Does the MOU include any earn‑out or performance‑based clauses that could affect future cash flows?

Answer

Based on the information that was supplied about the memorandum of understanding (MOU) between IQSTEL Inc. (NASDAQ: IQST) and Cycurion Inc. (NASDAQ: CYCU), there is no explicit mention of earn‑out provisions or performance‑based clauses that would tie future cash‑flow obligations to the achievement of specific milestones or financial targets.

Why this matters

• Earn‑out or performance‑based clauses are contractual mechanisms that require one party to make additional payments (often cash‑based) if the other party meets predefined operational or financial benchmarks after the deal closes.
  
• Such clauses can create future cash‑flow variability for the companies involved, because payments may be contingent on future performance rather than being fixed at the time of signing.

What the news release does specify

• The MOU is framed as an “Equity Exchange and Alliance” to jointly develop a “next‑gen AI‑driven powerhouse.”
  
• Half of the combined stock will be distributed as a dividend to shareholders—a clear, upfront equity‑distribution plan.
  
• The press release highlights that both firms have invested millions of dollars over the past five years in proprietary AI assets and technologies, underscoring the strategic, long‑term nature of the partnership.

What is not stated

• No language in the excerpt refers to contingent payments, milestone‑linked cash‑flows, or any “earn‑out” structure.
  
• There is no description of conditional cash‑payments, re‑investments, re‑purchase rights, or performance‑based earn‑out that would trigger additional cash outlays beyond the initial equity exchange and dividend distribution.

Implications for cash‑flow analysis

Bottom line

• From the material provided, the MOU does not contain earn‑out or performance‑based clauses that would obligate either IQSTEL or Cycurion to make additional cash payments contingent on future results.
  
• Consequently, the only cash‑flow effect explicitly disclosed is the dividend distribution of half the combined stock to shareholders. Any other cash‑flow considerations would stem from the normal operating results of the joint AI initiative, not from contractual earn‑out obligations.
  

If you later obtain a more detailed version of the MOU (e.g., a full press release, a SEC filing, or the actual agreement text) that outlines specific performance‑linked payment terms, those would need to be incorporated into any cash‑flow forecasts. Until such details emerge, the assumption for modeling purposes should be that no earn‑out or performance‑based cash obligations are present.