iQSTEL Inc. (NASDAQ: IQST) has entered into a Securities Purchase Agreement with M2B Funding Corp. and ADI Funding LLC to secure debt financing for the planned acquisition of a 51% controlling interest in Ultranet Telecom Group. The agreement was executed on October 20, 2026, and details the terms of a two-year senior secured, non-convertible promissory note.
The financing structure allows for a maximum aggregate principal amount of $3,000,000, issued in two tranches. The first tranche, or Tranche A, was funded on October 20, 2026, with an initial advance of $750,000 per Purchaser. Following the deduction of $10,000 in legal fees and $10,000 in non-accountable expenses from each advance, the net proceeds to iQSTEL were $730,000 per Purchaser, for a total of $1,460,000.
The promissory notes bear an interest rate of 18% per annum, calculated on a 360-day year, with monthly cash payments due in arrears. The principal is structured to amortize in four equal installments of 25% of the funded principal, due six, twelve, eighteen, and twenty-four months after the funding date of the applicable tranche. The full $750,000 principal is deemed outstanding and accrues interest until repayment. The notes are secured by a first-priority security interest in the Company’s collateral, with M2B serving as the Collateral Agent.
In conjunction with the debt, iQSTEL issued pre-funded warrants to purchase 210,000 shares of common stock per Purchaser, for a total of 420,000 shares. The warrants are exercisable at a nominal price of $0.0001 per share and include cashless exercise provisions, beneficial ownership limitations, and anti-dilution adjustments. The Company indicated that the proceeds from this financing are intended to support the Ultranet transaction, which it expects to execute a definitive share purchase agreement for in November 2026, with a target closing in the middle of the first quarter of 2027.
