Business Context and Reporting Period
This Form 8-K was filed by iQSTEL Inc. on November 18, 2020, reporting a material event occurring on that date. The company, incorporated in Nevada, announced the entry into a Memorandum of Understanding with Payment Virtual Mobile Solutions, LLC ("Virtual Mobile") to form a joint venture named "Global Money One, Inc." focused on building a prepaid debit card service.
Key Financial Metrics
This filing does not report historical financial results, revenue, profit, cash flow, margins, debt, or liquidity metrics for iQSTEL Inc. The document focuses exclusively on the terms of a new strategic agreement.
- Joint Venture Equity: iQSTEL will hold 75%; Virtual Mobile will hold 25%.
- Capital Contribution: iQSTEL is responsible for raising between $300,000 and $500,000 for the project.
- Fundraising Mechanism: iQSTEL is permitted to sell up to 24% of its equity position in the joint venture to raise the required funds.
Material Changes and Strategic Outlook
The primary material change is the formation of the joint venture. Management has outlined two 5-year business forecasts for Global Money One, Inc., subject to approval by the parties:
- Conservative Case: Projected revenues of $45,000,000 and EBITDA of $14,000,000.
- Optimistic Case: Projected revenues of $128,000,000 and EBITDA of $53,000,000.
Virtual Mobile will serve as the operating partner responsible for execution, implementation, operations, and management. iQSTEL retains the right to appoint 3 of the 5 board members, with officers Leandro Iglesias and Alvaro Cardona assuming key leadership roles in the new entity.
Risks and Contingencies
The filing notes that the description of the Memorandum of Understanding is not complete and is qualified by the full text of the document filed as Exhibit 10.1. Additionally, the press release issued on November 19, 2020, regarding this event is not deemed "filed" for purposes of Section 18 of the Exchange Act and is not subject to the liabilities of that section.
Investor Verification Checklist
- Review the full text of the Memorandum of Understanding (Exhibit 10.1) for specific terms, conditions, and exit strategies not detailed in the summary.
- Verify the status of the fundraising efforts for the $300,000 to $500,000 capital contribution.
- Confirm the appointment of the initial slate of directors and management for Global Money One, Inc.
- Assess the feasibility of the 5-year revenue and EBITDA forecasts given the current market environment for prepaid debit services.