Form 8-K - Current report

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
____________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 31, 2023

Ilustrato Pictures International, Inc.

(Exact name of registrant as specified in its charter)

Nevada	000-56487	27-2450645
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

26 Broadway, Suite 934

New York, NY

10004

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: 917-522-3202

______________________

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)

[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. [ ]

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.

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”) to revise the payment schedule for the QI Shares, which had previously become effective on March 31, 2023. The purchase price for the QI Shares shall remain up to $137,000,000 in cash (the “QI Purchase Price”).

Under section 2.1 of the Amended QI Purchase Agreement, the payment schedule of the QI Purchase Price has been revised (the “Amended Payment Schedule”) to extend the payment timeline with smaller amounts due at each date. Moreover, break fees were introduced if the payments are not received by their respective due dates. In the event that the Company fails to meet any of the revised payment dates and/or the revised payment amounts, pursuant to the Amended Payment Schedule, the parties acknowledge and agree that the QI Shareholders shall have the right, but not the obligation, to, in their sole discretion, terminate the Amended QI Purchase Agreement and all associated agreements with us. Consequently, if terminated, the Company would be liable for the applicable break fee pursuant to the table in the Amended Payment Schedule, and the parties agreed to release each other from the performance of any obligations under the Amended QI Purchase Agreement, together with all related transaction documents, and the parties shall have no accrued rights under the same save as those which are intended to survive after such termination.

Pursuant to the Amended Payment Schedule, payments for tranches 4, 5 and 6 are linked and paid in proportion to the percentage of EBITDA target achieved against forecasted EBITDA targets and capped at 100% of EBITDA target. Any shortfall or surplus (as the case may be) on the EBITDA target of a particular Tranche shall be carried over to the subsequent Tranche and to be added to or deducted from (as the case may be) the subsequent EBITDA target. Any shortfall EBITDA existing after the expiration of time allotted for tranche 6, shall be allowed to be delivered within an extended 6-month period until June 30, 2025, and be paid in proportion to the EBITDA target achieved and capped at 100% of EBITDA target. Any remaining shortfall existing after the expiration of time allotted for Tranche 6, shall be forfeit, resulting in a reduction to the QI Purchase Price.

Additionally, under section 2.2 of the Amended QI Purchase Agreement, the Company guarantees and repays Quality International’s future borrowings from any lender, capped at $10 million and a maximum of 22% annual interest. Costs, including a processing fee up to 2% of the principal and expenses during the term, will be borne by the Company. The financing cost will be covered until the Company pays off the Tranche 3 payment. Any borrowings by Quality International shall be strictly used for operational purposes.

Item 1.02 Termination of a Material Definitive Agreement.

As previously disclosed, on January 27, 2023, we entered into a definitive stock purchase agreement (the “Petro Line Purchase Agreement”) with the shareholders of Petro Line FZ-LLC (“Petro Line”), a United Arab Emirates company, to purchase 51% of the outstanding shares (the “Petro Line Shares”) in exchange for $1,530,000 in cash, paid in three tranches, subject to the achievement of financial milestones presented in a schedule of payments which are set forth in the Petro Line Purchase Agreement.

On August 3, 2023, the Company entered into a Termination Agreement and Release with Petro Line (the “Termination Agreement”), pursuant to which both the Company and Petro Line agreed to terminate the Petro Line Purchase Agreement, and to release each other from all claims associated with the Petro Line Purchase Agreement, with each party paying its own costs incurred in connection with the Petro Line Purchase Agreement. The acquisition did not close, and mutual termination of the agreement will have no impact on QIND’s consolidated financial statements.

The foregoing description of the Amended QI Purchase Agreement and Termination 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

(d)

Exhibits

10.1		Amendment No. 1 to the Share Purchase Agreement, dated as of July 31, 2023, by and between Quality Industrial Corp., Gerab National Enterprises LLC, and Mr. Saseendran Kodapully Ramakrishnan
10.2		Termination Agreement and Release, dated August 3, 2023, by and between Quality Industrial Corp. and Petro Line FZ-LLC.

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.

Ilustrato Pictures International, Inc.

/s/ Nicolas Link

Nicolas Link, CEO

Date: August 4, 2023

AMENDMENT AGREEMENT NO. 1

in respect of

Share Purchase Agreement dated 18 January 2023 ("Agreement")

between Quality lndustrial Corp. and Gerab National Enterprises LLC and Mr. Saseendran Kodapully Ramakrishnan

THIS AMENDMENT AGREEMENT NO. 1 to the Agreement has been entered into on 31^th July 2023

("Amendment No. 1") between:

QUALITY INDUSTRIAL CORP., a Nevada corporation established under the laws of the State of Nevada, United States of America, with company IRS employer identification number 35- 2675388, and whose address is at 315 Montgomery Street, San Francisco, 94104 California, United States of America, and having Mr. John-Paul Backwell as the authorized representative and signatory for and on behalf of the company ("First Party" or "Purchaser");

GERAB NATIONAL ENTERPRISES LLC, a company established under the laws of the Ernirate of Dubai, United Arab Emirates, and whose address is at Office no. 202, 5-19 Hotel, Office Section, Al Jaddaf Waterfront, Dubai, United Arab Emirates, and having Mr. Abdullah Sharafi as the authorized representative and signatory for and on behalf of the company ("Second Party") and

MR. SASEENDRAN KODAPULLY RAMAKRISHNAN, an lndian national with passport number Z4995587, a resident in the United Arab Emirates and whose address is at Villa no. 45, La Collection Avenue, Arabian Ranches, And Al Shiba, Dubai, United Arab Emirates ("Third Party").

Hereafter, the Second Party and the Third Party shall be collectively referred to as the "Sellers".

WHEREAS

(A)

The Parties entered into the Agreement on 18 January 2023, and subject to the terms and conditions set out under the same, the Purchaser agreed to purchase, and the Sellers agreed to sell, seventy eight (78) shares in Quality International Co Ltd FZC, a freezone company established under the rules and regulations of the Hamriyah Free Zone Authority and the laws of the United Arab Emirates, with company registration number 4378 and whose address is at PO Box 50622, located at 6C-02, Hamriyah Free Zone Phase 2, Sharjah, United Arab Emirates ("Company").

(B)

The Parties have agreed to make various amendments to the Agreement as set out in this Amendment No. 1.

AGREED TERMS

Now, in consideration of the foregoing and in further consideration of this Amendment No. 1 on mutual covenants, hereinafter set forth, it is agreed that:

DEFINITIONS AND COMMENCEMENT

1.1 Terms defined in the Agreement shall have the same meaning when used in this Amendment No. 1 unless the context otherwise required.

1.2 Notwithstanding the signing date of this Addendum No. 1, the effective date of this Amendment No. 1 is 1 March 2023 ("Effective Date").

AMENDMENTS

2.1

Clause 1.02 of the Agreement shall be deleted in its entirety and replaced with the following:

"Purchase Price. The Parties have agreed that the Purchase Price for the Shares is up to One Hundred Thirty-Seven Million United States Dollars ($137,000,000 USD), which is payable as part payments as follows:

Original Payment Arrangement	Revised Payment Arrangement	Revised Payment Date	Revised Payment Amount	Break Fee if a Revised Payment is not received by the Revised Payment Date*	Paid To
Tranche 2 : As	Tranche	16 June	USD	Tranche 1 value of USD	Quality International Co Ltd
per SPA for	2.1	2023	500,000	1,000,000 to be	FZC
USD		(paid)		considered as break fee
15,000,000, to				if USD 500,000 not
be paid				received by 16-Jun-2023
immediately	Tranche	On or	USD	In addition to USD	Quality International Co Ltd
upon closing being 6 March	2.2	before 31 July	2,000,000	1,000,000/-, 50% of USD 500,000 receivable by	FZC
2023.		2023		16-Jun-2023 to be
				considered as break fee
				(Total USD 1,250,000)
	Tranche	On or	USD	In addition to USD	Quality International Co Ltd
	2.3	before	5,000,000	1,000,000/-, 50% each of	FZC
		15 Sept		subsequent payments of
		2023		USD 500,000 + USD 2,000,000 to be
				considered a break fee
				(Total USD 2,250,000)
Original	Revised	Revised	Revised	Break Fee if a Revised	Paid To

Payment Arrangement	Payment Arrangement	Payment Date	Payment Amount	Payment Is not received by the Revised Payment Date*
Tranche 3: As per SPA for USD 66,000,000, to	Tranche 3.1	On or before 30 Nov 2023	USD 73,500,000	Break fee Capped at USD 3,500,000	$28,500,000 paid to Quality International Co Ltd FZC, $39,000,000 to Gerab National Enterprise LLC and
be paid on or before 210 days after closing being 6					$6,000,000 to Saseendran Kodapully Ramakrishnan
March 2023.
Tranche 4: As	Tranche	31	USD	Break fee not applicable	$6,000,000 to Gerab
per SPA for USD 14,000,000, to be paid within 30 days of H1,	4	January 2024	14,000,000	if Tranche 3.1 is fully received by 30 November 2023.	National Enterprise LLC, $5,000,000 to Saseendran Kodapully Ramakrishnan and $3,000,000 to Quality
2023 auditor					International Co Ltd FZC
certified
financials
Tranche 5: As per SPA for USD 20,000,000 to be paid within	Tranche 5	15 April 2024 considering Year End	USD 20,000,000	Break fee not applicable if Tranche 3.1 is fully received by 30 November 2023.	$15,000,000 to Gerab National Enterprise LLC, $2,000,000 to Saseendran Kodapully Ramakrishnan
30 days of Year End 2023		audited financials			and $3,000,000 to Quality International Co Ltd FZC
audited		to be
financials		completed
		by 15
		March
		2024
Tranche 6: As per SPA for USD 21,000,000 to be paid within	Tranche 6	15 April 2025 considering Year End	USD 21,000,000	Break fee not applicable if Tranche 3.1 is fully received by 30 November 2023.	$15,000,000 to Gerab National Enterprise LLC, $3,000,000 to Saseendran Kodapully Ramakrishnan
30 days of Year End 2024		audited financials			and $3,000,000 to Quality International Co Ltd FZC
audited		to be
financials		completed
		by 15
		March
		2025

*Notes for Tranche 2 and Tranche 3.1: In the event that the First Party fails to meet any of the Revised Payment Dates and/or the Revised Payment Amounts pursuant to the table above, the Parties acknowledge and agree that the Second Party and the Third Party shall have the right, but not the obligation, to, in their sole discretion, terminate this Agreement, together with all related transaction documents including (without limitation) the Disclosure Letter dated 18 January 2023, the Shareholder Guarantee dated 18 January 2023, the Escrow Agreement dated 1 March 2023 and the Shareholders' Agreement dated 1 March 2023. Consequently, the First Party shall be liable for the applicable break fee pursuant to the table above, and the Parties undertake to release each other from the performance of any obligations under this Agreement, together with all related transaction documents including (without limitation} the Disclosure Letter dated 18 January 2023, the Shareholder Guarantee dated 18 January 2023, the Escrow Agreement dated 1 March 2023 and the Shareholders' Agreement dated 1 March 2023, and the Parties shall have no accrued rights under the same save as those which are intended to survive after such termination.

*Notes for Tranches 4, 5 and 6: Pursuant to the table above, payments for Tranche 4 to Tranche 6 are linked and paid in proportion to the percentage of EBITDA target achieved against forecasted EBITDA targets and capped at 100% of EBITDA target. Any shortfall or surplus (as the case may be} on the EBITDA target of a particular Tranche shall be carried-over to the subsequent Tranche and to be added to or deducted from (as the case may be} the subsequent EBITDA target. Any shortfall EBITDA existing after the expiration of time allotted for Tranche 6, shall be allowed to be delivered within an extended 6-month period until 30 June 2025, and be paid in proportion to the EBITDA target achieved and capped at 100% of EBITDA target. Any remaining shortfall existing after the expiration of time allotted for Tranche 6, shall be forfeit, resulting in a reduction to the Purchase Price."

2.2 A new Clause 2.03 of the Agreement shall be inserted with the following:

112.03 Future Borrowings. The Purchaser undertakes to guarantee and repay any and all principal and interest in respect of any future borrowings of the Company from any lender(s} subject to the following:

(a} the principal of any such borrowings shall be a maximum of USD 10 million (or such other amount to be agreed between the Parties};

(b} the interest rate of any such borrowings shall be a maximum of 22% per annum (or such other

percentage to be agreed between the Parties};

(c} the costs and expenses of any such borrowings to be provided by the Purchaser shall be the sum of: (i} the costs and expenses payable by the Company for the tenure of any such borrowings; (ii) tenure of any such borrowings shall be less than 12 months (or such other time frame to be agreed between the Parties), and all such borrowing shall be repaid from the applicable portion related to Tranche payments due from the Purchaser to the Company; and (iii} the one-time processing cost shall be a maximum of 2% of the total principal of any such borrowings;

(d) the financing cost shall be borne until the date the Purchaser remits proceeds of the Tranche 3 payment to the Company under the Agreement to settle the total amount of any such borrowings pursuant to this clause; and

(e) any such borrowings by the Company shall be strictly be used for the operating purposes (unless otherwise agreed between the Parties).

2.3 Clause 6.01(g) of the Agreement shall be deleted in its entirety and replaced with the following:

"(g) Purchaser confirms that it has received, or Sellers have made available, all necessary information for Purchaser to arrange for its internal purposes relating to audited financial statements of the Company by a PCAOB qualified third party independent auditor for the past two completed fiscal years ending December 2021 and December 2022."

2.3 A new Clause 8.03 of the Agreement shall be inserted with the following:

"8.03 Financial Information Sharing. The Sellers shall make available all necessary financial information to the Purchaser, which the Purchaser may reasonably be required to arrange for its internal purposes relating to audited financial statements of the Company by a PCAOB qualified third party independent auditor and periodic filings by the Purchaser, and to enable the Purchaser to : (a) undertake the necessary guarantee and repay any and all principal and interest in respect of any future borrowings of the Company from any lender(s) subject to Clause 2.03 of the Agreement; and (b) acquire debt financing to support of the ongoing cash flow requirements of the Company in respect of Clause 8(e) of the Agreement."

MISCELLANEOUS

3.1 The Parties hereby agree and acknowledge that' this Amendment No. 1 in its entirety shall constitute an integral part of the Agreement.

3.2 Save and except for the amendments stipulated in this Amendment No. 1, all other terms of the Agreement remain unchanged and continue to be in full force and effect.

3.3 This Amendment No.1 and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with English law. Each party irrevocably agrees that the courts of the Dubai International Financial Centre shall have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this Amendment No. 1 or its subject matter or formation.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, this Amendment No. 1 has been duly executed and delivered on the date first above written.

/s/ John-Paul Backwell

John-Paul Backwell, Chief Executive Officer

For and on behalf of

QUALITY INDUSTRIAL CORP.

/s/ Abdullah Sharafi

Abdullah Sharafi Managing Director

For and on behalf of

GERAB NATIONAL ENTERPRISES LLC

/s/ Saseendran Kodapully Ramakrishnan

SASEENDRAN KODAPULLY RAMAKRISHNAN

TERMINATION AND RELEASE AGREEMENT

This Termination and Release Agreement (“Agreement”) is entered into as of this 3rd day of August, 2023, by and among Quality Industrial Corp., a Nevada corporation (“Quality Industrial”) and Petro Line FZ-LLC, a United Arab Emirates company (“Petro Line”).

WHEREAS, on or about January 27, 2023, Quality Industrial entered into a Share Purchase Agreement (the “Purchase Agreement”) with Petro Line for Quality Industrial to purchase and Petro Line to sell an amount of shares in Petro Line equal to 51% of the outstanding capital stock of Petro Line in exchange for cash consideration of $1,530,000 USD (the “Purchase Price”) payable over time;

WHEREAS, as of the date of this Agreement, the Purchase Agreement has not closed, no portion of the Purchase Price has been paid to Petro Line, and Petro Line has not contributed any shares of its capital stock to Quality Industrial; and

WHEREAS, the parties to the Purchase Agreement now desire to terminate and release each other from the Purchase Agreement.

NOW, THEREFORE, in exchange for consideration, the adequacy of which is hereby acknowledged, the parties agree as follows:

Termination. Subject to the terms and conditions of this Agreement, as of the date hereof, the Parties hereby terminate the Purchase Agreement, and any and all rights, obligations or duties created thereunder.

Coordination. The parties agree to take whatever measures are necessary return to their respective positions as if the Purchase Agreement was never executed. Each party shall pay its own costs incurred in connection with the Purchase Agreement. The parties agree to negotiate a new Purchase Agreement.

Mutual Release. Except for the obligations set forth in this Agreement, each party hereby releases, remises, acquits and forever discharges any other party to this Agreement and their related or controlled entities, and all of their directors, officers, members, managers, partners, employees, servants, attorneys, assigns, heirs, successors, agents and representatives, past and present, and the respective successors, executors, administrators and any legal and personal representatives of each of the foregoing, and each of them, from any and all claims, demands, actions, causes of action, debts, liabilities, rights, contracts, obligations, duties, damages, costs, expenses or losses, of every kind and nature whatsoever, and by whomever asserted, whether at this time known or suspected, or unknown or unsuspected, anticipated or unanticipated, direct or indirect, fixed or contingent, or which may presently exist or which may hereafter arise or become known, in law or in equity, in the nature of an administrative proceeding or otherwise, for or by reason of any event, transaction, matter or cause whatsoever, with respect to, in connection with or arising out of the Purchase Agreement, or otherwise.

It is understood by the parties that the facts with respect to which the foregoing release is given may hereafter turn out to be other than or different from the facts now known to a party or the parties or believed by a party or the parties to be true, and each party therefore expressly assumes the risk of the facts turning out to be so different and agrees that the foregoing release shall be in all respects effective and not subject to termination or rescission by any such difference in facts.

No Assignment. The parties to this Agreement represent and warrant that neither they or their affiliated persons or entities have assigned or transferred any claim or interest herein or authorized any other person or entity to assert any claim or claims on its behalf with respect to the subject matter of this Agreement.

Non-Disparagement. The parties agree not to make any oral or written statements or otherwise take any action that is intended or may reasonably be expected to disparage the reputation, business, prospects or operations of any other party to this Agreement.

Cooperation. Each of the parties hereby agree to perform any and all acts and to execute and deliver any and all documents reasonably necessary or convenient to carry out the intent and the provisions of this Agreement.

Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Dubai International Financial Centre in the United Arab Emirates and subject to the exclusive jurisdiction of the courts of the Dubai International Financial Centre (DIFC), without reference to the principles of conflict of laws.

Complete Agreement. This Agreement represents the complete agreement among the parties concerning the subject matter in this Agreement and supersedes all prior agreements or understandings, written or oral, including the Purchase Agreement, or otherwise. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

Successors and Assigns. This Agreement shall be binding and inure to the benefit of the parties hereto, their predecessors, parents, subsidiaries and affiliated corporations, all officers, directors, shareholders, agents, employees, attorneys, assigns, successors, heirs, executors, administrators, and legal representatives of whatsoever kind or character in privity therewith.

10.

Counterparts. This Agreement may be executed in counterparts, one or more of which may be facsimiles, but all of which shall constitute one and the same Agreement. Facsimile signatures of this Agreement shall be accepted by the parties to this Agreement as valid and binding in lieu of original signatures.

[SIGNATURE PAGE]

The parties to this Agreement have executed this Agreement as of the day and year first written above.

QUALITY INDUSTRIAL CORP.

By /s/ John-Paul Backwell

Printed Name: John-Paul Backwell

Title Chief Executive Officer

PETRO LINE FZ-LLC

By /s/ Suliman Naameh

Printed Name:: Suliman Naameh

Title: Partner

Cover	Jul. 31, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 31, 2023
Entity File Number	000-56487
Entity Registrant Name	Ilustrato Pictures International, Inc.
Entity Central Index Key	0001496383
Entity Tax Identification Number	27-2450645
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	26 Broadway
Entity Address, Address Line Two	Suite 934
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10004
City Area Code	917
Local Phone Number	522-3202
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false