Quality Industrial Corp. (QIND) reveals note defaults and Fusion Fuel control shift
Rhea-AI Filing Summary
Quality Industrial Corp. files its annual report outlining a transformation into an LPG-focused industrial energy company through its 51% stake in Dubai-based Al Shola Gas, acquired for a total purchase price of $10,000,000. The business designs, installs and operates LPG systems and distributes more than 20,000 LPG cylinders and over 500,000 liters of bulk LPG each month across the UAE, generating both project and recurring utility revenue.
The report highlights substantial financial strain: as of December 31, 2025, eight convertible promissory notes totaling $2,561,240 including interest and penalties remained unpaid and in default, exposing the company to acceleration, high default rates, discounted share conversions and secured enforcement. Goodwill represents 50.6% of total assets, creating sensitivity to impairment.
Control of QIND shifted to Fusion Fuel Green PLC in late 2024 via a share sale of 78,312,334 common shares and 20,000 Series B preferred shares in exchange for 109,114 Class A ordinary shares and 4,171,327 Series A preferred shares of Fusion Fuel. As of June 30, 2025, the market value of non-affiliate common stock was approximately $1,283,522, with 193,266,631 common shares outstanding as of March 31, 2026. Extensive risk disclosures cite dependence on Fusion Fuel funding, heavy leverage, exposure to Middle East geopolitical conflict — including severe disruption from the 2026 Iran conflict and Strait of Hormuz closure — climate and regulatory pressures, and competition in regional LPG markets.
Positive
- None.
Negative
- Multiple convertible note defaults totaling $2,561,240 as of December 31, 2025, with high default interest, penalty multipliers, deep-discount conversion rights and at least one senior secured facility, create acute refinancing, dilution and going-concern risk for Quality Industrial Corp.
Insights
Heavy note defaults and complex control deal heighten financial risk.
Quality Industrial Corp. discloses that all eight outstanding convertible promissory notes had matured unpaid by December 31, 2025, with a total balance of $2,561,240 including default interest and penalties. Several notes now accrue elevated default rates up to 20%, feature 150%–200% payout clauses or 25% liquidated damages, and allow conversion at deep discounts to market prices.
One senior secured note can increase principal to 110% of amounts due and be converted at 80% of a low-volume-weighted average price, with full-ratchet anti-dilution protection, materially threatening existing shareholders through potential dilution and collateral enforcement. The report states that failures here, combined with cross-defaults, could materially impair operations and raise doubt about continuing as a going concern.
At the same time, control has shifted to Fusion Fuel Green PLC via a share sale involving 78,312,334 QIND common shares, 20,000 Series B preferred shares, and a Fusion Fuel consideration of 109,114 Class A ordinary shares plus 4,171,327 Series A convertible preferred shares. Multiple covenants, financing conditions and unwind mechanisms create execution risk if shareholder approvals, Nasdaq listings or agreed capital allocations are not achieved. Indemnity caps of $4,000,000 with survival up to 24 months (and longer for fundamental reps) further shape risk allocation but do not solve underlying leverage stress.
Key Figures
Key Terms
convertible promissory notes financial
Strait of Hormuz other
fixed price contracts financial
smaller reporting company regulatory
emerging growth company regulatory
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the fiscal year ended
OR
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) | (I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
| (Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Securities registered under Section 12(g) of the Exchange Act:
| (Title of class) |
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
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, 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 has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. Yes ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
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 June 30, 2025 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market
value of the registrant’s shares of common stock, par value $0.001 per share (“common stock”), held by non-affiliates
(based upon the closing price of such shares as reported by OTC Markets Group Inc.) was approximately $
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: common shares as of March 31, 2026.
TABLE OF CONTENTS
| PART I | ||
| ITEM 1. | BUSINESS | 6 |
| ITEM 1A. | RISK FACTORS | 13 |
| ITEM 1B. | UNRESOLVED STAFF COMMENTS | 32 |
| ITEM 1C. | CYBERSECURITY | 32 |
| ITEM 2. | PROPERTIES | 33 |
| ITEM 3. | LEGAL PROCEEDINGS | 34 |
| ITEM 4. | MINE SAFETY DISCLOSURES | 34 |
| PART II | ||
| ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 35 |
| ITEM 6. | [RESERVED] | 37 |
| ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 37 |
| ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 43 |
| ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | 43 |
| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE | 43 |
| ITEM 9A. | CONTROLS AND PROCEDURES | 43 |
| ITEM 9B. | OTHER INFORMATION | 43 |
| ITEM 9C. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | 43 |
| PART III | ||
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE | 44 |
| ITEM 11. | EXECUTIVE COMPENSATION | 46 |
| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 48 |
| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE | 49 |
| ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES | 52 |
| PART IV | ||
| ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES | 53 |
| ITEM 16. | FORM 10-K SUMMARY | 56 |
| SIGNATURES | 57 | |
| 2 |
INTRODUCTORY NOTES
Use of Terms
As used in this Annual Report on Form 10-K (this “Annual Report”), unless the context otherwise requires, the terms the “Company,” “Registrant,” “we,” “us,” “our,” “Quality Industrial,” 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.
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.
Note Regarding Industry and Market Data
We are responsible for the information contained in this report. This report includes industry and market data that we obtained from periodic industry publications, third-party studies and surveys, filings of public companies in our industry and internal company surveys. These sources generally state that the information they provide has been obtained from sources believed to be reliable, but that the accuracy and completeness of the information are not guaranteed. The forecasts and projections are based on historical market data, and there is no assurance that any of the forecasts or projected amounts will be achieved. Industry and market data could be wrong because of the method by which sources obtained their data and because information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties. The market and industry data used in this report involve risks and uncertainties that are subject to change based on various factors, including those discussed in Part I. Item 1A. “Risk Factors”. These and other factors could cause results to differ materially from those expressed in, or implied by, the estimates made by independent parties and by us. Furthermore, we cannot assure you that a third party using different methods to assemble, analyze or compute industry and market data would obtain the same results.
Cautionary Note Regarding Forward-Looking Statements
This Annual Report contains or may contain 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. 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. These statements involve known and unknown risks, uncertainties and other factors, including those listed under Part I. Item 1A. “Risk Factors” and elsewhere in this Annual Report that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.
| 3 |
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. The forward-looking statements included in this Annual Report relate to, among other things:
| ● | 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 ability of our projects to generate the expected free cash flows or net income necessary for the Company to generate the anticipated returns in connection with the contemplated projects; | |
| ● | 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; and | |
| ● | relevant government policies and regulations relating to our industry. |
The forward-looking statements contained in this Annual Report speak only as of the date of this Annual Report or, if obtained from third-party studies or reports, the date of the corresponding study or report, and are expressly qualified in their entirety by the cautionary statements in this Annual Report. Since we operate in an emerging and evolving environment and new risk factors and uncertainties emerge from time to time, you should not rely upon forward-looking statements as predictions of future events. Except as otherwise required by the securities laws of the United States, we undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of this Annual Report or to reflect the occurrence of unanticipated events.
Summary of Risk Factors
The following is a summary of material risks that could affect our business. This summary may not contain all of our material risks, and it is qualified in its entirety by the more detailed risk factors set forth under Part II. Item 1A. “Risk Factors”.
| ● | We are in default under certain of our outstanding convertible promissory notes, which could result in acceleration of the indebtedness thereunder, enforcement of security interests, dilutive conversions of outstanding amounts into shares of our common stock, and other material adverse consequences. | |
| ● | We are dependent on Fusion Fuel and external financing to fund our operations and executive compensation, and there can be no assurance that such support will be available when needed. | |
| ● | We have a substantial amount of goodwill on our balance sheet. Future write-offs of goodwill may have the effect of decreasing our earnings or increasing our losses. | |
| ● | Our ability to generate the significant amount of cash needed to service our debt obligations and our ability to refinance all or a portion of our indebtedness or obtain additional financing depends on many factors, many of which may be beyond our control. | |
| ● | Our projections are subject to significant risks, assumptions, estimates and uncertainties, including assumptions regarding future legislation and changes in regulations of the jurisdictions in which we operate, or seek to operate, our business. As a result, our projected revenues, market share, expenses and profitability may differ materially from our expectations. |
| 4 |
| ● | Risks associated with climate change and other environmental impacts, and increased focus and evolving views of our customers, shareholders, and other stakeholders on climate change issues, could negatively affect our business and operations. | |
| ● | We are dependent on the availability of raw materials, parts, and components used in our products. | |
| ● | Uncertainty related to environmental regulation and industry standards, as well as physical risks of climate change, could impact our results of operations and financial position. | |
| ● | The conflict in Iran, which escalated sharply in late February 2026, poses material risks to our LPG distribution operations in Dubai. | |
| ● | We occasionally provide integrated gas distribution project management services in the form of long-term, fixed price contracts that may require us to assume additional risks associated with cost overruns, operating cost inflation, labor availability and productivity, supplier and contractor pricing and performance, and potential claims for liquidated damages. | |
| ● | Trends in gas prices affect the level of exploration, development, and production activity of our customers and the demand for our services and products, which could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition. | |
| ● | Demand for the products we distribute could decrease if the manufacturers of those products were to sell a substantial amount of goods directly to end users in the markets we serve. | |
| ● | We may experience unexpected supply shortages. | |
| ● | Price reductions by suppliers of gas products sold by us could cause the value of our inventory to decline. Also, such price reductions could cause our customers to demand lower sales prices for these products, possibly decreasing our margins and profitability on sales to the extent that our inventory of such products was purchased at the higher prices prior to supplier price reductions, and we are required to sell such products to our customers at the lower market prices. | |
| ● | We are subject to increased risks associated with our investments in emerging markets, particularly in the Middle East region and specifically in the United Arab Emirates. These risks encompass significant political, social, and economic uncertainties in the region. Given the volatile nature of these markets, instabilities in these regions could significantly adversely affect the value of our investments. | |
| ● | We are subject to the risk of international sanctions, which could significantly impact our business activities, results of operations and financial condition. | |
| ● | If we fail to comply with the rules under the Sarbanes-Oxley Act related to accounting controls and procedures, or if material weaknesses or other deficiencies are discovered in our internal accounting procedures, our stock price could decline significantly. | |
| ● | Our largest shareholder, Fusion Fuel Green PLC, holds substantial control over the Company and is able to influence all corporate matters, which shareholders may consider to not always be in their best interests. | |
| ● | We are dependent on the continued services of our director and chairman and officers and if we fail to keep them or fail to attract and retain qualified senior executives and key technical personnel, our business may not be able to expand. | |
| ● | The elimination of monetary liability against our directors, officers and employees under our Articles of Incorporation and the existence of indemnification rights to our directors, officers and employees may result in substantial expenditures by the Company and may discourage lawsuits against our directors, officers, and employees. | |
| ● | Our common stock price may be volatile and could fluctuate, which could result in substantial losses for investors. | |
| ● | Sales of a substantial number of shares of our common stock in the public market, or the perception that such sales could occur, could cause our stock price to fall. | |
| ● | The issuance of shares of our common stock upon conversion or exercise of convertible notes, will dilute ownership to existing shareholders and may cause our stock price to fall. | |
| ● | We have never declared or paid any cash dividends or distributions on our capital stock. |
| 5 |
PART I
ITEM 1. BUSINESS
Business Overview
Quality Industrial Corp. (“QIND,” “the Company,” “we,” “us,” or “our”) is an industrial company specializing in the energy sector. Through our 51%-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.
Al Shola Gas is based in Dubai, United Arab Emirates (“UAE”), offering a broad range of specialized services, including:
| ● | Central Gas Systems (LPG): |
| ● | Design, supply, construction, operation, and maintenance (certified by Dubai Civil Defense) | |
| ● | Design consultancy and project management | |
| ● | Repair and preventive maintenance | |
| ● | Billing and monitoring systems |
| ● | LPG Supply and Distribution: |
| ● | Supply of LPG in cylinders and bulk formats |
| ● | LPG System Projects: |
| ● | Design, supply, and installation of aboveground and underground LPG tanks, including all pipeline and instrumentation components | |
| ● | Installation and commissioning of LPG, propane, and synthetic natural gas-compatible systems | |
| ● | Pressure-reducing and distribution stations | |
| ● | Gas leak detection systems |
| ● | LPG metering stations | |
| ● | Vaporizer systems | |
| ● | Deluge and sprinkler systems, along with other gas safety systems |
Al Shola Gas specializes in the design, implementation, and maintenance of various LPG pipeline networks for commercial and industrial clients. We comply with Dubai Civil Defense regulations and international safety standards, offering warranty and safety certification as mandated by relevant regulations.
LPG Distribution – Cylinders
Al Shola Gas maintains an extensive LPG cylinder distribution network in Dubai, supported by a fleet of delivery trucks. Our centralized call center, along with a dedicated administrative team, allows it to distribute over 20,000 LPG cylinders each month.
| 6 |
LPG Distribution – Bulk Gas
Al Shola Gas is an approved supplier of bulk LPG, sourcing from the Emirates General Petroleum Corporation. We distribute more than 500,000 liters of bulk LPG each month. Our fleet consists of two 18,000-liter capacity trucks and one 25,000-liter capacity truck to support our bulk LPG supply operations.
Customers and Markets
Al Shola Gas serves residential, mixed-use, commercial, and selected industrial customers across the United Arab Emirates (“UAE”), with a core focus on Dubai and an active expansion program into the northern emirates of Sharjah, Ras Al Khaimah, Fujairah, Ajman, and Umm Al Quwain. Demand is driven by sustained real estate development and population growth, which translate into new central LPG system installations and recurring utility operations and bulk LPG supply. During 2025, Al Shola Gas secured numerous engineering and utility awards, including large multi-tower residential developments and mixed-use properties, and continued to add recurring customers through long-term utility service arrangements.
The customer base includes property developers, owners’ associations, and facilities managers for high-density residential complexes, as well as food and beverage outlets and retail tenants that require metered LPG supply. In addition to one-time engineering and installation revenue, the business generates recurring revenue from (i) metered LPG utility services after project handover, (ii) bulk LPG deliveries, and (iii) project operations and maintenance.
Competition
Al Shola Gas’s competitors are primarily UAE-based companies that specialize in gas distribution systems, such as Royal Development for Gas Works, Al Fanar Gas, and Lahej & Sultan.
Intellectual Property
Al Shola Gas does not possess registered intellectual property rights. Its intellectual property lies in its specific design and engineering processes, personnel, capabilities, compliance, and certifications, which have established it as a trusted service provider and supplier in its region. Al Shola Gas holds the ISO 9001 Quality Management System certification.
Laws and Regulations
LPG distribution and engineering service providers in Dubai are primarily regulated by the Dubai Municipality and Dubai Civil Defense, which enforce strict safety, storage, and transportation requirements in accordance with local laws. Licensing for LPG distributors and engineering firms necessitates compliance with technical standards, environmental guidelines, and periodic safety inspections. Across the broader Middle East, regulations vary by country but generally adhere to international safety standards, such as those set by the International Organization for Standardization (ISO). Gulf Cooperation Council countries, including Saudi Arabia, Qatar, and Oman, impose stringent controls on the importation, storage, and sale of LPG, with regulatory oversight from national energy and safety authorities.
Corporate History of Quality Industrial Inc.
Background
QIND was incorporated in the state of Nevada on May 4, 1998. In October 2011, the Company’s name was changed to Bluestar Technologies, Inc. In March 2018, the Company’s name was changed to Wikisoft Corp. On May 28, 2022, Ilustrato Pictures International Inc., a Nevada corporation, a stockholder of the Company (“Illustrato”), acquired 77.4% of the outstanding shares of QIND. In connection with Ilustrato’s acquisition of QIND, QIND’s name was changed from Wikisoft Corp. to Quality Industrial Corp. by way of a short-form merger with QIND’s wholly-owned subsidiary, Quality Industrial Corp. Since August 4, 2022, OTC Markets Group Inc. has provided quotation services for QIND’s common stock under the ticker symbol “QIND”.
| 7 |
Acquisition of Majority of Equity Interests in Al Shola Al Modea Gas Distribution L.L.C. by Quality Industrial Corp.
On March 27, 2024, QIND entered into a Share Purchase Agreement, dated as of March 27, 2024, between QIND and Al Shola Gas (the “ASG Purchase Agreement”), to acquire a 51% interest in Al Shola Gas. The closing of the transaction occurred with the execution of the ASG Purchase Agreement. On April 8, 2025, QIND entered into an Amendment Agreement in respect of the Share Purchase Agreement, dated as of April 8, 2025, among QIND, Al Shola Gas, Safir Ahammed (“Ahammed”), and Mohamed Hilal Saeed Muroushad Almheiri (“Almheiri”). As amended, the ASG Purchase Agreement provided that Sanjeeb Safir (“Safir”), Ahammed, and Almheiri (together with Safir and Ahammed, the “ASG Sellers”) will transfer 153 of the 300 outstanding shares of Al Shola Gas to QIND at the closing of the transaction pursuant to the ASG Purchase Agreement for a purchase price of $10,000,000, to be paid by QIND to the ASG Sellers, as follows: (1) $9 million will be paid in the form of national exchange-listed stock or cash, in eight quarterly tranches over a period of 24 months, beginning from the first quarter following QIND’s uplist to a national exchange, as follows: (a) $3,600,000 of the cash or stock will be paid to Safir; (b) $3,600,000 of the cash or stock will be paid to Ahammed; and (c) $1,800,000 of the cash or stock will be paid to Almheiri, with the value of any stock issued protected by make whole agreement(s), and with each tranche subject to a 12-month leak-out agreement; and (2) $1 million cash will be paid within 12 months of the closing and at the soonest possible time, as follows: (a) $400,000 will be paid to Safir; (b) $400,000 will be paid to Ahammed; and (c) $400,000 will be paid to Almheiri. As amended, the ASG Purchase Agreement provides that the Sellers confirm receipt of $200,000 from QIND during the first quarter of 2025, and that amount will be deducted from the purchase price.
Pursuant to the terms of the ASG Purchase Agreement, QIND will elect two non-paid directors of Al Shola Gas, including Chairman of the Board, and one non-paid director of Al Shola Gas will be elected by the other Al Shola Gas shareholders. QIND obtained immediate control of Al Shola Gas upon execution of the ASG Purchase Agreement. Full operational control of Al Shola Gas will be retained by existing management unless the board of directors designated under the ASG Purchase Agreement determines otherwise due to a breach of the ASG Purchase Agreement, ongoing poor performance, or if structural changes are recommended in line with the laws governed by the ASG Purchase Agreement which will be decided and approved by the board of directors designated under the ASG Purchase Agreement. Al Shola Gas will make payment along with interest, if any, to the Company from revenue proceeds before disbursement of dividends in four yearly equal installments, starting in 2025. The Company will have the right but not the obligation to purchase the remaining 49% of Al Shola Gas’s shares for a two-year period from the closing date at an amount prorated to the purchase price. The board of directors of Al Shola Gas will determine a mutually agreed management fee to be paid to the Company for services.
Acquisition of Majority of Equity Interests in Quality Industrial Corp. by Fusion Fuel Green PLC
On November 18, 2024, QIND, Fusion Fuel Green PLC (“Fusion Fuel”), an Irish public limited company, Illustrato, 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 “Fusion Fuel Acquisition Agreement”). Pursuant to the Fusion Fuel Acquisition Agreement, the QIND Sellers agreed to sell an aggregate of 78,312,334 shares of common stock and 20,000 shares of Series B Convertible Preferred Stock, par value $0.001 per share (“Series B Preferred Stock”), of the Company, constituting approximately 69.36% of the issued and outstanding capital stock of QIND, to Fusion Fuel (the “QIND Sellers’ Shares”). In exchange, Fusion Fuel was required to issue 109,114 Class A ordinary shares with a nominal value of $0.0035 each (“Class A Ordinary Shares”), constituting 19.99% of the issued and outstanding Class A Ordinary Shares on the date of the Fusion Fuel Acquisition Agreement (the “Ordinary Shares Consideration”), and an aggregate of 4,171,327 Series A Convertible Preferred Shares with a nominal value of $0.0001 each (“Series A Preferred Shares” and together with the Ordinary Shares Consideration, the “Fusion Fuel Shares Consideration”)), to the QIND Sellers. The Fusion Fuel Acquisition Agreement provided that, subject to the satisfaction or waiver of the conditions set forth in the Fusion Fuel Acquisition Agreement, the Company was required to consummate the transactions (the “Fusion Fuel Acquisition Transactions”) contemplated by the Fusion Fuel Acquisition Agreement at the date (the “Fusion Fuel Acquisition Closing Date”) of the closing of the Fusion Fuel Acquisition Transactions (the “Fusion Fuel Acquisition Closing”).
The conditions to the Fusion Fuel Acquisition Closing included, among other things, the written resignation of Frederico Figueira de Chaves as Chief Executive Officer of Fusion Fuel effective as of the Fusion Fuel Acquisition Closing Date, and the appointment of John-Paul Backwell, the Chief Executive Officer of QIND, as the Chief Executive Officer of Fusion Fuel effective as of the Fusion Fuel Acquisition Closing Date. In addition, Fusion Fuel, QIND, and each director and officer of Fusion Fuel that held equity securities in Fusion Fuel (collectively, the “Fusion Fuel Equityholders”) and each of the QIND Sellers were required to enter into a lock-up agreement which provided that the Fusion Fuel Equityholders and the QIND Sellers were each prohibited from transferring, entering into short sales, granting proxies or powers of attorney, or offering or agreeing to do any of the foregoing during the 180-day period beginning on the Fusion Fuel Acquisition Closing Date, subject to certain exceptions.
On November 26, 2024, the conditions to the Fusion Fuel Acquisition Closing were satisfied in all material respects, and therefore is considered to be the Fusion Fuel Acquisition Closing Date. On that date, Fusion Fuel instructed its transfer agent to issue the Fusion Fuel Shares Consideration to the QIND Sellers. The Ordinary Shares Consideration was subsequently issued to Ilustrato, and the Series A Preferred Shares were subsequently issued pro-rata to the QIND Sellers, with Ilustrato’s allocation of the Series A Preferred Shares reduced by the Ordinary Shares Consideration. On November 26, 2024, the QIND Sellers delivered to QIND’s transfer agent all of the necessary documentation to effect the transfer of the QIND Sellers’ Shares to Fusion Fuel, which were subsequently transferred to the Company. As of December 1, 2024, Fusion Fuel had gained effective control over QIND’s operations.
The Series A Preferred Shares were issued pursuant to a Certificate of Designation of Preferences, Benefits and Limitations of Series A Convertible Preferred Shares, which was filed with the Companies Registration Office of Ireland on December 13, 2024 (the “Series A Certificate of Designation”). Pursuant to the Series A Certificate of Designation, the Series A Preferred Shares rank on parity with the Class A Ordinary Shares as to distributions of assets upon liquidation. The Series A Preferred Shares will have no voting rights except as required by the Irish Companies Act and with respect to amendments to the Series A Certificate of Designation or the constitution of Fusion Fuel that adversely affect the terms of the Series A Preferred Shares. On the later of the date of the approval of Fusion Fuel’s issuance of the underlying Class A Ordinary Shares by Fusion Fuel’s shareholders in accordance with applicable Irish law (the “Series A Conversion Shareholder Approval”) or the clearance of the initial listing application filed by the Company with The Nasdaq Stock Market LLC (“Nasdaq”), the Series A Preferred Shares will automatically convert into a certain number of Class A Ordinary Shares (the “Series A Preferred Shares Conversion”). If the Series A Conversion Shareholder Approval is not obtained at the Shareholders Meeting (as defined below) by the Extended Meeting Deadline (as defined below), Fusion Fuel will, subject to applicable law, be required to repurchase all of the outstanding Series A Preferred Shares held by each of the QIND Sellers.
| 8 |
Pursuant to the Fusion Fuel Acquisition Agreement, following the Fusion Fuel Acquisition Closing Date, Fusion Fuel, QIND, and the QIND Sellers will enter into an agreement and plan of merger (the “Fusion Fuel/QIND Merger Agreement”). The Fusion Fuel Acquisition Agreement states that the parties intend that after the Fusion Fuel Acquisition Closing, subject to the terms of the Fusion Fuel/QIND Merger Agreement and the receipt of any necessary shareholder, regulatory, and Nasdaq consents or approvals, QIND will merge into a newly-formed, wholly-owned Nevada subsidiary of Fusion Fuel (the “QIND/Fusion Fuel Merger”). Upon completion of the QIND/Fusion Fuel Merger, QIND will become the surviving entity and a wholly owned subsidiary of Fusion Fuel.
In addition, in connection with the Fusion Fuel Acquisition Agreement, the board of directors of Fusion Fuel approved resolutions that: (i) approved the Fusion Fuel Acquisition Agreement, the Series A Certificate of Designation, the Fusion Fuel Acquisition Transactions, and the QIND/Fusion Fuel Merger; (ii) approved the payment of the Fusion Fuel Shares Consideration, (iii) directed that the issuance of the Class A Ordinary Shares underlying the Series A Preferred Shares pursuant to the Series A Preferred Shares Conversion, the amendment and restatement of the constitution of Fusion Fuel, including the change of the name of Fusion Fuel to such name as shall be designated by the QIND Sellers (the “Amended Fusion Fuel Charter”), and the election of the New Directors (as defined below) be submitted for consideration at the Shareholders Meeting, and (iv) recommended to the shareholders of Fusion Fuel that they approve the Series A Preferred Shares Conversion, the Amended Fusion Fuel Charter, and the election of the New Directors (the “Board Recommendation”).
The Fusion Fuel Acquisition Agreement provides that the following covenants will apply:
| ● | Within ten days of the date of the Fusion Fuel Acquisition Agreement, Fusion Fuel will cause its officers and directors who hold shares or convertible securities of Fusion Fuel (the “Fusion Fuel Insiders”) to execute a voting agreement. | |
| ● | After the date of the Fusion Fuel Acquisition Agreement, Fusion Fuel will use commercially reasonable efforts to raise at least $5,000,000 in one or more financing transactions (the “Fusion Fuel Financings”). QIND and the QIND Sellers are required to support and assist Fusion Fuel in connection with the Fusion Fuel Financings. 50% of the proceeds from the Fusion Fuel Financings will be set aside and made available expressly for QIND to use for its working capital and corporate needs and the remaining 50% of such funds will be set aside and made available expressly for the businesses of Fusion Fuel existing immediately prior to the Fusion Fuel Acquisition Closing to use for its working capital and corporate needs. To split the net proceeds of the Fusion Fuel Financings as described above, Fusion Fuel will make loans of one-half of the net proceeds (or such lesser amount as agreed to by the parties to the Fusion Fuel Acquisition Agreement) to QIND. Such loans will be (i) forgiven upon the Series A Preferred Shares Conversion, or (ii) repaid if the Fusion Fuel Acquisition Transactions are unwound in accordance with the Fusion Fuel Acquisition Agreement. Fusion Fuel and QIND are required to cooperate to structure such allocation of proceeds and the use of such proceeds on a mutually agreeable basis. Fusion Fuel will utilize its portion of the net proceeds of the Fusion Fuel Financings to pay off any indebtedness for borrowed money, accounts payable and other liabilities. | |
| ● | Any proceeds received by Fusion Fuel in connection with the Subscription Agreement, dated as of August 28, 2024, between Fusion Fuel and the investor signatory thereto (the “August 2024 Subscription Agreement”), must be used to repay certain funds that were received by certain subsidiaries of Fusion Fuel or entities organized under Portuguese law by Fusion Fuel, up to the lesser of (a) the amount of such funds that must be repaid pursuant to the terms and conditions for the receipt of such funds, or (b) €10 million. In the event that (i) any shares or securities of Fusion Fuel are issued in connection with the August 2024 Subscription Agreement prior to the effectiveness of the QIND/Fusion Fuel Merger, (ii) the proceeds are used to repay certain funds that were received by certain subsidiaries of Fusion Fuel or entities organized under Portuguese law by Fusion Fuel, and (iii) the satisfaction of the terms and conditions for the consummation of the QIND/Fusion Fuel Merger pursuant to the Fusion Fuel Acquisition Agreement and the Fusion Fuel/QIND Merger Agreement, then, within three business days of the QIND/Fusion Fuel Merger, Fusion Fuel will issue a number of Class A Ordinary Shares to the QIND Sellers that will cause their percentage ownership of Fusion Fuel to be the percentage that the QIND Sellers would have owned but for the occurrence of any such issuances in connection with the August 2024 Subscription Agreement as to which the proceeds were used to repay the funds. |
| 9 |
| ● | From the date of the Fusion Fuel Acquisition Agreement through the period ending on the earlier of (i) the Series A Preferred Shares Conversion, (ii) the repurchase of the Fusion Fuel Shares Consideration from the QIND Sellers in exchange for the QIND Sellers’ Shares, and (iii) the termination of the Fusion Fuel Acquisition Agreement (the “Restricted Period”), Fusion Fuel will not sell, transfer, or otherwise encumber the QIND Sellers’ Shares acquired under the Fusion Fuel Acquisition Agreement without the prior written consent from the QIND Sellers. In addition, during the Restricted Period, Fusion Fuel will not, without the written consent of QIND, which may not be unreasonably withheld, and QIND will not, without the written consent of Fusion Fuel, which may not be unreasonably withheld, among other things: (i) Declare any dividends; (ii) adjust, split, combine, reclassify, redeem, purchase, acquire, issue (other than pursuant to the exercise or conversion of convertible securities outstanding on the date of the Fusion Fuel Acquisition Agreement), or enter into any contract with respect to the sale, voting, registration, or repurchase of capital stock; (iii) incur more than a certain amount and/or type of indebtedness; (iv) sell any assets; (v) acquire material assets, properties, or business organizations; (vi) enter into certain types of contracts; (vii) make certain loans; (viii) commence, settle, or take certain other actions with respect to legal actions pending before any governmental or regulatory body; (ix) enter into transactions with any affiliate or shareholder that would reasonably be expected to materially delay or prevent the consummation of the Fusion Fuel Acquisition Transactions or the QIND/Fusion Fuel Merger or that would be required to be described under Item 404 of Regulation S-K of the Securities and Exchange Commission (the “SEC”) in Fusion Fuel or QIND’s SEC filings; or (x) increase or extend the compensation of any employees, directors, or officers or take certain other actions with respect to employees of Fusion Fuel or QIND. | |
| ● | As soon as practicable after the date of the Fusion Fuel Acquisition Agreement, and in any case no less than six weeks prior to the Shareholders Meeting, Fusion Fuel will file an initial listing application with Nasdaq. Fusion Fuel, the QIND Sellers and QIND are required to use their commercially reasonable efforts to respond to any questions or comments of the staff of Nasdaq. | |
| ● | Fusion Fuel will deliver the certificates representing the QIND Sellers’ Shares to a third-party agent on terms and conditions to be mutually agreed upon by the parties to the Fusion Fuel Acquisition Agreement to hold in escrow until the expiration of the Restricted Period such that (i) if the Series A Conversion Shareholder Approval is not obtained, then such certificates will be delivered to the QIND Sellers, and (ii) upon occurrence of the Series A Conversion Shareholder Approval, such certificates will be delivered to Fusion Fuel. | |
| ● | Fusion Fuel will be required to take all steps necessary to cause the Class A Ordinary Shares issued to the QIND Sellers in connection with the Fusion Fuel Acquisition Transactions to be approved for listing (subject to notice of issuance) on Nasdaq at or after the Fusion Fuel Acquisition Closing pursuant to Nasdaq rules and regulations. | |
| ● | Fusion Fuel, QIND, and the QIND Sellers will enter into the Fusion Fuel/QIND Merger Agreement. | |
| ● | As promptly as practicable following the Fusion Fuel Acquisition Closing Date and the execution and delivery of the Fusion Fuel/QIND Merger Agreement, and after reasonable consultation with QIND, Fusion Fuel will duly call, convene and hold a special meeting of the holders of the Class A Ordinary Shares (the “Shareholders Meeting”), to be held on a date (the “Initial Meeting Deadline”) no later than 45 days after the effective date (the “Registration Statement Effective Date”) of a registration statement on Form F-4 or such other applicable form (the “Registration Statement”) to be filed with the SEC, unless otherwise required by applicable laws, in accordance with Irish law, including the Irish Companies Act, and Fusion Fuel’s organizational documents. As promptly as practicable after the mailing of a proxy statement/prospectus relating to the matters to be submitted to the shareholders of Fusion Fuel at the Shareholders Meeting (the “Proxy Statement”), Fusion Fuel will solicit proxies from the holders of Class A Ordinary Shares to vote in accordance with the recommendation of Fusion Fuel’s board of directors with respect to (i) the Series A Preferred Shares Conversion in compliance with all applicable laws and regulations, including, but not limited to, Irish law, including the Irish Companies Act, and the rules and regulations of Nasdaq, (ii) the Amended Fusion Fuel Charter, (iii) the election of the New Directors, (iv) if the parties to the Fusion Fuel Acquisition Agreement determine that approval of the QIND/Fusion Fuel Merger by Fusion Fuel’s shareholders is required, the QIND/Fusion Fuel Merger, (v) approval to opt out of Rule 9 of the Irish Takeover Rules, (vi) the adjournment of such meeting in accordance with the terms and conditions of the Fusion Fuel Acquisition Agreement, and (vii) any other proposal or proposals that Fusion Fuel reasonably deems necessary or desirable to consummate the Fusion Fuel Acquisition Transactions and the QIND/Fusion Fuel Merger. Fusion Fuel will be required to use its best efforts to obtain the Series A Conversion Shareholder Approval by the c, including, without limitation, by causing (x) Fusion Fuel’s board of directors not to withdraw the Board Recommendation, (y) the Fusion Fuel Insiders to be present at the Shareholders Meeting for quorum purposes, and (z) the Fusion Fuel Insiders to vote their respective Class A Ordinary Shares in accordance with the Board Recommendation. The Fusion Fuel Acquisition Agreement provides that Fusion Fuel may postpone or adjourn the Shareholders Meeting: (A) with the consent of QIND; (B) for the absence of a quorum (other than due to the failure of Fusion Fuel Insiders); or (C) to allow reasonable additional time (not to exceed 20 days) for the filing and distribution of any supplemental or amended disclosure with respect to the Fusion Fuel Acquisition Transactions or the QIND/Fusion Fuel Merger that Fusion Fuel’s board of directors has determined in good faith (after consultation with its outside legal counsel) is necessary under applicable laws and for such supplemental or amended disclosure to be disseminated to and reviewed by Fusion Fuel’s shareholders prior to the Shareholders Meeting. Prior to the mailing of the Registration Statement, Fusion Fuel will be entitled to engage a proxy solicitor that is reasonably satisfactory to QIND and the QIND Sellers, and Fusion Fuel will keep QIND and the QIND Sellers reasonably informed regarding its solicitation efforts and proxy tallies following the mailing of the Proxy Statement. In connection with the above, Fusion Fuel’s board of directors will be required to take all necessary action to ensure that the restrictions on business combinations that are provided for in the Irish Companies Act, and any other similar law applicable to Fusion Fuel, will not apply to the Fusion Fuel Acquisition Agreement, the Fusion Fuel Acquisition Transactions, and the QIND/Fusion Fuel Merger, including by approving the Fusion Fuel Acquisition Agreement and certain related agreements, documents and certificates to which Fusion Fuel is or will be a party. |
| 10 |
| ● | If, despite Fusion Fuel’s reasonable best efforts, the Series A Conversion Shareholder Approval is not obtained by the Initial Meeting Deadline, Fusion Fuel will be required, during the period beginning on the Initial Meeting Deadline and continuing for 180 days thereafter (the “Extended Meeting Deadline”), cause one or more additional shareholder meetings to be held so as to obtain the Series A Conversion Shareholder Approval. | |
| ● | Each of Fusion Fuel and QIND must take all necessary actions so that, immediately upon adjournment of the Shareholders Meeting or additional shareholders meeting held prior to the Extended Meeting Deadline at which the Series A Conversion Shareholder Approval is obtained, Fusion Fuel’s board of directors will be comprised of: (w) one individual as designated by Fusion Fuel and who shall be designated in writing pursuant to the Fusion Fuel/QIND Merger Agreement; (x) one individual as designated by QIND and who shall be designated in writing pursuant to the Fusion Fuel/QIND Merger Agreement; (y) two individuals that qualify as “independent” under the Nasdaq rules as designated by QIND and who shall be designated in writing under the Fusion Fuel/QIND Merger Agreement; and (z) one individual that qualifies as “independent” under the Nasdaq rules as designated jointly by Fusion Fuel and QIND and who is designated in writing under the Fusion Fuel/QIND Merger Agreement, provided that a majority of these designees must qualify as an “independent director” under Nasdaq rules and regulations (collectively, the “New Directors”). | |
| ● | Within three business days of obtaining the Series A Conversion Shareholder Approval, Fusion Fuel will file the Amended Fusion Fuel Charter with the Companies Registration Office of Ireland or as otherwise required to be effective under Irish law. |
The Fusion Fuel Acquisition Agreement contains the following unwinding and termination provisions:
| ● | Fusion Fuel will be required to repurchase the Fusion Fuel Shares Consideration from the QIND Sellers, in whole, and return the QIND Sellers’ Shares to the QIND Sellers, (i) within 15 calendar days after the Extended Meeting Deadline if despite Fusion Fuel’s reasonable best efforts, the Series A Conversion Shareholder Approval is not obtained by the Extended Meeting Deadline; or (ii) if Fusion Fuel fails to allocate cash raised from the Fusion Fuel Financings in compliance with the Fusion Fuel Acquisition Agreement, and Fusion Fuel continues to fail to do so within five calendar days after written notice from QIND, then within 10 calendar days after the date of QIND’s notice to complete such repurchase. The Fusion Fuel Acquisition Agreement will automatically terminate upon such repurchase. | |
| ● | The Fusion Fuel Acquisition Agreement may be terminated by any party before the end of the Restricted Period, by written notice, if (a) the Fusion Fuel Acquisition Closing does not occur by the date that is 30 days from the date of the Fusion Fuel Acquisition Agreement, provided that the party seeking termination is not in material breach of the Fusion Fuel Acquisition Agreement, or (b) a law or order by any governmental or regulatory body (including Nasdaq) permanently prohibits the consummation of the Fusion Fuel Acquisition Transactions. |
If the Fusion Fuel Acquisition Agreement is validly terminated, it will become void without further obligations or liabilities, except if termination results from fraud or willful and material failure to perform or breach, then the responsible party will be liable for damages as a result of such breach. Certain provisions, including confidentiality, fees and expenses, and miscellaneous terms, will continue to apply after termination.
The Fusion Fuel Acquisition Agreement also contains customary representations, warranties, and covenants, including customary restrictive covenants. The Fusion Fuel Acquisition Agreement provides for mutual indemnification provisions. Indemnification obligations with respect to claims relating to breaches of required representations under the Fusion Fuel Acquisition Agreement or certain related agreements, documents, or certificates are limited to claims of maximum damages of $4,000,000 and claims exceeding $400,000, except that no such limits apply with respect to claims of breach of certain representations considered to be fundamental under the Fusion Fuel Acquisition Agreement or with respect to claims of acts of fraud or willful misconduct. Indemnification obligations under the Fusion Fuel Acquisition Agreement will survive until the earlier of the Series A Preferred Shares Conversion or 24 months following the Fusion Fuel Acquisition Closing Date, except that indemnification for claims of breach of certain representations considered to be fundamental under the Fusion Fuel Acquisition Agreement or with respect to claims of acts of fraud, willful misconduct or intentional misrepresentation will survive until the expiration of the applicable statute of limitations. The QIND Sellers’ indemnification obligations will be shared on a pro-rata basis.
| 11 |
Organizational Structure
The following diagram depicts our organizational structure as of March 31, 2026.
Corporate Office
Our offices are located at 505 Montgomery Street, San Francisco, CA 94104, and our telephone number is 800-706-0806. Our website addresses are www.qualityindustrialcorp.com, https://alsholagas.ae and our email address is info@qualityindustrialcorp.com. Information contained on, or accessible through, the foregoing website is not a part of, and is not incorporated by reference into, this Form 10-K.
Employees
As of March 31, 2026, we have 125 employees, including five employees of QIND and 120 employees of Al Shola Gas, all of whom are full-time.
Smaller Reporting Company
The Company is a “smaller reporting company” as defined in Rule 12b-2 under the Exchange Act. There are certain exemptions available to us as a smaller reporting company, including: (1) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (2) scaled executive compensation disclosures; and (3) the requirement to provide only two years of audited financial statements, instead of three years. As long as we maintain our status as a “smaller reporting company”, these exemptions will continue to be available to us.
Emerging Growth Company
We qualify as an “emerging growth company” under the U.S. Jumpstart Our Business Startups Act (the “JOBS Act”). As a result, we will be permitted to, and intend to, rely on exemptions from certain disclosure requirements. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) in the assessment of the emerging growth company’s internal control over financial reporting. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
| 12 |
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year during which we have total annual gross revenues of at least $1.235 billion; (ii) the last day of our fiscal year following the fifth anniversary of the completion of our initial public offering; (iii) the date on which we have, during the preceding three year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act, which could occur if the market value of the common stock that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.
ITEM 1A. RISK FACTORS
An investment in our securities involves a high degree of risk. In addition to the other information contained in this Annual Report on Form 10-K, prospective investors should carefully consider the following risks before investing in our securities. If any of the following risks actually occur, as well as other risks not currently known to us or that we currently consider immaterial, our business, operating results and financial condition could be materially adversely affected. As a result, the trading price of our common stock could decline, and you may lose all or part of your investment in our common stock. The risks discussed below also include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements. See “Introductory Notes – Cautionary Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K. In assessing the risks below, you should also refer to the other information contained in this Annual Report on Form 10-K, including the financial statements and the related notes, before deciding to purchase any of our securities.
Risks Relating to Macro Conditions and Our Financial Condition
We are in default under certain of our outstanding convertible promissory notes, which could result in acceleration of the indebtedness thereunder, enforcement of security interests, dilutive conversions of outstanding amounts into shares of our common stock, and other material adverse consequences.
As of December 31, 2025, all eight of our outstanding convertible promissory notes have matured and the amounts due thereunder remain unpaid. These notes include: (i) a note in the original principal amount of $1,100,000, which matured on August 3, 2024; (ii) a note in the original principal amount of $200,000, which matured on March 17, 2025; (iii) a note in the original principal amount of $220,000, which matured on February 23, 2024; (iv) a note in the original principal amount of $550,000, which matured on December 16, 2023; (v) a note in the original principal amount of $35,000, which matured on or about August 6, 2024; (vi) a note in the original principal amount of $100,000, which matured on December 20, 2024; (vii) a note in the original principal amount of $71,500, which matured on February 21, 2025; and (viii) a note in the original principal amount of $405,000, which matured on July 4, 2025. Including accrued and unpaid interest, default interest, penalties, and other amounts that are owed, as of December 31, 2025, the total balance remaining under these notes was $2,561,240.
The failure to repay these notes at maturity constitutes an event of default under several of the notes and may constitute an event of default under all of them. The consequences of such defaults are material and include, among other things: (a) acceleration of the full outstanding principal amount plus accrued and unpaid interest; (b) accrual of default interest at elevated rates (ranging from 15% to 20% per annum, depending on the note); (c) in the case of the notes that matured on February 23, 2024 and February 21, 2025, the outstanding amount becoming immediately due and payable at 150% to 200% of the then-outstanding principal and accrued interest (not including default due only to non-payment of principal or interest when due); (d) in the case of the note that matured on August 6, 2024, assessment of a liquidated damages charge equal to 25% of the outstanding balance; (e) in the case of the note that matured on June 30, 2025, the outstanding principal amount increasing to 110% of the amount then due plus default interest at 16% per annum, and the holder gaining the right to convert the default amount into shares of our common stock at a conversion price equal to 80% of the average of the four lowest volume weighted average prices over the preceding 20 trading days, with full-ratchet anti-dilution protection; and (f) in the case of all notes containing conversion features, the right of holders to convert outstanding amounts into shares of our common stock at conversion prices that may be substantially below the then-current market price, resulting in significant dilution to existing stockholders.
| 13 |
Additionally, the note that matured on June 30, 2025, is a senior secured obligation of the Company, and default thereunder could result in the lender enforcing its rights, which could materially impair our operations and the value of our assets. The related loan agreement also contains cross-default provisions triggered by defaults on other material agreements, potentially compounding the adverse effects described above.
Several of these notes also contain most-favored-nation provisions, anti-dilution protections, and beneficial ownership limitations that, in the aggregate, could further complicate our ability to restructure or refinance this indebtedness. There can be no assurance that we will be able to negotiate forbearance agreements, obtain waivers, refinance, or otherwise satisfy our obligations under these notes on terms acceptable to us, or at all. If the holders of these notes elect to exercise their remedies, including acceleration, conversion at discounted prices, or enforcement of security interests, such actions could have a material adverse effect on our business, financial condition, results of operations, and the market price of our common stock, and could raise substantial doubt about our ability to continue as a going concern.
We are dependent on Fusion Fuel and external financing to fund our operations and executive compensation, and there can be no assurance that such support will be available when needed.
We anticipate that Fusion Fuel, our parent company, will finance certain investments in connection with the operations of Al Shola Gas, our majority-owned subsidiary. We further anticipate that Fusion Fuel will provide all compensation required by our executive officers, other than our Chief Operating Officer and Managing Director Middle East. In addition, we plan to address cash flow deficits through borrowings and the sale of securities.
However, no assurance can be given that any such financing, executive compensation support, or additional capital will be available, if and when required. Fusion Fuel’s ability to finance our investments and fund executive compensation depends on its own financial condition and liquidity, which are subject to risks and uncertainties beyond our control. Similarly, our ability to raise capital through borrowings or securities sales may be constrained by adverse market conditions, deteriorating creditworthiness, regulatory limitations, or investor sentiment. If we are unable to obtain adequate financing or compensation support from Fusion Fuel, or to raise sufficient capital through borrowings or securities sales, we may be unable to fully fund our operations, retain key executive personnel, or execute our business plan. Any of these outcomes could have a material adverse effect on our business, financial condition, results of operations, and prospects.
We have a substantial amount of goodwill on our balance sheet. Future write-offs of goodwill may have the effect of decreasing our earnings or increasing our losses.
We have obtained growth through the acquisition of Al Shola Gas. Under existing accounting standards, we are required to periodically review goodwill assets for possible impairment. In the event that we are required to write down the value of any assets under these pronouncements, it may materially and adversely affect our operating results, financial condition, and the price of our common stock. The percentage of our goodwill compared to our total assets as of December 31, 2025, was 50.6%.
Our ability to generate the significant amount of cash needed to service our debt obligations and our ability to refinance all or a portion of our indebtedness or obtain additional financing depends on many factors, many of which may be beyond our control.
Our ability to make scheduled payments on, or to refinance our obligations under, our debt, will depend on our financial and operating performance, which, in turn, will be subject to prevailing economic and competitive conditions and to the financial and business factors, many of which may be beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations, that currently anticipated business opportunities will be realized on schedule or at all, or that future borrowings will be available to us in amounts sufficient to enable us to service our indebtedness and any amounts borrowed under future credit facilities, or to fund our other liquidity needs.
We will use cash to pay the principal and interest on our debt except to the extent that such debt may be convertible into equity. These payments limit funds otherwise available for working capital, capital expenditures, acquisitions, collaborations, and other purposes. As a result of these obligations, our current liabilities may exceed our current assets. We may need to take on additional debt as we expand in our industry, which could increase our ratio of debt to equity. The need to service our debt may limit funds available for other purposes and our inability to service debt in the future could lead to acceleration of our debt and foreclosure on assets.
| 14 |
We cannot assure that we will be able to refinance any of our indebtedness or obtain additional financing as well as prevailing market conditions. As a result, we could face liquidity problems and might be required to dispose of material assets or operations to meet our indebtedness service and other obligations.
Our projections are subject to significant risks, assumptions, estimates and uncertainties, including assumptions regarding future legislation and changes in regulations of the jurisdictions in which we operate, or seek to operate, our business. As a result, our projected revenues, market share, expenses and profitability may differ materially from our expectations.
We operate in a rapidly evolving and highly competitive industry and our projections are subject to the risks and assumptions made by management with respect to this industry. Operating results are difficult to forecast because they generally depend on our assessment of factors that are inherently beyond our control and impossible to predict with certainty, such as the timing of the adoption of future legislation and regulations by different jurisdictions.
Furthermore, if we invest in the development of new products or distribution channels that do not achieve commercial success, whether because of competition or otherwise, we may not recover the often material “up front” costs of developing and marketing those products and distribution channels or recover the opportunity cost of diverting management and financial resources away from other products or distribution channels.
Additionally, our business may be affected by reductions in customer acquisition, customer persistency and customer spending as a result of numerous factors which may be difficult to predict. This may result in decreased revenue levels, and we may be unable to adopt timely measures to compensate for any unexpected shortfall in income. Our profitability projections make numerous assumptions about the expected future levels of various expense items. Historically, most of these expense items have been relatively stable or predictable either in absolute terms or in relation to revenue but there is no certainty that such stability or predictability will continue into the future. These inabilities could cause our operating results in a given period to be higher or lower than expected. If actual results differ from our estimates, analysts may react negatively, and our share price could be adversely impacted.
If we are unable to successfully identify, complete and integrate acquisitions, our results of operations could be adversely affected.
Acquisitions have been and will continue to be a significant component of our growth strategy. We seek to identify and complete acquisitions and may continue to make strategic acquisitions. Our previous or future acquisitions may not be successful or may not generate the financial benefits that we expected to achieve at the time of acquisition. In addition, there can be no assurance that we will be able to locate suitable acquisition candidates in the future or acquire them on acceptable terms or, because of competition in the marketplace and limitations imposed by the agreements governing our indebtedness or the availability of capital, that we will be able to finance future acquisitions. We may be unable to identify, negotiate, and complete suitable acquisition opportunities on reasonable terms.
Acquisitions involve special risks, including, without limitation, the potential assumption of unanticipated liabilities and contingencies, difficulty in assimilating the operations and personnel of the acquired businesses, disruption of our existing business, dissipation of our limited management resources and impairment of relationships with employees and customers of the acquired business as a result of changes in ownership. Such incidents can significantly affect our financial and operational outlook.
While we believe that strategic acquisitions can improve our competitiveness and profitability, these activities could have a material adverse effect on our business, financial condition, and operating results. We may incur significant costs such as transaction fees, professional service fees and other costs related to future acquisitions. We may also incur integration costs following the completion of any such acquisition as we integrate the acquired business with the rest of our Company. Although we expect that the realization of efficiencies related to the integration of any acquired businesses will offset the incremental transaction and acquisition-related costs over time, this net financial benefit may not be achieved in the near term or at all.
| 15 |
Risks associated with climate change and other environmental impacts, and increased focus and evolving views of our customers, shareholders, and other stakeholders on climate change issues, could negatively affect our business and operations.
The effects of climate change create short and long-term financial risks to our business, both in the UAE and globally. We have significant operations located in regions that have been, and may in the future be, exposed to significant weather events and other natural disasters. Climate related changes can increase variability in or otherwise impact natural disasters, including weather patterns, with the potential for increased frequency and severity of significant weather events (e.g., flooding, hurricanes, and tropical storms), natural hazards (e.g., increased flooding risk), rising mean temperature and sea levels, and long-term changes in precipitation patterns (e.g., drought, desertification, and/or poor water quality). We expect climate change could affect our facilities, operations, employees, and communities in the future, particularly at facilities in coastal areas and areas prone to extreme weather events and water scarcity. Our suppliers are also subject to natural disasters that could affect their ability to deliver or perform under our contracts, including as a result of disruptions to their workforce and critical infrastructure. Disruptions also impact the availability and cost of materials needed for manufacturing and could increase insurance and other operating costs.
Increased worldwide focus on climate change has led to legislative and regulatory efforts to combat both potential causes and adverse impacts of climate change, including regulation of greenhouse gas emissions. New or more stringent laws and regulations related to greenhouse gas emissions and other climate change related concerns may adversely affect us, our suppliers, and our customers. Some of our facilities are, for example, engaged in manufacturing processes that produce greenhouse gas emissions, including carbon dioxide, or rely on products from others that do so. We have worked for years to reduce our reliance on fossil-based energy sources, to decrease our greenhouse gas emissions, to reduce our consumption of water and production of waste, and to ensure our compliance with environmental regulations where we operate, enhancing our record of environmental sustainability. However, new, and evolving laws and regulations could mandate different or more restrictive standards, could require capital investments to transition to low carbon technologies, could adversely impact our ongoing operations, and could require changes on a more accelerated time frame. Our suppliers may face similar challenges and incur additional compliance costs that are passed on to us. These direct and indirect costs may adversely impact our results.
We may be adversely affected by the effects of inflation.
Inflation in wages, materials, parts, equipment, and other costs has the potential to adversely affect our results of operations, cash flows and financial position by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices, we charge our customers for our products and services. In addition, the existence of inflation in the economy has the potential to result in higher interest rates, which could result in higher borrowing costs, supply shortages, increased costs of labor, weakening exchange rates and other similar effects. We have currently experienced inflationary pressures on its supply chain due to increased shipping costs, increased energy prices for manufacture of our commercial products as well as increased prices from suppliers of raw materials. We have so far been able to offset inflationary pressure to consumers, but it cannot be guaranteed that that our results of operations will not be adversely affected by inflation in the future and could reduce sales and/or operating margins, and overall financial performance.
We are dependent on the availability of raw materials, parts, and components used in our products.
While we manufacture certain parts and components used in our products, we also require substantial amounts of raw materials and purchases of certain parts and components from suppliers. The availability of and prices for raw materials, parts and components may be subject to curtailment or change due to, among other things, suppliers’ allocations to other purchasers, interruptions in production by suppliers, including due to geopolitical or civil unrest, unfavorable economic or industry conditions, labor disruptions, supply chain disruptions, catastrophic weather events, natural disasters, the occurrence of a contagious disease or illness, changes in exchange rates and prevailing price levels. Any change in the supply of, or price for, these raw materials or parts and components could materially affect us and our financial condition, results of operations and cash flow.
| 16 |
Increases in the price of commodities could impact the cost or price of our products, which could impact our ability to sustain and grow earnings.
The manufacturing processes for gas fuel consume significant amounts of raw materials, the costs of which are subject to worldwide supply and demand factors, as well as other factors beyond our control. Raw material price fluctuations may adversely affect our results. In the past raw material prices have experienced volatility. Commodity pricing has fluctuated over the past few years and may continue to do so in the future. Such fluctuations could have a material effect on our results of operations, balance sheets and cash flows and impact the comparability of our results between financial periods
The markets in which we operate are highly competitive which could reduce sales and operating margins.
Most of our products are sold in competitive markets. Maintaining and improving a competitive position will require continued investment in manufacturing, engineering, quality standards, marketing, customer service and support and distribution networks. We may not be successful in maintaining our competitive position. Our competitors may develop products and methods that are more efficient or may adapt quicker to new technologies or evolving customer requirements. We may not be able to compete successfully with existing competitors or with new competitors. Pricing pressures may require us to adjust the prices of products to stay competitive. Failure to continue competing successfully could reduce sales, operating margins, and overall financial performance.
Our business operations may be adversely affected by information systems interruptions or cybersecurity intrusions.
We depend on various information technologies to administer, store, and support multiple business activities. If these systems are damaged, cease to function properly or are subject to cybersecurity attacks, such as those involving unauthorized access, malicious software and/or other intrusions, we could experience production downtimes, operational delays, other detrimental impacts on operations or the ability to provide products and services to its customers, the compromising of confidential or otherwise protected information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems or networks, financial losses from remedial actions, loss of business or potential liability, penalties, fines and/or damage to our reputation. Our systems, networks, products, and services remain potentially vulnerable to known or unknown threats, any of which could have a material adverse effect on the Company and its financial condition or results of operations. Further, given the unpredictability, nature, and scope of cybersecurity attacks, it is possible that potential vulnerabilities could go undetected for an extended period. A severe cybersecurity incident could reduce sales, operating margins, and overall financial performance.
Our long-term success depends, in part, on our ability to operate and expand internationally, and our business is susceptible to risks associated with international operations.
Currently, we only maintain operations in the UAE, and plan to continue our efforts to expand globally, in jurisdictions where we do not currently operate. We expect international operations and export sales to continue to constitute the majority of our sales and assets in the foreseeable future. Managing a global organization is difficult, time consuming and expensive, and any international expansion efforts that we undertake may not be profitable in the near or long term. Although we have operating experience in many foreign jurisdictions, we must still continue to make significant investments to build our international operations. Our sales from international operations and sales from export are both subject in varying degrees to risks inherent in doing business outside the United States. These risks include the following:
| ● | Costs, risks, and uncertainties associated with tailoring our services in international jurisdictions as needed to better address both the needs of customers, and the threats of local competitors; | |
| ● | Risks of economic instability, including due to inflation; | |
| ● | Uncertainties in forecasting revenues and expenses in markets where we have not previously operated; | |
| ● | Costs and risks associated with local and national laws and regulations governing the industries in which we operate, health and safety, climate change and sustainability, and labor and employment; | |
| ● | Operational and compliance challenges caused by distance, language, and cultural differences; |
| 17 |
| ● | Costs and risks associated with compliance with international tax laws and regulations; | |
| ● | Costs and risks associated with compliance with the U.S. Foreign Corrupt Practices Act and other laws in the United States related to conducting business outside the United States, as well as the laws and regulations of non-U.S. jurisdictions governing bribery and other corrupt business activities; | |
| ● | Costs and risks associated with human trafficking, modern slavery and forced labor reporting, training and due diligence laws and regulations in various jurisdictions; | |
| ● | Being subject to other laws and regulations, including laws governing online advertising and other Internet activities, email and other messaging, collection and use of personal information, ownership of intellectual property, taxation, and other activities important to our online business practices; | |
| ● | Currency exchange rate fluctuations and restrictions on currency repatriation; | |
| ● | Competition with companies that understand the local market better than we do or that have preexisting relationships with regulators and customers in those markets; | |
| ● | Adverse effects resulting from the United Kingdom’s exit from the European Union (commonly known as “Brexit”); | |
| ● | Reduced or varied protection for intellectual property rights in some countries; | |
| ● | Disruption of operations from labor and political disturbances; | |
| ● | Withdrawal from or renegotiation of international trade agreements and other restrictions on the trade between the United States and other countries; | |
| ● | Changes in tariff and trade barriers; and | |
| ● | Geopolitical events, including natural disasters, climate change, public health issues, political instability (such as war between Ukraine and Russia and in the Middle East), terrorism, insurrection, or war. |
Entry into certain transactions with foreign entities now or in the future may be subject to government regulations, including review related to foreign direct investment by U.S. or foreign government entities. If a transaction with a foreign entity is subject to regulatory review, such regulatory review might limit our ability to enter into the desired strategic alliance and thus our ability to carry out our long-term business strategy.
Operating in international markets also requires significant management attention and financial resources. The investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability and could instead result in increased costs without a corresponding benefit. We cannot guarantee that our international operations or expansion efforts will be successful.
Any of these events as well as related events not aforementioned, could have a materially adverse impact on our Company and its operations.
Uncertainty related to environmental regulation and industry standards, as well as physical risks of climate change, could impact our results of operations and financial position.
Increased public awareness and concern regarding environmental risks, including global climate change, may result in more international, regional and/or federal requirements or industry standards to reduce or mitigate global warming and other environmental risks. New climate change laws and regulations could require us to change our manufacturing processes or obtain substitute materials that may cost more or be less available for its manufacturing operations. Various jurisdictions in which we do business have implemented, or in the future could implement or amend, restrictions on emissions of carbon dioxide or other greenhouse gases, limitations or restrictions on water use, the production of single use plastics, regulations on energy management and waste management and other climate change-based rules and regulations, which may increase our expenses and adversely affect its operating results. In addition, the physical risks of climate change may impact the availability and cost of materials, sources and supply of energy, product demand and manufacturing and could increase insurance and other operating costs. The expected future increased worldwide regulatory activity relating to climate change could expand the nature, scope, and complexity of matters that we are required to control, assess, and report. If environmental laws or regulations or industry standards are either changed or adopted and impose significant operational restrictions and compliance requirements upon us, our suppliers, our customers, or our products, or our operations are disrupted due to physical impacts of climate change on us, our customers or our suppliers, our business, results of operations and financial condition could be adversely impacted.
| 18 |
Significant fluctuations in foreign currency exchange rates may harm our financial results.
We operate primarily in the UAE, which attempts to fix the exchange rate of the UAE currency, UAE Dirham, to the U.S. dollar at a stable rate. However, we may still be or become exposed to fluctuations in foreign currency exchange rates. Any significant change in the value of the currencies of the countries in which we might do business against not pegged to the U.S. dollar could affect our ability to sell products competitively and control its cost structure, which could have a material adverse effect on our results of operations.
A significant or sustained decline in commodity prices including gas could negatively impact the levels of expenditures by certain company customers.
Demand for our products depends, in part, on the level of new and planned expenditures by certain of our customers. The level of expenditures by our customers is dependent on, among other factors, general economic conditions, availability of credit, economic conditions within their respective industries and expectations of future market behavior. Our profitability may be adversely affected during any periods of unexpected or rapid increases in interest rates and volatility in commodity prices, including gas, can negatively affect the level of these activities and impact our subsidiary and can result in postponement of capital spending decisions or the delay or cancellation of existing orders. The ability of our customers to finance capital investment and maintenance may also be affected by the conditions in their industries. Reduced demand for our products could result in the delay or cancellation of existing orders or lead to excess manufacturing capacity, which unfavorably impacts the absorption of fixed manufacturing costs. This reduced demand could have a material adverse effect on our financial condition and results of operations.
We are dependent on financing for the continuation of our operations.
It can at times be difficult to predict our capital needs on a monthly, quarterly, or annual basis. Our future is dependent upon our ability to obtain profitable operations or financing. We reserve the right to seek additional funds through private placements of our common stock and/or through debt financing. We do not have financing in place at this time for all future planned acquisitions. We may not have access to financing or on terms that are acceptable to us. Any lack of funds from operations or fundraising for any shortage could be detrimental to our ability to continue operations and negatively impact us and our financial condition, results of operations and cash flow.
Risks Relating to Our Industry and Market
The conflict in Iran, which escalated sharply in late February 2026, poses material risks to our LPG distribution operations in Dubai.
As of March 31, 2026, our business is subject to significant risks arising from the ongoing armed conflict involving the United States, Israel, and Iran, which has materially disrupted regional energy markets, critical infrastructure, and the maritime supply chains upon which our LPG distribution operations in Dubai fundamentally depend. The conflict, which escalated sharply beginning in late February 2026, has resulted in the effective closure of the Strait of Hormuz — the world’s single most critical energy chokepoint — to most commercial shipping, with Iran threatening to fire on vessels attempting transit and commercial operators, major oil companies, and insurers having substantially withdrawn from the corridor. The closure has been characterized as the largest disruption to global energy supply since the 1970s energy crisis. Approximately 20% of the world’s daily oil and LPG supply normally transits the Strait, and LPG supply chains are among the most acutely exposed commodities, with alternative supply options characterized by market analysts as “very limited”. Attacks by Iranian forces have directly struck Dubai’s Jebel Ali port — the UAE’s principal maritime commercial hub — as well as Abu Dhabi port infrastructure and other UAE facilities, causing direct and material disruption to shipping and logistics operations in the Emirate. Iranian forces have further threatened to designate the UAE’s al-Hosn gas field and additional UAE energy infrastructure as “direct and legitimate targets,” with Iranian state media calling for evacuation of personnel. The UAE’s Habshan complex — one of the world’s largest gas processing facilities — has already been forced to shut down following falling debris from intercepted missiles, and the Bab oilfield was targeted. These developments have caused the Middle East Dubai crude benchmark to reach a record $166.80 per barrel and Brent crude to spike above $119 per barrel, with further price increases possible if supply disruptions are prolonged.
| 19 |
The escalating conflict exposes our Dubai-based LPG distribution and related services business to a range of material and potentially severe operational, financial, and safety risks that could have a material adverse effect on our business, results of operations, financial condition, and prospects. Our ability to procure LPG at commercially viable prices and in sufficient volumes depends critically on regional supply chains and the continued operability of UAE port and infrastructure networks, all of which are currently under severe stress. Importers across the Gulf are scrambling to reroute essential cargoes, with trucking costs from alternative ports projected to increase by multiples of standard ocean freight rates. Insurance premiums for vessels operating in and near the Strait of Hormuz have already reached six-year highs, making transit economically unviable for many commercial operators and further constraining supply availability. Even if active hostilities were to cease, the restoration of normal supply chains is expected to take substantial time, as LPG production facilities, refineries, and port infrastructure that have sustained damage may require years to repair. The war has also materially impaired broader economic activity in Dubai, including disruptions to aviation, tourism, trade, and retail, which could reduce demand for our services. We cannot predict the duration, intensity, or geographic scope of the conflict, the extent of damage to regional energy infrastructure, or the timing of any restoration of the Strait of Hormuz to normal commercial transit. If these conditions persist or worsen, our ability to source, transport, store, and distribute LPG, as well as to maintain continuity of our related services operations, could be significantly impaired, which could materially and adversely affect our revenues, costs, and overall financial performance.
We occasionally provide integrated gas distribution project management services in the form of long-term, fixed price contracts that may require us to assume additional risks associated with cost overruns, operating cost inflation, labor availability and productivity, supplier and contractor pricing and performance, and potential claims for liquidated damages.
We occasionally provide integrated gas distribution project management services outside our normal discrete business in the form of long-term, fixed price contracts. Some of these contracts are required by our customers, primarily international gas companies. These services include acting as project managers as well as service providers and may require us to assume additional risks associated with cost overruns. These customers may provide us with inaccurate information in relation to their reserves, which is a subjective process that involves location and volume estimation, that may result in cost overruns, delays, and project losses. In addition, our gas distribution customers often operate in countries with unsettled political conditions, war, civil unrest, or other sources of disruption. These issues may also result in cost overruns, delays, and project losses.
Providing services on an integrated basis may also require us to assume additional risks associated with operating cost inflation, labor availability and productivity, supplier pricing and performance, and potential claims for liquidated damages. We rely on third-party subcontractors and equipment providers to assist us with the completion of these types of contracts. To the extent that we cannot engage subcontractors or acquire equipment or materials in a timely manner and on reasonable terms, our ability to complete a project in accordance with stated deadlines or at a profit may be impaired. If the amount we are required to pay for these goods and services exceeds the amount we have estimated in bidding for fixed-price work, we could experience losses in the performance of these contracts. These delays and additional costs may be substantial, and we may be required to compensate our customers for these delays. This may reduce the profit to be realized or result in a loss on a project.
| 20 |
The success of our business depends on our ability to maintain and enhance our reputation and brand.
We believe that our reputation in our industry is of significant importance to the success of our business. A well-recognized brand is critical to increasing our customer base and, in turn, increasing our revenue. Since the industry is highly competitive, our ability to remain competitive depends to a large extent on our ability to maintain and enhance our reputation and brand, which could be difficult and expensive. To maintain and enhance our reputation and brand, we need to successfully manage many aspects of our business, such as cost-effective marketing campaigns to increase brand recognition and awareness in a highly competitive market. We cannot assure you, however, that these activities will be successful and achieve the brand promotion goals we expect. If we fail to maintain and enhance our reputation and brand, or if we incur excessive expenses in our efforts to do so, our business, financial conditions and results of operations could be adversely affected.
In the event that we are unable to successfully compete in our industry, we may see lower profit margins.
We face substantial competition in our industry. Due to our small size, it can be assumed that some of our competitors have greater financial, technical, and other competitive resources. Accordingly, these competitors may have already begun to establish superior technologies in our industry. We will attempt to compete against these competitors by developing technology that exceeds what is offered by our competitors. However, we cannot assure you that our technology will outperform competing technology, or that our competitors will not develop new products or services that exceed what we provide. In addition, we may face competition based on price. If our competitors lower the prices on their products, then it may not be possible for us to market our products at prices that are economically viable. Increased competition could result in lower than projected revenues, price reductions, and lower profit margins.
Any one of these results could adversely affect our business, financial condition, and results of operations.
In addition, our competitors may develop competing products that achieve greater market acceptance. It is also possible that new competitors may emerge and acquire significant market share. Our inability to achieve sales and revenue due to competition will have an adverse effect on our business, financial condition, and results of operations.
If we are unable to successfully manage growth, our operations could be adversely affected.
Our progress is expected to require the full utilization of our management, financial and other resources. Our ability to manage growth effectively will depend on our ability to improve and expand operations, including our financial and management information systems, and to recruit, train and manage personnel. There can be no absolute assurance that management will be able to manage growth effectively.
If we do not properly manage the growth of our business, we may experience significant strains on our management and operations and disruptions in our business. Various risks arise when companies and industries grow quickly. If our business or industry grows too quickly, our ability to meet customer demand in a timely and efficient manner could be challenged. We may also experience development delays as we seek to meet increased demand for our services and platform. Our failure to properly manage the growth that we or our industry might experience could negatively impact our ability to execute on our operating plan and, accordingly, could have an adverse impact on our business, our cash flow and results of operations, and our reputation with our current or potential customers.
Trends in gas prices affect the level of exploration, development, and production activity of our customers and the demand for our services and products, which could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.
Demand for our services and products is particularly sensitive to the level of exploration, development, and production activity of, and the corresponding capital spending by, gas companies. The level of exploration, development, and production activity is directly affected by trends in gas prices, which historically have been volatile and are likely to continue to be volatile. Prices for gas are subject to large fluctuations in response to relatively minor changes in the supply of and demand for gas, market uncertainty, and a variety of other economic factors that are beyond our control. Given the long-term nature of many large-scale development projects, even the perception of longer-term lower gas prices by gas companies can cause them to reduce or defer major expenditures. Any prolonged reductions of commodity prices or expectations of such reductions could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.
| 21 |
Factors affecting the price of gas include:
| ● | the level of supply and demand for gas; |
| ● | the cost of, and constraints associated with, producing and delivering gas; |
| ● | governmental regulations and other actions, including economic sanctions and policies of governments regarding the exploration for and production and development of their gas reserves; |
| ● | weather conditions, natural disasters, and health or similar issues, such as pandemics or epidemics; |
| ● | worldwide political and military actions, and economic conditions, including potential recessions; and |
increased demand for alternative energy and use of electric vehicles and increased emphasis on decarbonization, including government initiatives to promote the use of renewable energy sources and public sentiment around alternatives to fossil fuels such as gas.
Our business is dependent on capital spending by our customers, and reductions in capital spending could have a material adverse effect on our gas distribution business, consolidated results of operations, and consolidated financial condition.
Our gas distribution business is directly affected by changes in capital expenditures by our customers, and reductions in their capital spending could reduce demand for our services and products and have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition. Some of the items that may impact our customers’ capital spending include:
| ● | gas prices, which are impacted by the factors described in the preceding risk factor; |
| ● | the inability of our customers to access capital on economically advantageous terms, which may be impacted by, among other things, a decrease of investors’ interest in hydrocarbon producers because of environmental and sustainability initiatives; |
| ● | changes in customers’ capital allocation, including an increased allocation to the production of renewable energy or other sustainability efforts, leading to less focus on gas production growth; |
| ● | restrictions on our customers’ ability to get their gas to market due to infrastructure limitations; |
| ● | consolidation of our customers; |
| ● | customer personnel changes; and |
| ● | adverse developments in the business or operations of our customers, including write-downs of gas reserves and borrowing base reductions under customers’ credit facilities. |
Constraints in the supply of, prices for, and availability of transportation of raw materials can have a material adverse effect on our gas distribution business and consolidated results of operations.
Raw materials essential to our gas distribution operations and manufacturing, such as proppants (primarily sand), chemicals, metals, and gels, are normally readily available. Shortages of raw materials as a result of high levels of demand or loss of suppliers can trigger constraints in the supply chain of those raw materials, particularly where we have a relationship with a single supplier for a particular resource. Many of the raw materials essential to our business require the use of rail, storage, and trucking services to transport the materials to our job sites. These services, particularly during times of high demand, may cause delays in the arrival of or otherwise constrain our supply of raw materials. These constraints could have a material adverse effect on our business and consolidated results of operations. In addition, price increases imposed by our vendors for raw materials and transportation providers used in our business, and the inability to pass these increases through to our customers, could have a material adverse effect on our business and consolidated results of operations.
| 22 |
Our ability to operate and our growth potential could be materially and adversely affected if we cannot attract, employ, and retain technical personnel at a competitive cost.
Many of the services that we provide and the products that we sell are complex and highly engineered and often must perform or be performed in harsh conditions. We believe that our success depends upon our ability to attract, employ, and retain technical personnel with the ability to design, utilize, and enhance these services and products. A significant increase in the wages paid by competing employers could result in a reduction of our skilled labor force, increases in the wage rates that we must pay, or both. If either of these events were to occur, our cost structure could increase, our margins could decrease, and any growth potential could be impaired.
Demand for the products we distribute could decrease if the manufacturers of those products were to sell a substantial amount of goods directly to end users in the markets we serve.
Our products are purchased through distributors and not directly from manufacturers. If those customers were to purchase the products that we sell directly from manufacturers, or if manufacturers sought to increase their efforts to sell directly to end users, our business, results of operations and financial condition could be materially and adversely affected. These or other developments that remove us from, or limit our role in, the distribution chain, may harm our competitive position in the marketplace and reduce our sales and earnings.
We may experience unexpected supply shortages.
We distribute products from a wide variety of manufacturers and suppliers. Nevertheless, in the future we may have difficulty obtaining the products we need from suppliers and manufacturers as a result of unexpected demand or production difficulties. Also, products may not be available to us in quantities sufficient to meet our customer demand. Our inability to obtain sufficient products from suppliers and manufacturers, in sufficient quantities, could have a material adverse effect on our business, results of operations and financial condition.
Price reductions by suppliers of gas products sold by us could cause the value of our inventory to decline. Also, such price reductions could cause our customers to demand lower sales prices for these products, possibly decreasing our margins and profitability on sales to the extent that our inventory of such products was purchased at the higher prices prior to supplier price reductions, and we are required to sell such products to our customers at the lower market prices.
The value of our gas products inventory could decline as a result of price reductions by manufacturers of products sold by us. There is no assurance that a substantial decline in product prices would not result in a write-down of our inventory value. Such a write-down could have a material adverse effect on our financial condition. Also, decreases in the market prices of products sold by us could cause customers to demand lower sale prices from us. These price reductions could reduce our margins and profitability on sales with respect to such lower-priced products. Reductions in our margins and profitability on sales could have a material adverse effect on our business, results of operations, and financial condition.
A substantial decrease in the price of gas could significantly lower our gross profit or cash flow.
We distribute gas and, as a result, our business may be significantly affected by the price and supply of gas. When gas prices are lower, the prices that we charge customers for products may decline, which affects our gross profit and cash flow. The gas industry as a whole is cyclical and at times pricing and availability of gas can be volatile due to numerous factors beyond our control, including general domestic and international economic conditions, labor costs, sales levels, competition, consolidation of steel producers, import duties and tariffs and currency exchange rates. When gas prices decline, customer demands for lower prices and our competitors’ responses to those demands could result in lower sale prices and, consequently, lower gross profit or cash flow.
| 23 |
If gas prices rise, we may be unable to pass along the cost increases to our customers.
We maintain inventories of gas to accommodate the lead time requirements of our customers. Accordingly, we purchase gas in an effort to maintain our inventory at levels that we believe to be appropriate to satisfy the anticipated needs of our customers based upon historic buying practices, contracts with customers and market conditions. Our commitments to purchase gas are generally at prevailing market prices in effect at the time we place our orders. If gas prices increase between the time, we order gas and the time of delivery of such products to us, our suppliers may impose surcharges that require us to pay for increases in gas prices during such period. Demand for the gas we distribute, the actions of our competitors, and other factors will influence whether we will be able to pass such gas cost increases and surcharges on to our customers, and we may be unsuccessful in doing so.
We may not have adequate insurance for potential liabilities, including liabilities arising from litigation.
In the ordinary course of business, we have and, in the future, may become the subject of various claims, lawsuits and administrative proceedings seeking damages or other remedies concerning our commercial operations, the products we distribute, employees and other matters, including potential claims by individuals alleging exposure to hazardous materials as a result of the products we distribute or our operations. Some of these claims may relate to the activities of businesses that we have acquired, even though these activities may have occurred prior to our acquisition of such businesses. The products we distribute are sold primarily for use in the energy industry, which is subject to inherent risks that could result in death, personal injury, property damage, pollution, or loss of production. In addition, defects in the products we distribute could result in death, personal injury, property damage, pollution or damage to equipment and facilities. Actual or claimed defects in the products we distribute may give rise to claims against us for losses and expose us to claims for damages.
We maintain insurance to cover certain of our potential losses, and we are subject to various self-retentions, deductibles, and caps under our insurance. It is possible, however, that judgments could be rendered against us in cases in which we would be uninsured and beyond the amounts that we currently have reserved or anticipate incurring for such matters. Even a partially uninsured claim, if successful and of significant size, could have a material adverse effect on our business, results of operations and financial condition. Furthermore, we may not be able to continue to obtain insurance on commercially reasonable terms in the future, and we may incur losses from interruption of our business that exceed our insurance coverage. Finally, even in cases where we maintain insurance coverage, our insurers may raise various objections and exceptions to coverage which could make uncertain the timing and amount of any possible insurance recovery uncertain.
Our operations are subject to hazards inherent in the gas industry and, as a result, we are exposed to potential liabilities that may affect our financial condition and reputation.
Risks inherent to the gas industry, such as equipment malfunctions and failures, equipment misuse and defects, explosions and uncontrollable flows of gas and natural disasters, can cause personal injury, loss of life, suspension of operations, damage to facilities, business interruption and damage to or destruction of property, equipment, and the environment. These risks could expose us to substantial liability for personal injury, wrongful death, property damage, loss of gas production, pollution, and other environmental damages. The frequency and severity of such incidents will affect operating costs, insurability and relationships with customers, employees, and regulators. In particular, our customers may elect not to purchase our services if they view our safety record as unacceptable, which could cause us to lose customers and substantial revenues. In addition, these risks may be greater for us because we may acquire companies that have not allocated significant resources and management focus to safety and have a poor safety record requiring rehabilitative efforts during the integration process.
Our customers could seek damages for losses associated with these errors, defects, or other performance problems. Our insurance policies may not be adequate to cover all liabilities. Further, insurance may not be generally available in the future or, if available, insurance premiums may make such insurance commercially unjustifiable. Moreover, even if we are successful in defending a claim, it could be time-consuming and costly to defend.
| 24 |
We are subject to increased risks associated with our investments in emerging markets, particularly in the Middle East region and specifically in the United Arab Emirates. These risks encompass significant political, social, and economic uncertainties in the region. Given the volatile nature of these markets, instabilities in these regions could significantly adversely affect the value of our investments.
Our gas operations are conducted, and our gas assets are located in, the UAE, which is defined as an emerging market. There is no assurance that any political, social, economic or market conditions affecting countries in the Middle East region would not have a material adverse effect on our business, results of operations and financial condition.
Specific risks in the Middle East region that may have a material impact on our business, results of operations and financial condition include:
| ● | an increase in inflation and the cost of living; |
| ● | a devaluation in the currency of any country in which we have operations; |
| ● | external acts of warfare and civil clashes or other hostilities involving nations in the region; |
| ● | governmental actions or interventions, including tariffs, protectionism, and subsidies; |
| ● | difficulties and delays in obtaining governmental or other approvals, new permits and consents for our operations or renewing existing ones; |
| ● | potential lack of transparency or reliability in jurisdictions where we operate; |
| ● | cancellation of contractual rights; |
| ● | lack of infrastructure; |
| ● | expropriation or nationalization of assets; |
| ● | inability to repatriate profits and/or dividends; |
| ● | continued regional political instability and unrest, including government or military regime change, riots or other forms of civil disturbance or violence, including through acts of terrorism; |
| ● | military strikes or the outbreak of war or other hostilities involving nations in the region; |
| ● | a material curtailment of the industrial and economic infrastructure development that is currently underway across the Middle East region; |
| ● | increased government regulations, or adverse governmental activities, with respect to price, import and export controls, the environment, customs and immigration, capital transfers, foreign exchange and currency controls, labor policies, land and water use and foreign ownership; |
| ● | changing tax regimes, including the imposition of taxes in currently tax favorable jurisdictions; |
| ● | arbitrary, inconsistent, or unlawful government action, including capricious application of tax laws and selective tax audits; |
| ● | limited availability of capital or debt financing; and |
| ● | slowing regional and global economic environment. |
Any unexpected changes in these or other political, social, economic, or other conditions in which we operate in the UAE or neighboring countries may have a material adverse effect on our business, results of operations and financial condition. It is not possible to predict the occurrence of events or circumstances such as or like those outlined above or the impact of such occurrences and no assurance can be given that we would be able to achieve profitable operations if such events or circumstances were to occur.
| 25 |
Investors should also be aware that emerging markets are subject to greater risks than more developed markets, including in some cases significant legal, economic, and political risks. Accordingly, investors should exercise particular care in evaluating the risks involved and must decide for themselves whether, considering those risks, their investment is appropriate. Generally, investment in developing markets is only suitable for sophisticated investors who fully appreciate the significance of the risks involved.
To the extent that economic growth or performance in the countries in which we operate slows or begins to decline, or political conditions become sufficiently unstable to have a material adverse effect on our operations, our business, financial condition, and results of operations may be materially adversely affected.
We are exposed to risks from potentially unpredictable legal and regulatory environments in the UAE and Middle East region.
We currently operate in the UAE, an emerging market economy, which is in various stages of developing legal and regulatory systems that are not yet as fully matured and/or established as those of Western Europe and the United States. Some emerging market countries are also in the process of transitioning to a market economy and, as a result, are experiencing changes in their economies and their government policies (including, without limitation, policies relating to foreign ownership, repatriation of profits, property and contractual rights and planning and permit granting regimes) that may affect our business in those countries. Such countries are also characterized by less comprehensive legal and regulatory environments and systems. Existing laws and regulations may be applied inconsistently with anomalies in their interpretation or implementation. Such anomalies could affect our ability to enforce our rights under our contracts or to defend our business against claims by others.
There can be no assurance that if laws or regulations were imposed on the products and services offered by us it would not increase our costs, or adversely affect the way in which we conduct our business or otherwise have a material adverse effect on our results of operations and financial condition.
Any of the above factors, alone or in combination, may have a material adverse effect on our business, results of operations and financial condition.
We are exposed to risks arising from potential changes in the UAE’s visa legislation, which could adversely impact our business operations.
Any restrictive changes to the UAE’s visa policies may discourage foreign nationals from choosing to live, work, and invest in the UAE, which would have an adverse effect on our ability to attract skilled personnel, our business, results of operations and financial condition.
We are subject to risks associated with potential unlawful or arbitrary governmental actions in the UAE, which could negatively impact our operations and financial performance.
Governmental authorities in the UAE may have a high degree of discretion and, at times, act selectively or arbitrarily, without hearing or prior notice, and sometimes in a manner that is contrary to law or influenced by political or commercial considerations. Such governmental action could include, among other things, the withdrawal of building permits, the expropriation of property without adequate compensation or the forcing of business acquisitions, combinations, or sales. Any such action taken may have a material adverse effect on our business, results of operations and financial condition.
We are subject to the risk of international sanctions, which could significantly impact our business activities, results of operations and financial condition.
European, U.S. and other international sanctions have in the past been imposed on companies engaging in certain types of transactions with specified countries or companies or individuals in those countries. Companies operating in certain countries in the Middle East region have been subject to such sanctions in the past. The UAE is not subject to such sanctions as of the date of this report. The terms of legislation and other rules and regulations that establish sanctions regimes are often broad in scope and difficult to interpret.
| 26 |
If the UAE were in the future to violate European, U.S. or international sanctions, penalties could include a prohibition or limitation on the UAE’s ability to conduct business in certain jurisdictions or to access the U.S. or international capital markets. Any such sanction could have a material adverse effect on our business, results of operations and financial condition.
Risks Related to Legal, Accounting and Regulatory Matters
The sale of our products involves potential product liability and related risks that could expose us to significant insurance and loss expenses.
We face an inherent risk of exposure to product liability claims if the use of our products results in, or is believed to have resulted in, illness or injury. Any product liability claim may increase our costs and adversely affect our revenue and operating income. Moreover, liability claims arising from a serious adverse event may increase our costs through higher insurance premiums and deductibles for our insurances and may make it more difficult to secure adequate insurance coverage in the future. In addition, our product liability insurance may fail to cover future product liability claims, which, if adversely determined, could subject us to substantial monetary damages. Al Shola Gas has General Liability Coverage.
Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act and new SEC regulations, are creating uncertainty for companies such as ours. These new or changed laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We are committed to maintaining high standards of corporate governance and public disclosure. As a result, we intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, our reputation may be harmed.
If we fail to comply with the rules under the Sarbanes-Oxley Act related to accounting controls and procedures, or if material weaknesses or other deficiencies are discovered in our internal accounting procedures, our stock price could decline significantly.
Section 404 of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness of our internal controls over financial reporting. We are in the process of documenting and testing our internal control procedures, and we may identify material weaknesses in our internal control over financial reporting and other deficiencies. If material weaknesses and deficiencies are detected, it could cause investors to lose confidence in us and result in a decline in our stock price and consequently affect our financial condition. In addition, if we fail to achieve and maintain the adequacy of our internal controls, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our Common Stock could drop significantly. In addition, we cannot be certain that additional material weaknesses or significant deficiencies in our internal controls will not be discovered in the future.
| 27 |
Failure to comply with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act or other applicable anti-bribery laws could have an adverse effect on us.
The U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business. Recent years have seen a substantial increase in anti-bribery law enforcement activity with more frequent and aggressive investigations and enforcement proceedings by both the Department of Justice and the SEC, increased enforcement activity by non-U.S. regulators and increases in criminal and civil proceedings brought against companies and individuals. Our policies mandate compliance with all anti-bribery laws. Our internal control policies and procedures may not always protect us from reckless or criminal acts committed by employees or third-party intermediaries. Violations of these anti-bribery laws may result in criminal or civil sanctions, which could have a material adverse effect on us as well as our financial condition and results of operations.
Changes in tax laws or exposure to additional income tax liabilities could have a material impact on our company, the results of operations, financial conditions and cash flows.
We are subject to income and non-income-based taxes in the jurisdictions in which we operate and intend to operate, as well as jurisdictions such as the United States. The tax laws in these jurisdictions could change on a prospective or retroactive basis, and any such changes could adversely affect us and our effective tax rate.
Taxation regulation in territories around the world can also change very quickly, which may mean that all the implications for businesses may not have been fully thought through by the regulating authorities before final guidelines and laws are issued. Furthermore, any changes made by tax authorities, together with other legislative changes, to the mandatory sharing of company information (financial and operational) with tax authorities on both a local and global basis, could lead to disagreements between jurisdictions with respect to the proper allocation of profits between such jurisdictions. We therefore continuously monitor changes to tax regulation and double tax treaties between the territories in which we operate. We also maintain a comprehensive transfer pricing policy to govern the flow of funds between various tax territories.
We are further subject to ongoing tax audits in the various jurisdictions in which we operate. We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provisions. However, there can be no assurance that we will accurately predict the outcomes of these audits, which could have a material impact on the business, financial condition, results of operations, and cash flows.
While we have recorded reserves for potential payments to various tax authorities related to uncertain tax positions, the calculation of such tax liabilities involves the application of complex tax regulations in many jurisdictions. Therefore, any dispute with a tax authority may result in payment that is significantly different from our estimates. If the payment proves to be less than the recorded reserves, the reversal of the liabilities would generally result in tax benefits being recognized in the period when we determine the liabilities to be no longer necessary. Conversely, if the payment proves to be more than the reserves, we could incur additional charges, and these could have a materially adverse effect on the Company’s business, financial condition, results of operations, and cash flows.
The U.S. Department of the Treasury’s Office of Foreign Assets Control, and the Bureau of Industry and Security at the U.S. Department of Commerce administer certain laws and regulations that restrict U.S. persons and, in some instances, non-U.S. persons, in conducting activities, transacting business with, or making investments in certain countries, governments, entities and individuals subject to U.S. economic sanctions.
Our international operations subject us to these laws and regulations, which are complex and constantly changing. They restrict business dealings with certain countries, governments, entities, and individuals and may enact, amend, enforce, or interpret further restrictions in a manner that materially impacts our operations.
Our subsidiary sells and installs products, and may provide related services, to distributors or contractors and other purchasing bodies in such countries. These business dealings represent an insignificant amount of our consolidated revenues and income but expose us to a heightened risk of violating applicable sanctions regulations. Violations of these regulations are punishable by civil penalties, including fines, denial of export privileges, injunctions, asset seizures, debarment from government contracts and revocations or restrictions of licenses, as well as criminal fines and imprisonment.
We have established policies and procedures designed to assist with compliance with such laws and regulations. However, there can be no assurance that these will prevent us from violating these regulations in every transaction in which we may engage. As such a violation could adversely affect our reputation, business, financial condition, results of operations and cash flows.
| 28 |
Risks Related to our Management and Control Persons
Our largest shareholder, Fusion Fuel Green PLC, holds substantial control over the Company and is able to influence all corporate matters, which shareholders may consider to not always be in their best interests.
Fusion Fuel holds substantial control of our Company with over 50% of the outstanding shares of common stock. By virtue of the ownership of common stock, Fusion Fuel is able to exercise significant influence over all matters requiring approval by our stockholders, including the election of directors, the approval of significant corporate transactions, and any change of control of our Company.
We are dependent on the continued services of our director and chairman and officers and if we fail to keep them or fail to attract and retain qualified senior executives and key technical personnel, our business may not be able to expand.
We are dependent on the continued availability of Frederico Figueira de Chaves, the Company’s Chairman and director; John-Paul Backwell, the Company’s Chief Executive Officer and director; Carsten Kjems Falk, the Company’s Interim Chief Financial Officer and a director; and Sanjeeb Safir, the Company’s Chief Operating Officer and Managing Director Middle East; and the availability of new executives to implement our business plans. The market for skilled employees is highly competitive, especially for employees in our industry. Although we expect that our planned compensation programs will be intended to attract and retain the employees required for us to be successful, there can be no assurance that we will be able to retain all our key employees or a sufficient number to execute our plans, nor can there be any assurance we will be able to continue to attract new employees as required.
The elimination of monetary liability against our directors, officers and employees under our Articles of Incorporation and the existence of indemnification rights to our directors, officers and employees may result in substantial expenditures by the Company and may discourage lawsuits against our directors, officers, and employees.
Our Articles of Incorporation contain provisions that eliminate the liability of our directors for monetary damages to the Company and shareholders. Our bylaws also require us to indemnify our officers and directors. We may also have contractual indemnification obligations under our agreements with our directors, officers, and employees. The foregoing indemnification obligations could result in our company incurring substantial expenditures to cover the cost of settlement or damage awards against directors, officers, and employees that we may be unable to recoup. These provisions and resulting costs may also discourage us from bringing a lawsuit against directors, officers, and employees for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors, officers, and employees even though such actions, if successful, might otherwise benefit the Company and shareholders.
Certain officers and directors have other business activities which might cause conflicts of interest.
Part of our management and board also serve on the management and board of Fusion Fuel. Our Chairman, Frederico Figueira de Chaves, is also the Interim Chief Financial Officer and a director of Fusion Fuel. Our Chief Executive Officer, John-Paul Backwell, is also the Chief Executive Officer and a director of Fusion Fuel. Our Interim Chief Financial Officer, Carsten Kjems Falk, is also head of M&A of Fusion Fuel. As a result, these officers may not be able to work for our company on a full-time basis, or may be subject to conflicts of interest, to the extent that the interest of Fusion Fuel and the Company may diverge. Our officers and directors may also face conflicts of interest impacting how funds are allocated between us and such affiliated entities. These competing interests could disrupt the focus of our key management and board. As a result, conflicts of interest may arise that can be resolved only through exercise of such judgment as is consistent with each officer or director’s understanding of his or her fiduciary duties to our company. We are at risk that our officers and director will favor their other business interests over the needs of the Company. These competing business interests could interfere with our ability to implement our business plan successfully.
| 29 |
Risks Relating to our Securities
We may conduct offerings of our equity securities in the future, in which case your proportionate interest may become diluted.
We may be required to conduct equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake. If our common stock is issued in return for additional funds, the price per share could be lower than that paid by our current shareholders but with the aim to increase overall value for all shareholders. We anticipate continuing to rely on sales of our common stock in order to fund our business operations. If we issue additional common stock or securities convertible into shares of our common stock, your percentage interest in us could become diluted.
Our common stock price may be volatile and could fluctuate, which could result in substantial losses for investors.
The market price of our common stock has been volatile and could continue to be volatile and fluctuate in price in response to various factors, many of which are beyond our control, including:
| ● | government regulation; | |
| ● | the establishment of partnerships; | |
| ● | intellectual property disputes; | |
| ● | additions or departures of key personnel; | |
| ● | sales of our common stock; | |
| ● | our ability to integrate operations, technology, products, and services; | |
| ● | our ability to execute our business plan; | |
| ● | operating results below expectations; | |
| ● | loss of any strategic relationship; | |
| ● | industry developments; | |
| ● | economic and other external factors; and | |
| ● | period-to-period fluctuations in our financial results. |
In addition, the securities markets have experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
Sales of a substantial number of shares of our common stock in the public market, or the perception that such sales could occur, could cause our stock price to fall.
The market price of our common stock could decline significantly as a result of sales of a large number of shares of our common stock. If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after the contractual and securities law restrictions on resale of such common stock lapse, or after those shares become registered for resale pursuant to an effective registration statement, the trading price of our common stock could decline. Any sales of shares or any perception in the market that such sales may occur could cause the trading price of our common stock to decline.
| 30 |
The issuance of shares of our common stock upon conversion or exercise of convertible notes, will dilute ownership to existing shareholders and may cause our stock price to fall.
Any issuance of additional common stock by us in the future as a result of the conversion or exercise of convertible notes or debt settlements would result in dilution to our existing shareholders. Such issuances could be made at a price that reflects a discount or a premium to the then-current trading price of our common stock.
Future issuance of additional shares of common stock and/or preferred stock could dilute existing stockholders. We have and may issue preferred stock that could have rights that are preferential to the rights of common stock that could discourage potentially beneficially transactions to our common stockholders.
Pursuant to our Articles of Incorporation, we currently have authorized 450,000,000 shares of common stock and 1,000,000 shares of preferred stock. Our Board of Directors has the ability to issue additional shares of common stock in the future for such consideration as the Board of Directors may consider sufficient. The issuance of any additional securities could, among other things, result in dilution of the percentage ownership of our stockholders at the time of issuance, result in dilution of our earnings per share and adversely affect the prevailing market price for our common stock.
An issuance of shares of preferred stock could result in a class of outstanding securities that would have preferences with respect to voting rights and dividends and in liquidation over our common stock and could, upon conversion or otherwise, have all of the rights of our common stock. Our Board of Directors’ authority to issue preferred stock could discourage potential takeover attempts or could delay or prevent a change in control through merger, tender offer, proxy contest or otherwise by making these attempts more difficult or costly to achieve. The issuance of preferred stock could impair the voting, dividend, and liquidation rights of common stockholders without their approval.
We have never declared or paid any cash dividends or distributions on our capital stock.
We have never declared or paid any cash dividends or distributions on our capital stock. While we may not anticipate paying a dividend in the short-term and we currently intend to retain short-term earnings for growth, we may do so in the medium to long-term future.
The declaration, payment and amount of any future dividends will be made at the discretion of the Board of Directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the Board of Directors considers relevant. There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend.
We may become involved in securities class action litigation that could divert management’s attention and harm our business.
The stock market in general has experienced extreme price and volume fluctuations. These fluctuations have often been unrelated or disproportionate to the operating performance of the companies involved. If these fluctuations occur in the future, the market price of our shares could fall regardless of our operating performance. In the past, following periods of volatility in the market price of a particular company’s securities, securities class action litigation has often been brought against that company. If the market price or volume of our shares suffers extreme fluctuations, then we may become involved in this type of litigation, which would be expensive and divert management’s attention and resources from managing our business.
As a public company, we may also from time to time make forward-looking statements about future operating results and provide some financial guidance to the public markets. Projections may not be timely made and set at expected performance levels and could affect the price of our shares.
| 31 |
We are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Pursuant to Section 107 of the JOBS Act, as an emerging growth company, we have elected to use the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies. As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our common stock less attractive to investors. In addition, if we cease to be an emerging growth company, we will no longer be able to use the extended transition period for complying with new or revised accounting standards.
We will remain an emerging growth company until the earliest of: (1) the last day of the fiscal year following the fifth anniversary of the first sale of our common stock pursuant to an effective registration statement; (2) the last day of the first fiscal year in which our annual gross revenue is $1.235 billion or more; (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (4) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC.
We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. For example, if we do not adopt a new or revised accounting standard, our future results of operations may not be comparable to the results of operations of certain other companies in our industry that adopted such standards. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 1C. CYBERSECURITY
Risk Assessment and Identification
We conduct regular cybersecurity risk assessments to identify potential vulnerabilities across our information systems, manufacturing platforms, and third-party integrations. We prioritize risks based on their potential impact to our financial condition, operational continuity, and reputation.
Risk Management Processes
| ● | Preventive Controls: We deploy advanced firewalls, endpoint protection, and intrusion detection systems to secure our network infrastructure. Multi-factor authentication and encryption are enforced across critical systems and data repositories. | |
| ● | Monitoring and Detection: Continuous monitoring of our IT environment is facilitated through our IT manager. | |
| ● | Incident Response: We maintain an incident response plan that outlines procedures for containment, eradication, and recovery from cybersecurity incidents. | |
| ● | Employee Training: All employees receive mandatory cybersecurity awareness training at onboarding, covering phishing prevention, secure data handling, and reporting suspicious activities. |
| 32 |
Third-Party Risk Management
We
rely on
| ● | Due diligence reviews of vendors’ cybersecurity policies and practices prior to engagement. | |
| ● | Contractual requirements for vendors to maintain robust security controls and report incidents promptly. |
Board Oversight
Management’s Role
Management plays a critical role in assessing and managing material cybersecurity risks. Key responsibilities are assigned as follows:
| ● | Chief Operating Officer:
| |
| ● | Incident Responses:
|
ITEM 2. PROPERTIES
The Company has a virtual office at 505 Montgomery Street in 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, respective square foot sizes, and annual rent amounts.
| Location | Lease Term | Area (Sq. Ft.) | Annual Rent | |||||||
| Office at Hamsah Building, O/112, Zabeel Road, Dubai, UAE | May 10, 2025 to May 9, 2026 | 1,222 | $ | 35,416 | ||||||
| Office at Hamsah Building, O/307, Zabeel Road, Dubai, UAE* | January 7, 2026 to January 6, 2027 | 347 | $ | 7,311 | ||||||
| Gas Warehouse Unit No. L723, Plot No. 0243-0154, Baghdad Street, Al Qusais Industrial Area 2, Al Qusais, Dubai, UAE | March 1, 2025 to February 28, 2026 | 6,400 | $ | 7,115 | ||||||
| Gas Store Unit No. L705, Plot No. 0243-0171, Baghdad Street, Al Qusais Industrial Area 2, Al Qusais, Dubai, UAE | March 1, 2025 to February 28, 2026 | 6,400 | $ | 7,115 | ||||||
| Warehouse Plot No: 987-1006, Al Layan 1, DIC, Dubai, UAE | March 26, 2025 to March 25, 2026 | 10,010 | $ | 5,455 | ||||||
| Employee Accommodation, 17 Units, Plot No: 438-0, Muhaisanah Second, DIC, Dubai, UAE | February 1, 2025 to January 31, 2026 | 2,928 | $ | 50,027 | ||||||
| Total | 27,307 | $ | 112,439 | |||||||
*Lease starting period from January 7, 2026, and included for disclosure purposes.
| 33 |
Rent and other lease expenses under certain of the above lease agreements may be paid by Al Shola Al Modea Safety and Security LLC (“Al Shola Al Modea Safety and Security”), a company owned by certain minority shareholders of Al Shola Gas. Such payments have generally been made on the basis of the extent of the use of Al Shola Gas’ leased properties by the employees of Al Shola Al Modea Safety and Security. This arrangement has not been reflected in a written sublease or other agreement between Al Shola Gas or the Company and Al Shola Al Modea Safety and Security. Use of Al Shola Gas’ leased properties by Al Shola Al Modea Safety and Security has been at the discretion of Al Shola Gas and is subject to Al Shola Gas’ rights under its lease agreements.
Rent expenses for the fiscal year ended December 31, 2025, amounted to the following:
| Rent Expense | Amount ($) | |||
| Office Rent Expenses | $ | 45,493 | ||
| Warehouse/Store Rent Expenses | 16,238 | |||
| Labor Accommodation Rent Expenses | 83,084 | |||
| Total | $ | 144,815 | ||
ITEM 3. 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 4. MINE SAFETY DISCLOSURES
Not applicable.
| 34 |
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Our common stock is quoted on the OTC ID tier operated by the OTC Markets Group, Inc. under the symbol “QIND”. Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. There can be no assurance that a significant active trading market in our common stock will develop, or if such a market develops, that it will be sustained.
Holders
As of March 31, 2026, there were 288 holders of record of our common stock, which does not include holders whose shares are held in nominee or “street name” accounts through banks, brokers or other financial institutions.
Dividends
The Company has not paid any cash dividends to date and does not anticipate or contemplate paying any dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the growth of our business.
Securities Authorized for Issuance Under Equity Compensation Plans
No securities were authorized for issuance under compensation plans (including individual compensation arrangements) under which equity securities of the Company were authorized for issuance as of December 31, 2025.
Recent Sales of Unregistered Securities
On January 10, 2025, the Company issued the following 600,962 shares of common stock to 1800 DIAGONAL LENDING LLC for the conversion of $20,000 of principal under a convertible note dated July 3, 2024 (the “July 3, 2024 Note”).
On January 13, 2025, the Company issued 818,331 shares of common stock to 1800 DIAGONAL LENDING LLC for the conversion of $25,000 of principal under the July 3, 2024 Note.
On January 17, 2025, the Company issued 1,024,590 shares of common stock to 1800 DIAGONAL LENDING LLC for the conversion of $25,000 of principal under the July 3, 2024 Note.
On January 27, 2025, the Company issued 1,678,321 shares of common stock to 1800 DIAGONAL LENDING LLC for the conversion of $30,000 of principal under the July 3, 2024 Note.
On January 29, 2025, the Company issued 2,482,269 shares of common stock to 1800 DIAGONAL LENDING LLC for the conversion of $35,000 of principal under the July 3, 2024 Note.
On January 30, 2025, the Company issued 2,836,879 shares of common stock to 1800 DIAGONAL LENDING LLC for $40,000, for part conversion of the July 3, 2024 Note.
On February 3, 2025, the Company issued 2,994,289 shares of common stock to 1800 DIAGONAL LENDING LLC for the conversion of $38,925.77 of principal under the July 3, 2024 Note. There was no balance due remaining under the July 3, 2024 Note after this conversion.
On March 27, 2025, the Company issued 1,351,351 shares of common stock to 1800 DIAGONAL LENDING LLC for the conversion of $15,000 of principal under a convertible note dated September 25, 2024 (the “DL September 25, 2024 Note”).
| 35 |
On April 27, 2025, the Company issued 1,538,461 shares of common stock to 1800 DIAGONAL LENDING LLC for the conversion of $20,000 of principal under the DL September 25, 2024 Note.
On April 30, 2025, the Company issued 1,972,386 shares of common stock to 1800 DIAGONAL LENDING LLC for the conversion of $25,000 of principal under the DL September 25, 2024 Note.
On May 1, 2025, the Company issued 2,866,698 shares of common stock to 1800 DIAGONAL LENDING LLC for the conversion of $30,000 of principal under the DL September 25, 2024 Note.
On May 6, 2025, the Company issued 3,959,276 shares of common stock to 1800 DIAGONAL LENDING LLC for the conversion of $35,000 of principal under the DL September 25, 2024 Note.
On May 6, 2025, the Company issued 2,449,570 shares of common stock to Jefferson Street Capital LLC (“Jefferson Street”) for the conversion of $8,794.98 of accrued and unpaid interest thereto, $11,200.00 in default principal and $1,500.00 in fees, totaling $21,494.98 under a convertible note dated May 23, 2023.
On May 13, 2025, the Company issued 7,644,749 shares of common stock to 1800 DIAGONAL LENDING LLC for the conversion of $56,150.68 of principal under the DL September 25, 2024 Note. There was no balance due remaining under the September 25, 2024 Note after this conversion.
On June 5, 2025, the Company issued 3,019,662 shares of common stock to Jefferson Street for the conversion of $20,000 of principal and $1,500 of conversion fees under a convertible note dated May 21, 2024.
On July 22, 2025, the Company issued 3,230,337 shares of our common stock to Jefferson Street for the conversion of $21,500 of principal and $1,500 of conversion fees under a convertible note dated May 21, 2024.
Pursuant to a Stock Purchase Agreement, dated as of August 1, 2025, between Fusion Fuel and the Company, Fusion Fuel acquired 2,000,000 shares of the Company’s common stock for an aggregate purchase price of $40,000.
On October 28, 2025, Fusion Fuel converted 1,900 shares of Series B Preferred Stock into 1,900,000 shares of common stock. The conversion was effected for no cash consideration, in accordance with the Certificate of Designation of Series B Convertible Preferred Stock of the Company (the “Series B Certificate of Designation”).
On December 2, 2025, Fusion Fuel converted 9,600 shares of Series B Preferred Stock into 9,600,000 shares of common stock. The conversion was effected for no cash consideration, in accordance with the Series B Certificate of Designation.
The sales and issuances of the securities described above were made pursuant to the exemptions from registration contained in Section 4(a)(2) of the Securities Act or Regulation D under the Securities Act.
| 36 |
Purchases of Equity Securities
The following table provides information about our repurchases of common stock during the three months ended December 31, 2025:
| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs | ||||||||||||
| October 1, 2025 – October 31, 2025 | 1,500,000 | (1) | $ | 0.02 | (1) | - | $ | - | ||||||||
| November 1, 2025 – November 30, 2025 | - | $ | - | - | $ | - | ||||||||||
| December 1, 2025 – December 31, 2025 | - | $ | - | - | $ | - | ||||||||||
| (1) | Pursuant to a Stock Purchase Agreement, dated as of October 21, 2025, between the Company and Safeguard Investments LLC (“Safeguard Investments”), the Company repurchased 1,500,000 shares of the Company’s common stock from Safeguard Investments for an aggregate purchase price of $30,000. |
ITEM 6. [Reserved]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this report. The discussion contains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report, particularly in the sections titled Part II. Item 1A. “Risk Factors” and “Introductory Notes – Cautionary Note Regarding Forward-Looking Statements”.
Factors Affecting Our Performance
The primary factors affecting our results of operations include but 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 of our products 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.
Impact of Acquisitions
A significant component of our growth has been through the acquisition and consolidation of our operating companies 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 sales synergies within the operating businesses with the aim to expand globally. The benefits of these integration efforts may not positively impact our financial results instantly but is expected to do so in the medium to long-term future.
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 their 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.
| 37 |
Write-offs of Buyback Reserve and Related-Party Receivable
As part of management’s ongoing assessment of asset recoverability, the Company reevaluated the accounting treatment of certain assets arising from prior-period transactions, including (i) a reserve (the “Buyback Reserve” recorded within other current assets in connection with the issuance of shares of common stock pursuant to a certain Share Purchase and Buyback Agreement, dated August 21, 2023, among the Company, Artelliq Software Trading, Ilustrato, Saseendran Kodapully Ramakrishnan, and Quality International Co Ltd FZC, and (ii) a related-party receivable associated with a purchase of a certain asset from the Company by Ilustrato (the “Related-Party Receivable”).
With respect to the Buyback Reserve, the Company determined in fiscal year 2025 that the $2.0 million balance, no longer represented an asset from which future economic benefits were probable. Accordingly, the Company recorded a non-cash write-off of $2.0 million in fiscal year 2025.
With respect to the Related-Party Receivable, management concluded that $1.5 million of the receivable, representing the asset-purchase-related balance, was not recoverable based on a reassessment of collectability. This conclusion was reached following management’s assessment of the recoverability of the receivable, based on information available to the Company and its evaluation of the counterparty’s ability to satisfy the obligation. As a result, the Company recorded a $1.5 million write-off of the Related-Party Receivable in fiscal year 2025. The remaining balance of approximately $0.5 million, primarily representing an intercompany loan, is expected to be recoverable and continues to be recognized as an asset.
As part of its fiscal year 2025 review procedures, management reassessed the recoverability of certain assets, including the Buyback Reserve and the Related-Party Receivable. Based on this reassessment, management determined that the balances were not recoverable and recorded the related write-offs in fiscal year 2025 in accordance with U.S. GAAP. These conclusions were reviewed and approved by the Company’s Board of Directors.
Although the foregoing balances have been written off, the Company may pursue recovery or claw back actions against the applicable counterparties. Any amounts recovered, whether in cash, equity, or other consideration, would be recognized as a gain in the period realized.
Results of Operations
Revenues
Revenue for the year ended December 31, 2025, was $16,307,787, compared to $11,177,567 for the year ended December 31, 2024, representing an increase of $5,130,220, or 45.90%. The increase in reported revenue was primarily attributable to (i) the inclusion of a full year of revenue from the Company’s majority-owned subsidiary, Al Shola Gas, in 2025, compared to consolidation beginning in the second quarter of 2024 following its acquisition, and (ii) higher sales volumes and improved operational performance driven by continued growth in customer demand and expansion of business activities.
Cost of Revenues
Cost of revenues for the year ended December 31, 2025, was $11,519,007, compared to $7,214,304 for the year ended December 31, 2024, representing an increase of $4,304,703, or 59.67%. The increase was primarily due to (i) the inclusion of a full year of revenue from the Company’s majority-owned subsidiary, Al Shola Gas, in 2025, compared to consolidation beginning in the second quarter of 2024 following its acquisition, and (ii) higher revenue during the year ended December 31, 2025.
Gross Profit
We earned $4,788,780 in gross profit for the year ended December 31, 2025, compared with $3,963,263 for the year ended December 31, 2024, representing an increase of $825,517, or 20.83%. The increase in gross profit was primarily attributable to (i) the inclusion of a full year of revenue from the Company’s majority-owned subsidiary, Al Shola Gas, in 2025, compared to consolidation beginning in the second quarter of 2024 following its acquisition, and (ii) higher revenue during the year ended December 31, 2025.
| 38 |
Operating Expenses
Operating expenses increased to $5,245,558 for the year ended December 31, 2025, from $3,265,008 for the year ended December 31, 2024. The increase was attributable to (i) costs for salary and bonus payments to management totaling $1,380,000 and settlement payments to certain former officers of the Company totaling $606,816; and (ii) an increase of $596,887 in operating expenses resulting from the inclusion of a full year of operations of the Company’s majority-owned subsidiary, Al Shola Gas, in the year ended December 31, 2025, as compared to only three quarters of operations in the year ended December 31, 2024 due to the timing of the Company’s acquisition of Al Shola Gas, which was completed at the end of the first quarter of 2024.
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.
Net Non-Operating Expenses
We had net other non-operating expenses of $3,981,758 for the year ended December 31, 2025, compared to $275,201 for the year ended December 31, 2024.
Non-operating expenses for the year ended December 31, 2025, increased significantly compared to the year ended December 31, 2024, primarily due to the write-off of non-operating assets totaling $3,502,388. During the year, management performed an assessment of the recoverability of certain non-operating asset balances and determined that these amounts were no longer realizable. Accordingly, the Company recorded a write-off consisting of $2.0 million related to the reversal of the Buyback Reserve, $1,500,000 representing the Related-Party Receivable, and $2,388 related to other miscellaneous non-operating assets.
Non-Operating Income
We had other non-operating income of $318,706 for the year ended December 31, 2025, compared to $427,554 for the same period in 2024. Our other income for the year ended December 31, 2025, resulted from the release of claims under the Lucosky Settlement Agreement.
Net Income/Net Loss
We incurred net loss of $4,603,645 for the year ended December 31, 2025, compared to a net income of $266,780 for the year ended December 31, 2024, primarily due to the reasons described above for increased cost of revenues and increased operating expenses.
Liquidity and Capital Resources
As of December 31, 2025, and 2024, we had total current assets of $7,038,913 and $7,466,617, respectively, and total current liabilities of $16,753,372 and $11,223,627. As of December 31, 2025, our working capital deficit was $9,714,459 compared to $3,757,010 as of December 31, 2024.
We 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 December 31, 2026, 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.
| 39 |
Going Concern
The accompanying 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 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.
For the 12 months ended December 31, 2026, the Company anticipates that Fusion Fuel, the Company’s parent company, will finance certain investments in connection with the operations of our majority-owned subsidiary, 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. Further, management plans to use borrowings and security sales to mitigate the effects of cash flow deficits. However, no assurance can be given that any such financing, compensation, or capital will be available, if and when required.
Summary of Cash Flow
The following table provides detailed information about our net cash flow for fiscal years ended December 31, 2025, and December 31, 2024:
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net cash (used in) provided by operating activities | $ | (2,587,934 | ) | $ | 1,154,846 | |||
| Net cash (used in) investing activities | (1,377,470 | ) | (5,636 | ) | ||||
| Net cash provided by (used in) financing activities | 4,166,407 | (926,120 | ) | |||||
| Net change in cash and cash equivalents | 201,003 | 223,090 | ||||||
| Cash and cash equivalents – beginning of period | 225,582 | 2,492 | ||||||
| Cash and cash equivalents – end of period | $ | 426,585 | $ | 225,582 | ||||
Net cash used in operating activities was $(2,587,934) for the fiscal year ended December 31, 2025, as compared with $1,154,846 provided for the fiscal year ended December 31, 2024. The change was primarily driven by adverse working capital movements, mainly due to an increase in accounts receivable of $2.10 million and a decrease in accounts payable of approximately $0.64 million.
Net cash used in investing activities was $(1,377,470) for the fiscal year ended December 31, 2025, as compared with $(5,636) used for the fiscal year ended December 31, 2024. The change was primarily due to payments to ASG shareholders of $1.00 million, advances for the purchase of property, plant and equipment of $0.30 million, and additions to property, plant and equipment of approximately $0.08 million during the fiscal year ended December 31, 2025..
Net cash provided by financing activities was $4,166,407 for the fiscal year ended December 31, 2025, as compared with net cash used in financing activities $(926,120) used for the fiscal year ended December 31, 2024. The change was primarily due to proceeds from related party loans of $4.43 million, changes in minority interest of $0.45 million, and proceeds from the issuance of common stock of approximately $0.04 million during the fiscal year ended December 31, 2025. These inflows were partially offset by net repayments of convertible notes of $0.49 million, payments for ASG debt of approximately $0.23 million, and a repurchase of shares of the Company’s common stock for $0.03 million during the fiscal year ended December 31, 2025.
Debt
The Company’s debt obligations as of December 31, 2025, were as follows (including convertible and nonconvertible promissory notes).
| 40 |
| Lender | Date of Issue | Maturity Date | Principal Amount ($) | Initial Interest Rate (%) | Interest Accrued ($) | Default Interest Rate (%) | Default Interest Accrued ($) | Amount Repaid ($) | Amount Converted ($) | Principal Outstanding ($) | Total Balance Remaining ($) | |||||||||||||||||||||||||||||
| RB Capital Partners Inc. | August 3, 2022 | August 3, 2024 | 1,100,000 | 7 | % | 263,066 | - | - | - | - | (1) | 1,100,000 | 1,363,066 | |||||||||||||||||||||||||||
| RB Capital Partners Inc. | March 17, 2023 | March 16, 2025 | 200,000 | 7 | % | 38,932 | - | - | 32,705 | - | (2) | 167,295 | 206,227 | |||||||||||||||||||||||||||
| Jefferson Street Capital LLC | May 23, 2023 | February 23, 2024 | 220,000 | 6.5 | % | 10,203 | 15 | % | $ | 123,949 | - | 241,495 | (3) | 102,454 | 112,657 | |||||||||||||||||||||||||
| Sky Holdings Ltd | June 16, 2023 | December 16, 2024 | 550,000 | 7 | % | 53,769 | - | - | - | 77,000 | (4) | 473,000 | 526,769 | |||||||||||||||||||||||||||
| Sean Levi | December 20, 2023 | December 20, 2024 | 100,000 | (5) | 29,000 | - | - | 75,000 | - | (6) | 25,000 | 54,000 | ||||||||||||||||||||||||||||
| Exchange Listing LLC | February 6, 2024 | August 6, 2024 | 35,000 | 10 | % | 12,066 | 20 | %- | - | - | - | (7) | 35,000 | 47,066 | ||||||||||||||||||||||||||
| Jefferson Street Capital LLC | May 21, 2024 | February 21, 2025 | 71,500 | 10 | % | 17,526 | 15 | % | $ | 48,811 | - | 83,041 | (8) | 37,269 | 54,795 | (8) | ||||||||||||||||||||||||
| J.J. Astor & Co.(9) | September 20, 2024 | June 30, 2025 | 405,000 | 0 | % | 70,623 | 16 | % | 37,463 | 316,425 | - | (10) | 126,038 | (11) | 196,660 | |||||||||||||||||||||||||
| Total | 2,681,500 | 495,185 | 210,223 | 424,130 | 401,536 | 2,066,056 | 2,561,240 | |||||||||||||||||||||||||||||||||
| (1) | The note may be converted by the holder at the initial conversion price of $1.00 per share, subject to adjustment. | |
| (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. As of December 31, 2025, the holder had converted an aggregate of $100,000 of principal into 2,697,315 shares of common stock. | |
| (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 December 31, 2025, 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 certain funding, and thereafter 15% per annum will be charged. | |
| (6) | The note may be converted by the holder at the initial conversion price equal to 200% of the value of the note, subject to adjustment. | |
| (7) | 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. | |
| (8) | The note may be converted by the holder at the initial conversion price of $0.03 per share, subject to adjustment. $1,500 will be added to principal for each conversion. Ilustrato is a guarantor under the note. | |
| (9) | The note ranks senior to other debt and is secured by all assets of the Company. | |
| (10) | The note may be converted by the holder at the initial conversion price is 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. | |
| (11) | Reflects an increase to 110% of the principal outstanding due to the occurrence of an event of default under the note. |
| 41 |
Impact of Acquisitions
Historically, 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 instantly, but this has historically been the case in future periods.
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 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 Notes to Consolidated Financial Statements.
We consider the following accounting estimate to be the most critical in understanding the judgments that are involved in preparing our 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 December 31, 2025.
| 42 |
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are not required to provide the information required by this item because we are a smaller reporting company.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of Quality Industrial Corp. and its subsidiaries, together with the notes thereto and the report of the independent registered public accounting firm, are included in this Annual Report on Form 10-K and are set forth beginning on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of 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 Annual 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 Annual Report, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level.
Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) of the Exchange Act. Our internal control system is designed to provide reasonable assurance regarding the preparation and fair presentation of financial statements for external purposes in accordance with generally accepted account principles. All internal control systems, no matter how well designed, have inherent limitations and can provide only reasonable assurance that the objectives of the internal control system are met.
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, management used the framework set forth in the report entitled Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring.
Based on this evaluation, our Chief Executive Officer and our Interim Chief Financial Officer concluded that the Company’s internal control over financial reporting as of December 31, 2025, was effective.
This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Pursuant to Item 308(b) of Regulation S-K, management’s report is not subject to attestation by our independent registered public accounting firm because the Company is neither an “accelerated filer” nor a “large accelerated filer” as those terms are defined by the SEC.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the year ended December 31, 2025, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
| 43 |
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The following information sets forth the names, ages and positions of our current directors and executive officers.
| Name | Age | Position | ||
| Frederico Figueira de Chaves | 42 | Chairman and Director | ||
| John-Paul Backwell | 45 | Chief Executive Officer and Director | ||
| Carsten Kjems Falk | 51 | Interim Chief Financial Officer and Director | ||
| Sanjeeb Safir | 53 | Chief Operating Officer and Managing Director Middle East |
Below is a brief description of the background and business experience of each of our current executive officers and directors.
Frederico Figueira de Chaves. Frederico Figueira de Chaves has served as the Chairman and a director of the Company since August 2025. Mr. Chaves has been Interim Chief Financial Officer of Fusion Fuel since January 2025, Chief Strategy Officer and Head of Hydrogen Solutions of Fusion Fuel since November 2024 and a director of Fusion Fuel since June 2020. Mr. Figueira de Chaves has also been Chief Executive Officer and a director of Bright Hydrogen Solutions Limited since February 2025. Mr. Figueira de Chaves was Chief Executive Officer of Fusion Fuel from June 2023 to November 2024. Mr. Figueira de Chaves was Chief Financial Officer of Fusion Fuel from June 2020 to June 2023. From January 2009 to 2019, Mr. Figueira de Chaves held a number of senior positions at UBS AG, including Asset Management Head of Sales Management & Marketing, Global Asset Management Head Wealth Management & Wealth Management Americas Distribution, Chief of Staff to Global Asset Management CEO & CEO Europe, the Middle East, and Africa (“EMEA”), and Chief of Staff to Group COO & CEO EMEA, and Business Manager of Group CEO Management Office. Mr. Figueira de Chaves holds a master’s degree in Economics from Edinburgh University. We believe that Mr. Figueira de Chaves is qualified to serve on the Board of Directors due to his experience in developing and running new business lines at UBS AG, his financial services background and network, and his knowledge of the Fusion Fuel strategy, business, and supply chain.
John-Paul Backwell. John-Paul Backwell has served as the Chief Executive Officer of the Company since October 2022 and as a director of the Company since August 2025. Mr. Backwell has been the Chief Executive Officer and a director of Fusion Fuel since November 2024 and has been the Chairman of Fusion Fuel since November 2025. Mr. Backwell was also a director and the Chief Executive Officer of Samsara Luggage, Inc. (OTCID: SAML). Mr. Backwell previously served as a director of FB Fire Technologies Ltd (FireBug) from November 2024 until January 2025. From July 2021 until January 2025, Mr. Backwell was Managing Director of Ilustrato. From February 2022 until January 2025, Mr. Backwell was a director of Emergency Response Technologies Inc. From May 2019 to June 2021, Mr. Backwell was a Non-Executive Director of ConnectNow. From September 2019 to June 2021, Mr. Backwell was the Managing Director of Detego Global. Mr. Backwell earned a Bachelor of Arts degree in English Language and Literature/Letters from Stellenbosch University. We believe that Mr. Backwell is qualified to serve on the Board of Directors due to my experience in the development and leadership of global teams, predominantly in the fields of manufacturing and technology, in a career spanning over 23 years.
Carsten Kjems Falk. Carsten Kjems Falk has served as the Interim Chief Financial Officer and a director of the Company since August 2025. Since June 2026, Mr. Falk has also served as Head of M&A of Fusion Fuel. 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. 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. We believe that Mr. Falk is qualified to serve on the 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.
Sanjeeb Safir. Sanjeeb Safir has served as the Chief Operating Officer of the Company since August 2025 and has been the Managing Director Middle East of the Company since September 2024. Since 2008, Mr. Safir has been the Managing Director of Al Shola Gas. Mr. Safir holds a Master of Business Administration in Marketing from The International University.
| 44 |
Family Relationships
There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.
Involvement in Certain Legal Proceedings
During the past 10 years, none of our current directors, nominees for directors, or current executive officers has been involved in any legal proceeding identified in Item 401(f) of Regulation S-K.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the Company’s directors and officers, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Company’s securities with the SEC on Forms 3, 4 and 5. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. We believe, based solely on a review of the copies of such reports furnished to us and representations of these persons, that all reports were timely filed for the year ended December 31, 2025 and prior fiscal years, except as follows: (1) Sanjeeb Safir failed to timely file a Form 3 with the SEC within ten days of his appointment as Managing Director Middle East effective September 2, 2024; (2) Sanjeeb Safir failed to timely file a Form 4 within two business days of receiving a grant of 1,000,000 shares of common stock on September 2, 2024; (3) Sanjeeb Safir failed to timely file a Form 4 within two business days of November 26, 2024, in connection with the transactions contemplated by the Fusion Fuel Acquisition Agreement, which provided, among other things, for the disposition of 1,000,000 shares of common stock by Mr. Safir; and (4) Frederico Figueira de Chaves failed to timely file a Form 3 with the SEC within ten days of his appointment as the Chairman of the Board of Directors and as a director of the Company effective August 28, 2025.
Code of Ethics and Business Conduct
We have adopted a Code of Ethics and Business Conduct that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. A copy of the Code of Ethics and Business Conduct is filed as Exhibit 14.1 to this Annual Report.
Insider Trading Policy
Effective
March 10, 2023, we
Material Changes to Director Nomination Procedures
There have been no material changes to the procedures by which stockholders may recommend nominees to our Board of Directors since such procedures were last disclosed.
Audit Committee Financial Expert
The Board of Directors has determined that the Company does not have an “audit committee financial expert” as defined by Item 407(d)(5) of Regulation S-K.
| 45 |
ITEM 11. EXECUTIVE COMPENSATION.
The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the noted periods.
| Summary Compensation Table - Years Ended December 31, 2025, and 2024 | ||||||||||||||||||||||||||||
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||
| John-Paul Backwell | 2025 | 210,000 | (1) | 595,000 | - | - | - | 805,000 | ||||||||||||||||||||
| Chief Executive Officer | 2024 | 35,000 | (2) | - | 36,500 | (3) | - | - | 71,500 | |||||||||||||||||||
| Carsten Falk | 2025 | 150,000 | (4) | 425,000 | - | - | - | (5) | 575,000 | |||||||||||||||||||
| Interim Chief Financial Officer | 2024 | 107,500 | (6) | - | - | - | 27,500 | (7)(8) | 135,000 | |||||||||||||||||||
| Sanjeeb Safir | 2025 | 120,000 | (9) | - | - | (10) | - | - | 120,000 | |||||||||||||||||||
| Chief Operating Officer | 2024 | 40,000 | (9) | - | 65,000 | (11) | - | - | 105,000 | |||||||||||||||||||
| (1) | This amount does not include $35,000 accrued unpaid 2024 salary, which was paid in 2025. | |
| (2) | This amount consists of $35,000 accrued unpaid 2024 salary, which was paid in 2025. | |
| (3) | On May 14, 2024, John-Paul Backwell was granted 500,000 shares of common stock. The aggregate grant date fair value was computed in accordance with ASC Topic 718 based on the assumptions described in Note 8 to the Company’s financial statements beginning on page F-1 of this Annual Report. | |
| (4) | This amount does not include 2024 salary amounting to $86,175, which was paid in 2025. | |
| (5) | This amount does not include $27,500 accrued unpaid discretionary benefits, which were paid in 2025. | |
| (6) | This amount consists of $107,500 accrued 2024 salary, of which $21,325 was paid in 2024 and the balance of $86,175 was paid in 2025. | |
| (7) | This amount consists of $27,500 accrued unpaid discretionary benefits, which were paid in 2025. | |
| (8) | Consisted of a discretionary benefits allowance for automobile, housing, health insurance, meals, or other personal expenses, with any unused amounts eligible to be carried forward and used in future years. | |
| (9) | Sanjeeb Safir was entitled to an annual base salary of $120,000 as an employee of the Company commencing on September 2, 2024. ASG paid Mr. Safir’s salary during 2024 and 2025. | |
| (10) | During 2025, Sanjeeb Safir was eligible to receive an annual long-term incentive equity award of at least 0.25% of total outstanding shares vesting over a 12-month period. However, Mr. Safir was not granted any equity awards in 2025. | |
| (11) | On September 2, 2024, Sanjeeb Safir was granted 1,000,000 shares of common stock. The aggregate grant date fair value was computed in accordance with ASC Topic 718 based on the assumptions described in Note 8 to the Company’s financial statements beginning on page F-1 of this Annual Report. |
Employment Agreements
John-Paul Backwell
Pursuant to an Executive Employment Agreement, dated November 14, 2023, between the Company and John-Paul Backwell (the “Backwell Employment Agreement”), Mr. Backwell will be entitled to an annual base salary of $420,000, subject to annual review by the Board of Directors; an uplist bonus equal to the base salary accrued from July 1, 2023 through the date that the Company’s common stock is listed on a national securities exchange; an annual target bonus opportunity equal to 100% of base salary plus stock options representing 1% of outstanding shares; and annual long-term incentive equity awards of at least 1% of total outstanding shares vesting over a 12-month period. Mr. Backwell will also be eligible for milestone-based equity awards, standard executive fringe benefits (including a corporate car, cellular telephone, health and disability insurance, and 401(k)), 30 days of paid vacation annually, and reimbursement of business expenses. Upon termination by the Company without cause or by Mr. Backwell for good reason, Mr. Backwell was entitled to a lump sum payment equal to two years of base salary, a pro-rated target bonus, and up to 18 months of COBRA premium reimbursement, subject to his execution of a release of claims. The Backwell Employment Agreement required Mr. Backwell to enter into the Company’s Employee Non-Compete Agreement as a condition of employment.
| 46 |
The Backwell Employment Agreement provides that the initial term under the agreement will commence on the first trading day of the Company’s common stock on a national securities exchange and end on June 30, 2024, and automatically renew for successive one-year periods unless either party provided at least 90 days’ prior written notice of non-renewal. Compensation rights will accrue on the first day that the term under the Backwell Employment Agreement commences.
On June 6, 2025, Mr. Backwell entered into that certain Contract of Employment, dated June 6, 2025, between Fusion Fuel and Mr. Backwell (the “Parent/Backwell Agreement”). Pursuant to the Parent/Backwell Agreement, effective June 1, 2025, Mr. Backwell agreed to use his best endeavors to promote the interests of Fusion Fuel, the Company, and all other subsidiaries of Fusion Fuel. Effective June 1, 2025, Mr. Backwell has been compensated by Fusion Fuel. The Company is not a party to the Parent/Backwell Agreement.
Carsten Falk
Pursuant to an Executive Employment Agreement, dated November 14, 2023, between the Company and Carsten Kjems Falk (the “Falk Employment Agreement”), Mr. Falk will be entitled to an annual base salary of $300,000, subject to annual review by the Board of Directors; an uplist bonus equal to the base salary accrued from July 1, 2023 through the date that the Company’s common stock is listed on a national securities exchange; an annual target bonus equal to 100% of base salary plus stock options representing 0.75% of outstanding shares; and annual long-term incentive equity awards of at least 0.75% of total outstanding shares vesting over a 12-month period. Mr. Falk will also be eligible for milestone-based equity awards, standard executive fringe benefits (including a corporate car, cellular telephone, health and disability insurance, and 401(k)), 30 days of paid vacation annually, and reimbursement of business expenses. Upon a termination by the Company without cause or by Mr. Falk for good reason, Mr. Falk will be entitled to a lump sum payment equal to two years of base salary, a pro-rated target bonus, and up to 18 months of COBRA premium reimbursement, subject to his execution of a release of claims. The Falk Employment Agreement required Mr. Falk to enter into the Company’s Employee Non-Compete Agreement as a condition of employment.
The Falk Employment Agreement provides that the initial term under the agreement will commence on the first trading day of the Company’s common stock on a national securities exchange and end on June 30, 2024, and automatically renew for successive one-year periods unless either party provided at least 90 days’ prior written notice of non-renewal. Compensation rights will accrue on the first day that the term under the Falk Employment Agreement commences.
On June 27, 2025, Mr. Falk entered into that certain Contract of Employment, dated June 27, 2025, between Fusion Fuel and Mr. Falk (the “Parent/Falk Agreement”). Pursuant to the Parent/Falk Agreement, effective July 1, 2025, Mr. Falk will act as Interim Chief Financial Officer of the Company and Head of Mergers and Acquisitions of Fusion Fuel. Effective July 1, 2025, Mr. Falk has been compensated by Fusion Fuel. The Company is not a party to the Parent/Falk Agreement.
Sanjeeb Safir
Pursuant to an Executive Employment Agreement, dated September 2, 2024, between the Company and Sanjeeb Safir (the “Safir Employment Agreement”), Mr. Safir will be entitled to an annual base salary of $120,000, subject to annual review by the Board of Directors; a sign-on bonus of 1,000,000 shares of common stock; an annual target bonus equal to 100% of base salary plus stock options representing 0.25% of outstanding shares; and annual long-term incentive equity awards of at least 0.25% of total outstanding shares vesting over a 12-month period. Mr. Safir will also be eligible for milestone-based equity awards, standard executive fringe benefits (including a corporate car, cellular telephone, and health and disability insurance), 30 days of paid vacation annually, and reimbursement of business expenses. The Safir Employment Agreement has an initial term commencing on September 2, 2024 through August 30, 2025, and automatically renews for successive one-year periods unless either party provides at least 90 days’ prior written notice of non-renewal. Upon a termination by the Company without cause or by Mr. Safir for good reason, Mr. Safir will be entitled to a lump sum payment equal to two years of base salary, a pro-rated target bonus, and up to 18 months of COBRA premium reimbursement, subject to his execution of a release of claims. The Safir Employment Agreement required Mr. Safir to enter into the Company’s Employee Non-Compete Agreement as a condition of employment.
| 47 |
Bonus Payments
During the fiscal year ended December 31, 2025, the Board of Directors awarded discretionary bonus payments of $595,000 and $425,000 to John-Paul Backwell and Carsten Falk, respectively. The awards were granted due to the Board’s determination that: (i) Mr. Backwell’s salary was significantly below market for his position in 2024 and no salary during 2023 and previous years, (ii) Mr. Falk’s salary was significantly below market for his position in 2024 and previous years and Mr. Falk waived salaries of $195,000 in previous years, (iii) each of Mr. Backwell and Mr. Falk had provided significant services in connection with the Company’s acquisition of a majority interest in Al Shola Gas during 2024, (iv) each of Mr. Backwell and Mr. Falk had provided significant services in connection with the Fusion Fuel Acquisition Agreement and related transactions in 2024, and (v) each of Mr. Backwell and Mr. Falk continue to perform full-time services in his position at both Fusion Fuel and the Company while receiving compensation from Fusion Fuel only, effective June 1, 2026 as to Mr. Backwell, under the Parent/Backwell Agreement, and effective July 1, 2026 as to Mr. Falk, under the Falk/Backwell Agreement, respectively.
Outstanding Equity Awards at Fiscal Year-End
The executive officers named above had no unexercised options, stock that has not vested or equity incentive plan awards outstanding as of December 31, 2025.
Compensation of Directors
The directors of the Company did not receive compensation for services in their capacity as directors during the fiscal year ended December 31, 2025.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth certain information with respect to the beneficial ownership of our common stock as of March 31, 2026, by (i) each of our named executive officers, current executive officers, and directors; (ii) all of our executive officers and directors as a group; and (iii) each person who is known by us to beneficially own more than 5% of our common stock.
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Under those rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power, and also any shares which the person has the right to acquire within 60 days of March 31, 2026, through the exercise or conversion of any stock option, convertible security, warrant or other right. Except as set forth below, each of the beneficial owners listed below has direct ownership of and sole voting power and investment power with respect to the shares of our common stock.
Unless otherwise specified, the address of each of the persons named in this table is c/o Quality Industrial Corp., 505 Montgomery Street, San Francisco, CA 94104.
| 48 |
| Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percentage of Beneficial Ownership(1) | ||||||
| Frederico Figueira de Chaves, Chairman and Director | 0 | 0 | % | |||||
| John-Paul Backwell, Chief Executive Officer and Director | 0 | 0 | % | |||||
| Carsten Falk, Interim Chief Financial Officer and Director | 0 | 0 | % | |||||
| Sanjeeb Safir, Chief Operating Officer and Managing Director Middle East | 0 | 0 | % | |||||
| All executive officers and directors as a group (4 persons) | 0 | 0 | % | |||||
| Fusion Fuel Green PLC(2) | 100,312,334 | 51.9 | % | |||||
| (1) | Based on 193,266,631 shares of common stock issued and outstanding as of March 31, 2026. | |
| (2) | The address of Fusion Fuel Green PLC is 9 Pembroke Street Upper, Dublin, D02 KR83, Ireland. |
Changes in Control
We do not have any arrangements known to us the operation of which may at a subsequent date result in a change in control of the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Transactions with Related Persons
Other than as disclosed below or included in Item 11. Executive Compensation, there have been no transactions involving the Company since the beginning of the last fiscal year, or any currently proposed transactions, in which the Company was or is to be a participant and the amount involved exceeds $120,000 or one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest.
Fusion Fuel Green PLC Stock Purchase Agreement
Pursuant to a Stock Purchase Agreement, dated as of August 1, 2025, between Fusion Fuel and the Company, Fusion Fuel acquired 2,000,000 shares of the Company’s common stock for an aggregate purchase price of $40,000.
Nicolas Link Employment Agreement
Pursuant to an Executive Director Employment Agreement, dated November 14, 2023, between the Company and Nicolas Link (“Link Employment Agreement”), Link was entitled to an annual base salary of $420,000, subject to annual review by the Board of Directors; an uplist bonus equal to the base salary accrued from July 1, 2023 through the date that the Company’s common stock is listed on a national securities exchange; an annual target bonus opportunity equal to 100% of base salary plus stock options representing 1% of outstanding shares; and annual long-term incentive equity awards of at least 1% of total outstanding shares vesting over a 12-month period. Link was also eligible for milestone-based equity awards, standard executive fringe benefits (including a corporate car, cellular telephone, health and disability insurance, and 401(k)), 30 days of paid vacation annually, and reimbursement of business expenses. Upon termination by the Company without cause or by Link for good reason, Link was entitled to a lump sum payment equal to two years of base salary, a pro-rated target bonus, and up to 18 months of COBRA premium reimbursement, subject to his execution of a release of claims. The Link Employment Agreement required Mr. Backwell to enter into the Company’s Employee Non-Compete Agreement as a condition of employment.
The Link Employment Agreement provided that the initial term under the agreement will commence on the first trading day of the Company’s common stock on a national securities exchange and end on June 30, 2024, and automatically renew for successive one-year periods unless either party provided at least 90 days’ prior written notice of non-renewal. Compensation rights will accrue on the first day that the term under the Link Employment Agreement commences.
The Link Employment Agreement was terminated on August 28, 2025, by mutual agreement, in connection with Link’s resignation from his positions with the Company on the same date.
| 49 |
Nicolas Link Settlement Agreement
On August 28, 2025, the Company entered into a Settlement Agreement and Release with Link, the former Chairman and director of the Company (the “Link Settlement Agreement”). Pursuant to the Link Settlement Agreement, Link resigned as Chairman and a director of the Company. The Company agreed to pay Link a total of $430,000 under the Link Settlement Agreement, which was equal to Link’s total unpaid accrued salary under the Link Employment Agreement (the “Link Settlement Amount”). The approximate dollar value of the amount involved in the transaction, and the approximate dollar value of Link’s interest in the transaction (computed without regard to profit or loss), is equal to the Link Settlement Amount.
The Link Settlement Agreement provides for an initial payment of $165,000 on or about August 28 or 29, 2025 (contingent upon Link’s resignation as Chairman and director), followed by a minimum quarterly payment of $75,000. The Link Settlement Agreement does not provide for the payment of any interest on pending or unpaid amounts. Upon full payment of the Link Settlement Amount, Link will release and discharge the Company and its officers, directors, and employees from any and all claims, demands, or causes of action relating to his accrued salary and service as Chairman and director.
During 2025, the Company paid Link a total of $243,000 in connection with the Link Settlement Agreement. As of March 31, 2026, the Company had paid Link an additional $47,000 in connection with the Link Settlement Agreement.
Nicolas Link 2025 Compensation
Prior to Link’s resignation and entry into the Link Settlement Agreement, the Company paid Link a total of $53,516 as 2025 salary under the Link Employment Agreement.
Louise Bennett Employment Agreement
Pursuant to an Executive Employment Agreement, dated November 14, 2023, between the Company and Louise Bennett (the “Bennett Employment Agreement”), Bennett was entitled to an annual base salary of $220,000, subject to annual review by the Board of Directors; an uplist bonus equal to the base salary accrued from July 1, 2023 through the date that the Company’s common stock is listed on a national securities exchange; an annual target bonus opportunity equal to 50% of base salary plus stock options representing 0.25% of outstanding shares; and annual long-term incentive equity awards of at least 0.25% of total outstanding shares vesting over a 12-month period. Bennett was also eligible for milestone-based equity awards, standard executive fringe benefits (including a corporate car, cellular telephone, health and disability insurance, and 401(k)), 30 days of paid vacation annually, and reimbursement of business expenses. Upon termination by the Company without cause or by Bennett for good reason, Bennett was entitled to a lump sum payment equal to two years of base salary, a pro-rated target bonus, and up to 18 months of COBRA premium reimbursement, subject to her execution of a release of claims. The Bennett Employment Agreement required Ms. Bennett to enter into the Company’s Employee Non-Compete Agreement as a condition of employment.
The Bennett Employment Agreement provided that the initial term under the agreement will commence on the first trading day of the Company’s common stock on a national securities exchange and end on June 30, 2024, and automatically renew for successive one-year periods unless either party provided at least 90 days’ prior written notice of non-renewal. Compensation rights will accrue on the first day that the term under the Bennett Employment Agreement commences.
Louise Bennett Settlement Agreement
On August 28, 2025, the Company entered into a Settlement Agreement and Release with Bennett, the former Chief Operating Officer of the Company (the “Bennett Settlement Agreement”). Pursuant to the Bennett Settlement Agreement, Bennett resigned as Chief Operating Officer of the Company. The Company agreed to pay Bennett a total of $110,000 under the Bennett Settlement Agreement, which was equal to Bennett’s total unpaid accrued salary (the “Bennett Settlement Amount”). The approximate dollar value of the amount involved in the transaction, and the approximate dollar value of Bennett’s interest in the transaction (computed without regard to profit or loss), is equal to the Bennett Settlement Amount.
| 50 |
The Bennett Settlement Agreement provides for an initial payment of $50,000 on or about August 28 or 29, 2025 (contingent upon Bennett’s resignation as Chief Operating Officer), followed by a minimum quarterly payment of $30,000. The Bennett Settlement Agreement does not provide for the payment of any interest on pending or unpaid amounts. Upon full payment of the Bennett Settlement Amount, Bennett will release and discharge the Company and its officers, directors, and employees from any and all claims, demands, or causes of action relating to her accrued salary and service as Chief Operating Officer.
During 2025, the Company paid Bennett a total of $80,000 in connection with the Bennett Settlement Agreement. As of March 31, 2026, the Company had paid Bennett an additional $20,000 in connection with the Bennett Settlement Agreement.
Louise Bennett 2025 Compensation
Prior to Bennett’s resignation and entry into the Bennett Settlement Agreement, the Company paid Bennett a total of $13,300 as 2025 salary under the Bennett Employment Agreement.
Asset Purchase Agreement with Ilustrato Pictures International Inc.
On June 21, 2024, the Company entered into an Asset Purchase Agreement (the “Ilustrato Asset Purchase Agreement”) with Ilustrato. Ilustrato is a former majority shareholder, and Nicolas Link, the former Chairman and a former director of the Company, is considered to have control over Ilustrato. Pursuant to the Ilustrato Asset Purchase Agreement, Ilustrato agreed to purchase from the Company certain long-term investments valued at $1,500,000 (the “Quality International-Related Assets”). The Quality International-Related Assets consist of long-term investments that were originally made by the Company in connection with a Share Purchase Agreement, dated as of January 18, 2023, as amended on July 27, 2023 (the “Quality International Purchase Agreement”), among the Company, Gerab National Enterprises LLC and Saseendran Kodapully Ramakrishnan to purchase 52% of the shares of Quality International Co Ltd FZC, a freezone company established under the rules and regulations of the Hamriyah Free Zone Authority and the Laws of the United Arab Emirates (“Quality International”). The Quality International Purchase Agreement was subsequently terminated. The approximate dollar value of Link’s interest in the Ilustrato Asset Purchase Agreement is $1,500,000, computed without regard to profit or loss or any non-controlling interest of Ilustrato. As of December 31, 2025, no part of the purchase price under the Ilustrato Asset Purchase Agreement had been paid by Ilustrato to the Company.
May 21, 2024, Convertible Note Issued to Jefferson Street Capital LLC, Guaranteed by Ilustrato Pictures International Inc.
On May 21, 2024, the Company entered into a Securities Purchase Agreement (the “Jefferson Street Purchase Agreement”) with Jefferson Street, pursuant to which the Company issued and sold to Jefferson Street a Convertible Promissory Note (the “May 2024 Note”) in the aggregate principal amount of $71,500.00, for an aggregate purchase price of $65,000.00. As additional consideration, the Company issued 500,000 shares of common stock to Jefferson Street. Ilustrato, which owned 61% of the Company’s outstanding shares of common stock, entered into the Jefferson Street Purchase Agreement as a guarantor of the Company’s obligations under the May 2024 Note. Link, the former Chairman and a former director of the Company, is considered to have control over Ilustrato.
The May 2024 Note bears 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. Upon certain events of default, the May 2024 Note becomes immediately due and payable at 150% of the outstanding amount; upon other specified events, at 200% of the outstanding amount. The holder has the right, from the date of the May 2024 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 the May 2024 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 May 2024 Note for each conversion.
During the fiscal year ended December 31, 2024, the following conversions of the May 2024 Note occurred:
| ● | On July 9, 2024, the Company issued 884,365 shares of common stock to Jefferson Street for the conversion of $25,000 of principal and $1,500 of conversion fees; | |
| ● | on August 9, 2024, the Company issued 884,365 shares of common stock to Jefferson Street for the conversion of $25,000 of principal and $1,500 of conversion fees; | |
| ● | on September 24, 2024, the Company issued 884,365 shares of common stock to Jefferson Street for the conversion of $25,000 of principal and $1,500 of conversion fees; | |
| ● | on October 22, 2024, the Company issued 1,092,118 shares of common stock to Jefferson Street for the conversion of $10,000 of principal and $1,500 of conversion fees; and | |
| ● | on November 20, 2024, the Company issued 4,890,788 shares of our common stock to Jefferson Street Capital LLC for the conversion of $35,000 of principal together with $15,000.00 of accrued and unpaid interest thereto, $0.00 in default principal and $1,500.00 in fees, totaling $51,500. |
During the fiscal year ended December 31, 2025, the following conversions of the May 2024 Note occurred:
| ● | On June 5, 2025, the Company issued 3,019,662 shares of common stock to Jefferson Street for the conversion of $20,000 of principal and $1,500 of conversion fees; and | |
| ● | on July 22, 2025, the Company issued 3,230,337 shares of common stock to Jefferson Street for the conversion of $21,500 of principal and $1,500 of conversion fees. |
The Company has not repaid any amount outstanding under the May 2024 Note in cash.
On January 12, 2026, the Company issued 5,655,811 shares of common stock to Jefferson Street for the conversion of $0.00 principal, $1,500.00 of accrued regular interest, $37,269.38 in default principal, $1,500.00 in fees, totaling $40,269.38, under the May 2024 Note.
As of December 31, 2025, the total balance remaining under the May 2024 Note was $54,795. As of March 31, 2026, a total of $16,790 remained outstanding under the May 2024 Note.
As of March 31, 2026, the approximate dollar value of Link’s interest in the May 2024 Note was $16,790, computed without regard to profit or loss or any non-controlling interest of Ilustrato. As of March 31, 2026, no part of the purchase price under the Ilustrato Asset Purchase Agreement had been paid by Ilustrato to the Company.
Intercompany Loan Agreement with Ilustrato Pictures International, Inc.
As of December 31, 2025, and December 31, 2024, the Company had amounts due from Ilustrato of $493,525 and $1,979,772, respectively. Ilustrato is a former majority shareholder, and Nicolas Link, the former Chairman and a former director of the Company, is considered to have control over Ilustrato.
The amounts owed resulted from advances made by the Company at the request of Ilustrato pursuant to an Intercompany Loan Agreement, dated as of June 15, 2022 (the “Intercompany Loan Agreement”), between Ilustrato and the Company, which provided for a revolving credit facility in an aggregate principal amount of up to $1,000,000, with individual advances of up to $100,000 per request, to fund working capital and other corporate purposes. Outstanding principal under the Intercompany Loan Agreement accrues simple interest at 1% per annum, with all amounts due on the termination date or upon an event of default. Advances are unsecured and funded within five business days of a written request. The Intercompany Loan Agreement has an initial one-year term with automatic successive one-year renewals unless either party provides 30 days’ prior written notice of termination. Events of default include failure to pay, change of control, bankruptcy, insolvency, material misrepresentation, and breach of covenants. Either party may prepay the balance at any time without penalty.
| 51 |
Since January 1, 2024, the largest aggregate amount owed by Ilustrato outstanding under the Intercompany Loan Agreement was $510,205. Since January 1, 2024, the aggregate amount of principal and interest paid by Ilustrato under the Intercompany Loan Agreement was $16,680 and $0, respectively. As of March 24, 2026, the outstanding balance owed by Ilustrato under the Intercompany Loan Agreement was $493,525. As of March 24, 2026, the approximate dollar value of Nicolas Link’s interest in the Intercompany Loan Agreement was equal to $493,525, computed without regard to profit or loss or any non-controlling interest of Ilustrato.
As of March 24, 2026, the outstanding balance owed by the Company under the Intercompany Loan Agreement was $0. Since January 1, 2024, the largest aggregate amount owed by the Company outstanding under the Intercompany Loan Agreement was $0. Since January 1, 2024, the aggregate amount of principal and interest paid by the Company under the Intercompany Loan Agreement was $0 and $0, respectively.
Director Independence
We use the definition of “independence” of The Nasdaq Stock Market LLC Rules (the “Nasdaq Listing Rules”) to make the determination whether a director is an “independent director” set forth in Rule 5605(a)(2) of the Nasdaq Listing Rules. None of our directors has been determined to meet this definition of “independent director”.
We may be deemed to meet the definition of a “Controlled Company” under Rule 5615(a)(7)(A) of the Nasdaq Listing Rules. Under Rule 5615(a)(7)(B) of the Nasdaq Listing Rules, as a Controlled Company, we may be exempt from the requirements under the Nasdaq Listing Rules to have a board of directors comprised of a majority of independent directors; to have a Compensation Committee that meets certain requirements; and that director nominations be made solely by a majority of directors that meet the definition of “independent director” set forth in Rule 5605(a)(2) of the Nasdaq Listing Rules or a nominations committee comprised solely of such independent directors.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The aggregate fees billed to the Company by Bush & Associates CPA LLC, the Company’s principal registered public accounting firm performing services in connection with engagements for which independence is required (the “principal accountant”), for the indicated services for each of the last two fiscal years were as follows:
| Fees | 2025 | 2024 | ||||||
| Audit Fees | $ | 111,000 | $ | 62,500 | ||||
| Audit-Related Fees | 0 | 0 | ||||||
| Tax Fees | 0 | 0 | ||||||
| All Other Fees | 0 | 0 | ||||||
| Total | $ | 111,000 | $ | 62,500 | ||||
Audit Fees
Audit fees were for professional services rendered for the audits of our annual financial statements and for review of our quarterly financial statements during the 2025 and 2024 fiscal years.
Audit-related Fees
Audit-related fees consist of aggregate fees billed for each of the last two fiscal years for assurance and related services performed by the Company’s principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under the paragraph captioned “Audit Fees” above. We did not engage our principal accountant to provide assurance or related services during the last two fiscal years.
Tax Fees
Tax fees consist of aggregate fees billed for each of the last two fiscal years for professional services performed by the Company’s principal accountant with respect to tax compliance, tax advice, tax consulting and tax planning. We did not engage our principal accountant to provide tax compliance, tax advice or tax planning services during the last two fiscal years.
| 52 |
All Other Fees
All other fees consist of aggregate fees billed for each of the last two fiscal years for products and services provided by the Company’s principal accountant, other than for the services reported under the headings “Audit Fees,” “Audit-Related Fees” and “Tax Fees” above. We did not engage our principal accountant to render services to us during the last two fiscal years, other than as reported above.
Pre-Approval Policies and Procedures
Our Board of Directors must pre-approve all services provided and fees earned by the Company’s principal accountant.
The Company’s principal accountant did not provide, and the Board of Directors did not approve, any services that would have been described under “—Tax Fees”, “—Audit-Related Fees”, or “—All Other Fees” above for either of the last two fiscal years.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
| (a) | List of Documents Filed as a Part of This Report: |
| (1) | Index to Financial Statements: |
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| Report of Independent Registered Public Accounting Firm | F-2 | |
| Consolidated Balance Sheets as of December 31, 2025, and 2024 | F-3 | |
| Consolidated Statements of Operations for the years ended December 31, 2025, and 2024 | F-4 | |
| Consolidated Statements of Stockholders’ Equity as of December 31, 2025, and 2024 | F-5 | |
| Consolidated Statements of Cash Flows for the years ended December 31, 2025, and 2024 | F-6 | |
| Notes to Consolidated Financial Statements. | F-7 |
| (2) | Index to Financial Statement Schedules: |
Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included in the consolidated financial statements or notes thereto.
| (3) | Index to Exhibits: |
See exhibits listed under “—(b) Exhibits” below.
| 53 |
(b) Exhibits
| Exhibit | Exhibit Name | |
| 2.1* | Agreement and Plan of Merger, dated April 16, 2019, among Wikisoft Corp., Wikisoft Corp., and Wikisoft Acquisition Corp. (incorporated by reference to Exhibit 3.6 to the Form 10 filed with the SEC on January 6, 2021) | |
| 2.2* | Agreement and Plan of Merger, dated March 19, 2020, between Wikisoft Corp. and Wikisoft Corp., (incorporated by reference to Exhibit 3.7 to the Form 10 filed with the SEC on January 6, 2021) | |
| 2.3* | Share Purchase Agreement, dated January 18, 2023, among Quality Industrial Corp., Gerab National Enterprises LLC, and Mr. Saseendran Kodapully Ramakrishnan (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on January 18, 2023) | |
| 2.4* | Amendment No. 1 to the Share Purchase Agreement, dated as of July 31, 2023, by and between Quality Industrial Corp., Gerab National Enterprises LLC, and Mr. Saseendran Kodapully Ramakrishnan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on August 4, 2023) | |
| 2.5* | Share Purchase Agreement, dated March 27, 2024, between Quality Industrial Corp. and Al Shola Al Modea Gas Distribution L.L.C. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on April 2, 2024) | |
| 2.6* | Amendment Agreement in respect of the Share Purchase Agreement dated 27 March 2024, dated April 8, 2025, among Quality Industrial Corp., Al Shola Al Modea Gas Distribution L.L.C., Mr. Sanjeeb Safir, Mr. Safir Ahammed, and Mr. Mohamed Hilal Saeed Muroushad Almheiri (incorporated by reference to Exhibit 2.8 to the Annual Report on Form 10-K filed with the SEC on April 28, 2025) | |
| 3.1* | Amended and Restated Articles of Incorporation, filed with the Secretary of State of the State of Nevada on October 5, 2011 (incorporated by reference to Exhibit 3.1 to the Form 1-A filed with the SEC on July 1, 2020) | |
| 3.2* | Certificate of Amendment to Articles of Incorporation, filed with the Secretary of State of the State of Nevada on March 22, 2018 (incorporated by reference to Exhibit 3.2 to the Form 1-A filed with the SEC on July 1, 2020.) | |
| 3.3* | Certificate of Ownership and Merger, filed with the Secretary of State of the State of Delaware on March 25, 2020 (incorporated by reference to Exhibit 3.3 of the Form 1-A filed with the SEC on July 1, 2020.) | |
| 3.4* | Articles of Merger, filed with the Secretary of State of the State of Nevada on March 25, 2020 (incorporated by reference to Exhibit 3.4 to the Form 1-A filed with the SEC on July 1, 2020) | |
| 3.5* | Articles of Merger, filed with the Secretary of State of the State of Nevada on June 27, 2022 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on August 4, 2022) | |
| 3.6* | Bylaws, dated June 24, 2020 (incorporated by reference to Exhibit 3.5 of the Form 1-A filed with the SEC on July 1, 2020) | |
| 4.1* | Certificate of Designation of Series A Preferred Stock, par value $0.001, filed with the Secretary of State of the State of Nevada on April 4, 2018 (incorporated by reference to Exhibit 4.1 to the Form 10 filed with the SEC on January 6, 2021) | |
| 4.2* | Convertible Promissory Note, dated August 3, 2022, issued by Quality Industrial Corp. (f/k/a Wikisoft Corp.) to RB Capital Partners Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on August 9, 2022) | |
| 4.3* | Convertible Promissory Note, dated March 17, 2023, issued by Quality Industrial Corp. to RB Capital Partners Inc. (incorporated by reference to Exhibit 4.3 of the Annual Report on Form 10-K filed with the SEC on March 31, 2023) | |
| 4.4* | Warrant To Purchase Common Stock of Quality Industrial Corp., dated April 19, 2023, issued by Quality Industrial Corp. to Exchange Listing LLC (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q filed with the SEC on August 10, 2023) | |
| 4.5* | Common Stock Purchase Warrant, dated May 23, 2023, issued by Quality Industrial Corp. to Jefferson Street Capital LLC (incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q filed with the SEC on August 10, 2023) | |
| 4.6* | Convertible Promissory Note, dated May 23, 2023, issued by Quality Industrial Corp. to Jefferson Street Capital LLC (incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q filed with the SEC on August 10, 2023) | |
| 4.7* | Convertible Promissory Note, dated June 16, 2023, issued by Quality Industrial Corp. to Sky Holdings Ltd (incorporated by reference to Exhibit 10.9 to the Quarterly Report on Form 10-Q filed with the SEC on August 10, 2023) | |
| 4.8* | Convertible Promissory Note, dated December 20, 2023, issued by Quality Industrial Corp. to Sean Levi (incorporated by reference to Exhibit 4.17 to the Annual Report on Form 10-K filed with the SEC on April 8, 2024) | |
| 54 |
| 4.9* | Convertible Promissory Note, dated February 6, 2024, issued by Quality Industrial Corp. to Exchange Listing, LLC (incorporated by reference to Exhibit 4.18 to the Annual Report on Form 10-K filed with the SEC on April 8, 2024) | |
| 4.10* | Convertible Promissory Note, dated May 21, 2024, issued by Quality Industrial Corp. to Jefferson Street Capital LLC, with Ilustrato Pictures International Inc. as guarantor (incorporated by reference to Exhibit 4.3 to the Quarterly Report on Form 10-Q filed with the SEC on August 19, 2024) | |
| 4.11* | Addendum, dated May 16, 2024, Amending Convertible Promissory Note, dated June 16, 2023, issued by Quality Industrial Corp. to Sky Holdings Ltd (incorporated by reference to Exhibit 4.4 to the Quarterly Report on Form 10-Q filed with the SEC on August 19, 2024) | |
| 4.12* | Certificate of Designation of Series B Convertible Preferred Stock, par value $0.001 per share, filed with the Secretary of State of the State of Nevada on September 23, 2024 (incorporated by reference to Exhibit 4.5 to the Quarterly Report on Form 10-Q filed with the SEC on November 19, 2024) | |
| 4.13** | Senior Secured Note, dated September 20, 2024, issued by Quality Industrial Corp. to J.J. Astor & Co. | |
| 4.14** | Description of securities of Quality Industrial Corp. | |
| 10.1* | Short-Term Loan Agreement, dated July 27, 2023, with Mahavir Investments Limited (incorporated by reference to Exhibit 4.11 to the Registration Statement on Form S-1/A filed with the SEC on December 7, 2023) | |
| 10.2* | Securities Purchase Agreement, dated May 21, 2024, among Quality Industrial Corp., Ilustrato Pictures International Inc., and Jefferson Street Capital LLC (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q filed with the SEC on August 19, 2024) | |
| 10.3* | Guarantee & Indemnity Agreement dated as of August 21, 2023, by and between Quality Industrial Corp., Ilustrato Pictures International Inc., Quality International Co Ltd FZC, Mr. Saseendran Kodapully Ramakrishnan and Artelliq Software Trading (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on August 25, 2023) | |
| 10.4* | Loan Agreement, dated September 20, 2024, between J.J. Astor & Co. and Quality Industrial Corp. (incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q filed with the SEC on November 19, 2024) | |
| 10.5** | Subsidiary Guarantee, dated as of September 20, 2024, between Al Shola Al Modea Gas Distribution L.L.C. and Quality Industrial Corp. | |
| 10.6** | Pledge and Security Agreement, dated as of September 20, 2024, among Al Shola Al Modea Gas Distribution L.L.C., Quality Industrial Corp. and J.J. Astor & Co. | |
| 10.7** | Registration Rights Agreement, dated as of September 20, 2024, between Quality Industrial Corp. and J.J. Astor & Co. | |
| 10.8** | Covenant Compliance Guaranty Agreement, dated as of September 20, 2024, by John-Paul Backwell | |
| 10.9** | Renewal Contract, dated May 10, 2025, between Al Shola Al Modea Gas Distribution L.L.C. and Dubai International Real Estate | |
| 10.10** | Digital Lease Contract No. 9877, dated May 7, 2025, between Dubai Real Estate Corporation and Al Shola Al Modea Gas Distribution L.L.C. | |
| 10.11** | Digital Lease Contract No. 1735, dated March 18, 2025, between Dubai Real Estate Corporation and Al Shola Al Modea Gas Distribution L.L.C. | |
| 10.12** | Tenancy Contract Information Registration Certificate (Sub-Lease) among Dubai Real Estate Corporation, Al Tatweer Contracting L.L.C., and Al Shola Al Modea Gas Distribution L.L.C. | |
| 10.13** | Digital Lease Contract No. 8421, dated August 7, 2025, between Dubai Real Estate Corporation and Al Shola Al Modea Gas Distribution L.L.C. | |
| 10.14* | Employment Agreement, dated September 2, 2024, between Quality Industrial Corp. and Sanjeeb Safir (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on September 4, 2025) | |
| 10.15** | Sub-Lease Agreement, dated January 7, 2026, between Breeze Business Center L.L.C. and Al Shola Al Modea Gas Distribution L.L.C. | |
| 10.16* | Stock Purchase Agreement, dated August 1, 2025, between Quality Industrial Corp. and Fusion Fuel Green PLC (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed with the SEC on November 10, 2025) | |
| 10.17* | Stock Purchase Agreement, dated October 21, 2025, between Quality Industrial Corp. and Safeguard Investment LLC (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q filed with the SEC on November 10, 2025) | |
| 10.18** | Settlement Agreement and Release, dated as of August 28, 2025, between Quality Industrial Corp. and Nicolas Link | |
| 10.19** | Settlement Agreement and Release, dated as of August 28, 2025, between Quality Industrial Corp. and Louise Bennett | |
| 10.20** | Settlement and Release Agreement, dated as of September 2025, between Lucosky Brookman LLP and Quality Industrial Corp. | |
| 10.21** | Intercompany Loan Agreement, dated as of June 15, 2022, between Ilustrato Pictures International Inc. and Quality Industrial Corp. (f/k/a WikiSoft Corp.) | |
| 55 |
| 10.22* | Asset Purchase Agreement, dated as of June 21, 2024, between Ilustrato Pictures International Inc. and Quality Industrial Corp. (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q filed with the SEC on August 19, 2024) | |
| 10.23* | Stock Purchase Agreement, dated as of November 18, 2024, among Fusion Fuel Green PLC, Quality Industrial Corp., Ilustrato Pictures International Inc., and certain stockholders of Quality Industrial Corp. (incorporated by reference to Exhibit 2.1 to Report on Form 6-K/A filed by Fusion Fuel Green PLC on March 10, 2025) | |
| 14.1** | Code of Ethics and Business Conduct, dated March 23, 2026 | |
| 19.1* | Insider Trading Policy, dated March 10, 2023 (incorporated by reference to Exhibit 14.2 to the Annual Report on Form 10-K filed with the SEC on March 31, 2023) | |
| 21.1** | List of Subsidiaries of Quality Industrial Corp. | |
| 31.1** | Certification of Principal Executive 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 | |
| 31.2** | Certification of 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 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 32.2** | Certification of principal financial and accounting 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.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| * | Previously filed. |
| ** | Filed herewith. |
ITEM 16. FORM 10-K SUMMARY
None.
| 56 |
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| Report of Independent Registered Public Accounting Firm | F-2 | |
| Consolidated Balance Sheets as of December 31, 2025 and 2024 | F-3 | |
| Consolidated Statements of Operations for the years ended December 31, 2025 and 2024 | F-4 | |
| Consolidated Statements of Stockholders’ Equity as of December 31, 2025 and 2024 | F-5 | |
| Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 | F-6 | |
| Notes to Consolidated Financial Statements | F-7 |
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders,
Quality Industrial Corp.
OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS
BASIS FOR OPINION
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the entity has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgements. We determined that there are no critical audit matters.
/s/
We have served as the Company’s auditor since 2024.
March 31, 2026
PCAOB ID Number
9555 S. Eastern Avenue, Suite 280, Las Vegas, NV 89123 ● 702.703.5979 ● www.bushandassociatescpas.com
| F-2 |
QUALITY INDUSTRIAL CORP.
CONSOLIDATED BALANCE SHEETS
(AUDITED)
December 31, 2025 Audited | December 31, 2024 Audited | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and Cash Equivalents | $ | $ | ||||||
| Inventory | ||||||||
| Accounts Receivable | ||||||||
| Deposits, Prepayments & Advances | ||||||||
| Other Current Assets | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Property, Plant and Equipment | ||||||||
| Right-of-Use Assets | ||||||||
| Goodwill | ||||||||
| Related Party Receivables | ||||||||
| Advances for Purchase of Property, Plant and Equipment | ||||||||
| Total Non-current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | $ | ||||||
| Related Party Payables | ||||||||
| Lease Operating Liabilities | ||||||||
| Convertible Notes, net of discount | ||||||||
| Other payables - current | ||||||||
| Other Current Liabilities | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liabilities | ||||||||
| Lease Operating Non-Current Portion | ||||||||
| Other payables – long-term | ||||||||
| Total Long-Term Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Equity (Deficit) | ||||||||
| Preferred stock; $ par value; shares authorized; and Series B shares issued and outstanding as of as of Dec 31, 2025, and December 31, 2024, respectively | ||||||||
| Common stock; $ par value; shares authorized; and shares issued and outstanding as of Dec 31, 2025, and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Retained Earnings/ accumulated Deficit | ( | ) | ( | ) | ||||
| Noncontrolling interest | ||||||||
| Total stockholders’ Equity (Deficit) | ( | ) | ||||||
| Total liabilities and stockholders’ Equity (Deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these audited consolidated financial statements.
| F-3 |
QUALITY INDUSTRIAL CORP.
CONSOLIDATED STATEMENT OF OPERATIONS
(AUDITED)
December 31, 2025 Audited | December 31, 2024 Audited | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Professional fees | ||||||||
| General and administrative | ||||||||
| Depreciation and Amortization | ||||||||
| Total operating expenses | ||||||||
| Income (loss) from operations | ( | ) | ||||||
| Other (income) expenses | ||||||||
| Interest expense | ||||||||
| Interest on Convertible Notes | ||||||||
| Commitment and Conversion Fees | ||||||||
| Discount on Convertible Notes | ||||||||
| Loss on Cash Write-Off | ||||||||
| Other non-operating expenses - write-off-assets | ||||||||
| Other Income – Credit Card Fees | ( | ) | ||||||
| Other Non - Operating Income | ( | ) | ( | ) | ||||
| Total other (income) expense, net | ||||||||
| Net Income (Loss) Before Provision for Income Taxes | ( | ) | ||||||
| Corporate Income Tax | ||||||||
| Net Income (Loss) | ( | ) | ||||||
| Less: net income attributable to noncontrolling interest | ||||||||
| Net income (loss) attributable to QIND stockholders | $ | ( | ) | $ | ( | ) | ||
| Weighted average common shares outstanding | ||||||||
| Net income (loss) per common share - basic and diluted | ) | ) | ||||||
The accompanying notes are an integral part of these audited consolidated financial statements.
| F-4 |
QUALITY INDUSTRIAL CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the year Ended December 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 | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares of common stock for Cash | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Issuance of shares of common stock for services | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Issuance of shares as a commitment fee | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Issued shares from conversion of convertible note | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Share buyback | - | - | ( | ) | ( | ) | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Common Stock Converted to Prefer B stock | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Common stock issued as staff compensation | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Prefer B stock Converted to Common Stock | - | ( | ) | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Minority Interest | ||||||||||||||||||||||||||||||||||||||||||||
| Income for the year | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Total Shareholders’ Equity as of December 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
For the year Ended December 31, 2024
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, 2023 | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares of common stock for Cash | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares of common stock for services | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Issuance of shares as a commitment fee | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Issued shares from conversion of convertible note | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Share buyback | - | - | ( | ) | ( | ) | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Common Stock Converted to Prefer B stock | - | ( | ) | ( | ) | - | ||||||||||||||||||||||||||||||||||||||
| Common stock issued as staff compensation | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Minority Interest | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Income for the year | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Total Shareholders’ Equity as of | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these audited consolidated financial statements.
| F-5 |
QUALITY INDUSTRIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AUDITED)
December 31, 2025 | December 31, 2024 | |||||||
| Cash flows from operating activities | ||||||||
| (Loss) income for the period | ( | ) | ||||||
| Adjustment to reconcile net gain (loss) to net cash | ||||||||
| Finance cost | ||||||||
| Non-cash stock compensation expense | ||||||||
| Stock issued for services | ||||||||
| Conversion fees | ||||||||
| Other non operating expenses - write-off assets | ||||||||
| Commitment 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 | ( | ) | ||||||
| Other current assets | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Lease operating liabilities | ( | ) | ( | ) | ||||
| Other payables - current | ( | ) | ( | ) | ||||
| Other payables - non current | ( | ) | ( | ) | ||||
| Other current liabilities | ( | ) | ||||||
| Net cash (used in) / provided by operating activities | ( | ) | ||||||
| Cash flows from investing activities | ||||||||
| Addition of fixed assets | ( | ) | ( | ) | ||||
| Advances for purchase of property, plant and equipment | ( | ) | ||||||
| Purchase consideration paid | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Buyback of shares | ( | ) | ||||||
| Fund support from holding company | ||||||||
| Repayment of bank borrowings - ASG | ( | ) | ||||||
| Proceeds/(repayment) of convertible note, net | ( | ) | ||||||
| Finance cost | ( | ) | ||||||
| Changes in non-controlling interest | ( | ) | ||||||
| Net cash provided / (used in) financing activities | ( | ) | ||||||
| Net increase in cash and cash equivalents | ||||||||
| Cash and cash equivalents at the beginning of the year | ||||||||
| Cash and cash equivalents at end of the year | ||||||||
The accompanying notes are an integral part of these audited consolidated financial statements.
| F-6 |
NOTE 1: OUR HISTORY
The Company 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.
| F-7 |
We
changed ownership on May 28, 2022, when ILUS 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.”
After
ILUS acquired control of QIND, on May 28, 2022, ILUS 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”). ASG is an Engineering and Distribution Company in the 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. The foregoing description of the Amended Share Purchase Agreement is not complete and is qualified in its entirety and filed as an exhibit to this form 10-K.
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 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, Quality Industrial Corp., a Nevada corporation, Fusion Fuel Green PLC, an Irish public limited company, Ilustrato
Pictures International Inc., a Nevada corporation, a stockholder of the Company, and certain other stockholders of the Company, entered
into a Stock Purchase Agreement, dated as of November 18, 2024. Under the Purchase Agreement, the Sellers transferred an aggregate of
shares of common stock and shares of 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.
| F-8 |
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 this Current Report on Form 8-K and incorporated herein by reference.
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 Green PLC (“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 increased
On
January 20, 2026, the Board of Directors of Quality Industrial Corp. and Fusion Fuel Green PLC, the Company’s majority stockholder
holding approximately
| F-9 |
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 accompanying audited 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 United States Securities and Exchange Commission (the “SEC”) for interim financial information. It is management’s opinion that the accompanying audited condensed consolidated financial statements are prepared in accordance with instructions for Form 10-K 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 accounting principles generally accepted in the United States of America (“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. as of and for the year ended December 31, 2024, filed with the SEC on April 28, 2025.
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 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.
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-10 |
Inventories
During fiscal year 2025, the Company evaluated the classification of its LPG cylinders under ASC 330 and ASC 360
based on their intended use, ownership, and expected use over multiple reporting periods. This evaluation was performed in connection
with changes in operational procedures. Based on this assessment, the Company determined that the LPG cylinders represent long-lived assets
used in operations and, accordingly, transferred LPG cylinders with a carrying value of $
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.
LPG Cylinders
During
fiscal year 2025, the Company evaluated the classification of its LPG cylinders under ASC 330 and ASC 360 based on their intended use,
ownership, and expected use over multiple reporting periods. This evaluation was performed in connection with changes in operational
procedures. Based on this assessment, the Company determined that the LPG cylinders represent long-lived assets used in operations and,
accordingly, transferred LPG cylinders with a carrying value of $
Beginning
in fiscal year 2026, the LPG cylinders are depreciated on a straight-line basis over an estimated useful life of
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.
| F-11 |
| Deposits & Advances Details |
December 31, 2025 | December 31, 2024 | ||||||
| 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 | ||||||||
| Total | ||||||||
| Prepaid Expenses | December 31, 2025 | December 31, 2024 | ||||||
| Hamsah Office Rent | ||||||||
| Store Rent | ||||||||
| Insurance | ||||||||
| Accommodation Rent | ||||||||
| DCD License | ||||||||
| Trade License | ||||||||
| Visa Cost | ||||||||
| Other Pre Payments | ||||||||
| Aiwa Energy | ||||||||
| Aiko Mall | ||||||||
| Aswaaq Shopping Mall | ||||||||
| Total | ||||||||
| 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 | December 31, 2025 | December 31, 2024 | ||||||
| Balance at Beginning | ||||||||
| Add: charge for the period | ||||||||
| Less: Settlement for the period | ( | ) | ( | ) | ||||
| Balance at the end of the period | ||||||||
| F-12 |
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.
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.
| F-13 |
| 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.
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.
| F-14 |
| Particulars | Year Ended December 31, 2025 (audited) | Year Ended December 31, 2024 (audited) | ||||||
| Basic and diluted EPS* | ||||||||
| Numerator | ||||||||
| Net income/(loss) | ( | ) | ||||||
| Net Income attributable to common stockholders | ( | ) | ( | ) | ||||
| Denominator | ||||||||
| Weighted average common shares outstanding | ||||||||
| Weighted-average number of common shares used for basic and diluted EPS. | ||||||||
| Basic and diluted EPS* | ) | ) | ||||||
| * |
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.
| F-15 |
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.
The Company’s subsidiary, Al Shola Gas, has entered into commercial vehicles. These leases generally have a lease term of 4 years. 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 also has leases with terms of 12 months or less which the Company has elected to not apply Topic 842 to short-term leases.
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.
| F-16 |
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, the presentation of depreciation as a separate
line item within operating expenses, and the reclassification of a $
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.
For the fiscal year 2025, the Company revised the presentation of commercial discounts granted to customers. Historically, revenue was recorded at the government-regulated gross selling price of cylinders, and customer discounts were presented within operating expenses as “Sales Discount.”
Under
ASC 606, Revenue from Contracts with Customers, discounts granted to customers are considered variable consideration and are required
to be reflected as a reduction of the transaction price. Accordingly, effective January 1, 2025, the Company reclassified sales discounts
of USD
This
change in presentation did not affect net income, operating income, total assets, liabilities, or stockholders’ equity for any
period presented. Prior period amounts, including fiscal year 2024 of $
NOTE 3. GOING CONCERN
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.
Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated financial statements are issued and determined. The Company’s ability to continue as a going concern is dependent on the Company’s ability to continue to generate sufficient revenues and raise capital within one year from the date of filing.
Over the next twelve months, management plans to use borrowings and security sales to mitigate the effects of cash flow deficits; however, no assurance can be given that debt or equity financing, if and when required, will be available.
| F-17 |
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 $
December 31, 2025 | December 31, 2024 | |||||||
| Cash and Cash Equivalents | ||||||||
| Cash in hand | ||||||||
| Cash at bank | ||||||||
| Total | $ | $ | ||||||
Accounts Receivables
Accounts receivable arise from our subsidiary Al Shola Gas consolidated as of December 31, 2025. 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 | December 31, 2025 | December 31, 2024 | ||||||
| 1-30 days | ||||||||
| 31-60 days | ||||||||
| 61-90 days | ||||||||
| +90 days | ||||||||
| Total | ||||||||
Other Current Assets
As
of December 31, 2025, and December 31, 2024, the Company reported Other Current Assets of $
The
$
On
August 25, 2023, the Company issued shares of its common stock to Artelliq Software Trading pursuant to a Share Purchase and
Buyback Agreement dated August 21, 2023, in exchange for $
Although the foregoing has been written off, the Company may pursue recovery or claw back actions against the applicable counterparties. Any amounts recovered, whether in cash, equity, or other consideration, would be recognized as a gain in the period realized.
| F-18 |
NOTE 5. NON-CURRENT ASSETS
Related Party Receivables
As
of December 31, 2025, and December 31, 2024, the Company had amounts due from Ilustrato Pictures International, Inc. (“ILUS”),
a former majority shareholder and former related party of the Company, of $
During
the fourth quarter of fiscal year 2025, management completed a recoverability assessment of the Company’s receivable from ILUS.
Based on that assessment, and pursuant to a written resolution adopted by the Company’s Board of Directors on December 15, 2025,
the Board approved the write-off of $
The
Board further acknowledged that approximately $
Although the foregoing has been written off, the Company may pursue recovery or claw back actions against the applicable counterparties. Any amounts recovered, whether in cash, equity, or other consideration, would be recognized as a gain in the period realized.
The Company’s majority-owned subsidiary, Al Shola Al Modea Gas LLC has a sister company, Al Shola Al Modea Safety and Security LLC, an established fire safety company registered in the UAE. While both entities operate independently, there is a limited overlap in their customer base. In certain instances, customers may remit payment for goods or services provided by both companies to only one of the entities. These transactions are recorded as related party transactions on the transaction date and are reconciled monthly between the respective related party accounts. As of December 31, 2025, and December 31, 2024, respectively, there were no outstanding balances between Al Shola Gas and Al Shola Al Modea Safety and Security.
Goodwill
The
Company acquired a
The
Company acquired
| F-19 |
NOTE 6. CURRENT LIABILITIES
Accounts Payable
Accounts
payable of $
| Accounts Payable Ageing Al Shola Gas | December 31, 2025 | December 31, 2024 | ||||||
| 1-30 days | ||||||||
| 31-60 days | ||||||||
| 61-90 days | ||||||||
| +90 days | ||||||||
| Total | ||||||||
Operating Lease Liabilities - Current
As
disclosed, we acquired
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 $
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 $
| F-20 |
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 $
On
July 3, 2024, we issued a convertible promissory note 1800 Diagonal Lending LLC in the principal amount of $
| F-21 |
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. During the year ended December 31, 2025, amortization
related to these discounts totaled $
A summary of these outstanding convertible notes and accrued interest as of December 31, 2025, is summarized below:
Debt & Interest Payable
| Lender | Date of Issue | Maturity Date | Principal Amount | Default Interest/Fees | Paid | Converted | Principal Outstanding | Interest Accrued | Total | |||||||||||||||||||||||
| RB Capital Partners Inc. | ||||||||||||||||||||||||||||||||
| RB Capital Partners Inc. | ||||||||||||||||||||||||||||||||
| Jefferson | ||||||||||||||||||||||||||||||||
| Sky Holdings | ||||||||||||||||||||||||||||||||
| RB Capital Partners Inc. | ||||||||||||||||||||||||||||||||
| Sean Levi | ||||||||||||||||||||||||||||||||
| Exchange Listing LLC | ||||||||||||||||||||||||||||||||
| Jefferson | ||||||||||||||||||||||||||||||||
| 1800 Diagonal Lending | ||||||||||||||||||||||||||||||||
| 1800 Diagonal Lending | ||||||||||||||||||||||||||||||||
| J.J. Astor & Co | ||||||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||
| F-22 |
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
In
connection with the ASG Acquisition, we acquired short term bank debt totaling $
The
Company acquired a
| Other Payables Current | December 31, 2025 | December 31, 2024 | ||||||
| Payable Al Shola Gas | ||||||||
| Other Payables current | ||||||||
| Total Other Payables Current | $ | $ | ||||||
Other Liabilities - Current
| Other Current Liabilities | December 31, 2025 | December 31, 2024 | ||||||
| Accrued Interest on Convertible note | ||||||||
| Payroll Liabilities | ||||||||
| Audit fee provision | ||||||||
| Corporate Tax payable | ||||||||
| Total | ||||||||
| F-23 |
Related Party Payable
On
November 18, 2024, Quality Industrial Corp., Fusion Fuel Green PLC, an Irish public limited company, Ilustrato Pictures International
Inc., a Nevada corporation, and certain other stockholders of the Company, entered into a Stock Purchase Agreement. Pursuant to section
6.04 of the agreement, Purchaser shall use commercially reasonable efforts to raise at least $
As
of December 31, 2025, and December 31, 2024, the Company had amounts owed to Fusion Fuel Green PLC amounting to $
NOTE 7. NON-CURRENT LIABILITIES
Operating Lease Liabilities - Non-Current portion
As
disclosed, we acquired
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 | MAZDA CX5- 94560Y | ISUZU 4.2T SC TRUCK 72938P | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Year 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year 2027 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year 2028 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year 2029 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Information:
| 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 | MAZDA CX5- 94560Y | ISUZU 4.2T SC TRUCK 72938P | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
| RoU | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease Liability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-Current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weighted average remaining lease term (in years) | ||||
| Weighted average discount rate | % |
Other Payables - Long term
In
connection with the ASG Acquisition, we acquired long term bank debt totaling $
The
Company acquired a
| Other Payables Non-current | December
31, 2025 | December
31, 2024 | ||||||
| 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 December 31, 2025, and December 31, 2024, there were and shares of common stock issued and outstanding, respectively.
As of December 31, 2025, and December 31, 2024, there were and shares of Series A stock of the Company issued and outstanding, respectively.
| F-24 |
As of December 31, 2025, and December 31, 2024, 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, 2024, to December 31, 2024, we made the following issuances:
On
January 11, 2024, the Company issued shares of our common stock to Jefferson Street Capital LLC for the conversion of $
On
January 19, 2024, the Company issued shares of our common stock to Jefferson Street Capital LLC for the conversion of $
On
February 15, 2024, the Company issued shares of our common stock for the conversion of $
On
April 26, 2024, we entered into an asset purchase agreement with Mr. Refer, the previous owner of the legacy business. Mr. Refer bought
the intangible legacy assets of Wikisoft for a total consideration of of the company’s common stocks to Quality Industrial
Corp. (“QIND”) with a fair market value of $ per common stock or $
On
May 7, 2024, the Company issued shares of our common stock to Jefferson Street Capital LLC for the conversion of $
On April 30, 2024, the Company issued fully vested shares of our common stock to Paul Keely for services with a fair market value of $ based on the market price of our stock on the date of grant.
On May 14, 2024, the Company issued fully vested shares of our common stock to John-Paul Backwell, our CEO, pursuant to his employment contract with a fair market value of $ based on the market price of our stock on the date of grant.
On
June 3, 2024, the Company issued commitment shares of our common stock to Jefferson Street Capital, pursuant to a convertible
note signed on May 21, 2024, with a fair value of $
On
June 5, 2024, the Company issued shares of our common stock to Jefferson Street Capital LLC for the conversion of $
On
June 13, 2024, the Company issued shares of our common stock to Sky Holding Ltd. For the conversion of $
On
July 9, 2024, the Company issued shares of our common stock to Jefferson Street Capital LLC for the conversion of $
| F-25 |
On
August 9, 2024, the Company issued shares of our common stock to Jefferson Street Capital LLC for the conversion of $
On September 9, 2024, the Company issued fully vested shares of our common stock to Sanjeeb Safir, pursuant to his employment contract signed on September 2, 2024, with a fair market value of $ based on the market price of our stock on the date of grant.
On September 13, 2024, the Company issued fully vested shares of our common stock to Safeguard Investments LLC, pursuant to a Consultancy contract signed on August 31, 2024, with a fair market value of $ based on the market price of our stock on the date of grant.
On September 21, 2024, the Company cancelled shares of common stock issued to Ilustrato Pictures International Inc. The shares were reissued to Ilustrato Pictures International Inc.as series B preferred stock converting at 1:1000.
On September 20, 2024, the Company issued shares of our common stock with a fair market value of $ per share and a total value of $ to JJ Astor Co., pursuant to a convertible note signed on September 21, 2024.
On
September 24, 2024, the Company issued shares of our common stock to Jefferson Street Capital LLC for the conversion of $
On October 16, 2024, the Company entered into a Share Purchase Agreement with Safeguard Investments LLC, pursuant to which the Investor acquired shares of the Company’s Common Stock for a purchase price of $.
On
October 22, 2024, the Company issued shares of our common stock to Jefferson Street Capital LLC for the conversion of $
On
November 18, 2024, Quality Industrial Corp., a Nevada corporation, Fusion Fuel Green PLC, an Irish public limited company, Ilustrato
Pictures International Inc., a Nevada corporation, a stockholder of the Company, and certain other stockholders of the Company together
with the Company and Fusion Fuel, entered into a Stock Purchase Agreement, dated as of November 18, 2024. Under the Purchase Agreement,
the Sellers transferred an aggregate of shares of common stock and shares of Series B Preferred Stock of the Company,
constituting approximately
On
November 20, 2024, the Company issued of our common stock to Jefferson Street Capital LLC for the conversion of $
From January 1, 2025, to December 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 $
| F-26 |
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 $
On
April 27, 2025, the Company issued shares of our common stock to 1800 DIAGONAL LENDING LLC for the conversion of $
On
April 30, 2025, the Company issued shares of our common stock to 1800 DIAGONAL LENDING LLC for the conversion of $
On
May 1, 2025, the Company issued shares of our common stock to 1800 DIAGONAL LENDING LLC for the conversion of $
On
May 6, 2025, the Company issued shares of our common stock to 1800 DIAGONAL LENDING LLC for the conversion of $
On
May 6, 2025, the Company issued shares of our common stock to Jefferson Street Capital LLC for the conversion of $
On
May 13, 2025, the Company issued shares of our common stock to 1800 DIAGONAL LENDING LLC for the conversion of $
On
June 5, 2025, the Company issued shares of our common stock to Jefferson Street Capital LLC for the conversion of $
On
July 22, 2025, the Company issued shares of our common stock to Jefferson Street Capital LLC for the conversion of $
On
August 1, 2025, Fusion Fuel Green PLC signed a stock purchase agreement pursuant to which they bought shares of common stock
at a price of $ per share with a total price of $
| F-27 |
Pursuant
to a Stock Purchase Agreement, dated as of October 21, 2025, between the Company and Safeguard Investment LLC (“Safeguard Investment”),
the Company repurchased shares of common stock from Safeguard Investment for an aggregate purchase price of $
On
October 28, 2025, Fusion Fuel Green PLC, converted shares of Series B Convertible Preferred Stock, par value $ per share (“Series
B Preferred Stock”), of the Issuer into
On
December 2, 2025, Fusion Fuel Green PLC converted shares of Series B Convertible Preferred Stock, par value $ per share, of
the Issuer (“Series B Preferred Stock”), into
NOTE 9. OPERATING EXPENSES
| General and Administrative Expenses | December 31, 2025 | December 31, 2024 | ||||||
| Salary & Compensation – QIND | ||||||||
| Salary | ||||||||
| Bonus | ||||||||
| Salary & Compensation – ASG | ||||||||
| Salary and other allowances | ||||||||
| Compensation and Benefits – Managing Directors | ||||||||
| Rent | ||||||||
| Office Expenses | ||||||||
| IT support | ||||||||
| Other expenses** | ||||||||
| Total | $ | $ | ||||||
| ** |
NOTE 10. NON-OPERATING INCOME
The Company Earned other income in 2024 as a result of sale of intangible legacy assets and reversal of interest payments on the loan agreements with Mahavir and Artelliq which was unwound with cancellation of the agreement with Quality International.
The Company earned other income for the year ended December 31, 2025, as a result of a settlement agreement signed on September 30, 2025, with Lucosky Brookman LLP.
The table below presents the breakdown of non-Operating income:
| Non-Operating income | December 31, 2025 | December 31, 2024 | ||||||
| Liability Waiver - Lucosky Brookman LLP | ||||||||
| Reversal of interest payment | ||||||||
| Sale of Wikisoft assets | ||||||||
| Other Income - Credit Card Fees | ||||||||
| Total | $ | $ | ||||||
| F-28 |
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 $
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 | December 31, 2025 | March 31, 2024 | ||||||
| Total | ||||||||
As
of December 31, 2025, $
Fair value of Consideration
| Cash or National Exchange listed stock | $ | |||
| Cash | $ | |||
| Total | $ |
| F-29 |
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 | $ | |||
During
the year ended December 31, 2025, we consolidated this acquired business since March 31, 2024, rather than since the acquisition date
of March 27, 2024. The impact on our December 31, 2024, results would have resulted in revenue of $
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
January 12, 2026, the Company issued
On
January 20, 2026, the Board of Directors and Fusion Fuel Green PLC, the Company’s majority stockholder holding approximately
On
February 23, 2026, Fusion Fuel Green PLC converted shares of Series B Convertible Preferred Stock, par value $ per share,
of the Issuer (“Series B Preferred Stock”), into
On
March 05, 2026, it was announced that ASG was awarded two new engineering subcontracts with a combined value of approximately $
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.
| F-30 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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: March 31, 2026 | Quality Industrial Corp. | |
| /s/ John-Paul Backwell | ||
| Name: | John-Paul Backwell | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| /s/ Carsten Kjems Falk | ||
| Name: | Carsten Kjems Falk | |
| Title: | Interim Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature |
Title |
Date | ||
| /s/ John-Paul Backwell | Chief Executive Officer (principal executive officer) and Director | March 31, 2026 | ||
| John-Paul Backwell | ||||
| Interim Chief Financial Officer (principal financial officer and principal accounting officer) and Director | March 31, 2026 | |||
| /s/ Carsten Kjems Falk | ||||
| Carsten Kjems Falk | ||||
| /s/ Frederico Figueira de Chaves | Chairman and Director | March 31, 2026 | ||
| Frederico Figueira de Chaves |
| 57 |
FAQ
What is Quality Industrial Corp. (QIND) and what does it do?
What are the key financial risks QIND discloses in this 10-K filing?
How did Fusion Fuel Green PLC gain control of QIND?
What are the main geopolitical and operational risks facing QIND’s Dubai LPG business?
Why is QIND’s large goodwill balance considered a risk factor?
What strategic role does Al Shola Gas play in QIND’s business model?
