UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended September 30, 2023

 

Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from __________ to__________

 

Commission File Number: 000-56239

 

Ilustrato Pictures International, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada   27-2450645
(State or other jurisdiction of
incorporation or organization)
  (IRS Employer
Identification No.)

 

26 Broadway, Suite 934

New York, NY 10004

(Address of principal executive offices)

 

917-522-3202

(Registrant’s telephone number)

____________

 

 

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.

 

  Large accelerated filer Accelerated filer
  Non-accelerated filer Smaller reporting company
    Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

 

Securities registered pursuant to Section 12(b) of the Act: None

 

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 1,629,315,728 common shares as of November 24, 2023

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
PART I – FINANCIAL INFORMATION 1
   
Item 1: Financial Statements 1
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations 2
Item 3: Quantitative and Qualitative Disclosures About Market Risk 6
Item 4: Controls and Procedures 6
   
PART II – OTHER INFORMATION 7
   
Item 1: Legal Proceedings 7
Item 1A: Risk Factors 8
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 8
Item 3: Defaults Upon Senior Securities 9
Item 4: Mine Safety Disclosures 9
Item 5: Other Information 9
Item 6: Exhibits 10

 

i

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Our financial statements included in this Form 10-Q are as follows:

 

  F-1 Consolidated Balance Sheets as of September 30, 2023 (Unaudited) and December 31, 2022;
  F-2 Consolidated Statements of Operations for the three and nine months ended September 30, 2023, and 2022 (Unaudited);
  F-3 Consolidated Statement of Stockholders’ Equity for the periods ended September 30, 2023, and 2022 (Unaudited);
  F-4 Consolidated Statements of Cash Flows for the periods ended September 30, 2023, and 2022 (Unaudited); and
  F-5 Notes to consolidated Financial Statements (Unaudited).

 

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended September 30, 2023, are not necessarily indicative of the results that can be expected for the full year.

 

1

 

 

ILUSTRATO PICTURES INTERNATIONAL INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

      September 30,
2023
   December 31,
2022
 
ASSETS           
Current Assets           
Cash and Cash Equivalents  4   1,587,275    1,478,702 
Accounts Receivables  5   95,815,503    60,690,812 
Inventory      2,274,355    1,877,905 
Inventory (work-in-progress)  6   36,848,297    58,081,202 
Other Current Assets  7   18,939,563    17,062,388 
Total Current Assets      155,464,993    139,191,009 
Long term Investments  8   18,495,263    18,368,326 
Right of use of asset  9   11,906,654    11,906,654 
Goodwill  10   60,944,584    60,310,468 
Tangible Assets  11   20,474,209    21,017,415 
Intangible Assets  12   6,352    623,591 
Total Non-Current Assets      111,829,062    112,226,454 
Total Assets      267,294,055    251,417,463 
LIABILITIES AND STOCKHOLDERS’ EQUITY             
Current Liabilities  13          
Account Payable      60,013,057    52,141,842 
Current lease liability      333,515    836,382 
Other Current liabilities      102,559,457    102,059,819 
Total Current Liabilities      162,906,029    155,038,043 
Non-current liabilities  14          
Notes Payable      11,855,013    10,550,000 
Non-current lease liability      12,192,300    13,696,729 
Other non-current liabilities      15,013,029    16,015,558 
Total Non-Current Liabilities      39,060,342    40,262,287 
Total Liabilities      201,966,371    195,300,330 
Stockholders’ Equity             
Common Stock: 2,000,000,000 shares authorized, $0.001 par value, 1,556,878,281and 1,355,230,699 issued and outstanding
  15   1,556,878    1,355,230 
Preferred Stock: 235,741,000 authorized, $0.001 par value,  15   
 
    
 
 
Class A - 10,000,000 authorized; 10,000,000 issued and outstanding      10,000    10,000 
Class B - 100,000,000 authorized; 3,400,000 issued and outstanding      3,400    3,400 
Class C - 10,000,000 authorized; 0 issued and outstanding      
    
 
Class D - 60,741,000 authorized; 60,741,000 issued and outstanding      60,741    60,741 
Class E - 5,000,000 authorized; 3,172,175 issued and outstanding      3,172    3,172 
Class F - 50,000,000 authorized; 1,668,250 issued and outstanding      1,668    1,633 
Additional Paid-in-capital      22,949,605    21,474,067 
Other Comprehensive Income  16   27,253    (20,666)
Non-Controlling Interest  17   33,228,672    24,386,712 
Retained Earnings      7,014,150    5,126,274 
Net Income      472,145    4,559,375 
Total Stockholders’ Equity      65,327,684    56,117,132 
              
Total Liabilities and Stockholders’ Equity      267,294,055    251,417,463 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

F-1

 

 

ILUSTRATO PICTURES INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED) 

 

   For the Three Months Ended   For the Nine months ended 
   September 30,
2023
   September 30,
2022
   September 30,
2023
   September 30,
2022
 
NET REVENUE   24,120,561    20,419,421    67,476,168    43,110,166 
COST OF REVENUE   15,469,041    13,608,451    44,389,499    28,580,965 
GROSS PROFIT   8,651,520    6,810,970    23,086,669    14,529,201 
Operating Expenses:                    
Selling and Distribution Expense   19,250    25,450    66,989    25,450 
General, Selling & Administrative Expenses   5,445,612    4,119,346    11,587,107    8,141,266 
Other Operating Expenses   160,788    169,792    1,148,210    440,703 
Depreciation   722,157    587,813    2,047,168    1,739,310 
Total Operating Expense   6,347,807    4,902,401    14,849,474    10,346,729 
PROFIT/ LOSS FROM OPERATIONS   2,303,713    1,908,569    8,237,195    4,182,472 
Non-Operating Expenses   2,054,165    721,075    6,097,465    1,226,020 
Non-Operating Income   222,597         227,301      
NET PROFIT/ LOSS   472,145    1,187,494    2,367,031    2,956,452 
BASIC EARNING PER SHARE   0.00    0.00    0.00    0.00 
WEIGHTED AVERAGE SHARES OUTSTANDING   1,556,878,281    1,271,530,699    1,556,878,281    1,271,530,699 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

F-2

 

 

ILUSTRATO PICTURES INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(UNAUDITED)

 

For the Nine Months Ended September 30, 2023

 

   Common Stock   Preferred Stock -
Class A
   Preferred Stock -
Class B
   Preferred Stock -
Class D
   Preferred Stock -
Class E
   Preferred Stock -
Class F
   Additional Paid in   Minority   Retained   Total
Stockholders’
 
   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Interest   Earnings   Equity 
Balance December 31, 2022   1,355,230,699    1,355,230    10,000,000    10,000    3,400,000    3,400    60,741,000    60,741    3,172,175    3,172    1,633,250    1,634    20,631,261    24,386,712    9,664,983    56,117,132 
Common stock issued   63,850,000    63,850    -    -    -    -    -    -    -    -    -    -    484,650    
 
    -    548,500 
Common stock cancelled   (40,000,000)   (40,000)   
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
         40,000    - 
Preferred stock issued   -    -    -    -    
 
    
 
    
 
    
 
    
 
    
 
    35,000    35    2,205    
 
    -    2,240 
Preferred stock cancelled   -    -    -    -         
 
         
 
         
 
         -    
 
    
 
    -    - 
Changes in Retained earnings        
 
         
 
         
 
         
 
         
 
         
 
    
 
         (333,635)   (333,635)
Current Quarter Income   -    -    -    -    -    -    -    -    -    -    -    -    -         914,662    914,662 
Income transferred to Minority Interest                                                                    1,306,458    (1,306,458)     
Balance March 31, 2023   1,379,080,699    1,379,081    10,000,000    10,000    3,400,000    3,400    60,741,000    60,741    3,172,175    3,172    1,668,250    1,668    21,118,116    25,693,170    8,979,553    57,248,900 
Common stock issued   55,300,000    55,300    -    -    -    -    -    -    -    -    -    -    547,800    
 
    -    603,100 
Preferred stock converted in common   10,000,000    10,000         
 
         
 
         
 
         
 
    (100,000)   (100)   
 
    
 
    -    9,900 
Preferred stock issued   -    -    -    -    
 
    
 
    
 
    
 
    
 
    
 
    100,000    100    
 
    
 
    -    100 
Preferred stock cancelled   -    -    -    -                                       -              -    - 
Changes in Retained earnings        
 
         
 
         
 
         
 
         
 
         
 
    
 
         (216,412)   (216,412)
Current Quarter Income   -    -    -    -    -    -    -    -    -    -    -    -    
 
         980,224    980,224 
Income transferred to Minority Interest        
 
         
 
         
 
         
 
         
 
         
 
    
 
    257,759    (2,386,489)   (2,128,730)
QIND Income transferred to Minority Interest                                                                    3,723,114         3,723,114 
Balance June 30, 2023   1,444,380,699    1,444,381    10,000,000    10,000    3,400,000    3,400    60,741,000    60,741    3,172,175    3,172    1,668,250    1,668    21,665,916    29,674,043    7,356,876    60,220,196 
Common stock issued against Services   21,665,710    21,666                                                      470,146              491,812 
Common stock issued against Note conversion   53,125,000    53,125                                                      478,125              531,250 
Common stock issued for Cash   37,081,872    37,082                                                      322,918              360,000 
Common stock issued as commitment shares   625,000    625                                                      12,500              13,125 
Current Quarter Income                                                                         472,145    472,145 
Income transferred to Minority Interest                                                                    3,554,629         3,554,629 
Changes in Retained earnings                                                                         (315,472)   (315,472)
Balance September 30, 2023   1,556,878,281    1,556,878    10,000,000    10,000    3,400,000    3,400    60,741,000    60,741    3,172,175    3,172    1,668,250    1,668    23,949,605    33,228,672    7,513,548    65,327,684 

 

For the Nine Months Ended September 30, 2022

 

STATEMENT OF STOCKHOLDERS’ EQUITY 
   Common Stock   Preferred Stock - Class A   Preferred Stock - Class B   Preferred Stock - Class D   Preferred Stock - Class E   Preferred Stock - Class F   Additional
Paid in
   Share
capital of
   Accumulated   Total
Stockholders’
 
   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Subsidiaries   Deficit   Equity 
Balance Dec 31, 2021   1,243,530,699   $1,243,531    10,000,000   $10,000    2,200,000   $2,200    60,741,000   $60,741    3,172,175   $3,172    5,800,000   $5,800   $3,664,118        $13,081,367   $18,070,929 
Shares issued   70,000,000   $70,000    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
   $124,746        $636,636   $831,382 
Balance Mar 31, 2022   1,313,530,699   $1,313,531   $10,000,000   $10,000   $2,200,000   $2,200    60,741,000   $60,741    3,172,175   $3,172    5,800,000   $5,800    3,788,864        $13,718,003   $18,902,311 
Share Capital of Subsidiary                                                                                
Common stock converted into Preferred B   (120,000,000)  $(120,000)                                                                   $(120,000)
Preferred Stock Converted to Common Stock   25,000,000   $25,000                                                                    $25,000 
Convertible notes converted to common stock   53,000,000   $53,000    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
   $53,000 
Common stock converted into Preferred                       1,200,000   $1,200                                                $1,200 
Preferred Stock Converted to Common Stock                                                     (243,250)  $(243)                 $(243)
Changes in Add Capital        
 
         
 
         
 
         
 
         
 
         
 
   $12,633,277    
 
    
 
   $12,633,277 
Current quarter income        
 
         
 
         
 
         
 
         
 
         
 
    
 
        $1,132,322   $1,132,322 
Changes in Retained Earnings        
 
         
 
         
 
         
 
         
 
         
 
    
 
        $(11,589,135)  $(11,589,135)
Balance June 30, 2022   1,271,530,699   $1,271,531   $10,000,000   $10,000    3,400,000   $3,400    60,741,000   $60,741    3,172,175   $3,172    5,556,750   $5,557   $16,422,141   $-   $3,261,190   $21,037,732 
Common Stock issued   53,700,000   $53,700    -   $-    -    -    -   $-    -   $-    0    0   $-        $-   $53,700 
Preferred Stock issued   -   $-    -   $-    -    -    -   $-    -   $-    1500   $1.5   $-        $-   $2 
Current Quarter Income                                                                        $1,187,494   $1,187,494 
Changes in Additional Capital                                                              $563,900             $563,900 
 Foreign exchange adjustment                                                                        $17,158   $17,158 
Share Capital of subsidiaries                                                                   $563,393   $-   $563,393 
Balance September 30, 2022   1,325,230,699   $1,325,231    10,000,000   $10,000    3,400,000   $3,400    60,741,000   $60,741    3,172,175   $3,172    5,558,250   $5,559   $16,986,041   $563,393   $4,465,842   $23,423,378 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

F-3

 

 

ILUSTRATO PICTURES INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

   For the Nine Months Ended 
   September 30,
2023
   September 30,
2022
 
CASH FLOWS FROM OPERATING ACTIVITIES        
Net Loss/ Profit   2,367,031    2,956,452 
Adjustment to reconcile net gain (loss) to net cash          
Non- Cash non- operating Expenses   3,517,233    
 
 
Depreciation   2,047,167    44,518 
Finance cost   3,889,223    340,217 
Discount on convertible Notes   
 
    
 
 
Changes in Assets and Liabilities, net          
Current Assets   (16,165,412)   (41,532,128)
Other Current Liabilities   7,992,208    28,071,183 
Net cash (used in) provided by operating activities   3,647,450    (10,119,758)
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Addition/ Disposal of Fixed Assets   (1,505,960)   1,450,143 
Changes in Non-current assets   (126,938)   1,389,004 
Changes in Non- Current Liabilities   (2,506,959)   1,484,805 
Net cash (used in) provided by investing activities   (4,139,857)   4,323,952 
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Funds raised through notes   4,718,302    
 
 
Finance cost   (1,064,033)   5,925,000 
Funds raised through issuance of Stock   360,000      
Note settled   (3,413,289)   
 
 
Net cash (used in) provided by financing activities   600,980    5,925,000 
           
Net change in cash, cash equivalents and restricted cash   108,573    129,194 
Cash, cash equivalents and restricted cash, beginning of the year   1,478,702    176,688 
Cash, cash equivalents and restricted cash, end of the year   1,587,275    305,862 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

F-4

 

 

ILUSTRATO PICTURES INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1. ORGANIZATION, HISTORY AND NATURE OF BUSINESS

 

a)We were incorporated as a Superior Venture Corp. on April 27, 2010, in the State of Nevada for the purpose of selling wine varietals. On November 9, 2012, we entered into an Exchange Agreement with the Ilustrato Pictures Ltd., a British Columbia corporation (Ilustrato BC”), whereby we acquired all the issued and outstanding common stock of Ilustrato BC. On November 30, 2012, Ilustrato BC transferred all of its assets and liabilities to Ilustrato Pictures Limited, our wholly owned subsidiary in Hong Kong (“Ilustrato HK”). On February 11, 2013, we changed the name to Ilustrato Pictures International, Inc.

 

  b) On April 1, 2016, Barton Hollow, together with the newly elected director of the issuer, caused the Issuer to enter into a letter of Intent to merger with Cache Cabinetry, LLC, and Arizona limited liability company. Pursuant to the Letter of Intent, the parties thereto would endeavor to arrive at, and enter into, a definitive merger agreement providing for the Merger. As an inducement to the members of Cache Cabinetry, LLC to enter into the Letter of Intent and thereafter transact, the Issuer caused to be issued to the members 360,000,000 shares of its common stock.

 

  c) Subsequently, on April 6, 2016, the Issuer and Cache Cabinetry, LLC entered into a definitive agreement and Plan of Merger (the “Merger Agreement”). Concomitant therewith, the stockholders of the Issuer elected Derrick McWilliams, the President of Cache Cabinetry, LLC Chief Executive Officer of the Issuer, who along with Barton Hollow, ratified and approved the Merger Agreement and Merger.

 

  d) The Merger closed on June 3, 2016. The merger is designed as a reverse subsidiary merger pursuant to Section 368(a)(2)(E) of the Internal Revenue Code. That is, upon closing, Cache Cabinetry LLC will merger into a newly created subsidiary of the Issuer with the members of Cache Cabinetry, LLC receiving shares of the common stock of the Issuer as consideration therefor. Upon closing of the Merger, Cache Cabinetry, LLC will be the surviving corporation in its merger with the wholly owned subsidiary of the Issuer, therefore has become the wholly owned operating subsidiary of the Issuer.

 

  e) On November 9th, 2018, the Company entered into a Term Sheet for Plan of Merger and Control with Larson Elmore.

 

  f) As a part of share purchase arrangement between Lee Larson Elmore and FB Technologies Global Inc., Nick Link, the owner of FB Technologies Global Inc. replaced Lee Larson Elmore as CEO of Ilustrato Pictures International Inc. on January 14, 2021, and we eventually got control over activities and books of accounts of Ilustrato Pictures International Inc. from the date January 14, 2021. So, we are not aware about facts mentioned above vide note no. 1(A), 1(B), 1(C), 1(D), 1(E), 1(F) and 1(G) ‘organization, history, and business’ as they are related to prior to the date on which control over activities and books of accounts of Ilustrato Pictures International Inc. were handed over to us. Thus, those events have been reiterated as disclosed in previous fillings made by the preceding management of the company with SEC.

 

  g) On June 10, 2020, the Company entered into a definitive agreement with FB Fire Technologies Ltd. for the conversion of debt. The shareholders were issued 2,500,000 shares of Class E Preferred Stock and BrohF Holdings Ltd., a creditor of the company was issued 672,175 shares. A final tranche of shares for debt conversion will be issued to the shareholders following the audited financials for 2022.

  

F-5

 

 

  h) Firebug Mechanical Equipment LLC (Firebug Group – U.A.E.) was incorporated on May 8, 2017. ILUS acquired 100% of this company on January 26, 2021, under a signed Share Purchase Agreement. This company is engaged in the business of research and development of firefighting technologies as well as the manufacturing firefighting equipment and firefighting vehicles for its customers in the Middle East, Asia, and Africa.

 

  i) Georgia Fire & Rescue Supply LLC (Georgia Fire) was incorporated on the January 21, 2003. ILUS acquired 100% of this company on March 31, 2022, under a signed Share Purchase Agreement. This company is engaged in the business of sales, distribution and servicing/maintenance of Firefighting, Rescue and Emergency Medical Services equipment.

 

  j) Bright Concept Detection and Protection System LLC (BCD Fire) was incorporated on March 18, 2014. ILUS acquired 100% of this company on April 13, 2021, in connection a signed Share Purchase Agreement. This company is engaged in the business of sales, distribution, installation and maintenance of Fire Protection and Security systems.

 

  k) Bull Head Products Inc. was incorporated on June 8, 2007. ILUS acquired 100% of this company on January 1, 2022, under a signed Share Purchase Agreement. This company is engaged in the business of manufacturing of aluminum truck beds and brush truck skid units for firefighting purposes including wildland firefighting.

 

  l) Emergency Response Technologies, Inc. This company was incorporated by ILUS on February 22, 2022, as the company’s Emergency Response Subsidiary. This company is engaged in the business of public safety and emergency response focused mergers and acquisitions.

 

  m) E-Raptor. This company was incorporated by ILUS as the company’s Commercial Electric Utility Vehicle manufacturer on February 22, 2022. This company is engaged in the business of manufacturing electric utility vehicles for the emergency response, agricultural, industrial, hospitality and transport sectors.

 

  n) Replay Solutions was incorporated by ILUS on March 1, 2022. The company is engaged in the business of recovering precious metals from electronic waste, known as urban mining.

 

  o) Quality Industrial Corp. was originally incorporated on May 4, 1998. ILUS acquired 77% of this company on May 28, 2022, under a signed Share Purchase Agreement. This company is engaged in the industrial, oil & gas, and manufacturing sectors. Quality Industrial Corp. is a public company which trades on the OTC Market under the ticker QIND and is designed as a Special Purpose Vehicle for our industrial and manufacturing division as well as for our operating company Quality International Co Ltd FCZ and other future acquisitions.

 

  p) AL Shola Al Modea Safety and Security LLC is a fire safety company registered in the United Arab Emirates. The company has signed a Share Purchase Agreement to acquire 51% control of AL Shola Al Modea Safety and Security LLC (ASSS) on December 13, 2022.

 

  q) Quality International Co Ltd FCZ is a United Arab Emirates registered process manufacturing and engineering company. It manufactures custom solutions for the oil and gas, power/energy, water, desalination, wastewater, offshore and public safety industries. Quality Industrial Corp. signed a binding letter of intent on June 28, 2022, and the definitive Share Purchase Agreement on January 18, 2023, to acquire a 52% interest in Quality International Co Ltd FCZ.

  

  s) Hyperion Defense Solutions (Hyperion) was incorporated on February 13, 2023, and alongside two experienced and esteemed British military veterans, Chris Derbyshire, and Tim Grey. Through their combined 34 years of military service and 22 years holding senior roles in the defense sector, they have amassed a wealth of technical expertise and senior roles in the defense sector, senior level contacts as well as an acute understanding of defense customer requirements and military procurement processes.

 

F-6

 

 

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 ILUS and all of its majority - owned or controlled subsidiaries are prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP). All significant inter-company accounts and transactions have been eliminated. Further, while preparing consolidated financial statements, all the U.S. GAAP principles of consolidation have been followed and non-controlling interest have been recorded separately in the Consolidated Balance sheets.

 

The following companies are consolidated on the basis of Mergers & Acquisitions:

 

1.ILUS International UK

 

2.Firebug Mechanical Equipment LLC

 

3.Bull Head products Inc.

 

4.Georgia Fire & Rescue supply LLC

 

5.Bright Concept and protection System LLC

 

6.Quality Industrial Corp.

 

7.AL Shola Al Modea Safety and Security LLC

 

8.Hyperion Defense Solutions

 

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.

 

F-7

 

 

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.

 

Fair value of financial instruments

 

The carrying value of cash, accounts payable and accrued expenses, and debt approximate their fair values because of the short-term nature of these instruments. 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 to engage in general trading, manufacturing and fabrication or steel and steel products and mainly manufacturing of pressure vessels, tanks, heat exchangers and construction of storage tanks and piping. 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 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.

 

Construction contracts

 

Construction contract revenue and contract costs are recognized as revenue and expenses respectively by reference to the stage of completion of the contract activity at the end of the reporting period when the outcome of a construction contract can be estimated reliably. The percentage of completion method of accounting requires the reporting of revenues and expenses on a yearly basis, as determined by the percentage of the contract that has been fulfilled. The stage of completion is measured by reference to the proportion of the costs incurred to date.

 

F-8

 

 

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized to the extent of contract costs incurred that are likely to be recoverable and contracts costs are recognized as expense in the period in which they are incurred. An expected loss on the construction contract is recognized as an expense immediately when it is probable that total contract costs will exceed total contract revenue.

 

The Company principally operates fixed price contracts. If the outcome of such a contract can be reliably measured, revenue associated with the construction contract is recognized by reference to the stage of completion of the contract activity at year end (the percentage of completion method).

 

The outcome of a construction contract can be estimated reliably when:

 

  the total contract revenue can be measured reliably;

 

  it is probable that the economic benefits associated with the contract will flow to the entity;

 

  the costs to complete the contract and the stage of completion can be measured reliably; and

 

  the contract costs attributable to the contract can be clearly identified and measured reliably so that actual contract costs incurred can be compared with prior estimates. When the outcome of a construction cannot be estimated reliably (principally during early stages of a contract), contract revenue is recognized only to the extent of costs incurred that are expected to be recoverable.

 

In applying the percentage of completion method, revenue recognized corresponds to the total contract revenue (as defined below) multiplied by the actual completion rate based on the proportion of total contract costs (as defined below) incurred to date over the total estimated contract costs.

 

Contract revenue corresponds to the initial amount of revenue agreed in the contract and any variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue, and they are capable of being reliably measured.

 

Contract costs include costs that relate directly to the specific contract and costs that are attributable to contract activity in general and can be allocated to the contract.

 

The Company’s contracts are typically negotiated for the construction of a single asset or a group of assets which are closely interrelated or interdependent in terms of their design, technology, and function. In certain circumstances, the percentage of completion method is applied to the separately identifiable components of a single contract or to a group of contracts together in order to reflect the substance of a contract or a group of contracts.

 

Accounts Receivable

 

Accounts receivables are recorded at face value 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.

 

Allowance for Doubtful Accounts

 

An allowance for doubtful accounts on accounts receivable is charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write off percentages and information collected from individual customers. Accounts receivables are charged off against the allowances when collectability is determined to be permanently impaired.

 

Stock Based Compensation

 

When applicable, the Company will account for stock-based payments to employees in accordance with ASC 718, “Stock Compensation” (“ASC 718”). Stock-based payments to employees include grants of stocks, grants of stock options and issuance of warrants that are recognized in the consolidated statement of operations based on their fair values at the date of grant.

 

F-9

 

 

In accordance with ASC 718, the company will generally apply the same guidance to both employee and nonemployee share-based awards. However, the company will also follow specific guidance for share-based awards to nonemployees related to the attribution of compensation cost and the inputs to the option-pricing model for expected term. Nonemployee share-based payment equity awards are measured at the grant-date fair value of the equity instruments, similar to employee share-based payment equity awards.

 

The Company calculate 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.

 

Earnings (Loss) per Share

 

The Company reports earnings (loss) per share in accordance with ASC Topic 260-10, “Earnings per Share.” Basic earnings (loss) per share is computed by dividing income (loss) available to shareholders by the weighted average number of shares available. Diluted earnings (loss) per shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except the denominator is increased to include the number of additional shares that would have been outstanding if the potential shares had been issued and if the additional shares were dilutive.

 

Organization and Offering Cost

 

The Company has a policy to expense organization and offering costs as incurred.

 

Cash and Cash Equivalents

 

For purpose of the statements of cash flows, the Company considers cash and cash equivalents to include all stable, highly liquid investments with maturities of three months or less.

 

Concentration of Credit Risk

 

The Company primarily transacts its business with one financial institution. The amount on deposit in that one institution may from time to time exceed the federally insured limit.

 

Business segment

 

ASC 280, “Segment Reporting” requires use of the “management approach” model for segments reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. A Division overview presented in the Management Discussion and analysis filed with this form 10-Q.

 

Leases

 

The Company accounts for leases with escalation clauses and rent holidays on a straight-line basis in accordance with Accounting Standards Codification (ASC) 842, “Lease”. The deferred rent expenses liability associated with future lease commitments was reported under the caption “Other long-term obligation” on our consolidated balance sheet. The Company has Lease arrangement for which the liability has been recorded separately. Such Lease arrangements corresponds to the operating subsidiary QIND.

 

F-10

 

 

Lease liabilities 

 

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 expense 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, Quality International, has entered into commercial leases of land for offices, manufacturing yards and storage facilities. These leases generally have a lease term of 25 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 and leases with low value.  

 

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 a 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. Additionally, the Company has elected the short-term lease recognition exemption for all leases that qualify, which means ROU assets and lease liabilities will not be recognized for leases with an initial term of twelve months or less.

 

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. 

 

Short-term leases and leases of low-value assets 

 

The Company accounts for leases with escalation clauses in accordance with Accounting Standards Codification (ASC) 842, “Lease”.

 

The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Low value asset consideration is those less than USD 5,000. Lease payments on short-term leases and leases of low value assets are recognized as expense on a straight-line basis over the lease term. 

 

F-11

 

 

Recent Accounting Pronouncements

 

The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial report, the Company undertakes a study to determine the consequences of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change. The Company currently does not have any recent accounting pronouncement that they are studying, and feel may be applicable.

 

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.

 

Rounding Off

 

Figures are rounded off to the nearest $, except value of EPS and number of shares.

 

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.

 

NOTE 4. 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 was $1,587,275 in cash and cash equivalents as of September 30, 2023, and $1,478,702 as of December 31, 2022, respectively.

 

NOTE 5. ACCOUNTS RECEIVABLES

 

Accounts receivables are recorded at face value 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.

 

F-12

 

 

Major Accounts receivable are from our subsidiary QIND. The duration of such receivables extends from 30 days beyond 12 Months with an average of 60 days. Payments are received only when a project milestone or entire project is completed, and approvals are obtained. Provisions are created based on the estimated irrecoverable amounts determined by referring to past default experience. The accounts receivable that extends beyond 12 months, amounting to $30,095,285 as of September 30, 2023, and December 31, 2022, for both periods respectively, due to warranties and legacy receivables are guaranteed by Gerab National Enterprises LLC.

 

NOTE 6. INVENTORY - WORK IN PROGRESS

 

Work In Progress only reflects the value of products in intermediate production stages and excludes the value of finished products being held as inventory in anticipation of future sales and raw materials not yet incorporated into an item for sale. 

 

NOTE 7. OTHER CURRENT ASSETS

 

Other Current Assets  September 30,
2023
   December 31,
2022
 
Retention and other Receivables   2,590,611    2,800,612 
Amount due from Related Parties   1,794,218    1,794,218 
Deposits   1,547,977    1,550,914 
Accrued Discount on Convertible notes   79,089    100,000 
Advance to sub-Contractors   7,292,624    7,572,440 
Other misc Current Assets   541,320    194,937 
Prepaid assets   109,736    278,192 
loans advanced   647,456    578,367 
Directors Current Account   2,279,322    2,096,777 
Statutory dues  Receivable   48,852    46,326 
Staff Advances   8,358    49,605 
Buy back commitment   2,000,000    0 
Total   18,939,563    17,062,388 

 

Other Misc. Current Assets:

 

Other Misc. Current Assets as mentioned in the above table includes advances paid in connection with the operations of the company.

 

  Advances to Suppliers and sub- Contractors: Advances have been paid to the suppliers in the ordinary course of business for procurement of specialized material and equipment required in the process of manufacturing of pressure vessels, tanks, heat exchangers and construction of storage tanks and pipes.  The Industrial and Manufacturing Division engages in the production of process equipment, pressure vessels, and substantial offshore structures. To undertake these projects, the company is required to make substantial upfront investments in materials and machinery. These projects involve many processes and take a long time to complete. 
     
  Loan advanced refers to the amount advanced by a company in the ordinary course of business and includes amount paid for set up of new businesses. 

 

F-13

 

 

  Retention Receivables relates to a percentage of the contract price being retained by the customers for a period of 12 to 18 months (as per contract agreements), for the purpose of repair of damages (if any), that arise as a result of work done on the projects by the Company. These amounts are received at the expiration of the retention period. 
     
  Other Receivables represents claims for damages from suppliers. 

 

Related party Advances:

  

As of September 30, 2023, and September 30, 2022, the Company had amounts due to Quality Industrial Corp. (“QIND”), a subsidiary of the Company, of $397,390 and $(30,000), respectively. These figures are related to an intercompany loan agreement executed by and between the Company and QIND on June 15, 2022. The maximum principal amount to be borrowed by either party from each other under the agreement is $1,000,000. The purpose of the agreement is to provide for working capital to either the Company or QIND through cash advances on an unsecured basis requested by either party at any time and from time to time in amounts of up to $100,000 and the agreement shall automatically be renewed for successive one-year terms thereafter unless terminated. The intercompany loan agreement has a term of one year from the date of execution and all cash advances mature and become payable on the termination date. Any unpaid principal accrues simple interest from the date of each cash advance until payment in full at a rate equal to 1% per annum.

 

As of September 30, 2023, and September 30, 2022, the Company had amounts due from Gerab National Enterprises LLC (“Gerab”), a shareholder of Quality International, the operating subsidiary of the Company, of $1,794,218 and $4,990,679, respectively. Gerab is a large supplier of piping and steel solutions located in the UAE and supplies piping and steel to Quality International. The amounts due are related to an advance in connection with the supply of materials for which delivery was delayed. The amount due has reduced following resumption of the delayed project leading to delivery of the materials as per project milestones. The amount due will be further reduced by the end of as the remaining materials are delivered. As per the audited financial statements of Quality International, outstanding balances at the year-end arise in the normal course of business. For the year ended June 30, 2023, Quality International has not recorded impairment of amounts owed by any related party, as the provision for expected credit losses on the amounts due from a related party was not material to the financial statements and the credit risk associated with it, is assessed as low/nil for the period June 30, 2022.

 

On September 15, 2023, QIND issued 2,000,000 shares to Nicolas Link of QIND common stock pursuant to his employee contract with a grant-date and fair market value of $0.27.

 

On September 15, 2023, QIND issued 2,000,000 shares to John-Paul Backwell QIND common stock, pursuant to his employee contract, with a grant-date and fair market value of $0.27.

 

On September 15, 2023, QIND issued 1,250,000 shares to Carsten Kjems Falk of QIND common stock, pursuant to his employee contract, with a grant-date and fair market value of $0.27.

 

On September 15, 2023, QIND issued 350,000 shares to Louise Bennett 350,000 shares of QIND common stock, pursuant to her employee contract, with a grant-date and fair market value of $0.27.

 

NOTE 8. LONG TERM INVESTMENTS/OTHER ASSETS

 

Particulars  September 30,
2023
   December 31,
2022
 
Investments:        
Investment in FB Fire Technology Ltd.   3,172,175    3,172,175 
Investment in TVC   20,500    20,500 
Capital Advances   1,496,695    1,496,656 
Loan to FB Fire Technologies Ltd   1,805,893    1,678,995 
Investment in Dear Cashmere Holding Co.   12,000,000    12,000,000 
TOTAL   18,495,263    18,368,326 

 

F-14

 

 

Investment in Dear Cashmere Holding Co. The company received 10,000,000 shares of Common stock in Dear Cashmere Holding Co on May 21, 2021, as compensation for services to provided DRCR such as but not limited to, free rent in Al Marsa Street 66, 11th Floor, Office 1105, Dubai, free use of inhouse accounting, IT, and legal team from 2021 until December 31, 2023. Capital advances represents 3,172,175 number of Class E Preferred Stock issued, in advance, at $1 per share amounting $3,172,175 to the shareholders of FB Fire Technologies Ltd. for acquisition of FB Fire Technologies Ltd.

 

Investment in FB Fire technologies represents 3,172,175 number of Class E Preferred Stock issued, in advance, at $1 per share amounting $3,172,175 to the shareholders of FB Fire Technologies Ltd. for acquisition of FB Fire Technologies Ltd. 

 

Capital Advance of $1,496,656 represents amount advanced for two subsidiaries -Bull head and Georgia Fire security LLC. 

 

NOTE 9. RIGHT OF USE ASSETS

 

The Company’s subsidiaries have entered into commercial leases of land for offices, manufacturing yards and storage facilities. 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. To determine the present value of lease payments, the Company uses the stated interest rate in the lease, when available, or more commonly a secured incremental borrowing rate that reflects risk, term, and economic environment in which the lease is denominated. The Company has elected not to recognize ROU assets or lease liabilities for leases with a term of twelve months or less. Expense is recognized on a straight-line basis over the lease term for operating leases.

 

NOTE 10. GOODWILL

 

As of December 31, 2022, the Goodwill has been generated through acquisition of our subsidiaries - Bull Head Products Inc., Georgia Fire & Rescue, Quality Industrial Corp. and its subsidiary Quality International. Goodwill accounted in the books is primarily a result of acquisitions, representing the excess of the purchase price over the fair value of the tangible net assets acquired.

 

The Company accounts for business combinations by estimating the fair value of consideration paid for acquired businesses and assigning that amount to the fair values of assets acquired and liabilities assumed, with the remainder assigned to goodwill. If the fair value of assets acquired and liabilities assumed exceeds the fair value of consideration paid, a gain on bargain purchase is recognized. The estimates of fair values are determined utilizing customary valuation procedures and techniques, which require us, among other things, to estimate future cash flows and discount rates. Such analyses involve significant judgments and estimations.

 

The Company follows the guidance prescribed in Accounting Standards Codification (“ASC”) 350, Goodwill and Other Intangible Assets, to test goodwill and intangible assets for impairment annually if an event occurs or circumstances change which indicates that its carrying amount may not exceed its fair value.

 

The annual impairment review is performed in the fourth quarter of each fiscal year based upon information and estimates available at that time. To perform the impairment testing, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair values of the Company’s reporting units or indefinite-lived intangible assets are less than their carrying amounts as a basis for determining whether or not to perform the quantitative impairment test. Qualitative testing includes the evaluation of economic conditions, financial performance, and other factors such as key events when they occur. The Company then estimates the fair value of each reporting unit and each indefinite-lived intangible asset not meeting the qualitative criteria and compares their fair values to their carrying values.

 

F-15

 

 

As all the subsidiaries were acquired in 2022, hence company would start impairment process from the next year 2023 in accordance with the guidance prescribed in ASC 350. The Company would assess at year-end whether there has been an impairment in the value of goodwill and identifiable intangible assets.

 

If future operating performance at one or more of the Company’s reporting units were to fall significantly below forecasted levels, the Company could be required to reflect, under current applicable accounting rules, a non-cash charge to operating income for an impairment. Any determination requiring the write-off of a significant portion of goodwill or identifiable intangible assets would adversely impact the Company’s results of operations and net worth.

 

As of December 31, 2022, Goodwill and intangible assets amount to $60,310,468 as compared to total assets amounting to $ 251,417,462. Below is a table displaying the goodwill arising from the Company’s acquisitions:

 

Quality International   56,387,027 
QIND   4,065,075 
Bullhead   8,810 
Georgia   (772,095)
ILUS UK   315,063 
BCD   306,597 
Goodwill Total   $60,310,468 

 

NOTE 11. TANGIBLE ASSETS

 

Particulars  September 30,
2023
   December 31,
2022
 
Tangible Assets:        
Land and Building   16,885,820    17,390,322 
Plant and machinery   1,529,819    1,419,802 
Furniture, Fixtures and Fittings   120,608    221,329 
Vehicles   53,977    70,326 
Computer and computer Equipment   18,476    31,067 
Capital WIP   1,867,509    1,884,569 
TOTAL   20,476,209    21,017,415 

 

Property, Plant and Equipment

 

Property, Plant and Equipment is 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 lifespan of the respective assets using the straight-line method.

 

The estimated useful lifespans are as follows:

 

Item   Years 
Buildings, related improvements & land improvements   5-25 
Machinery & Equipment   3-15 
Computer hardware & software   3-10 
Furniture & Fixtures   3-15 

 

F-16

 

 

Expenditure that extends the useful lifespan of existing property, plant and equipment are capitalized and depreciated over the remaining useful lifespan of the related asset, Expenditure 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.

 

Property, plant and equipment  Plant & Machinery   Leasehold
Improvements
& Building
   Furniture,
Fixtures &
Office
Equipment
   Vehicles   Computer and
Computer
Equipment
   Capital
work in
Progress
   Total 
As of December 31, 2021   106,528    22,158    30,126    2,725    42,774    0    204,311 
Additions during the year   0    -    34,833    67,601    
 
    
 
    102,434 
Additions on account of acquisition of Subsidiary   25,427,300    27,086,143    5,741,179    1,668,183    0    1,884,569    61,807,374 
As at December 31, 2022   25,533,828    27,108,301    5,806,138    1,738,509    42,774    1,884,569    62,114,119 
Additions during Jan- June 2023   929,642    313              (5,630)   (217,060)   707,265 
June 30,2023   26,463,470    27,108,614    5,806,138    1,738,509    37,144    1,667,509    62,821,384 
Additions during July- Sept 2023   598,696                        200,000    798,696 
September30,2023   27,062,166    27,108,614    5,806,138    1,738,509    37,144    1,867,509    63,620,080 
                                    
Acc dep as at December 31, 2021   23,049,947    8,613,635    5,419,774    1,667,592    -    
 
    38,750,948 
Charge for the year   1,064,079    1,104,344    165,035    591    11,707    
 
    2,345,756 
Acc dep at December 31, 2022   24,114,026    9,717,979    5,584,809    1,668,183    11,707    0    41,096,704 
Carrying value as at December 31, 2022   1,419,802    17,390,322    221,329    70,326    31,067    1,884,569    21,017,415 
Charge for the period Jan to June 2023   1,013,913    243,436    53,074    11,904    2,683    -    1,325,010 
Acc dep as at June 30,2023   25,127,939    9,961,415    5,637,883    1,680,087    14,390    -    42,421,714 
Carrying value as at June 30,2023   1,335,531    17,147,199    168,255    58,422    22,754    1,667,509    20,399,670 
Charge for the period July- September 2023   404,408    261,379    47,647    4,445    4,278         722,157 
Acc dep as of September 30,2023   25,532,347    10,222,794    5,685,530    1,684,532    18,668    -    43,143,871 
Carrying value as at September 30,2023   1,529,819    16,885,820    120,608    53,977    18,476    1,867,509    20,476,209 

 

NOTE 12. INTANGIBLE ASSETS

 

Particulars  September 30,
2023
   December 31,
2022
 
Intellectual Rights       617,239 
Website   6,112    6,112 
Trademarks   240    240 
TOTAL   6,352    623,591 

 

F-17

 

 

NOTE 13. CURRENT LIABILITIES

 

Other Current Liabilities

 

Other Current Liabilities as mentioned in the below table includes short term liabilities. Short term bank borrowings relate to credit-lines and bank borrowings by the company’s subsidiary QIND to meet asset financing and working capital requirements for orders that are in production.

 

Particulars  September 30,
2023
   December 31,
2022
 
Credit Cards   6,663    6,895 
Payable to subsidiaries   77,299,629    82,235,560 
Short Term Bank Borrowings   19,055,041    18,220,315 
Tax Payable   28,703    31,421 
Provision for Expenses   28,000    1,303,229 
Accrued Interest for Convertible Notes   117,525    31,855 
Other short-term loan   395,000    101,141 
Payroll Liability   377,292    119,987 
Misc. liabilities   218,251    9,416 
Short term Borrowings   5,033,333    
 
 
TOTAL   102,559,457    102,059,819 

 

As of September 30, 2023, loan payable – Payable to subsidiaries amounting to $77,299,629 is the liability of the company on account of its acquisition of subsidiaries. The Major portion of $75.5 million is payable in tranches to Quality International as a part of purchase consideration. Other amounts include payment to other subsidiaries, Al Shola Modea Safety and Security LLC, Georgia Fire and Bull head products Inc.

 

Borrowings amounting to $18,911,641, is the current portion of bank borrowings, which correspond to our subsidiary Quality International. As per the applicable accounting standards, Borrowings from financial institutions have been bifurcated into current and non-Current liabilities.

 

NOTE 14. NON – CURRENT LIABILITIES

Particulars

  September 30,
2023
   December 31,
2022
 
Provision for Convertible Notes   1,155,338    1,155,338 
Borrowings from Financial Institutions   10,768,392    12,378,098 
Interest On Convertible Notes   722,622    461,994 
Employees’ End of Service Benefits   2,075,676    1,953,853 
Defined Benefit Obligation (Gratuity)   291,001    66,275 
TOTAL   15,013,029    16,015,558 

 

The borrowings from financial institutions belong to our subsidiary, Quality International. These terms loans were acquired from commercial banks in the UAE for the purchase of machinery and equipment. These term loans carry financing costs at commercial rates plus 1 to 3-month EIBOR per annum.

 

Options and Warrants

 

In accordance with ASC 470, detachable warrants issued are allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at the time of issuance, the portion of the proceeds assigned to the warrants credited to paid-in capital, and the remainder to the debt instrument.

 

F-18

 

 

On February 4, 2022, a Common Share Purchase Warrant was issued to Discover Growth Fund, LLC, of the $2,000,000 convertible promissory note of even date herewith (the “Note”), , 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, 20,000,000 of the Company’s common shares (the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant to the terms and conditions of this Warrant) at the Exercise Price of $0.275, per share then in effect. 

 

On December 2, 2022, we issued a common stock purchase warrant to AJB Capital Investment LLC for the $1,200,000 convertible promissory note. 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, 30,000,000 of the Company’s common shares (the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant to the terms and conditions of this Warrant) at the Exercise Price per share then in effect. The Warrant was later amended on March 8, 2023, and May 12, 2023.

 

On January 26, 2023, we issued a common stock purchase warrant to Jefferson Street Capital for the $100,000 convertible promissory note. 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, 650,000 of the Company’s common shares (the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant to the terms and conditions of this Warrant) at the Exercise Price per share then in effect.

 

On June 30, 2023, we issued a common stock purchase warrant to Exchange Listing. The holder is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date of issuance hereof, to purchase from the Company, 200,000 of the Company’s common shares (the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant to the terms and conditions of this Warrant) at the Exercise Price per share then in effect

 

NOTE 15. COMMON STOCK AND PREFERRED STOCK

 

In August 2019 the Company’s Amended its Articles of Incorporation to authorize it to issue up to two billion (2,000,000,000) shares, of which all shares are common stock, with a par value of one-tenth of one cent ($0.001) per share. The Company also created the following 30,000,000 preferred shares with a par value of $0.001 to be designated Class A, B and C.

 

Class A – 10,000,000 preferred shares that convert at 3 common shares for every 1 preferred class A share and voting rights of 500 common shares for every 1 preferred class A share. All 10,000,000 preferred class A shares have been issued to the Company’s CEO.

 

Class B – 10,000,000 preferred shares that convert at 3 common shares for every 1 preferred class B common share.

 

Class C – 10,000,000 preferred shares that convert at 2 common shares for every 1 preferred class C common share with voting rights of 100 common shares for every 1 preferred class C share.

 

On February 14, 2020 the Company designated Class D– 60,741,000 preferred shares; par value $0.001 that convert at 500 common shares for every 1 preferred class D common share with voting rights of 500 common shares for every 1 preferred class D share.

 

On May 28, 2020, the Company designated preferred Class E shares - 5,000,000 preferred shares; par value $0.001; non-cumulative. Dividends are 6% a year commencing a year after issuance. Dividends to be paid annually. Redeemable at $1.00 per share, 2.25% must be redeemed per quarter, commencing one year after issuance, and shall be redeemed at 130% premium to the redemption value. The shares do not have voting rights.

 

On August 26, 2021, the company amended its Articles of Incorporation to updated authorized Class B preferred shares to 100,000,000 (10,000,000 previously) with par value $0.001 that will be converted at 100 common shares (3 common shares previously) for every 1 preferred Class B Share with voting rights of 100 common shares for every 1 preferred class B share. Dividends to be paid according to the company’s dividend policy agreed by the board from time to time.

 

F-19

 

 

On July 20, 2021, the Company designed preferred Class F shares – 50,000,000 preferred shares; par value $0.001 that convert at 100 common shares for every 1 preferred class F share with no voting rights and no dividends.

 

As of December 31, 2022, there was 1,355,230,699 shares of the Company’s common stock issued and outstanding.

 

As of June 30, 2023, the number of shares outstanding of our Common Stock was 1,444,380,699.

 

Common Stock issuances during the nine months ended September 30, 2023.

 

On February 18, 2023, we cancelled 40,000,000 shares of common stock with Ambrose & Keith Ltd.

 

On March 17, 2023, we issued 10,000,000 shares of common stock as commitment shares to AJB Capital Investment LLC for an aggregate price of $421,000.

 

On March 21, 2023, we issued 53,850,000 shares of common stock as compensation to RB Capital Partners Inc. For conversion of a convertible note for an aggregate price of $538,500

 

On April 12, 2023, 100,000 Preferred F shares were converted into 10,000,000 common shares.

 

On April 12, 2023, 100,000 Preferred F shares were issued to John-Paul Backwell as staff compensation.

 

On May 12, 2023, we issued 2,000,000 shares of common stock as commitment shares to AJB Capital Investment LLC for an aggregate price of $80,000.

 

On June 1, 2023, we issued 53,300,000 shares of common stock as compensation to RB Capital Partners Inc. For conversion of a convertible note for an aggregate price of $533,000.

 

On July 14, 2023, we issued 21,665,710 shares of common stock to Exchange Listing LLC for a stock purchase agreement for an aggregate price of $100 for consultancy services for the planned uplist to a National Exchange.

 

On August 04, 2023, we issued 53,125,000 shares of common stock as compensation to RB Capital Partners Inc. For conversion of a convertible note for an aggregate price of $531,250.

 

On September 06, 2023, we issued 5,555,556 shares of common stock to Kyle Comerford for a stock purchase agreement for an aggregate price of $50,000.

 

On September 09, 2023 we issued 10,000,000 shares of common stock to Cameron Canzellarini for a stock purchase agreement for an aggregate price of $100,000.

 

On September 11, 2023 we issued 625,000 shares of common stock as commitment shares to Richard Astrom with a fair market value of $0.02 per shares for an aggregate price of $12,500.

 

On September 18, 2023 we issued 5,000,000 shares of common stock to Kirt Weidner for a stock purchase agreement for an aggregate price of $50,000.

 

On September 21, we issued 6,000,000 shares of common stock to Kaleb Ryan for a stock purchase agreement for the aggregate price of $60,000.

 

On September 28, we issued 10,526,316 shares of common stock to Kevin Van Hoesen for a stock purchase agreement for the aggregate price of $100,000.

 

F-20

 

 

EARNING PER SHARE

 

Particulars  September 30,
2023
   December 31,
2022
 
Basic EPS        
Numerator        
Net income / (loss)   472,145    4,559,375 
Net Income attributable to common stockholders  $472,145   $4,559,375 
Denominator          
Weighted average shares outstanding   1,556,878,281    1,355,230,699 
Number of shares used for basic EPS computation   1,556,878,281    1,355,230,699 
Basic EPS  $0.00   $0.00 
Diluted EPS          
Numerator          
Net income / (loss)   472,145    4,559,375 
Net Income attributable to common stockholders  $472,145   $4,559,375 
Denominator          
Number of shares used for basic EPS computation        1,355,230,699 
Conversion of Class A preferred stock to common stock   30,000,000    30,000,000 
Conversion of Class B preferred stock to common stock   65,589,041    65,589,041 
Conversion of Class D preferred stock to common stock   30,370,500,000    30,370,500,000 
Conversion of Class F preferred stock to common stock   166,825,000    158,602,740 
Number of shares used for diluted EPS computation   32,189,792,322    31,979,922,480 
Diluted EPS  $0.00   $0.00 

 

NOTE 16. OTHER COMPREHENSIVE INCOME 

 

Statement of Comprehensive Income Statement  Q3 2023   Q3 2022 
Net Income   472,145    1,187,494 
Other comprehensive Income /(loss), net of tax   27,253    
 
 
Foreign currency translation adjustments   
 
    
 
 
Comprehensive Income   444,892    1,187,494 

 

NOTE 17. NON-CONTROLLING INTEREST

 

The total Net Assets of Quality International were $49,255,718 on December 31, 2022, of which 52% was acquired amounting to $25,612,973. The remaining $56,387,027 of the total purchase price of $82,000,000 is part of the Company’s Goodwill (see footnote). Furthermore, 48% of Quality International’s earnings have been transferred to Minority Interest. Current quarter earnings of the subsidiaries where the company doesn’t hold 100% ownership has been transferred to Non-Controlling Interest in the respective shareholding ratio. 

 

F-21

 

 

NOTE 18. NOTES PAYABLE

 

The following is the list of Notes payable as of June 30, 2023. Convertible Notes issued during the reported period are accounted in the books as liability, accrued Interest and discount on notes is also accounted accordingly as per general accounting principles. 

 

  On February 04, 2022, the company entered into a convertible note with Discover Growth Fund LLC – John Burke for the amount of $2,000,000. The note is convertible at a 35% below the lowest past 15-day share price and bears 12% interest per annum. The note matures on February 4, 2023.

 

  On May 20, 2022, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $500,000. The note is convertible into common stock at the rate of $0.50 and bears 5% interest per annum. The note matures on May 19, 2024.

 

  On May 27, 2022, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $500,000. The note is convertible into common stock at the rate of $0.50 and bears 5% interest per annum. The note matures on May 26, 2024.

 

  On June 01, 2022, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $1,000,000. The note is convertible into common stock at the rate of $0.50 and bears 5% interest per annum. The note matures on May 31, 2024

 

  On July 12, 2022, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $500,000. The note is convertible into common stock at the rate of $0.50 and bears 5% interest per annum. The note matures on July 11, 2024.

 

  On August 10, 2022, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $500,000. The note is convertible into common stock at the rate of $0.50 and bears 5% interest per annum. The note matures on August 09, 2024.

 

  On August 25, 2022, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $200,000. The note is convertible into common stock at the rate of $0.50 and bears 5% interest per annum. The note matures on August 24, 2024.

 

  On September 21, 2022, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $650,000. The note is convertible into common stock at the rate of $0.50 and bears 5% interest per annum. The note matures on September 20, 2024.

 

  On November 14, 2022, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $400,000. The note is convertible into common stock at the rate of $0.50 and bears 5% interest per annum. The note matures on November 13, 2024.

 

  On December 2, 2022, the company entered into a convertible note with AJB Capital Investment LLC for the amount of $1,200,000. The note is convertible into common stock upon an event of default at the rate equal to volume weighted average trading price of the specified period and bears 12% interest. The note matures on June 01, 2023.

 

  On January 26, 2023, the company entered into a convertible note with Jefferson Street Capital for the amount of $100,000. The note is convertible into common stock upon an event of default at the rate equal to volume weighted average trading price of the specified period and bears 12% interest. The note matures on July 26, 2023.

 

  On April 11, 2023, ILUS entered into a note payable of $144,200 with 1800 Diagonal Lending LLC. Repayable in 9 monthly payments and shall bear 13% interest as one time charge on the issuance date. In case of event of default, note is convertible into common stock at 65% of lowest trading price during previous ten days. The note matures on March 11, 2024.

 

F-22

 

 

  On April 12, 2023, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $500,000. The note is convertible into common stock at the rate of $0.50 and bears 5% interest per annum. The note matures on April 12, 2025.

  

  On May 2, 2023, the company entered into a convertible note with RB Capital Partners Inc., for the amount of 250,000. The note is convertible into common stock at the rate of $0.50 and bears 5% interest per annum. The note matures on May 2, 2025.

 

  On May 3, 2023, the company The Company signed a Forbearance Agreement with Discover Growth Fund for the original note dated February 4, 2022. The Company shall make monthly minimum loan payments to Discover Growth Fund of $450,000 commencing on May 30, 2023, and on the 5th day of each month thereafter, until the Note is paid in full.

 

  On May 30, 2023, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $200,000. The note is convertible into common stock at the rate of $0.50 and bears a 5% interest per annum. The note matures on May 30, 2025

 

  On May 30, 2023, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $450,000. The note is convertible into common stock at the rate of $0.50 and bears a 5% interest per annum. The note matures on May 30, 2025.

 

  On June 21, 2023, the company entered into a note payable of $61,868 with 1800 Diagonal Lending LLC. Repayable in 9 monthly payments and shall bear 13% interest as one time charge on the issuance date. In case of event of default, note is convertible into common stock at 65% of lowest trading price during previous ten days. The note matures on March 30, 2024.

 

On July 03, 2023, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $475,000. The note is convertible into common stock at the rate of $0.50 and bears a 5% interest per annum. The note matures on July 3, 2025.

 

On July 26, 2023, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $550,000. The note is convertible into common stock at the rate of $0.50 and bears a 5% interest per annum. The note matures on July 26, 2025.

 

On August 29, 2023, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $100,000. The note is convertible into common stock at the rate of $0.50 and bears a 5% interest per annum. The note matures on August 29, 2025

 

On September 5, 2023, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $450,000. The note is convertible into common stock at the rate of $0.50 and bears a 5% interest per annum. The note matures on September 5, 2025

 

On September 7, 2023, the company entered into convertible Note with Richard Astrom, for the amount of $27,500. The note is convertible into common stock at variable conversion price and bears a 9% interest per annum. The note matures on March 6, 2024. The Note cannot be converted until 3 months from the date of issue of Note.

 

F-23

 

 

NOTE 19. SUBSEQUENT EVENTS

 

In accordance with ASC 855-10-50 the company list events which are deemed to have a determinable significant effect on the balance sheet at the time of occurrence or on the future operations, and without disclosure of it, the financial statements would be misleading.

 

On October 13, 2023, the company entered into a share purchase agreement with Lovejit Singh to sell 5,000,000 shares of common stock for a purchase price of $50,000.

 

On October 19, 2023 we issued 2,118,644 shares of common stock as compensation to 1800 Diagonal Lending LLC. For partial conversion of a convertible note for an aggregate price of $25,000.

 

On October 20, 2023 we issued 4,555,555 shares of common stock as compensation to Jefferson Street Capital LLC. For partial conversion of a convertible note for an aggregate price of $40,000.

 

On October 20, 2023, ILUS entered into a note payable of $89,250.00 with 1800 Diagonal Lending LLC.

Repayable any time after 180 days following the date of note till maturity date and shall bears 9% interest rate per annum. The note is convertible into common stock at the rate equal to variable conversion price as defined, shall mean 65% of lowest trading price during previous ten days. The note matures on July 30, 2024

 

On October 23, 2023 we issued 3,092,784 shares of common stock as compensation to 1800 Diagonal Lending LLC. For partial conversion of a convertible note for an aggregate price of $30,000.

 

On October 25, 2023 we issued 9,538,461 shares of common stock as compensation to Jefferson Street Capital LLC. For partial conversion of a convertible note for an aggregate price of $30,000.

 

On November 6, 2023, the company entered into a share purchase agreement with Kevin Van Hoesen to sell 16,666,667 shares of common stock for a purchase price of $100,000.

 

On November 07, 2023 we issued 9,538,461 shares of common stock as compensation to Jefferson Street Capital LLC. For partial conversion of a convertible note for an aggregate price of $30,000.

 

On November 7, 2023 the company entered into a convertible note with RB Capital Partners Inc., for the amount of $200,000. The note is convertible into common stock at the rate of $0.50 and bears a 5% interest per annum. The note matures on November 7, 2025.

 

On November 15, 2023 we issued 21,926,875 shares of common stock as compensation to RB Capital Partners LLC for partial conversion of a convertible note for an aggregate price of $86,069.

 

On November 21, 2023 the company entered into a convertible note with Twn Brooks Inc., for the amount of $20,000. The note is convertible into common stock at the rate of 65% of the lowest trading price 10 days prior to conversion and bears a 9% interest per annum. The note matures on May 21, 2024.

 

On November 21, 2023 the company entered into a convertible note with Carizzo LLC, for the amount of $20,000. The note is convertible into common stock at the rate of 65% of the lowest trading price 10 days prior to conversion and bears a 9% interest per annum. The note matures on May 21, 2024.

 

F-24

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

 

Overview

 

ILUS is a Nevada Corporation primarily focused on the public safety, industrial and renewable energy sectors. Through its wholly owned subsidiary, Emergency Response Technologies Inc. (“ERT”), ILUS aims to provide technology that protects communities, front line personnel and assets by acquiring technology and solutions for the emergency response sector. This sector includes Fire and Rescue Services, Law Enforcement, Emergency Medical Services and Emergency Management. The company also has an Industrial and Manufacturing subsidiary, Quality Industrial Corp., which is focused on the manufacturing of heavy engineering equipment for the Oil and Gas, Utility and Renewables sectors. Furthermore, the company has a Mining and Renewable Energy subsidiary which is focused on the incorporation, acquisition, and growth of companies in the sustainable mining and renewable energy sectors and also has a Defense subsidiary which is focused on delivery effective capability and technology to the defense sector.

 

ILUS has four distinct divisions which together serve a diverse global customer base. An overview of the current divisions is found below:

 

Emergency Response division:

 

Emergency Response Technologies is a subsidiary of ILUS, whose operating companies design, manufacture and distribute specialty equipment, vehicles and related parts and services. We provide firefighting equipment, firefighting vehicles, firefighting vehicle superstructures, distribution of equipment for emergency services, fire protection equipment sales, installation, and maintenance as well as servicing/maintenance of Firefighting, Rescue and Emergency Medical Services equipment.

 

Industrial & Manufacturing division:

 

This division specializes in the manufacturing and assembling of process equipment, piping, and modules for the oil, gas, and energy sectors with over two decades of experience and key end-users in the Oil & Gas, Off-shore, Refineries & Petrochemical, Waste-water treatment plants and Chemical, Fertilizer, Metals and Mineral Processing industries. The international end-users include companies such as, but not limited to Chevron, BP, Shell, Total, Sasol and Gasco. The division has extensive capabilities including the undertaking of design, detailed engineering, procurement, fabrication, site erection, commissioning, testing & handing over of process equipment. The funding obligations for acquisitions such as Quality International Co Ltd FCZ, by our publicly listed industrial subsidiary, Quality Industrial Corp. (OTC: QIND), are funded funding by QIND itself as are the ongoing obligations for future acquisitions by the subsidiary.

 

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Mining & Renewable Energy division:

 

This division is engaged in the Mining and Renewable Energy industry currently through its subsidiary Replay Solutions, which recovers and recycles precious metals from electronic waste. Replay Solutions incorporates a ‘Closed loop’ concept where it uses E–Waste and data destruction as a resource not only to extract precious metals but to reuse all materials found in E-Waste such as plastics. The company recycles cleanly, safely, and sustainably on items such as, but not limited to Printed Circuit Boards (PCB) and precious metals, Cables, wire, and car radiators. Replay Solution’s machines shred, crush, and grind the board to powder form and then use an airflow and an electrostatic separator to separate the materials into metal and fibers.

 

Defense Division:

 

This division is engaged in the Defense industry currently through its subsidiary Hyperion Defence Solutions where it aims to provide customers with the technological capability, solutions and services that will protect their warfighters and provide them with a technological advantage in the following key areas: Joint Close Air Support (JCAS), Counter Improvised Explosive Devices (CIED), Security Risk Management, Simulation Technology and Services.

 

Factors Affecting Our Performance

 

The primary factors affecting our results of operations include:

 

General Macro Economic Conditions

 

Our business is impacted by the global economic environment, employment levels, consumer confidence, government, and municipal spending. Global instability in securities markets and the war in Ukraine are among other factors that can impact our financial performance. In particular, changes in the U.S. economic climate can impact the demand of our products range. In addition, the impact of taxes and fees can have a dramatic effect on the availability, lead-times and costs associated with raw materials and parts for our product range.

 

Our purchases are discretionary by nature and therefore sensitive to the availability of financing, consumer confidence, and unemployment levels among other factors and are affected by general U.S. and global economic conditions, which create risks that future economic downturns will further reduce consumer demand and negatively impact our sales.

 

While less economically sensitive than the Emergency Response sector, the Industrial and Manufacturing sectors are also impacted by the overall economic environment. Tenders can be withdrawn and lead times for the manufacturing can be affected which can result in cancellation of orders if not delivered on time.

 

Impact of Acquisitions

 

Historically, a significant component of our growth has been through the acquisition of businesses in our targeted sectors. We typically incur upfront costs as we incorporate and integrate acquired businesses into our operating philosophy and operational excellence. This includes the consolidation of supplies and raw materials, optimized logistics and production processes, and other restructuring and improvements initiatives. The benefits of these integration efforts may not positively impact our financial results in the short-term but has historically positively impacted medium to long-term results.

 

We recognize acquired assets and liabilities at fair value. This includes the recognition of identified intangible assets and goodwill. In addition, assets acquired, and liabilities assumed generally include tangible assets, as well as contingent assets and liabilities.

 

Recent developments 

 

In the second half of 2023, ILUS plans to continue the individual growth and international expansion of its subsidiaries by increasing sales and operational efficiencies. The company plans to strengthen its Emergency Response Technologies subsidiary through increased manufacturing of the company’s emergency products and technology in the United States. The company will also be manufacturing its E-Raptor range of commercial electric utility vehicles in Serbia and plans for the first vehicles to roll off the Serbian production line towards the end of 2023. Additional focus will go towards the ongoing consolidation and integration of existing acquisitions.  

 

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Results of Operation for the Three & Nine Months Ended September 30, 2023, and 2022 

 

Revenues

 

We earned $24,120,561 and $67,476,168 in revenues for the Three and Nine months ended September 30, 2023, as compared with $20,419,421 and $43,110,167 in revenues for the Three and Nine months ended September 30, 2022. The 18.1% increase in revenue for the three months ended is a result of revenue growth in our divisions. The acquisition of Quality International has been consolidated from the second quarter of 2022 and the revenue for the Nine months ended September 30, is hence not like-for-like which is most relevant when analyzing and improving the progress of its operations with customer behavior varying between quarters due to seasonal and cyclical trends.

 

We expect increased revenue in the future quarters through organic growth within all our division in the fourth quarter which is generally the strongest.

 

Operating Expenses 

 

Operating expenses increased from $4,902,401 and $10,346,729 for the Three & Nine months ended September 30, 2022, to $6,347,807 and $14,849,474 for the Three & Nine months ended September 30, 2023.

 

Selling, general and administrative (“SG&A”) expenses for the Three months ended September 30, have increased primarily due to the stock-based compensation to management in our subsidiary QIND. Issuances for the three months ended September 30, 2023, and 2022, was $1,512,000 and $0, respectively.

 

We anticipate that our operating expenses will increase as we undertake our expansion plan associated with our acquisitions. The increase will be attributable to administrative and operating costs associated with our business activities and the professional fees associated with our reporting obligations. 

 

Other Expenses

 

We had other non-operating expenses of $2,054,165 for the Three months ended September 30, 2023, as compared $721,075 for the same period ended 2022. Our increase expenses in Q3 2023, were mainly payment of lease liabilities in the subsidiary Quality International and issuance of shares to Exchange Listings LLC as strategic advisors to pursue the Company’s goal of completing a successful uplisting to a major stock exchange.

 

Net Income/Net Loss

 

We incurred a Net Income of $472,145 and $2,367,031 for the Three and Nine months ended September 30, 2023, compared to a net income of $1,187,494 and $2,956,452 for the Three and Nine months ended September 30, 2022, respectively. The decline in Net Income in the third quarter was a result of one-off expenses due to issuances of shares to management and Exchange Listings LLC as strategic advisors amounting to $2,003,812 and $0 for the three months ended September 30, 2023, and 2022, respectively. Adjusting for the issuances the Company’s net income would have been $2,447,957 and $1,187,494 for the Three months ended September 30, 2023, and 2022, respectively.

 

Liquidity and Capital Resources

 

As of September 30, 2023, we had total current assets of $155,464,993 and total current liabilities of $162,906,029 which include the QIND’s payable amount of $75,500,000 as part of purchase consideration for acquisition of its operating company, Quality International. We had a working capital deficit of $7,441,036 as of September 30, 2023. This compares with a working capital deficit of $15,847,034 as of December 31, 2022.

 

Operating activities provided $3,647,450 used in cash for the nine months ended September 30, 2023, as compared with $10,119,758 provided a cash deficit for the nine months ended September 30, 2022. Our increased operating cash deficit for 2023, was mainly the result of growth in core business activities.

 

Investing activities used $4,139,857 in cash for the nine months ended September 30, 2023, as compared with $4,323,952 provided in cash for the nine months ended September 30, 2022. Our negative investing cash flow for Q3 2023 was mainly the result of investing in long term assets for the company’s growth.

 

Financing activities provided $600,980 in cash deficit for the nine months ended September 30, 2023, as compared with $5,925,000 cash provided for the same period ended 2022 and was mainly the result of financing through issuance of convertible notes for working capital and settlement of historic notes.

 

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Going Concern

 

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

 

Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated financial statements are issued and determined. The Company’s ability to continue as a going concern is dependent on the Company’s ability to continue to generate sufficient revenues and raise capital within one year from the date of filing.

 

Over the next twelve months management plans to use borrowings and security sales to mitigate the effects of cash flow deficits; however, no assurance can be given that debt or equity financing, if and when required, will be available.

 

Impact of Acquisitions

 

Historically a significant component of our growth has been through the acquisition of businesses in our targeted sectors. We typically incur upfront costs as we incorporate and integrate acquired businesses into our operating philosophy and operational excellence. This includes consolidation of supplies and raw materials, optimized logistics and production processes, and other restructuring and improvements initiatives. The benefits of these integration efforts and upcoming planned acquisitions may not positively impact our financial results instantly but has historically been the case in future periods.

 

Critical Accounting Policies

 

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies are disclosed Note 2 of our unaudited financial statements included in this Quarterly Report on Form 10-Q.

 

Goodwill

 

The Company continues to review its goodwill for possible impairment or loss of value at least annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. On December 31, 2022, we performed a goodwill impairment evaluation. We performed a qualitative assessment of factors to determine whether it was necessary to perform the goodwill impairment test. Based on the results of the work performed, the Company has concluded that no impairment loss was warranted on December 31, 2022. Factors including non-renewal of a major contract or other substantial changes in business conditions could have a material adverse effect on the valuation of goodwill in future periods and the resulting charge could be material to future periods’ results of operations.

 

Off-Balance Sheet Arrangements

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders. 

 

Recently Issued Accounting Pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 4. Controls and Procedures

 

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 

In designing and evaluating our disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

 

As required by SEC Rule 15d-15, our management carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q.

 

Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period covered by this report.

 

Changes in Internal Control over Financial Reporting

 

There has been no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the year ended December 31, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Critical Accounting Policies.

 

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies are disclosed Note 2 of our unaudited financial statements included in this Quarterly Report on Form 10-Q.

 

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PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We may from time to time be involved in various claims and legal proceedings of a nature we believe are normal and incidental to our business. These matters may include product liability, intellectual property, employment, personal injury cause by our employees, and other general claims. Aside from the following, we are not presently a party to any legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

  

We have been named as a defendant in an action commenced by our former CEO, Larson Elmore. A case has been filed in the Eight Judicial District Court of the State of Nevada (Case No. A-22-858343-C). The Plaintiff alleges that we breached a stock purchase agreement dated May 10, 2020, and promissory notes, and is therefore entitled to damages. We have potential counterclaims against the former CEO which are being prepared, arising out of improper action and lack of disclosures. The company has disputed the claim and argue that Larson Elmore has mislead the company and its shareholders on various matters including but not limited to liabilities, company commitments and due diligence items presented by Larson Elmore during the takeover process. We have filed a motion to dismiss Larson Elmore’s complaint on the basis that it fails to state a claim and lacks jurisdiction in the Nevada courts.  At the hearing on this motion, the court determined that discovery would be required before ruling for the company and denied the motion without prejudice. The company is evaluating a motion for reconsideration once the order has been entered. In the interim, the parties have discussed a tentative discovery schedule and the possibility of a mediation and settlement conference. 

 

We have been named as a defendant in an action commenced by Steve Nicol, who claims that he loaned $12,000 on or about May 23, 2017, to Cache Cabinetry, LLC a subsidiary of ILUS under a promissory note, but that ILUS agreed to assume the note. He further claims that he elected to convert the note and that ILUS failed to convert the note into shares of ILUS common stock. He has alleged breach of contract, declaratory relief, and specific performance to require the company to issue 75,000,000 shares of common stock in ILUS. The company obtained a settlement on September 6, 2023, of $100,000 and has received the final court order.

 

We have been named as a defendant in an action commenced by Black Ice Advisors LLC, regarding a historic note entered into by the previous CEO, Larson Elmore, with a principal amount of $4,000. The company disputes the legitimacy of the note and as to whether ILUS ever actually received the $4,000. On August 22, 2023, the company received information that Black Ice Advisors filed a motion seeking a monetary judgment in Black Ice’s in the amount of $3.772 million for the historic note with a principal amount of $4,000. At the hearing on November 3, 2023, the Court adopted its tentative ruling as the final ruling and denied the motion for summary judgement from Black Ice Advisors LLC. The case has received a trial date for March 8, 2024.

 

We cannot predict whether the action against involving our former CEO, Mr. Nicol or Black Ice Advisors is likely to result in any material recovery by or expense to our company. Where it is reasonably possible to do so, the Company accrues estimates of the probable costs for the resolution of these matters. These estimates based upon an analysis of potential results and settlement strategies. It is possible, however, that future operating results for any particular quarter or annual period could be affected by changes in assumption.

 

We may continue to incur legal fees in responding to this and other lawsuits. The expense of defending such litigation may be significant and any sizeable verdict may adversely affect the company. The amount of time to resolve this and any additional lawsuits is unpredictable, and these actions may divert management’s attention from the day-to-day operations of our business, all of which could adversely affect our business, results of operations and cash flows.

 

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Item 1A: Risk Factors

 

See risk factors included in our Annual Report on Form 10-K/A for the year ended December 31, 2022, filed on September 12, 2023.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

The information set forth below relates to our issuances of securities without registration under the Securities Act of 1933.

 

List of Notes issued during the third Quarter of 2023:

 

On June 21, 2023, the company entered into a note payable of $61,868 with 1800 Diagonal Lending LLC. Repayable in 9 monthly payments and shall bear 13% interest as one time charge on the issuance date. In case of event of default, note is convertible into common stock at 65% of lowest trading price during previous ten days. The note matures on March 30, 2024.

 

On July 03, 2023, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $475,000. The note is convertible into common stock at the rate of $0.50 and bears a 5% interest per annum. The note matures on July 3, 2025.

 

On July 26, 2023, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $550,000. The note is convertible into common stock at the rate of $0.50 and bears a 5% interest per annum. The note matures on July 26, 2025.

 

On August 29, 2023, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $100,000. The note is convertible into common stock at the rate of $0.50 and bears a 5% interest per annum. The note matures on August 29, 2025. 

 

On September 5, 2023, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $450,000. The note is convertible into common stock at the rate of $0.50 and bears a 5% interest per annum. The note matures on September 5, 2025. 

 

On September 7, 2023, the company entered into convertible Note with Richard Astrom, for the amount of $27,500. The note is convertible into common stock at variable conversion price and bears a 9% interest per annum. The note matures on March 6, 2024. The Note cannot be converted until 3 months from the date of issue of Note.

 

On October 20, 2023, ILUS entered into a note payable of $89,250.00 with 1800 Diagonal Lending LLC. Repayable any time after 180 days following the date of note till maturity date and shall bears 9% interest rate per annum. The note is convertible into common stock at the rate equal to variable conversion price as defined, shall mean 65% of lowest trading price during previous ten days. The note matures on July 30, 2024.

 

List of Stock issued during the third Quarter of 2023:

 

On June 1, 2023, we issued 53,300,000 shares of common stock as compensation to RB Capital Partners Inc. For conversion of a convertible note for an aggregate price of $533,000.

 

On July 14, 2023, we issued 21,665,710 shares of common stock to Exchange Listing LLC for a stock purchase agreement for an aggregate price of $100 for consultancy services for the planned uplist to a National Exchange.

 

On August 04, 2023, we issued 53.125.000 shares of common stock as compensation to RB Capital Partners Inc. For conversion of a convertible note for an aggregate price of $531,250.

 

On September 06, 2023, we issued 5,555,556 shares of common stock to Kyle Comerford for a stock purchase agreement for an aggregate price of $50,000.

 

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On September 09, 2023 we issued 10,000,000 shares of common stock to Cameron Canzellarini for a stock purchase agreement for an aggregate price of $100,000.

 

On September 11, 2023 we issued 625,000 shares of common stock as commitment shares to Richard Astrom with a fair market value of $0.02 per shares for an aggregate price of $12,500.

  

On September 18, 2023 we issued 5,000,000 shares of common stock to Kirt Weidner for a stock purchase agreement for an aggregate price of $50,000.

 

On September 21, we issued 6,000,000 shares of common stock to Kaleb Ryan for a stock purchase agreement for the aggregate price of $60,000.

 

On September 28, we issued 10,526,316 shares of common stock to Kevin Van Hoesen for a stock purchase agreement for the aggregate price of $100,000.00.

 

On October 13, 2023, the company entered into a share purchase agreement with Lovejit Singh to sell 5,000,000 shares of common stock for a purchase price of $50,000.

 

On October 19, 2023 we issued 2,118,644 shares of common stock as compensation to 1800 Diagonal Lending LLC. For partial conversion of a convertible note for an aggregate price of $25,000.

 

On October 20, 2023 we issued 4,555,555 shares of common stock as compensation to Jefferson Street Capital LLC. For partial conversion of a convertible note for an aggregate price of $40,000.

 

On October 23, 2023 we issued 3,092,784 shares of common stock as compensation to 1800 Diagonal Lending LLC. For partial conversion of a convertible note for an aggregate price of $30,000.

 

On October 25, 2023 we issued 9,538,461 shares of common stock as compensation to Jefferson Street Capital LLC. For partial conversion of a convertible note for an aggregate price of $30,000.

 

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 and Regulation D under the Securities Act. Each purchaser represented that such purchaser’s intention to acquire the shares for investment only and not with a view toward distribution. We requested our stock transfer agent to affix appropriate legends to the stock certificate issued to each purchaser and the transfer agent affixed the appropriate legends. Each purchaser was given adequate access to sufficient information about us to make an informed investment decision.

 

Item 3. Defaults upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

None

 

Item 5. Other Information

 

None

 

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Item 6. Exhibits

 

Exhibit Number   Description of Exhibit
     
4.1*   Stock Purchase Agreement, dated September 6, 2023, with Kyle Comerford
4.2*   Stock Purchase Agreement, dated September 7, 2023, with Cameron Canzellarini
4.3*   Stock Purchase Agreement, dated September 13, 2023, with Kirt Weidner
4.4*   Stock Purchase Agreement, dated September 18, 2023, with Kaleb Ryan
4.5*   Stock Purchase Agreement, dated September 21, 2023, with Kevin Van Hoesen
4.6*   Stock Purchase Agreement, dated October 3, 2023, with Lovejit Singh
4.7*   Stock Purchase Agreement, dated November 6, 2023, with Kevin Van Hoesen
10.1**   Convertible Promissory Note, dated July 3, 2023, with RB Capital Partners Inc.
10.2**   Convertible Promissory Note, dated July 26, 2023, with RB Capital Partners Inc.
10.3*   Amended Convertible Promissory Note, dated July 24, 2023, with RB Capital Partners Inc.
10.4*   Convertible Promissory Note, dated August 29, 2023, with RB Capital Partners Inc.
10.5*   Convertible Promissory Note, dated September 5, 2023, with RB Capital Partners Inc.
10.6*   Convertible Promissory Note, dated September 7, 2023, with Richard Astrom
10.7*   Amended Convertible Promissory Note, dated October 4, 2023, with RB Capital Partners Inc.
10.8*   Convertible Promissory Note, dated October 20, 2023, with 1800 Diagonal Lending LLC
10.9*   Convertible Promissory Note, dated November 7, 2023, with RB Capital Partners Inc.
10.10*   Convertible Promissory Note, dated November 21, 2023, with Twn Brooks Inc.
10.11*   Convertible Promissory Note, dated November 21, 2023, with Carizzo LLC
31.1*   Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*   Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*   Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*   The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in Extensible Business Reporting Language (XBRL).
104*   Cover Page Interactive Data File. The cover page XBRL tags are embedded within the inline XBRL document and are included in Exhibit 101*

 

*Provided herewith
**Provided previously

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Ilustrato Pictures International Inc.  
   
Date:  November 24, 2023  
     
By: /s/ Nicolas Link  
  Nicolas Link  
Title:  Chief Executive Officer (principal executive)  

 

By: /s/ Krishnan Krishnamoorthy  
  Krishnan Krishnamoorthy  
Title:  Chief Financial Officer (principal accounting, and financial officer)  

 

 

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