iQSTEL Inc. filed a Form 8-K on October 26, 2026, disclosing that on October 20, 2026, the company entered into a Securities Purchase Agreement with M2B Funding Corp. and ADI Funding LLC, issuing senior secured, non-convertible promissory notes with an aggregate maximum principal amount of $3,000,000, along with pre-funded warrants for 420,000 shares of common stock.

Key Highlights

  • Aggregate note principal: Two senior secured, non-convertible promissory notes with a combined maximum principal of $3,000,000 ($1,500,000 per purchaser) were issued to M2B Funding Corp. and ADI Funding LLC.
  • Initial tranche net proceeds: Tranche A advances of $750,000 per purchaser were funded on or about October 20, 2026, resulting in net proceeds of $730,000 per purchaser ($1,460,000 aggregate) after deduction of a $10,000 legal fee and $10,000 non-accountable expense fee per purchaser.
  • Interest rate: The notes bear interest at 18% per annum, computed on a 360-day year, payable monthly in cash in arrears.
  • Pre-funded warrants: Each purchaser received a pre-funded warrant to purchase 210,000 shares of common stock at a nominal exercise price of $0.0001 per share, for an aggregate of 420,000 shares.
  • Stated use of proceeds: According to the filing, proceeds are intended to support the company's planned acquisition of a 51% controlling interest in Ultranet Telecom Group, with a definitive share purchase agreement expected in November 2026 and a targeted closing in the middle of the first quarter of 2027.
  • Default acceleration: Upon an uncured event of default, holders may demand payment of 120% of outstanding funded principal plus accrued interest and other amounts.

iQSTEL's $3 Million Two-Tranche Financing Structure and Ultranet Acquisition Plans

According to the filing, iQSTEL Inc. (NASDAQ:IQST) executed a Securities Purchase Agreement on October 20, 2026, with M2B Funding Corp. and ADI Funding LLC (collectively, the "Purchasers"). Each purchaser received a senior secured, non-convertible promissory note with a maximum principal of $1,500,000. The notes are structured in two tranches: Tranche A, consisting of an initial advance of $750,000 per purchaser funded at or around the October 20, 2026 closing, and Tranche B, a second advance of up to $750,000 per purchaser to be funded on or before December 1, 2026, subject to closing conditions and the absence of an event of default.

The filing states that principal under each tranche is repayable in four equal installments of 25% of the original funded principal of that tranche, due at six, twelve, eighteen, and twenty-four months after the applicable tranche's funding date. The company disclosed that it may, at its option and subject to specified conditions including written agreement on a stock payment price formula and Nasdaq rules, elect to pay scheduled principal installments in shares of common stock valued at the lowest volume-weighted average price over the prior 10 trading days. Until such written agreement is reached, principal is payable solely in cash, and interest remains payable in cash at all times. The notes are secured by a first-priority security interest in collateral as defined in the Security Agreement, with M2B designated as Collateral Agent.

The pre-funded warrants issued to each purchaser cover 210,000 shares and are exercisable at any time from October 20, 2026 at $0.0001 per share, subject to a 4.99% beneficial ownership limitation (increasable to 9.99% upon 61 days' notice). The filing notes that the warrants were fully earned at the initial closing regardless of whether Tranche B is funded. The warrants were issued in a private placement in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933 and/or Regulation D. According to the filing, the company "expects Ultranet to contribute to making the Company cash-flow positive on a consolidated basis," a characterization that is the company's own and subject to its cautionary language.

What Was Disclosed

iQSTEL Inc. disclosed the entry into a $3,000,000 senior secured note facility with two purchasers, the issuance of pre-funded warrants for 420,000 shares, the creation of a direct financial obligation, and unregistered sales of equity securities, all dated October 20, 2026, connected to its planned Ultranet Telecom Group acquisition.