Business Context and Reporting Period
Company: iQSTEL Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: May 22, 2020
Event: Entry into a material definitive agreement and creation of a direct financial obligation regarding an amendment to a convertible promissory note.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, or operating margins. It focuses exclusively on debt restructuring.
- Original Note Principal: $235,000 (Issued December 3, 2019 to Labrys Fund, LP).
- Outstanding Balance (as of May 22, 2020): Approximately $248,675.08 (Principal and interest).
- Revised Total Obligation: $308,660.80 (Aggregate of 9 monthly installments).
- First Payment Due: $35,000 on or before June 19, 2020.
- Final Payment Due: $28,660.80 on or before February 19, 2021.
Material Changes
The company amended a convertible promissory note originally executed on December 3, 2019. Key changes include:
- Default Waiver: The purchaser waived all existing events of default under the original note, contingent upon the company fulfilling obligations under the new amendment.
- Reinstatement Clause: If the company fails to meet the new obligations, any defaults existing as of May 22, 2020, will be reinstated.
- Payment Structure: The repayment schedule was modified to nine monthly installments, increasing the total amount payable from the outstanding balance of ~$248,675 to $308,660.80.
Outlook, Risks, and Contingencies
Management Commentary: The filing indicates the company is actively managing liquidity by restructuring debt to avoid immediate default.
Risks and Contingencies:
- Re-default Risk: Failure to make the scheduled installment payments will reinstate all prior defaults.
- Liquidity Pressure: The company must generate or secure $35,000 by June 19, 2020, to maintain the waiver of default.
Unusual Items: The filing does not disclose unusual items outside of the debt restructuring.
Investor Verification Checklist
- Verify the company's ability to meet the $35,000 payment due June 19, 2020.
- Review the full text of the Amendment (Exhibit 4.1) for specific interest rate calculations and conversion terms.
- Confirm whether the increase in total obligation to $308,660.80 includes accrued interest or penalty fees.
- Check for any subsequent filings regarding the June 2020 payment status.