Results of Operations for the Years Ended
Net Revenue
Our net revenue for the year ended
When looking at the numbers by subsidiary, we have the following breakout for
the year ended
Revenue Year Ended SubsidiaryDecember 31, 2020 Etelix.com USA, LLC $ 14,033,528 SwissLink Carrier AG 5,432,022QGlobal LLC 421,619IoT Labs LLC 25,022,837$ 44,910,006
The continued growth of our revenue is the result of the development of our business strategy, which includes the strengthening of our commercial and operating activities and new acquisitions.
If net revenues continue growing at a similar rates for the next twelve months,
we believe that the company will reach a total consolidated revenue of
approximately
Cost of Revenue
Our total cost of sales for the year ended
When looking at the numbers by subsidiary, we have the following breakout for
the year ended
Cost of revenue Year Ended SubsidiaryDecember 31, 2020 Etelix.com USA, LLC $ 14,062,553 SwissLink Carrier AG 4,656,865QGlobal LLC 311,409IoT Labs LLC 24,916,827$ 43,947,654
Our cost of revenues consists of direct charges from vendors that the Company incurs to deliver services to its customers. These costs primarily consist of usage charges for calls and SMS terminated in vendor's network.
The behavior in the costs shows a logical correlation with the behavior of the revenue commented above. We have reached a higher volume of sales and every additional unit sold (minutes and SMS) has its corresponding termination cost.
Gross Margin
Our gross margin, which is simply the difference between our revenues and our
cost of sales, discussed above, increased from
We expect an increase in the gross margin for the next twelve months as a result of having better termination costs.
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Operating Expenses
Operating expenses for the year ended
Years Ended December 31 2020 2019 Salaries, Wages and Benefits$ 1,208,709 $ 657,790 Technology 133,400 160,251 Professional Fees 374,821 346,567 Legal & Regulatory 121,229 58,126 Travel & Events 8,596 22,689 Public Cost 87,234 33,537 Allowance for doubtful accounts 183,414 - Depreciation and Amortization 68,602 41,737 Advertising 942,950 61.346 Bank Services and Fees 137,598 21,687 Office, Facility and Other 209,956 45,894 Subtotal 3,476,509 1,449,624 Stock-based compensation 697,858 - Total Operating Expense$ 4,174,367 $ 1,449,624
The main reasons for the overall increase in operating expenses for the year
ended
Years Ended December 31, 2020 2019 Difference iQSTEL$ 2,623,555 $ 746,932 $ 1,876,623 Etelix 407,937 442,748 (34,811) SwissLink 815,130 259,944 555,186 ItsBchain 52,684 - 52,684 QGlobal 83,304 - 83,304 IoT Labs 191,757 - 191,757$ 4,174,367 $ 1,449,624 $ 2,724,743
The most significant difference is generated by iQSTEL which is due to the
following: (1) the Salaries, Wages and Benefits as a result of the new
employment agreements with the Management Team members valid from
The item Technology already reflects the savings resulting from the implementation of the new switching platform.
No allowance for doubtful accounts were established due to additional controls already implemented within the commercial area and collection team.
All other items were stable from one year to the other, which allows us to affirm that the cost structure of the company is under control and supervision.
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Other Expenses
We had other expenses of
Net Loss
We finished the year ended
Liquidity and Capital Resources
As of
Following is a table with summary data from the consolidated statement of cash
flows for the year ended
2020 2019 Net cash used in operating activities $ (2,116,174) $ (1,244,027) Net cash provided by (used) in investing activities (91,211) 152,069 Net cash provided by financing activities 2,662,756 1,357,526 Effect of exchange rate changes on cash 27,442 365 Net change in cash and cash
equivalents $ ????????????482,813??????????????????$ 265,933 ??????????????????
Our operating activities used
Investing activities used
Financing activities provided
Based upon our current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve months. We intend to fund operations through increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements. The Company has received the qualification of an Offering Statement under Regulation A for the sale of up to 80,000,000 common stocks. This offering is being conducted on a "best efforts" basis, which means that there is no guarantee that any minimum amount will be sold. We also plan to seek additional financing in a private equity offering to secure funding for operations. There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.
Inflation
Although our operations are influenced by general economic conditions, we do not
believe that inflation had a material effect on our results of operations during
the twelve month period ended
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Critical Accounting Policies
A "critical accounting policy" is one which is both important to the portrayal of a company's financial condition and results, and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Our accounting policies are discussed in detail in the footnotes to our
financial statements included in this Annual Report on Form 10-K for the year
ended
Off Balance Sheet Arrangements
As of
Recently Issued Accounting Pronouncements
We do not expect the adoption of these or other recently issued accounting pronouncements to have a significant impact on our results of operation, financial position or cash flow.
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