Salary-to-stock move signals IQSTEL cash strategy, raises dilution flags

Rhea-AI Filing Summary

iQSTEL (NASDAQ:IQST) filed an 8-K announcing amended employment agreements for CEO Leandro Iglesias and CFO Alvaro Quintana Cardona approved on June 23, 2025.

Key terms: If remuneration is not paid on time, each officer may convert accrued salary/bonus into equity. Common stock uses the 10-day average price at a 25% discount; Series B Preferred uses the same discounted price divided by 12.5.

On June 24, 2025 the executives converted $631,500 of unpaid salary into 6,571 Series B Preferred shares, lowering cash liability and increasing potential dilution.

Full agreements are in Exhibits 10.1 and 10.2. The filing highlights cash-flow preservation, dilution risk and governance implications.

Positive

• $631,500 cash obligation eliminated via equity conversion, improving near-term liquidity
• Equity-based remuneration potentially aligns executive incentives with shareholder value

Negative

• Issuance of 6,571 Series B Preferred shares at a 25% discount introduces immediate and potentially outsized dilution
• Ability to convert unpaid compensation indicates possible liquidity constraints and raises governance concerns

Insights

Financial Analyst

Execs swap $631k salary for preferred stock; cash saved, dilution rises.

The conversion removes a short-term cash burden of $631,500. Although only 6,571 preferred shares were issued, each share converts at a 1:12.5 ratio based on a 25% discounted common price, implying a larger diluted impact than the headline number suggests. The discount represents an immediate value transfer to insiders. While the move conserves liquidity and signals management confidence, investors should model worst-case dilution and monitor future accruals as the mechanism may be used again if cash constraints persist.

Corporate Governance Expert

Discounted conversion rights heighten governance and fairness questions.

The amended contracts give executives unilateral rights to convert unpaid compensation at favorable terms—25% below market and leveraged via Series B Preferred. This concentrates negotiating power with management and can erode minority-shareholder value if cash shortfalls continue. Board approval is disclosed, but the filing offers no insight on independent committee oversight or valuation fairness. Shareholders should scrutinize upcoming proxy disclosures and consider whether additional safeguards around discounted equity issuance are warranted.

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
____________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 23, 2025

iQSTEL Inc.
(Exact name of registrant as specified in its charter)

Nevada	000-55984	45-2808620
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

300 Aragon Avenue, Suite 375 Coral Gables, FL 33134	33134
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (954) 951-8191

________________________________________________

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: 

Title of each class		Trading symbol		Name of each exchange on which registered
Common Stock		IQST		Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company   [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      [ ]

SECTION 1 - Registrant's Business and Operations

Item 1.01 – Entry into a Material Definitive Agreement

The disclosures concerning the entry into material definitive agreements contained in Item 5.02 are incorporated herein by reference into this Item 1.01.

SECTION 5 – Corporate Governance and Management

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

On June 23, 2025, our board of directors approved amended employment agreements in favor of our Chief Executive Officer, Leandro Iglesias, and our Chief Financial Officer, Alvaro Quintana Cardona.

In case the monthly remuneration is not set in full on time , the amended agreements provide that Messrs. Iglesias and Quintana  may convert their accrued salary/bonus into shares of our common stock or our Series B Preferred Stock. For common stock, the number of shares issuable is determined by considering the average price per share of our common stock on the Nasdaq Capital Market  during the last 10 days and applying a discount of 25% and then dividing the accrued salary by the average price per share. For Series B Preferred stock, the number of shares issuable is determined by considering the discounted average price per share of our common stock on the Nasdaq Capital Market during the last 10 days, dividing the accrued salary by the discounted average price per share, and then dividing that number of shares by 12.5.

The foregoing description of the amended employment agreements does not purport to be complete and is qualified in its entirety by reference to the complete text of the amended employment agreements filed as Exhibits 10.1 and 10.2 hereto and incorporated herein by reference.

Item 8.01 Other Events

The disclosures set forth in Item 5.02 are incorporated by reference into this Item 8.01.

On June 24 , 2025, as provided in their amended employment agreements, Messrs. Iglesias and Quintana elected to convert their accrued and unpaid salaries amounting to $631,500 into a total of 6,571 shares of our Series B Preferred Stock.

SECTION 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

	Exhibit No.	Description
	10.1	Amended Employment Agreement with Mr. Iglesias, dated June 23, 2025
	10.2	Amended Employment Agreement with Mr. Quintana, dated June 23, 2025

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

iQSTEL Inc.

/s/ Leandro Iglesias

Leandro Iglesias
Chief Executive Officer

Date June 25, 2025

3

FAQ

What material event did IQSTEL disclose in its June 23 2025 8-K?

The board approved amended employment agreements allowing the CEO and CFO to convert unpaid salary or bonus into equity at a 25% discount.

How many Series B Preferred shares were issued and for what amount?

On June 24, 2025, $631,500 of unpaid salary was converted into 6,571 Series B Preferred shares.

What discount applies to common-stock conversions under the new agreements?

A 25% discount to the 10-day average Nasdaq trading price of IQST common shares.

How does the conversion impact IQSTEL's cash position?

The equity issuance preserves $631,500 in cash that would otherwise have been paid as salary, easing short-term liquidity needs.

When were the amended agreements approved by IQSTEL's board?

They were approved on June 23, 2025.