QIND 10-Q
Quality Industrial Corp. (QIND)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended:
or
| TRANSITION REPORT PERSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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.) | |
| 94111 | ||
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
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 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 such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| 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 ☐ No
As of May 15, 2026, there were a total of shares of the registrant’s common Stock, $ par value per share, outstanding.
TABLE OF CONTENTS
| PART I - FINANCIAL INFORMATION | ||
| 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 | 9 |
| Item 4. | Controls and Procedures | 9 |
| PART II - OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 10 |
| Item 1A. | Risk Factors | 10 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 10 |
| Item 3. | Defaults Upon Senior Securities | 11 |
| Item 4. | Mine Safety Disclosures | 11 |
| Item 5. | Other Information | 11 |
| Item 6. | Exhibits | 12 |
| SIGNATURES | 13 | |
| i |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Quality Industrial Corp.
Unaudited Consolidated Financial Statements
| 1 |
QUALITY INDUSTRIAL CORP.
CONSOLIDATED BALANCE SHEETS
March 31, 2026 | December 31, 2025 | |||||||
| Unaudited | Audited | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Inventory | ||||||||
| Accounts receivable | ||||||||
| Related party receivables | ||||||||
| Deposits, prepayments & advances | ||||||||
| Other current assets | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| NON-CURRENT ASSETS | ||||||||
| Property, plant and equipment | ||||||||
| Right-of-use assets | ||||||||
| Advances for purchase of property, plant and equipment | ||||||||
| Goodwill | ||||||||
| TOTAL NON-CURRENT ASSETS | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND EQUITY (DEFICIT) | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Related party payables | ||||||||
| Lease liabilities – current portion | ||||||||
| Convertible notes, net of discount | ||||||||
| Other payables - current | ||||||||
| Other current liabilities | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| NON-CURRENT LIABILITIES | ||||||||
| Lease liabilities - non-current portion | ||||||||
| Other non-current liabilities | ||||||||
| TOTAL NON-CURRENT LIABILITIES | ||||||||
| TOTAL LIABILITIES | ||||||||
| EQUITY (DEFICIT) | ||||||||
| Preferred stock; $ par value; shares authorized; and Series B shares issued and outstanding as of as of March 31, 2026, and December 31, 2025, respectively | ||||||||
| Common stock; $ par value; shares authorized; and shares issued and outstanding as of March 31, 2026, and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income (loss) – foreign currency translation | ||||||||
| Noncontrolling interest | ||||||||
| TOTAL EQUITY (DEFICIT) | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND EQUITY (DEFICIT) | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-1 |
QUALITY INDUSTRIAL CORP.
CONSOLIDATED STATEMENT OF OPERATIONS
| For the Three Months Ended | ||||||||
31-March-26 | 31-March-25 | |||||||
| Unaudited | Unaudited | |||||||
| REVENUE | $ | |||||||
| Cost of revenues | ||||||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES | ||||||||
| Professional fees | ||||||||
| General and administrative | ||||||||
| Depreciation and amortization | ||||||||
| TOTAL OPERATING EXPENSES | ||||||||
| OPERATING INCOME (LOSS) | ( | ) | ||||||
| OTHER (INCOME) EXPENSES | ||||||||
| Interest expenses | ||||||||
| Interest on convertible notes | ||||||||
| Conversion fees | ||||||||
| Discount on convertible notes | ||||||||
| Other non operating expenses | ||||||||
| Other income - credit card fees | ( | ) | ||||||
| Other non - operating income | ( | ) | ||||||
| TOTAL OTHER (INCOME) EXPENSES, NET | ||||||||
| INCOME (LOSS) BEFORE INCOME TAX | ( | ) | ||||||
| Corporate income tax | ||||||||
| NET INCOME (LOSS) | ( | ) | ||||||
| Less: net income attributable to noncontrolling interest | ||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO QIND STOCKHOLDERS | $ | ( | ) | |||||
| Net income (loss) per common share: | ||||||||
| Basic | $ | ( | ) | |||||
| Diluted | $ | ( | ) | |||||
| Weighted average number of common shares outstanding: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-2 |
QUALITY INDUSTRIAL CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Three Months Ended March 31, 2026
Preferred Stock A | Preferred Stock B | Common Stock | Noncontrolling Interest | Additional Paid-in Capital | Accumulated other comprehensive income (loss) – foreign currency translation | Accumulated Deficit | Total Equity | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Amount | Amount | Amount | Amount | ||||||||||||||||||||||||||||||||||||||
| Total Equity as of December 31, 2025 | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||
| Issued shares from conversion of convertible note | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
| Prefer B stock Converted to common Stock | - | ( | ) | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Income for the period | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income – foreign currency translation adjustment | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Net transactions with Non-controlling interest | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Total Equity (Deficit) as of March 31, 2026 | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended March 31, 2025
Preferred Stock A | Preferred Stock B | Common Stock | Minority Interest | Additional Paid-in Capital | Retain Loss | Total Equity | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Amount | Amount | Amount | ||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Issued shares from conversion of convertible note | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Minority Interest | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Income for the period | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance March 31, 2025 | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-3 |
QUALITY INDUSTRIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| March 31, 2026 | March 31, 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Income (Loss) for the period | ( | ) | ||||||
| Adjustment to reconcile net gain (loss) to net cash | ||||||||
| Finance cost | ||||||||
| Employee End of service benefits accrual | ||||||||
| Conversion fees | ||||||||
| Corporate income tax expense | ||||||||
| Depreciation and amortization | ||||||||
| Other non – operating income | ( | ) | ||||||
| Discount on convertible Notes | ||||||||
| Changes in assets and liabilities, net | ||||||||
| Inventory | ( | ) | ||||||
| Accounts receivable | ||||||||
| Deposits, prepayments & advances | ( | ) | ( | ) | ||||
| Related party receivables | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ( | ) | ||||
| Other current liabilities | ||||||||
| Lease liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Addition of fixed assets | ( | ) | ||||||
| Payments to ASG shareholders | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Repayment of convertible note, net | ( | ) | ( | ) | ||||
| Finance cost | ( | ) | ||||||
| Fund support from holding company | ||||||||
| Repayment of bank borrowings - ASG | ( | ) | ( | ) | ||||
| Changes in noncontrolling interest | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | ||||||||
| Net (decrease)increase in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at the beginning of the period | ||||||||
| Cash and cash equivalents at end of the period | ||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-4 |
NOTE 1: OUR HISTORY
Quality Industrial Corp., a Nevada corporation (the “Company,” “QIND,” “we,” “us,” or “our”) was incorporated in the state of Nevada under the name Sensor Technologies, Inc. on May 4, 1998. In March 2006 the Company changed its name to Bixby Energy Systems Inc. In September 2006, the Company changed its name to Power Play Development Corporation. In April 2007, the Company changed its name to National League of Poker, Inc. In October 2007 the Company changed its name back to Power Play Development Corporation. In October 2011 the Company changed its name to Bluestar Technologies, Inc. In March 2018, the Company then changed its name to Wikisoft Corp.
In May 2016, the Company’s Board of Directors terminated the services of all prior officers and directors and the board appointed Robert Stevens as the Board Appointed Receiver for the Company. This was a private receivership where the receiver was appointed by the board to act on behalf of the Company and no court filings were ever made in connection with the receivership. On April 16, 2019, in connection with the Merger described below, Robert Stevens resigned from all of his positions with the Company and the board-appointed receivership was concluded. At that time Rasmus Refer was appointed as the Company’s CEO and Director, and he resigned from such positions in August and November 2020, respectively. On August 31, 2020, Carsten Kjems Falk was appointed as CEO, and Paul C Quintal was on December 1, 2021, appointed as the sole director of the Company.
On April 11, 2019, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with WikiSoft Acquisition Corp., a Delaware corporation which was then the Company’s wholly owned subsidiary (“Merger Sub”) and WikiSoft Corp., a privately held Delaware corporation (“WikiSoft DE”). In connection with the closing of this merger transaction, Merger Sub merged with and into WikiSoft DE (the “Merger”) on April 24, 2019. Pursuant to the Merger, the Company acquired WikiSoft DE which then became its wholly owned subsidiary.
On March 19, 2020, the Company entered into an Agreement and Plan of Merger (the “Short Form Merger Agreement”) with WikiSoft DE, pursuant to which it was agreed that the Company would merge with and into WikiSoft DE, with the Company surviving. Thereafter, on March 25, 2020, WikiSoft DE merged with and into the Company, with the Company (i.e., WikiSoft Corp. - the NV corporation) surviving pursuant to a Certificate of Ownership and Merger filed in with Delaware Secretary of State, whereby the then wholly owned subsidiary (WikiSoft DE) merged with and into the Company, with the Company surviving. On March 25, 2020, the Company filed Articles of Conversion in Nevada, whereby the then subsidiary (WikiSoft DE) merged with and into the Company, with the Company surviving. Prior to the Merger, the Company did not have any business operations, and at the closing of the Merger, the Company’s business was as described in detail below.
Wikisoft Corp. had a vision to become one of the largest portals of information for businesses and business professionals. Built on open-source software, the portal wikiprofile.com, was initially launched in January 2018, and the portal was relaunched in June 2021.
We
changed ownership on May 28, 2022, when Ilustrato Pictures International, Inc., a Nevada corporation (“Ilustrato”), at the
time, acquired
In line with the change in control and business direction, our Company changed its name to Quality Industrial Corp. with the ticker QIND, with a market effective date of August 4, 2022. As a result of these transactions, Quality Industrial Corp. became a public company focused on the industrial, oil & gas and utility sectors. The Company filed articles of merger with the Secretary of State of Nevada in order to effectuate a merger with our wholly owned subsidiary, Quality Industrial Corp. Shareholder approval was not required under Section 92A.180 of the Nevada Revised Statutes. As part of the merger, our Board of Directors authorized a change in our name to “Quality Industrial Corp.” and our Articles of Incorporation have been amended to reflect this name change. Our common stock trades under the symbol “QIND.”
| F-5 |
After
Ilustrato acquired control of QIND, on May 28, 2022, Ilustrato signed a binding letter of intent on June 28, 2022, to acquire
On March 9, 2023, we changed the SIC code of the Company to SIC 3590 - Misc. Industrial & Commercial Machinery and Equipment to reflect the new business direction.
On March 27, 2024, the Company signed a definitive Share Purchase Agreement with Al Shola Al Modea Gas LLC (“ASG” or “Al Shola Gas”). ASG is an Engineering and Distribution Company in the liquefied petroleum gas (“LPG”) Industry in the UAE and was established in 1980. The company are one of the leading suppliers & contractors of LPG centralized pipeline systems. ASG has been consolidated since its acquisition on March 27, 2024.
On April 8, 2025, the Company signed an Amendment to the Share Purchase Agreement, dated March 27, 2024, with the shareholders of ASG. The amended Share Purchase Agreement removed the termination clause 9.14 and amended other clauses of the Share Purchase Agreement, dated March 27, 2024.
On April 1, 2024, after several failed effort negotiations with the purpose of restructuring the deal and obtaining information from the selling shareholders of Quality International, the QI Purchase Agreement with Quality International was terminated by Quality International and subsequently the board of directors of the Company (the “Board of Directors” or the “Board”) approved the cancellation of the agreement with Quality International Co Ltd FZC signed on January 18, 2023, and amended on July 27, 2023. Quality International Co Ltd FZC is no longer consolidated with our financial statements.
On
November 18, 2024, the Company, Fusion Fuel Green PLC, an Irish public limited company (“Fusion Fuel Green PLC”, “Fusion
Fuel” or “HTOO”), Ilustrato, a stockholder of the Company, and certain other stockholders of the Company (together
with Ilustrato, the “QIND Sellers”), entered into a Stock Purchase Agreement, dated as of November 18, 2024 (the “Purchase
Agreement”). Under the Purchase Agreement, the QIND Sellers transferred an aggregate of shares of common stock and
shares of Series B Convertible Preferred Stock, par value $ per share (“Series B Preferred Stock”) of the Company, constituting
approximately
On August 28, 2025, the Board of Directors of the Company approved a strategic realignment of its executive leadership and board composition, effective immediately. As part of this planned transition, the Board approved several executive and director appointments. In connection with these appointments, certain officers and directors submitted their resignations, which became effective concurrently to facilitate the new leadership structure.
Appointment of Interim Chief Financial Officer and Director; Resignation of Chief Financial Officer
The Board appointed Mr. Carsten Kjems Falk as the Company’s Interim Chief Financial Officer and as a Director of the Company, effective August 28, 2025. Mr. Falk has served the Company in several senior executive roles since 2020 and brings extensive leadership experience across the SaaS, FMCG, and energy sectors.
In connection with Mr. Falk’s appointment, Mr. Krishnan Krishnamoorthy resigned from his position as Chief Financial Officer, effective immediately. The resignation was not the result of any disagreement with the Company, its management, operations, policies, or practices. Mr. Krishnamoorthy has confirmed that he has no outstanding claims or obligations with respect to the Company.
Appointment of Chief Operating Officer; Resignation of Chief Operating Officer
The Board appointed Mr. Sanjeeb Safir as the Company’s Chief Operating Officer (“COO”), effective August 28, 2025. Mr. Safir has served since 2008 as Managing Director of Al Shola Al Modea Gas and Distribution LLC and currently oversees the Company’s operations in the Middle East region. Mr. Safir’s existing employment agreement remains unchanged and has been filed as Exhibit 10.1 to the Current Report on Form 8-K, filed with the Securities and Exchange Commission (the “SEC”) on September 4, 2025.
| F-6 |
To
facilitate Mr. Safir’s appointment, Mrs. Louise Bennett resigned from her position as COO, effective immediately. The resignation
was not the result of any disagreement with the Company, its operations, or policies. Pursuant to a pre-agreed arrangement, the Company
has agreed to pay Mrs. Bennett approximately $
Appointment of Chairman and Director; Resignation of Chairman and Director
The Board appointed Mr. Frederico Figueira de Chaves as Chairman of the Board of Directors and as a Director of the Company, effective August 28, 2025. Mr. Chaves currently serves as Interim Chief Financial Officer and Director of Fusion Fuel. He has previously served in multiple senior leadership roles at Fusion Fuel, including Chief Executive Officer and Chief Financial Officer.
In
connection with Mr. Chaves’s appointment, Mr. Nicolas Link resigned as Chairman of the Board and Director of the Company, effective
immediately. The resignation was not the result of any disagreement with the Company, its management, operations, policies, or practices.
Pursuant to a pre-agreed arrangement, the Company has agreed to pay Mr. Link approximately $
Appointment of Director
The Board of Directors also appointed Mr. John-Paul Backwell as a Director of the Company, effective August 28, 2025. Mr. Backwell currently serves as the Company´s Chief Executive Officer and as Chief Executive Officer of Fusion Fuel Green PLC, the Company´s majority shareholder. He brings over 25 years of leadership experience in the manufacturing, technology, and energy industries.
Company’s Authorized Shares increase
On
January 20, 2026, the Board of Directors of Quality Industrial Corp. and Fusion Fuel Green PLC, the Company’s majority stockholder
holding approximately
On April 20, 2026, John-Paul Backwell resigned from his position as Chief Executive Officer of the Company, effective immediately. Mr. Backwell will continue to be a director of the Company. The resignation was not the result of any disagreement with the Company on any matter known to an executive officer of the Company relating to the operations, policies or practices of the Company.
Further on April 20, 2026, the Board of Directors of the Company appointed Carsten Kjems Falk as the Company’s Chief Executive Officer, effective immediately. Mr. Falk, 51, has served as the Interim Chief Financial Officer and a director of the Company since August 2025. Since June 2025, Mr. Falk has also served as Head of M&A of Fusion Fuel Green PLC, an Irish public limited company (Nasdaq: HTOO). From October 2022 to August 2025, Mr. Falk was the Chief Commercial Officer of the Company. From June 2022 to October 2024, Mr. Falk served as Chief Commercial Officer of Ilustrato Pictures International Inc., a Nevada corporation (OTC: ILUS). From September 2020 to October 2022, Mr. Falk was the Chief Executive Officer of the Company. From 2013 through 2019, Mr. Falk was Chief Executive Officer of Domino’s Pizza Denmark. Mr. Falk holds a Master of Arts in Educational Theory and Curriculum Studies: Mathematics from Aarhus University. The Board of Directors of the Company believes that Mr. Falk is qualified to serve on the Company’s Board of Directors due to his service to the Company in several senior executive roles since 2020 and extensive leadership experience across the SaaS, FMCG, and energy sectors.
| F-7 |
NOTE 2. SUMMARY OF SIGNIFICANT POLICIES
Basis of Presentation and Principles of consolidation
The accompanying consolidated financial statements represent the results of operations, financial position, and cash flows of QIND, and all of its majority-owned and controlled subsidiary are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The accounts of ASG have been included since acquired on March 27, 2024. All significant inter-company accounts and transactions have been eliminated.
The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the SEC for interim financial information. It is management’s opinion that the unaudited condensed consolidated financial statements are prepared in accordance with instructions for Form 10-Q and include all adjustments (consisting only of normal recurring accruals) which are necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Annual Report on Form 10-K of Quality Industrial Corp. for the year ended December 31, 2025, filed with the SEC on March 31, 2026 (the “Annual Report”).
Use of estimates
A critical accounting estimate is an estimate that: (i) is made in accordance with generally accepted accounting principles, (ii) involves a significant level of estimation uncertainty and (iii) has had or is reasonably likely to have a material impact on the Company’s financial condition or results of operations.
The Company’s Consolidated Financial Statements have been prepared in accordance with U.S. GAAP. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect reported amounts and related disclosures. On an ongoing basis, management evaluates and updates its estimates. Management employs judgment in making its estimates but they are based on historical experience and currently available information and various other assumptions that the Company believes to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results could differ from those estimates. Management believes that its judgment is applied consistently and produces financial information that fairly depicts the results of operations for all periods presented.
Significant estimates include estimates used to review the Company’s, impairments and estimations of long-lived assets, revenue recognition of Contract based revenue, allowances for uncollectible accounts, and the valuations of non-cash capital stock issuances. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Accounts receivable
Accounts receivables are recorded at the invoice amount less an allowance for credit losses. The allowance is an estimate based on historical collection experience, current and future economic and market conditions, and a review of the current status of each customer’s trade accounts receivable. Management evaluates the aging of the accounts receivable balances and the financial condition of its customers and all other forward-looking information that is reasonably available to estimate the amount of accounts receivable that may not be collected in the future and before recording the appropriate provision.
The duration of such receivables extends from 30 days to beyond 90 days. Payments are received only when a project is completed, and approvals are obtained. Provisions are created based on the estimated irrecoverable amounts determined by referring to past default experience and future economic and market conditions.
| F-8 |
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.
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. The estimated useful lives are as follows:
| Property, Plant and Equipment | Years | ||
| Machinery & Cylinders | |||
| Vehicles | |||
| Furniture, Fixtures & Office Equipment | |||
| LPG Cylinders |
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.
Deposits, Advances and Prepayments
Advances have been paid to the suppliers and subcontractors in the ordinary course of business for the procurement of specialized material and equipment required in the process of designing, engineering and installing Central Gas distribution and monitoring systems. The Company is engaged in the design, engineering, supply and monitoring of Central Gas systems supplying and installing equipment such as pressure regulators, pipelines, safety equipment, tapping points, metering units, valves and storage tanks. To undertake these projects, the Company is required to make upfront investments in materials and machinery. These projects involve many processes and take substantial time to complete. We estimate that the deposit will be utilized in the next 12 months, however, some will only be returned upon cancellation such as office lease deposit, internet and utilities.
| Deposits & Advances Details | March 31, 2026 | December 31, 2025 | ||||||
| Project Job Refundable Security Deposit Against Project Performances | ||||||||
| DEWA Office | ||||||||
| Emarat General Petroleum Corporation LLC | ||||||||
| WASL Land | ||||||||
| Dubai Properties | ||||||||
| Dubai Real Estate Corporation | ||||||||
| DIRE Land | ||||||||
| Emirates Gas LLC | ||||||||
| Energy Tech | ||||||||
| Al Nabbah Real Estate | ||||||||
| Breeze Business Center LLC | ||||||||
| Total Deposits And Advances | ||||||||
| F-9 |
| Prepaid Expenses | March 31, 2026 | December 31, 2025 | ||||||
| Hamsah Office Rent | ||||||||
| Store Rent | ||||||||
| Insurance | ||||||||
| Accommodation Rent | ||||||||
| DCD License | ||||||||
| Trade License | ||||||||
| Visa Cost | ||||||||
| On Account Fees, Costs and disbursements to Priestlys Attorneys at Law | ||||||||
| Retainer Fee to Leah Martin Law | ||||||||
| Other Pre Payments | ||||||||
| Aiwa Energy | ||||||||
| Aiko Mall | ||||||||
| Aswaaq Shopping Mall | ||||||||
| Total Deposits, Prepayments &Advances | ||||||||
End-of-service benefits
Employee
end-of-service benefits in our subsidiary Al Shola Gas amounting to $
| Employee end of service benefits Al Shola Gas | March 31, 2026 | December 31, 2025 | ||||||
| Balance at Beginning | ||||||||
| Add: charge for the period | ||||||||
| Less: Settlement for the period | ( | ) | ( | ) | ||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Balance at the end of the period | ||||||||
Goodwill
Goodwill represents the cost of acquired companies in excess of the fair value of the net assets at the acquisition date and is subject to annual impairment. Goodwill is the excess of the purchase price paid for an acquired entity and the amount of the price not assigned to acquired assets and liabilities. It arises when an acquirer pays a high price to acquire a business. This asset only arises from an acquisition, and it cannot be generated internally. Goodwill is an intangible asset, and so is listed within the long-term assets section of the acquirers’ balance sheet.
The Company accounts for business combinations by estimating the fair value of 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.
| F-10 |
Fair value of financial instruments
The carrying value of cash, accounts payable, warrants, accrued expenses, and debt, short term as well as long term, is recorded at fair value. Management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable.
| Level 1. Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets. | |
| Level 2. Quoted prices for similar assets and liabilities in active markets; quoted prices included for identical or similar assets and liabilities that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. These are typically obtained from readily available pricing sources for comparable instruments. | |
| Level 3. Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances. |
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606).
The principal activity of the Company is through our operating subsidiary, ASG, we provide comprehensive solutions for the LPG industry. Our services include consulting, designing, supplying, installing, and maintaining LPG systems, as well as the transportation and supply of LPG in both bulk and cylinder formats. We cater to a diverse range of clients, including commercial buildings, mixed-use apartment complexes, shopping centers, food courts, heavy industries, labor accommodations, catering units, commercial kitchens, and dining establishments. Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The company has applied the five-step approach below and has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods or services before transferring them to the customer.
| 1. | Identify the contract with a customer. | |
| 2. | Identify the performance obligations in the contract. | |
| 3. | Determine the transaction price. | |
| 4. | Allocate the transaction price. | |
| 5. | Recognize revenue when the entity satisfies the performance obligation. |
The Company recognizes all stock-based compensation using the fair value provisions prescribed by ASC Topic 718, Compensation - Stock Compensation. Accordingly, compensation costs for awards of stock-based compensation settled in shares are determined based on the fair value of the share-based instrument at the time of grant and are recognized as expense over the vesting period of the share-based instrument, net of estimated forfeitures.
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 expected term. Non-employee 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-11 |
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 a 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.
Rounding
For purposes of clarity and ease of presentation, all dollar amounts in these financial statements have been rounded to the nearest whole number. However, the underlying data used in the calculations is not rounded, and the totals presented may differ by a small amount due to rounding. These differences are considered immaterial and do not affect the overall financial position or results of operations.
The Company reports earnings (loss) per share in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 260-10 “Earnings Per Share,” which provides for the calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive.
| Particulars | March 31, 2026 (Unaudited) | March 31, 2025 (Unaudited) |
| |||||
| Earnings (loss) per share | ||||||||
| Numerator | ||||||||
| Net income (loss) | ( | ) | ||||||
| Net Income attributable to noncontrolling interest | ||||||||
| Net Income (loss) attributable to common stock holders | ( | ) | ||||||
| Denominator | ||||||||
| Weighted average number of common shares outstanding: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
| Net income (loss) per share: | ||||||||
| Basic | ( | ) | ||||||
| Diluted* | ( | ) | ||||||
| * |
| F-12 |
Income taxes
The Company accounts for income tax positions in accordance with Accounting Standards Codification Topic 740-10-50, “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 the majority of the company’s income belongs to the subsidiary, which is registered in an income tax-free jurisdiction since any losses incurred cannot be utilized in the future, rendering deferred tax assets irrelevant, The profits of a foreign subsidiary corporation are ordinarily not subject to tax in the United States as in accordance with the general Internal Revenue Service rule, foreign subsidiaries are not considered U.S. corporations even if they are wholly owned.
Corporate Tax Provision
On
January 1, 2024, the UAE introduced a Corporate Tax applicable to Companies on taxable income of above AED
Recently issued accounting pronouncements
The Company has evaluated all other recent accounting pronouncements and believes that none of them are expected to have a material effect on the Company’s financial position, results of operations, or cash flows.
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.
Lease liabilities
The Company accounts for leases under ASC Topic 842, Leases (Topic 842). Under Topic 842, at the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include, if any, the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease term reflects the Company exercising the option to terminate.
The variable lease payments that do not depend on an index or a rate are recognized as expenses in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments, or a change in the assessment to purchase the underlying asset.
| F-13 |
The
Company’s subsidiary, Al Shola Gas, has entered into commercial vehicles. These leases generally have a lease term of
The Company has a Lease arrangement for which the liability has been recorded separately. The Company determines whether an arrangement contains a lease at inception. A lease liability and corresponding right of use (ROU) asset are recognized for qualifying leased assets based on the present value of fixed and certain index-based lease payments at lease commencement.
The Company’s obligations under its leases are secured by the lessor’s title to the leased assets. There are no restrictions placed upon the Company by entering into these leases. The Company determines if an arrangement is or contains a lease at contract inception and recognizes an ROU asset and a lease liability based on the present value of fixed, and certain index-based lease payments at the lease commencement date. Variable payments are excluded from the present value of lease payments and are recognized in the period in which the payment is made.
The Company generally uses its incremental borrowing rate as the discount rate for measuring its lease liabilities, as the Company cannot determine the interest rate implicit in the lease because it does not have access to certain lessor-specific information. Lease expense is recognized on a straight-line basis over the lease term. The Company does not have significant finance leases. The Company has elected not to separate payments for lease components from payments for non-lease components for all classes of leases.
When accounting for finance leases in accordance with ASC 842, entity recognizes interest on the lease liability and amortization of the ROU asset in the income statement and classify payments of the principal portion of the lease liability as financing activities and payments of interest on the lease liability as operating activities.
Reclassification
Certain prior-period amounts have been reclassified in accordance with ASC 205 to conform to the current-period presentation, including the reclassification of retirement benefits from current liabilities to other payables – non-current, and the presentation of depreciation as a separate line item within operating expenses. These changes had no impact on previously reported net income, total assets, total liabilities, equity, or net cash flows.
During the year ended December 31, 2025, the Company reclassified Employee End of Service Benefits previously presented within Other current liabilities to other payables – non-current in the Consolidated Statements of Financial Position. Management determined this reclassification was appropriate to reflect the expected timing of settlement of the obligation, consistent with the classification guidance under ASC 210, Balance Sheet.
In addition, in accordance with ASC 230, Statement of Cash Flows, the Company reclassified interest paid from financing activities to operating activities in the Consolidated Statements of Cash Flows. This change was made to align the classification of cash payments for interest with U.S. GAAP presentation requirements.
Effective January 1, 2025, the Company revised the presentation of sales discounts to reflect their nature as variable consideration in accordance with ASC 606, Revenue from Contracts with Customers. Under the revised presentation, sales discounts are recorded as a reduction of revenue, resulting in revenue being reported on a net basis
The
Company implemented this presentation beginning in the fourth quarter of 2025 and recorded the full-year impact of sales discounts, totaling
USD
The impact of this reclassification was not material to any previously reported interim or annual period. Accordingly, prior period amounts have not been reclassified to conform to the current period presentation.
This change in presentation had no impact on net income, operating income, total assets, liabilities, or stockholders’ equity for any period presented.
NOTE 3. GOING CONCERN
The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP 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.
| F-14 |
NOTE 4. CURRENT ASSETS
Cash and Cash Equivalents
For
purposes of the statements of cash flows, in accordance with ASC 230-10-20, the Company considers all highly liquid investments and short-term
debt instruments with original maturities of three months or less to be cash equivalents. There were $
March 31, 2026 | December 31, 2025 | |||||||
| Cash and Cash Equivalents | ||||||||
| Cash in hand | ||||||||
| Cash at bank | ||||||||
| Total | $ | $ | ||||||
Accounts Receivables
Accounts receivable arises from our subsidiary Al Shola Gas consolidated as of March 31, 2026. The duration of such receivables extends from 30 days to beyond 90 days. Payments are received only when a project milestone is completed, and approvals are obtained, or after the goods or services are transferred and according to the payment terms with the customer. Provisions are created based on the estimated irrecoverable amounts determined by referring to past default experience.
| Accounts Receivables Ageing Al Shola Gas | March 31, 2026 | December 31, 2025 | ||||||
| 1-30 days | ||||||||
| 31-60 days | ||||||||
| 61-90 days | ||||||||
| +90 days | ||||||||
| Total | ||||||||
Other Current Assets
As
of March 31, 2026, and December 31, 2025, the Company reported Other Current Assets of $
NOTE 5. NON-CURRENT ASSETS
Goodwill
The
Company acquired a
| F-15 |
The
Company acquired
NOTE 6. CURRENT LIABILITIES
Accounts Payable
Accounts
payable of $
| Accounts Payable Ageing Al Shola Gas | March 31, 2026 | December 31, 2025 | ||||||
| 1-30 days | ||||||||
| 31-60 days | ||||||||
| 61-90 days | ||||||||
| +90 days | ||||||||
| Total | ||||||||
Operating Lease Liabilities - Current
As
of March 31, 2026, the Company had a current portion of lease liabilities of $
Convertible Notes
On
August 3, 2022, the Company issued a two-year convertible promissory note in the principal amount of $
On
March 17, 2023, the Company issued a two-year convertible promissory note in the principal amount of $
On
May 23, 2023, the Company issued to Jefferson Street Capital LLC a one-year convertible promissory note in the principal amount of $
On
July 31, 2023, the Company issued to 1800 Diagonal Lending Ltd. a promissory note in the principal amount of $
| F-16 |
On
August 15, 2023, the Company issued to 1800 Diagonal Lending Ltd. a promissory note in the principal amount of $
On
June 16, 2023, the Company issued to Sky Holdings Ltd. a six-month convertible promissory note in the principal amount of $
On
December 20, 2023, QIND issued a two-year convertible promissory note RB Capital Partners Inc. in the principal amount of $
On
December 20, 2023, the Company issued a one-year convertible promissory note in the principal amount of $
On
January 18, 2024, we issued a convertible promissory note 1800 Diagonal Lending LLC in the principal amount of $
On
February 6, 2024, we issued a six-month convertible promissory note to Exchange Listing LLC in the principal amount of $
On
March 12, 2024, we issued a convertible promissory note to 1800 Diagonal Lending LLC in the principal amount of $
On
May 21, 2024, we issued a one-year convertible promissory note Jefferson Street Capital LLC in the principal amount of $
| F-17 |
On
July 3, 2024, we issued a convertible promissory note 1800 Diagonal Lending LLC in the principal amount of $
On
September 25, 2024, we entered into a loan agreement with J.J. Astor & Co. The Note is the senior secured with a Principal Amount
of $
On
September 25, 2024, we issued a convertible promissory note 1800 Diagonal Lending LLC in the principal amount of $
Certain convertible notes include original issuance discounts or other issuance-type costs, resulting in debt discounts upon execution. These discounts are amortized into interest expense over the term of the convertible note. As of March 31, 2026, all related discounts have been fully amortized and no amortization expense was recognized during the period ended March 31, 2026.
| F-18 |
A summary of these outstanding convertible notes and accrued interest as of March 31, 2026, is summarized below:
Debt & Interest Payable
| Cumulative Repayments | Cumulative Conversions | Total Balance Remaining | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lender | Date of Issue | Maturity Date | Initial Interest Rate (%) | Default Interest Rate (%) | Original Principal Amount | Total Default Interest/Fees Incurred Since Issuance (Before Repayments and Conversions) | Total Interest Accrued Since Issuance (Before Repayments and Conversions) | Principal Repayments | Default Interest Repayments | Accrued Interest Repayments | Total Repayments | Principal Converted | Default Interest and Fees converted | Accrued Interest Converted | Total Amount Converted | Conversion Price per share | Total Number of Common Shares Issued | Principal Outstanding | Default Interest (Default Principal) outstanding | Accrued Interest Outstanding | Total Balance Remaining | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RB Capital Partners Inc. | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RB Capital Partners Inc. | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jefferson Street Capital LLC | % | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sky Holdings Ltd | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lorlev 26 Irrevocable Trust | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exchange Listing LLC | % | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jefferson Street Capital LLC | % | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| J.J. Astor & Co | % | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| F-19 |
Options and Warrants
In accordance with ASC 470, warrants have been classified as a liability and recorded at their fair value.
On
April 19, 2023, the Company issued a common share purchase warrant to Exchange Listings LLC (the “Exchange Common Share Purchase
Warrant”). 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, of the Company’s common shares
(whereby such number may be adjusted from time to time pursuant to the terms and conditions of the Exchange Common Share Purchase Warrant)
at the exercise price of $
On
May 23, 2023, the Company issued a common share purchase warrant to Jefferson Street Capital LLC (the “Jefferson Common Share Purchase
Warrant”). 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, of the Company’s common shares
(whereby such number may be adjusted from time to time pursuant to the terms and conditions of the Jefferson Common Share Purchase Warrant)
at the exercise price of $
Other Payables Current
Other
payables - current amounted to $
The
balance primarily consists of (i) the current portion of bank borrowings of $
| Other Payables Current | March 31, 2026 | December 31, 2025 | ||||||
| Payable Al Shola Gas | ||||||||
| Other Payables current | ||||||||
| Total Other Payables Current | $ | $ | ||||||
Other Current Liabilities –
Other
current liabilities amounted to $
| Other Current Liabilities | March 31, 2026 | December 31, 2025 | ||||||
| Value Added Tax (VAT) Payable | ||||||||
| Accrued Interest on Convertible note | ||||||||
| Payroll Liabilities | ||||||||
| Provision for Audit & Review fee | ||||||||
| Provision for Legal & Professional Charges | ||||||||
| Corporate Tax payable | ||||||||
| Total | ||||||||
Related Party Payable
On
November 18, 2024, QIND, Fusion, Ilustrato, and certain other stockholders of the Company, entered into the Purchase Agreement. Pursuant
to section 6.04 of the Purchase Agreement, Purchaser (as defined therein) shall use commercially reasonable efforts to raise at least
$
As
of March 31, 2026, and December 31, 2025, the Company had amounts owed to Fusion Fuel amounting to $
NOTE 7. NON-CURRENT LIABILITIES
Lease Liabilities - Non-Current portion
Operating
lease liabilities are measured at the present value of the remaining lease payments, discounted using an estimated incremental borrowing
rate of
| F-20 |
The following is a summary of future lease payments required under the lease agreements:
| Vehicle | DUSTER | X TRAIL | KICKS | URWAN | MICROBUS | SUNNY | ASX | YARIS | KICKS NEW | RENAULT NEW | MERCEDES BENZ G580 | MAHINDRA SCORPIO S11 -41765EE | MAZDA CX5- 58416P | TOYOTA HIACE - 84402DD | ISUZU 4.2T SC TRUCK 72938P | MAZDA CX5- 94560Y | GEELY GX3 PRO | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year 2027 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year 2028 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year 2029 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year 2030 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vehcile | DUSTER | X TRAIL | KICKS | URWAN | MICROBUS | SUNNY | ASX | YARIS | KICKS NEW | RENAULT NEW | MERCEDES BENZ G580 | MAHINDRA SCORPIO S11 -41765EE | MAZDA CX5- 58416P | TOYOTA HIACE - 84402DD | ISUZU 4.2T SC TRUCK 72938P | MAZDA CX5- 94560Y | GEELY GX3 PRO | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RoU | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease Liability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non Current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weighted average remaining lease term (in years) | ||||
| Weighted average discount rate | % |
| F-21 |
Other Non-Current Liabilities
Other
non-current liabilities amounted to $
| Other Non-Current Liabilities | March 31, 2026 | December 31, 2025 | ||||||
| Payable to Shareholders of Al Shola Gas | ||||||||
| Bank Borrowings – Non – Current | ||||||||
| Employee End of Service Benefits | ||||||||
| Total | ||||||||
NOTE 8. STOCKHOLDERS’ EQUITY
The Company’s authorized capital stock consists of shares of common stock and shares of preferred stock, par value $ per share.
As of March 31, 2026, and December 31, 2025, there were and shares of common stock issued and outstanding, respectively.
As of March 31, 2026, and December 31, 2025, there were and shares of Series A stock of the Company issued and outstanding, respectively.
As of March 31, 2026, and December 31, 2025, there were and shares of Series B stock of the Company issued and outstanding, respectively.
On
January 20, 2026, the Board of Directors and Fusion Fuel Green PLC, the Company’s majority stockholder holding approximately
From January 1, 2025, to March 31, 2025, we made the following issuances:
On
January 10, 2025, the Company issued shares of our common stock to 1800 DIAGONAL LENDING LLC for the conversion of $
On
January 13, 2025, the Company issued shares of our common stock to 1800 DIAGONAL LENDING LLC for the conversion of $
On
January 17, 2025, the Company issued shares of our common stock to 1800 DIAGONAL LENDING LLC for the conversion of $
On
January 27, 2025, the Company issued shares of our common stock to 1800 DIAGONAL LENDING LLC for the conversion of $
On
January 29, 2025, the Company issued shares of our common stock to 1800 DIAGONAL LENDING LLC for the conversion of $
On
January 30, 2025, the Company issued shares of our common stock to 1800 DIAGONAL LENDING LLC for $
On
February 3, 2025, the Company issued shares of our common stock to 1800 DIAGONAL LENDING LLC for the conversion of $
On
March 27, 2025, the Company issued shares of our common stock to 1800 DIAGONAL LENDING LLC for the conversion of $
From January 1, 2026, to March 31, 2026, we made the following issuances:
On
January 12, 2026, the Company issued
| F-22 |
On
February 23, 2026, Fusion Fuel Green PLC converted shares of Series B Preferred Stock, into
NOTE 9. OPERATING EXPENSES
| General and Administrative Expenses | March 31, 2026 | March 31, 2025 | ||||||
| Salaries and compensation to employees | ||||||||
| Salary and compensation - QIND | ||||||||
| Salary and compensation - ASG | ||||||||
| Management Expenses – ASG | ||||||||
| Rent | ||||||||
| Office Expenses | ||||||||
| IT support | ||||||||
| Other expenses* | ||||||||
| Total | ||||||||
| * |
NOTE 10. NON-OPERATING INCOME
The
Company recognized non-operating income during the three months ended March 31, 2026, in connection with the waiver of outstanding consultancy
fees payable to a third-party service provider. The service provider waived fees totaling $
The table below presents the breakdown of non-operating income:
| Non-Operating income | March 31, 2026 | March 31, 2025 | ||||||
| Non-operating income - liability waive off | ||||||||
| Total | $ | $ | ||||||
NOTE 11. BUSINESS COMBINATION DISCLOSURE
In Accordance with ASC 805-10-50, ASC 805-30-50, and ASC 805-10-25-6
On
March 27, 2024, QIND entered into a definitive Stock Purchase Agreement with the shareholders of AL SHOLA AL MODEA GAS DISTRIBUTION L.L.C.
to acquire
QIND
acquired majority ownership of Al Shola Gas, effective as of March 27, 2024, resulting in, Al Shola Gas becoming a subsidiary, in a transaction
accounted for as a business combination. The Company and its auditors considered all pertinent facts pursuant to ASC 805-10-25-6 that
the Share Purchase Agreement signing date is the acquisition date of the company, with the value of $
| F-23 |
The audited pro forma financial statements of Al Shola Gas for the periods ended December 31, 2023, has been filed through 8-K on June 7, 2024.
In accordance with ASC 805-30-50-1 (b) and ASC 805-20-50-1(c), the following table summarizes the consideration transferred to acquire Al Shola Gas and the amounts of identified assets acquired, and liabilities assumed at the acquisition date, as well as the fair value of the noncontrolling interest in Al Shola Gas at the acquisition date:
The Payment Schedule signed on March 27, 2024, outlines a series of payment requirements as follows:
Tranche
1: $
Tranche
2: Within 12 months of closing and at the soonest possible time, $
| Consideration paid | March 31, 2026 | December 31, 2025 | ||||||
| Total | ||||||||
As
of March 31, 2026, $
Fair value of Consideration
| Cash or National Exchange listed stock | $ | |||
| Cash | $ | |||
| Total | $ |
Goodwill calculation of acquisition
| Date of Acquisition | USD | |||
| Cash and cash equivalents | $ | |||
| Trade receivables & Other receivables | ||||
| Inventories | ||||
| Deposits, prepayments and advances | ||||
| Property, plant, and equipment | ||||
| Right of use assets | ||||
| Trade and other payables | ( | ) | ||
| Lease liabilities | ( | ) | ||
| Bank borrowings | ( | ) | ||
| Total identifiable net assets | $ | |||
| Non-Controlling Share (%) | ||||
| Parent
Share ( | ||||
| Goodwill | $ | |||
| F-24 |
NOTE 12. SUBSEQUENT EVENTS
In accordance with ASC 855-10-50, the company lists events that are deemed to have a determinable significant effect on the balance sheet at the time of occurrence or on future operations, and without disclosure of it, the financial statements would be misleading.
On
April 7, 2026, it was announced that its majority-owned subsidiary, Al Shola Al Modea Gas Distribution L.L.C., was awarded 16 new engineering
subcontracts with a combined expected value of approximately $
On April 20, 2026, John-Paul Backwell resigned from his position as Chief Executive Officer of the Company, effective immediately. Mr. Backwell will continue to be a director of the Company. The resignation was not the result of any disagreement with the Company on any matter known to an executive officer of the Company relating to the operations, policies or practices of the Company.
Further on April 20, 2026, the Board of Directors of the Company appointed Carsten Kjems Falk as the Company’s Chief Executive Officer, effective immediately. Mr. Falk, 51, has served as the Interim Chief Financial Officer and a director of the Company since August 2025. Since June 2025, Mr. Falk has also served as Head of M&A of Fusion Fuel Green PLC, an Irish public limited company (Nasdaq: HTOO). From October 2022 to August 2025, Mr. Falk was the Chief Commercial Officer of the Company. From June 2022 to October 2024, Mr. Falk served as Chief Commercial Officer of Ilustrato Pictures International Inc., a Nevada corporation (OTC: ILUS). From September 2020 to October 2022, Mr. Falk was the Chief Executive Officer of the Company. From 2013 through 2019, Mr. Falk was Chief Executive Officer of Domino’s Pizza Denmark. Mr. Falk holds a Master of Arts in Educational Theory and Curriculum Studies: Mathematics from Aarhus University. The Board of Directors of the Company believes that Mr. Falk is qualified to serve on the Company’s Board of Directors due to his service to the Company in several senior executive roles since 2020 and extensive leadership experience across the SaaS, FMCG, and energy sectors.
| F-25 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of the Company’s condensed consolidated results of operations and financial condition. The discussion should be read together with the unaudited condensed consolidated financial statements and the accompanying notes to those statements that are included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and the audited financial statements and related notes for the year ended December 31, 2025, included in the Annual Report on Form 10-K of the Company for the year ended December 31, 2025, filed by the Company with the Securities and Exchange Commission (the “SEC”) on March 31, 2026 (the “Annual Report”). This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements”.
Use of Terms
Except as otherwise indicated by the context, references in this Quarterly Report to the “Company,” “we,” “us,” “our,” or “QIND” refer to Quality Industrial Corp., a Nevada corporation; and “common stock” refers to the Company’s common stock, par value $0.001 per share. References in this Quarterly Report to “Al Shola Gas” or “ASG” refer to Al Shola Al Modea Gas Distribution L.L.C., a United Arab Emirates (“UAE”) company, a 51.0%-owned subsidiary of the Company. References in this quarterly report to “Fusion Fuel” are to Fusion Fuel Green PLC, an Irish public limited company, the Company’s parent company.
Note Regarding Trademarks, Trade Names and Service Marks
We use various trademarks, trade names and service marks in our business. For convenience, we may not include the ℠, ® or ™ symbols, but such omission is not meant to indicate that we would not protect our intellectual property rights to the fullest extent allowed by law. Any other trademarks, trade names or service marks referred to in this report are the property of their respective owners.
Special Note Regarding Forward-Looking Statements
This Quarterly Report contains forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve significant risks and uncertainties. In some cases, these forward-looking statements can be identified by words and phrases such as “may,” “will,” “believes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “should,” “seeks,” “future,” “continue,” “plan,” “target,” “predict,” “potential,” or the negative form of these words and phrases or other comparable expressions. All statements other than statements of historical facts are forward-looking statements. These forward-looking statements include information about our possible or assumed future results of operations or our performance. Forward-looking statements are based on management’s current expectations and assumptions regarding the Company’s business, the economy, and other future conditions.
The forward-looking statements included in this Quarterly Report relate to, among other things:
| ● | Al Shola Gas’s expected value from the announced new engineering subcontracts; | |
| ● | Al Shola Gas’s plans to add service vehicles; | |
| ● | the allocation of resources to Al Shola Gas; | |
| ● | planned investments in new vehicles; | |
| ● | anticipated enhancements to efficiency and bulk LPG supply capabilities; | |
| ● | expected increases in sales and revenue; | |
| ● | anticipated positive influence on financial performance from any of the above; and | |
| ● | expected increases in operating expenses. |
Forward-looking statements relate to the future, and are therefore subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Known and unknown risks, uncertainties and other factors may cause actual results to be materially different from those expressed or implied by such forward-looking statements.
| 2 |
Risks and uncertainties that could cause actual results to differ materially from those contemplated in the forward-looking statements include, but are not limited to:
| ● | major, irreversible disruptions and damage to Al Shola Gas’s core operations due to ongoing military conflict among Iran, the United States, Israel, and other belligerents; | |
| ● | the Company’s ability to support the expansion of the operations of Al Shola Gas; | |
| ● | the ability of the parties to our service contracts to obtain all necessary regulatory and other consents and approvals and to deliver all required products and services in connection with the contemplated projects; | |
| ● | the availability of additional financing from Fusion Fuel, the Company’s parent company, including uncertainty as to the timing and amount of capital raises by Fusion Fuel; | |
| ● | the possibility that previous loans from Fusion Fuel will be required to be repaid; | |
| ● | Al Shola Gas’s ability to secure and execute liquified petroleum gas (“LPG”) engineering and distribution projects; | |
| ● | Al Shola Gas’s ability to obtain sufficient financing to support operations and growth initiatives; | |
| ● | other risks associated with operating internationally, including in the UAE and other foreign jurisdictions; | |
| ● | the ability of our projects to generate the expected free cash flow or net income necessary for the Company to generate the anticipated returns in connection with contemplated projects; | |
| ● | fluctuations in demand for LPG engineering and distribution services; | |
| ● | the Company’s ability to continue as a going concern and to generate sufficient revenues within one year from the date of filing; | |
| ● | regulatory approvals and compliance requirements affecting LPG distribution and engineering services; | |
| ● | volatility in energy markets and commodity prices; | |
| ● | our goals and strategies; | |
| ● | our future business development, financial condition and results of operations; | |
| ● | our projected revenues, profits, earnings and other estimated financial information; | |
| ● | our ability to secure additional funding necessary for the expansion of our business; | |
| ● | the growth of and competition trends in our industry; | |
| ● | fluctuations in general economic and business conditions in the markets in which we operate; | |
| ● | relevant government policies and regulations relating to our industry; and | |
| ● | those listed under Part I. Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K. |
Overview
We are an industrial company specializing in the energy sector. Through our 51.0%-owned operating subsidiary, Al Shola Al Modea Gas Distribution L.L.C. (“ASG” or “Al Shola Gas”), we provide comprehensive solutions for the liquefied petroleum gas (“LPG”) industry. Our services include consulting, designing, supplying, installing, and maintaining LPG systems, as well as the transportation and supply of LPG in both bulk and cylinder formats. We cater to a diverse range of clients, including commercial buildings, mixed-use apartment complexes, shopping centers, food courts, heavy industries, labor accommodations, catering units, commercial kitchens, and dining establishments. Our mission is to develop a next-generation industrial and energy corporation that meets the increasing global demand for high-quality, cost-effective, and sustainable energy solutions.
Factors Affecting Our Performance
The primary factors affecting our results of operations include, but are not limited to:
General Macroeconomic Conditions
Our business is impacted by the global economic environment, employment levels, consumer confidence, government, and municipal spending. Global instability in securities markets, the Russian invasion of Ukraine, and war in the Middle East 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. The industrial and manufacturing sectors are impacted by the overall economic environment as addressed in the risk factors. 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.
Subsequent to December 31, 2025, military conflict involving Iran, Israel, and the United States escalated in the Middle East region. The Company operates in the United Arab Emirates within the oil and gas sector. Management has evaluated the potential impact of this conflict on the Company’s operations, supply chain, and financial condition and has concluded that, as of March 31, 2026, there has been no material adverse impact. However, the situation remains uncertain, and future developments could affect the Company’s operations and financial results.
Recent Developments
Subsequent to March 31, 2026, ASG, the Company’s majority-owned subsidiary, was awarded 16 new LPG engineering subcontracts with an aggregate expected contract value of approximately $1.14 million as of April 2026. In addition, ASG renewed a number of engineering and LPG supply contracts that are expected to continue generating recurring annual revenue.
Planned Developments
In 2026, the Company expects to allocate resources to its majority-owned subsidiary, Al Shola Gas, to enhance efficiency, boost sales, and positively influence financial performance, primarily through investment from our parent company, Fusion Fuel. We plan to continue investing in new vehicles for our subsidiary to improve their bulk LPG supply capabilities and increase our revenue. We expect that our revenue and operating expenses will increase as we implement such plans.
| 3 |
Results of Operations for the Three Months Ended March 31, 2026, and 2025
Revenues
Revenue for the three months ended March 31, 2026, increased to $3,665,660 from $3,621,473 for the three months ended March 31, 2025. The increase in revenue was a result of an increase of revenue of Al Shola Gas compared with the same quarter last year as a result of higher sales volumes and improved operational performance driven by continued growth in customer demand and expansion of business activities.
Gross Profit
Gross profit increased to $1,000,600 for the three months ended March 31, 2026, from $955,386 for the three months ended March 31, 2025. The increase in gross profit was primarily attributable to higher revenue during the three months ended March 31, 2026.
Operating Expenses
Operating expenses decreased to $824,780 for the three months ended March 31, 2026, from $1,902,508 for the three months ended March 31, 2025. The decrease was primarily attributable to reduced administrative and operating costs from the non-recurrence of aggregate discretionary bonus payments to management of $1,020,000.
We anticipate that our operating expenses will increase as we undertake our subsidiary expansion plan. The increase is anticipated to be attributable to administrative and operating costs associated with our business activities and the professional fees associated with our reporting obligations.
Other Expenses
Other expenses decreased to $56,118 for the three months ended March 31, 2026, from $285,418 for the three months ended March 31, 2025. The decrease in other operating expenses was primarily due to reduced interest and discount-related expenses on convertible notes.
Other Income
Other income increased to $36,152 for the three months ended March 31, 2026, from $0 for the three months ended March 31, 2025. The increase in other income was primarily due to the waiver of $35,000 in fees by a service provider.
Net Income (Loss)
Net income was $133,324 for the three months ended March 31, 2026, while net loss for the three months ended March 31, 2025, was $1,259,606. The change was primarily due to the non-recurrence of aggregate discretionary bonus payments to management of $1,020,000.
Liquidity and Capital Resources
As of March 31, 2026, we had cash and cash equivalents of $172,548, total current assets of $7,297,799, and total current liabilities of $18,036,654.
Going Concern
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States 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 unaudited 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.
| 4 |
The Company will require additional financing to fund our operations beyond the near term. Based on our current projections, our existing cash resources will not be sufficient to meet our anticipated operating and other cash needs through March 31, 2027, and for at least 12 months beyond that period, unless we receive such additional financing, including the costs associated with being a public reporting company. Since our own financial resources may be insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities in public offerings, private placements or credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.
As of March 31, 2026, the Company had received $4,667,537 in loans from its parent company, Fusion Fuel. The loans are not evidenced by separate loan agreements and do not bear contractual interest or specified maturity dates. The loans are subject to the terms of the Stock Purchase Agreement, dated November 18, 2024, among the Company, and certain other stockholders of the Company (the “Fusion Fuel Acquisition Agreement”). Under the Fusion Fuel Acquisition Agreement, Fusion Fuel will make loans of one-half of the net proceeds (or such lesser amount as agreed to by the parties) to QIND from certain capital raises by Fusion Fuel. Such loans will be (i) forgiven upon the Preferred Stock Conversion (as defined in the Fusion Fuel Acquisition Agreement), or (ii) repaid if the Transactions (as defined in the Fusion Fuel Acquisition Agreement) are unwound in accordance with the provisions of the Fusion Fuel Acquisition Agreement. For the 12 months ended March 31, 2027, the Company anticipates that Fusion Fuel, the Company’s parent company, will provide additional financing in connection with the operations of Al Shola Gas. In addition, the Company anticipates that Fusion Fuel will provide all compensation required by our executive officers, other than our Chief Operating Officer and Managing Director Middle East, Sanjeeb Safir. No assurance can be given that any such financing will be available, if and when required. No assurance can be given that previous loans from Fusion Fuel will not be required to be repaid. If we are unable to obtain sufficient funding, it could adversely affect our ability to execute our business plan and meet our obligations.
Summary of Cash Flow
The following table provides detailed information about our net cash flows for the three months ended March 31, 2026, and March 31, 2025:
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net cash (used in) provided by operating activities | $ | (309,650 | ) | $ | 334,816 | |||
| Net cash (used in) investing activities | (75,057 | ) | (200,000 | ) | ||||
| Net cash provided by financing activities | 130,098 | 669,648 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 572 | - | ||||||
| Net change in cash and cash equivalents | (254,609 | ) | 134,832 | |||||
| Cash and cash equivalents – beginning of period | 426,585 | 225,582 | ||||||
| Cash and cash equivalents – end of period | $ | 172,548 | $ | 360,414 | ||||
Net cash used in operating activities was $(309,650) for the three months ended March 31, 2026, and was $(334,816) for the three months ended March 31, 2025. The decrease in net cash used in operating activities was primarily attributable to a change from $1.3 million in net loss to $0.1 million in net income, as well as reduced accounts payable, deposits, prepayments and advances, partially offset by increased related party receivables and reduced other current liabilities.
Net cash used in investing activities was $(75,057) for the three months ended March 31, 2026, and was $(200,000) for the three months ended March 31, 2025. The decrease in net cash used in investing activities was primarily due to reduced payments made toward the purchase consideration payable to ASG shareholders from $0.2 million to $0.02 million, partially offset by additions to fixed assets.
Net cash provided by financing activities was $130,098 for the three months ended March 31, 2026, and was $669,648 for the three months ended March 31, 2025. The decrease in cash provided by financing activities was primarily due to reduced financing from the Company’s parent company (from approximately $0.9 million to approximately $0.2 million), as well as the non-recurrence of proceeds from the issuance of common stock, offset by reduced repayments of convertible notes and bank borrowings.
| 5 |
Summary of Future Lease Obligations
QIND has a virtual office at 505 Montgomery Street, San Francisco, California. The cost per month is $115 and is renewed annually.
Set forth in the table below is information regarding Al Shola Gas’ leased facilities, including the lease term, and annual rent amounts.
| Location | Lease Term | Annual Rent | ||||
| Office at Hamsah Building, O/112, Zabeel Road, Dubai, UAE | May 10, 2025 to May 9, 2026 | $ | 35,416 | (1) | ||
| Office at Hamsah Building, O/307, Zabeel Road, Dubai, UAE | January 7, 2026 to January 6, 2027 | $ | 7,306 | |||
| Office at Al Yousef Building, Dubai, UAE | January 1, 2026 to December 31, 2026 | $ | 17,698 | |||
| Gas Warehouse Unit No. L723, Plot No. 0243-0154, Baghdad Street, Al Qusais Industrial Area 2, Al Qusais, Dubai, UAE | March 1, 2026 to February 28, 2027 | $ | 7,110 | |||
| Gas Store Unit No. L705, Plot No. 0243-0171, Baghdad Street, Al Qusais Industrial Area 2, Al Qusais, Dubai, UAE | March 1, 2026 to February 28, 2027 | $ | 7,110 | |||
| Warehouse Plot No: 987-1006, Al Layan 1, DIC, Dubai, UAE | March 26, 2025 to March 25, 2026 | $ | 5,455 | (1) | ||
| Employee Accommodation, 17 Units, Plot No: 483-0, Muhaisanah Second, Dubai, UAE | February 1, 2026 to January 31, 2027 | $ | 166,644 | |||
| Employee Accommodation, Fortuna Global Real Estate, Dubai, UAE | January 20, 2026 to January 31, 2027 | $ | 26,983 | |||
| Employee Accommodation, Al Nabbah Real Estate, Dubai, UAE | April 3, 2026 to March 2, 2027 | $ | 10,783 | |||
| Total | $ | 284,505 | ||||
1. The renewal process for these lease agreements is currently in progress.
Property rent expenses for the three months ended March 31, 2026, amounted to the following:
| Rent Expense | Amount ($) | |||
| Office Rent Expenses | $ | 14,886 | ||
| Warehouse/Store Rent Expenses | 4,240 | |||
| Labor Accommodation Rent Expenses | 40,268 | |||
| Total | $ | 59,394 | ||
In addition, the Company has payment obligations under certain vehicle leases.
The following table summarizes the Company’s future lease financial obligations by period in which payment is expected, as of March 31, 2026:
| Short-Term | Long-Term | Total | ||||||||||
| Property Leases* | $ | 187,055 | $ | 0 | $ | 187,055 | ||||||
| Vehicle Leases | $ | 157,678 | $ | 201,132 | $ | 358,810 | ||||||
| Total Lease Obligations | $ | 344,733 | $ | 201,132 | $ | 545,865 | ||||||
* Property leases are primarily one-year office, warehouse, store, and employee accommodation leases.
Convertible Notes
The Company’s outstanding debt obligations as of March 31, 2026, consisted primarily of convertible promissory notes, which are as follows:
| Cumulative Repayments | Cumulative Conversions | Total Balance Remaining | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lender | Date of Issue | Maturity Date | Initial Interest Rate (%) | Default Interest Rate (%) | Original Principal Amount | Total Default Interest/Fees Incurred Since Issuance (Before Repayments and Conversions) | Total Interest Accrued Since Issuance (Before Repayments and Conversions) | Principal Repayments | Default Interest and Fees Repayments | Accrued Interest Repayments | Total Repayments | Principal Converted | Default Interest and Fees Converted | Accrued Interest Converted | Total Amount Converted | Conversion Price per Share | Total Number of Common Shares Issued | Principal Outstanding | Default Interest and Fees Outstanding | Accrued Interest Outstanding | Total Balance Remaining | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RB Capital Partners Inc. | August 3, 2022 | August 3, 2024 | 7 | % | - | 1,100,000 | - | 282,052 | - | - | - | - | - | - | - | - | - | (1) | - | 1,100,000 | - | 282,052 | 1,382,052 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RB Capital Partners Inc. | March 17, 2023 | March 16, 2025 | 7 | % | - | 200,000 | - | 41,412 | 57,705 | - | - | 57,705 | - | - | - | - | - | (2) | - | 142,295 | - | 41,412 | 183,707 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jefferson Street Capital LLC | May 23, 2023 | February 23, 2024 | 6.5 | % | 15 | % | 220,000 | 138,963 | 30,531 | - | - | - | - | 220,000 | (3) | 36,509 | (3) | 16,486 | (3) | 272,995 | (3) | - | (3) | 13,524,647 | (3) | - | 102,454 | 14,045 | 116,499 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sky Holdings Ltd | June 16, 2023 | December 16, 2023 | 7 | % | - | 550,000 | - | 97,796 | - | - | - | - | 77,000 | (4) | - | 35,863 | (4) | 112,863 | (4) | 0.0375 | (4) | 3,009,680 | (4) | 473,000 | - | 61,933 | 534,933 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lorlev 26 Irrevocable Trust | December 20, 2023 | December 20, 2024 | - | (5) | - | 100,000 | - | 29,000 | 100,000 | 5,000 | 105,000 | (6) | - | - | - | - | (7) | - | - | - | - | 24,000 | 24,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exchange Listing LLC | February 6, 2024 | August 6, 2024 | 10 | % | 20 | % | 35,000 | - | 13,879 | - | - | - | - | - | - | - | - | (8) | - | - | 35,000 | - | 13,879 | 48,879 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jefferson Street Capital LLC(9) | May 21, 2024 | February 21, 2025 | 10 | % | 15 | % | 71,500 | 44,769 | 18,290 | - | - | - | - | 71,500 | 44,769 | 1,500 | 117,769 | (10) | - | 61,995,097 | - | - | 16,790 | 16,790 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| J.J. Astor & Co(11) | September 20, 2024 | June 30, 2025 | 0 | % | 16 | % | 405,000 | 37,462 | (12) | 77,779 | 308,963 | 37,462 | - | 346,425 | - | - | - | - | (13) | - | - | 96,037 | - | 77,779 | 173,816 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 2,681,500 | 221,195 | 590,739 | 466,668 | 37,462 | 5,000 | 509,130 | 368,500 | 81,278 | 53,849 | 503,627 | - | 78,529,424 | 1,846,332 | 102,454 | 531,890 | 2,480,676 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | The note may be converted by the holder at the initial conversion price of $1.00 per share, subject to adjustment. |
| 6 |
| (2) | The note may be converted by the holder at the initial conversion price of $1.00 per share, subject to adjustment |
| (3) | The note may be converted by the holder at the initial conversion price of $0.35 per share, subject to adjustment. Upon an event of default, the holder may convert the note using the common stock’s lowest trading price during the period commencing on the date of default discounted by 35%. $1,500 will be added to principal for each conversion. As of March 31, 2026, the holder had converted an aggregate of $272,995, consisting of $220,000 of principal, $36,509 of default interest and fees, and $16,486 of accrued interest into 13,524,647 shares of common stock at a conversion price determined in accordance with the event of default conversion terms set forth in the Note, as the Note was in default at the time of conversion. |
| (4) | The note was initially convertible by the holder at the initial conversion price of $0.35 per share. On May 16, 2024, the note was amended to have a conversion price equal to $0.0375 per share. As of March 31, 2026, the holder had converted $77,000 of principal and $35,863 of accrued interest into 3,009,680 shares of common stock at a conversion price of $0.0375 per share. |
| (5) | 20% interest will be charged on the day the Company receives funding in connection with an initial public offering, and thereafter 15% per annum will be charged. |
| (6) | On September 2, 2025, the lender and the Company entered into a settlement agreement to resolve amounts outstanding under this note. Pursuant to the settlement agreement, the parties agreed to settle the $100,000 principal amount, together with $29,000 of accrued interest as of June 30, 2025 (notwithstanding that $29,589 of interest had accrued under the note as of June 30, 2025), for an aggregate settlement amount of $129,000. The settlement amount is payable in installments consisting of an initial payment of $30,000 due by September 10, 2025, followed by monthly payments of $15,000 due on the 15th of each month thereafter until the settlement amount is paid in full. |
| (7) | The note may be converted by the holder at an initial conversion price equal to a 50% discount of the Company’s listing price, subject to adjustment. |
| (8) | The note may be converted by the holder at the initial conversion price equal to the price reflecting a discount of 35% to the volume weight average price of the Company’s common stock for the five days before any conversion, subject to adjustment. |
| (9) | Ilustrato Pictures International Inc. is a guarantor under the note. |
| (10) | The note may be converted by the holder at the initial conversion price of $0.03 per share, subject to adjustment. Upon an event of default, the holder may convert the note using the common stock’s lowest trading price during the period commencing on the date of default discounted by 20%. $1,500 will be added to principal for each conversion. As of March 31, 2026, the holder had converted an aggregate of $117,769, consisting of $71,500 principal, $44,769 of default interest and fees, and $1,500 of accrued interest into 61,995,097 shares of common stock at a conversion price determined in accordance with the event of default conversion terms set forth in the Note, as the Note was in default at the time of conversion. |
| (11) | The note ranks senior to other debt and is secured by all assets of the Company. |
| (12) | Reflects a default fee equal to an increase of principal outstanding to 110% of the principal outstanding due to the occurrence of an event of default under the note. |
| (13) | The note may be converted by the holder at the initial conversion price equal to 80% of the average of the four lowest volume weighted average closing prices of the Company’s common stock over the 20 trading days immediately prior to each permitted conversion of the note, subject to adjustment. The Company is required to file a resale registration statement with the SEC within 60 days of any default or event of default and register for resale all shares of common stock issued under the note within 90 days of any default or event of default. |
| 7 |
Related-Party Debt
As of March 31, 2026, the Company had received $4,667,537 in loans from its parent company, Fusion Fuel. The loans are not evidenced by separate loan agreements and do not bear contractual interest or specified maturity dates. The loans are subject to the terms of the Stock Purchase Agreement, dated November 18, 2024, among the Company, and certain other stockholders of the Company (the “Fusion Fuel Acquisition Agreement”). Under the Fusion Fuel Acquisition Agreement, Fusion Fuel will make loans of one-half of the net proceeds (or such lesser amount as agreed to by the parties) to QIND from certain capital raises by Fusion Fuel. Such loans will be (i) forgiven upon the Preferred Stock Conversion (as defined in the Fusion Fuel Acquisition Agreement), or (ii) repaid if the Transactions (as defined in the Fusion Fuel Acquisition Agreement) are unwound in accordance with the provisions of the Fusion Fuel Acquisition Agreement.
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 improvement initiatives. The benefits of these integration efforts and upcoming planned acquisitions may not positively impact our financial results in the short term but have historically been the case in the medium to long term.
Critical Accounting Estimates
A critical accounting estimate is an estimate that: (i) is made in accordance with generally accepted accounting principles, (ii) involves a significant level of estimation uncertainty and (iii) has had or is reasonably likely to have a material impact on the Company’s financial condition or results of operations.
The “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section is based on the Company’s unaudited consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect reported amounts and related disclosures. On an ongoing basis, management evaluates and updates its estimates. Management employs judgment in making its estimates but they are based on historical experience and currently available information and various other assumptions that the Company believes to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results could differ from those estimates. Management believes that its judgment is applied consistently and produces financial information that fairly depicts the results of operations for all periods presented.
Significant estimates include estimates used to review the Company’s impairments and estimations of long-lived assets, revenue recognition of Contract-based revenue, allowances for uncollectible accounts, and the valuations of non-cash capital stock issuances. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Further, refer to the Company’s significant accounting policies as described in Note 2 of the unaudited consolidated financial statements.
We consider the following accounting estimate to be the most critical in understanding the judgments that are involved in preparing our unaudited consolidated financial statements:
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
The Company has evaluated all recently issued accounting pronouncements and has implemented all standards that are currently 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 recently issued accounting pronouncements will have a material impact on its financial position, results of operations, or cash flows.
ASU 2017-04, Simplifying the Test for Goodwill Impairment, has been effective for fiscal years beginning after December 15, 2019, and has been adopted by the Company. Under this standard, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total goodwill allocated to that reporting unit. The Company applies this simplified one-step impairment test in its annual goodwill assessment. As noted above, no impairment was identified as of March 31, 2026.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company,” we are not required to provide the information required by this Item.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Interim Chief Financial Officer, have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) prior to the filing of this Quarterly Report. Based on that evaluation, our Chief Executive Officer and Interim Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
During the period covered by this Quarterly Report, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not currently aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition, or operating results.
Settlement and Release Agreement with Lucosky Brookman
In September 2025, the Company entered into a Settlement and Release Agreement (the “Lucosky Settlement Agreement”) with Lucosky Brookman LLP (“Lucosky Brookman”), the Company’s former legal counsel, to resolve an outstanding obligation of approximately $568,706. Under the terms of the Lucosky Settlement Agreement, the Company agreed to pay a total settlement amount of $250,000 in five equal monthly installments of $50,000, due monthly from September 2025 through January 2026. Upon receipt of the full settlement amount, the parties agreed to exchange mutual general releases of all claims. If the Company failed to pay the full settlement amount by January 31, 2026, Lucosky Brookman retains the right to seek collection of the full outstanding balance, less amounts previously paid. As of March 31, 2026, the Company had not paid the full settlement amount and owed $125,000 to Lucosky Brookman.
Item 1A. Risk Factors.
As a “smaller reporting company,” we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
Other than as disclosed below, during the three months ended March 31, 2026, any equity securities that were not registered under the Securities Act and that were not previously disclosed in a Current Report on Form 8-K.
On January 12, 2026, the Company issued 5,655,811 shares of common stock to Jefferson Street Capital LLC for the conversion of $1,500.00 of accrued and unpaid interest, $37,269.38 in default principal and $1,500.00 in fees, totaling $40,269.38 pursuant to the holder’s conversion notice under a convertible note issued on May 21, 2024.
On May 21, 2024, the Company issued the convertible promissory note to Jefferson Street Capital in a principal amount of $71,500 (purchase price of $65,000), bearing interest at 10% per annum (with default interest at 15% per annum), with equal consecutive monthly payments commencing five months from the issue date, with a final maturity date of February 21, 2025. Ilustrato Pictures International Inc., a Nevada corporation, is a guarantor under the note. The note may not be prepaid in whole or in part except as otherwise set forth therein; however, the Company has the right, upon not less than five trading days’ prior written notice, to prepay the outstanding balance at 110% of the then-outstanding balance. The holder has the right, from the date of the note through the later of the maturity date or the date of payment of the default amount, to convert all or any part of the outstanding and unpaid amount into shares of our common stock at a fixed conversion price of $0.03 per share, subject to equitable adjustments for stock splits, stock dividends, rights offerings, combinations, recapitalizations, reclassifications, extraordinary distributions, and similar events, and further subject to anti-dilution adjustment in the event of a dilutive issuance at a lower price. In no event may the holder convert any portion of this note if, after giving effect to the conversion, the holder and its affiliates would beneficially own more than 4.99% of our outstanding common stock, and this limitation may not be waived. $1,500 will be added to principal under the note for each conversion. Events of default include, among other things, failure to pay principal or interest when due (with a five-day cure period), failure to issue conversion shares, breach of covenants, appointment of a receiver, bankruptcy or insolvency, delisting, failure to comply with Exchange Act reporting requirements, cessation of operations, and failure to disclose the note and guaranty in SEC filings. Upon certain events of default, the note becomes immediately due and payable at 150% of the outstanding amount; upon other specified events, at 200% of the outstanding amount.
On February 23, 2026, Fusion Fuel converted 8,500 shares of Series B Convertible Preferred Stock, par value $0.001 per share, into 8,500,000 shares of common stock, pursuant to the Company’s Certificate of Designation of Series B Convertible Preferred Stock of the Company (the “Series B Certificate of Designation”). The conversion was effected for no cash consideration, in accordance with the Series B Certificate of Designation.
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Each of these securities was offered and sold by the Company in a transaction that was exempt from the registration requirements of the Securities Act, in reliance on Section 4(a)(2) thereof.
Purchases of Equity Securities
No repurchases of our common stock were made during the three months ended March 31, 2026.
Item 3. Defaults Upon Senior Securities.
The following convertible promissory notes were in default as of March 31, 2026:
| (i) | a convertible note in the original principal amount of $1,100,000 issued to RB Capital Partners Inc. (“RB Capital Partners”), which matured on August 3, 2024, as to which the Company defaulted in the amount of $1,254,422, and had a total amount in arrearage of $1,391,545 as of May 15, 2026; | |
| (ii) | a convertible note in the original principal amount of $200,000 issued to RB Capital Partners, which matured on March 16, 2025, as to which the Company defaulted in the amount of $228,038, and had a total amount in arrearage of $184,935 as of May 15, 2026; | |
| (iii) | a convertible note in the original principal amount of $220,000 issued to Jefferson Street Capital LLC (“Jefferson Street Capital”), which matured on February 23, 2024, as to which the Company defaulted in the amount of $340,963, and had a total amount in arrearage of $118,420 as of May 15, 2026; | |
| (iv) | a convertible note in the original principal amount of $550,000 issued to Sky Holdings Ltd, which matured on December 16, 2023, as to which the Company defaulted in the amount of $569,303, and had a total amount in arrearage of $539,015 as of May 15, 2026; | |
| (v) | a convertible note in the original principal amount of $100,000 issued to Lorlev 26 Irrevocable Trust, which matured on December 20, 2024, as to which the Company defaulted in the amount of $120,000, and had a total amount in arrearage of $9,000 as of May 15, 2026; | |
| (vi) | a convertible note in the original principal amount of $35,000 issued to Exchange Listing LLC, which matured on August 6, 2024, as to which the Company defaulted in the amount of $36,755, and had a total amount in arrearage of $49,785 as of May 15, 2026; | |
| (vii) | a convertible note in the original principal amount of $71,500 issued to Jefferson Street Capital, which matured on February 21, 2025, as to which the Company defaulted in the amount of $117,818, and had a total amount in arrearage of $17,094 as of May 15, 2026; and | |
| (viii) | a convertible note in the original principal amount of $405,000 issued to J.J. Astor & Co., which matured on June 30, 2025, as to which the Company defaulted in the amount of $412,088, and had a total amount in arrearage of $162,085 as of May 15, 2026. |
For a further description of terms and repayment status with respect to the above convertible notes, see Part 1. Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Non-Related Party Debt”.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
We have no information to disclose that was required to be disclosed in a Current Report on Form 8-K during the three months ended March 31, 2026, but was not reported.
None
of our directors or “officers,” as defined in Rule 16a-1(f) under the Exchange Act,
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Item 6. Exhibits.
| Exhibit No. | Description | |
| 31.1* | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1** | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
** Furnished herewith.
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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 thereunto duly authorized.
| Date: May 15, 2026 | Quality Industrial Corp. | |
| /s/ Carsten Kjems Falk | ||
| Name: | Carsten Kjems Falk | |
| Title: | Chief Executive Officer and Interim Chief Financial Officer | |
| (Principal Executive Officer and Principal Financial Officer) | ||
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