Ilustrato Pictures International Inc 10-Q for FY2024 Q3
Ilustrato Pictures International Inc. (ILUS)
About this 10-Q
Ilustrato Pictures International Inc filed this 10-Q on November 19, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).
Headline figures
Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $3.33M
- up 67.2% from $1.99M a year earlier
- Net loss
- $1.14M
- compared with a net loss of $3.32M a year earlier
- Diluted EPS
- $0.00
- compared with $0.00 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarterly period ended
For the transition period from __________ to__________
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. ☒
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | |||
| Emerging growth company | ||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes
Securities registered pursuant to Section 12(b) of the Act: None
State the number of shares outstanding of each
of the issuer’s classes of common stock, as of the latest practicable date:
EXPLANATORY NOTE
This Quarterly Report on Form 10-Q for the period ended September 30, 2024 (the “Report”) including, but not limited to, the financial statements, related notes, and other information included herein has not been reviewed by the Company’s independent public accounting firm prior to the filing of this Report. On August 19, 2024, the Company engaged a new independent registered public accounting firm. The new independent registered public accounting firm will review this Form 10-Q and upon the completion of its review, the Company will file the requisite amendment to this Report. The delayed review is due to the fact that ILUS owns controlling positions in a number of public companies which have all changed auditors simultaneously and all need to be reviewed prior to ILUS being reviewed. Quarter 1 was reviewed by the previous auditor, and it is anticipated that Quarter 2 and Quarter 3 will be reviewed by the companies' new auditors during the 4th Quarter and any amendments will be filed accordingly, if required.
TABLE OF CONTENTS
| Page | ||
| PART I – FINANCIAL INFORMATION | 1 | |
| Item 1: | Financial Statements | 1 |
| Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 2 |
| Item 3: | Quantitative and Qualitative Disclosures About Market Risk | 8 |
| Item 4: | Controls and Procedures | 8 |
| PART II – OTHER INFORMATION | 9 | |
| Item 1: | Legal Proceedings | 9 |
| Item 1A: | Risk Factors | 9 |
| Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 9 |
| Item 3: | Defaults Upon Senior Securities | 9 |
| Item 4: | Mine Safety Disclosures | 9 |
| Item 5: | Other Information | 9 |
| Item 6: | Exhibits | 10 |
i
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Our financial statements included in this Form 10-Q are as follows:
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended September 30, 2024, are not necessarily indicative of the results that can be expected for the full year.
1
ILUSTRATO PICTURES INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED/NOT REVIEWED)
| September 30, 2024 | December 31, 2023 | |||||||||||
| Not Reviewed | Audited | |||||||||||
| ASSETS | ||||||||||||
| Current Assets | ||||||||||||
| Cash and Cash Equivalents | ||||||||||||
| Accounts Receivables | 3 | |||||||||||
| Inventory | ||||||||||||
| Deposits, Prepayments, & Advances | ||||||||||||
| Other Current Assets | 3 | |||||||||||
| Total Current Assets | ||||||||||||
| Long term Investments | 4 | |||||||||||
| Right of use of asset | ||||||||||||
| Goodwill | 4 | |||||||||||
| Tangible Assets | 4 | |||||||||||
| Capital work in progress | ||||||||||||
| Receivable Non-Current | 4 | |||||||||||
| Total Non-Current Assets | ||||||||||||
| Total Assets | ||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| Current Liabilities | ||||||||||||
| Account Payable | ||||||||||||
| Current lease liability | ||||||||||||
| Related Party Payables | ||||||||||||
| Other Current liabilities | 5 | |||||||||||
| Total Current Liabilities | ||||||||||||
| Non-current liabilities | ||||||||||||
| Notes payable – long-term | 6 | |||||||||||
| Non-current lease liability | ||||||||||||
| Other non-current liabilities | 7 | |||||||||||
| Total Non-Current Liabilities | ||||||||||||
| Total Liabilities | ||||||||||||
| Stockholders’ Equity | ||||||||||||
| Common Stock: | 8 | |||||||||||
| Preferred Stock: | ||||||||||||
| Class A - | ||||||||||||
| Class B - | ||||||||||||
| Class C - | ||||||||||||
| Class D - | ||||||||||||
| Class E - | ||||||||||||
| Class F - | ||||||||||||
| Additional Paid-in-capital | ||||||||||||
| Capital Reserve | ||||||||||||
| Non-Controlling Interest | ||||||||||||
| Retained Earnings | ( | ) | ( | ) | ||||||||
| Total Stockholders’ Equity | ||||||||||||
| Total Liabilities and Stockholders’ Equity | ||||||||||||
The accompanying notes are an integral part of these unaudited and not reviewed consolidated financial statements.
F-1
ILUSTRATO PICTURES INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED/NOT REVIEWED)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
30-Sep-24 Not Reviewed | 30-Sep-23 Not Reviewed | 30-Sep-24 Not Reviewed | 30-Sep-23 Not Reviewed | |||||||||||||
| Revenue | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Professional fees | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Income (loss) from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (income) expenses | ||||||||||||||||
| Interest expense | ( | ) | ||||||||||||||
| Other Income | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other (income) expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Income (Loss) before Tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Corporate Income Tax | ||||||||||||||||
| Net Income (Loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Less: net income attributable to noncontrolling interest | ( | ) | ( | ) | ||||||||||||
| Net income (loss) attributable to ILUS stockholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Weighted average common shares outstanding | ||||||||||||||||
| Net income (loss) per common share - basic and diluted | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
The accompanying notes are an integral part of these unaudited and not reviewed consolidated financial statements.
F-2
ILUSTRATO PICTURES INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(UNAUDITED/NOT REVIEWED)
For the Nine Months Ended September 30, 2024
| Preferred Stock A | Preferred Stock B | Preferred Stock D | Preferred Stock E | Preferred Stock F | Common Stock | Minority Interest | Capital Reserve | Additional Paid-in Capital | Retain Loss | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Amount | Amount | Amount | Amount | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shared Issued | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Convertible Conversion common stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued against Warrant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for Cash | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued as commitment shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock as compensation to AJB Capital Investments LLC | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| common stock as compensation to RB Capital Partners LLC | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock class F issued | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock converted into common stock | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Minority Interest - Hyperion - Removed | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Minority Interest - QI - Removed | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in Retained earnings | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capital Reserve | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Minority Interest | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Shareholders’ Equity as of March 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shared Issued | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock through Convertible | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Converted F Stock to Common | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Compensation Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Converted B Stock to Common | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in Capital Reserve | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in shareholders account | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in Minority Interest | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Shareholders’ Equity as of June 30, 2024 | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shared Issued | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock Share - Conversion | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock - Compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prefer F Stock - Services | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock - Commitment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock - Settlement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in shareholders account | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share issue pursuant to a loan | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Shareholders’ Equity as of September 30, 2024 | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Nine Months Ended September 30, 2023
| Preferred Stock A | Preferred Stock B | Preferred Stock D | Preferred Stock E | Preferred Stock F | Common Stock | Minority Interest | Capital Reserve | Additional Paid-in Capital | Retain Loss | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Amount | Amount | Amount | Amount | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock cancelled | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock issued | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in Retained earnings | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current Quarter Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Shareholders’ Equity as of March 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred converted into Common stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock converted | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock issued | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in Retainer Earnings | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current Quarter Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share of profit transferred to Non-Controlling Interest | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Shareholders’ Equity as of June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued against Services | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued against Note conversion | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for Cash | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued as commitment shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current Quarter Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment (QI NCI Removed) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income transferred to Minority Interest | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in Retained earnings | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Shareholders’ Equity as of September 30, 2023 | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited and not reviewed consolidated financial statements.
F-3
ILUSTRATO PICTURES INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED/NOT REVIEWED)
| September 30, 2024 | September 30, 2023 | |||||||
| Cash flows from operating activities | ||||||||
| Loss for the period | ( | ) | ( | ) | ||||
| Adjustment to reconcile net gain (loss) to net cash | ||||||||
| Finance cost | ||||||||
| Non-Cash Stock Compensation Expense | ||||||||
| Stock issued for Services | ||||||||
| Amortization | ||||||||
| Commitment fees | ||||||||
| Depreciation - PPE | ||||||||
| Corporate Income Tax | ||||||||
| Other income | ( | ) | ||||||
| Discount on convertible Notes | ||||||||
| Changes in Assets and Liabilities, net | ||||||||
| Current Assets | ||||||||
| Other Current Liabilities | ( | ) | ( | ) | ||||
| Net cash (used In) provided by operating activities | ( | ) | ||||||
| Cash flows from investing activities | ||||||||
| Addition of Fixed Assets | ( | ) | ||||||
| Right of use Assets | ( | ) | ||||||
| Changes in Non-current assets | ( | ) | ||||||
| Changes in Non- Current Liabilities | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities | ||||||||
| Common Stock issued | ||||||||
| Lease Finance | ||||||||
| Preferred Stock Issued | ( | ) | ||||||
| Finance cost | ( | ) | ||||||
| Discount on convertible Notes | ( | ) | ||||||
| Additional Paid-up Capital | ( | ) | ||||||
| Subsidiaries Finances | ( | ) | ||||||
| 0 | ||||||||
| Net cash generated from financing activities | ( | ) | ||||||
| Net increase/(decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at the beginning of the year | ||||||||
| Cash and cash equivalents at end of the year | ||||||||
The accompanying notes are an integral part of these unaudited and not reviewed consolidated financial statements.
F-4
ILUSTRATO PICTURES INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1: ORGANIZATION, HISTORY AND BUSINESS
(A) We were incorporated as Superior Venture Corp. on April 27, 2010, in the State of Nevada to sell wine varietals. On November 9, 2012, we entered into an Exchange Agreement with Ilustrato Pictures Ltd., a British Columbia corporation (Ilustrato BC”), whereby we acquired all the issued and outstanding common stock of Ilustrato BC. On November 30, 2012, Ilustrato BC transferred all of its assets and liabilities to Ilustrato Pictures Limited, our wholly owned subsidiary in Hong Kong (“Ilustrato HK”). On February 11, 2013, we changed the name to Ilustrato Pictures International, Inc.
(B) On April 1, 2016, Barton
Hollow and the newly elected director of the issuer caused the Issuer to enter into a letter of Intent to merge with Cache Cabinetry,
LLC, an Arizona limited liability company. Pursuant to the Letter of Intent, the parties thereto would endeavor to arrive at, and enter
into, a definitive merger agreement providing for the Merger. As an inducement to the members of Cache Cabinetry, LLC to enter into the
Letter of Intent and thereafter transact, the Issuer caused to be issued
(C) Subsequently, on April 6, 2016, the Issuer and Cache Cabinetry, LLC entered into a definitive agreement and Plan of Merger (the “Merger Agreement”). Concomitant therewith, the stockholders of the Issuer elected Derrick McWilliams, the President of Cache Cabinetry, LLC Chief Executive Officer of the Issuer, who along with Barton Hollow, ratified and approved the Merger Agreement and Merger.
(D) The Merger closed on June 3, 2016. The merger is designed as a reverse subsidiary merger pursuant to Section 368(a)(2)(E) of the Internal Revenue Code. That is, upon closing, Cache Cabinetry LLC will merge into a newly created subsidiary of the Issuer with the members of Cache Cabinetry, LLC receiving shares of the common stock of the Issuer as consideration therefor. Upon closing of the Merger, Cache Cabinetry, LLC will be the surviving corporation in its merger with the wholly owned subsidiary of the Issuer and, therefore has become the wholly owned operating subsidiary of the Issuer.
(E) On November 9th, 2018, the Company entered into a Term Sheet for a Plan of Merger and Control with Larson Elmore.
(F) As part of the share purchase arrangement between Lee Larson Elmore and FB Technologies Global Inc., Nick Link, the owner of FB Technologies Global Inc. replaced Lee Larson Elmore as CEO of Ilustrato Pictures International Inc. on January 14, 2021, where we eventually got control over activities and books of accounts of Ilustrato Pictures International Inc. So, we are not aware about facts mentioned above vide note no. 1(A), 1(B), 1(C), 1(D), 1(E), 1(F) and 1(G) ‘organization, history, and business’ as they are related to prior to the date on which control over activities and books of accounts of Ilustrato Pictures International Inc. were handed over to us. Thus, those events have been reiterated as disclosed in previous filings made by the preceding management of the company with the SEC.
(G) On May 18, 2020, the Company entered into
a definitive agreement and Plan of Merger with FB Technologies Global, Inc, the shareholders of FB Technologies Global, Inc. were issued
(H) Firebug Mechanical Equipment LLC was incorporated
on May 8, 2017. ILUS acquired
(I) Georgia Fire & Rescue Supply LLC (Georgia
Fire) was incorporated on January 21, 2003. ILUS acquired
(J) Bright Concept Detection and Protection System
LLC (BCD Fire) was incorporated on March 18, 2014. ILUS acquired
(K) Bull Head Products Inc. was incorporated
on June 8, 2007. ILUS acquired
F-5
(L) Emergency Response Technologies, Inc. This company was incorporated by ILUS on February 22, 2022, as the company’s Emergency Response Subsidiary. This company is engaged in the business of public safety and emergency response-focused mergers and acquisitions.
(M) E-Raptor. This company was incorporated by ILUS as the company’s Commercial Electric Utility Vehicle manufacturer on February 22, 2022. This company is engaged in the business of manufacturing electric utility vehicles for the emergency response, agricultural, industrial, hospitality and transport sectors.
(N) Replay Solutions was incorporated by ILUS on March 1, 2022. The company is engaged in the business of recovering precious metals from electronic waste, known as urban mining.
(O) Quality Industrial Corp. was originally incorporated
on May 4, 1998. ILUS acquired
(P) AL Shola Al Modea Safety and Security LLC
is a fire safety company registered in the United Arab Emirates. The company has signed a Share Purchase Agreement to acquire
(Q) On January 3, 2024, Ilustrato Pictures International
Inc. acquired a convertible note from YAII PN, LTD with outstanding principal and accrued interest of $
(R) On February 23, 2024, Ilustrato Pictures International, Inc., entered into a Stock Purchase Agreement with Samsara Luggage Inc., and sold all its equity interests in seven companies owned by the Company:
| ● | Firebug Mechanical Equipment LLC |
| ● | Georgia Fire & Rescue Supply LLC |
| ● | Bright Concept Detection and Protection System LLC |
| ● | Bull Head Products Inc |
| ● | E-Raptor |
| ● | The Vehicle Converters |
| ● | AL
Shola Al Modea Safety and Security LLC, the only entity in which the Company does not own |
The consideration for the sale of the equity
interests in the foregoing companies was paid by SAML by the issuance of
(S) On March 27, 2024, our subsidiary QIND entered
into a definitive Stock Purchase Agreement (the “Stock Purchase Agreement”) with the shareholders of Al Shola Al Modea Gas
Distribution LLC (“ASG” or “Al Shola Gas”) to acquire a
F-6
NOTE 2: SUMMARY OF ACCOUNTING POLICIES
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers.
Accordingly, revenue is recognized when control of the goods or services promised under a contract is transferred to the customer either at a point in time (e.g., upon delivery) or overtime (e.g., as the Company performs under the contract) in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the goods or services. The Company accounts for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. If collectability is not probable, the sale is deferred until collection becomes probable or payment is received.
Contract Assets and Contract Liabilities acquired under Business Combinations
The company follows new guidance under ASC 606 regarding the recognition and measurement of contract assets and contract liabilities acquired in a business combination. The company applies the definition of a performance obligation in ASC 606 when recognizing contract liabilities assumed in a business combination. The company eventually recognizes contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date. Earlier, contract assets and contract liabilities acquired in a business combination were recorded by the acquirer at fair value.
Work-in-progress
Work-in-progress is stated at cost plus attributable profit, less provision for any anticipated losses and progress billings. Cost comprises direct materials, labor, depreciation, and overheads. If any progress billings for any contract exceed the cost-plus attributable profit or less anticipated losses, the excess to be shown as excess progress billings. Claims are only recognized as income when the outcome and recoverability can be determined with reasonable certainty. Contract revenue and costs are recognized as revenue and expenses, respectively, in the statement of comprehensive income when the outcome of a construction contract can be estimated reliably.
In accordance with ASC-606 revenue recognition, amounts are billed in accordance with contractual terms or as work progresses. Unbilled amounts arise when the timing of billing differs from the timing of revenue recognized, such as when contract provisions require specific milestones to be met before a customer can be billed. Unbilled amounts primarily relate to performance obligations satisfied over time when the cost-to-cost method is utilized, and the revenue recognized exceeds the amount billed to the customer as there’s not yet a right to invoice in accordance with contractual terms. Unbilled amounts are recorded as a contract asset when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract.
Variations
Variations are recognized in contract revenue when the outcome can be determined with reasonable certainty and are capable of being reliably measured.
Variable consideration
If the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved. The construction contracts provide customers with a right to claim damages for delay in delivery of goods. The rights to claim damages for delay in delivery of goods give rise to variable consideration.
F-7
Accounts Receivable
Accounts receivables are reported at the customers’ outstanding balances, less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable.
The duration of such receivables extends from 30 days to beyond 12 months. Full payment is received only when a job/project is completed, and approvals are obtained. Provisions are created based on estimated irrecoverable amounts determined by reference to past default experience.
Allowance for Doubtful Accounts
An allowance for doubtful accounts on accounts receivable is charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write-off percentages and information collected from individual customers. Accounts receivables are charged off against the allowances when collectability is determined to be permanently impaired.
Inventories
In accordance with ASC 330, the Company states inventories at the lower of cost or net realizable value. Cost, which includes material, labor and overhead, is determined on a first-in, first-out basis. The Company makes adjustments to reduce the cost of inventory to its net realizable value, if required, for estimated excess, obsolete, zero usage or impaired balances. Factors influencing these adjustments include changes in market demand, product life cycle and engineering changes.
Tangible Assets/ Property Plant & Equipment
Property, plant, and equipment are recorded at cost, except when acquired in a business combination where property, plant and equipment are recorded at fair value. Depreciation of property, plant and equipment is recognized over the estimated useful lives of the respective assets using the straight-line method.
| Buildings, related improvements & land improvements | ||
| Machinery & equipment | ||
| Computer hardware & software | ||
| Office, furniture & others |
Expenditures that extend the useful life of existing property, plant and equipment are capitalized and depreciated over the remaining useful life of the related asset. Expenditures for repairs and maintenance are expensed as incurred. When property, plant and equipment are retired or sold, the cost and related accumulated depreciation is removed from the Company’s balance sheet, with any gain or loss reflected in operations.
Stock-Based Compensation
When applicable, the Company will account for stock-based payments to employees in accordance with ASC 718, “Stock Compensation” (“ASC 718”). Stock-based payments to employees include grants of stocks, grants of stock options and issuance of warrants that are recognized in the consolidated statement of operations based on their fair values at the date of grant.
In accordance with ASC 718, the company will generally apply the same guidance to both employee and non-employee share-based awards. However, the company will also follow specific guidance for share-based awards to non-employees related to the attribution of compensation cost and the inputs to the option-pricing model for the expected term. Nonemployee share-based payment equity awards are measured at the grant-date fair value of the equity instruments, similar to employee share-based payment equity awards.
F-8
The Company calculates the fair value of option grants and warrant issuances utilizing the Binomial pricing model. The amount of stock-based compensation recognized during the period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeiture” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock option or warrant. The Company estimates forfeiture rates for all unvested awards when calculating the expenses for the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as well as employee termination patterns. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period.
Earnings (Loss) per Share
The Company reports earnings (loss) per share in accordance with ASC Topic 260-10, “Earnings per Share.” Basic earnings (loss) per share is computed by dividing income (loss) available to shareholders by the weighted average number of shares available. Diluted earnings (loss) per share available. Diluted earnings (loss) per share is computed similarly to basic earnings (loss) per share except the denominator is increased to include the number of additional shares that would have been outstanding if the potential shares had been issued and if the additional shares were dilutive.
Organization and Offering Cost
The Company has a policy to expense organization and offering cost as incurred.
Cash and Cash Equivalents
For the purpose of the statements of cash flows, the Company considers cash and cash equivalents to include all stable, highly liquid investments with maturities of three months or less.
Fair Value of Financial Instruments
The company’s financial instruments consist of cash and cash equivalents, accounts receivable, and notes payable. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Business segment
ASC 280, “Segment Reporting” requires the use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance.
F-9
Below is the Statement of operations of reportable Segment:
Divisional Income Statement
The Company is organized into two divisions based on the similarity of products, customers served, common use of facilities, and economic characteristics. The Company’s segments are as follows:
| 1. | Emergency Response |
| 2. | Industrial & Manufacturing |
| For the Nine Months Ended | ||||||||
| September 30, 2024 | 2023 (Restated) | |||||||
| Emergency & Response Division | ||||||||
| Revenue | ||||||||
| Cost Of Goods Sold | ||||||||
| Gross Profit | ||||||||
| Total Operating Expenses | ||||||||
| Operating Loss | ( | ) | ( | ) | ||||
| Net Loss | ( | ) | ( | ) | ||||
Our revenue decreased to $
Operating expenses decreased to $
For the coming period 2024, the Company will continue to allocate financial, technical and sales resources for recently acquired subsidiaries to positively impact their financial results through increased sales orders and efficiency. Allocated personnel will primarily focus on accelerating sales and marketing efforts, product development, international market expansion, optimizing supply chain and production processes, and overall increased profitability while continuing with the integration and optimization of currently operating companies. With the group expansion and growth, we also intend to hire executives and personnel with specific industry experience and fields of expertise to streamline financial reporting, compliance, and Investor Relations and to improve our corporate governance.
| For the Nine Months Ended | ||||||||
September 30, | September 30, 2023 (Restated) | |||||||
| Industrial & Manufacturing Division (QIND) | ||||||||
| Revenue | ||||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Total Operating Expenses | ||||||||
| Profit/ loss from Operations | ( | ) | ||||||
| Non-Operating expenses | ||||||||
| Non-Operating Income | ||||||||
| Net loss/ profit | ( | ) | ||||||
F-10
year ended September 30, 2024. The increase
in revenue, was the result of the consolidation of Al Shola Gas For our Industrial and Manufacturing Division, the Operating expenses
increased to $
We earned a profit of $
Geographical presence
Presently our operations are spread across the United States, United Arab Emirates, United Kingdom, and the Republic of Serbia, however, we plan to further expand our regional presence and aim to expand our manufacturing operations in the United States during 2024. At present the revenue reported above is from the United States and United Arab Emirates. We’ve classified the revenue based on the entities registered in their respective locations. All the revenue generated as indicated has solely come from external customers, with no sales involving inter-company transactions.
Income Taxes
The Company accounts for income tax positions in accordance with Accounting Standards Codification Topic 740, “Income Taxes” (“ASC Topic 740”). This standard prescribes a recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There was no material impact on the Company’s financial position or results of operations as a result of the application of this standard. Deferred tax assets have not been created for those subsidiaries which are in income tax-free jurisdiction, because the losses incurred cannot be utilized in the future, rendering deferred tax assets irrelevant.
Recent Accounting Pronouncements
In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. ASU 2017-04 also clarifies that an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The new standard is effective for fiscal years beginning after December 15, 2019, for both interim and annual reporting periods.
F-11
Rounding Off
Figures are rounded off to the nearest $, except the value of EPS and number of shares.
NOTE 3: OTHER CURRENT ASSETS
| September 30, | December 31, | |||||||
| Particulars | 2024 | 2023 | ||||||
| Loans advanced | ||||||||
| Advance given to suppliers and sub-contractors | ||||||||
| Director’s current accounts | ||||||||
| Statutory dues receivable | ||||||||
| Deposits | ||||||||
| Intercompany loan | ||||||||
| Accrual of discount on notes | ||||||||
| Deferred expenses - consultancy | ||||||||
| Buy Back Commitment | ||||||||
| Misc. current assets | ||||||||
| Total | ||||||||
| ● | Advances to Subcontractors and Suppliers: Advances have been paid to the suppliers/ sub-contractors in the ordinary course of business for procurement of specialized material and equipment. |
| ● | Directors Current Account includes amount incurred for Company’s Annual shareholders meeting, events for investor relationship, advances for our investment projects and other expenses incurred for future potential acquisitions. |
| ● | Loan advanced refers to the amount advanced by a company in the ordinary course of business and includes the amount paid for set up of new businesses. |
Accounts Receivable
Accounts receivables are reported at the customers’ outstanding balances, less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable.
The duration of such receivables extends from
30 days to beyond 12 months. Full payment is received only when a job/project is completed, and approvals are obtained.
| September 30, | ||||
| 2024 | ||||
| Accounts Receivables Ageing | (unaudited) | |||
| 1-30 days | ||||
| 31-60 days | ||||
| 61-90 days | ||||
| +90 days | ||||
| Total | ||||
F-12
NOTE 4: NON-CURRENT ASSETS
Goodwill
As a part of the share purchase arrangement between Lee Larson Elmore and FB Technologies Global Inc., Nick Link, the owner of FB Technologies Global Inc. replaced Lee Larson Elmore as CEO of Ilustrato Pictures International Inc. on January 14, 2021, and we eventually got control over activities and books of accounts of Ilustrato Pictures International Inc. from the date January 14, 2021.
As of September 30, 2024, the additional Goodwill has been generated through the acquisition by our subsidiary Quality Industrial Corp, through the operating business of Al Shola Gas as consolidated from April 1, 2024. Goodwill accounted for in the books is primarily a result of the acquisition, representing the excess of the purchase price over the fair value of the tangible net assets acquired.
The Company accounts for business combinations by estimating the fair value of the consideration paid for acquired businesses and assigning that amount to the fair values of assets acquired and liabilities assumed, with the remainder assigned to goodwill. If the fair value of assets acquired and liabilities assumed exceeds the fair value of consideration paid, a gain on bargain purchase is recognized. The estimates of fair values are determined utilizing customary valuation procedures and techniques, which require us, among other things, to estimate future cash flows and discount rates. Such analyses involve significant judgments and estimations.
The Company follows the guidance prescribed in Accounting Standards Codification (“ASC”) 350, Goodwill and Other Intangible Assets, to test goodwill and intangible assets for impairment annually if an event occurs or circumstances change which indicates that its carrying amount may not exceed its fair value.
The annual impairment review is performed in the fourth quarter of each fiscal year based upon information and estimates available at that time. To perform the impairment testing, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair values of the Company’s reporting units or indefinite-lived intangible assets are less than their carrying amounts as a basis for determining whether or not to perform the quantitative impairment test. Qualitative testing includes the evaluation of economic conditions, financial performance, and other factors such as key events when they occur. The Company then estimates the fair value of each reporting unit and each indefinite-lived intangible asset not meeting the qualitative criteria and compares their fair values to their carrying values.
The company will assess impairment from the 2024 year-end in accordance with the guidance prescribed in ASC 350. The Company would assess at year-end whether there has been an impairment in the value of goodwill and identifiable intangible assets.
If future operating performance at one or more of the Company’s reporting units were to fall significantly below forecasted levels, the Company could be required to reflect, under current applicable accounting rules, a non-cash charge to operating income for impairment. Any determination requiring the write-off of a significant portion of goodwill, or identifiable intangible assets would adversely impact the Company’s results of operations and net worth.
On April 1, 2024, the Agreement with Quality International was canceled by the Board of Directors of Quality Industrial Corp. QIND restated its financial statements as of December 31, 2022, which were previously reported on the Original Filing and subsequent amendments. Quality International is no longer considered as Goodwill. The following items reflect the restatements:
As of September 30, 2024, Goodwill and intangible
assets amount to $
| Year | September 30, 2024 | December 31, 2023 | ||||||
| QIND | ||||||||
| Firebug | ( | ) | ||||||
| Bullhead | ||||||||
| Georgia Fire | ||||||||
| ILUS UK | ||||||||
| BCD | ||||||||
| ASSS | ||||||||
| SAML | ||||||||
| Goodwill Total | ||||||||
F-13
| Particulars | September 30, 2024 | December 31, 2023 | ||||||
| Investment in BCD | ||||||||
| Investment in FB Fire Technologies Ltd | ||||||||
| Investment in Quality International | ||||||||
| Investment in QIND | ||||||||
| Investment in Dear Cashmere Holding Co. | ||||||||
| Long term investment | ||||||||
| Loan to Fb Fire Technologies Ltd | ||||||||
| Total | ||||||||
The company holds long-term investments of $
Investment in Dear Cashmere Holding Co.: The company
received
Investment in FB Fire Technologies:
Represents
The company holds investment Quality Industrial Corp (QIND).
The company holds long term equity investments in one of our subsidiaries.
| Particulars | September 30, 2024 | December 31, 2023 | ||||||
| Tangible Assets | ||||||||
| Land and Buildings | ||||||||
| Plant and Machineries | ||||||||
| Furniture, Fixtures and Fittings | ||||||||
| Vehicles | ||||||||
| Computer and Computer Equipment | ||||||||
| Total | ||||||||
| Plant & Machinery | Furniture, Fixtures & Office Equipment | Vehicles | Computers | Total | ||||||||||||||||
| Carrying value as of January 1, 2024 | ||||||||||||||||||||
| Addition during Q1 2024 | ||||||||||||||||||||
| Charged Depreciation Q1 2024 | ||||||||||||||||||||
| Carrying value March 31, 2024 | ||||||||||||||||||||
| Addition during Q2 2024 | ||||||||||||||||||||
| Charged Depreciation Q2 2024 | ||||||||||||||||||||
| Carrying value June 30, 2024 | ||||||||||||||||||||
| Addition during Q3 2024 | ||||||||||||||||||||
| Charged Depreciation Q3 2024 | ||||||||||||||||||||
| Carrying value September 30, 2024 | ||||||||||||||||||||
F-14
NOTE 5: CURRENT LIABILITIES
| Particulars | September 30, 2024 | December 31, 2023 | ||||||
| Accrued payables | ||||||||
| Credit cards | ||||||||
| other advances | ||||||||
| Loan Payable | ||||||||
| Misc. current liabilities | ||||||||
| Payroll Liabilities | ||||||||
| Payable to Government Authorities | ||||||||
| Provision for Audit Fees | ||||||||
| Payable to subsidiaries | ||||||||
| Total | ||||||||
As per the applicable accounting standards, Borrowings from financial institutions have been bifurcated into current and non-current liabilities.
NOTE 6: NON-CURRENT LIABILITIES
| September 30, | December 31, | |||||||
| Particulars | 2024 | 2023 | ||||||
| SAMSARA LUGGAGE, INC (SAML) | ||||||||
| QUALITY INDUSTRAILA CORP.(QIND) | ||||||||
| ILUSTRATO PICTURES INTERNATIONAL INC (ILUS) | ||||||||
| Total | ||||||||
The following is the list of Notes payable as of September 30, 2024. Convertible Notes issued during the reported period are accounted in the books as a liability, accrued Interest and discount on notes is also accounted accordingly as per general accounting principles.
On February 04, 2022, the company entered into
a convertible note with Discover Growth Fund LLC – John Burke for the amount of $
On June 1, 2022, the company entered into a convertible
note with RB Capital Partners Inc., for the amount of $
On December 22, 2023, the company entered into
a convertible note with AJB Capital Investment LLC for the amount of $
On January 31, 2024, the company entered into
a convertible note with RB Capital Partners Inc., for the amount of $
F-15
On April 1, 2024, ILUS entered into
a consolidated note payable with a principal amount of $
On April 15, 2024, the company entered into a convertible
note with TwnBrooks Inc., for the amount of $
On May 6, 2024, the company entered into a convertible
note with RB Capital Partners Inc., for the amount of $
On May 16, 2024, the company entered into a convertible
note with RB Capital Partners Inc., for the amount of $
On May 20, 2024, the company entered into a convertible
note with TwnBrooks Inc., for the amount of $
On June 12, 2024, ILUS entered into a note payable
of $
On June 20, 2024, ILUS entered into a note payable
of $
On July 01, 2024, the company entered into a convertible
note with TwnBrooks Inc., for the amount of $
On July 01, 2024, the company entered into a convertible
note with TwnBrooks Inc., for the amount of $
On July 02, 2024, the company entered into a
convertible note with RB Capital Partners Inc., for the amount of $
On August 13, 2024, the company entered into
a convertible note with RB Capital Partners Inc., for the amount of $
On August 30, 2024, the company entered into a
convertible note with TwnBrooks Inc., for the amount of $
On September 04, 2024, the company entered into
a convertible note with TwnBrooks Inc., for the amount of $
F-16
NOTE 7: OTHER NON CURRENT LIABILITIES
| Particulars | September 30, 2024 | December 31, 2023 | ||||||
| Retirement benefits to pay | ||||||||
| Bank Borrowings & Payable to Al Shola Gas Shareholders | ||||||||
| Provision for Convertible Notes | ||||||||
| Interest on Convertible Notes | ||||||||
| Total | ||||||||
Options and Warrants
The Company chooses not to record warrants in
its financial books if the exercise price is significantly higher than the current market price and classifies it as a contingent liability. For
example, the common stock purchase warrant to Discover Growth Fund, LLC described below has an exercise price of $
On February 4, 2022, a Common Share Purchase
Warrant was issued to Discover Growth Fund, LLC, of the $
On December 2, 2022, we issued a common stock
purchase warrant to AJB Capital Investment LLC for the $
On January 26, 2023, we issued a common stock
purchase warrant to Jefferson Street Capital for the $
On June 30, 2023, we issued a common stock purchase
warrant to Exchange Listing. The holder is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date of issuance hereof, to purchase from the Company,
F-17
NOTE 8: STOCKHOLDER´S EQUITY
Common Stock and Preferred Stock
In August 2019 the Company Amended its Articles of
Incorporation to authorize it to issue up to two billion (
The Company also created the following
Class A –
Class B –
Class C –
Class D –
Class E –
Class F –
Stockholders’ Equity
As of September 30, 2024,
| 1. | 3, |
| 2. | 235, |
On January 3, 2024, Ilustrato Pictures International
Inc. acquired a convertible note from YAII PN, LTD with outstanding principal and accrued interest of $
F-18
On January 03, 2024, we issued
On January 18, 2024, we issued
On January 22, 2024, James Gibbons converted
On January 22, 2024, we issued
On January 25, 2024, we issued
On February 1, 2024, we issued
On February 2, 2024, we issued
On February 8, 2024, the company entered into
a share purchase agreement with William Black to sell
On February 19, 2024, we issued
On February 23, 2024, Ilustrato Pictures International, Inc., entered into a Stock Purchase Agreement with Samsara Luggage Inc., and sold all its equity interests in seven companies owned by the Company:
| ● | Firebug Mechanical Equipment LLC |
| ● | Georgia Fire & Rescue Supply LLC |
| ● | Bright Concept Detection and Protection System LLC |
| ● | Bull Head Products Inc |
| ● | E-Raptor |
| ● | The Vehicle Converters |
| ● |
The consideration for the sale of the equity
interests in the foregoing companies was paid by SAML by the issuance of
On March 19, 2024, we issued
On March 26, 2024, the Company amended its Articles
of Incorporation to authorize it to issue up to three and a half billion (
On March 27, 2024, we issued
On March 27, 2024, our subsidiary
QIND entered into a definitive Stock Purchase Agreement (the “Stock Purchase Agreement”) with the shareholders of Al Shola
Al Modea Gas Distribution LLC (“ASG” or “Al Shola Gas”) to acquire a
F-19
On April 01, 2024, we issued
On April 02, 2024, we issued
On April 03, 2024, we issued
On April 11, 2024, John-Paul
Backwell converted
On April 11, 2024, Daniel
Link converted
On April 15, 2024, we issued
On May 6, 2024, we issued
On May 8, 2024, Alexander
Kolyakin converted
On May 15, 2024, we issued
On May 21, 2024, we issued
On 14 June 2024, we issued
On July 01, 2024, we issued
On July 01, 2024, we issued
On July 8, 2024, we issued
On the 10th of July we issued
On July 11, 2024, we issued
On July 31, 2024, we issued
On August 5, 2024, we issued
On August 14, 2024, we issued
On August 29, 2024, we issued
On August 30, 2024, we issued
On September 04, 2024, we
issued
On September 04, 2024, we
issued
F-20
NOTE 9: EXPENSES
| GENERAL, SELLING AND ADMINISTRATION EXPENSES | September 30, 2024 | |||
| Administration and General Expense | ||||
| Professional fee | ||||
| Payroll Expense | ||||
| Stock Based Compensation | ||||
| Total | $ | |||
General and administrative expenses include finance administration and human resources, facility costs (including rent) and other general overhead costs to support the company’s operations.
NOTE 10: NET LOSS PER SHARE
| Particulars | September 30, 2024 | September 30, 2023 | ||||||
| Basic EPS | ||||||||
| Numerator | ||||||||
| Net income / (loss) | ( | ) | ( | ) | ||||
| Net Income attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Denominator | ||||||||
| Weighted average shares outstanding | ||||||||
| Number of shares used for basic EPS computation | ||||||||
| Basic EPS | $ | ( | ) | $ | ( | ) | ||
| Diluted EPS | ||||||||
| Numerator | ||||||||
| Net income / (loss) | ( | ) | ( | ) | ||||
| Net Income attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Denominator | ||||||||
| Number of shares used for basic EPS computation | ||||||||
| Conversion of Class A preferred stock to common stock | ||||||||
| Conversion of Class B preferred stock to common stock | ||||||||
| Conversion of Class C preferred stock to common stock | ||||||||
| Conversion of Class D preferred stock to common stock | ||||||||
| Conversion of Class E preferred stock to common stock | ||||||||
| Conversion of Class F preferred stock to common stock | ||||||||
| Number of shares used for diluted EPS computation | ||||||||
| Diluted EPS | $ | ( | ) | $ | ( | ) | ||
F-21
NOTE 11: RELATED PARTY TRANSACTIONS
The transactions described under the heading
“Executive Compensation,” there have not been, and there is not currently proposed, any transaction or series of similar
transactions to which we were or will be a participant in which the amount involved exceeded or will exceed the lesser of $
On April 1, 2024, the Agreement with Quality International was cancelled by the Board of Directors of Quality Industrial Corp. QIND restated its financial statements as of December 31, 2022, which were previously reported on the Original Filing and subsequent amendments. Quality International is no longer considered a related party. The following items reflect the restatements:
As of September 30, 2024, and December 31,
2023, the Company had amounts due to Quality Industrial Corp. (“QIND”), a subsidiary of the Company, of $
On December 5, 2022, we issued
On December 5, 2022, we issued
On December 5, 2022, we issued
On December 5, 2022, we issued
On December 08, 2022, we cancelled
On December 08, 2022, we cancelled
On December 08, 2022, we cancelled
On April 12, 2023,
On May 4, 2023, QIND issued to Nicolas Link
On May 4, 2023, QIND issued to John-Paul
Backwell
On May 4, 2023, QIND issued to Carsten Kjems
Falk
On May 4, 2023, QIND issued to Krishnan
Krishnamoorthy
F-22
On May 4, 2023, QIND issued to Louise
Bennett
On September 15, 2023, QIND issued to Nicolas
Link
On September 15, 2023, QIND issued to John-Paul
Backwell
On September 15, 2023, QIND issued to Carsten
Kjems Falk
On September 15, 2023, QIND issued to Louise
Bennett
On April 3, 2024, we issued
On April 3, 2024, we issued
On April 3, 2024, we issued
On May 14, 2024, QIND issued to John-Paul
Backwell
On July 05, 2024, we issued
On July 05, 2024, we issued
On the 10th of July Ilus issued
On September 08, 2024, QIND issued to Sanjeeb
Safeer
NOTE 12: CONSOLIDATION BASIS
Following companies are consolidating basis of Mergers & Acquisitions as of September 30, 2024:
| 1) | ILUS International US |
| 2) | ILUS International UK Ltd. |
| 4) | Firebug Mechanical Equipment LLC. |
| 5) | Bull Head Products Inc. |
| 6) | Georgia Fire & Rescue |
| 7) | Bright Concept and protection System LLC |
| 8) | Quality Industrial Corp. |
| 9) | Al Shola Al Modea Safety and Security LLC |
| 10) | Al Shola Al Modea Gas and Distribution LLC |
| 11) | Samsara Luggage Inc. |
F-23
NOTE 13: LEGAL PROCEEDINGS
From time to time, we may become party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. Aside from the below, we are not currently a party, as plaintiff or defendant, to any legal proceedings that we believe to be material or which, individually or in the aggregate, would be expected to have a material effect on our business, financial condition or results of operation if determined adversely to us.
We have been named as a defendant in an action commenced by our former CEO, Larson Elmore. A case was filed in the Eight Judicial District Court of the State of Nevada (Case No. A-22-858343-C) on September 07, 2022 . The plaintiff alleges that we breached a stock purchase agreement dated May 10, 2020, and promissory notes and is therefore entitled to damages. On May 28, 2024, Lee Larson Elmore (Elmore), Ilustrato Pictures International, Inc. (“ILUS”) Nicholas Link (Link), and FB Technologies Global Inc. (collectively the parties) have agreed to resolve all claims existing between themselves. In exchange for the satisfaction of the disputed promissory note (note) and release of all claims between these parties, ILUS shall:
| 1. | Convert
the remainder of the note to |
| 2. | Pay,
or cause to be paid, to Elmore the total of $ |
This has gone back to mediation as there is a disagreement with regards to the 15m shares, and mediation date is to be confirmed.
We were named as a defendant in an action commenced by Steve Nicol,
who claims that he loaned $
We have been named as a defendant in an action commenced by Black Ice
Advisors LLC, regarding a historic note entered into by the previous CEO, Larson Elmore with a principal amount of $
We have been named as a defendant in an action commenced by George
Joe Chudina with regards to a share purchase agreement dated December 23, 2021. The case was filed in the Chancery Court for Sevier County,
Tennessee, Case Number 24-6-118. On September 12, 2024, we received a default final judgement whereby the plaintiff is awarded Damages
in the amount of $
We cannot predict whether any action is likely to result in any material recovery or expense to our company. Where it is reasonably possible to do so, the Company accrues estimates of the probable costs for the resolution of these matters. These estimates are based on an analysis of potential results and settlement strategies. It is possible, however, that future operating results for any particular quarter or annual period could be affected by changes in assumption.
F-24
NOTE 14: GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Currently, the Company has incurred operating losses, and as of December 31, 2023, the Company also had a working capital deficit and an accumulated deficit. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
Management also believes the Company needs to raise additional capital for working capital purposes. There is no assurance that such financing will be available in the future. The conditions described above raise substantial doubt about our ability to continue as a going concern. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going Ilustrato Pictures International Inc. recorded all revenue generated from selected customers on a credit basis. At the end of the year, accounts receivable for the previous year and the current year have not been collected. The management has represented that they will collect the cash for all outstanding account receivables due from the previous years and the current year.
NOTE 15: SUBSEQUENT EVENTS
On October 07, 2024, we issued
On October 11, 2024, the company entered into
a convertible note with RB Capital Partners Inc., for the amount of $
On October 31, 2024, we issued
On November 05, 2024, the company entered into
a convertible note with TwnBrooks Inc., for the amount of $
On November 05, 2024, we issued
The company may enter into a share purchase agreement with a Nasdaq listed company whereby Ilustrato Pictures International Inc. will swap its shares in QIND for shares in the Nasdaq Entity If this closes, it is anticipated to close during the month of November.
F-25
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors that could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to changes in economic conditions, incorporating acquisitions, changes in the supply chain for raw materials, effects of Covid and wars, including the Ukraine war, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
General
The following is a discussion by management of its view of the Company’s business, financial condition, and corporate performance for the past year. The purpose of this information is to give management’s recap of the past year, and to give an understanding of management’s current outlook for the near future. This section is meant to be read in conjunction with the Financial Statements of this Quarterly Report on Form 10-Q.
Overview
ILUS is a corporation based in Nevada with a primary focus on serving the public safety, industrial, and renewable energy sectors. The company consists of two subsidiaries: Emergency Response Technologies (ERT) and Quality Industrial Corp. (QIND). ERT’s technology aims to protect communities, assets, and frontline personnel by acquiring the latest technology and solutions for the emergency response industry, which includes emergency medical services, fire and rescue services, law enforcement, and emergency management. QIND is an industrial company focused on the oil and gas as well as the utilities sector.
Factors Affecting Our Performance
The primary factors affecting our results of operations include:
General Macro Economic Conditions
Our business is impacted by the global economic environment, employment levels, consumer confidence, government, and municipal spending. Global instability in securities markets and the war in Ukraine are among other factors that can impact our financial performance. In particular, changes in the U.S. economic climate can impact the demand for our product range. In addition, the impact of taxes and fees can have a dramatic effect on the availability, lead times and costs associated with raw materials and parts for our product range.
2
Our purchases are discretionary by nature and therefore sensitive to the availability of financing, consumer confidence, and unemployment levels among other factors, and are affected by general U.S. and global economic conditions, which create risks that future economic downturns will further reduce consumer demand and negatively impact our sales.
While less economically sensitive than the Emergency Response sector, the Industrial and Manufacturing sectors are also impacted by the overall economic environment. Tenders can be withdrawn and lead times for the manufacturing can be affected, which can result in cancellation of orders if not delivered on time.
Impact of Acquisitions
Historically, a significant component of our growth has been through the acquisition of businesses in our targeted sectors. We typically incur upfront costs as we incorporate and integrate acquired businesses into our operating philosophy and operational excellence. This includes the consolidation of supplies and raw materials, optimized logistics and production processes, and other restructuring and improvement initiatives. The benefits of these integration efforts may not positively impact our financial results in the short term but have historically positively impacted medium to long-term results.
We recognize acquired assets and liabilities at fair value. This includes the recognition of identified intangible assets and goodwill. In addition, assets acquired, and liabilities assumed generally include tangible assets, as well as contingent assets and liabilities.
Recent Developments
On March 27, 2024, the company’s subsidiary QIND, entered into a definitive Stock Purchase Agreement with the shareholders of Al Shola Al Modea Gas Distribution LLC (“ASG” or “Al Shola Gas”) to acquire a 51% interest in ASG. The Closing of the transaction took place when both parties signed the definitive Share Purchase Agreement. Al Shola Gas is an Engineering and Distribution Company in the LPG Industry in the United Arab Emirates and was established in 1980. The company is one of the region’s leading suppliers and contractors of LPG centralized pipeline systems and is approved by The General Directorate of Civil Defense, Government of Dubai, as a Central Gas Contractor and LPG Supplier. Al Shola Gas has been consolidated into the financials for the quarter ended March 31, 2024.
On April 1, 2024, after several failed effort negotiations to restructure the deal and obtain information from the selling shareholders of Quality International, the Purchase Agreement with Quality International was terminated by Quality International and subsequently, the Board of Directors of QIND and ILUS approved the cancellation of the agreement with Quality International Co Ltd FZC signed on January 18, 2023, and amended on July 27, 2023. The company is in the process of unwinding the transaction, with management aiming to recover the investment or parts of it. However, if recovery proves unattainable, the investment may need to be written off in the future.
Planned Developments
ILUS continues to streamline its operations and align its core competencies with the evolving market demands. The Company is taking strategic steps to expand its portfolio of operating companies and therefore plans to acquire additional Emergency Response and Industrial companies. To support its expansion, the company plans to hire additional personnel in finance and legal. Our top priorities include supporting the expansion of our Emergency Response and Industrial subsidiaries. We intend to complete the Reverse Mergers of SAML and QIND (our two subsidiaries) with National Exchange-listed companies in the second half of 2024. Furthermore, we intend to issue an equity dividend in the form of SAML shares to ILUS shareholders following our sale of Emergency Response Technologies assets to SAML.
3
Results of Operation for the Three and Nine Months Ended September 30, 2024, and 2023
Revenues
We earned $8,672,940 in revenue for the nine months ended September 30, 2024, compared with a revenue of $5,586,439 in revenue for the nine months ended September 30, 2023.
We earned $3,327,681 in revenue for the three months ended September 30, 2024, compared with a revenue of $1,990,558 in revenue for the three months ended September 30, 2023. Our increase in revenue were mainly as a result of acquiring Al Shola Gas in our industrial and manufacturing division.
Operating Expenses
Operating expenses decreased from $9,676,392 for the nine months ended September 30, 2023, to $7,612,493 for the nine months ended September 30, 2024. For the three months ended September 30, 2023, we had operating expenses of $3,973,907 and for the same period in 2024 are $2,960,766. Our decrease in operating expenses for the nine months ended September 30, 2024, were mainly as a result of revenue drop in Al Shola Gas, and administrative and operating costs associated with the business activities of our subsidiaries QIND and SAML.
We anticipate that our operating expenses will increase as QIND and SAML undertake their expansion plans associated with all operating businesses.
Non-Operating Expenses
We had other non-operating expenses of $244,501for the nine months ended September 30, 2024, as compared to $ 0 in other expenses for the same period ended 2023. We had other non-operating expenses of $(194,193) for the three months ended September 30, 2024, as compared with $0 in other expenses for the same period ended 2023. The decrease in non-operating expenses was mainly the result of an exchange note with RB Capital which decreased the Interest on Convertible notes.
Non-Operating Income
We had other non-operating income of $549,546 for the nine months ended September 30, 2024, as compared $5,231 for the same period ended 2023. We had other non-operating income of $42,942 for the three months ended September 30, 2024, as compared $526 for the same period ended 2023, Our other income YTD 2024 was a result of the reversal of interest payments on the loan agreements with Mahavir and Artelliq which have been unwound with the cancellation of the agreement with Quality International.
Net Income/Net Loss
We incurred a Net loss of $4,167,668 for the nine months ended September 30, 2024, compared to a net loss of $7,972,443 for the nine months ended September 30, 2023. We incurred a Net loss of $1,461,377 for the three months ended September 30, 2024, compared to a net loss of $3,317,229 for the three months ended September 30, 2023. The decrease in Net loss YTD ended September 30, 2024, is a result of Al Shola Gas’ reported profit for the quarter and a reduction in operating expenses along with other income.
Divisional Income Statement
The Company is organized into two divisions based on the similarity of products, customers served, common use of facilities, and economic characteristics. The Company’s segments are as follows:
| 1. | Emergency Response |
| 2. | Industrial & Manufacturing |
4
Intersegment transactions have been eliminated in consolidation.
| For the Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Emergency & Response Division | ||||||||
| Revenue | $ | 2,693,684 | 5,586,439 | |||||
| Cost Of Goods Sold | 1,803,179 | 3,887,721 | ||||||
| Gross Profit | 890,505 | 1,698,718 | ||||||
| Total Operating Expenses | 3,156,647 | 3,156,647 | ||||||
| Operating Loss | (2,266,142 | ) | (7,077,347 | ) | ||||
| Net Loss | $ | (2,152,674 | ) | $ | (6,305,686 | ) | ||
Our revenue decreased to $2,693,684 for the nine months ended September 30, 2024, from $5,586,439 in 2023. Gross profit percentage increased to 33% for the nine months ended September 30, 2024, from 30% in 2023. The focus for the quarter has been to drive higher margin orders and hereby increase our Gross Profit.
Operating expenses decreased to $3,156,647 for the nine months ended September 30, 2024, $3,156,647 in 2023, primarily due to elimination of initial legal and other cost.
For the coming period 2024, the Company will continue to allocate financial, technical and sales resources for recently acquired subsidiaries to positively impact their financial results through increased sales orders and efficiency. Allocated personnel will primarily focus on accelerating sales and marketing efforts, product development, international market expansion, optimizing of supply chain and production processes, overall increased profitability while continuing with the integration and optimization of current operating companies. With the group expansion and growth, we also intend to hire executives and personnel with specific industry experience and fields of expertise to streamline financial reporting, compliance, and Investor Relations and to improve our corporate governance.
| For the Nine Months Ended | ||||||||
| September 30, 2024 | September 30, 2023 | |||||||
| Industrial & Manufacturing Division | ||||||||
| Revenue | 5,979,256 | — | ||||||
| Cost of revenues | 3,649,996 | — | ||||||
| Gross profit | 2,329,260 | — | ||||||
| Total Operating Expenses | 2,098,762 | 900,027 | ||||||
| Profit/ loss from Operations | 230,498 | (900,027 | ) | |||||
| Non-Operating expenses | 306,684 | 766,430 | ||||||
| Non-Operating Income | 427,554 | — | ||||||
| Net loss/ profit | 351,368 | $ | (1,666,757 | ) | ||||
5
For our Industrial and Manufacturing Division, the Operating Revenue increased to $5,979,256 for the period ended September 30, 2024, compared to $0 for the period ended September 30, 2023. The increase in revenue, was the result of the consolidation of Al Shola Gas For our Industrial and Manufacturing Division. The Operating expenses increased to $2,098,762 for the period ended September 30, 2024, compared to $900,027 for the period ended September 30, 2023. Our increase in operating expenses in 2024 was mainly the result of consolidation of Al Shola Gas in our subsidiary QIND. Our Subsidiary QIND acquired a 51% interest in Al Shola Gas on March 23, 2024, and will be consolidating the profitable operating company into the financials from Q2 2024 along reduction of some expenses.
We earned Net Income of $351,368 for the nine months ended September 30, 2024, compared to a net loss of $1,666,757 for the nine months ended September 30, 2023. The increase in Net Profit for the quarter that ended September 30, 2024, is a result of Net Income from our acquisition of Al Shola Gas and the reversal of interest payments on the loan agreements with Mahavir and Artelliq.
Liquidity and Capital Resources
As of September 30, 2024, we had total current assets of $17,706,005 and total current liabilities of $14,187,480. We had a positive working capital of $3,518,525 as of September 30, 2024. This compares with a working capital of $11,384,674 as of December 31, 2023.
Operating activities generated $4,744,254 in cash for the nine months ended September 30, 2024, as compared with $(434,727) provided in cash for the nine months ended September 30, 2023. Our positive operating cash flow YTD 2024 was mainly the result of nine months of core business activities being higher and the merger of ASG operating expenses.
Investing activities used $(8,983,206) in cash for the nine months ended September 30, 2024, as compared with $10,623,566 provided in cash for the nine months ended September 30, 2023.
Financing activities provided $4,364,785 in cash for the nine months ended September 30, 2024, as compared with $(10,490,637) for the same period ended 2023. Our financing cash flow YTD 2024 was mainly the result of Finance costs, proceeds from the issuance of convertible notes and changes in retained earnings.
Going Concern
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.
Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated financial statements are issued and determined. The Company’s ability to continue as a going concern is dependent on the Company’s ability to continue to generate sufficient revenues and raise capital within one year from the date of filing.
Over the next twelve months, management plans to use borrowings and security sales to mitigate the effects of cash flow deficits; however, no assurance can be given that debt or equity financing, if and when required, will be available.
Impact of Acquisitions
Historically a significant component of our growth has been through the acquisition of businesses in our targeted sectors. We typically incur upfront costs as we incorporate and integrate acquired businesses into our operating philosophy and operational excellence. This includes consolidation of supplies and raw materials, optimized logistics and production processes, and other restructuring and improvements initiatives. The benefits of these integration efforts and upcoming planned acquisitions may not positively impact our financial results in the short term but this has historically been the case in the medium to long term.
6
Critical Accounting Policies
In December 2001, the SEC requested that all registrants list their most “critical accounting policies” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is 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 inherently uncertain matters. Our critical accounting policies are disclosed in the Notes of our unaudited financial statements included in this Quarterly Report on Form 10-Q.
Goodwill
The Company continues to review its goodwill for possible impairment or loss of value at least annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. On September 30, 2024, we performed a goodwill impairment evaluation. We performed a qualitative assessment of factors to determine whether it was necessary to perform the goodwill impairment test. Based on the results of the work performed, the Company has concluded that no impairment loss was warranted on September 30, 2024. Factors including non-renewal of a major contract or other substantial changes in business conditions could have a material adverse effect on the valuation of goodwill in future periods and the resulting charge could be material to the future periods’ results of operations.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to stockholders.
Recently Issued Accounting Pronouncements
In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. ASU 2017-04 also clarifies that an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The new standard is effective for fiscal years beginning after December 15, 2019, for both interim and annual reporting periods. The Company is currently assessing the potential impact of the adoption of ASU 2017-04 on its consolidated financial statements.
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that any other new accounting pronouncements have been issued that might have a material impact on its financial position or results of operations.
7
Item 3. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 4. Controls and Procedures
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
As required by SEC Rule 15d-15, our management carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q.
Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period covered by this report.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the period ended September 30, 2024, that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.
8
Part II: Other Information
Item 1 - Legal Proceedings
We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation other than those mentioned in Note 12. There are no proceedings in which any of our directors, officers, or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interests.
Item 1A. Risk Factors
There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
None
Item 4. Mine Safety Disclosures
None
Item 5. Other Information
9
Item 6. Exhibits
| * | Provided Previously |
| ** | Provided herewith |
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Ilustrato Pictures International Inc. | ||
| Date: | November 19, 2024 | |
| By: | /s/ Nicolas Link | |
| Nicolas Link | ||
| Title: | Chief Executive Officer (principal executive) |
|
| Ilustrato Pictures International Inc. | ||
| Date: | November 19, 2024 | |
| By: | /s/ Krishnan Krishnamoorthy | |
| Krishnan Krishnamoorthy | ||
| Title: | Chief Financial Officer (principal accounting and financial officer) |
|
11
Exhibit 4.29
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE AFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
ILUSTRATO PICTURES INTERNATIONAL INC.
CONVERTIBLE PROMISSORY NOTE
| Principal Amount: $55,000.00 USD | August 30, 2024 |
Purchase Price: $50,000.00 USD
WHEREAS on August 30, 2024, Twn Brooks Inc. (the “Holder”) loaned funds totaling, $55,000.00 to Ilustrato Pictures International Inc., a Nevada corporation (the “Company”). Payment for the loan is to be made directly to the company in the form of a Wire Transfer.
WHEREAS the Company and Holder further agreed that such loaned funds provided by the Holder to the Company would be evidenced in a convertible note, which convertible note would be convertible into shares of common stock of the Company in accordance with Section 3 below;
NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the mutual premises and the mutual covenants and agreements contained herein, the parties covenant and agree each with the other as follows:
1. Principal and Interest.
1.1 The Company, for value received, hereby promises to pay to the order of the Holder the sum of Fifty Five Thousand Dollars ($55,000), which amount represents the amount owed to Holder as of August 30, 2024.
1.2 This Convertible Promissory Note (the “Note”) shall bear nine percent (9%) interest per annum. The Note is for a period of 6 months and cannot be converted until (3) months from the date first written above has passed.
1.3 This note carries an original issue discount of $5,000.00 (the “OID”) which is included in the principal balance of this note. Thus, the purchase price of this note shall be
$50,000 computed as follows: the Principal amount minus the OID.
1.4 Upon payment in full of the principal, this Note shall be surrendered to the Company for cancellation.
1.5 The principal under this Note shall be payable at the principal office of the Company and shall be forwarded to the address of the Holder hereof as such Holder shall from time to time designate.
2. Attorney’s Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal payable hereunder, reasonable attorneys’ fees and costs incurred by the Holder.
3. Conversion.
3.1 Voluntary Conversion. The Holder shall have the right, exercisable in whole or in part, to convert the outstanding principal into a number of fully paid and non-assessable whole shares of the Company’s $0.001 Par Value common stock (“Common Stock”) determined in accordance with Section 3.2 below.
3.2 Conversion Price. The conversion price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments by the Borrower relating to the Borrower’s securities, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Variable Conversion Price” shall mean 50% multiplied by the Market Price (as defined herein) (representing a discount rate of 50%). “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.
3.3 Notice and Conversion Procedures. After receipt of demand for repayment, the Company agrees to give the Holder notice at least five (5) business days prior to the time that the Company repays this Note. If the Holder elects to convert this Note, the Holder shall provide the Company with a written notice of conversion setting forth the amount to be converted. The notice must be delivered to the Company together with this Note. Within ten (10) business days of receipt of such notice, the Company shall deliver to the Holder certificate(s) or evidence of electronic book recording for the Common Stock issuable upon such conversion and, if the entire principal amount was not so converted, a new note representing such balance.
2
3.4 Other Conversion Provisions.
(a) Adjustment of Note Conversion Price. If the Company at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced, and if the Company at any time combines (by reverse stock split, recapitalization or otherwise) its outstanding shares into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased.
(b) Common Stock Defined. Whenever reference is made in this Note to the shares of Common Stock, the term “Common Stock” shall mean the Common Stock of the Company authorized as of the date hereof, and any other class of stock ranking on a parity with such Common Stock. Shares issuable upon conversion hereof shall include only shares of Common Stock of the Company.
3.5 No Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Holder upon the conversion of this Note, the Company shall pay to the Holder the amount of outstanding principal hereunder that is not so converted.
3.6 Prepayment. At any time prior to the date that an Event of Defaults occurs under this note, the Company shall have the right, exercisable on four (4) Trading days prior written notice to the Holder of the note, to prepay the outstanding Principal Amount and interest then due under this note in accordance with this section 3.6. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the holder of the Note at its registered addresses or by email and shall state: (1) that the Company is exercising its right to prepay the Note, and (2) the date of prepayment which shall be four (4) Trading days from the date of the Optional Prepayment Notice (the “Optional Prepayment Date”). Within two (2) Trading Day after the Holder’s receipt of the Optional Prepayment Notice, Holder shall specify in writing payment instructions to the Company. On the Optional Prepayment Date, the Company shall make payment of the amounts designated below to or upon the order of the Holder as specified by the Holder in writing to the Company. If the Company exercises its right to prepay the Note in accordance with this section, the Company shall make payment to the Holder of an amount in cash equal to the sum of : (w) 110% multiplied by the Principal Amount then outstanding plus (x) accrued and unpaid interest on the Principal Amount to the Optional Prepayment date.
4. Representations, Warranties and Covenants of the Company. The Company represents, warrants and covenants with the Holder as follows:
(a) Authorization; Enforceability. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Note and the performance of all obligations of the Company hereunder has been taken, and this Note constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
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(b) Governmental Consents. No consent, approval, qualification, order or authorization of, or filing with, any local, state or federal governmental authority is required on the part of the Company in connection with the Company’s valid execution, delivery or performance of this Note except any notices required to be filed with the Securities and Exchange Commission under Regulation D of the Securities Act of 1933, as amended (the “1933 Act”), or such filings as may be required under applicable state securities laws, which, if applicable, will be timely filed within the applicable periods therefor.
(c) No Violation. The execution, delivery and performance by the Company of this Note and the consummation of the transactions contemplated hereby will not result in a violation of its Certificate of Incorporation or Bylaws, in any material respect of any provision of any mortgage, agreement, instrument or contract to which it is a party or by which it is bound or, to the best of its knowledge, of any federal or state judgment, order, writ, decree, statute, rule or regulation applicable to the Company or be in material conflict with or constitute, with or without the passage of time or giving of notice, either a material default under any such provision or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations, or any of its assets or properties.
5. Representations and Covenants of the Holder. The Company has entered into this Note in reliance upon the following representations and covenants of the Holder:
(a) Investment Purpose. This Note and the Common Stock issuable upon conversion of the Note are acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.
(b) Private Issue. The Holder understands (i) that this Note and the Common Stock issuable upon conversion of this Note are not registered under the 1933 Act or qualified under applicable state securities laws, and (ii) that the Company is relying on an exemption from registration predicated on the representations set forth in this Section 8.
(c) Financial Risk. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment and has the ability to bear the economic risks of its investment.
6. Assignment. Subject to the restrictions on transfer described in Section 8 below, the rights and obligations of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.
7. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.
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8. Transfer of This Note or Securities Issuable on Conversion Hereof. With respect to any offer, sale or other disposition of this Note or securities into which this Note may be converted, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof. Unless the Company reasonably determines that such transfer would violate applicable securities laws, or that such transfer would adversely affect the Company’s ability to account for future transactions to which it is a party as a pooling of interests and notifies the Holder thereof within five (5) business days after receiving notice of the transfer, the Holder may effect such transfer. The Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the 1933 Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the 1933 Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
9. Notices. Any notice, other communication or payment required or permitted hereunder shall be in writing and shall be deemed to have been given upon delivery if personally delivered or fourteen (14) business days after deposit if deposited in the United States mail for mailing by certified mail, postage prepaid. Each of the above addressees may change its address for purposes of this Section by giving to the other addressee notice of such new address in conformance with this Section. Notices are also accepted by email and considered notified within 24 hours of read receipt.
10. Governing Law. This Note is being delivered in and shall be construed in accordance with the laws of the State of Florida, without regard to the conflicts of law provisions thereof.
11. Heading; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except as otherwise indicated, all references herein to Sections refer to Sections hereof.
12. Waiver by the Company. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.
13. Delays. No delay by the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right.
14. Severability. If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision was so excluded and shall be enforceable in accordance with its terms.
15. No Impairment. The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Note and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Note against impairment.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, Ilustrato Pictures International Inc. has caused this Note to be executed in its corporate name and this Note to be dated, issued and delivered, all on the date first above written.
| ILUSTRATO PICTURES INTERNATIONAL INC. | ||
| Date: August 30, 2024 | /s/ Nicolas Link | |
| By: | Nicolas Link | |
| Its: | CEO | |
| Twn Brooks Inc. | ||
| Date: August 30, 2024 | By: | |
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Exhibit 4.30
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE AFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
ILUSTRATO PICTURES INTERNATIONAL
INC.
CONVERTIBLE PROMISSORY NOTE
| Principal Amount: $27,500.00 USD | September 04, 2024 |
Purchase Price: $25,000.00 USD
WHEREAS on September 04, 2024, Twn Brooks Inc. (the “Holder”) loaned funds totaling, $27,500.00 to Ilustrato Pictures International Inc., a Nevada corporation (the “Company”). Payment for the loan is to be made directly to the company in the form of a Wire Transfer.
WHEREAS the Company and Holder further agreed that such loaned funds provided by the Holder to the Company would be evidenced in a convertible note, which convertible note would be convertible into shares of common stock of the Company in accordance with Section 3 below;
NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the mutual premises and the mutual covenants and agreements contained herein, the parties covenant and agree each with the other as follows:
1. Principal and Interest.
1.1 The Company, for value received, hereby promises to pay to the order of the Holder the sum of Twenty Seven Thousand Five Hundred Dollars ($27,500), which amount represents the amount owed to Holder as of August 30, 2024.
1.2 This Convertible Promissory Note (the “Note”) shall bear nine percent (9%) interest per annum. The Note is for a period of 6 months and cannot be converted until (3) months from the date first written above has passed.
1.3 This note carries an original issue discount of $2,500.00 (the “OID”) which is included in the principal balance of this note. Thus, the purchase price of this note shall be
$25,000 computed as follows: the Principal amount minus the OID.
1.4 Upon payment in full of the principal, this Note shall be surrendered to the Company for cancellation.
1.5 The principal under this Note shall be payable at the principal office of the Company and shall be forwarded to the address of the Holder hereof as such Holder shall from time to time designate.
2. Attorney’s Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal payable hereunder, reasonable attorneys’ fees and costs incurred by the Holder.
3. Conversion.
3.1 Voluntary Conversion. The Holder shall have the right, exercisable in whole or in part, to convert the outstanding principal into a number of fully paid and non-assessable whole shares of the Company’s $0.001 Par Value common stock (“Common Stock”) determined in accordance with Section 3.2 below.
3.2 Conversion Price. The conversion price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments by the Borrower relating to the Borrower’s securities, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Variable Conversion Price” shall mean 50% multiplied by the Market Price (as defined herein) (representing a discount rate of 50%). “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.
3.3 Notice and Conversion Procedures. After receipt of demand for repayment, the Company agrees to give the Holder notice at least five (5) business days prior to the time that the Company repays this Note. If the Holder elects to convert this Note, the Holder shall provide the Company with a written notice of conversion setting forth the amount to be converted. The notice must be delivered to the Company together with this Note. Within ten (10) business days of receipt of such notice, the Company shall deliver to the Holder certificate(s) or evidence of electronic book recording for the Common Stock issuable upon such conversion and, if the entire principal amount was not so converted, a new note representing such balance.
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3.4 Other Conversion Provisions.
(a) Adjustment of Note Conversion Price. If the Company at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced, and if the Company at any time combines (by reverse stock split, recapitalization or otherwise) its outstanding shares into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased.
(b) Common Stock Defined. Whenever reference is made in this Note to the shares of Common Stock, the term “Common Stock” shall mean the Common Stock of the Company authorized as of the date hereof, and any other class of stock ranking on a parity with such Common Stock. Shares issuable upon conversion hereof shall include only shares of Common Stock of the Company.
3.5 No Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Holder upon the conversion of this Note, the Company shall pay to the Holder the amount of outstanding principal hereunder that is not so converted.
3.6 Prepayment. At any time prior to the date that an Event of Defaults occurs under this note, the Company shall have the right, exercisable on four (4) Trading days prior written notice to the Holder of the note, to prepay the outstanding Principal Amount and interest then due under this note in accordance with this section 3.6. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the holder of the Note at its registered addresses or by email and shall state: (1) that the Company is exercising its right to prepay the Note, and (2) the date of prepayment which shall be four (4) Trading days from the date of the Optional Prepayment Notice (the “Optional Prepayment Date”). Within two (2) Trading Day after the Holder’s receipt of the Optional Prepayment Notice, Holder shall specify in writing payment instructions to the Company. On the Optional Prepayment Date, the Company shall make payment of the amounts designated below to or upon the order of the Holder as specified by the Holder in writing to the Company. If the Company exercises its right to prepay the Note in accordance with this section, the Company shall make payment to the Holder of an amount in cash equal to the sum of : (w) 110% multiplied by the Principal Amount then outstanding plus (x) accrued and unpaid interest on the Principal Amount to the Optional Prepayment date.
4. Representations, Warranties and Covenants of the Company. The Company represents, warrants and covenants with the Holder as follows:
(a) Authorization; Enforceability. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Note and the performance of all obligations of the Company hereunder has been taken, and this Note constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
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(b) Governmental Consents. No consent, approval, qualification, order or authorization of, or filing with, any local, state or federal governmental authority is required on the part of the Company in connection with the Company’s valid execution, delivery or performance of this Note except any notices required to be filed with the Securities and Exchange Commission under Regulation D of the Securities Act of 1933, as amended (the “1933 Act”), or such filings as may be required under applicable state securities laws, which, if applicable, will be timely filed within the applicable periods therefor.
(c) No Violation. The execution, delivery and performance by the Company of this Note and the consummation of the transactions contemplated hereby will not result in a violation of its Certificate of Incorporation or Bylaws, in any material respect of any provision of any mortgage, agreement, instrument or contract to which it is a party or by which it is bound or, to the best of its knowledge, of any federal or state judgment, order, writ, decree, statute, rule or regulation applicable to the Company or be in material conflict with or constitute, with or without the passage of time or giving of notice, either a material default under any such provision or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations, or any of its assets or properties.
5. Representations and Covenants of the Holder. The Company has entered into this Note in reliance upon the following representations and covenants of the Holder:
(a) Investment Purpose. This Note and the Common Stock issuable upon conversion of the Note are acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.
(b) Private Issue. The Holder understands (i) that this Note and the Common Stock issuable upon conversion of this Note are not registered under the 1933 Act or qualified under applicable state securities laws, and (ii) that the Company is relying on an exemption from registration predicated on the representations set forth in this Section 8.
(c) Financial Risk. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment and has the ability to bear the economic risks of its investment.
6. Assignment. Subject to the restrictions on transfer described in Section 8 below, the rights and obligations of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.
7. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.
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8. Transfer of This Note or Securities Issuable on Conversion Hereof. With respect to any offer, sale or other disposition of this Note or securities into which this Note may be converted, the Holder will give written notice to the Company prior thereto, describing briefly the manner
thereof. Unless the Company reasonably determines that such transfer would violate applicable securities laws, or that such transfer would adversely affect the Company’s ability to account for future transactions to which it is a party as a pooling of interests and notifies the Holder thereof within five (5) business days after receiving notice of the transfer, the Holder may effect such transfer. The Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the 1933 Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the 1933 Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
9. Notices. Any notice, other communication or payment required or permitted hereunder shall be in writing and shall be deemed to have been given upon delivery if personally delivered or fourteen (14) business days after deposit if deposited in the United States mail for mailing by certified mail, postage prepaid. Each of the above addressees may change its address for purposes of this Section by giving to the other addressee notice of such new address in conformance with this Section. Notices are also accepted by email and considered notified within 24 hours of read receipt.
10. Governing Law. This Note is being delivered in and shall be construed in accordance with the laws of the State of Florida, without regard to the conflicts of law provisions thereof.
11. Heading; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except as otherwise indicated, all references herein to Sections refer to Sections hereof.
12. Waiver by the Company. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.
13. Delays. No delay by the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right.
14. Severability. If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision was so excluded and shall be enforceable in accordance with its terms.
15. No Impairment. The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Note and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Note against impairment.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, Ilustrato Pictures International Inc. has caused this Note to be executed in its corporate name and this Note to be dated, issued and delivered, all on the date first above written.
| ILUSTRATO PICTURES INTERNATIONAL INC. | ||
| /s/ Nicolas Link | ||
| Date: September 04, 2024 | By: | Nicolas Link |
| Its: | CEO | |
| Twn Brooks Inc. | ||
| Date: September 04, 2024 | ||
| By: | ||
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Exhibit 4.31
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
ILUSTRATO PICTURES INTERNATIONAL, INC.
CONVERTIBLE PROMISSORY NOTE
| Principal Amount: $75,000.00 USD | October 11, 2024 |
WHEREAS on October 11, 2024, RB Capital Partners, Inc., with its offices at 2856 Torrey Pines Road, La Jolla, California 92037 (the “Holder”) loaned funds totaling, $75,000.00 to Ilustrato Pictures International, Inc., a Nevada corporation with its office at 26 Broadway; Suite 934; New York, NY 10004 (the “Company”). Payment for the loan was made directly to the Company in the form of a Wire Transfer.
WHEREAS the Company and Holder further agreed that such services provided by the Holder to the Company would be evidenced in a convertible note, which convertible note would be convertible into shares of common stock of the Company at the rate of $0.10 in accordance with Section 3 below;
NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the mutual premises and the mutual covenants and agreements contained herein, the parties covenant and agree each with the other as follows:
1. Principal and Interest.
1.1 The Company, for value received, hereby promises to pay to the order of the Holder the sum of Seventy-Five Thousand Dollars ($75,000.00), which amount represents the amount owed to Holder as of October 11, 2024.
1.2 This Convertible Promissory Note (the “Note”) shall bear seven percent (7%) interest per annum. The Note is for a period of (24) months and cannot be converted until (6) months from the date first written above has passed.
1.3 Upon payment in full of the principal, this Note shall be surrendered to the Company for cancellation.
1.4 The principal under this Note shall be payable at the principal office of the Company and shall be forwarded to the address of the Holder hereof as such Holder shall from time to time designate.
2. Attorney’s Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal payable hereunder, reasonable attorneys’ fees and costs incurred by the Holder.
3. Conversion.
3.1 Voluntary Conversion. The Holder shall have the right, exercisable in whole or in part, to convert the outstanding principal into a number of fully paid and non-assessable whole shares of the Company’s $0.001 Par Value common stock (“Common Stock”) determined in accordance with Section 3.2 below.
3.2 Shares Issuable. The number of whole shares of Common Stock into which this Note may be voluntarily converted (the “Conversion Shares”) shall be determined by dividing the aggregate principal amount borrowed hereunder by $0.10 (the “Note Conversion Price”); provided, however, that, in no event, shall Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common stock beneficially owned by Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of this Note or the unexercised or unconverted portion of any other security of Maker subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of common stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in the beneficial ownership by Holder and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934 and Regulation 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the Note Conversion Price. The Term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus, (2) at the Company’s option, accrued and unpaid interest, if any, on such principal amount at the interest rate provided in this Note to the conversion date, provided; however, that the Company shall have the right to pay any or all interest in cash.
3.3 Notice and Conversion Procedures. After receipt of demand for repayment, the Company agrees to give the Holder notice at least five (5) business days prior to the time that the Company repays this Note. If the Holder elects to convert this Note, the Holder shall provide the Company with a written notice of conversion setting forth the amount to be converted. The notice must be delivered to the Company together with this Note. Within twenty (20) business days of receipt of such notice, the Company shall deliver to the Holder certificate(s) for the Common Stock issuable upon such conversion and, if the entire principal amount was not so converted, a new note representing such balance.
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3.4 Other Conversion Provisions.
(a) Adjustment of Note Conversion Price. In the event the Company shall in any manner, subsequent to the issuance of this Note, approve a reclassification involving a reverse stock split and subdivision of the Company’s issued and outstanding shares of Common Stock, the Note Conversion Price shall forthwith be unaffected. In the event the Company shall in any manner, subsequent to the issuance of this Note, approve a reclassification involving a forward stock split and subdivision of the Company’s issued and outstanding shares of Common Stock, the Note Conversion Price shall forthwith be unaffected.
(b) Common Stock Defined. Whenever reference is made in this Note to the shares of Common Stock, the term “Common Stock” shall mean the Common Stock of the Company authorized as of the date hereof, and any other class of stock ranking on a parity with such Common Stock. Shares issuable upon conversion hereof shall include only shares of Common Stock of the Company.
3.5 No Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Holder upon the conversion of this Note, the Company shall pay to the Holder the amount of outstanding principal hereunder that is not so converted.
4. Representations, Warranties and Covenants of the Company. The Company represents, warrants and covenants with the Holder as follows:
(a) Authorization; Enforceability. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Note and the performance of all obligations of the Company hereunder has been taken, and this Note constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
(b) Governmental Consents. No consent, approval, qualification, order or authorization of, or filing with, any local, state or federal governmental authority is required on the part of the Company in connection with the Company’s valid execution, delivery or performance of this Note except any notices required to be filed with the Securities and Exchange Commission under Regulation D of the Securities Act of 1933, as amended (the “1933 Act”), or such filings as may be required under applicable state securities laws, which, if applicable, will be timely filed within the applicable periods therefor.
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(c) No Violation. The execution, delivery and performance by the Company of this Note and the consummation of the transactions contemplated hereby will not result in a violation of its Certificate of Incorporation or Bylaws, in any material respect of any provision of any mortgage, agreement, instrument or contract to which it is a party or by which it is bound or, to the best of its knowledge, of any federal or state judgment, order, writ, decree, statute, rule or regulation applicable to the Company or be in material conflict with or constitute, with or without the passage of time or giving of notice, either a material default under any such provision or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations, or any of its assets or properties.
(d) Reservation of Shares. The Company shall deliver within five days of execution of this Note, a fully-executed and complete irrevocable letter of instruction or similar instrument to the transfer agent of Company, in a form acceptable to Holder, with respect to the issuance of shares of Common Stock issuable pursuant to conversion of this Note (the “Letter of Instruction”). The shares of Common Stock issuable upon conversion of this Note shall not bear any restrictive legends. On and after the date of this Note, Company shall timely report all necessary public information required by Rule 144(c)(2) of the 1933 Act for Holder to resell the shares of Common Stock issued to Holder under this Note in reliance upon the public information requirements set forth in Rule 144(c)(2). In the Letter of Instruction, the Company shall instruct the transfer agent to place 2,000,000 shares of Common Stock on reserve for eventual conversion of this Note (the “Reserved Shares”). The Reserved Shares shall remain in the created reserve with the transfer agent until Holder and an authorized officer of Company provide joint written instructions to the transfer agent that the Reserved Shares, or any part of the Reserved Shares, shall be taken out of the reserve and shall no longer be subject to the terms of the Letter of Instruction.
5. Representations and Covenants of the Holder. The Company has entered into this Note in reliance upon the following representations and covenants of the Holder:
(a) Investment Purpose. This Note and the Common Stock issuable upon conversion of the Note are acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.
(b) Private Issue. The Holder understands (i) that this Note and the Common Stock issuable upon conversion of this Note are not registered under the 1933 Act or qualified under applicable state securities laws, and (ii) that the Company is relying on an exemption from registration predicated on the representations set forth in this Section 8.
(c) Financial Risk. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment.
(d) Risk of No Registration. The Holder understands that if the Company does not register with the Securities and Exchange Commission pursuant to Section 12 of the Securities Exchange Act of 1934 (the “1934 Act”), or file reports pursuant to Section 15(d) of the 1934 Act, or if a registration statement covering the securities under the 1933 Act is not in effect when it desires to sell the Common Stock issuable upon conversion of the Note, it may be required to hold such securities for an indefinite period. The Holder also understands that any sale of the Note or the Common Stock which might be made by it in reliance upon Rule 144 under the 1933 Act may be made only in accordance with the terms and conditions of that Rule.
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6. Assignment. Subject to the restrictions on transfer described in Section 8 below, the rights and obligations of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.
7. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.
8. Transfer of This Note or Securities Issuable on Conversion Hereof. With respect to any offer, sale or other disposition of this Note or securities into which this Note may be converted, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof. Unless the Company reasonably determines that such transfer would violate applicable securities laws, or that such transfer would adversely affect the Company’s ability to account for future transactions to which it is a party as a pooling of interests, and notifies the Holder thereof within five (5) business days after receiving notice of the transfer, the Holder may effect such transfer. The Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the 1933 Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the 1933 Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
9. Notices. Any notice, other communication or payment required or permitted hereunder shall be in writing and shall be deemed to have been given upon delivery if personally delivered or three (3) business days after deposit if deposited in the United States mail for mailing by certified mail, postage prepaid. Each of the above addressees may change its address for purposes of this Section by giving to the other addressee notice of such new address in conformance with this Section.
10. Governing Law. This Note is being delivered in and shall be construed in accordance with the laws of the State of California, without regard to the conflicts of law provisions thereof.
11. Heading; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except as otherwise indicated, all references herein to Sections refer to Sections hereof.
12. Waiver by the Company. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.
13. Delays. No delay by the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right.
14. Severability. If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision was so excluded and shall be enforceable in accordance with its terms.
15. No Impairment. The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Note and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Note against impairment.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, Ilustrato Pictures International, Inc. has caused this Note to be executed in its corporate name and this Note to be dated, issued and delivered, all on the date first above written.
ILUSTRATO PICTURES INTERNATIONAL, INC. | ||
| By | /s/ Nicolas Link | |
| Date: October 11, 2024 | Nicolas Link | |
| Its: | CEO & Director | |
| RB CAPITAL PARTNERS, INC. | ||
| By: | ||
| Date: October 11, 2024 | Brett Rosen | |
| Its: | Managing Partner | |
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Exhibit 4.32
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE AFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
ILUSTRATO PICTURES INTERNATIONAL INC.
CONVERTIBLE PROMISSORY NOTE
| Principal Amount: $110,000.00 USD | November 05, 2024 |
Purchase Price: $100,000.00 USD
WHEREAS on November 05, 2024, Twn Brooks Inc. (the “Holder”) loaned funds totaling, $110,000.00 to Ilustrato Pictures International Inc., a Nevada corporation (the “Company”). Payment for the loan is to be made directly to the company in the form of a Wire Transfer.
WHEREAS the Company and Holder further agreed that such loaned funds provided by the Holder to the Company would be evidenced in a convertible note, which convertible note would be convertible into shares of common stock of the Company in accordance with Section 3 below;
NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the mutual premises and the mutual covenants and agreements contained herein, the parties covenant and agree each with the other as follows:
1. Principal and Interest.
1.1 The Company, for value received, hereby promises to pay to the order of the Holder the sum of One Hundred & Ten Thousand Dollars ($110,000), which amount represents the amount owed to Holder as of November 05, 2024.
1.2 This Convertible Promissory Note (the “Note”) shall bear nine percent (9%) interest per annum. The Note is for a period of 6 months and cannot be converted until (3) months from the date first written above has passed.
1.3 This note carries an original issue discount of $10,000.00 (the “OID”) which is included in the principal balance of this note. Thus, the purchase price of this note shall be $100,000 computed as follows: the Principal amount minus the OID.
1.4 Upon payment in full of the principal, this Note shall be surrendered to the Company for cancellation.
1.5 The principal under this Note shall be payable at the principal office of the Company and shall be forwarded to the address of the Holder hereof as such Holder shall from time to time designate.
2. Attorney’s Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal payable hereunder, reasonable attorneys’ fees and costs incurred by the Holder.
3. Conversion.
3.1 Voluntary Conversion. The Holder shall have the right, exercisable in whole or in part, to convert the outstanding principal into a number of fully paid and non-assessable whole shares of the Company’s $0.001 Par Value common stock (“Common Stock”) determined in accordance with Section 3.2 below.
3.2 Conversion Price. The conversion price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments by the Borrower relating to the Borrower’s securities, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Variable Conversion Price” shall mean 50% multiplied by the Market Price (as defined herein) (representing a discount rate of 50%). “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.
3.3 Notice and Conversion Procedures. After receipt of demand for repayment, the Company agrees to give the Holder notice at least five (5) business days prior to the time that the Company repays this Note. If the Holder elects to convert this Note, the Holder shall provide the Company with a written notice of conversion setting forth the amount to be converted. The notice must be delivered to the Company together with this Note. Within ten (10) business days of receipt of such notice, the Company shall deliver to the Holder certificate(s) or evidence of electronic book recording for the Common Stock issuable upon such conversion and, if the entire principal amount was not so converted, a new note representing such balance.
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3.4 Other Conversion Provisions.
(a) Adjustment of Note Conversion Price. If the Company at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced, and if the Company at any time combines (by reverse stock split, recapitalization or otherwise) its outstanding shares into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased.
(b) Common Stock Defined. Whenever reference is made in this Note to the shares of Common Stock, the term “Common Stock” shall mean the Common Stock of the Company authorized as of the date hereof, and any other class of stock ranking on a parity with such Common Stock. Shares issuable upon conversion hereof shall include only shares of Common Stock of the Company.
3.5 No Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Holder upon the conversion of this Note, the Company shall pay to the Holder the amount of outstanding principal hereunder that is not so converted.
3.6 Prepayment. At any time prior to the date that an Event of Defaults occurs under this note, the Company shall have the right, exercisable on four (4) Trading days prior written notice to the Holder of the note, to prepay the outstanding Principal Amount and interest then due under this note in accordance with this section 3.6. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the holder of the Note at its registered addresses or by email and shall state: (1) that the Company is exercising its right to prepay the Note, and (2) the date of prepayment which shall be four (4) Trading days from the date of the Optional Prepayment Notice (the “Optional Prepayment Date”). Within two (2) Trading Day after the Holder’s receipt of the Optional Prepayment Notice, Holder shall specify in writing payment instructions to the Company. On the Optional Prepayment Date, the Company shall make payment of the amounts designated below to or upon the order of the Holder as specified by the Holder in writing to the Company. If the Company exercises its right to prepay the Note in accordance with this section, the Company shall make payment to the Holder of an amount in cash equal to the sum of : (w) 110% multiplied by the Principal Amount then outstanding plus (x) accrued and unpaid interest on the Principal Amount to the Optional Prepayment date.
4. Representations, Warranties and Covenants of the Company. The Company represents, warrants and covenants with the Holder as follows:
(a) Authorization; Enforceability. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Note and the performance of all obligations of the Company hereunder has been taken, and this Note constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
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(b) Governmental Consents. No consent, approval, qualification, order or authorization of, or filing with, any local, state or federal governmental authority is required on the part of the Company in connection with the Company’s valid execution, delivery or performance of this Note except any notices required to be filed with the Securities and Exchange Commission under Regulation D of the Securities Act of 1933, as amended (the “1933 Act”), or such filings as may be required under applicable state securities laws, which, if applicable, will be timely filed within the applicable periods therefor.
(c) No Violation. The execution, delivery and performance by the Company of this Note and the consummation of the transactions contemplated hereby will not result in a violation of its Certificate of Incorporation or Bylaws, in any material respect of any provision of any mortgage, agreement, instrument or contract to which it is a party or by which it is bound or, to the best of its knowledge, of any federal or state judgment, order, writ, decree, statute, rule or regulation applicable to the Company or be in material conflict with or constitute, with or without the passage of time or giving of notice, either a material default under any such provision or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations, or any of its assets or properties.
5. Representations and Covenants of the Holder. The Company has entered into this Note in reliance upon the following representations and covenants of the Holder:
(a) Investment Purpose. This Note and the Common Stock issuable upon conversion of the Note are acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.
(b) Private Issue. The Holder understands (i) that this Note and the Common Stock issuable upon conversion of this Note are not registered under the 1933 Act or qualified under applicable state securities laws, and (ii) that the Company is relying on an exemption from registration predicated on the representations set forth in this Section 8.
(c) Financial Risk. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment and has the ability to bear the economic risks of its investment.
6. Assignment. Subject to the restrictions on transfer described in Section 8 below, the rights and obligations of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.
7. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.
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8. Transfer of This Note or Securities Issuable on Conversion Hereof. With respect to any offer, sale or other disposition of this Note or securities into which this Note may be converted, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof. Unless the Company reasonably determines that such transfer would violate applicable securities laws, or that such transfer would adversely affect the Company’s ability to account for future transactions to which it is a party as a pooling of interests and notifies the Holder thereof within five (5) business days after receiving notice of the transfer, the Holder may effect such transfer. The Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the 1933 Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the 1933 Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
9. Notices. Any notice, other communication or payment required or permitted hereunder shall be in writing and shall be deemed to have been given upon delivery if personally delivered or fourteen (14) business days after deposit if deposited in the United States mail for mailing by certified mail, postage prepaid. Each of the above addressees may change its address for purposes of this Section by giving to the other addressee notice of such new address in conformance with this Section. Notices are also accepted by email and considered notified within 24 hours of read receipt.
10. Governing Law. This Note is being delivered in and shall be construed in accordance with the laws of the State of Florida, without regard to the conflicts of law provisions thereof.
11. Heading; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except as otherwise indicated, all references herein to Sections refer to Sections hereof.
12. Waiver by the Company. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.
13. Delays. No delay by the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right.
14. Severability. If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision was so excluded and shall be enforceable in accordance with its terms.
15. No Impairment. The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Note and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Note against impairment.
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IN WITNESS WHEREOF, Ilustrato Pictures International Inc. has caused this Note to be executed in its corporate name and this Note to be dated, issued and delivered, all on the date first above written.
| ILUSTRATO PICTURES INTERNATIONAL INC. | ||
| /s/ Nicolas Link | ||
| Date: November 05, 2024 | By: | Nicolas Link |
| Its: | CEO | |
| Twn Brooks Inc. | ||
| Date: November 05, 2024 | ||
| By: | ||
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Exhibit 31.1
CERTIFICATIONS
I, Nicolas Link, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the three months ended September 30, 2024, of Ilustrato Pictures International Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: |
| a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | evaluated the effectiveness of the registrant s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | disclosed in this report any change in the registrant s internal control over financial reporting that occurred during the registrant s most recent fiscal quarter (the registrant s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant s internal control over financial reporting; and; |
| 5. | The registrant s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant s auditors and the audit committee of the registrant s board of directors (or persons performing the equivalent functions); |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant s internal controls. |
| Dated: November 19, 2024 | /s/ Nicolas Link |
| Nicolas Link | |
| Chief Executive Officer | |
| (principal executive officer) |
Exhibit 31.2
CERTIFICATIONS
I, Krishnan Krishnamoorthy, certify that;
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the three months ended September 30, 2024, of Ilustrato Pictures International Inc. (the registrant); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant s internal control over financial reporting that occurred during the registrant s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant s internal control over financial reporting; and |
| 5. | The registrant s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant s auditors and the audit committee of the registrant s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant s internal control over financial reporting. |
Date: November 19, 2024
| /s/ Krishnan Krishnamoorthy | ||
| By: | Krishnan Krishnamoorthy | |
| Title: | Chief Financial Officer | |
| (principal accounting, and financial officer) | ||
Exhibit 32.1
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION
1350 AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Ilustrato Pictures International Inc. (the Company ) for the Form 10-Q for the three months ended September 30, 2024, as filed with the Securities and Exchange Commission (the Report ), I, Nicolas Link, Chief Executive Officer, and I, Krishnan Krishnamoorthy, Chief Financial Officer of the Company certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Dated: November 19, 2024 | /s/ Nicolas Link |
| Nicolas Link | |
| Chief Executive Officer | |
| (Principal executive officer) |
| Dated: November 19, 2024 | /s/ Krishnan Krishnamoorthy |
| Krishnan Krishnamoorthy Chief Financial Officer | |
| (Principal accounting and financial officer) |
This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.