Business Context and Reporting Period
Company: iQSTEL Inc. (Nasdaq: IQSTEL)
Filing Type: Form 8-K (Current Report)
Date of Report: August 7, 2025
Principal Executive Offices: Coral Gables, FL
This filing discloses a strategic development involving a non-binding Memorandum of Understanding (MOU) with Cycurion Inc. (Nasdaq: CYCU). The document does not contain financial statements or operational results for a specific reporting period.
Key Financial Metrics
The filing text does not provide revenue, profit, cash flow, margins, debt, or liquidity figures. This report focuses exclusively on a proposed corporate transaction.
Material Changes and Transaction Details
On August 7, 2025, iQSTEL Inc. entered into a non-binding MOU with Cycurion Inc. to explore a potential stock exchange transaction and an expanded strategic partnership focused on AI-powered cybersecurity services and the global telecom industry.
- Proposed Stock Exchange: Subject to due diligence and approvals, each party intends to issue $1,000,000 worth of its common stock to the other.
- Share Calculation: The number of shares will be based on the lower of the Nasdaq Official Closing Price on the trading day preceding the binding agreement or the average closing price over the five trading days preceding such signing.
- Shareholder Distribution: Each party intends to distribute up to 50% of the shares received in the exchange to its shareholders as a stock dividend, subject to board and regulatory approvals.
- Strategic Collaboration: The parties plan to continue collaborating on AI-powered cybersecurity, joint ventures, shared R&D, and potential structural integrations.
- Timeline: A 60-day exploration period is established from the effective date to negotiate a definitive agreement, extendable by mutual consent.
Guidance, Risks, and Contingencies
Binding Nature: The MOU is non-binding, except for confidentiality, its non-binding nature, and governing law (Nevada law). It does not obligate either party to proceed unless a definitive agreement is executed.
Forward-Looking Statements: The filing contains forward-looking statements regarding the proposed transaction, terms, and potential benefits. These are subject to risks and uncertainties, including the ability to negotiate definitive documentation, obtain necessary shareholder and regulatory approvals, and satisfy closing conditions.
Contingencies: The transaction is contingent upon satisfactory due diligence, internal approvals, and regulatory compliance.
Investor Verification Checklist
- Verify the full text of the non-binding MOU (Exhibit 99.2) for specific terms not detailed in the summary.
- Monitor the 60-day exploration period for the execution of a definitive binding agreement.
- Assess the potential dilution impact of the proposed $1,000,000 stock issuance and the subsequent 50% stock dividend to shareholders.
- Review Cycurion Inc.'s (CYCU) current stock price and market capitalization to evaluate the relative value of the proposed exchange.
- Confirm whether shareholder approval is required for the stock dividend and the transaction structure under Nasdaq rules and corporate bylaws.