ | 57,054 |
| $ | 18,324 |
|
|
|
|
|
|
|
NON CASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
|
Related party debt forgiveness |
| $ | 45,200 |
| $ | - |
The accompanying notes are an integral part of these unaudited financial statements.
4
ETELIX.COM USA LLC
Notes to the Unaudited Financial Statements
March 31, 2018
NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS
ETELIX,COM USA LLC (the “Company”) is a Florida corporation incorporated on September 30, 2008.
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 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 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 March 31, 2018 and the results of operations and cash flows for the periods presented. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited interim financial statements should be read in conjunction with the audited financial statements and related notes thereto included in Exhibit 99.1 of the Form 8-K Amendment 1, as filed with the SEC on December 14, 2018
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 March 31, 2018, and December 31, 2017, the Company had no valuation allowance for doubtful accounts for the Company’s accounts receivable and recorded no bad debt expense.
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 or other current assets, 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 March 31, 2018, the Company had accumulated deficit of $544,186 and net cash used in operating activities of $66,866 for the three months ended March 31, 2018. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. 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.
5
Historically, the Company has relied upon funds from its members. 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 members.
NOTE 4 – OTHER CURRENT ASSETS
Other current assets at March 31, 2018 and December 31, 2017, consist of the following:
|
| March 31, |
| December 31, | ||
|
| 2018 |
| 2017 | ||
Other receivable |
| $ | - |
| $ | 124,484 |
Prepaid expenses |
|
| - |
|
| 8,092 |
|
| $ | - |
| $ | 132,576 |
NOTE 5 – FIXED ASSETS, NET
Fixed assets, net at March 31, 2018 and December 31, 2017, consist of the following:
|
| March 31, |
| December 31, | ||
|
| 2018 |
| 2017 | ||
Telecommunication equipment |
| $ | 245,260 |
| $ | 245,260 |
Telecommunication software |
|
| 400,903 |
|
| 400,903 |
Total fixed assets |
|
| 646,163 |
|
| 646,163 |
Accumulated depreciation and amortization |
|
| (359,993) |
|
| (341,132) |
Total Fixed assets |
| $ | 286,170 |
| $ | 305,031 |
Depreciation expense for the three months ended March 31, 2018 and 2017 amounted to $18,861 and $18,861, respectively.
NOTE 6 –LOANS PAYABLE
Loans payable at March 31, 2018 and December 31, 2017 consist of the following:
|
| March 31, |
| December 31, |
|
| Interest | ||
|
| 2018 |
| 2017 |
| Term | rate | ||
APP Group Inter |
| $ | 1,390 |
| $ | 1,390 |
| Note was issued on June 28, 2017 and due in December 17, 2017 | 32.0% |
Complete Business Solutions_2 |
|
| - |
|
| 34,438 |
| Note was issued on November 14, 2017 and due in May 3, 2018 | 28.6% |
Advantage Platform Services_3 |
|
| 132,420 |
|
| 192,130 |
| Note was issued on December 19, 2017 and due in October 18, 2018 | 31.5% |
Advantage Platform Services_4 |
|
| 63,732 |
|
| - |
| Note was issued on February 2, 2018 and due in October 1, 2018 | 31.0% |
DMKA LLC |
|
| 42,000 |
|
| - |
| Note was issued on March 9, 2018 and due in July 28, 2018 | 28.6% |
Total |
|
| 239,542 |
|
| 227,958 |
|
|
|
Less : Current portion of loans payable |
|
| 239,542 |
|
| 227,958 |
|
|
|
Long-term loans payable |
| $ | - |
| $ | - |
|
|
|
During the three months ended March 31, 2018 and 2017, the Company borrowed $133,000 and $82,625, respectively, and repaid the principal amount of $121,416 and $15,998 and interest expense of $57,054 and $18,324, respectively.
6
NOTE 7 – OTHER CURRENT LIABILITIES
Other current liabilities at March 31, 2018 and December 31, 2017, consist of the following:
|
| March 31, |
| December 31, | ||
|
| 2018 |
| 2017 | ||
Accrued liabilities |
| $ | 372,531 |
| $ | 118,152 |
Salary payable |
|
| 153,030 |
|
| 137,348 |
Other payable |
|
| 25,345 |
|
| 7,081 |
|
| $ | 550,906 |
| $ | 262,581 |
NOTE 8 – MEMBERS’ EQUITY
During the three months ended March 31, 2018 and 2017, the Company received capital contributions of $59,800 and $0, respectively. During the three months ended March 31, 2018, loan payable – related parties of $45,200 was forgiven.
NOTE 9 - RELATED PARTY TRANSACTIONS
Loans payable – related parties
|
| March 31, |
| December 31, |
|
| Interest | ||
|
| 2018 |
| 2017 |
| Term | rate | ||
Alonso Van Der Biest |
| $ | 80,200 |
| $ | 80,200 |
| Note was issued on June 12, 2015 and due in June 11, 2019 | 16.5% |
Alvaro Quintana |
|
| 10,637 |
|
| 10,837 |
| Note was issue on September 30, 2016 and due in September 29, 2019 | 0% |
Leandro Iglesias |
|
| - |
|
| 45,000 |
|
|
|
Total |
|
| 90,837 |
|
| 136,037 |
|
|
|
Less: Current portion of loans payable |
|
| - |
|
| - |
|
|
|
Long-term loans payable |
| $ | 90,837 |
| $ | 136,037 |
|
|
|
NOTE 10 - SUBSEQUENT EVENTS
Membership Interest Purchase Agreements and Reorganization
On June 25, 2018 (the “Effective Date”), the Company entered into a membership purchase agreement with iQSTEL Inc. (“iQSTEL”) and became a 100% subsidiary of iQSTEL.
Pursuant to the terms of the membership interest purchase agreement, iQSTEL issued 13,751,875 shares of its unregistered common stock to the members of Etelix in exchange for their memberships interests in Etelix and as a result of the Purchase Agreements, Etelix became a wholly owned subsidiary of iQSTEL.
7