Business Context and Reporting Period
This Form 8-K was filed by iQSTEL Inc. on April 28, 2020, reporting a material definitive agreement entered into on the same date. The company's majority-owned subsidiary, QGlobal SMS, LLC, agreed to acquire 100% of the equity and certain assets of Alcyon Cloud SMS, S.a.S., a Colombian entity specializing in retail SMS services.
Key Financial Metrics
The filing does not provide standard financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity for iQSTEL Inc. or the target company. The only financial figure disclosed is the acquisition consideration of $25,000 USD, structured as follows:
- $15,000 USD payable in cash within one year for retail marketing plan development.
- $10,000 USD payable in cash to the seller within one year.
Material Changes
The primary material change is the entry into the Company Acquisition Agreement. The transaction aims to expand iQSTEL's service offerings from SMS to omnichannel products including Email, RCS, Social Media Channels, WebRTC, VoIP, and AI-based ChatBots. The agreement is subject to closing conditions, including board approval, satisfactory due diligence, and the preparation of auditable financial statements by the buyer.
Outlook, Risks, and Contingencies
Outlook: Management plans to leverage the acquisition to diversify into omnichannel communication services.
Risks and Contingencies: The agreement may be terminated if either party is deemed economically unviable or bankrupt, if due diligence reveals a material impact on valuation, or by mutual agreement. The closing is scheduled for 90 days from execution but is contingent upon the buyer's board approval and the ability to produce financial statements auditable by a PCAOB auditor.
Investor Verification Checklist
- Verify the financial viability and auditable status of iQSTEL Inc. as a closing condition.
- Confirm the completion of due diligence on Alcyon Cloud SMS, S.a.S.
- Monitor the 90-day closing timeline for potential delays or terminations.
- Review the attached Company Purchase Agreement (Exhibit 2.1) for full terms and representations.