Up to $3 million in two-year senior secured, non-convertible promissory notes closed — debt financing with no conversion feature. Ultranet generated $130.9 million in 2025 revenue, up 30%, with $5.0 million in EBITDA and $4.6 million in net income, and is expected to make IQSTEL cash-flow positive on a consolidated basis. Ultranet's six markets — Nigeria , Côte d'Ivoire, Ghana , Burkina Faso , Mali and Senegal — sit in Sub-Saharan Africa, one of the world's fastest-growing mobile regions. IQSTEL Digital's microdrama service is in commercial outreach to seven mobile operators serving approximately 93 million subscribers. NEW YORK , Oct. 26, 2026 /PRNewswire/ -- IQSTEL Inc. (NASDAQ: IQST) (" IQSTEL " or the "Company"), a global telecommunications and technology company, today announced that it has closed the first financing tranche for its planned acquisition of a 51% controlling interest in Ultranet Telecom Group ("Ultranet"). The financing consists of two-year senior secured, non-convertible promissory notes of up to $3 million , together with pre-funded warrants to purchase up to 420,000 shares of common stock. Full terms will be described in a Current Report on Form 8-K to be filed with the U.S. Securities and Exchange Commission. "We funded this step with two-year non-convertible debt, so shareholders are not taking on conversion dilution to move Ultranet forward, " said Leandro Iglesias , CEO of IQSTEL . "Ultranet gives us profitable scale in six fast-growing West African markets. Ultranet builds the base, and Digital Services, starting with our microdrama, builds the margin." Ultranet: profitable scale in West Africa Headquartered in Accra, Ghana , Ultranet provides international telecom and messaging services across six West African markets, supported by exclusive international SMS gateway agreements with African mobile operators. In 2025, Ultranet's revenue grew 30% to $130.9 million from $100.9 million in 2024. It generated $5.0 million in EBITDA, $4.6 million in net income and $5.5 million in cash flow from operations.1 IQSTEL expects Ultranet to bring the Company to approximately $9 million in annualized adjusted EBITDA and to make it cash-flow positive on a consolidated basis. Ultranet operates in one of the world's fastest-growing mobile regions. The GSMA estimates that mobile technologies contributed $240 billion to Africa's economy in 2025,2 up from about $220 billion in 2024,3 and expects that figure to reach $290 billion by 2030.2 Nigeria alone has more than 195 million mobile subscriptions.4 Across the region, SMS remains the main channel for mobile-money confirmations and identity-verification codes, the traffic that runs through gateways like Ultranet's.5 IQSTEL also sees room to grow by offering its Digital Services, including AI-driven communications, cybersecurity, fintech and content, to Ultranet's operator customers. Digital Services: microdramas as the first recurring-revenue product IQSTEL Digital's first consumer subscription product is a microdrama service built with IDILIO TV, a Colombian platform for short, vertical, Spanish-language serialized dramas. IDILIO TV is backed by a seed round led by a16z speedrun, with Goodwater Capital , WndrCo and Nubank founder David Vélez, and has more than 2 million downloads.6 Omdia estimates global microdrama revenue at about $11 billion in 2025, rising to about $14 billion by the end of 2026. More than 60% of that revenue comes from subscriptions and transactional payments, and Chinese-language platforms account for roughly 83% of the market,7 leaving the more than 630 million Spanish speakers worldwide8 largely underserved. Regional streamers such as ViX have begun commissioning microdramas of their own.9 The service is sold through mobile operators and billed on the customer's phone bill, which matters where many consumers lack credit cards. IQSTEL Digital is in commercial outreach with seven mobile operators serving approximately 93 million subscribers, and has set a 2027 operating objective of 300,000 active paid monthly subscriptions. At an assumed price of $4 to $6 per month and a profit contribution of $0.50 to $1.00 per subscription per month after revenue sharing, 300,000 subscriptions would represent approximately $1.8 million to $3.6 million in annual profit contribution to IQSTEL Digital. These figures are illustrative and are not guidance.10 No operator distribution agreements have been executed to date. "Operators want content that keeps subscribers engaged and adds revenue to the monthly bill. Microdramas do both," Iglesias added. "Our focus now is turning discussions with seven operators into signed distribution agreements." Financing and timeline The two-year notes are secured and cannot be converted into shares. Shares issued on exercise of the pre-funded warrants are subject to a holding period. The notes carry 18% annual interest, paid monthly, and are structured to amortize in four equal semiannual installments, with 25%