Quality Industrial Corp 8-K, filed Apr 8, 2024
Quality Industrial Corp. (QIND)
About this 8-K
Quality Industrial Corp filed this 8-K on April 8, 2024, reporting on events of April 1, 2024.
Items reported
- Item 1.02: Ended a material agreement
- Item 4.02: Earlier financial statements no longer reliable
- Item 9.01: Financial statements and exhibits
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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Item 1.02 Termination of a Material Definitive Agreement.
As previously disclosed, on January 18, 2023, and as amended on July 27, 2023, Quality Industrial Corp. (the “Company”) entered into a stock purchase agreement (the “QI Purchase Agreement”) with Gerab National Enterprises LLC and Mr. Saseendran Kodapully Ramakrishnan, (together, the “QI Shareholders”) of Quality International Co Ltd FZC, a United Arab Emirates company (“Quality International” or “QI”), in order to purchase 52% of the shares of Quality International (the “QI Shares”) from the QI Shareholders. On July 27, 2023, Quality International entered into a short-term loan agreement (the “Loan Agreement”) with Mahavir Investments Limited (“Mahavir”). Pursuant to the Loan Agreement, Quality International borrowed an amount of $3 million from Mahavir and Gerab National Enterprises LLC, Mr. Saseendran Kodapully Ramakrishnan, and the Company each signed as co-borrowers under the Loan Agreement. On August 21, 2023, the Company entered into a shares subscription and buy-back agreement (the “Subscription Buy-Back Agreement”) with Ilustrato Pictures International Inc. (“ILUS”), the parent of the Company, and Artelliq Software Trading (“Artelliq”). Pursuant to the Subscription Buy-Back Agreement, the Company agreed to issue common shares (the “Subscription Shares”) to Artelliq in exchange for an amount of $2 million paid directly by Artelliq to Quality International. Quality International and Mr. Saseendran Kodapully Ramakrishnan, each signed as a guarantor.
During December of 2023, the Company requested information from Quality International, needed by the Company’s investors in connection with the business, including but not limited to, and use of the funds received by Quality International per the transactions described in the preceding paragraph, recent accounts receivable report and specific aged accounts receivable information, as requested by and for the investors to provide additional funding with the purpose of aiding the Company to fulfill its obligations under the QI Purchase Agreement, the Loan Agreement and the Subscription Buy-Back Agreement. Quality International did not provide the specific requested information and on January 17, 2024, Quality International notified the Company of its termination of the QI Purchase Agreement and all related transaction documents. During the month of February and March following Quality International’s communication of January 17, 2024, the Company and QI conducted negotiations with the intention of restructuring the deal.
On April 1, 2024, after several failed efforts at negotiation, the termination QI Purchase Agreement was accepted and cancelled by the Board of Directors of the Company.
Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On April 1, 2024, as a result of the cancellation of the QI Purchase Agreement, the Company’s independent registered public accounting firm, Pipara & Co LLP (“Pipara”), determined that the Company’s audited financial statements as of and for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K, filed with the SEC on May 8, 2023 (the “Original Filing”), need to be restated as such report contains consolidated financial statements reflecting the acquisition of QI. Therefore, the Original Filing should no longer be relied upon, as such report must be restated to show the financial statements of Quality Industrial without QI included.
The Company’s Board of Directors and management have discussed the matters disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with Pipara.
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SECTION 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
| (a) | Financial Statements of business Acquired |
The Company will file the financial statements required by Item 9.01 (a) of Form 8-K in its annual report on Form 10-K for the year ended December 31, 2023, within the time period required by such filing.
| (b) | Pro Forma Financial Information |
The Company will file the financial statements required by Item 9.01 (a) of Form 8-K by an amendment to this Current Report on Form 8-K no later than 71 days from the date this Current Report on Form 8-K is required to be filed.
| (d) | Exhibits |
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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 hereunto duly authorized.
Quality Industrial Corp.
| /s/ John-Paul Backwell | |
| John-Paul Backwell, CEO | |
| Date: April 5, 2024 |
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