Business Context and Reporting Period
Company: iQSTEL Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: January 15, 2021
Event: Entry into Material Definitive Agreements regarding the conversion of common stock held by executive officers into Series B Preferred Stock.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, debt, or liquidity metrics. The document focuses exclusively on a corporate governance and capital structure transaction.
Material Changes and Transaction Details
On January 15, 2021, iQSTEL Inc. entered into Conversion Agreements with three executive officers to convert a total of 21,000,000 shares of common stock into 21,000 shares of Series B Preferred Stock. The transaction was executed to increase the availability of common stock for future note conversions and to implement trading restrictions on the officers' holdings.
| Officer | Common Stock Converted | Series B Preferred Acquired |
|---|---|---|
| Leandro Iglesias (CEO) | 12,200,000 | 12,200 |
| Alvaro Quintana (CFO) | 5,300,000 | 5,300 |
| Juan Carlos Lopez (CCO) | 3,500,000 | 3,500 |
| Total | 21,000,000 | 21,000 |
Terms, Restrictions, and Outlook
- Lock-Up Period: The Series B Preferred Stock is subject to a one-year lock-up period following issuance.
- Leak-Out Agreement: Upon future conversion back to common stock, shares are subject to a one-year leak-out period.
- Sales Limitation: Shareholders cannot sell more than 5% of the market liquidity during the leak-out period.
- Regulatory Status: The exchange is exempt from registration under Section 3(a)(9) of the Securities Act of 1933.
- Management Commentary: The filing states the primary intent is to manage share availability for future issuances and restrict trading of officer holdings.
Investor Verification Checklist
- Verify the full terms of the Series B Preferred Stock in the Certificate of Designation (Exhibit 3.1 from the November 13, 2020 filing).
- Review the specific Conversion Agreements (Exhibits 10.1, 10.2, and 10.3) for additional covenants or conditions.
- Confirm the impact of removing 21,000,000 shares from the common float on future dilution calculations.
- Monitor compliance with the 5% market liquidity sales cap during the leak-out period.