SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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Item 1.01 Entry Into A Material Definitive Agreement
As previously disclosed, on January 18, 2023, Quality Industrial Corp. (the “Company”) entered into a definitive stock purchase agreement (the “QI Purchase Agreement”) with Gerab National Enterprises LLC and Mr. Saseendran Kodapully Ramakrishnan, (together, the “QI Shareholders”) of Quality International Co Ltd FZC, a United Arab Emirates company (“Quality International”), in order to purchase 52% of the shares of Quality International (the “QI Shares”) from the QI Shareholders. Quality International manufactures custom solutions for businesses operating in the oil and gas, energy, water desalination, wastewater, offshore and public safety sectors. Thereafter, on July 31, 2023, the parties to the QI Purchase Agreement entered into an amendment to the QI Purchase Agreement (the “Amended QI Purchase Agreement”) in order to revise the payment schedule for the QI Shares, which had previously become effective on March 31, 2023.
On August 21. 2023, the Company entered into a shares subscription and buy-back agreement (the “Subscription Buy-Back Agreement”) with Ilustrato Pictures International Inc. (“ILUS”), the parent company of Quality Industrial Corp., Quality International, Mr. Saseendran Kodapully Ramakrishnan, (each a “Guarantor” and collectively, the “Guarantors”) and Artelliq Software Trading (“Artelliq”), pursuant to which the Company agreed to issue 6,410,971 common shares (the “Subscription Shares”) to Artelliq in exchange for USD 2,000,000, or AED 7,340,000 at an agreed upon exchange rate of 1 USD to 3.672 AED.
In accordance with the Amended QI Purchase Agreement and the payment schedule therein, on the same date as the issuance and subscription, the Company shall immediately buy back all Subscription Shares from Artelliq for the amount of USD 2,398,693 or AED 8,808,000, payable prior to the first anniversary of the Subscription Buy-Back Agreement, provided however, that Artelliq may in its sole discretion demand that the Company buy-back the Subscription Shares immediately upon the occurrence of any of the events of default described in section 4.1 of the Subscription Buy-Back Agreement. Furthermore, the Company has committed to pay Artelliq monthly installments of USD 33,333.33 or AED 122,400.00, and/or daily installments of USD 1,111.11 or AED 4,080.00 throughout the duration of the Subscription Buy-Back Agreement. These installments shall accumulate daily and be payable monthly, in arrears, on the last working day of each month.
The proceeds from the Subscription Shares are to enable the Company to discharge a part of its obligations under Section 2.1 of the Amended QI Purchase Agreement. Furthermore, the issuance and subscription of the Subscription Shares rely on the warranties provided by Company and the Guarantors as detailed in the Subscription Buy-Back Agreement and corresponding guarantee and indemnity agreement, dated August 21, 2023 (the “Guarantee & Indemnity Agreement”).
The foregoing description of the Subscription Buy-Back Agreement and Guarantee & Indemnity Agreement is a summary and is qualified in its entirety by reference to the provisions thereof, a copy of which is attached to this Current Report as Exhibit 10.1 and 10.2 respectively, which are incorporated herein by reference.
SECTION 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Quality Industrial Corp.
/s/ John-Paul Backwell
John-Paul Backwell, CEO
Date: August 25, 2023
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