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 June 30, 2024

 

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: 2,291,192,403 common shares as of August 26, 2024

 

 

 

 

 

 

EXPLANATORY NOTE

 

This Quarterly Report on Form 10-Q for the period ended June 30, 2024 (the “Report”) including, but not limited to, the financial statements, related notes, and other information included herein has not been reviewed by the Company’s independent public accounting firm prior to the filing of this Report. On August 19, 2024, the Company engaged a new independent registered public accounting firm. The new independent registered public accounting firm will review this Form 10-Q and upon the completion of its review, the Company will file the requisite amendment to this Report.

 

 

 

 

TABLE OF CONTENTS

 

    Page
PART I – FINANCIAL INFORMATION  
   
Item 1: Financial Statements 1
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations 2
Item 3: Quantitative and Qualitative Disclosures About Market Risk 8
Item 4: Controls and Procedures 8
     
PART II – OTHER INFORMATION  
   
Item 1: Legal Proceedings 9
Item 1A: Risk Factors 9
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 9
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 June 30, 2024 (Unaudited) and December 31, 2023;
F-2 Consolidated Statements of Operations for the three & six months ended June 30, 2024, and 2023 (Unaudited);
F-3 Consolidated Statement of Stockholders’ Equity (Deficit) for the periods ended June 30, 2024, and 2023 (Unaudited);
F-4 Consolidated Statements of Cash Flows for the six months ended June 30, 2024, and 2023 (Unaudited); and
F-5 Notes to Consolidated Financial Statements (Unaudited).

 

These 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 June 30, 2024, are not necessarily indicative of the results that can be expected for the full year.

 

1

 

  

ILUSTRATO PICTURES INTERNATIONAL INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED/NOT REVIEWED)

 

  

June 30,
2024
Not Reviewed

  

December 31,
2023
Audited

 
ASSETS        
Current Assets        
Cash and Cash Equivalents  $302,254   $213,073 
Inventory   2,025,381    1,612,800 
Accounts Receivable   7,531,969    22,825,113 
Deposits, Prepayments, & Advances   785,311    0 
Other Current Assets   10,116,487    5,451,159 
Total Current Assets   20,761,402    30,102,145 
           
Non-Current Assets          
Long Term Investments   25,264,697    23,639,209 
Property and Equipment   186,207    139,523 
Right-of-Use assets   259,304    0 
Capital work in progress   654,666    0 
Receivable Non-Current Portion   7,157,417    0 
Goodwill   11,115,562    8,606,289 
Total Non-current Assets   44,637,853    32,385,021 
Total Assets  $65,399,255   $62,487,166 
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
Current Liabilities          
Accounts Payable  $4,136,227   $9,891,505 
Lease Operating Liabilities   90,875    0 
Related Party Payables   406,235    0 
Other Current Liabilities   13,780,865    8,825,966 
Total Current Liabilities   18,414,202    18,717,471 
           
Non-Current Liabilities          
Lease Operating Non-Current Portion   180,062    0 
Notes  payable – long-term   14,355,776    11,740,619 
Other Non-Current Liabilities   1,844,602    2,121,455 
Total Long-Term Liabilities   16,380,440    13,862,074 
Total Liabilities   34,794,642    32,579,545 
Stockholders’ Equity          
Class A - 10,000,000 authorized; 10,000,000 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively   10,000    10,000 
Class B - 100,000,000 authorized; 3,560,000 and 4,064,000 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively   3,560    4,064 
Class C - 10,000,000 authorized; 0 issued and outstanding as of June 30, 2024 and December 31, 2023   0    0 
Class D - 60,741,000 authorized; 60,741,000 issued and outstanding as of December 31, 2023, and 2022, respectively   60,741    60,741 
Class E - 5,000,000 authorized; 3,172,175 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively   3,172    3,172 
Class F - 50,000,000 authorized, 1,455,750 and 1,618,250 issued and outstanding as of June 30, 2024 and  December 31, 2023, respectively   1,456    1,618 
Common stock; $0.001 par value; 200,000,000 shares authorized;  133,006,691and 127,129,694 shares issued and outstanding as of June 30, 2024, and December 31, 2023, respectively
   2,107,853    1,720,183 
Additional paid-in capital   26,019,639    24,521,777 
Retained Earnings/ accumulated Deficit   -5,754,719    -100,292 
Capital Reserve   5,455,393    
-
 
Noncontrolling interest   2,697,518    3,686,358 
Total stockholders’ Equity   30,604,613    29,907,621 
Total liabilities and stockholders’ Equity  $65,399,255   $62,487,166 

 

The accompanying notes are an integral part of these unaudited/not reviewed consolidated financial statements.

 

F-1

 

 

ILUSTRATO PICTURES INTERNATIONAL INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED/NOT REVIEWED) 

 

   For the Three Months Ended   For the Six Months Ended 
   30-Jun-24
Not Reviewed
   30-Jun-23
Not Reviewed
   30-Jun-24
Not Reviewed
   30-Jun-23
Not Reviewed
 
                 
Revenue   4,245,791    1,943,690    5,345,259    3,595,851 
                     
Cost of revenues   2,688,540    1,375,004.00    3,467,733    2,553,284.00 
                     
Gross profit   1,557,251    568,686.00    1,877,526    1,042,567.00 
                     
Operating expenses                    
Professional fees   142,101    0    436,020    0 
General and administrative   1,814,552    2,907,943    4,215,707    4,159,976 
Total operating expenses   1,956,653    2,907,943    4,651,727    4,159,976 
                     
Income (loss) from operations   (399,402)   (2,339,257)   (2,774,201)   (3,117,409)
                     
Other (income) expenses                    
Interest expense   255,669    1,116,537    438,694    1,542,509 
Other Income   (107,050)   (1,164)   (506,604)   (4,703)
Total other (income) expense, net   148,619    1,115,373    (67,910)   1,537,806 
                     
Net Income (Loss)   (548,021)   (3,454,630)   (2,706,291)   (4,655,215)
Less: net income attributable to noncontrolling interest   152,547    
-
    19,111    
-
 
Net income (loss) attributable to ILUS stockholders   (700,568)   (3,454,630)   (2,725,402)   (4,655,215)
                     
Weighted average common shares outstanding   1,959,529,013    1,444,380,699    1,959,529,013    1,444,380,699 
                     
Net income (loss) per common share - basic and diluted
   (0.00)   (0.00)   (0.00)   (0.00)

 

The accompanying notes are an integral part of these unaudited/not reviewed consolidated financial statements.

 

F-2

 

 

ILUSTRATO PICTURES INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED/NOT REVIEWED)

 

FOR THE PERIOD ENDED JUNE 30, 2024

  

    Preferred Stock A      Preferred Stock B    Preferred Stock D     Preferred Stock E      Preferred Stock F    Common Stock     Minority
Interest  
    Capital Reserve      Additional Paid-in Capital    Retain Loss     Total Equity  
    Shares     Amount     Shares      Amount    Shares     Amount     Shares     Amount     Shares     Amount      Shares    Amount      Amount     Amount     Amount    Amount     Amount  
                                                                                      
Balance, December 31, 2023   10,000,000    10,000    4,064,000    4,064    60,741,000    60,741    3,172,175    3,172    1,618,250    1,618    1,720,182,651    1,720,183    3,686,358    0    24,521,777    (100,292)   29,907,621 
Shared Issued                                                                                   0 
Convertible notes converted to common stock                                                     11,986,538    11,987              40,807         52,794 
Common stock issued against Warrant                                                     26,566,901    26,567              70,933         97,500 
Common stock issued for Cash                                                     22,349,206    22,349              97,651         120,000 
Common stock issued as commitment shares                                                     4,750,000    4,750              50,200         54,950 
Common stock as compensation to AJB Capital Investments LLC                                                     75,000,000    75,000              558,000         633,000 
common stock as compensation to RB Capital Partners LLC                                                     50,000,000    50,000              150,000         200,000 
Preferred Stock class F issued                                           162,500    163                        199,838         200,000 
Preferred stock converted into common stock                                           (50,000)   (50)   5,000,000    5,000              (4,950)        0 
Minority Interest - Hyperion - Removed                                                               (131,319)                  (131,319)
Minority Interest - QI - Removed                                                               (1,922,351)                  (1,922,351)
Changes in Retained earnings                                                                              4,195,517    4,195,517 
Capital Reserve                                                                    5,520,734              5,520,734 
Net Income                                                               (206,332)             (1,951,939)   (2,158,270)
Minority Interest                                                                                   0 
                                                                                      
Total Shareholders’ Equity as of March 31, 2024   10,000,000    10,000    4,064,000    4,064    60,741,000    60,741    3,172,175    3,172    1,730,750    1,731    1,915,835,296    1,915,836    1,426,357    5,520,734    25,684,256    2,143,286    36,770,175 
Shared Issued                                                                                   0 
Common Stock Share through Convertible                                                     12,731,764    12,732              93,444         106,176 
Converted F Stock to Common                                           (275,000)   (275)   27,500,000    27,500              (27,225)        0 
Compensation Common Stock                                                     101,385,800    101,386              319,060         420,446 
Converted B Stock to Common             (504,000)   (504)                                 50,400,000    50,400              (49,896)        0 
Change in Capital Reserve                                                                    (65,341)             (65,341)
Adjustment                                                                              (7,197,437)   (7,197,437)
Change in shareholder’s account                                                               1,118,615                   1,118,615
Net Income                                                               152,547              (700,568)   (548,021)
                                                                                      
Total Shareholders’ Equity as of June 30, 2024   10,000,000    10,000    3,560,000    3,560    60,741,000    60,741    3,172,175    3,172    1,455,750    1,456    2,107,852,860    2,107,853    2,697,518    5,455,393    26,019,639    (5,754,719)   30,604,613 

 

FOR THE PERIOD ENDED JUNE 30, 2023

 

    Preferred Stock A      Preferred Stock B    Preferred Stock D     Preferred Stock E      Preferred Stock F    Common Stock     Minority
Interest  
    Capital Reserve      Additional Paid-in Capital    Retain Loss     Total Equity  
    Shares     Amount     Shares      Amount    Shares     Amount     Shares     Amount     Shares     Amount      Shares    Amount      Amount     Amount     Amount    Amount     Amount  
                                                                                      
Balance December 31,2022   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    1,355,230,699    1,355,230    24,386,712         20,631,261    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    0 
Preferred stock issued                                           35,000    35                        2,205         2,240 
Adjustment                                                               1,306,458              100    1,306,558 
Changes in Retained earnings                                                                              (1,640,192)   (1,640,192)
Current Quarter Income                                                                              914,662    914,662 
                                                                                      
Total Shareholders’ Equity as of March 31, 2023   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    1,379,080,699    1,379,081    25,693,170         21,118,116    8,979,553    57,248,900 
                                                                                      
Common stock issued                                                     55,300,000    55,300              547,800.00         603,100 
Preferred converted into Common stock                                                     10,000,000    10,000                        10,000 
Preferred stock converted                                           (100,000)   (100)                                 (100)
Preferred stock issued                                           100,000    100                                  100 
Adjustment                                                                              (198)   (198)
                                                                                    0 
Changes in Retainer Earnings                                                                              (216,214)   (216,214)
Current Quarter Income                                                                              980,224    980,224 
Share of profit transferred to Non-Controlling Interest                                                               3,980,873              (2,386,489)   1,594,384 
                                                                                      
Total Shareholders’ Equity as of June 30, 2023   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    1,444,380,699    1,444,381    29,674,043    0    21,665,916    7,356,876    60,220,196 

 

The accompanying notes are an integral part of these unaudited/not reviewed consolidated financial statements. 

 

F-3

 

 

ILUSTRATO PICTURES INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED/NOT REVIEWED) 

 

   June 30,
2024
   June 30,
2023
 
Cash flows from operating activities        
Loss for the period   (2,706,291)   (4,655,215)
           
Adjustment to reconcile net gain (loss) to net cash          
Finance cost   438,694    0 
Non-Cash Stock Compensation Expense   679,113    0 
Stock issued for Services   
 
    
 
 
Amortization   58,393      
Commitment fees   248,350    0 
Depreciation  - PPE   38,680    31,868 
Other income   (506,604)   0 
Discount on convertible Notes   77,522    0 
Changes in Assets and Liabilities, net          
Current Assets   9,429,924    (1,937,566)
Other Current Liabilities   (303,269)   (68,940,644)
Net cash (used In) provided by operating activities   7,454,512    (75,501,557)
           
Cash flows from investing activities          
Addition of Fixed Assets   (740,030)   (948,437)
Right of use Assets   (259,304)   0 
Changes in Non-current assets   (11,292,178)   43,170,769 
Changes in Non- Current Liabilities   2,338,304    2,567,583 
Net cash used in investing activities   (9,953,208)   44,789,915 
           
Cash flows from financing activities          
           
Common Stock issued   387,670    52,034,434 
Lease Finance   180,062    0 
Preferred Stock Issued   (666)   5,455,341 
Finance cost   (438,694)   0 
Discount on convertible Notes   (77,522)   0 
Additional Paid-up Capital   1,497,862    4,262,103 
Changes in Retained Earnings & MI   1,039,165    (30,990,287)
         0 
Net cash generated from financing activities   2,587,877    30,761,591 
           
Net increase/(decrease) in cash and cash equivalents   89,181    49,949 
Cash and cash equivalents at the beginning of the year   213,073    163,124 
Cash and cash equivalents at end of the year   302,254    213,073 

 

The accompanying notes are an integral part of these unaudited/not reviewed consolidated financial statements.

 

F-4

 

 

ILUSTRATO PICTURES INTERNATIONAL INC.

NOTES TO AUDITED FINANCIAL STATEMENTS

 

NOTE 1: ORGANIZATION, HISTORY AND BUSINESS

 

(A) We were incorporated as a Superior Venture Corp. on April 27, 2010, in the State of Nevada to sell wine varietals. On November 9, 2012, we entered into an Exchange Agreement with 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 and the newly elected director of the issuer caused the Issuer to enter into a letter of Intent to merge 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 360,000,000 shares of its common stock to the members.

 

(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 merge 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 and, therefore has become the wholly-owned operating subsidiary of the Issuer. 

 

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

 

(F) As a part of the 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, where we eventually got control over activities and books of accounts of Ilustrato Pictures International Inc. 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 the SEC.

 

F-5

 

 

(G) On May 18, 2020, the Company entered into a definitive agreement and Plan of Merger with FB Technologies Global, Inc, the shareholders of FB Technologies Global, Inc. were issued 3,172,175 shares of Series E Preferred Stock for their shares 360,000,000 common shares, 60,741,000 Preference D and 10,000,000 Preference A Shares. A final tranche of preference shares subject to performance to be issued in Quarter 1 of 2022. The merger was consummated on January 14, 2021.

 

(H) Firebug Mechanical Equipment LLC 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 research and development of firefighting technologies and the manufacturing of firefighting equipment and vehicles for its customers in the Middle East, Asia, and Africa.

 

(I) Georgia Fire & Rescue Supply LLC (Georgia Fire) was incorporated on 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. Purchase consideration includes an aggregate cash purchase price of $900,000 (Nine Hundred Thousand Dollars), wherein a fixed sum of $680,000 (Six Hundred Eighty Thousand) payable upon closing and the remaining $220,000 (Two Hundred Twenty Thousand Dollars) payable over a one-year period after closing to the extent the business operations of Georgia Fire & Rescue Supply, LLC meet mutually agreeable performance thresholds along with 1,500 (One Thousand Five Hundred) restricted Class F Preferred Shares in the public company llustrato Pictures International Inc. (Symbol: ILUS)

 

(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 with a signed Share Purchase Agreement. This company is engaged in the business of sales, distribution, installation and maintenance of Fire Protection and Security systems. Purchase consideration includes 250,000 AED (Two hundred and fifty thousand) payable on signing of the Sales Purchase agreement, 10,000 AED (Ten thousand) monthly for 24 months starting from May 2021 and 1,000,000 (1 million) restricted shares in the public company llustrato Pictures International Inc. (Symbol: ILUS)

 

(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 manufacturing aluminum truck beds and brush truck skid units for firefighting purposes including wildland firefighting. Purchase consideration includes an aggregate cash purchase price of $500,000 (Five Hundred Thousand) wherein a fixed sum of $300,000 (Three Hundred Thousand) payable upon closing and remaining $200,000 (Two Hundred Thousand) payable over a one-year period after closing to the extent the business operations of Bull Head Products Inc. meet mutually agreeable performance thresholds referenced in Exhibit B in the SPA along with 6,750 (Six Thousand Seven Hundred and Fifty) restricted Class F Preferred Shares in the public company llustrato Pictures International Inc. (Symbol: ILUS)

 

(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.

 

F-6

 

 

(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 for an aggregate amount of $500,000. This company is engaged in the industrial, oil & gas, and manufacturing sectors. Quality Industrial Corp. is a public company that 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. The purchase consideration for 51% of the shares shall be up to $714,000 subject to certain agreed Targets and Key Performance indices being met as referenced in the SPA.

 

(Q) On January 3, 2024, Ilustrato Pictures International Inc. acquired a convertible note from YAII PN, LTD with outstanding principal and accrued interest of $600,685 in Samsara Luggage Inc. (SAML). On January 5, 2024, SAML reissued a convertible note to ILUS who on the same day converted the note into 150,753,425 shares of common stock in the Company pursuant to the terms of said exchange note. As a result of such conversion, Ilustrato acquired control of 91.5% of the outstanding shares in SAML as of January 5, 2024.

 

(R) On February 23, 2024, Ilustrato Pictures International, Inc., entered into a Stock Purchase Agreement with Samsara Luggage Inc., and sold all its equity interests in seven companies owned by the Company:

 

Firebug Mechanical Equipment LLC

 

Georgia Fire & Rescue Supply LLC

 

Bright Concept Detection and Protection System LLC

 

Bull Head Products Inc

 

E-Raptor

 

The Vehicle Converters

 

AL Shola Al Modea Safety and Security LLC, the only entity in which the Company does not own 100% but only 51% of the membership interests.

 

The consideration for the sale of the equity interests in the foregoing companies was paid by SAML by the issuance of 350,000 restricted shares of Series B stock of SAML convertible into 350,000,000 common stock and further milestone payment/s should applicable performance targets be referenced.

 

(S) On March 27, 2024, our subsidiary QIND entered into a definitive Stock Purchase Agreement (the “Stock Purchase Agreement”) with the shareholders of Al Shola Al Modea Gas Distribution LLC (“ASG” or “Al Shola Gas”) to acquire a 51% interest in ASG. The Closing of the transaction took place when both parties signed the definitive Stock Purchase Agreement. Al Shola Gas is an Engineering and Distribution Company in the liquefied petroleum gas (“LPG”) Industry in the United Arab Emirates and was established in 1980. The company is one of the region’s leading suppliers and contractors of LPG centralized pipeline systems and is approved by The General Directorate of Civil Defense, Government of Dubai, as a Central Gas Contractor and LPG Supplier.

 

 

F-7

 

 

NOTE 2: SUMMARY OF ACCOUNTING POLICIES

 

Revenue Recognition

 

The Company recognizes revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers.

 

Accordingly, revenue is recognized when control of the goods or services promised under a contract is transferred to the customer either at a point in time (e.g., upon delivery) or over time (e.g., as the Company performs under the contract) in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the goods or services. The Company accounts for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. If collectability is not probable, the sale is deferred until collection becomes probable or payment is received.

 

Contract Assets and Contract Liabilities acquired under Business Combinations

 

The company follows new guidance under ASC 606 regarding the recognition and measurement of contract assets and contract liabilities acquired in a business combination. The company applies the definition of a performance obligation in ASC 606 when recognizing contract liabilities assumed in a business combination. The company eventually recognizes contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date. Earlier, contract assets and contract liabilities acquired in a business combination were recorded by the acquirer at fair value.

 

Work-in-progress

 

Work-in-progress is stated at cost plus attributable profit, less provision for any anticipated losses and progress billings. Cost comprises direct materials, labor, depreciation, and overheads. If any progress billings for any contract exceed the cost-plus attributable profit or less anticipated losses, the excess to be shown as excess progress billings. Claims are only recognized as income when the outcome and recoverability can be determined with reasonable certainty. Contract revenue and costs are recognized as revenue and expenses, respectively, in the statement of comprehensive income when the outcome of a construction contract can be estimated reliably.

 

In accordance with ASC-606 revenue recognition, amounts are billed in accordance with contractual terms or as work progresses. Unbilled amounts arise when the timing of billing differs from the timing of revenue recognized, such as when contract provisions require specific milestones to be met before a customer can be billed. Unbilled amounts primarily relate to performance obligations satisfied over time when the cost-to-cost method is utilized, and the revenue recognized exceeds the amount billed to the customer as there’s not yet a right to invoice in accordance with contractual terms. Unbilled amounts are recorded as a contract asset when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract.

 

Variations

 

Variations are recognized in contract revenue when the outcome can be determined with reasonable certainty and are capable of being reliably measured.

 

Variable consideration

 

If the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved. The construction contracts provide customers with a right to claim damages for delay in delivery of goods. The rights to claim damages for delay in delivery of goods give rise to variable consideration.

 

F-8

 

 

Accounts Receivable

 

Accounts receivable are reported at the customers’ outstanding balances, less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable.

 

The duration of such receivables extends from 30 days to beyond 12 months. Full payment is received only when a job/project is completed, and approvals are obtained. Provisions are created based on estimated irrecoverable amounts determined by reference to past default experience.

 

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.

 

Inventories

 

In accordance with ASC 330, the Company states inventories at the lower of cost or net realizable value. Cost, which includes material, labor and overhead, is determined on a first-in, first-out basis. The Company makes adjustments to reduce the cost of inventory to its net realizable value, if required, for estimated excess, obsolete, zero usage or impaired balances. Factors influencing these adjustments include changes in market demand, product life cycle and engineering changes.

 

Tangible Assets/ Property Plant & Equipment

 

Property, plant, and equipment are recorded at cost, except when acquired in a business combination where property, plant and equipment are recorded at fair value. Depreciation of property, plant and equipment is recognized over the estimated useful lives of the respective assets using the straight-line method.

 

The estimated useful lives are as follows:

 

Buildings, related improvements & land improvements  5-25
Machinery & equipment  3-15
Computer hardware & software  3-10
Office, furniture & others  3-15

 

Expenditures that extend the useful life of existing property, plant and equipment are capitalized and depreciated over the remaining useful life of the related asset. Expenditures for repairs and maintenance are expensed as incurred. When property, plant and equipment are retired or sold, the cost and related accumulated depreciation is removed from the Company’s balance sheet, with any gain or loss reflected in operations.

 

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.

 

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 the 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.

 

F-9

 

 

The Company calculates the fair value of option grants and warrant issuances utilizing the Binomial pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeiture” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock option or warrant. The Company estimates forfeiture rates for all unvested awards when calculating the expenses for the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as well as employee termination patterns. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period.

 

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 share available. Diluted earnings (loss) per share is computed similarly 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 cost as incurred.

 

Cash and Cash Equivalents

 

For the 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.

 

Fair Value of Financial Instruments

 

The company’s financial instruments consist of cash and cash equivalents, accounts receivable, and notes payable. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Business segment

 

ASC 280, “Segment Reporting” requires the use of the “management approach” model for segment 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. 

 

Below is the Statement of operations of reportable Segment:

 

F-10

 

 

Divisional Income Statement

 

The Company is organized into two divisions based on the similarity of products, customers served, common use of facilities, and economic characteristics. The Company’s segments are as follows:

 

1.Emergency Response

 

2.Industrial & Manufacturing

 

All intersegment transactions have been eliminated in consolidation. 

   For the Six Months Ended 
   June 30,
2024
   2023
(Restated)
 
Emergency & Response Division        
Revenue   2,028,053    3,595,851 
Cost Of Goods Sold   1,399,025    2,553,284 
Gross Profit   629,028    1,042,567 
Total Operating Expenses   1,886,734    3,259,649 
Operating Loss   (1,257,706)   
(2,217,08
)
Net Loss   (1,252,125)   (2,988,458)

 

Our revenue decreased to $2,028,053 for the six months ended June 30, 2024, from $3,595,851 in 2023, a 44% decrease year to date. Gross profit percentage increased to 31% for the six months ended June 3, 2024, from 29% in 2023.

 

Operating expenses decreased to $1,886,734 for the six months ended June 30, 2024, compared with the same period of $ 3,259,649 in the year 2023.

 

For the coming period 2024, the Company will continue to allocate financial, technical and sales resources for recently acquired subsidiaries to positively impact their financial results through increased sales orders and efficiency. Allocated personnel will primarily focus on accelerating sales and marketing efforts, product development, international market expansion, optimizing supply chain and production processes, and overall increased profitability while continuing with the integration and optimization of currently operating companies. With the group expansion and growth, we also intend to hire executives and personnel with specific industry experience and fields of expertise to streamline financial reporting, compliance, and Investor Relations and to improve our corporate governance.

 

   For the Six Months Ended 
  

June 30,

2024

   June 30,
2023
(Restated)
 
Industrial & Manufacturing Division (QIND)        
Revenue   3,317,206    0 
           
Cost of revenues   2,068,708    0 
           
Gross profit   1,248,498    0 
           
Total Operating Expenses   911,179    900,327 
Profit/ loss from Operations   337,319    (900,327)
Non-Operating expenses   165,851    766,430 
Non-Operating Income   427,554    
 
Net loss/ profit   599,022    (1,666,757)

 

F-11

 

 

For our Industrial and Manufacturing Division, the Operating Revenue increased to $3,317,206 for the quarter ended June 30, 2024, compared to $0 for the year ended June 30, 2023. The increase in revenue, was the result of the consolidation of Al Shola Gas For our Industrial and Manufacturing Division, the Operating expenses increased to $10,852 for the year ended June 30, 2024, compared to $65,013 for the year ended June 30, 2023. Our increase in operating expenses in 2024 was mainly the result of the consolidation of Al Shola Gas in our subsidiary QIND. Our Subsidiary QIND acquired a 51% interest in Al Shola Gas on March 23, 2024, and is consolidating the profitable operating company into its financials from Q2 2024.

 

We earned a profit of $599,022 for the six months ended June 30, 2024, compared to a net loss of $1,666,757 for the six months ended June 30, 2023. The change from loss to profit for the period ended June 30, 2024, is a result of Net Income from our acquisition of Al Shola Gas and the reversal of interest payments on the loan agreements with Mahavir and Artelliq.

 

Geographical presence

 

Presently our operations are spread across the United States, United Arab Emirates, United Kingdom, and the Republic of Serbia, however, we plan to further expand our regional presence and aim to expand our manufacturing operations in the United States during 2024. At present the revenue reported above is from the United States and United Arab Emirates. We’ve classified the revenue based on the entities registered in their respective locations. All the revenue generated as indicated has solely come from external customers, with no sales involving inter-company transactions. 

  

Income Taxes

 

The Company accounts for income tax positions in accordance with Accounting Standards Codification Topic 740, “Income Taxes” (“ASC Topic 740”). This standard prescribes a recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There was no material impact on the Company’s financial position or results of operations as a result of the application of this standard. Deferred tax assets have not been created for those subsidiaries which are in income tax-free jurisdiction, because the losses incurred cannot be utilized in the future, rendering deferred tax assets irrelevant.

 

Recent Accounting Pronouncements

 

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. ASU 2017-04 also clarifies that an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The new standard is effective for fiscal years beginning after December 15, 2019, for both interim and annual reporting periods.

 

F-12

 

 

Rounding Off

 

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

 

NOTE 3: CURRENT ASSETS

 

   June 30,   December 31, 
Particulars  2024   2023 
         
Loans advanced   (2,327)   1,855,892 
Advance given to suppliers and sub-contractors   0    65,089 
Director’s current accounts   2,519,267    679,245 
Statutory dues receivable   0    50,404 
Deposits   0    46,918 
Accrual of discount on notes   85,354    217,440 
Deferred expenses - consultancy   1,785,938    0 
Buy Back Commitment   2,000,000    2,000,000 
Toto Loan Current Portion   3578709    0 
Misc. current assets   149,546    536,171 
Total   10,116,487    5,451,159 

 

Advances to Subcontractors and Suppliers: Advances have been paid to the suppliers/ sub-contractors in the ordinary course of business for procurement of specialized material and equipment.

 

Directors Current Account includes amount incurred for Company’s Annual shareholders meeting, events for investor relationship, advances for our investment projects and other expenses incurred for future potential acquisitions.

 

Loan advanced refers to the amount advanced by a company in the ordinary course of business and includes the amount paid for set up of new businesses.

 

Accounts Receivable

 

Accounts receivables are reported at the customers’ outstanding balances, less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable.

 

The duration of such receivables extends from 30 days to beyond 12 months. Full payment is received only when a job/project is completed, and approvals are obtained. Provisions are created based on estimated irrecoverable amounts determined by reference to past default experience.

 

   June 30, 
   2024 
Accounts Receivables Ageing  (unaudited) 
1-30 days   329,345 
31-60 days   175,352 
61-90 days   146,028 
+90 days   6,881,243 
Total   7,531,969 

 

F-13

 

 

NOTE 4: NON-CURRENT ASSETS

 

Goodwill

 

As a part of the 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.

 

As of June 30, 2024, the additional Goodwill has been generated through the acquisition by our subsidiary Quality Industrial Corp, through the operating business of Al Shola Gas as consolidated from April 1, 2024. Goodwill accounted for in the books is primarily a result of the acquisition, 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 the 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.

  

The company will assess impairment from the 2024 year-end 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.

 

On April 1, 2024, the Agreement with Quality International was canceled by the Board of Directors of Quality Industrial Corp. QIND restated its financial statements as of December 31, 2022, which were previously reported on the Original Filing and subsequent amendments. Quality International is no longer considered as Goodwill. The following items reflect the restatements: 

 

As of June 30, 2024, Goodwill, and intangible assets amount to $11,115,562 as compared to total assets amounting to $8,606,289 as of December 31, 2023. Below is a table displaying the Goodwill arising from the Company’s acquisitions:

 

Year  June 30,
2024
   December 31,
2023
 
QIND   6,704,318    6,704,318 
Firebug   0    (81,676)
Bullhead   0    597,226 
Georgia Fire   0    136,175 
ILUS UK   335,741    335,741 
BCD   0    306,597 
ASSS   0    607,908 
SAML   4,075,503    0 
Goodwill Total   11,115,562    8,606,289 

 

F-14

 

 

Long term investments

 

Particulars  June 30,
2024
   December 31,
2023
 
Investment in BCD   0    20,500 
Investment in FB Fire Technologies Ltd   2,036,767    3,172,175 
Investment in Quality International   0    6,500,000 
Investment in Wikisoft   6,555,755    0 
Investment in Dear Cashmere Holding Co.   12,000,000    12,000,000 
Long term investment   4,672,175    0 
Loan to Fb Fire Technologies Ltd   0    1,946,534 
Total   25,264,697    23,639,209 

 

The company holds long-term investments of $6,500,000 and $0 as of December 31, 2023, and June 30, 2024, respectively. These investments were made for the acquisition of Quality International, a transaction that was terminated on April 1, 2024

 

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. The shares were discretionary awarded and recorded at a fair market value of $1.20 with a grant date as of May 21, 2021, in accordance with ASC 718 and issued by, the Chairman, Nicolas Link and CEO, James Gibbons, of DRCR.

 

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.

 

Tangible Assets 

 

Particulars  June 30,
2024
   December 31,
2023
 
Tangible Assets        
Land and Buildings   0    0 
Plant and Machineries   34,401    38,582 
Furniture, Fixtures and Fittings   34,250    37,432 
Vehicles   69,397    14,645 
Computer and Computer Equipment   48,160    49,044 
Total   186,207    139,523 

 

Depreciation on tangible assets in accordance with ASC 360.

 

   Plant &
Machinery
   Furniture,
Fixtures &
Office
Equipment
   Vehicles   Computers   Total 
Carrying value as of January 1, 2024   38,582    37,432.00    118,789    49,044    243,847 
Addition during Q1 2024   3,116    9,801    
-
    
-
    12,917 
Charged Depreciation Q1 2024   3,806    10,075    24,290    
-
    38,171 
Carrying value March 31, 2024   37,892    37,158    94,499    49,044    218,592 
 Addition during Q2 2024   0    3,949    0    2,060    6,009 
Charged Depreciation Q2 2024   3,491    6,857    25,102    2,944    38,394 
Carrying value June 30, 2024   34,401    34,250    69,397    48,160    186,207 

 

F-15

 

 

NOTE 5: CURRENT LIABILITIES

 

Other Current Liabilities

 

Particulars  June 30,
2024
   December 31,
2023
 
Accrued payables   68,505    204,925 
Credit cards   10,494    8,221 
other advances   942,990    827,824 
Loan Payable   537,115    6,021,338 
Misc. current liabilities   432,607    165,344 
Payroll Liabilities   792,605    534,068 
Payable to Government Authorities   124,309    64,199 
Provision for Audit Fees   39,500    24,500 
Payable to subsidiaries   10,832,740    975,547 
Total   13,780,865    8,825,966 

 

As per the applicable accounting standards, Borrowings from financial institutions have been bifurcated into current and non-current liabilities.

 

NOTE 6: NON-CURRENT LIABILITIES

  

Notes Payable

 

The following is the list of Notes payable as of June 30, 2024. Convertible Notes issued during the reported period are accounted in the books as a 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 35% below the lowest past 15-day share price and bears 12% interest per annum. The note matured on February 4, 2023. The Company signed a Forbearance Agreement with Discover Growth Fund on May 3, 2023. The Company shall make monthly minimum loan payments to Discover Growth Fund of $450,000.00 commencing on May 30, 2023, and on the 5th day of each month thereafter, until the Note is paid in full. Four payments of  450,000 have been made as of June 30, 2024.

 

On June 1, 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. This note has been partially converted. 

 

On December 22, 2023, the company entered into a convertible note with AJB Capital Investment LLC for the amount of $1,680,000. 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 May 1, 2024.

 

On January 15, 2024, the company entered into a convertible note with Twn Brooks Inc., for the amount of $27,500. 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 July 15, 2024.

 

On January 23, 2024, the company entered into a convertible note with Twn Brooks Inc., for the amount of $25,000. 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 July 23, 2024.

 

On January 31, 2024, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $600,000. The note is convertible into common stock at the rate of $0.10 and bears 8% interest per annum. The note matures on January 31, 2026.

 

F-16

 

 

On April 1, 2024, ILUS entered into a consolidated note payable with a principal amount of $6,405,750 with RB Capital Inc. which amount represents the amount owed to Holder as of April 1, 2024. Repayable at any time and bears 7% interest rate per annum. The Company may repay the Holder in cash at any time in full including all interest and principal, without penalty. If the issuer pays the holder $650,000 in cash in a fiscal quarter the holder will not be permitted to carry out a conversion in that fiscal quarter, unless by mutual agreement. The note is convertible into common stock at a rate equal to the variable conversion price as of 70% of the lowest trading price during the previous ten trading days.

 

On April 15, 2024, the company entered into a convertible note with Twn Brooks Inc., for the amount of $55,000. 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 October 15, 2024.

 

On May 6, 2024, 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 $0.10 and bears a 7% interest per annum. The note matures on May 6, 2026.

 

On May 16, 2024, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $150,000. The note is convertible into common stock at the rate of $0.10 and bears a 7% interest per annum. The note matures on May 16, 2026.

 

On May 20, 2024, the company entered into a convertible note with Twn Brooks Inc., for the amount of $27,500. The note is convertible into common stock at the rate of 35% below the average past 10-day share price prior to conversion and bears a 9% interest per annum. The note matures on November 20, 2024.

 

On June 12, 2024, ILUS entered into a note payable of $91,530 with 1800 Diagonal Lending LLC. convertible into common stock 65% multiplied by the lowest trading price for the Common Stock during the ten (10) Trading Days prior to the Conversion date and bears a 13% interest per annum. The note matures on March 15, 2025.

 

On June 20, 2024, ILUS entered into a note payable of $63,250 with 1800 Diagonal Lending LLC. convertible into common stock 65% multiplied by the lowest trading price for the Common Stock during the ten (10) Trading Days prior to the Conversion date and bears a 13% interest per annum. The note matures on March 30, 2025.

 

F-17

 

 

NOTE 7: OTHER NON CURRENT LIABILITIES

 

Particulars  June 30,
2024
   December 31,
2023
 
Retirement benefits to pay   274,575    145,662 
Bank Borrowings   320,972    0 
Provision for Convertible Notes   1,249,055    1,155,338 
Interest on Convertible Notes   0    820,455 
Total   1,844,602    2,121,455 

 

Options and Warrants

 

The Company chooses not to record warrants in its financial books if the exercise price is significantly higher than the current market price and classifies it as a contingent liability. For example, the common stock purchase warrant to Discover Growth Fund, LLC described below has an exercise price of $0.275. As of December 31, 2022, the market price was $0.07, and by March 15, 2023, it had further decreased to $0.04 when the Consolidated Financial Statements were being audited. The Company’s management classifies these warrants as a contingent liability, given the decline in prices, making it unlikely that the warrants will be exercised in the future. The management reserves warrant shares with its transfer agent. If the warrants should be exercised in the future the warrants will be accounted for in accordance with ASC 480.

 

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.

 

F-18

 

 

NOTE 8: STOCKHOLDER´S EQUITY

 

Common Stock And Preferred Stock

 

In August 2019 the Company 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 – 100,000,000 preferred with par value $0.001 that will be converted at 100 common shares 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

 

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.

 

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.

 

Class E - 5,000,000 preferred shares; par value $0.001; non-cumulative. Dividends are 6% a year commencing a year after issuance. Dividends are 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 a 130% premium to the redemption value. The shares do not have voting rights.

 

Class F – 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.

 

Stockholders’ Equity

 

As of June 30, 2024,

 

1.3,500,000,000 shares of common stock are authorized, and 2,107,852,860 shares of the Company’s common stock are issued and outstanding.

 

2.235,741,000 shares of all classes of preferred stock are authorized and 78,928,925 shares of the Company’s all classes of Preferred stock are issued and outstanding.

 

On January 3, 2024, Ilustrato Pictures International Inc. acquired a convertible note from YAII PN, LTD with outstanding principal and accrued interest of $600,685 in Samsara Luggage Inc. (SAML). On January 5, 2024, SAML reissued a convertible note to ILUS who on the same day converted the note into 150,753,425 shares of common stock in the Company pursuant to the terms of said exchange note. As a result of such conversion, Ilustrato acquired control of 91.5% of the outstanding shares in SAML as of January 5, 2024.

 

F-19

 

 

On January 03, 2024, we issued 3,250,000 shares of common stock as commitment shares to Twn Brooks Inc. with a fair market value of $.0072 per share for an aggregate price of $23,400.

 

On January 18, 2024, we issued 6,349,206 shares of common stock to Kyle Comerford for a stock purchase agreement for an aggregate price of $20,000.

 

On January 22, 2024, James Gibbons converted 50,000 shares of Preference F stock into 5,000,000 shares of common stock.

 

On January 22, 2024, we issued 2,500,000 shares of common stock as commitment shares to Twn Brooks Inc. with a fair market value of $.0166 per share for an aggregate price of $41,500.

 

On January 25, 2024, we issued 75,000,000 shares of common stock as compensation to AJB Capital Investments LLC for partial conversion of a convertible note for an aggregate price of $633,000.

 

On February 1, 2024, we issued 50,000,000 shares of common stock as compensation to RB Capital Partners LLC for partial conversion of a convertible note for an aggregate price of $200,000.

 

On February 2, 2024, we issued 2,250,000 shares of common stock as commitment shares to Twn Brooks Inc. with a fair market value of $.0172 per share for an aggregate price of $38,700.

 

On February 8, 2024, the company entered into a share purchase agreement with William Black to sell 37,500 shares of Preferred F Stock for a purchase price of $30,000.

 

On February 19, 2024, we issued 125,000 shares of Preferred F stock to Safeguard Investments LLC for an aggregate price of $170,000 for consultancy services.

 

On February 23, 2024, Ilustrato Pictures International, Inc., entered into a Stock Purchase Agreement with Samsara Luggage Inc., and sold all its equity interests in seven companies owned by the Company:

 

Firebug Mechanical Equipment LLC

 

Georgia Fire & Rescue Supply LLC

 

Bright Concept Detection and Protection System LLC

 

Bull Head Products Inc

 

E-Raptor

 

The Vehicle Converters

 

AL Shola Al Modea Safety and Security LLC, the only entity in which the Company does not own 100% but only 51% of the membership interests.

 

The consideration for the sale of the equity interests in the foregoing companies was paid by SAML by the issuance of 350,000 restricted shares of Series B stock of SAML convertible into 350,000,000 common stock and further milestone payment/s should applicable performance targets be referenced.

 

On March 19, 2024, we issued 26,566,901 shares of common stock to Jefferson Street for conversion of a warrant for an aggregate price of $97,500.

  

On March 26, 2024, the Company amended its Articles of Incorporation to authorize it to issue up to three and a half billion (3,500,000,000) common shares, with a par value of one-tenth of one cent ($0.001) per share.

 

F-20

 

 

On March 27, 2024, we issued 8,736,538 shares of common stock as commitment shares to Twn Brooks Inc. with a fair market value of $.0125 per share for an aggregate price of $109,207.

 

On March 27, 2024, our subsidiary QIND entered into a definitive Stock Purchase Agreement (the “Stock Purchase Agreement”) with the shareholders of Al Shola Al Modea Gas Distribution LLC (“ASG” or “Al Shola Gas”) to acquire a 51% interest in ASG. The Closing of the transaction took place when both parties signed the definitive Stock Purchase Agreement. Al Shola Gas is an Engineering and Distribution Company in the liquefied petroleum gas (“LPG”) Industry in the United Arab Emirates and was established in 1980. The company is one of the region’s leading suppliers and contractors of LPG centralized pipeline systems and is approved by The General Directorate of Civil Defense, Government of Dubai, as a Central Gas Contractor and LPG Supplier.

 

On April 01, 2024, we issued 3,365,882 shares of common stock to TwnBrooks Inc for conversion of a convertible note for an aggregate price of $22,888.

 

On April 02, 2024, we issued 3,365,882 shares of common stock to TwnBrooks Inc for conversion of a convertible note for an aggregate price of $22,888.

 

On April 03, 2024, we issued 16,000,000 shares of common stock to Kevin Van Hoesen for a stock purchase agreement for an aggregate price of $100,000.

 

On April 11, 2024, John-Paul Backwell converted 200,000 shares of Preference F Stock into 20,000,000 shares of common stock.

 

On April 11, 2024, Daniel Link converted 75,000 shares of Preference F stock into 7,500,000 shares of common stock.

 

On April 15, 2024, we issued 4,000,000 shares of common stock as commitment shares to Twn Brooks Inc. with a fair market value of $.0108 per share for an aggregate price of $43,200 pursuant to the issuance of a convertible promissory note dated April 15, 2024, amounting to $55,000.00

 

On May 6, 2024, we issued 18,000,000 shares of common stock as compensation to RB Capital Partners LLC for the final conversion of a convertible note for an aggregate price of $72,000

 

On May 8, 2024, Alexander Kolyakin converted 504,000 shares of Preference B stock into 50,400,000 shares of common stock.

 

On May 15, 2024, we issued 72,000,000 shares of common stock as compensation to RB Capital Partners LLC for the partial conversion of a convertible note for an aggregate price of $288,000

 

On May 21, 2024, we issued 2,000,000 shares of common stock as commitment shares to TwnBrooks Inc, with a fair market value of $.0086 per share for an aggregate price of $17,200.00 pursuant to the issuance of a convertible promissory note dated May 20, 2024, amounting to $27,500.00

 

On 14 June 2024, we issued 11,385,800 shares of common stock as compensation to 1800 Diagonal Lending LLC for the conversion of a convertible note for an aggregate price of $59,946.24

 

F-21

 

 

NOTE 9: NET LOSS PER SHARE

 

Particulars  June 30,
2024
   June 30,
2023
 
Basic EPS        
Numerator        
Net income / (loss)   (2,725,402)   (4,655,215)
Net Income attributable to common stockholders  $(2,725,402)  $(4,655,215)
Denominator          
Weighted average shares outstanding   1,959,529,013    1,444,380,699 
Number of shares used for basic EPS computation   1,959,529,013    1,444,380,699 
Basic EPS  $(0.00)  $(0.00)
           
Diluted EPS          
Numerator          
Net income / (loss)   (2,725,402)   (4,655,215)
Net Income attributable to common stockholders  $(2,725,402)  $(4,655,215)
Denominator          
Number of shares used for basic EPS computation   2,107,852,860    1,379,080,699 
Conversion of Class A preferred stock to common stock   30,000,000    30,000,000 
Conversion of Class B preferred stock to common stock   356,000,000    340,000,000 
Conversion of Class C preferred stock to common stock   0    0 
Conversion of Class D preferred stock to common stock   30,370,500,000    30,370,500,000 
Conversion of Class E preferred stock to common stock   3,172,175    3,172,175 
Conversion of Class F preferred stock to common stock   145,575,000    166,825,000 
Number of shares used for diluted EPS computation   33,013,100,035    32,289,577,874 
Diluted EPS  $(0.00)  $(0.00)

 

F-22

 

 

NOTE 10: RELATED PARTY TRANSACTIONS

 

The transactions described under the heading “Executive Compensation,” there have not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a participant in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.

 

On April 1, 2024, the Agreement with Quality International was canceled by the Board of Directors of Quality Industrial Corp. QIND restated its financial statements as of December 31, 2022, which were previously reported on the Original Filing and subsequent amendments. Quality International is no longer considered a related party. The following items reflect the restatements: 

 

As of June 30, 2024, and December 31, 2023, the Company had amounts due to Quality Industrial Corp. (“QIND”), a subsidiary of the Company, of $1,836,396 and $333,133, 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 ILUS 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.

 

On December 5, 2022, we issued 35,000 preferred Class F shares to Krishnan Krishnamoorthy as staff compensation for an aggregate price of $273,700.

 

On December 5, 2022, we issued 25,000 preferred Class F shares to Carsten Kjems Falk as staff compensation for an aggregate price of $195,500.

  

On December 5, 2022, we issued 75,000 preferred class F shares to Daniel Link as staff compensation for an aggregate price of $586,500. Daniel Link and Nicolas Link are siblings. Daniel Link was employed in Firebug UK from 2014 until February 28, 2022, thereafter he was employed in Replay Solutions which was incorporated by ILUS on March 1, 2022.

  

On December 5, 2022, we issued 250,000 shares of preferred class F to Nicolas Link as staff compensation for an aggregate price of $1,955,000.

 

On December 08, 2022, we canceled 10,000,000 shares of common stock held by Louise Bennett.

 

On December 08, 2022, we canceled 1,300,000 shares of preferred class F held by Louise Bennett.

 

On December 08, 2022, we canceled 800,000 shares of preferred class F held by John-Paul Backwell.

 

On April 12, 2023, 100,000 Preferred F shares were issued to John-Paul Backwell as staff compensation. with a fair market value of $429,000.

 

On May 4, 2023, QIND issued to Nicolas Link 2,750,000 shares of our common stock with a grant-date and fair market value of the award as of June 1, 2022, at $0.0721 pursuant to his employee contract.

 

On May 4, 2023, QIND issued to John-Paul Backwell 2,250,000 shares of our common stock with a grant-date and fair market value of the award as of June 1, 2022, at $0.0721 pursuant to his employee contract.

 

On May 4, 2023, QIND issued to Carsten Kjems Falk 2,250,000 shares of our common stock with a grant date and fair market value of the award as of June 1, 2022, at $0.0721 pursuant to his employee contract.

 

On May 4, 2023, QIND issued to Krishnan Krishnamoorthy 2,250,000 shares of our common stock with a grant date and fair market value of the award as of June 1, 2022, at $0.0721 pursuant to his employee contract.

 

F-23

 

 

On May 4, 2023, QIND issued to Louise Bennett 500,000 shares of our common stock with a grant-date and fair market value of the award as of June 1, 2022, at $0.0721 pursuant to her employee contract.

 

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

 

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

 

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

 

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

 

On April 3, 2024, we issued 30,000 shares of Series B stock in our subsidiary Samsara Luggage Inc. to John-Paul Backwell pursuant to his employment agreement dated January 5, 2023, with a fair market value of $900,000.

 

On April 3, 2024, we issued 10,000 shares of Series B stock to Daniel Link pursuant to a consultancy agreement dated January 5, 2023, with a fair market value of $300,000

 

On May 14, 2024, QIND issued to John-Paul Backwell 500,000 shares of our common stock, pursuant to his employee contract, with a grant-date and fair market value of $0.07 per share and $35,000 in total.

 

NOTE 11: CONSOLIDATION BASIS

 

Following companies are consolidating basis of Mergers & Acquisitions as of June 30, 2024:

 

1)ILUS International US

 

2)ILUS International UK Ltd.

 

4)Firebug Mechanical Equipment LLC.

 

5)Bull Head Products Inc.

 

6)Georgia Fire & Rescue

 

7)Bright Concept and protection System LLC

 

8)Quality Industrial Corp.

 

9)Al Shola Al Modea Safety and Security LLC

 

10)Al Shola Al Modea Gas and Distribution LLC

 

11)Samsara Luggage Inc.

 

F-24

 

 

NOTE 12: LEGAL PROCEEDINGS

 

From time to time, we may become party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. Aside from the below, we are not currently a party, as plaintiff or defendant, to any legal proceedings that we believe to be material or which, individually or in the aggregate, would be expected to have a material effect on our business, financial condition or results of operation if determined adversely to us. 

 

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. On May 28, 2024, Lee Larson Elmore (Elmore), Ilustrato Pictures International, Inc. (“ILUS”) Nicholas Link (Link), and FB Technologies Global Inc. (collectively the parties) have agreed to resolve all claims existing between themselves. In exchange for the satisfaction of the disputed promissory note (note) and release of all claims between these parties, ILUS shall:

 

  1. Convert the remainder of the note to 15 million shares of ILUS which will be issued to Elmore. These shares shall be subject to a 10% leak out based upon average daily volume; and
     
  2. Pay, or cause to be paid, to Elmore the total of $75,000 in 5 equal installments with the first installment on June 17, 2024, and the remaining payments being paid monthly on the following dates: July 17, 2024; August 17, 2024; September 17, 2024; and October 17, 2024. As security for these payments, ILUS will issue to Elmore 15 million restricted shares of ILUS to be released pro rata as payments are made. If there is a default in any portion of the payment of the $75,000 the portion of the restricted shares which have not been released pro rata may be piggy backed on any registration efforts made by ILUS.

 

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 provisional settlement on September 6, 2023, and final details are in negotiation.

 

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. On June 5, 2023, we received a service of process by the Superior Court of California, County of San Diego, with a hearing rescheduled for March 8, 2024. On August 22, 2023, the company received information that Black Ice Advisors withdrew their prior demand for shares with a new motion seeking a monetary judgment in Black Ice’s for $3.772 million for the historic note with a principal amount of $4,000. At a hearing on November 3, 2023, the Court adopted its tentative ruling as the final ruling and denied the motion for summary judgment from Black Ice Advisors LLC. The company is currently trying to conclude a settlement agreement. A hearing date set for September 2024 if a settlement is unable to be negotiated.

  

We cannot predict whether the action against Steve Nicol and Black Ice Advisors is likely to result in any material recovery 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 are based on 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.

 

F-25

 

 

NOTE 13: GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Currently, the Company has incurred operating losses, and as of December 31, 2023, the Company also had a working capital deficit and an accumulated deficit. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

Management also believes the Company needs to raise additional capital for working capital purposes. There is no assurance that such financing will be available in the future. The conditions described above raise substantial doubt about our ability to continue as a going concern. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going Ilustrato Pictures International Inc. recorded all revenue generated from selected customers on a credit basis. At the end of the year, accounts receivable for the previous year and the current year have not been collected. The management has represented that they will collect the cash for all outstanding account receivables due from the previous years and the current year.

 

NOTE 14: SUBSEQUENT EVENTS

 

On July 1, 2024, the company ILUS entered into a Convertible Note with a principal amount of $27,500 to Twn Brooks Inc. The note is convertible into common stock at the rate 35% below the average past 10-day share price. and bear 9% interest per annum. The note matures on January 1, 2025

 

On July 1, 2024, the company ILUS entered into a Convertible Note with a principal amount of $27,500 to Twn Brooks Inc. The note is convertible into common stock at a rate 35% below the average past 10-day share price. and bear 9% interest per annum. The note matures on January 1, 2025

 

On July 01, 2024, we issued 3,250,000 shares of common stock as commitment shares to Twn Brooks Inc. with a fair market value of $.0047 per share for an aggregate price of $15,275 pursuant to the issuance of a convertible promissory note dated April 15, 2024, amounting to $55,000.00.

 

On July 01, 2024, we issued 3,250,000 shares of common stock as commitment shares to Twn Brooks Inc. with a fair market value of $.0047 per share for an aggregate price of $15,275 pursuant to the issuance of a convertible promissory note dated April 15, 2024, amounting to $55,000.00.

 

On July 2, 2024, the company ILUS entered into a Convertible Note with a principal amount of $200,000 to RB Capital Partners Inc., which shall be convertible into shares of common stock of the Company at the rate of $0.10 per share. and bear 7% interest per annum. The note matures on July 2, 2026.

 

On July 8, 2024, we issued 15,000,000 shares of common stock to Larson Elmore pursuant to the Settlement Agreement.

 

On the 10th of July, we issued 200,000 Pref F shares as compensation to John-Paul Backwell.

 

On July 11, 2024, we issued 100,000,000 shares of common stock as compensation to RB Capital Partners LLC for the partial conversion of a convertible note for an aggregate price of $200,000

 

On August 13, 2024, the company ILUS entered into a Convertible Note with a principal amount of $65,000 to RB Capital Partners Inc., which shall be convertible into shares of common stock of the Company at the rate of $0.10 per share. and bear 7% interest per annum. The note matures on August 13, 2026.

 

On July 31, 2024, we issued 5,986,979 shares of common stock to Twn Brooks Inc for conversion of a convertible note for an aggregate price of $28,737.50

 

On August 05, 2024, we issued 5,852,564 shares of common stock to Twn Brooks Inc for conversion of a convertible note for an aggregate price of $28,531.25

 

F-26

 

 

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 that 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, incorporating acquisitions, changes in the supply chain for raw materials, effects of Covid and wars, including the Ukraine war, 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.

 

General 

 

The following is a discussion by management of its view of the Company’s business, financial condition, and corporate performance for the past year. The purpose of this information is to give management’s recap of the past year, and to give an understanding of management’s current outlook for the near future. This section is meant to be read in conjunction with the Financial Statements of this Quarterly Report on Form 10-Q.

 

Overview

 

ILUS is a corporation based in Nevada with a primary focus on serving the public safety, industrial, and renewable energy sectors. The company consists of two subsidiaries: Emergency Response Technologies (ERT) and Quality Industrial Corp. (QIND). ERT’s technology aims to protect communities, assets, and frontline personnel by acquiring the latest technology and solutions for the emergency response industry, which includes emergency medical services, fire and rescue services, law enforcement, and emergency management. QIND is an industrial company focused on the oil and gas as well as the utilities sector.

 

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 for our product 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.

 

2

 

 

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 improvement initiatives. The benefits of these integration efforts may not positively impact our financial results in the short term but have 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

 

On March 27, 2024, the company’s subsidiary QIND, entered into a definitive Stock Purchase Agreement with the shareholders of Al Shola Al Modea Gas Distribution LLC (“ASG” or “Al Shola Gas”) to acquire a 51% interest in ASG. The Closing of the transaction took place when both parties signed the definitive Share Purchase Agreement. Al Shola Gas is an Engineering and Distribution Company in the LPG Industry in the United Arab Emirates and was established in 1980. The company is one of the region’s leading suppliers and contractors of LPG centralized pipeline systems and is approved by The General Directorate of Civil Defense, Government of Dubai, as a Central Gas Contractor and LPG Supplier. Al Shola Gas has been consolidated into the financials for the quarter ended March 31, 2024.

 

On April 1, 2024, after several failed effort negotiations to restructure the deal and obtain information from the selling shareholders of Quality International, the Purchase Agreement with Quality International was terminated by Quality International and subsequently, the Board of Directors of QIND and ILUS approved the cancellation of the agreement with Quality International Co Ltd FZC signed on January 18, 2023, and amended on July 27, 2023. The company is in the process of unwinding the transaction, with management aiming to recover the investment or parts of it. However, if recovery proves unattainable, the investment may need to be written off in the future.

 

Planned Developments

 

ILUS continues to streamline its operations and align its core competencies with the evolving market demands. The Company is taking strategic steps to expand its portfolio of operating companies and therefore plans to acquire additional Emergency Response and Industrial companies. To support its expansion, the company plans to hire additional personnel in finance and legal. Our top priorities include supporting the expansion of our Emergency Response and Industrial subsidiaries. We intend to complete the Reverse Mergers of SAML and QIND (our two subsidiaries) with National Exchange-listed companies in the second half of 2024. Furthermore, we intend to issue an equity dividend in the form of SAML shares to ILUS shareholders following our sale of Emergency Response Technologies assets to SAML.

 

3

 

 

Results of Operation for the Three and Six Months Ended June 30, 2024, and 2023

 

Revenues

 

We earned $5,345,259 in revenue for the six months ended June 30, 2024, compared with a revenue of $3,595,851 in revenue for the six months ended June 30, 2023.

 

We earned $4,245,791 in revenue for the three months ended June 30, 2024, compared with a revenue of $1,943,690 in revenue for the three months ended June 30, 2023. Our increase in revenue were mainly as a result of acquiring Al Shola Gas in our industrial and manufacturing division.

 

Operating Expenses 

 

Operating expenses increased from $4,159,976 for the six months ended June 30, 2023, to $4,651,727 for the six months ended June 30, 2024. For three months ended June 30, 2023, we had operating expenses of 2,907,943 and for the same period in 2024 were 1,956,653. Our increase in operating expenses for the six months ended June 30, 2024, were mainly as a result of acquiring Al Shola Gas, and administrative and operating costs associated with the business activities of our subsidiaries QIND and SAML.

 

We anticipate that our operating expenses will increase as QIND and SAML undertake their expansion plans associated with all operating businesses.

 

Non-Operating Expenses

 

We had other non-operating expenses of $438,694 for the six months ended June 30, 2024, as compared $1,542,509 in other expenses for the same period ended 2023. We had other non-operating expenses of $255,669 for the three months ended June 30, 2024, as compared with $1,116,537 in other expenses for the same period ended 2023. The decrease in non-operating expenses was mainly the result of an exchange note with RB Capital which decreased the Interest on Convertible notes.

 

Non-Operating Income

 

We had other non-operating income of $506,609 for the six months ended June 30, 2024, as compared $4,703 for the same period ended 2023. We had other non-operating income of $107,050 for the three months ended June 30, 2024, as compared $1,164 for the same period ended 2023, Our other income YTD 2024 was a result of the reversal of interest payments on the loan agreements with Mahavir and Artelliq which have been unwound with the cancellation of the agreement with Quality International.

 

Net Income/Net Loss

 

We incurred Net loss of $2,725,402 for the six months ended June 30, 2024, compared to a net loss of $4,655,215 for the six months ended June 30, 2023. We incurred a Net loss of $548,021 for the three months ended June 30, 2024, compared to a net loss of $3,454,630 for the three months ended June 30, 2023. The decrease in Net loss YTD ended June 30, 2024, is a result of Al Shola Gas’ reported profit for the quarter and a reduction in operating expenses along with other income.

 

Divisional Income Statement

 

The Company is organized into two divisions based on the similarity of products, customers served, common use of facilities, and economic characteristics. The Company’s segments are as follows:

 

1.Emergency Response

 

2.Industrial & Manufacturing

 

4

 

 

intersegment transactions have been eliminated in consolidation.

 

   For the Six Months Ended
June 30,
 
   2024   2023 
Emergency & Response Division        
Revenue  $2,028,053    1,099,000 
Cost Of Goods Sold   1,399,025    779,000 
Gross Profit   629,028    320,000 
Total Operating Expenses   3,740,548    1,234,000 
Operating Loss   (3,111,520)   (914,000)
Net Loss  $(3,305,313)  $(993,000)

 

Our revenue increased to $2,028,053 for the six months ended June 30, 2024, from $1,099,000 in 2023, constituting an 85% increase YTD. Gross profit percentage increased to 31% for the six months ended June 30, 2024, from 28.6% in 2023. The focus for the quarter has been to drive higher margin orders and hereby increase our Gross Profit.

 

Operating expenses increased to $3,740,548 for the six months ended June 30, 2024, $1,234,000 in 2023, primarily due to optimizing product development, marketing, and employee-related costs.

 

For the coming period 2024, the Company will continue to allocate financial, technical and sales resources for recently acquired subsidiaries to positively impact their financial results through increased sales orders and efficiency. Allocated personnel will primarily focus on accelerating sales and marketing efforts, product development, international market expansion, optimizing of supply chain and production processes, overall increased profitability while continuing with the integration and optimization of current operating companies. With the group expansion and growth, we also intend to hire executives and personnel with specific industry experience and fields of expertise to streamline financial reporting, compliance, and Investor Relations and to improve our corporate governance.

  

   For the Six Months Ended 
   June 30,
2024
   June 30,
2023
 
Industrial & Manufacturing Division        
Revenue   3,317,206     
           
Cost of revenues   2,068,708     
           
Gross profit   1,248,498     
           
Total Operating Expenses   911,179    900,065 
Profit/ loss from Operations   337,319    (900,065)
Non-Operating expenses   165,851    766,430 
Non-Operating Income   427,554     
Net loss/ profit   599,022   $(1,666,495)

 

5

 

 

For our Industrial and Manufacturing Division, the Operating Revenue increased to $3,317,206 for the period ended June 30, 2024, compared to $0 for the period ended June 30, 2023. The increase in revenue, was the result of the consolidation of Al Shola Gas For our Industrial and Manufacturing Division. The Operating expenses increased to $911,179 for the period ended June 30, 2024, compared to $900,065 for the period ended June 30, 2023. Our increase in operating expenses in 2024, was mainly the result of consolidation of Al Shola Gas in our subsidiary QIND. Our Subsidiary QIND acquired a 51% interest in Al Shola Gas on March 23, 2024, and will be consolidating the profitable operating company into the financials from Q2 2024 along reduction of some expenses.

 

We incurred Net Income of $599,022 for the six months ended June 30, 2024, compared to a net loss of $1,666,495 for the six months ended June 30, 2023. The increase in Net Profit for the quarter that ended June 30, 2024, is a result of Net Income from our acquisition of Al Shola Gas and the reversal of interest payments on the loan agreements with Mahavir and Artelliq.

 

Liquidity and Capital Resources

 

As of June 30, 2024, we had total current assets of $20,761,402 and total current liabilities of $18,414,202. We had a positive working capital of $2,347,200 as of June 30, 2024. This compares with a working capital of $11,384,674 as of December 31, 2023.

 

Operating activities generated $7,454,512 in cash for the six months ended June 30, 2024, as compared with $75,501,557 provided in cash for the six months ended June 30, 2023. Our positive operating cash flow YTD 2024 was mainly the result of six months of core business activities being higher and the merger of ASG operating expenses.

 

Investing activities used $9,953,208 in cash for the six months ended June 30, 2024, as compared with $44,789,915 provided in cash for the six months ended June 30, 2023.

 

Financing activities provided $2,587,877 in cash for the six months ended June 30, 2024, as compared with $30,761,591 for the same period ended 2023. Our financing cash flow YTD 2024 was mainly the result of Finance costs, proceeds from the issuance of convertible notes and changes in retained earnings.

 

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 in the short term but has historically been the case in the medium to long term.

 

6

 

 

Critical Accounting Policies

 

In December 2001, the SEC requested that all registrants list their most “critical accounting policies” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is 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 inherently uncertain matters. Our critical accounting policies are disclosed in the Notes 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 June 30, 2024, 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 March 31, 2024. 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 the 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

 

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. ASU 2017-04 also clarifies that an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The new standard is effective for fiscal years beginning after December 15, 2019, for both interim and annual reporting periods. The Company is currently assessing the potential impact of the adoption of ASU 2017-04 on its consolidated financial statements.

 

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 any other new accounting pronouncements have been issued that might have a material impact on its financial position or results of operations.

 

7

 

 

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 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 quarter ended March 31, 2024, that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.

 

8

 

 

Part II: Other Information

 

Item 1 - Legal Proceedings

 

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation other than those mentioned in Note 12. There are no proceedings in which any of our directors, officers, or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interests.

 

Item 1A. Risk Factors

 

There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

 

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

 

None.

 

Item 3. Defaults upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

None

 

Item 5. Other Information

  

None

 

9

 

 

Item 6. Exhibits

 

Exhibit
Number
  Description of Exhibit
     
2.1     Share Purchase Agreement, dated January 18, 2023 *
2.2     Share Purchase Agreement, dated January 27, 2023 *
2.3     Stock Purchase Agreement Al Shola Gas LLC., dated March 27, 2024 *
3.1     Certificate of Amendment, dated April 11, 2024 *
4.1      Convertible Promissory Note, dated January 26, 2023, with Jefferson Street Capital LLC *
4.2      Convertible Stock Purchase Warrant, dated January 26, 2023, with Jefferson Street Capital LLC *
4.3      Amended Convertible Stock Purchase Warrant, dated March 8, 2023, with AJB Capital Investments, LLC *
4.4      Amended Convertible Promissory Note, dated March 8, 2023, with AJB Capital Investments, LLC *
4.5     Assignment Agreement, dated January 3, 2024, by and among YAII, Ltd and ILUS *
4.6     Convertible Debenture, reissued January 5, 2024, in Samsara Luggage Inc.*
4.7     Stock Purchase Agreement, dated January 12, 2024, with Kyle Edward Comerford *
4.8     Convertible Promissory Note, dated January 17, 2024, with 1800 Diagonal Lending LLC *
4.9     Convertible Note, dated January 15, 2024, Twn Brooks Inc.*
4.10     Convertible Note, dated January 23, 2024, Twn Brooks Inc.*
4.11     Convertible Promissory Note, dated January 31, 2024, with RB Capital Partners Inc.*
4.12     Assignment Agreement Twn Brooks Inc., dated March 11, 2024, with Twn Brooks Inc. *
4.13     Assignment Agreement Twn Brooks Inc., dated March 11, 2024, with Twn Brooks Inc. *
4.14     Stock Purchase Agreement dated March 18, 2024, with Kevin Van Hoesen *
4.15     Consolidated Convertible Promissory Note, dated April 1, 2024, with RB Capital Partners Inc.*
4.16     Convertible Note, dated April 15, 2024, Twn Brooks Inc.*
4.17   Convertible Promissory Note, dated May 6, 2024, with RB Capital Partners Inc.*
4.18   Cancellation of debt, dated May 6, 2024, with RB Capital Partners Inc.*
4.19   Amendment Convertible Promissory Note, dated May 7, 2024, with RB Capital Partners Inc.*
4.20   Convertible Promissory Note, dated January 17, 2024, with 1800 Diagonal Lending LLC *
4.21   Convertible Note, dated May 20, 2024, Twn Brooks Inc.*
4.22   Convertible Note, dated May 16, 2024, with RB Capital Partners Inc.**
4.23   Convertible Note, dated June 12, 2024, with 1800 Diagonal Lending LLC **
4.24   Convertible Note, dated June 20, 2024, with 1800 Diagonal Lending LLC **
4.25   Convertible Note, dated July 1, 2024, with TwnBrooks Inc. **
4.26   Convertible Note, dated July 1, 2024, with TwnBrooks Inc. **
4.27   Convertible Note, dated July 2, 2024, with RB Capital Partners Inc. **
4.28   Convertible Note, dated August 13, 2024, with RB Capital Partners Inc. **
31.1     Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 **
31.2     Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 **
32.1     Certification of principal executive officer and principal financial and accounting officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended **
101.INS     Inline XBRL Instance Document.
101.SCH     Inline XBRL Taxonomy Extension Schema Document.
101.CAL     Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF     Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB     Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE     Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104     Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101

 

*Provided Previously

**Provided herewith

 

10

 

 

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: August 26, 2024  
     
By: /s/ Nicolas Link  
  Nicolas Link  
Title:  Chief Executive Officer
(principal executive)
 

 

Ilustrato Pictures International Inc.  
   
Date: August 26, 2024  
     
By: /s/ Krishnan Krishnamoorthy  
  Krishnan Krishnamoorthy  
Title:  Chief Financial Officer
(principal accounting and financial officer)
 

 

 

11

 

 

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Exhibit 4.22

 

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

ILUSTRATO PICTURES INTERNATIONAL, INC. CONVERTIBLE PROMISSORY NOTE

 

Principal Amount: $150,000.00 USD May 16, 2024

 

WHEREAS on May 16, 2024, RB Capital Partners, Inc., with its offices at 2856 Torrey Pines Road, La Jolla, California 92037 (the “Holder”) loaned funds totaling, $150,000.00 to Ilustrato Pictures International, Inc., a Nevada corporation with its office at 26 Broadway; Suite 934; New York, NY 10004 (the “Company”). Payment for the loan was made directly to the Company in the form of a Wire Transfer.

 

WHEREAS the Company and Holder further agreed that such services provided by the Holder to the Company would be evidenced in a convertible note, which convertible note would be convertible into shares of common stock of the Company at the rate of $0.10 in accordance with Section 3 below;

 

NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the mutual premises and the mutual covenants and agreements contained herein, the parties covenant and agree each with the other as follows:

 

1.Principal and Interest.

 

1.1   The Company, for value received, hereby promises to pay to the order of the Holder the sum of One Hundred Fifty Thousand Dollars ($150,000.00), which amount represents the amount owed to Holder as of May 16, 2024.

 

1.2  This Convertible Promissory Note (the “Note”) shall bear seven percent (7%) interest per annum. The Note is for a period of (24) months and cannot be converted until (6) months from the date first written above has passed.

 

1.3  Upon payment in full of the principal, this Note shall be surrendered to the Company for cancellation.

 

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1.4  The principal under this Note shall be payable at the principal office of the Company and shall be forwarded to the address of the Holder hereof as such Holder shall from time to time designate.

 

2.   Attorney’s Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal payable hereunder, reasonable attorneys’ fees and costs incurred by the Holder.

 

3.Conversion.

 

3.1  Voluntary Conversion. The Holder shall have the right, exercisable in whole or in part, to convert the outstanding principal into a number of fully paid and non-assessable whole shares of the Company’s $0.001 Par Value common stock (“Common Stock”) determined in accordance with Section 3.2 below.

 

3.2  Shares Issuable. The number of whole shares of Common Stock into which this Note may be voluntarily converted (the “Conversion Shares”) shall be determined by dividing the aggregate principal amount borrowed hereunder by $0.10 (the “Note Conversion Price”); provided, however, that, in no event, shall Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common stock beneficially owned by Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of this Note or the unexercised or unconverted portion of any other security of Maker subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of common stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in the beneficial ownership by Holder and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934 and Regulation 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the Note Conversion Price. The Term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus, (2) at the Company’s option, accrued and unpaid interest, if any, on such principal amount at the interest rate provided in this Note to the conversion date, provided; however, that the Company shall have the right to pay any or all interest in cash.

 

3.3    Notice and Conversion Procedures. After receipt of demand for repayment, the Company agrees to give the Holder notice at least five (5) business days prior to the time that the Company repays this Note. If the Holder elects to convert this Note, the Holder shall provide the Company with a written notice of conversion setting forth the amount to be converted. The notice must be delivered to the Company together with this Note. Within twenty (20) business days of receipt of such notice, the Company shall deliver to the Holder certificate(s) for the Common Stock issuable upon such conversion and, if the entire principal amount was not so converted, a new note representing such balance.

 

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3.4Other Conversion Provisions.

 

(a) Adjustment of Note Conversion Price. In the event the Company shall in any manner, subsequent to the issuance of this Note, approve a reclassification involving a reverse stock split and subdivision of the Company’s issued and outstanding shares of Common Stock, the Note Conversion Price shall forthwith be unaffected. In the event the Company shall in any manner, subsequent to the issuance of this Note, approve a reclassification involving a forward stock split and subdivision of the Company’s issued and outstanding shares of Common Stock, the Note Conversion Price shall forthwith be unaffected.

 

(b) Common Stock Defined. Whenever reference is made in this Note to the shares of Common Stock, the term “Common Stock” shall mean the Common Stock of the Company authorized as of the date hereof, and any other class of stock ranking on a parity with such Common Stock. Shares issuable upon conversion hereof shall include only shares of Common Stock of the Company.

 

3.5 No Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Holder upon the conversion of this Note, the Company shall pay to the Holder the amount of outstanding principal hereunder that is not so converted.

 

4. Representations, Warranties and Covenants of the Company. The Company represents, warrants and covenants with the Holder as follows:

 

(a) Authorization; Enforceability. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Note and the performance of all obligations of the Company hereunder has been taken, and this Note constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

 

(b)  Governmental Consents. No consent, approval, qualification, order or authorization of, or filing with, any local, state or federal governmental authority is required on the part of the Company in connection with the Company’s valid execution, delivery or performance of this Note except any notices required to be filed with the Securities and Exchange Commission under Regulation D of the Securities Act of 1933, as amended (the “1933 Act”), or such filings as may be required under applicable state securities laws, which, if applicable, will be timely filed within the applicable periods therefor.

 

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(c) No Violation. The execution, delivery and performance by the Company of this Note and the consummation of the transactions contemplated hereby will not result in a violation of its Certificate of Incorporation or Bylaws, in any material respect of any provision of any mortgage, agreement, instrument or contract to which it is a party or by which it is bound or, to the best of its knowledge, of any federal or state judgment, order, writ, decree, statute, rule or regulation applicable to the Company or be in material conflict with or constitute, with or without the passage of time or giving of notice, either a material default under any such provision or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations, or any of its assets or properties.

 

(d)  Reservation of Shares. The Company shall deliver within five days of execution of this Note, a fully-executed and complete irrevocable letter of instruction or similar instrument to the transfer agent of Company, in a form acceptable to Holder, with respect to the issuance of shares of Common Stock issuable pursuant to conversion of this Note (the “Letter of Instruction”). The shares of Common Stock issuable upon conversion of this Note shall not bear any restrictive legends. On and after the date of this Note, Company shall timely report all necessary public information required by Rule 144(c)(2) of the 1933 Act for Holder to resell the shares of Common Stock issued to Holder under this Note in reliance upon the public information requirements set forth in Rule 144(c)(2). In the Letter of Instruction, the Company shall instruct the transfer agent to place 5,000,000 shares of Common Stock on reserve for eventual conversion of this Note (the “Reserved Shares”). The Reserved Shares shall remain in the created reserve with the transfer agent until Holder and an authorized officer of Company provide joint written instructions to the transfer agent that the Reserved Shares, or any part of the Reserved Shares, shall be taken out of the reserve and shall no longer be subject to the terms of the Letter of Instruction.

 

5.  Representations and Covenants of the Holder. The Company has entered into this Note in reliance upon the following representations and covenants of the Holder:

 

(a)  Investment Purpose. This Note and the Common Stock issuable upon conversion of the Note are acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.

 

(b)  Private Issue. The Holder understands (i) that this Note and the Common Stock issuable upon conversion of this Note are not registered under the 1933 Act or qualified under applicable state securities laws, and (ii) that the Company is relying on an exemption from registration predicated on the representations set forth in this Section 8.

 

(c)   Financial Risk. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment.

 

(d)  Risk of No Registration. The Holder understands that if the Company does not register with the Securities and Exchange Commission pursuant to Section 12 of the Securities Exchange Act of 1934 (the “1934 Act”), or file reports pursuant to Section 15(d) of the 1934 Act, or if a registration statement covering the securities under the 1933 Act is not in effect when it desires to sell the Common Stock issuable upon conversion of the Note, it may be required to hold such securities for an indefinite period. The Holder also understands that any sale of the Note or the Common Stock which might be made by it in reliance upon Rule 144 under the 1933 Act may be made only in accordance with the terms and conditions of that Rule.

 

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6. Assignment. Subject to the restrictions on transfer described in Section 8 below, the rights and obligations of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

 

7. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.

 

8. Transfer of This Note or Securities Issuable on Conversion Hereof. With respect to any offer, sale or other disposition of this Note or securities into which this Note may be converted, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof. Unless the Company reasonably determines that such transfer would violate applicable securities laws, or that such transfer would adversely affect the Company’s ability to account for future transactions to which it is a party as a pooling of interests, and notifies the Holder thereof within five (5) business days after receiving notice of the transfer, the Holder may effect such transfer. The Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the 1933 Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the 1933 Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.

 

9.  Notices. Any notice, other communication or payment required or permitted hereunder shall be in writing and shall be deemed to have been given upon delivery if personally delivered or three (3) business days after deposit if deposited in the United States mail for mailing by certified mail, postage prepaid. Each of the above addressees may change its address for purposes of this Section by giving to the other addressee notice of such new address in conformance with this Section.

 

10.  Governing Law. This Note is being delivered in and shall be construed in accordance with the laws of the State of California, without regard to the conflicts of law provisions thereof.

 

11.  Heading; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except as otherwise indicated, all references herein to Sections refer to Sections hereof.

 

12. Waiver by the Company. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

 

13.  Delays. No delay by the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right.

 

14.  Severability. If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision was so excluded and shall be enforceable in accordance with its terms.

 

15.  No Impairment. The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Note and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Note against impairment.

 

[SIGNATURE PAGE TO FOLLOW]

 

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IN WITNESS WHEREOF, Ilustrato Pictures International, Inc. has caused this Note to be executed in its corporate name and this Note to be dated, issued and delivered, all on the date first above written.

 

  ILUSTRATO PICTURES INTERNATIONAL, INC.
     
Date: May 16, 2024 By: /s/ Nicolas Link
  Nicolas Link
  Its: CEO & Director
     
  RB CAPITAL PARTNERS, INC.
     
Date: May 16, 2024 By:  
  Brett Rosen
  Its: Managing Partner

 

 

 

 

 

Exhibit 4.23

 

THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

 

THE ISSUE PRICE OF THIS NOTE IS $91,530.00
THE ORIGINAL ISSUE DISCOUNT IS $10,530.00

 

Principal Amount: $91,530.00 Issue Date: June 12, 2024
Purchase Price: $81,000.00  

 

PROMISSORY NOTE

 

FOR VALUE RECEIVED, ILUSTRATO PICTURES INTERNATIONAL, INC., a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of 1800 DIAGONAL LENDING LLC, a Virginia limited liability company, or registered assigns (the “Holder”) the sum of $91,530.00 together with any interest as set forth herein, on March 15, 2025 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof from the date hereof (the “Issue Date”) as set forth herein. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).

 

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

The following terms shall apply to this Note:

 

ARTICLE I. GENERAL TERMS

 

1.1 Interest. A one-time interest charge of thirteen percent (13%) (the “Interest Rate”) shall be applied on the Issuance Date to the Principal ($91,530.00 * thirteen percent (13%) = $11,898.00). Interest hereunder shall be paid as set forth herein to the Holder or its assignee in whose name this Note is registered on the records of the Company regarding registration and transfers of Notes in cash or, in the Event of Default, at the Option of the Holder, converted into share of Common Stock as set forth herein.

 

 

 

 

1.2 Mandatory Monthly Payments. Accrued, unpaid Interest and outstanding principal, subject to adjustment, shall be paid in nine (9) payments each in the amount of $11,492.00 (a total payback to the Holder of $103,428.00). The first payment shall be due July 15, 2024 with eight (8) subsequent payments on the last day of each month thereafter. The Company shall have a five (5) day grace period with respect to each payment. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. All payments shall be made by bank wire transfer to the Holder’s wire instructions, attached hereto as Exhibit A. For the avoidance of doubt, a missed payment shall be considered an Event of Default.

 

1.3 Security. This Note shall not be secured by any collateral or any assets pledged to the Holder.

 

ARTICLE II. CERTAIN COVENANTS

 

2.1 Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

ARTICLE III. EVENTS OF DEFAULT

 

This Note shall be deemed in default upon the occurrence of one more of the events set forth in this Article III (each, an “Event of Default”). Upon the occurrence of an Event of Default, Holder, prior to exercising its rights hereunder, shall provide to Borrower written notification via both electronic mail (with confirmation of receipt) and another notification delivery method as set forth in Section 5.2 of this Note that an Event of Default has occurred. After receipt of such notice, Borrower shall have five (5) business days to cure such Default (or such other longer cure period as set forth in this Article III for a particular Event of Default) if such Event of Default is capable of being cured. In the event that an Event of Default is not completely cured during such time period, Holder may exercise his rights hereunder.

 

3.1 Failure to Pay Principal and Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.

 

3.2 Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of ten (10) days.

 

3.3 Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.4 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

 

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3.5 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

 

3.6 Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC (which specifically includes the quotation platforms maintained by the OTC Markets Group) or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the NYSE American Stock Exchange.

 

3.7 Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

3.8 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3.9 Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3.10 Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC at any time after 180 days after the Issuance Date for any date or period until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.11 Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

3.12 Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, and (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes evidencing obligations of the Borrower to the Holder; provided, however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross- defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

 

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Upon the occurrence and during the continuation of any Event of Default, the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to 150% (“Default Percentage”) times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Article IV hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity. Any failure to deliver shares in conversion following a default shall result in a unilateral increase of the Default Percentage to 200%.

 

If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, to convert the balance owed pursuant to the note including the Default Amount into shares of common stock of the Company as set forth herein.

 

ARTICLE IV. CONVERSION RIGHTS

 

4.1 Conversion Right. At any time following an Event of Default, the Holder shall have the right, to convert all or any part of the outstanding and unpaid amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The beneficial ownership limitations on conversion as set forth in the section may NOT be waived by the Holder. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit B(the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 4.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”); however, if the Notice of Conversion is sent after 6:00 p.m., New York, New York time the Conversion Date shall be the next business day. The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 4.4 hereof.

 

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The Holder shall be entitled to deduct $1,500.00 from the conversion amount in each Notice of Conversion to cover Holder’s deposit fees associated with each Notice of Conversion. Any additional expenses incurred by Holder with respect to the Borrower’s transfer agent, for the issuance of the Common Stock into which this Note is convertible into, shall immediately and automatically be added to the balance of the Note at such time as the expenses are incurred by Holder.

 

4.2 Conversion Price. The conversion price (the “Conversion Price”) shall mean 65% multiplied by the lowest Trading Price for the Common Stock during the ten (10) Trading Days prior to the Conversion Date (representing a discount rate of 35%) (subject to equitable adjustments by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). “Trading Price” means, for any security as of any date, the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

 

4.3 Authorized Shares. The Borrower covenants that during the period that the Note is outstanding, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved four times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Note in effect from time to time initially 70,407,692 shares) (the “Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations hereunder. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

 

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under this Note.

 

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4.4 Method of Conversion.

 

(a) Mechanics of Conversion. As set forth in Section 4.1 hereof, at any time following an Event of Default, the balance due pursuant to this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 4.4(b), surrendering this Note at the principal office of the Borrower (upon payment in full of any amounts owed hereunder).

(b) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion.

 

(c) Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 4.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations hereunder, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion.

 

(d) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions set forth herein, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit and Withdrawal at Custodian (“DWAC”) system.

 

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(e) Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline solely due to action and/or inaction of the Borrower, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock (the “Fail to Deliver Fee”); provided; however that the Fail to Deliver Fee shall not be due if the failure is a result of a third party (i.e., transfer agent; and not the result of any failure to pay such transfer agent) despite the best efforts of the Borrower to effect delivery of such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 4.4(e) are justified.

 

4.5 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless: (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 4.5 and who is an Accredited Investor (as defined in the Purchase Agreement).

 

Any restrictive legend on certificates representing shares of Common Stock issuable upon conversion of this Note shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if the Borrower or its transfer agent shall have received an opinion of counsel from Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that (i) a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected; or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act; or otherwise may be sold pursuant to an exemption from registration. In the event that the Company does not reasonably accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to an exemption from registration (such as Rule 144), it will be considered an Event of Default pursuant to this Note.

 

4.6 Effect of Certain Events.

 

(a) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section 4.6(a) unless (a) it first gives, to the extent practicable, ten (10) days prior written notice (but in any event at least five (5) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Note. The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

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(b) Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

 

ARTICLE V. MISCELLANEOUS

 

5.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

5.2 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or electronic mail, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by electronic mail, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

If to the Borrower, to:

 

ILUSTRATO PICTURES INTERNATIONAL, INC.

26 Broadway, Suite 934

New York, NY 10004

Attn: Nicolas Link, Chief Executive Officer

Email: nick.link@firebuggroup.com

 

If to the Holder:

 

1800 DIAGONAL LENDING LLC

1800 Diagonal Road, Suite 623

Alexandria VA 22314

Attn: Curt Kramer, President

Email: ckramer@sixthstreetlending.com

 

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5.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

5.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the Securities and Exchange Commission). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement; and may be assigned by the Holder without the consent of the Borrower.

 

5.5 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

 

5.6 Governing Law. This Note shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the Circuit Court of Fairfax County, Virginia or in the Alexandria Division of the United States District Court for the Eastern District of Virginia. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The Holder shall be entitled to recover from the Borrower its reasonable attorney’s fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note, any agreement or any other document delivered in connection with this Note by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

5.7 Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

 

5.8 Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

 

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IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this on June 12, 2024

 

ILUSTRATO PICTURES INTERNATIONAL, INC.

 

By:  /s/ Nicolas Link  
  Nicolas Link  
  Chief Executive Officer  

 

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EXHIBIT A – WIRE INSTRUCTIONS

 

[to be provided via email]

 

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EXHIBIT B – NOTICE OF CONVERSION

 

The undersigned hereby elects to convert $                                 principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of ILUSTRATO PICTURES INTERNATIONAL, INC., a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of June 12, 2024 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable instructions:

 

The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

 

Name of DTC Prime Broker:

Account Number:

 

The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

 

  Date of conversion:    
  Applicable Conversion Price: $                       
  Number of shares of common stock to be issued pursuant to conversion of the Notes:    
  Amount of Principal Balance due remaining under the Note after this conversion:    
       
  1800 DIAGONAL LENDING LLC    
       
  By:                                                              
  Name: Curt Kramer    
  Title:   President    
  Date:                                           

 

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Exhibit 4.24

 

THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

 

THE ISSUE PRICE OF THIS NOTE IS $63,250.00

THE ORIGINAL ISSUE DISCOUNT IS $8,250.00

 

Principal Amount: $63,250.00 Issue Date: June 20, 2024
Purchase Price: $55,000.00  

 

PROMISSORY NOTE

 

FOR VALUE RECEIVED, ILUSTRATO PICTURES INTERNATIONAL, INC., a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of 1800 DIAGONAL LENDING LLC, a Virginia limited liability company, or registered assigns (the “Holder”) the sum of $63,250.00 together with any interest as set forth herein, on March 30, 2025 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof from the date hereof (the “Issue Date”) as set forth herein. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).

 

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

The following terms shall apply to this Note:

 

ARTICLE I. GENERAL TERMS

 

1.1 Interest. A one-time interest charge of thirteen percent (13%) (the “Interest Rate”) shall be applied on the Issuance Date to the Principal ($63,250.00 * thirteen percent (13%) = $8,222.00). Interest hereunder shall be paid as set forth herein to the Holder or its assignee in whose name this Note is registered on the records of the Company regarding registration and transfers of Notes in cash or, in the Event of Default, at the Option of the Holder, converted into share of Common Stock as set forth herein.

 

 

 

 

1.2 Mandatory Monthly Payments. Accrued, unpaid Interest and outstanding principal, subject to adjustment, shall be paid in nine (9) payments each in the amount of $7,941.34 (a total payback to the Holder of $71,472.00). The first payment shall be due July 30, 2024 with eight (8) subsequent payments on the last day of each month thereafter. The Company shall have a five (5) day grace period with respect to each payment. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. All payments shall be made by bank wire transfer to the Holder’s wire instructions, attached hereto as Exhibit A. For the avoidance of doubt, a missed payment shall be considered an Event of Default.

 

1.3 Security. This Note shall not be secured by any collateral or any assets pledged to the Holder

 

ARTICLE II. CERTAIN COVENANTS

 

2.1 Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

ARTICLE III. EVENTS OF DEFAULT

 

This Note shall be deemed in default upon the occurrence of one more of the events set forth in this Article III (each, an “Event of Default”). Upon the occurrence of an Event of Default, Holder, prior to exercising its rights hereunder, shall provide to Borrower written notification via both electronic mail (with confirmation of receipt) and another notification delivery method as set forth in Section 5.2 of this Note that an Event of Default has occurred. After receipt of such notice, Borrower shall have five (5) business days to cure such Default (or such other longer cure period as set forth in this Article III for a particular Event of Default) if such Event of Default is capable of being cured. In the event that an Event of Default is not completely cured during such time period, Holder may exercise his rights hereunder.

 

3.1 Failure to Pay Principal and Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.

 

3.2 Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of ten (10) days.

 

3.3 Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.4 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

 

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3.5 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

 

3.6 Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC (which specifically includes the quotation platforms maintained by the OTC Markets Group) or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the NYSE American Stock Exchange.

 

3.7 Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

3.8 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3.9 Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3.10 Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC at any time after 180 days after the Issuance Date for any date or period until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.11 Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

3.12 Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, and (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes evidencing obligations of the Borrower to the Holder; provided, however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross- defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

 

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Upon the occurrence and during the continuation of any Event of Default, the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to 150% (“Default Percentage”) times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Article IV hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity. Any failure to deliver shares in conversion following a default shall result in a unilateral increase of the Default Percentage to 200%.

 

If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, to convert the balance owed pursuant to the note including the Default Amount into shares of common stock of the Company as set forth herein.

 

ARTICLE IV. CONVERSION RIGHTS

 

4.1 Conversion Right. At any time following an Event of Default, the Holder shall have the right, to convert all or any part of the outstanding and unpaid amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The beneficial ownership limitations on conversion as set forth in the section may NOT be waived by the Holder. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit B(the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 4.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”); however, if the Notice of Conversion is sent after 6:00 p.m., New York, New York time the Conversion Date shall be the next business day. The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 4.4 hereof.

 

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The Holder shall be entitled to deduct $1,500.00 from the conversion amount in each Notice of Conversion to cover Holder’s deposit fees associated with each Notice of Conversion. Any additional expenses incurred by Holder with respect to the Borrower’s transfer agent, for the issuance of the Common Stock into which this Note is convertible into, shall immediately and automatically be added to the balance of the Note at such time as the expenses are incurred by Holder.

 

4.2 Conversion Price. The conversion price (the “Conversion Price”) shall mean 65% multiplied by the lowest Trading Price for the Common Stock during the ten (10) Trading Days prior to the Conversion Date (representing a discount rate of 35%) (subject to equitable adjustments by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). “Trading Price” means, for any security as of any date, the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

 

4.3 Authorized Shares. The Borrower covenants that during the period that the Note is outstanding, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved four times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Note in effect from time to time initially 62,779,156 shares) (the “Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations hereunder. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

 

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under this Note.

 

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4.4 Method of Conversion.

 

(a) Mechanics of Conversion. As set forth in Section 4.1 hereof, at any time following an Event of Default, the balance due pursuant to this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 4.4(b), surrendering this Note at the principal office of the Borrower (upon payment in full of any amounts owed hereunder).

(b) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion.

 

(c) Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 4.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations hereunder, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion.

 

(d) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions set forth herein, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit and Withdrawal at Custodian (“DWAC”) system.

 

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(e) Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline solely due to action and/or inaction of the Borrower, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock (the “Fail to Deliver Fee”); provided; however that the Fail to Deliver Fee shall not be due if the failure is a result of a third party (i.e., transfer agent; and not the result of any failure to pay such transfer agent) despite the best efforts of the Borrower to effect delivery of such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 4.4(e) are justified.

 

4.5 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless: (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 4.5 and who is an Accredited Investor (as defined in the Purchase Agreement).

 

Any restrictive legend on certificates representing shares of Common Stock issuable upon conversion of this Note shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if the Borrower or its transfer agent shall have received an opinion of counsel from Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that (i) a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected; or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act; or otherwise may be sold pursuant to an exemption from registration. In the event that the Company does not reasonably accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to an exemption from registration (such as Rule 144), it will be considered an Event of Default pursuant to this Note.

 

4.6 Effect of Certain Events.

 

(a) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section 4.6(a) unless (a) it first gives, to the extent practicable, ten (10) days prior written notice (but in any event at least five (5) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Note. The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

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(b) Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

 

ARTICLE V. MISCELLANEOUS

 

5.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

5.2 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or electronic mail, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by electronic mail, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

If to the Borrower, to:

 

ILUSTRATO PICTURES INTERNATIONAL, INC.

26 Broadway, Suite 934

New York, NY 10004

Attn: Nicolas Link, Chief Executive Officer

Email: nick.link@firebuggroup.com

 

If to the Holder:

 

1800 DIAGONAL LENDING LLC

1800 Diagonal Road, Suite 623

Alexandria VA 22314

Attn: Curt Kramer, President

Email: ckramer@sixthstreetlending.com

 

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5.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

5.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the Securities and Exchange Commission). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement; and may be assigned by the Holder without the consent of the Borrower.

 

5.5 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

 

5.6 Governing Law. This Note shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the Circuit Court of Fairfax County, Virginia or in the Alexandria Division of the United States District Court for the Eastern District of Virginia. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The Holder shall be entitled to recover from the Borrower its reasonable attorney’s fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note, any agreement or any other document delivered in connection with this Note by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

5.7 Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

 

5.8 Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

 

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IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this on June 20, 2024

 

ILUSTRATO PICTURES INTERNATIONAL, INC.

 

By:  /s/ Nicolas Link  
  Nicolas Link  
  Chief Executive Officer  

 

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EXHIBIT A – WIRE INSTRUCTIONS

 

[to be provided via email]

 

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EXHIBIT B – NOTICE OF CONVERSION

 

The undersigned hereby elects to convert $                                             principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of ILUSTRATO PICTURES INTERNATIONAL, INC., a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of June 20, 2024 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable instructions:

 

The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

 

Name of DTC Prime Broker:

Account Number:

 

The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

 

  Date of conversion:    
  Applicable Conversion Price: $                       
  Number of shares of common stock to be issued
pursuant to conversion of the Notes:
   
  Amount of Principal Balance due remaining
under the Note after this conversion:
   
       
  1800 DIAGONAL LENDING LLC    
       
  By:                                                              
  Name: Curt Kramer    
  Title:   President    
  Date:                                           

 

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Exhibit 4.25

 

12THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE AFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

ILUSTRATO PICTURES INTERNATIONAL INC.
CONVERTIBLE PROMISSORY NOTE

 

Principal Amount: $27,500.00 USD July 01, 2024
Purchase Price: $25,000.00 USD  

 

WHEREAS on July 01, 2024, Twn Brooks Inc. (the “Holder”) loaned funds totaling, $27,500.00 to Ilustrato Pictures International Inc., a Nevada corporation (the “Company”). Payment for the loan is to be made directly to the company in the form of a Wire Transfer.

 

WHEREAS the Company and Holder further agreed that such loaned funds provided by the Holder to the Company would be evidenced in a convertible note, which convertible note would be convertible into shares of common stock of the Company in accordance with Section 3 below;

 

NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the mutual premises and the mutual covenants and agreements contained herein, the parties covenant and agree each with the other as follows:

 

1.Principal and Interest.

 

1.1The Company, for value received, hereby promises to pay to the order of the Holder the sum of Twenty Seven Thousand, Five Hundred Dollars ($27,500), which amount represents the amount owed to Holder as of July 01, 2024.

 

1.2This Convertible Promissory Note (the “Note”) shall bear nine percent (9%) interest per annum. The Note is for a period of 6 months and cannot be converted until (3) months from the date first written above has passed.

 

1.3This note carries an original issue discount of $2,500.00 (the “OID”) which is included in the principal balance of this note. Thus, the purchase price of this note shall be $25,000 computed as follows: the Principal amount minus the OID.

 

1.4Upon payment in full of the principal, this Note shall be surrendered to the Company for cancellation.

 

 

 

 

1.5The principal under this Note shall be payable at the principal office of the Company and shall be forwarded to the address of the Holder hereof as such Holder shall from time to time designate.

 

2.Attorney’s Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal payable hereunder, reasonable attorneys’ fees and costs incurred by the Holder.

 

3.Conversion.

 

3.1Voluntary Conversion. The Holder shall have the right, exercisable in whole or in part, to convert the outstanding principal into a number of fully paid and non-assessable whole shares of the Company’s $0.001 Par Value common stock (“Common Stock”) determined in accordance with Section 3.2 below.

 

3.2Conversion Price. The conversion price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments by the Borrower relating to the Borrower’s securities, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Variable Conversion Price” shall mean 65% multiplied by the Market Price (as defined herein) (representing a discount rate of 35%). “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

 

3.3Notice and Conversion Procedures. After receipt of demand for repayment, the Company agrees to give the Holder notice at least five (5) business days prior to the time that the Company repays this Note. If the Holder elects to convert this Note, the Holder shall provide the Company with a written notice of conversion setting forth the amount to be converted. The notice must be delivered to the Company together with this Note. Within ten (10) business days of receipt of such notice, the Company shall deliver to the Holder certificate(s) or evidence of electronic book recording for the Common Stock issuable upon such conversion and, if the entire principal amount was not so converted, a new note representing such balance.

 

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3.4Other Conversion Provisions.

 

(a)Adjustment of Note Conversion Price. If the Company at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced, and if the Company at any time combines (by reverse stock split, recapitalization or otherwise) its outstanding shares into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased.

 

(b)Common Stock Defined. Whenever reference is made in this Note to the shares of Common Stock, the term “Common Stock” shall mean the Common Stock of the Company authorized as of the date hereof, and any other class of stock ranking on a parity with such Common Stock. Shares issuable upon conversion hereof shall include only shares of Common Stock of the Company.

 

3.5No Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Holder upon the conversion of this Note, the Company shall pay to the Holder the amount of outstanding principal hereunder that is not so converted.

 

3.6Prepayment. At any time prior to the date that an Event of Defaults occurs under this note, the Company shall have the right, exercisable on four (4) Trading days prior written notice to the Holder of the note, to prepay the outstanding Principal Amount and interest then due under this note in accordance with this section 3.6. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the holder of the Note at its registered addresses or by email and shall state: (1) that the Company is exercising its right to prepay the Note, and (2) the date of prepayment which shall be four (4) Trading days from the date of the Optional Prepayment Notice (the “Optional Prepayment Date”). Within two (2) Trading Day after the Holder’s receipt of the Optional Prepayment Notice, Holder shall specify in writing payment instructions to the Company. On the Optional Prepayment Date, the Company shall make payment of the amounts designated below to or upon the order of the Holder as specified by the Holder in writing to the Company. If the Company exercises its right to prepay the Note in accordance with this section, the Company shall make payment to the Holder of an amount in cash equal to the sum of : (w) 110% multiplied by the Principal Amount then outstanding plus (x) accrued and unpaid interest on the Principal Amount to the Optional Prepayment date.

 

4.Representations, Warranties and Covenants of the Company. The Company represents, warrants and covenants with the Holder as follows:

 

(a)Authorization; Enforceability. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Note and the performance of all obligations of the Company hereunder has been taken, and this Note constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

 

3

 

 

(b)Governmental Consents. No consent, approval, qualification, order or authorization of, or filing with, any local, state or federal governmental authority is required on the part of the Company in connection with the Company’s valid execution, delivery or performance of this Note except any notices required to be filed with the Securities and Exchange Commission under Regulation D of the Securities Act of 1933, as amended (the “1933 Act”), or such filings as may be required under applicable state securities laws, which, if applicable, will be timely filed within the applicable periods therefor.

 

(c)No Violation. The execution, delivery and performance by the Company of this Note and the consummation of the transactions contemplated hereby will not result in a violation of its Certificate of Incorporation or Bylaws, in any material respect of any provision of any mortgage, agreement, instrument or contract to which it is a party or by which it is bound or, to the best of its knowledge, of any federal or state judgment, order, writ, decree, statute, rule or regulation applicable to the Company or be in material conflict with or constitute, with or without the passage of time or giving of notice, either a material default under any such provision or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations, or any of its assets or properties.

 

5.Representations and Covenants of the Holder. The Company has entered into this Note in reliance upon the following representations and covenants of the Holder:

 

(a)Investment Purpose. This Note and the Common Stock issuable upon conversion of the Note are acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.

 

(b)Private Issue. The Holder understands (i) that this Note and the Common Stock issuable upon conversion of this Note are not registered under the 1933 Act or qualified under applicable state securities laws, and (ii) that the Company is relying on an exemption from registration predicated on the representations set forth in this Section 8.

 

(c)Financial Risk. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment and has the ability to bear the economic risks of its investment.

 

6.Assignment. Subject to the restrictions on transfer described in Section 8 below, the rights and obligations of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

 

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7.Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.

 

8.Transfer of This Note or Securities Issuable on Conversion Hereof. With respect to any offer, sale or other disposition of this Note or securities into which this Note may be converted, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof. Unless the Company reasonably determines that such transfer would violate applicable securities laws, or that such transfer would adversely affect the Company’s ability to account for future transactions to which it is a party as a pooling of interests and notifies the Holder thereof within five (5) business days after receiving notice of the transfer, the Holder may effect such transfer. The Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the 1933 Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the 1933 Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.

 

9.Notices. Any notice, other communication or payment required or permitted hereunder shall be in writing and shall be deemed to have been given upon delivery if personally delivered or fourteen (14) business days after deposit if deposited in the United States mail for mailing by certified mail, postage prepaid. Each of the above addressees may change its address for purposes of this Section by giving to the other addressee notice of such new address in conformance with this Section. Notices are also accepted by email and considered notified within 24 hours of read receipt.

 

10.Governing Law. This Note is being delivered in and shall be construed in accordance with the laws of the State of Florida, without regard to the conflicts of law provisions thereof.

 

11.Heading; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except as otherwise indicated, all references herein to Sections refer to Sections hereof.

 

12.Waiver by the Company. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

 

13.Delays. No delay by the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right.

 

14.Severability. If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision was so excluded and shall be enforceable in accordance with its terms.

 

15.No Impairment. The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Note and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Note against impairment.

 

[SIGNATURE PAGE TO FOLLOW]

 

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IN WITNESS WHEREOF, Ilustrato Pictures International Inc. has caused this Note to be executed in its corporate name and this Note to be dated, issued and delivered, all on the date first above written.

 

    ILUSTRATO PICTURES INTERNATIONAL INC.
     
    /s/ Nicolas Link
Date: July 01, 2024   By: Nicolas Link
    Its: CEO
       
    Twn Brooks Inc.
     
     
Date: July 01, 2024   By:  

 

 

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Exhibit 4.26

 

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE AFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

ILUSTRATO PICTURES INTERNATIONAL INC.

CONVERTIBLE PROMISSORY NOTE

 

Principal Amount: $27,500.00 USD   July 01, 2024
Purchase Price: $25,000.00 USD    

 

WHEREAS on July 01, 2024, Twn Brooks Inc. (the “Holder”) loaned funds totaling, $27,500.00 to Ilustrato Pictures International Inc., a Nevada corporation (the “Company”). Payment for the loan is to be made directly to the company in the form of a Wire Transfer.

 

WHEREAS the Company and Holder further agreed that such loaned funds provided by the Holder to the Company would be evidenced in a convertible note, which convertible note would be convertible into shares of common stock of the Company in accordance with Section 3 below;

 

NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the mutual premises and the mutual covenants and agreements contained herein, the parties covenant and agree each with the other as follows:

 

1. Principal and Interest.

 

1.1 The Company, for value received, hereby promises to pay to the order of the Holder the sum of Twenty Seven Thousand, Five Hundred Dollars ($27,500), which amount represents the amount owed to Holder as of July 01, 2024.

 

1.2  This Convertible Promissory Note (the “Note”) shall bear nine percent (9%) interest per annum. The Note is for a period of 6 months and cannot be converted until (3) months from the date first written above has passed.

 

1.3  This note carries an original issue discount of $2,500.00 (the “OID”) which is included in the principal balance of this note. Thus, the purchase price of this note shall be $25,000 computed as follows: the Principal amount minus the OID.

 

1.4  Upon payment in full of the principal, this Note shall be surrendered to the Company for cancellation.

 

1.5  The principal under this Note shall be payable at the principal office of the Company and shall be forwarded to the address of the Holder hereof as such Holder shall from time to time designate.

 

 

 

2. Attorney’s Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal payable hereunder, reasonable attorneys’ fees and costs incurred by the Holder.

 

3. Conversion.

 

3.1  Voluntary Conversion. The Holder shall have the right, exercisable in whole or in part, to convert the outstanding principal into a number of fully paid and non-assessable whole shares of the Company’s $0.001 Par Value common stock (“Common Stock”) determined in accordance with Section 3.2 below.

 

3.2  Conversion Price. The conversion price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments by the Borrower relating to the Borrower’s securities, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Variable Conversion Price” shall mean 65% multiplied by the Market Price (as defined herein) (representing a discount rate of 35%). “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

 

3.3   Notice and Conversion Procedures. After receipt of demand for repayment, the Company agrees to give the Holder notice at least five (5) business days prior to the time that the Company repays this Note. If the Holder elects to convert this Note, the Holder shall provide the Company with a written notice of conversion setting forth the amount to be converted. The notice must be delivered to the Company together with this Note. Within ten (10) business days of receipt of such notice, the Company shall deliver to the Holder certificate(s) or evidence of electronic book recording for the Common Stock issuable upon such conversion and, if the entire principal amount was not so converted, a new note representing such balance.

 

2

 

 

3.4 Other Conversion Provisions.

 

(a) Adjustment of Note Conversion Price. If the Company at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced, and if the Company at any time combines (by reverse stock split, recapitalization or otherwise) its outstanding shares into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased.

 

(b) Common Stock Defined. Whenever reference is made in this Note to the shares of Common Stock, the term “Common Stock” shall mean the Common Stock of the Company authorized as of the date hereof, and any other class of stock ranking on a parity with such Common Stock. Shares issuable upon conversion hereof shall include only shares of Common Stock of the Company.

 

3.5 No Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Holder upon the conversion of this Note, the Company shall pay to the Holder the amount of outstanding principal hereunder that is not so converted.

 

3.6 Prepayment. At any time prior to the date that an Event of Defaults occurs under this note, the Company shall have the right, exercisable on four (4) Trading days prior written notice to the Holder of the note, to prepay the outstanding Principal Amount and interest then due under this note in accordance with this section 3.6. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the holder of the Note at its registered addresses or by email and shall state: (1) that the Company is exercising its right to prepay the Note, and (2) the date of prepayment which shall be four (4) Trading days from the date of the Optional Prepayment Notice (the “Optional Prepayment Date”). Within two (2) Trading Day after the Holder’s receipt of the Optional Prepayment Notice, Holder shall specify in writing payment instructions to the Company. On the Optional Prepayment Date, the Company shall make payment of the amounts designated below to or upon the order of the Holder as specified by the Holder in writing to the Company. If the Company exercises its right to prepay the Note in accordance with this section, the Company shall make payment to the Holder of an amount in cash equal to the sum of : (w) 110% multiplied by the Principal Amount then outstanding plus (x) accrued and unpaid interest on the Principal Amount to the Optional Prepayment date.

 

4.  Representations, Warranties and Covenants of the Company. The Company represents, warrants and covenants with the Holder as follows:

 

(a) Authorization; Enforceability. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Note and the performance of all obligations of the Company hereunder has been taken, and this Note constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

 

3

 

 

(b)  Governmental Consents. No consent, approval, qualification, order or authorization of, or filing with, any local, state or federal governmental authority is required on the part of the Company in connection with the Company’s valid execution, delivery or performance of this Note except any notices required to be filed with the Securities and Exchange Commission under Regulation D of the Securities Act of 1933, as amended (the “1933 Act”), or such filings as may be required under applicable state securities laws, which, if applicable, will be timely filed within the applicable periods therefor.

 

(c)  No Violation. The execution, delivery and performance by the Company of this Note and the consummation of the transactions contemplated hereby will not result in a violation of its Certificate of Incorporation or Bylaws, in any material respect of any provision of any mortgage, agreement, instrument or contract to which it is a party or by which it is bound or, to the best of its knowledge, of any federal or state judgment, order, writ, decree, statute, rule or regulation applicable to the Company or be in material conflict with or constitute, with or without the passage of time or giving of notice, either a material default under any such provision or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations, or any of its assets or properties.

 

5.  Representations and Covenants of the Holder. The Company has entered into this Note in reliance upon the following representations and covenants of the Holder:

 

(a)  Investment Purpose. This Note and the Common Stock issuable upon conversion of the Note are acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.

 

(b)  Private Issue. The Holder understands (i) that this Note and the Common Stock issuable upon conversion of this Note are not registered under the 1933 Act or qualified under applicable state securities laws, and (ii) that the Company is relying on an exemption from registration predicated on the representations set forth in this Section 8.

 

(c)   Financial Risk. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment and has the ability to bear the economic risks of its investment.

 

6.  Assignment. Subject to the restrictions on transfer described in Section 8 below, the rights and obligations of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

 

7.  Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.

 

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8.  Transfer of This Note or Securities Issuable on Conversion Hereof. With respect to any offer, sale or other disposition of this Note or securities into which this Note may be converted, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof. Unless the Company reasonably determines that such transfer would violate applicable securities laws, or that such transfer would adversely affect the Company’s ability to account for future transactions to which it is a party as a pooling of interests and notifies the Holder thereof within five (5) business days after receiving notice of the transfer, the Holder may effect such transfer. The Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the 1933 Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the 1933 Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.

 

9.  Notices. Any notice, other communication or payment required or permitted hereunder shall be in writing and shall be deemed to have been given upon delivery if personally delivered or fourteen (14) business days after deposit if deposited in the United States mail for mailing by certified mail, postage prepaid. Each of the above addressees may change its address for purposes of this Section by giving to the other addressee notice of such new address in conformance with this Section. Notices are also accepted by email and considered notified within 24 hours of read receipt.

 

10.  Governing Law. This Note is being delivered in and shall be construed in accordance with the laws of the State of Florida, without regard to the conflicts of law provisions thereof.

 

11.  Heading; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except as otherwise indicated, all references herein to Sections refer to Sections hereof.

 

12.  Waiver by the Company. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

 

13.  Delays. No delay by the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right.

 

14.  Severability. If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision was so excluded and shall be enforceable in accordance with its terms.

 

15.  No Impairment. The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Note and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Note against impairment.

 

[SIGNATURE PAGE TO FOLLOW]

 

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IN WITNESS WHEREOF, Ilustrato Pictures International Inc. has caused this Note to be executed in its corporate name and this Note to be dated, issued and delivered, all on the date first above written.

 

  ILUSTRATO PICTURES INTERNATIONAL INC.
     
  /s/ Nicolas Link
Date: July 01, 2024 By: Nicolas Link
  Its: CEO
     
  Twn Brooks Inc.
     
Date: July 01, 2024  
  By:  

 

 

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Exhibit 4.27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 4.28

 

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

ILUSTRATO PICTURES INTERNATIONAL, INC.

CONVERTIBLE PROMISSORY NOTE

 

Principal Amount: $65,000.00 USDAugust 13, 2024

 

WHEREAS on August 13, 2024, RB Capital Partners, Inc., with its offices at 2856 Torrey Pines Road, La Jolla, California 92037 (the “Holder”) loaned funds totaling, $65,000.00 to Ilustrato Pictures International, Inc., a Nevada corporation with its office at 26 Broadway; Suite 934; New York, NY 10004 (the “Company”). Payment for the loan was made directly to the Company in the form of a Wire Transfer.

 

WHEREAS the Company and Holder further agreed that such services provided by the Holder to the Company would be evidenced in a convertible note, which convertible note would be convertible into shares of common stock of the Company at the rate of $0.10 in accordance with Section 3 below;

 

NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the mutual premises and the mutual covenants and agreements contained herein, the parties covenant and agree each with the other as follows:

 

1. Principal and Interest.

 

1.1 The Company, for value received, hereby promises to pay to the order of the Holder the sum of Sixty-Five Thousand Dollars ($65,000.00), which amount represents the amount owed to Holder as of August 13, 2024.

 

1.2 This Convertible Promissory Note (the “Note”) shall bear seven percent (7%) interest per annum. The Note is for a period of (24) months and cannot be converted until (6) months from the date first written above has passed.

 

1.3 Upon payment in full of the principal, this Note shall be surrendered to the Company for cancellation.

 

1

 

 

1.4 The principal under this Note shall be payable at the principal office of the Company and shall be forwarded to the address of the Holder hereof as such Holder shall from time to time designate.

 

2. Attorney’s Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal payable hereunder, reasonable attorneys’ fees and costs incurred by the Holder.

 

3. Conversion.

 

3.1 Voluntary Conversion. The Holder shall have the right, exercisable in whole or in part, to convert the outstanding principal into a number of fully paid and non-assessable whole shares of the Company’s $0.001 Par Value common stock (“Common Stock”) determined in accordance with Section 3.2 below.

 

3.2 Shares Issuable. The number of whole shares of Common Stock into which this Note may be voluntarily converted (the “Conversion Shares”) shall be determined by dividing the aggregate principal amount borrowed hereunder by $0.10 (the “Note Conversion Price”); provided, however, that, in no event, shall Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common stock beneficially owned by Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of this Note or the unexercised or unconverted portion of any other security of Maker subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of common stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in the beneficial ownership by Holder and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934 and Regulation 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the Note Conversion Price. The Term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus, (2) at the Company’s option, accrued and unpaid interest, if any, on such principal amount at the interest rate provided in this Note to the conversion date, provided; however, that the Company shall have the right to pay any or all interest in cash.

 

3.3 Notice and Conversion Procedures. After receipt of demand for repayment, the Company agrees to give the Holder notice at least five (5) business days prior to the time that the Company repays this Note. If the Holder elects to convert this Note, the Holder shall provide the Company with a written notice of conversion setting forth the amount to be converted. The notice must be delivered to the Company together with this Note. Within twenty (20) business days of receipt of such notice, the Company shall deliver to the Holder certificate(s) for the Common Stock issuable upon such conversion and, if the entire principal amount was not so converted, a new note representing such balance.

 

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3.4 Other Conversion Provisions.

 

(a) Adjustment of Note Conversion Price. In the event the Company shall in any manner, subsequent to the issuance of this Note, approve a reclassification involving a reverse stock split and subdivision of the Company’s issued and outstanding shares of Common Stock, the Note Conversion Price shall forthwith be unaffected. In the event the Company shall in any manner, subsequent to the issuance of this Note, approve a reclassification involving a forward stock split and subdivision of the Company’s issued and outstanding shares of Common Stock, the Note Conversion Price shall forthwith be unaffected.

 

(b) Common Stock Defined. Whenever reference is made in this Note to the shares of Common Stock, the term “Common Stock” shall mean the Common Stock of the Company authorized as of the date hereof, and any other class of stock ranking on a parity with such Common Stock. Shares issuable upon conversion hereof shall include only shares of Common Stock of the Company.

 

3.5 No Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Holder upon the conversion of this Note, the Company shall pay to the Holder the amount of outstanding principal hereunder that is not so converted.

 

4. Representations, Warranties and Covenants of the Company. The Company represents, warrants and covenants with the Holder as follows:

 

(a) Authorization; Enforceability. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Note and the performance of all obligations of the Company hereunder has been taken, and this Note constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

 

(b) Governmental Consents. No consent, approval, qualification, order or authorization of, or filing with, any local, state or federal governmental authority is required on the part of the Company in connection with the Company’s valid execution, delivery or performance of this Note except any notices required to be filed with the Securities and Exchange Commission under Regulation D of the Securities Act of 1933, as amended (the “1933 Act”), or such filings as may be required under applicable state securities laws, which, if applicable, will be timely filed within the applicable periods therefor.

 

3

 

 

(c) No Violation. The execution, delivery and performance by the Company of this Note and the consummation of the transactions contemplated hereby will not result in a violation of its Certificate of Incorporation or Bylaws, in any material respect of any provision of any mortgage, agreement, instrument or contract to which it is a party or by which it is bound or, to the best of its knowledge, of any federal or state judgment, order, writ, decree, statute, rule or regulation applicable to the Company or be in material conflict with or constitute, with or without the passage of time or giving of notice, either a material default under any such provision or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations, or any of its assets or properties.

 

(d) Reservation of Shares. The Company shall deliver within five days of execution of this Note, a fully-executed and complete irrevocable letter of instruction or similar instrument to the transfer agent of Company, in a form acceptable to Holder, with respect to the issuance of shares of Common Stock issuable pursuant to conversion of this Note (the “Letter of Instruction”). The shares of Common Stock issuable upon conversion of this Note shall not bear any restrictive legends. On and after the date of this Note, Company shall timely report all necessary public information required by Rule 144(c)(2) of the 1933 Act for Holder to resell the shares of Common Stock issued to Holder under this Note in reliance upon the public information requirements set forth in Rule 144(c)(2). In the Letter of Instruction, the Company shall instruct the transfer agent to place 2,000,000 shares of Common Stock on reserve for eventual conversion of this Note (the “Reserved Shares”). The Reserved Shares shall remain in the created reserve with the transfer agent until Holder and an authorized officer of Company provide joint written instructions to the transfer agent that the Reserved Shares, or any part of the Reserved Shares, shall be taken out of the reserve and shall no longer be subject to the terms of the Letter of Instruction.

 

5. Representations and Covenants of the Holder. The Company has entered into this Note in reliance upon the following representations and covenants of the Holder:

 

(a) Investment Purpose. This Note and the Common Stock issuable upon conversion of the Note are acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.

 

(b) Private Issue. The Holder understands (i) that this Note and the Common Stock issuable upon conversion of this Note are not registered under the 1933 Act or qualified under applicable state securities laws, and (ii) that the Company is relying on an exemption from registration predicated on the representations set forth in this Section 8.

 

(c) Financial Risk. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment.

 

(d) Risk of No Registration. The Holder understands that if the Company does not register with the Securities and Exchange Commission pursuant to Section 12 of the Securities Exchange Act of 1934 (the “1934 Act”), or file reports pursuant to Section 15(d) of the 1934 Act, or if a registration statement covering the securities under the 1933 Act is not in effect when it desires to sell the Common Stock issuable upon conversion of the Note, it may be required to hold such securities for an indefinite period. The Holder also understands that any sale of the Note or the Common Stock which might be made by it in reliance upon Rule 144 under the 1933 Act may be made only in accordance with the terms and conditions of that Rule.

 

4

 

 

6. Assignment. Subject to the restrictions on transfer described in Section 8 below, the rights and obligations of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

 

7. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.

 

8. Transfer of This Note or Securities Issuable on Conversion Hereof. With respect to any offer, sale or other disposition of this Note or securities into which this Note may be converted, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof. Unless the Company reasonably determines that such transfer would violate applicable securities laws, or that such transfer would adversely affect the Company’s ability to account for future transactions to which it is a party as a pooling of interests, and notifies the Holder thereof within five (5) business days after receiving notice of the transfer, the Holder may effect such transfer. The Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the 1933 Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the 1933 Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.

 

9. Notices. Any notice, other communication or payment required or permitted hereunder shall be in writing and shall be deemed to have been given upon delivery if personally delivered or three (3) business days after deposit if deposited in the United States mail for mailing by certified mail, postage prepaid. Each of the above addressees may change its address for purposes of this Section by giving to the other addressee notice of such new address in conformance with this Section.

 

10. Governing Law. This Note is being delivered in and shall be construed in accordance with the laws of the State of California, without regard to the conflicts of law provisions thereof.

 

11. Heading; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except as otherwise indicated, all references herein to Sections refer to Sections hereof.

 

12. Waiver by the Company. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

 

13. Delays. No delay by the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right.

 

14. Severability. If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision was so excluded and shall be enforceable in accordance with its terms.

 

15. No Impairment. The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Note and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Note against impairment.

 

[SIGNATURE PAGE TO FOLLOW]

 

5

 

 

IN WITNESS WHEREOF, Ilustrato Pictures International, Inc. has caused this Note to be executed in its corporate name and this Note to be dated, issued and delivered, all on the date first above written.

 

  ILUSTRATO PICTURES
INTERNATIONAL, INC.
   
Date: August 13, 2024 By /s/ Nicolas Link
    Nicolas Link
  Its: CEO & Director
   
  RB CAPITAL PARTNERS, INC.
   
Date: August 13, 2024 By:  
    Brett Rosen
  Its: Managing Partner

 

6

Exhibit 31.1

 

CERTIFICATIONS

 

I, Nicolas Link, certify that:

 

1.I have reviewed this Quarterly Report on Form 10-Q for the three months ended June 30, 2024, of Ilustrato Pictures International Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

 

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.evaluated the effectiveness of the registrant s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.disclosed in this report any change in the registrant s internal control over financial reporting that occurred during the registrant s most recent fiscal quarter (the registrant s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant s internal control over financial reporting; and;

 

5.The registrant s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant s auditors and the audit committee of the registrant s board of directors (or persons performing the equivalent functions);

 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant s ability to record, process, summarize and report financial information; and

 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant s internal controls.

 

Dated: August 26, 2024 /s/ Nicolas Link
  Nicolas Link
  Chief Executive Officer
  (principal executive officer)

Exhibit 31.2

 

CERTIFICATIONS

 

I, Krishnan Krishnamoorthy, certify that;

 

1.I have reviewed this Quarterly Report on Form 10-Q for the three months ended June 30, 2024, of Ilustrato Pictures International Inc. (the registrant);

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.Evaluated the effectiveness of the registrant s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.Disclosed in this report any change in the registrant s internal control over financial reporting that occurred during the registrant s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant s internal control over financial reporting; and

 

5.The registrant s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant s auditors and the audit committee of the registrant s board of directors (or persons performing the equivalent functions):

 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant s ability to record, process, summarize and report financial information; and

 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant s internal control over financial reporting.

 

Date: August 26, 2024

 

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

Exhibit 32.1

 

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q of Ilustrato Pictures International Inc. (the Company ) for the Form 10-Q for the three months ended June 30, 2024, as filed with the Securities and Exchange Commission (the Report ), I, Nicolas Link, Chief Executive Officer, and I, Krishnan Krishnamoorthy, Chief Financial Officer of the Company certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

 

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: August 26, 2024 /s/ Nicolas Link
  Nicolas Link
  Chief Executive Officer
  (Principal executive officer)
   
Dated: August 26, 2024 /s/ Krishnan Krishnamoorthy
  Krishnan Krishnamoorthy Chief Financial Officer
  (Principal accounting and financial officer)

 

This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

v3.24.2.u1
Cover - shares
6 Months Ended
Jun. 30, 2024
Aug. 26, 2024
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Transition Report false  
Entity Interactive Data Current Yes  
Amendment Flag false  
Document Period End Date Jun. 30, 2024  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q2  
Entity Information [Line Items]    
Entity Registrant Name Ilustrato Pictures International, Inc.  
Entity Central Index Key 0001496383  
Entity File Number 000-56239  
Entity Tax Identification Number 27-2450645  
Entity Incorporation, State or Country Code NV  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Shell Company false  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Contact Personnel [Line Items]    
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  
Entity Phone Fax Numbers [Line Items]    
City Area Code 917  
Local Phone Number 522-3202  
Entity Listings [Line Items]    
Entity Common Stock, Shares Outstanding   2,291,192,403
v3.24.2.u1
Consolidated Balance Sheets (Unaudited/Not Reviewed) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Current Assets    
Cash and Cash Equivalents $ 302,254 $ 213,073
Inventory 2,025,381 1,612,800
Accounts Receivable 7,531,969 22,825,113
Deposits, Prepayments, & Advances 785,311 0
Other Current Assets 10,116,487 5,451,159
Total Current Assets 20,761,402 30,102,145
Non-Current Assets    
Long Term Investments 25,264,697 23,639,209
Property and Equipment 186,207 139,523
Right-of-Use assets 259,304 0
Capital work in progress 654,666 0
Receivable Non-Current Portion 7,157,417 0
Goodwill 11,115,562 8,606,289
Total Non-current Assets 44,637,853 32,385,021
Total Assets 65,399,255 62,487,166
Current Liabilities    
Accounts Payable 4,136,227 9,891,505
Lease Operating Liabilities 90,875 0
Other Current Liabilities 13,780,865 8,825,966
Total Current Liabilities 18,414,202 18,717,471
Non-Current Liabilities    
Lease Operating Non-Current Portion 180,062 0
Notes payable – long-term 14,355,776 11,740,619
Other Non-Current Liabilities 1,844,602 2,121,455
Total Long-Term Liabilities 16,380,440 13,862,074
Total Liabilities 34,794,642 32,579,545
Stockholders’ Equity    
Common stock; $0.001 par value; 200,000,000 shares authorized; 133,006,691and 127,129,694 shares issued and outstanding as of June 30, 2024, and December 31, 2023, respectively 2,107,853 1,720,183
Additional paid-in capital 26,019,639 24,521,777
Retained Earnings/ accumulated Deficit (5,754,719) (100,292)
Capital Reserve 5,455,393
Noncontrolling interest 2,697,518 3,686,358
Total stockholders’ Equity 30,604,613 29,907,621
Total liabilities and stockholders’ Equity 65,399,255 62,487,166
Related Party    
Current Liabilities    
Related Party Payables 406,235 0
Class A Preferred Stock    
Stockholders’ Equity    
Preferred stock value 10,000 10,000
Class B Preferred Stock    
Stockholders’ Equity    
Preferred stock value 3,560 4,064
Class C Preferred Stock    
Stockholders’ Equity    
Preferred stock value 0 0
Class D Preferred Stock    
Stockholders’ Equity    
Preferred stock value 60,741 60,741
Class E Preferred Stock    
Stockholders’ Equity    
Preferred stock value 3,172 3,172
Class F Preferred Stock    
Stockholders’ Equity    
Preferred stock value $ 1,456 $ 1,618
v3.24.2.u1
Consolidated Balance Sheets (Unaudited/Not Reviewed) (Parentheticals) - $ / shares
Jun. 30, 2024
Dec. 31, 2023
Common Stock, Shares Authorized 200,000,000 200,000,000
Common Stock, Par Value (in Dollars per share) $ 0.001 $ 0.001
Common Stock, Shares issued 133,006,691 127,129,694
Common Stock, Shares, Outstanding 133,006,691 127,129,694
Class A Preferred Stock    
Preferred Stock, Shares Authorized 10,000,000 10,000,000
Preferred Stock, Shares Issued 10,000,000 10,000,000
Preferred Stock, Shares Outstanding 10,000,000 10,000,000
Class B Preferred Stock    
Preferred Stock, Shares Authorized 100,000,000 100,000,000
Preferred Stock, Shares Issued 3,560,000 4,064,000
Preferred Stock, Shares Outstanding 3,560,000 4,064,000
Class C Preferred Stock    
Preferred Stock, Shares Authorized 10,000,000 10,000,000
Preferred Stock, Shares Issued 0 0
Preferred Stock, Shares Outstanding 0 0
Class D Preferred Stock    
Preferred Stock, Shares Authorized 60,741,000 60,741,000
Preferred Stock, Shares Issued 60,741,000 60,741,000
Preferred Stock, Shares Outstanding 60,741,000 60,741,000
Class E Preferred Stock    
Preferred Stock, Shares Authorized 5,000,000 5,000,000
Preferred Stock, Shares Issued 3,172,175 3,172,175
Preferred Stock, Shares Outstanding 3,172,175 3,172,175
Class F Preferred Stock    
Preferred Stock, Shares Authorized 50,000,000 50,000,000
Preferred Stock, Shares Issued 1,455,750 1,618,250
Preferred Stock, Shares Outstanding 1,455,750 1,618,250
v3.24.2.u1
Consolidated Statement of Operations (Unaudited/Not Reviewed) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Income Statement [Abstract]        
Revenue $ 4,245,791 $ 1,943,690 $ 5,345,259 $ 3,595,851
Cost of revenues 2,688,540 1,375,004 3,467,733 2,553,284
Gross profit 1,557,251 568,686 1,877,526 1,042,567
Operating expenses        
Professional fees 142,101 0 436,020 0
General and administrative 1,814,552 2,907,943 4,215,707 4,159,976
Total operating expenses 1,956,653 2,907,943 4,651,727 4,159,976
Income (loss) from operations (399,402) (2,339,257) (2,774,201) (3,117,409)
Other (income) expenses        
Interest expense 255,669 1,116,537 438,694 1,542,509
Other Income (107,050) (1,164) (506,604) (4,703)
Total other (income) expense, net 148,619 1,115,373 (67,910) 1,537,806
Net Income (Loss) (548,021) (3,454,630) (2,706,291) (4,655,215)
Less: net income attributable to noncontrolling interest 152,547 19,111
Net income (loss) attributable to ILUS stockholders $ (700,568) $ (3,454,630) $ (2,725,402) $ (4,655,215)
Weighted average common shares outstanding (in Shares) 1,959,529,013 1,444,380,699 1,959,529,013 1,444,380,699
Net income (loss) per common share - basic (in Dollars per share) $ 0 $ 0 $ 0 $ 0
v3.24.2.u1
Consolidated Statement of Operations (Unaudited/Not Reviewed) (Parentheticals) - $ / shares
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Income Statement [Abstract]        
Net income (loss) per common share - diluted $ 0.00 $ 0.00 $ 0 $ 0
v3.24.2.u1
Consolidated Statements of Stockholders’ Equity (Unaudited / Not Reviewed) - USD ($)
Preferred Stock
Class A
Preferred Stock
Class B
Preferred Stock
Class D
Preferred Stock
Class E
Preferred Stock
Class F
Common Stock
Minority Interest
Capital Reserve
Additional Paid-in Capital
Retain Loss
Total
Balance at Dec. 31, 2022 $ 10,000 $ 3,400 $ 60,741 $ 3,172 $ 1,634 $ 1,355,230 $ 24,386,712   $ 20,631,261 $ 9,664,983 $ 56,117,132
Balance (in Shares) at Dec. 31, 2022 10,000,000 3,400,000 60,741,000 3,172,175 1,633,250 1,355,230,699          
Common stock issued           $ 63,850     484,650   548,500
Common stock issued (in Shares)           63,850,000          
Common stock cancelled           $ (40,000)       40,000 0
Common stock cancelled (in Shares)           (40,000,000)          
Preferred stock issued         $ 35       2,205   2,240
Preferred stock issued (in Shares)         35,000            
Adjustment             1,306,458     100 1,306,558
Changes in Retained earnings                   (1,640,192) (1,640,192)
Current Quarter Income                   914,662 914,662
Balance at Mar. 31, 2023 $ 10,000 $ 3,400 $ 60,741 $ 3,172 $ 1,668 $ 1,379,081 25,693,170   21,118,116 8,979,553 57,248,900
Balance (in Shares) at Mar. 31, 2023 10,000,000 3,400,000 60,741,000 3,172,175 1,668,250 1,379,080,699          
Balance at Dec. 31, 2022 $ 10,000 $ 3,400 $ 60,741 $ 3,172 $ 1,634 $ 1,355,230 24,386,712   20,631,261 9,664,983 56,117,132
Balance (in Shares) at Dec. 31, 2022 10,000,000 3,400,000 60,741,000 3,172,175 1,633,250 1,355,230,699          
Net Income                     (4,655,215)
Balance at Jun. 30, 2023 $ 10,000 $ 3,400 $ 60,741 $ 3,172 $ 1,668 $ 1,444,381 29,674,043 $ 0 21,665,916 7,356,876 60,220,196
Balance (in Shares) at Jun. 30, 2023 10,000,000 3,400,000 60,741,000 3,172,175 1,668,250 1,444,380,699          
Balance at Mar. 31, 2023 $ 10,000 $ 3,400 $ 60,741 $ 3,172 $ 1,668 $ 1,379,081 25,693,170   21,118,116 8,979,553 57,248,900
Balance (in Shares) at Mar. 31, 2023 10,000,000 3,400,000 60,741,000 3,172,175 1,668,250 1,379,080,699          
Common stock issued           $ 55,300     547,800   603,100
Common stock issued (in Shares)           55,300,000          
Preferred stock issued         $ 100           100
Preferred stock issued (in Shares)         100,000            
Adjustment                   (198) (198)
Preferred stock converted into common stock           $ 10,000         10,000
Preferred stock converted into common stock (in Shares)           10,000,000          
Preferred stock converted         $ (100)           (100)
Preferred stock converted (in Shares)         (100,000)            
Changes in Retained earnings                   (216,214) (216,214)
Current Quarter Income                   980,224 980,224
Share of profit transferred to Non-Controlling Interest             3,980,873     (2,386,489) 1,594,384
Net Income                     (3,454,630)
Balance at Jun. 30, 2023 $ 10,000 $ 3,400 $ 60,741 $ 3,172 $ 1,668 $ 1,444,381 29,674,043 0 21,665,916 7,356,876 60,220,196
Balance (in Shares) at Jun. 30, 2023 10,000,000 3,400,000 60,741,000 3,172,175 1,668,250 1,444,380,699          
Balance at Dec. 31, 2023 $ 10,000 $ 4,064 $ 60,741 $ 3,172 $ 1,618 $ 1,720,183 3,686,358 0 24,521,777 (100,292) 29,907,621
Balance (in Shares) at Dec. 31, 2023 10,000,000 4,064,000 60,741,000 3,172,175 1,618,250 1,720,182,651          
Shared Issued                     0
Convertible notes converted to common stock           $ 11,987     40,807   52,794
Convertible notes converted to common stock (in Shares)           11,986,538          
Common stock issued against Warrant           $ 26,567     70,933   97,500
Common stock issued against Warrant (in Shares)           26,566,901          
Common stock issued for Cash           $ 22,349     97,651   120,000
Common stock issued for Cash (in Shares)           22,349,206          
Common stock issued as commitment shares           $ 4,750     50,200   54,950
Common stock issued as commitment shares (in Shares)           4,750,000          
Common stock as compensation to AJB Capital Investments LLC           $ 75,000     558,000   633,000
Common stock as compensation to AJB Capital Investments LLC (in Shares)           75,000,000          
common stock as compensation to RB Capital Partners LLC           $ 50,000     150,000   200,000
common stock as compensation to RB Capital Partners LLC (in Shares)           50,000,000          
Preferred Stock class F issued         $ 163       199,838   200,000
Preferred Stock class F issued (in Shares)         162,500            
Preferred stock converted into common stock         $ (50) $ 5,000     (4,950)   0
Preferred stock converted into common stock (in Shares)         (50,000) 5,000,000          
Minority Interest - Hyperion - Removed             (131,319)       (131,319)
Minority Interest - QI - Removed             (1,922,351)       (1,922,351)
Changes in Retained earnings                   4,195,517 4,195,517
Capital Reserve               5,520,734     5,520,734
Net Income             (206,332)     (1,951,939) (2,158,270)
Minority Interest                     0
Balance at Mar. 31, 2024 $ 10,000 $ 4,064 $ 60,741 $ 3,172 $ 1,731 $ 1,915,836 1,426,357 5,520,734 25,684,256 2,143,286 36,770,175
Balance (in Shares) at Mar. 31, 2024 10,000,000 4,064,000 60,741,000 3,172,175 1,730,750 1,915,835,296          
Balance at Dec. 31, 2023 $ 10,000 $ 4,064 $ 60,741 $ 3,172 $ 1,618 $ 1,720,183 3,686,358 0 24,521,777 (100,292) 29,907,621
Balance (in Shares) at Dec. 31, 2023 10,000,000 4,064,000 60,741,000 3,172,175 1,618,250 1,720,182,651          
Net Income                     (2,706,291)
Balance at Jun. 30, 2024 $ 10,000 $ 3,560 $ 60,741 $ 3,172 $ 1,456 $ 2,107,853 2,697,518 5,455,393 26,019,639 (5,754,719) 30,604,613
Balance (in Shares) at Jun. 30, 2024 10,000,000 3,560,000 60,741,000 3,172,175 1,455,750 2,107,852,860          
Balance at Mar. 31, 2024 $ 10,000 $ 4,064 $ 60,741 $ 3,172 $ 1,731 $ 1,915,836 1,426,357 5,520,734 25,684,256 2,143,286 36,770,175
Balance (in Shares) at Mar. 31, 2024 10,000,000 4,064,000 60,741,000 3,172,175 1,730,750 1,915,835,296          
Shared Issued                     0
Common Stock Share through Convertible           $ 12,732     93,444   106,176
Common Stock Share through Convertible (in Shares)           12,731,764          
Converted F Stock to Common         $ (275) $ 27,500     (27,225)   0
Converted F Stock to Common (in Shares)         (275,000) 27,500,000          
Compensation Common Stock           $ 101,386     319,060   420,446
Compensation Common Stock (in Shares)           101,385,800          
Converted B Stock to Common   $ (504)       $ 50,400     (49,896)   0
Converted B Stock to Common (in Shares)   (504,000)       50,400,000          
Change in Capital Reserve               (65,341)     (65,341)
Adjustment                   (7,197,437) (7,197,437)
Change in shareholder’s account             1,118,615       1,118,615
Net Income             152,547     (700,568) (548,021)
Balance at Jun. 30, 2024 $ 10,000 $ 3,560 $ 60,741 $ 3,172 $ 1,456 $ 2,107,853 $ 2,697,518 $ 5,455,393 $ 26,019,639 $ (5,754,719) $ 30,604,613
Balance (in Shares) at Jun. 30, 2024 10,000,000 3,560,000 60,741,000 3,172,175 1,455,750 2,107,852,860          
v3.24.2.u1
Consolidated Statements of Cash Flows (Unaudited/Not Reviewed) - USD ($)
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash flows from operating activities    
Loss for the period $ (2,706,291) $ (4,655,215)
Adjustment to reconcile net gain (loss) to net cash    
Finance cost 438,694 0
Non-Cash Stock Compensation Expense 679,113 0
Stock issued for Services
Amortization 58,393  
Commitment fees 248,350 0
Depreciation - PPE 38,680 31,868
Other income (506,604) 0
Discount on convertible Notes 77,522 0
Changes in Assets and Liabilities, net    
Current Assets 9,429,924 (1,937,566)
Other Current Liabilities (303,269) (68,940,644)
Net cash (used In) provided by operating activities 7,454,512 (75,501,557)
Cash flows from investing activities    
Addition of Fixed Assets (740,030) (948,437)
Right of use Assets (259,304) 0
Changes in Non-current assets (11,292,178) 43,170,769
Changes in Non- Current Liabilities 2,338,304 2,567,583
Net cash used in investing activities (9,953,208) 44,789,915
Cash flows from financing activities    
Common Stock issued 387,670 52,034,434
Lease Finance 180,062 0
Preferred Stock Issued (666) 5,455,341
Finance cost (438,694) 0
Discount on convertible Notes (77,522) 0
Additional Paid-up Capital 1,497,862 4,262,103
Changes in Retained Earnings & MI 1,039,165 (30,990,287)
Net cash generated from financing activities 2,587,877 30,761,591
Net increase/(decrease) in cash and cash equivalents 89,181 49,949
Cash and cash equivalents at the beginning of the year 213,073 163,124
Cash and cash equivalents at end of the year $ 302,254 $ 213,073
v3.24.2.u1
Organization, History and Business
6 Months Ended
Jun. 30, 2024
Organization, History and Business [Abstract]  
ORGANIZATION, HISTORY AND BUSINESS

NOTE 1: ORGANIZATION, HISTORY AND BUSINESS

 

(A) We were incorporated as a Superior Venture Corp. on April 27, 2010, in the State of Nevada to sell wine varietals. On November 9, 2012, we entered into an Exchange Agreement with 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 and the newly elected director of the issuer caused the Issuer to enter into a letter of Intent to merge 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 360,000,000 shares of its common stock to the members.

 

(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 merge 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 and, therefore has become the wholly-owned operating subsidiary of the Issuer. 

 

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

 

(F) As a part of the 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, where we eventually got control over activities and books of accounts of Ilustrato Pictures International Inc. 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 the SEC.

 

(G) On May 18, 2020, the Company entered into a definitive agreement and Plan of Merger with FB Technologies Global, Inc, the shareholders of FB Technologies Global, Inc. were issued 3,172,175 shares of Series E Preferred Stock for their shares 360,000,000 common shares, 60,741,000 Preference D and 10,000,000 Preference A Shares. A final tranche of preference shares subject to performance to be issued in Quarter 1 of 2022. The merger was consummated on January 14, 2021.

 

(H) Firebug Mechanical Equipment LLC 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 research and development of firefighting technologies and the manufacturing of firefighting equipment and vehicles for its customers in the Middle East, Asia, and Africa.

 

(I) Georgia Fire & Rescue Supply LLC (Georgia Fire) was incorporated on 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. Purchase consideration includes an aggregate cash purchase price of $900,000 (Nine Hundred Thousand Dollars), wherein a fixed sum of $680,000 (Six Hundred Eighty Thousand) payable upon closing and the remaining $220,000 (Two Hundred Twenty Thousand Dollars) payable over a one-year period after closing to the extent the business operations of Georgia Fire & Rescue Supply, LLC meet mutually agreeable performance thresholds along with 1,500 (One Thousand Five Hundred) restricted Class F Preferred Shares in the public company llustrato Pictures International Inc. (Symbol: ILUS)

 

(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 with a signed Share Purchase Agreement. This company is engaged in the business of sales, distribution, installation and maintenance of Fire Protection and Security systems. Purchase consideration includes 250,000 AED (Two hundred and fifty thousand) payable on signing of the Sales Purchase agreement, 10,000 AED (Ten thousand) monthly for 24 months starting from May 2021 and 1,000,000 (1 million) restricted shares in the public company llustrato Pictures International Inc. (Symbol: ILUS)

 

(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 manufacturing aluminum truck beds and brush truck skid units for firefighting purposes including wildland firefighting. Purchase consideration includes an aggregate cash purchase price of $500,000 (Five Hundred Thousand) wherein a fixed sum of $300,000 (Three Hundred Thousand) payable upon closing and remaining $200,000 (Two Hundred Thousand) payable over a one-year period after closing to the extent the business operations of Bull Head Products Inc. meet mutually agreeable performance thresholds referenced in Exhibit B in the SPA along with 6,750 (Six Thousand Seven Hundred and Fifty) restricted Class F Preferred Shares in the public company llustrato Pictures International Inc. (Symbol: ILUS)

 

(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 for an aggregate amount of $500,000. This company is engaged in the industrial, oil & gas, and manufacturing sectors. Quality Industrial Corp. is a public company that 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. The purchase consideration for 51% of the shares shall be up to $714,000 subject to certain agreed Targets and Key Performance indices being met as referenced in the SPA.

 

(Q) On January 3, 2024, Ilustrato Pictures International Inc. acquired a convertible note from YAII PN, LTD with outstanding principal and accrued interest of $600,685 in Samsara Luggage Inc. (SAML). On January 5, 2024, SAML reissued a convertible note to ILUS who on the same day converted the note into 150,753,425 shares of common stock in the Company pursuant to the terms of said exchange note. As a result of such conversion, Ilustrato acquired control of 91.5% of the outstanding shares in SAML as of January 5, 2024.

 

(R) On February 23, 2024, Ilustrato Pictures International, Inc., entered into a Stock Purchase Agreement with Samsara Luggage Inc., and sold all its equity interests in seven companies owned by the Company:

 

Firebug Mechanical Equipment LLC

 

Georgia Fire & Rescue Supply LLC

 

Bright Concept Detection and Protection System LLC

 

Bull Head Products Inc

 

E-Raptor

 

The Vehicle Converters

 

AL Shola Al Modea Safety and Security LLC, the only entity in which the Company does not own 100% but only 51% of the membership interests.

 

The consideration for the sale of the equity interests in the foregoing companies was paid by SAML by the issuance of 350,000 restricted shares of Series B stock of SAML convertible into 350,000,000 common stock and further milestone payment/s should applicable performance targets be referenced.

 

(S) On March 27, 2024, our subsidiary QIND entered into a definitive Stock Purchase Agreement (the “Stock Purchase Agreement”) with the shareholders of Al Shola Al Modea Gas Distribution LLC (“ASG” or “Al Shola Gas”) to acquire a 51% interest in ASG. The Closing of the transaction took place when both parties signed the definitive Stock Purchase Agreement. Al Shola Gas is an Engineering and Distribution Company in the liquefied petroleum gas (“LPG”) Industry in the United Arab Emirates and was established in 1980. The company is one of the region’s leading suppliers and contractors of LPG centralized pipeline systems and is approved by The General Directorate of Civil Defense, Government of Dubai, as a Central Gas Contractor and LPG Supplier.

v3.24.2.u1
Summary of Accounting Policies
6 Months Ended
Jun. 30, 2024
Summary of Accounting Policies [Abstract]  
SUMMARY OF ACCOUNTING POLICIES

NOTE 2: SUMMARY OF ACCOUNTING POLICIES

 

Revenue Recognition

 

The Company recognizes revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers.

 

Accordingly, revenue is recognized when control of the goods or services promised under a contract is transferred to the customer either at a point in time (e.g., upon delivery) or over time (e.g., as the Company performs under the contract) in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the goods or services. The Company accounts for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. If collectability is not probable, the sale is deferred until collection becomes probable or payment is received.

 

Contract Assets and Contract Liabilities acquired under Business Combinations

 

The company follows new guidance under ASC 606 regarding the recognition and measurement of contract assets and contract liabilities acquired in a business combination. The company applies the definition of a performance obligation in ASC 606 when recognizing contract liabilities assumed in a business combination. The company eventually recognizes contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date. Earlier, contract assets and contract liabilities acquired in a business combination were recorded by the acquirer at fair value.

 

Work-in-progress

 

Work-in-progress is stated at cost plus attributable profit, less provision for any anticipated losses and progress billings. Cost comprises direct materials, labor, depreciation, and overheads. If any progress billings for any contract exceed the cost-plus attributable profit or less anticipated losses, the excess to be shown as excess progress billings. Claims are only recognized as income when the outcome and recoverability can be determined with reasonable certainty. Contract revenue and costs are recognized as revenue and expenses, respectively, in the statement of comprehensive income when the outcome of a construction contract can be estimated reliably.

 

In accordance with ASC-606 revenue recognition, amounts are billed in accordance with contractual terms or as work progresses. Unbilled amounts arise when the timing of billing differs from the timing of revenue recognized, such as when contract provisions require specific milestones to be met before a customer can be billed. Unbilled amounts primarily relate to performance obligations satisfied over time when the cost-to-cost method is utilized, and the revenue recognized exceeds the amount billed to the customer as there’s not yet a right to invoice in accordance with contractual terms. Unbilled amounts are recorded as a contract asset when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract.

 

Variations

 

Variations are recognized in contract revenue when the outcome can be determined with reasonable certainty and are capable of being reliably measured.

 

Variable consideration

 

If the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved. The construction contracts provide customers with a right to claim damages for delay in delivery of goods. The rights to claim damages for delay in delivery of goods give rise to variable consideration.

 

Accounts Receivable

 

Accounts receivable are reported at the customers’ outstanding balances, less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable.

 

The duration of such receivables extends from 30 days to beyond 12 months. Full payment is received only when a job/project is completed, and approvals are obtained. Provisions are created based on estimated irrecoverable amounts determined by reference to past default experience.

 

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.

 

Inventories

 

In accordance with ASC 330, the Company states inventories at the lower of cost or net realizable value. Cost, which includes material, labor and overhead, is determined on a first-in, first-out basis. The Company makes adjustments to reduce the cost of inventory to its net realizable value, if required, for estimated excess, obsolete, zero usage or impaired balances. Factors influencing these adjustments include changes in market demand, product life cycle and engineering changes.

 

Tangible Assets/ Property Plant & Equipment

 

Property, plant, and equipment are recorded at cost, except when acquired in a business combination where property, plant and equipment are recorded at fair value. Depreciation of property, plant and equipment is recognized over the estimated useful lives of the respective assets using the straight-line method.

 

The estimated useful lives are as follows:

 

Buildings, related improvements & land improvements  5-25
Machinery & equipment  3-15
Computer hardware & software  3-10
Office, furniture & others  3-15

 

Expenditures that extend the useful life of existing property, plant and equipment are capitalized and depreciated over the remaining useful life of the related asset. Expenditures for repairs and maintenance are expensed as incurred. When property, plant and equipment are retired or sold, the cost and related accumulated depreciation is removed from the Company’s balance sheet, with any gain or loss reflected in operations.

 

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.

 

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 the 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 calculates the fair value of option grants and warrant issuances utilizing the Binomial pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeiture” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock option or warrant. The Company estimates forfeiture rates for all unvested awards when calculating the expenses for the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as well as employee termination patterns. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period.

 

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 share available. Diluted earnings (loss) per share is computed similarly 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 cost as incurred.

 

Cash and Cash Equivalents

 

For the 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.

 

Fair Value of Financial Instruments

 

The company’s financial instruments consist of cash and cash equivalents, accounts receivable, and notes payable. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Business segment

 

ASC 280, “Segment Reporting” requires the use of the “management approach” model for segment 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. 

 

Below is the Statement of operations of reportable Segment:

 

Divisional Income Statement

 

The Company is organized into two divisions based on the similarity of products, customers served, common use of facilities, and economic characteristics. The Company’s segments are as follows:

 

1.Emergency Response

 

2.Industrial & Manufacturing

 

All intersegment transactions have been eliminated in consolidation. 

   For the Six Months Ended 
   June 30,
2024
   2023
(Restated)
 
Emergency & Response Division        
Revenue   2,028,053    3,595,851 
Cost Of Goods Sold   1,399,025    2,553,284 
Gross Profit   629,028    1,042,567 
Total Operating Expenses   1,886,734    3,259,649 
Operating Loss   (1,257,706)   
(2,217,08
)
Net Loss   (1,252,125)   (2,988,458)

 

Our revenue decreased to $2,028,053 for the six months ended June 30, 2024, from $3,595,851 in 2023, a 44% decrease year to date. Gross profit percentage increased to 31% for the six months ended June 3, 2024, from 29% in 2023.

 

Operating expenses decreased to $1,886,734 for the six months ended June 30, 2024, compared with the same period of $ 3,259,649 in the year 2023.

 

For the coming period 2024, the Company will continue to allocate financial, technical and sales resources for recently acquired subsidiaries to positively impact their financial results through increased sales orders and efficiency. Allocated personnel will primarily focus on accelerating sales and marketing efforts, product development, international market expansion, optimizing supply chain and production processes, and overall increased profitability while continuing with the integration and optimization of currently operating companies. With the group expansion and growth, we also intend to hire executives and personnel with specific industry experience and fields of expertise to streamline financial reporting, compliance, and Investor Relations and to improve our corporate governance.

 

   For the Six Months Ended 
  

June 30,

2024

   June 30,
2023
(Restated)
 
Industrial & Manufacturing Division (QIND)        
Revenue   3,317,206    0 
           
Cost of revenues   2,068,708    0 
           
Gross profit   1,248,498    0 
           
Total Operating Expenses   911,179    900,327 
Profit/ loss from Operations   337,319    (900,327)
Non-Operating expenses   165,851    766,430 
Non-Operating Income   427,554    
 
Net loss/ profit   599,022    (1,666,757)

 

For our Industrial and Manufacturing Division, the Operating Revenue increased to $3,317,206 for the quarter ended June 30, 2024, compared to $0 for the year ended June 30, 2023. The increase in revenue, was the result of the consolidation of Al Shola Gas For our Industrial and Manufacturing Division, the Operating expenses increased to $10,852 for the year ended June 30, 2024, compared to $65,013 for the year ended June 30, 2023. Our increase in operating expenses in 2024 was mainly the result of the consolidation of Al Shola Gas in our subsidiary QIND. Our Subsidiary QIND acquired a 51% interest in Al Shola Gas on March 23, 2024, and is consolidating the profitable operating company into its financials from Q2 2024.

 

We earned a profit of $599,022 for the six months ended June 30, 2024, compared to a net loss of $1,666,757 for the six months ended June 30, 2023. The change from loss to profit for the period ended June 30, 2024, is a result of Net Income from our acquisition of Al Shola Gas and the reversal of interest payments on the loan agreements with Mahavir and Artelliq.

 

Geographical presence

 

Presently our operations are spread across the United States, United Arab Emirates, United Kingdom, and the Republic of Serbia, however, we plan to further expand our regional presence and aim to expand our manufacturing operations in the United States during 2024. At present the revenue reported above is from the United States and United Arab Emirates. We’ve classified the revenue based on the entities registered in their respective locations. All the revenue generated as indicated has solely come from external customers, with no sales involving inter-company transactions. 

  

Income Taxes

 

The Company accounts for income tax positions in accordance with Accounting Standards Codification Topic 740, “Income Taxes” (“ASC Topic 740”). This standard prescribes a recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There was no material impact on the Company’s financial position or results of operations as a result of the application of this standard. Deferred tax assets have not been created for those subsidiaries which are in income tax-free jurisdiction, because the losses incurred cannot be utilized in the future, rendering deferred tax assets irrelevant.

 

Recent Accounting Pronouncements

 

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. ASU 2017-04 also clarifies that an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The new standard is effective for fiscal years beginning after December 15, 2019, for both interim and annual reporting periods.

 

Rounding Off

 

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

v3.24.2.u1
Current Assets
6 Months Ended
Jun. 30, 2024
Current Assets [Abstract]  
CURRENT ASSETS

NOTE 3: CURRENT ASSETS

 

   June 30,   December 31, 
Particulars  2024   2023 
         
Loans advanced   (2,327)   1,855,892 
Advance given to suppliers and sub-contractors   0    65,089 
Director’s current accounts   2,519,267    679,245 
Statutory dues receivable   0    50,404 
Deposits   0    46,918 
Accrual of discount on notes   85,354    217,440 
Deferred expenses - consultancy   1,785,938    0 
Buy Back Commitment   2,000,000    2,000,000 
Toto Loan Current Portion   3578709    0 
Misc. current assets   149,546    536,171 
Total   10,116,487    5,451,159 

 

Advances to Subcontractors and Suppliers: Advances have been paid to the suppliers/ sub-contractors in the ordinary course of business for procurement of specialized material and equipment.

 

Directors Current Account includes amount incurred for Company’s Annual shareholders meeting, events for investor relationship, advances for our investment projects and other expenses incurred for future potential acquisitions.

 

Loan advanced refers to the amount advanced by a company in the ordinary course of business and includes the amount paid for set up of new businesses.

 

Accounts Receivable

 

Accounts receivables are reported at the customers’ outstanding balances, less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable.

 

The duration of such receivables extends from 30 days to beyond 12 months. Full payment is received only when a job/project is completed, and approvals are obtained. Provisions are created based on estimated irrecoverable amounts determined by reference to past default experience.

 

   June 30, 
   2024 
Accounts Receivables Ageing  (unaudited) 
1-30 days   329,345 
31-60 days   175,352 
61-90 days   146,028 
+90 days   6,881,243 
Total   7,531,969 
v3.24.2.u1
Non-Current Assets
6 Months Ended
Jun. 30, 2024
Non-Current Assets [Abstract]  
NON-CURRENT ASSETS

NOTE 4: NON-CURRENT ASSETS

 

Goodwill

 

As a part of the 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.

 

As of June 30, 2024, the additional Goodwill has been generated through the acquisition by our subsidiary Quality Industrial Corp, through the operating business of Al Shola Gas as consolidated from April 1, 2024. Goodwill accounted for in the books is primarily a result of the acquisition, 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 the 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.

  

The company will assess impairment from the 2024 year-end 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.

 

On April 1, 2024, the Agreement with Quality International was canceled by the Board of Directors of Quality Industrial Corp. QIND restated its financial statements as of December 31, 2022, which were previously reported on the Original Filing and subsequent amendments. Quality International is no longer considered as Goodwill. The following items reflect the restatements: 

 

As of June 30, 2024, Goodwill, and intangible assets amount to $11,115,562 as compared to total assets amounting to $8,606,289 as of December 31, 2023. Below is a table displaying the Goodwill arising from the Company’s acquisitions:

 

Year  June 30,
2024
   December 31,
2023
 
QIND   6,704,318    6,704,318 
Firebug   0    (81,676)
Bullhead   0    597,226 
Georgia Fire   0    136,175 
ILUS UK   335,741    335,741 
BCD   0    306,597 
ASSS   0    607,908 
SAML   4,075,503    0 
Goodwill Total   11,115,562    8,606,289 

 

Long term investments

 

Particulars  June 30,
2024
   December 31,
2023
 
Investment in BCD   0    20,500 
Investment in FB Fire Technologies Ltd   2,036,767    3,172,175 
Investment in Quality International   0    6,500,000 
Investment in Wikisoft   6,555,755    0 
Investment in Dear Cashmere Holding Co.   12,000,000    12,000,000 
Long term investment   4,672,175    0 
Loan to Fb Fire Technologies Ltd   0    1,946,534 
Total   25,264,697    23,639,209 

 

The company holds long-term investments of $6,500,000 and $0 as of December 31, 2023, and June 30, 2024, respectively. These investments were made for the acquisition of Quality International, a transaction that was terminated on April 1, 2024

 

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. The shares were discretionary awarded and recorded at a fair market value of $1.20 with a grant date as of May 21, 2021, in accordance with ASC 718 and issued by, the Chairman, Nicolas Link and CEO, James Gibbons, of DRCR.

 

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.

 

Tangible Assets 

 

Particulars  June 30,
2024
   December 31,
2023
 
Tangible Assets        
Land and Buildings   0    0 
Plant and Machineries   34,401    38,582 
Furniture, Fixtures and Fittings   34,250    37,432 
Vehicles   69,397    14,645 
Computer and Computer Equipment   48,160    49,044 
Total   186,207    139,523 

 

Depreciation on tangible assets in accordance with ASC 360.

 

   Plant &
Machinery
   Furniture,
Fixtures &
Office
Equipment
   Vehicles   Computers   Total 
Carrying value as of January 1, 2024   38,582    37,432.00    118,789    49,044    243,847 
Addition during Q1 2024   3,116    9,801    
-
    
-
    12,917 
Charged Depreciation Q1 2024   3,806    10,075    24,290    
-
    38,171 
Carrying value March 31, 2024   37,892    37,158    94,499    49,044    218,592 
 Addition during Q2 2024   0    3,949    0    2,060    6,009 
Charged Depreciation Q2 2024   3,491    6,857    25,102    2,944    38,394 
Carrying value June 30, 2024   34,401    34,250    69,397    48,160    186,207 
v3.24.2.u1
Current Liabilities
6 Months Ended
Jun. 30, 2024
Current Liabilities [Abstract]  
CURRENT LIABILITIES

NOTE 5: CURRENT LIABILITIES

 

Other Current Liabilities

 

Particulars  June 30,
2024
   December 31,
2023
 
Accrued payables   68,505    204,925 
Credit cards   10,494    8,221 
other advances   942,990    827,824 
Loan Payable   537,115    6,021,338 
Misc. current liabilities   432,607    165,344 
Payroll Liabilities   792,605    534,068 
Payable to Government Authorities   124,309    64,199 
Provision for Audit Fees   39,500    24,500 
Payable to subsidiaries   10,832,740    975,547 
Total   13,780,865    8,825,966 

 

As per the applicable accounting standards, Borrowings from financial institutions have been bifurcated into current and non-current liabilities.

v3.24.2.u1
Non-Current Liabilities
6 Months Ended
Jun. 30, 2024
Non-Current Liabilities [Abstract]  
NON-CURRENT LIABILITIES

NOTE 6: NON-CURRENT LIABILITIES

  

Notes Payable

 

The following is the list of Notes payable as of June 30, 2024. Convertible Notes issued during the reported period are accounted in the books as a 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 35% below the lowest past 15-day share price and bears 12% interest per annum. The note matured on February 4, 2023. The Company signed a Forbearance Agreement with Discover Growth Fund on May 3, 2023. The Company shall make monthly minimum loan payments to Discover Growth Fund of $450,000.00 commencing on May 30, 2023, and on the 5th day of each month thereafter, until the Note is paid in full. Four payments of  450,000 have been made as of June 30, 2024.

 

On June 1, 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. This note has been partially converted. 

 

On December 22, 2023, the company entered into a convertible note with AJB Capital Investment LLC for the amount of $1,680,000. 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 May 1, 2024.

 

On January 15, 2024, the company entered into a convertible note with Twn Brooks Inc., for the amount of $27,500. 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 July 15, 2024.

 

On January 23, 2024, the company entered into a convertible note with Twn Brooks Inc., for the amount of $25,000. 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 July 23, 2024.

 

On January 31, 2024, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $600,000. The note is convertible into common stock at the rate of $0.10 and bears 8% interest per annum. The note matures on January 31, 2026.

 

On April 1, 2024, ILUS entered into a consolidated note payable with a principal amount of $6,405,750 with RB Capital Inc. which amount represents the amount owed to Holder as of April 1, 2024. Repayable at any time and bears 7% interest rate per annum. The Company may repay the Holder in cash at any time in full including all interest and principal, without penalty. If the issuer pays the holder $650,000 in cash in a fiscal quarter the holder will not be permitted to carry out a conversion in that fiscal quarter, unless by mutual agreement. The note is convertible into common stock at a rate equal to the variable conversion price as of 70% of the lowest trading price during the previous ten trading days.

 

On April 15, 2024, the company entered into a convertible note with Twn Brooks Inc., for the amount of $55,000. 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 October 15, 2024.

 

On May 6, 2024, 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 $0.10 and bears a 7% interest per annum. The note matures on May 6, 2026.

 

On May 16, 2024, the company entered into a convertible note with RB Capital Partners Inc., for the amount of $150,000. The note is convertible into common stock at the rate of $0.10 and bears a 7% interest per annum. The note matures on May 16, 2026.

 

On May 20, 2024, the company entered into a convertible note with Twn Brooks Inc., for the amount of $27,500. The note is convertible into common stock at the rate of 35% below the average past 10-day share price prior to conversion and bears a 9% interest per annum. The note matures on November 20, 2024.

 

On June 12, 2024, ILUS entered into a note payable of $91,530 with 1800 Diagonal Lending LLC. convertible into common stock 65% multiplied by the lowest trading price for the Common Stock during the ten (10) Trading Days prior to the Conversion date and bears a 13% interest per annum. The note matures on March 15, 2025.

 

On June 20, 2024, ILUS entered into a note payable of $63,250 with 1800 Diagonal Lending LLC. convertible into common stock 65% multiplied by the lowest trading price for the Common Stock during the ten (10) Trading Days prior to the Conversion date and bears a 13% interest per annum. The note matures on March 30, 2025.

v3.24.2.u1
Other Non Current Liabilities
6 Months Ended
Jun. 30, 2024
Other Non Current Liabilities [Abstract]  
OTHER NON CURRENT LIABILITIES

NOTE 7: OTHER NON CURRENT LIABILITIES

 

Particulars  June 30,
2024
   December 31,
2023
 
Retirement benefits to pay   274,575    145,662 
Bank Borrowings   320,972    0 
Provision for Convertible Notes   1,249,055    1,155,338 
Interest on Convertible Notes   0    820,455 
Total   1,844,602    2,121,455 

 

Options and Warrants

 

The Company chooses not to record warrants in its financial books if the exercise price is significantly higher than the current market price and classifies it as a contingent liability. For example, the common stock purchase warrant to Discover Growth Fund, LLC described below has an exercise price of $0.275. As of December 31, 2022, the market price was $0.07, and by March 15, 2023, it had further decreased to $0.04 when the Consolidated Financial Statements were being audited. The Company’s management classifies these warrants as a contingent liability, given the decline in prices, making it unlikely that the warrants will be exercised in the future. The management reserves warrant shares with its transfer agent. If the warrants should be exercised in the future the warrants will be accounted for in accordance with ASC 480.

 

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.

v3.24.2.u1
Stockholder´ Equity
6 Months Ended
Jun. 30, 2024
Stockholder´ Equity [Abstract]  
STOCKHOLDER´ EQUITY

NOTE 8: STOCKHOLDER´S EQUITY

 

Common Stock And Preferred Stock

 

In August 2019 the Company 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 – 100,000,000 preferred with par value $0.001 that will be converted at 100 common shares 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

 

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.

 

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.

 

Class E - 5,000,000 preferred shares; par value $0.001; non-cumulative. Dividends are 6% a year commencing a year after issuance. Dividends are 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 a 130% premium to the redemption value. The shares do not have voting rights.

 

Class F – 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.

 

Stockholders’ Equity

 

As of June 30, 2024,

 

1.3,500,000,000 shares of common stock are authorized, and 2,107,852,860 shares of the Company’s common stock are issued and outstanding.

 

2.235,741,000 shares of all classes of preferred stock are authorized and 78,928,925 shares of the Company’s all classes of Preferred stock are issued and outstanding.

 

On January 3, 2024, Ilustrato Pictures International Inc. acquired a convertible note from YAII PN, LTD with outstanding principal and accrued interest of $600,685 in Samsara Luggage Inc. (SAML). On January 5, 2024, SAML reissued a convertible note to ILUS who on the same day converted the note into 150,753,425 shares of common stock in the Company pursuant to the terms of said exchange note. As a result of such conversion, Ilustrato acquired control of 91.5% of the outstanding shares in SAML as of January 5, 2024.

 

On January 03, 2024, we issued 3,250,000 shares of common stock as commitment shares to Twn Brooks Inc. with a fair market value of $.0072 per share for an aggregate price of $23,400.

 

On January 18, 2024, we issued 6,349,206 shares of common stock to Kyle Comerford for a stock purchase agreement for an aggregate price of $20,000.

 

On January 22, 2024, James Gibbons converted 50,000 shares of Preference F stock into 5,000,000 shares of common stock.

 

On January 22, 2024, we issued 2,500,000 shares of common stock as commitment shares to Twn Brooks Inc. with a fair market value of $.0166 per share for an aggregate price of $41,500.

 

On January 25, 2024, we issued 75,000,000 shares of common stock as compensation to AJB Capital Investments LLC for partial conversion of a convertible note for an aggregate price of $633,000.

 

On February 1, 2024, we issued 50,000,000 shares of common stock as compensation to RB Capital Partners LLC for partial conversion of a convertible note for an aggregate price of $200,000.

 

On February 2, 2024, we issued 2,250,000 shares of common stock as commitment shares to Twn Brooks Inc. with a fair market value of $.0172 per share for an aggregate price of $38,700.

 

On February 8, 2024, the company entered into a share purchase agreement with William Black to sell 37,500 shares of Preferred F Stock for a purchase price of $30,000.

 

On February 19, 2024, we issued 125,000 shares of Preferred F stock to Safeguard Investments LLC for an aggregate price of $170,000 for consultancy services.

 

On February 23, 2024, Ilustrato Pictures International, Inc., entered into a Stock Purchase Agreement with Samsara Luggage Inc., and sold all its equity interests in seven companies owned by the Company:

 

Firebug Mechanical Equipment LLC

 

Georgia Fire & Rescue Supply LLC

 

Bright Concept Detection and Protection System LLC

 

Bull Head Products Inc

 

E-Raptor

 

The Vehicle Converters

 

AL Shola Al Modea Safety and Security LLC, the only entity in which the Company does not own 100% but only 51% of the membership interests.

 

The consideration for the sale of the equity interests in the foregoing companies was paid by SAML by the issuance of 350,000 restricted shares of Series B stock of SAML convertible into 350,000,000 common stock and further milestone payment/s should applicable performance targets be referenced.

 

On March 19, 2024, we issued 26,566,901 shares of common stock to Jefferson Street for conversion of a warrant for an aggregate price of $97,500.

  

On March 26, 2024, the Company amended its Articles of Incorporation to authorize it to issue up to three and a half billion (3,500,000,000) common shares, with a par value of one-tenth of one cent ($0.001) per share.

 

On March 27, 2024, we issued 8,736,538 shares of common stock as commitment shares to Twn Brooks Inc. with a fair market value of $.0125 per share for an aggregate price of $109,207.

 

On March 27, 2024, our subsidiary QIND entered into a definitive Stock Purchase Agreement (the “Stock Purchase Agreement”) with the shareholders of Al Shola Al Modea Gas Distribution LLC (“ASG” or “Al Shola Gas”) to acquire a 51% interest in ASG. The Closing of the transaction took place when both parties signed the definitive Stock Purchase Agreement. Al Shola Gas is an Engineering and Distribution Company in the liquefied petroleum gas (“LPG”) Industry in the United Arab Emirates and was established in 1980. The company is one of the region’s leading suppliers and contractors of LPG centralized pipeline systems and is approved by The General Directorate of Civil Defense, Government of Dubai, as a Central Gas Contractor and LPG Supplier.

 

On April 01, 2024, we issued 3,365,882 shares of common stock to TwnBrooks Inc for conversion of a convertible note for an aggregate price of $22,888.

 

On April 02, 2024, we issued 3,365,882 shares of common stock to TwnBrooks Inc for conversion of a convertible note for an aggregate price of $22,888.

 

On April 03, 2024, we issued 16,000,000 shares of common stock to Kevin Van Hoesen for a stock purchase agreement for an aggregate price of $100,000.

 

On April 11, 2024, John-Paul Backwell converted 200,000 shares of Preference F Stock into 20,000,000 shares of common stock.

 

On April 11, 2024, Daniel Link converted 75,000 shares of Preference F stock into 7,500,000 shares of common stock.

 

On April 15, 2024, we issued 4,000,000 shares of common stock as commitment shares to Twn Brooks Inc. with a fair market value of $.0108 per share for an aggregate price of $43,200 pursuant to the issuance of a convertible promissory note dated April 15, 2024, amounting to $55,000.00

 

On May 6, 2024, we issued 18,000,000 shares of common stock as compensation to RB Capital Partners LLC for the final conversion of a convertible note for an aggregate price of $72,000

 

On May 8, 2024, Alexander Kolyakin converted 504,000 shares of Preference B stock into 50,400,000 shares of common stock.

 

On May 15, 2024, we issued 72,000,000 shares of common stock as compensation to RB Capital Partners LLC for the partial conversion of a convertible note for an aggregate price of $288,000

 

On May 21, 2024, we issued 2,000,000 shares of common stock as commitment shares to TwnBrooks Inc, with a fair market value of $.0086 per share for an aggregate price of $17,200.00 pursuant to the issuance of a convertible promissory note dated May 20, 2024, amounting to $27,500.00

 

On 14 June 2024, we issued 11,385,800 shares of common stock as compensation to 1800 Diagonal Lending LLC for the conversion of a convertible note for an aggregate price of $59,946.24

v3.24.2.u1
Net Loss Per Share
6 Months Ended
Jun. 30, 2024
Net Loss Per Share [Abstract]  
NET LOSS PER SHARE

NOTE 9: NET LOSS PER SHARE

 

Particulars  June 30,
2024
   June 30,
2023
 
Basic EPS        
Numerator        
Net income / (loss)   (2,725,402)   (4,655,215)
Net Income attributable to common stockholders  $(2,725,402)  $(4,655,215)
Denominator          
Weighted average shares outstanding   1,959,529,013    1,444,380,699 
Number of shares used for basic EPS computation   1,959,529,013    1,444,380,699 
Basic EPS  $(0.00)  $(0.00)
           
Diluted EPS          
Numerator          
Net income / (loss)   (2,725,402)   (4,655,215)
Net Income attributable to common stockholders  $(2,725,402)  $(4,655,215)
Denominator          
Number of shares used for basic EPS computation   2,107,852,860    1,379,080,699 
Conversion of Class A preferred stock to common stock   30,000,000    30,000,000 
Conversion of Class B preferred stock to common stock   356,000,000    340,000,000 
Conversion of Class C preferred stock to common stock   0    0 
Conversion of Class D preferred stock to common stock   30,370,500,000    30,370,500,000 
Conversion of Class E preferred stock to common stock   3,172,175    3,172,175 
Conversion of Class F preferred stock to common stock   145,575,000    166,825,000 
Number of shares used for diluted EPS computation   33,013,100,035    32,289,577,874 
Diluted EPS  $(0.00)  $(0.00)
v3.24.2.u1
Related Party Transactions
6 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 10: RELATED PARTY TRANSACTIONS

 

The transactions described under the heading “Executive Compensation,” there have not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a participant in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.

 

On April 1, 2024, the Agreement with Quality International was canceled by the Board of Directors of Quality Industrial Corp. QIND restated its financial statements as of December 31, 2022, which were previously reported on the Original Filing and subsequent amendments. Quality International is no longer considered a related party. The following items reflect the restatements: 

 

As of June 30, 2024, and December 31, 2023, the Company had amounts due to Quality Industrial Corp. (“QIND”), a subsidiary of the Company, of $1,836,396 and $333,133, 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 ILUS 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.

 

On December 5, 2022, we issued 35,000 preferred Class F shares to Krishnan Krishnamoorthy as staff compensation for an aggregate price of $273,700.

 

On December 5, 2022, we issued 25,000 preferred Class F shares to Carsten Kjems Falk as staff compensation for an aggregate price of $195,500.

  

On December 5, 2022, we issued 75,000 preferred class F shares to Daniel Link as staff compensation for an aggregate price of $586,500. Daniel Link and Nicolas Link are siblings. Daniel Link was employed in Firebug UK from 2014 until February 28, 2022, thereafter he was employed in Replay Solutions which was incorporated by ILUS on March 1, 2022.

  

On December 5, 2022, we issued 250,000 shares of preferred class F to Nicolas Link as staff compensation for an aggregate price of $1,955,000.

 

On December 08, 2022, we canceled 10,000,000 shares of common stock held by Louise Bennett.

 

On December 08, 2022, we canceled 1,300,000 shares of preferred class F held by Louise Bennett.

 

On December 08, 2022, we canceled 800,000 shares of preferred class F held by John-Paul Backwell.

 

On April 12, 2023, 100,000 Preferred F shares were issued to John-Paul Backwell as staff compensation. with a fair market value of $429,000.

 

On May 4, 2023, QIND issued to Nicolas Link 2,750,000 shares of our common stock with a grant-date and fair market value of the award as of June 1, 2022, at $0.0721 pursuant to his employee contract.

 

On May 4, 2023, QIND issued to John-Paul Backwell 2,250,000 shares of our common stock with a grant-date and fair market value of the award as of June 1, 2022, at $0.0721 pursuant to his employee contract.

 

On May 4, 2023, QIND issued to Carsten Kjems Falk 2,250,000 shares of our common stock with a grant date and fair market value of the award as of June 1, 2022, at $0.0721 pursuant to his employee contract.

 

On May 4, 2023, QIND issued to Krishnan Krishnamoorthy 2,250,000 shares of our common stock with a grant date and fair market value of the award as of June 1, 2022, at $0.0721 pursuant to his employee contract.

 

On May 4, 2023, QIND issued to Louise Bennett 500,000 shares of our common stock with a grant-date and fair market value of the award as of June 1, 2022, at $0.0721 pursuant to her employee contract.

 

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

 

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

 

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

 

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

 

On April 3, 2024, we issued 30,000 shares of Series B stock in our subsidiary Samsara Luggage Inc. to John-Paul Backwell pursuant to his employment agreement dated January 5, 2023, with a fair market value of $900,000.

 

On April 3, 2024, we issued 10,000 shares of Series B stock to Daniel Link pursuant to a consultancy agreement dated January 5, 2023, with a fair market value of $300,000

 

On May 14, 2024, QIND issued to John-Paul Backwell 500,000 shares of our common stock, pursuant to his employee contract, with a grant-date and fair market value of $0.07 per share and $35,000 in total.

v3.24.2.u1
Consolidation Basis
6 Months Ended
Jun. 30, 2024
Consolidation Basis [Abstract]  
CONSOLIDATION BASIS

NOTE 11: CONSOLIDATION BASIS

 

Following companies are consolidating basis of Mergers & Acquisitions as of June 30, 2024:

 

1)ILUS International US

 

2)ILUS International UK Ltd.

 

4)Firebug Mechanical Equipment LLC.

 

5)Bull Head Products Inc.

 

6)Georgia Fire & Rescue

 

7)Bright Concept and protection System LLC

 

8)Quality Industrial Corp.

 

9)Al Shola Al Modea Safety and Security LLC

 

10)Al Shola Al Modea Gas and Distribution LLC

 

11)Samsara Luggage Inc.
v3.24.2.u1
Legal Proceedings
6 Months Ended
Jun. 30, 2024
Legal Proceedings [Abstract]  
LEGAL PROCEEDINGS

NOTE 12: LEGAL PROCEEDINGS

 

From time to time, we may become party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. Aside from the below, we are not currently a party, as plaintiff or defendant, to any legal proceedings that we believe to be material or which, individually or in the aggregate, would be expected to have a material effect on our business, financial condition or results of operation if determined adversely to us. 

 

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. On May 28, 2024, Lee Larson Elmore (Elmore), Ilustrato Pictures International, Inc. (“ILUS”) Nicholas Link (Link), and FB Technologies Global Inc. (collectively the parties) have agreed to resolve all claims existing between themselves. In exchange for the satisfaction of the disputed promissory note (note) and release of all claims between these parties, ILUS shall:

 

  1. Convert the remainder of the note to 15 million shares of ILUS which will be issued to Elmore. These shares shall be subject to a 10% leak out based upon average daily volume; and
     
  2. Pay, or cause to be paid, to Elmore the total of $75,000 in 5 equal installments with the first installment on June 17, 2024, and the remaining payments being paid monthly on the following dates: July 17, 2024; August 17, 2024; September 17, 2024; and October 17, 2024. As security for these payments, ILUS will issue to Elmore 15 million restricted shares of ILUS to be released pro rata as payments are made. If there is a default in any portion of the payment of the $75,000 the portion of the restricted shares which have not been released pro rata may be piggy backed on any registration efforts made by ILUS.

 

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 provisional settlement on September 6, 2023, and final details are in negotiation.

 

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. On June 5, 2023, we received a service of process by the Superior Court of California, County of San Diego, with a hearing rescheduled for March 8, 2024. On August 22, 2023, the company received information that Black Ice Advisors withdrew their prior demand for shares with a new motion seeking a monetary judgment in Black Ice’s for $3.772 million for the historic note with a principal amount of $4,000. At a hearing on November 3, 2023, the Court adopted its tentative ruling as the final ruling and denied the motion for summary judgment from Black Ice Advisors LLC. The company is currently trying to conclude a settlement agreement. A hearing date set for September 2024 if a settlement is unable to be negotiated.

  

We cannot predict whether the action against Steve Nicol and Black Ice Advisors is likely to result in any material recovery 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 are based on 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.

v3.24.2.u1
Going Concern
6 Months Ended
Jun. 30, 2024
Going Concern [Abstract]  
GOING CONCERN

NOTE 13: GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Currently, the Company has incurred operating losses, and as of December 31, 2023, the Company also had a working capital deficit and an accumulated deficit. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

Management also believes the Company needs to raise additional capital for working capital purposes. There is no assurance that such financing will be available in the future. The conditions described above raise substantial doubt about our ability to continue as a going concern. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going Ilustrato Pictures International Inc. recorded all revenue generated from selected customers on a credit basis. At the end of the year, accounts receivable for the previous year and the current year have not been collected. The management has represented that they will collect the cash for all outstanding account receivables due from the previous years and the current year.

v3.24.2.u1
Subsequent Events
6 Months Ended
Jun. 30, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 14: SUBSEQUENT EVENTS

 

On July 1, 2024, the company ILUS entered into a Convertible Note with a principal amount of $27,500 to Twn Brooks Inc. The note is convertible into common stock at the rate 35% below the average past 10-day share price. and bear 9% interest per annum. The note matures on January 1, 2025. 

 

On July 1, 2024, the company ILUS entered into a Convertible Note with a principal amount of $27,500 to Twn Brooks Inc. The note is convertible into common stock at a rate 35% below the average past 10-day share price. and bear 9% interest per annum. The note matures on January 1, 2025. 

 

On July 01, 2024, we issued 3,250,000 shares of common stock as commitment shares to Twn Brooks Inc. with a fair market value of $.0047 per share for an aggregate price of $15,275 pursuant to the issuance of a convertible promissory note dated April 15, 2024, amounting to $55,000.00.

 

On July 01, 2024, we issued 3,250,000 shares of common stock as commitment shares to Twn Brooks Inc. with a fair market value of $.0047 per share for an aggregate price of $15,275 pursuant to the issuance of a convertible promissory note dated April 15, 2024, amounting to $55,000.00.

 

On July 2, 2024, the company ILUS entered into a Convertible Note with a principal amount of $200,000 to RB Capital Partners Inc., which shall be convertible into shares of common stock of the Company at the rate of $0.10 per share. and bear 7% interest per annum. The note matures on July 2, 2026.

 

On July 8, 2024, we issued 15,000,000 shares of common stock to Larson Elmore pursuant to the Settlement Agreement.

 

On the 10th of July, we issued 200,000 Pref F shares as compensation to John-Paul Backwell.

 

On July 11, 2024, we issued 100,000,000 shares of common stock as compensation to RB Capital Partners LLC for the partial conversion of a convertible note for an aggregate price of $200,000

 

On August 13, 2024, the company ILUS entered into a Convertible Note with a principal amount of $65,000 to RB Capital Partners Inc., which shall be convertible into shares of common stock of the Company at the rate of $0.10 per share. and bear 7% interest per annum. The note matures on August 13, 2026.

 

On July 31, 2024, we issued 5,986,979 shares of common stock to Twn Brooks Inc for conversion of a convertible note for an aggregate price of $28,737.50

 

On August 05, 2024, we issued 5,852,564 shares of common stock to Twn Brooks Inc for conversion of a convertible note for an aggregate price of $28,531.25

v3.24.2.u1
Pay vs Performance Disclosure - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Pay vs Performance Disclosure        
Net Income (Loss) $ (700,568) $ (3,454,630) $ (2,725,402) $ (4,655,215)
v3.24.2.u1
Insider Trading Arrangements
3 Months Ended
Jun. 30, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.2.u1
Accounting Policies, by Policy (Policies)
6 Months Ended
Jun. 30, 2024
Summary of Accounting Policies [Abstract]  
Revenue Recognition

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers.

Accordingly, revenue is recognized when control of the goods or services promised under a contract is transferred to the customer either at a point in time (e.g., upon delivery) or over time (e.g., as the Company performs under the contract) in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the goods or services. The Company accounts for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. If collectability is not probable, the sale is deferred until collection becomes probable or payment is received.

Contract Assets and Contract Liabilities acquired under Business Combinations

Contract Assets and Contract Liabilities acquired under Business Combinations

The company follows new guidance under ASC 606 regarding the recognition and measurement of contract assets and contract liabilities acquired in a business combination. The company applies the definition of a performance obligation in ASC 606 when recognizing contract liabilities assumed in a business combination. The company eventually recognizes contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date. Earlier, contract assets and contract liabilities acquired in a business combination were recorded by the acquirer at fair value.

Work-in-progress

Work-in-progress

Work-in-progress is stated at cost plus attributable profit, less provision for any anticipated losses and progress billings. Cost comprises direct materials, labor, depreciation, and overheads. If any progress billings for any contract exceed the cost-plus attributable profit or less anticipated losses, the excess to be shown as excess progress billings. Claims are only recognized as income when the outcome and recoverability can be determined with reasonable certainty. Contract revenue and costs are recognized as revenue and expenses, respectively, in the statement of comprehensive income when the outcome of a construction contract can be estimated reliably.

In accordance with ASC-606 revenue recognition, amounts are billed in accordance with contractual terms or as work progresses. Unbilled amounts arise when the timing of billing differs from the timing of revenue recognized, such as when contract provisions require specific milestones to be met before a customer can be billed. Unbilled amounts primarily relate to performance obligations satisfied over time when the cost-to-cost method is utilized, and the revenue recognized exceeds the amount billed to the customer as there’s not yet a right to invoice in accordance with contractual terms. Unbilled amounts are recorded as a contract asset when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract.

Variations

Variations

Variations are recognized in contract revenue when the outcome can be determined with reasonable certainty and are capable of being reliably measured.

Variable consideration

Variable consideration

If the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved. The construction contracts provide customers with a right to claim damages for delay in delivery of goods. The rights to claim damages for delay in delivery of goods give rise to variable consideration.

 

Accounts Receivable

Accounts Receivable

Accounts receivable are reported at the customers’ outstanding balances, less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable.

The duration of such receivables extends from 30 days to beyond 12 months. Full payment is received only when a job/project is completed, and approvals are obtained. Provisions are created based on estimated irrecoverable amounts determined by reference to past default experience.

Allowance for Doubtful Accounts

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.

Inventories

Inventories

In accordance with ASC 330, the Company states inventories at the lower of cost or net realizable value. Cost, which includes material, labor and overhead, is determined on a first-in, first-out basis. The Company makes adjustments to reduce the cost of inventory to its net realizable value, if required, for estimated excess, obsolete, zero usage or impaired balances. Factors influencing these adjustments include changes in market demand, product life cycle and engineering changes.

Tangible Assets/ Property Plant & Equipment

Tangible Assets/ Property Plant & Equipment

Property, plant, and equipment are recorded at cost, except when acquired in a business combination where property, plant and equipment are recorded at fair value. Depreciation of property, plant and equipment is recognized over the estimated useful lives of the respective assets using the straight-line method.

The estimated useful lives are as follows:

Buildings, related improvements & land improvements  5-25
Machinery & equipment  3-15
Computer hardware & software  3-10
Office, furniture & others  3-15

Expenditures that extend the useful life of existing property, plant and equipment are capitalized and depreciated over the remaining useful life of the related asset. Expenditures for repairs and maintenance are expensed as incurred. When property, plant and equipment are retired or sold, the cost and related accumulated depreciation is removed from the Company’s balance sheet, with any gain or loss reflected in operations.

Stock-Based Compensation

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.

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 the 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 calculates the fair value of option grants and warrant issuances utilizing the Binomial pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeiture” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock option or warrant. The Company estimates forfeiture rates for all unvested awards when calculating the expenses for the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as well as employee termination patterns. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period.

Earnings (Loss) per Share

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 share available. Diluted earnings (loss) per share is computed similarly 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

Organization and Offering Cost

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

Cash and Cash Equivalents

Cash and Cash Equivalents

For the 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.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The company’s financial instruments consist of cash and cash equivalents, accounts receivable, and notes payable. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Business segment

Business segment

ASC 280, “Segment Reporting” requires the use of the “management approach” model for segment 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. 

 

Below is the Statement of operations of reportable Segment:

 

Divisional Income Statement

The Company is organized into two divisions based on the similarity of products, customers served, common use of facilities, and economic characteristics. The Company’s segments are as follows:

1.Emergency Response
2.Industrial & Manufacturing

All intersegment transactions have been eliminated in consolidation. 

   For the Six Months Ended 
   June 30,
2024
   2023
(Restated)
 
Emergency & Response Division        
Revenue   2,028,053    3,595,851 
Cost Of Goods Sold   1,399,025    2,553,284 
Gross Profit   629,028    1,042,567 
Total Operating Expenses   1,886,734    3,259,649 
Operating Loss   (1,257,706)   
(2,217,08
)
Net Loss   (1,252,125)   (2,988,458)

Our revenue decreased to $2,028,053 for the six months ended June 30, 2024, from $3,595,851 in 2023, a 44% decrease year to date. Gross profit percentage increased to 31% for the six months ended June 3, 2024, from 29% in 2023.

Operating expenses decreased to $1,886,734 for the six months ended June 30, 2024, compared with the same period of $ 3,259,649 in the year 2023.

For the coming period 2024, the Company will continue to allocate financial, technical and sales resources for recently acquired subsidiaries to positively impact their financial results through increased sales orders and efficiency. Allocated personnel will primarily focus on accelerating sales and marketing efforts, product development, international market expansion, optimizing supply chain and production processes, and overall increased profitability while continuing with the integration and optimization of currently operating companies. With the group expansion and growth, we also intend to hire executives and personnel with specific industry experience and fields of expertise to streamline financial reporting, compliance, and Investor Relations and to improve our corporate governance.

   For the Six Months Ended 
  

June 30,

2024

   June 30,
2023
(Restated)
 
Industrial & Manufacturing Division (QIND)        
Revenue   3,317,206    0 
           
Cost of revenues   2,068,708    0 
           
Gross profit   1,248,498    0 
           
Total Operating Expenses   911,179    900,327 
Profit/ loss from Operations   337,319    (900,327)
Non-Operating expenses   165,851    766,430 
Non-Operating Income   427,554    
 
Net loss/ profit   599,022    (1,666,757)

 

For our Industrial and Manufacturing Division, the Operating Revenue increased to $3,317,206 for the quarter ended June 30, 2024, compared to $0 for the year ended June 30, 2023. The increase in revenue, was the result of the consolidation of Al Shola Gas For our Industrial and Manufacturing Division, the Operating expenses increased to $10,852 for the year ended June 30, 2024, compared to $65,013 for the year ended June 30, 2023. Our increase in operating expenses in 2024 was mainly the result of the consolidation of Al Shola Gas in our subsidiary QIND. Our Subsidiary QIND acquired a 51% interest in Al Shola Gas on March 23, 2024, and is consolidating the profitable operating company into its financials from Q2 2024.

We earned a profit of $599,022 for the six months ended June 30, 2024, compared to a net loss of $1,666,757 for the six months ended June 30, 2023. The change from loss to profit for the period ended June 30, 2024, is a result of Net Income from our acquisition of Al Shola Gas and the reversal of interest payments on the loan agreements with Mahavir and Artelliq.

Geographical presence

Geographical presence

Presently our operations are spread across the United States, United Arab Emirates, United Kingdom, and the Republic of Serbia, however, we plan to further expand our regional presence and aim to expand our manufacturing operations in the United States during 2024. At present the revenue reported above is from the United States and United Arab Emirates. We’ve classified the revenue based on the entities registered in their respective locations. All the revenue generated as indicated has solely come from external customers, with no sales involving inter-company transactions. 

Income Taxes

Income Taxes

The Company accounts for income tax positions in accordance with Accounting Standards Codification Topic 740, “Income Taxes” (“ASC Topic 740”). This standard prescribes a recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There was no material impact on the Company’s financial position or results of operations as a result of the application of this standard. Deferred tax assets have not been created for those subsidiaries which are in income tax-free jurisdiction, because the losses incurred cannot be utilized in the future, rendering deferred tax assets irrelevant.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. ASU 2017-04 also clarifies that an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The new standard is effective for fiscal years beginning after December 15, 2019, for both interim and annual reporting periods.

 

Rounding Off

Rounding Off

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

v3.24.2.u1
Summary of Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2024
Summary of Accounting Policies [Line items]  
Schedule of Estimated Useful Lives
Particulars  June 30,
2024
   December 31,
2023
 
Tangible Assets        
Land and Buildings   0    0 
Plant and Machineries   34,401    38,582 
Furniture, Fixtures and Fittings   34,250    37,432 
Vehicles   69,397    14,645 
Computer and Computer Equipment   48,160    49,044 
Total   186,207    139,523 
Schedule of Transactions Have Been Eliminated in Consolidation All intersegment transactions have been eliminated in consolidation.
   For the Six Months Ended 
   June 30,
2024
   2023
(Restated)
 
Emergency & Response Division        
Revenue   2,028,053    3,595,851 
Cost Of Goods Sold   1,399,025    2,553,284 
Gross Profit   629,028    1,042,567 
Total Operating Expenses   1,886,734    3,259,649 
Operating Loss   (1,257,706)   
(2,217,08
)
Net Loss   (1,252,125)   (2,988,458)
   For the Six Months Ended 
  

June 30,

2024

   June 30,
2023
(Restated)
 
Industrial & Manufacturing Division (QIND)        
Revenue   3,317,206    0 
           
Cost of revenues   2,068,708    0 
           
Gross profit   1,248,498    0 
           
Total Operating Expenses   911,179    900,327 
Profit/ loss from Operations   337,319    (900,327)
Non-Operating expenses   165,851    766,430 
Non-Operating Income   427,554    
 
Net loss/ profit   599,022    (1,666,757)

 

Property Plant & Equipment  
Summary of Accounting Policies [Line items]  
Schedule of Estimated Useful Lives The estimated useful lives are as follows:
Buildings, related improvements & land improvements  5-25
Machinery & equipment  3-15
Computer hardware & software  3-10
Office, furniture & others  3-15
v3.24.2.u1
Current Assets (Tables)
6 Months Ended
Jun. 30, 2024
Current Assets [Abstract]  
Schedule of Current Assets
   June 30,   December 31, 
Particulars  2024   2023 
         
Loans advanced   (2,327)   1,855,892 
Advance given to suppliers and sub-contractors   0    65,089 
Director’s current accounts   2,519,267    679,245 
Statutory dues receivable   0    50,404 
Deposits   0    46,918 
Accrual of discount on notes   85,354    217,440 
Deferred expenses - consultancy   1,785,938    0 
Buy Back Commitment   2,000,000    2,000,000 
Toto Loan Current Portion   3578709    0 
Misc. current assets   149,546    536,171 
Total   10,116,487    5,451,159 
Schedule of Provisions are Created Based on Estimated Irrecoverable Amounts Provisions are created based on estimated irrecoverable amounts determined by reference to past default experience.
   June 30, 
   2024 
Accounts Receivables Ageing  (unaudited) 
1-30 days   329,345 
31-60 days   175,352 
61-90 days   146,028 
+90 days   6,881,243 
Total   7,531,969 
v3.24.2.u1
Non-Current Assets (Tables)
6 Months Ended
Jun. 30, 2024
Non-Current Assets [Abstract]  
Schedule of Goodwill and Intangible Assets Below is a table displaying the Goodwill arising from the Company’s acquisitions:
Year  June 30,
2024
   December 31,
2023
 
QIND   6,704,318    6,704,318 
Firebug   0    (81,676)
Bullhead   0    597,226 
Georgia Fire   0    136,175 
ILUS UK   335,741    335,741 
BCD   0    306,597 
ASSS   0    607,908 
SAML   4,075,503    0 
Goodwill Total   11,115,562    8,606,289 

 

Schedule of Long Term Investments
Particulars  June 30,
2024
   December 31,
2023
 
Investment in BCD   0    20,500 
Investment in FB Fire Technologies Ltd   2,036,767    3,172,175 
Investment in Quality International   0    6,500,000 
Investment in Wikisoft   6,555,755    0 
Investment in Dear Cashmere Holding Co.   12,000,000    12,000,000 
Long term investment   4,672,175    0 
Loan to Fb Fire Technologies Ltd   0    1,946,534 
Total   25,264,697    23,639,209 
Schedule of Tangible Assets
Particulars  June 30,
2024
   December 31,
2023
 
Tangible Assets        
Land and Buildings   0    0 
Plant and Machineries   34,401    38,582 
Furniture, Fixtures and Fittings   34,250    37,432 
Vehicles   69,397    14,645 
Computer and Computer Equipment   48,160    49,044 
Total   186,207    139,523 
Schedule of Depreciation on Tangible Assets
   Plant &
Machinery
   Furniture,
Fixtures &
Office
Equipment
   Vehicles   Computers   Total 
Carrying value as of January 1, 2024   38,582    37,432.00    118,789    49,044    243,847 
Addition during Q1 2024   3,116    9,801    
-
    
-
    12,917 
Charged Depreciation Q1 2024   3,806    10,075    24,290    
-
    38,171 
Carrying value March 31, 2024   37,892    37,158    94,499    49,044    218,592 
 Addition during Q2 2024   0    3,949    0    2,060    6,009 
Charged Depreciation Q2 2024   3,491    6,857    25,102    2,944    38,394 
Carrying value June 30, 2024   34,401    34,250    69,397    48,160    186,207 
v3.24.2.u1
Current Liabilities (Tables)
6 Months Ended
Jun. 30, 2024
Current Liabilities [Abstract]  
Schedule of Other Current Liabilities Other Current Liabilities
Particulars  June 30,
2024
   December 31,
2023
 
Accrued payables   68,505    204,925 
Credit cards   10,494    8,221 
other advances   942,990    827,824 
Loan Payable   537,115    6,021,338 
Misc. current liabilities   432,607    165,344 
Payroll Liabilities   792,605    534,068 
Payable to Government Authorities   124,309    64,199 
Provision for Audit Fees   39,500    24,500 
Payable to subsidiaries   10,832,740    975,547 
Total   13,780,865    8,825,966 
v3.24.2.u1
Other Non Current Liabilities (Tables)
6 Months Ended
Jun. 30, 2024
Other Non Current Liabilities [Abstract]  
Schedule of Other Non Current Liabilities
Particulars  June 30,
2024
   December 31,
2023
 
Retirement benefits to pay   274,575    145,662 
Bank Borrowings   320,972    0 
Provision for Convertible Notes   1,249,055    1,155,338 
Interest on Convertible Notes   0    820,455 
Total   1,844,602    2,121,455 
v3.24.2.u1
Net Loss Per Share (Tables)
6 Months Ended
Jun. 30, 2024
Net Loss Per Share [Abstract]  
Schedule of Net Loss Per Share
Particulars  June 30,
2024
   June 30,
2023
 
Basic EPS        
Numerator        
Net income / (loss)   (2,725,402)   (4,655,215)
Net Income attributable to common stockholders  $(2,725,402)  $(4,655,215)
Denominator          
Weighted average shares outstanding   1,959,529,013    1,444,380,699 
Number of shares used for basic EPS computation   1,959,529,013    1,444,380,699 
Basic EPS  $(0.00)  $(0.00)
           
Diluted EPS          
Numerator          
Net income / (loss)   (2,725,402)   (4,655,215)
Net Income attributable to common stockholders  $(2,725,402)  $(4,655,215)
Denominator          
Number of shares used for basic EPS computation   2,107,852,860    1,379,080,699 
Conversion of Class A preferred stock to common stock   30,000,000    30,000,000 
Conversion of Class B preferred stock to common stock   356,000,000    340,000,000 
Conversion of Class C preferred stock to common stock   0    0 
Conversion of Class D preferred stock to common stock   30,370,500,000    30,370,500,000 
Conversion of Class E preferred stock to common stock   3,172,175    3,172,175 
Conversion of Class F preferred stock to common stock   145,575,000    166,825,000 
Number of shares used for diluted EPS computation   33,013,100,035    32,289,577,874 
Diluted EPS  $(0.00)  $(0.00)
v3.24.2.u1
Organization, History and Business (Details)
6 Months Ended
Mar. 27, 2024
Jan. 05, 2024
shares
Dec. 13, 2022
May 28, 2022
USD ($)
Mar. 31, 2022
Jan. 01, 2022
May 31, 2021
AED (د.إ)
shares
Apr. 13, 2021
Jan. 26, 2021
May 18, 2020
shares
Apr. 01, 2016
shares
Jun. 30, 2024
USD ($)
shares
Jun. 30, 2024
AED (د.إ)
shares
Jan. 03, 2024
USD ($)
Organization, History and Business [Line Items]                            
Issuance of common stock shares                     360,000,000      
Aggregate cash purchase price | $                       $ 500,000    
Payable amount | $                       300,000    
Remaining payable amount | $                       $ 220,000    
Restricted shares             1,000,000         350,000 350,000  
Purchase consideration | د.إ                         د.إ 250,000  
Sales purchase agreement aggregate amount       $ 500,000     د.إ 10,000              
Puchase consideration amount | $                       $ 714,000    
Accrued interest amount | $                           $ 600,685
Georgia Fire & Rescue Supply LLC [Member]                            
Organization, History and Business [Line Items]                            
Restricted shares                       1,500 1,500  
Firebug Mechanical Equipment LLC [Member]                            
Organization, History and Business [Line Items]                            
Percentage of share purchase agreement                 100.00%          
Georgia Fire & Rescue Supply LLC [Member]                            
Organization, History and Business [Line Items]                            
Percentage of share purchase agreement         100.00%                  
Georgia Fire & Rescue Supply LLC [Member]                            
Organization, History and Business [Line Items]                            
Aggregate cash purchase price | $                       $ 900,000    
Payable amount | $                       680,000    
Bright Concept Detection and Protection System LLC [Member]                            
Organization, History and Business [Line Items]                            
Percentage of share purchase agreement               100.00%            
Bullheadf Products Inc [Member]                            
Organization, History and Business [Line Items]                            
Percentage of share purchase agreement           100.00%                
Remaining payable amount | $                       $ 200,000    
Restricted shares                       6,750 6,750  
Quality Industrial Corp [Member]                            
Organization, History and Business [Line Items]                            
Percentage of share purchase agreement       77.00%                    
AL Shola Al Modea Safety and Security LLC [Member]                            
Organization, History and Business [Line Items]                            
Percentage of share purchase agreement   91.50% 51.00%                 100.00% 100.00%  
AL Shola Al Modea Safety and Security LLC [Member] | Membership [Member]                            
Organization, History and Business [Line Items]                            
Percentage of share purchase agreement                       51.00% 51.00%  
Al Shola Al Modea Gas Distribution LLC [Member]                            
Organization, History and Business [Line Items]                            
Percentage of share purchase agreement 51.00%                          
Share Purchase Agreement [Member] | AL Shola Al Modea Safety and Security LLC [Member]                            
Organization, History and Business [Line Items]                            
Percentage of share purchase agreement                       51.00% 51.00%  
Series E Preferred Stock [Member] | FB Technologies Global, Inc [Member]                            
Organization, History and Business [Line Items]                            
Shares issued                   3,172,175        
Common Stock [Member]                            
Organization, History and Business [Line Items]                            
Converted to shares   150,753,425                        
Common Stock [Member] | FB Technologies Global, Inc [Member]                            
Organization, History and Business [Line Items]                            
Shares issued                   360,000,000        
Common Stock [Member] | SAML [Member]                            
Organization, History and Business [Line Items]                            
Converted to shares                       350,000,000 350,000,000  
Preference D Shares [Member] | FB Technologies Global, Inc [Member]                            
Organization, History and Business [Line Items]                            
Shares issued                   60,741,000        
Preferred A Shares [Member]                            
Organization, History and Business [Line Items]                            
Shares issued                   10,000,000        
v3.24.2.u1
Summary of Accounting Policies (Details) - USD ($)
6 Months Ended
Jun. 30, 2024
Jun. 03, 2024
Jun. 30, 2023
Jun. 03, 2023
Mar. 23, 2024
Emergency & Response Division [Member]          
Summary of Significant Policies [Line Items]          
Revenue $ 2,028,053   $ 3,595,851    
Revenue percentage 44.00%        
Gross profit percentage   31.00%   29.00%  
Operating expenses $ 1,886,734   3,259,649    
Net loss/ profit (1,252,125)   (2,988,458)    
Industrial and Manufacturing [Member]          
Summary of Significant Policies [Line Items]          
Operating expenses 10,852   65,013    
Net loss/ profit 599,022   (1,666,757)    
Industrial and Manufacturing [Member] | Al Shola Gas [Member]          
Summary of Significant Policies [Line Items]          
Revenue $ 3,317,206   $ 0    
Subsidiary ownership percentage         51.00%
v3.24.2.u1
Summary of Accounting Policies (Details) - Schedule of Estimated Useful Lives
Jun. 30, 2024
Minimum [Member] | Buildings, related improvements & land improvements [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives 5 years
Minimum [Member] | Machinery & equipment [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives 3 years
Minimum [Member] | Computer hardware & software [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives 3 years
Minimum [Member] | Office, furniture & others [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives 3 years
Maximum [Member] | Buildings, related improvements & land improvements [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives 25 years
Maximum [Member] | Machinery & equipment [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives 15 years
Maximum [Member] | Computer hardware & software [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives 10 years
Maximum [Member] | Office, furniture & others [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives 15 years
v3.24.2.u1
Summary of Accounting Policies (Details) - Schedule of Transactions Have Been Eliminated in Consolidation - USD ($)
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Emergency & Response Division [Member]    
Schedule of Divisional Income Statement [Line Items]    
Revenue $ 2,028,053 $ 3,595,851
Cost Of Goods Sold 1,399,025 2,553,284
Gross profit 629,028 1,042,567
Total Operating Expenses 1,886,734 3,259,649
Income (loss) from operations (1,257,706) (221,708)
Net Income (Loss) (1,252,125) (2,988,458)
Industrial & Manufacturing Division (QIND&ASG) [Member]    
Schedule of Divisional Income Statement [Line Items]    
Revenue 3,317,206 0
Cost of revenues 2,068,708 0
Gross profit 1,248,498 0
Total Operating Expenses 911,179 900,327
Income (loss) from operations 337,319 (900,327)
Non-Operating expenses 165,851 766,430
Non-Operating Income 427,554
Net Income (Loss) $ 599,022 $ (1,666,757)
v3.24.2.u1
Current Assets (Details) - Schedule of Current Assets - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Current Assets [Abstract]    
Loans advanced $ (2,327) $ 1,855,892
Advance given to suppliers and sub-contractors 0 65,089
Director’s current accounts 2,519,267 679,245
Statutory dues receivable 0 50,404
Deposits 0 46,918
Accrual of discount on notes 85,354 217,440
Deferred expenses - consultancy 1,785,938 0
Buy Back Commitment 2,000,000 2,000,000
Toto Loan Current Portion 3,578,709 0
Misc. current assets 149,546 536,171
Total $ 10,116,487 $ 5,451,159
v3.24.2.u1
Current Assets (Details) - Schedule of Provisions are Created Based on Estimated Irrecoverable Amounts - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Schedule of Provisions are Created Based on Estimated Irrecoverable Amounts [Line Items]    
Accounts Receivables Ageing $ 7,531,969 $ 22,825,113
1-30 days [Member]    
Schedule of Provisions are Created Based on Estimated Irrecoverable Amounts [Line Items]    
Accounts Receivables Ageing 329,345  
31-60 days [Member]    
Schedule of Provisions are Created Based on Estimated Irrecoverable Amounts [Line Items]    
Accounts Receivables Ageing 175,352  
61-90 days [Member]    
Schedule of Provisions are Created Based on Estimated Irrecoverable Amounts [Line Items]    
Accounts Receivables Ageing 146,028  
+90 days [Member]    
Schedule of Provisions are Created Based on Estimated Irrecoverable Amounts [Line Items]    
Accounts Receivables Ageing $ 6,881,243  
v3.24.2.u1
Non-Current Assets (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
May 21, 2021
Non-Current Assets [Line Items]      
Goodwill and intangible assets amount $ 11,115,562 $ 8,606,289  
Long-term investments $ 25,264,697 $ 23,639,209  
Common stock, share issued (in Shares) 133,006,691 127,129,694  
Market fair value (in Dollars per share)     $ 1.2
Investment in Quality International [Member]      
Non-Current Assets [Line Items]      
Long-term investments $ 0 $ 6,500,000  
Investment in FB Fire Technologies Ltd [Member]      
Non-Current Assets [Line Items]      
Long-term investments $ 2,036,767 $ 3,172,175  
Investment in Dear Cashmere Holding Co. [Member]      
Non-Current Assets [Line Items]      
Common stock, share issued (in Shares)     10,000,000
Class E Preferred Stock [Member]      
Non-Current Assets [Line Items]      
Preferred stock issued (in Shares) 3,172,175 3,172,175  
Preferred stock value $ 3,172 $ 3,172  
Class E Preferred Stock [Member] | Investment in FB Fire Technologies Ltd [Member]      
Non-Current Assets [Line Items]      
Preferred stock issued (in Shares) 3,172,175    
Advance per share (in Dollars per share) $ 1    
Preferred stock value $ 3,172,175    
v3.24.2.u1
Non-Current Assets (Details) - Schedule of Goodwill and Intangible Assets - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Schedule of Goodwill and Intangible Assets [Line Items]    
Goodwill Total $ 11,115,562 $ 8,606,289
QIND [Member]    
Schedule of Goodwill and Intangible Assets [Line Items]    
Goodwill Total 6,704,318 6,704,318
Firebug [Member]    
Schedule of Goodwill and Intangible Assets [Line Items]    
Goodwill Total 0 (81,676)
Bullhead [Member]    
Schedule of Goodwill and Intangible Assets [Line Items]    
Goodwill Total 0 597,226
Georgia Fire [Member]    
Schedule of Goodwill and Intangible Assets [Line Items]    
Goodwill Total 0 136,175
ILUS UK [Member]    
Schedule of Goodwill and Intangible Assets [Line Items]    
Goodwill Total 335,741 335,741
BCD [Member]    
Schedule of Goodwill and Intangible Assets [Line Items]    
Goodwill Total 0 306,597
ASSS [Member]    
Schedule of Goodwill and Intangible Assets [Line Items]    
Goodwill Total 0 607,908
SAML [Member]    
Schedule of Goodwill and Intangible Assets [Line Items]    
Goodwill Total $ 4,075,503 $ 0
v3.24.2.u1
Non-Current Assets (Details) - Schedule of Long Term Investments - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Schedule of Long Term Investments [Line Items]    
Long term investments, Total $ 25,264,697 $ 23,639,209
Investment in BCD [Member]    
Schedule of Long Term Investments [Line Items]    
Long term investments, Total 0 20,500
Investment in FB Fire Technologies Ltd [Member]    
Schedule of Long Term Investments [Line Items]    
Long term investments, Total 2,036,767 3,172,175
Investment in Quality International [Member]    
Schedule of Long Term Investments [Line Items]    
Long term investments, Total 0 6,500,000
Investment in Wikisoft [Member]    
Schedule of Long Term Investments [Line Items]    
Long term investments, Total 6,555,755 0
Investment in Dear Cashmere Holding Co. [Member]    
Schedule of Long Term Investments [Line Items]    
Long term investments, Total 12,000,000 12,000,000
Long term investment [Member]    
Schedule of Long Term Investments [Line Items]    
Long term investments, Total 4,672,175 0
Loan to Fb Fire Technologies Ltd [Member]    
Schedule of Long Term Investments [Line Items]    
Long term investments, Total $ 0 $ 1,946,534
v3.24.2.u1
Non-Current Assets (Details) - Schedule of Tangible Assets - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Tangible Assets    
Tangible assets, Total $ 186,207 $ 139,523
Land and Buildings [Member]    
Tangible Assets    
Tangible assets, Total 0 0
Plant and Machineries [Member]    
Tangible Assets    
Tangible assets, Total 34,401 38,582
Furniture, Fixtures and Fittings [Member]    
Tangible Assets    
Tangible assets, Total 34,250 37,432
Vehicles [Member]    
Tangible Assets    
Tangible assets, Total 69,397 14,645
Computer and Computer Equipment [Member]    
Tangible Assets    
Tangible assets, Total $ 48,160 $ 49,044
v3.24.2.u1
Non-Current Assets (Details) - Schedule of Depreciation on Tangible Assets - USD ($)
3 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Plant & Machinery [Member]    
Property, Plant and Equipment [Line Items]    
Carrying value, beginning $ 37,892 $ 38,582
Addition 0 3,116
Charged Depreciation 3,491 3,806
Carrying value, ending 34,401 37,892
Furniture, Fixtures & Office Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Carrying value, beginning 37,158 37,432
Addition 3,949 9,801
Charged Depreciation 6,857 10,075
Carrying value, ending 34,250 37,158
Vehicles [Member]    
Property, Plant and Equipment [Line Items]    
Carrying value, beginning 94,499 118,789
Addition 0
Charged Depreciation 25,102 24,290
Carrying value, ending 69,397 94,499
Computers [Member]    
Property, Plant and Equipment [Line Items]    
Carrying value, beginning 49,044 49,044
Addition 2,060
Charged Depreciation 2,944
Carrying value, ending 48,160 49,044
Property, Plant and Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Carrying value, beginning 218,592 243,847
Addition 6,009 12,917
Charged Depreciation 38,394 38,171
Carrying value, ending $ 186,207 $ 218,592
v3.24.2.u1
Current Liabilities (Details) - Schedule of Other Current Liabilities - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Current Liabilities [Abstract]    
Accrued payables $ 68,505 $ 204,925
Credit cards 10,494 8,221
other advances 942,990 827,824
Loan Payable 537,115 6,021,338
Misc. current liabilities 432,607 165,344
Payroll Liabilities 792,605 534,068
Payable to Government Authorities 124,309 64,199
Provision for Audit Fees 39,500 24,500
Payable to subsidiaries 10,832,740 975,547
Total $ 13,780,865 $ 8,825,966
v3.24.2.u1
Non-Current Liabilities (Details) - USD ($)
6 Months Ended
Jun. 20, 2024
Jun. 12, 2024
May 20, 2024
May 16, 2024
May 06, 2024
Apr. 15, 2024
Apr. 01, 2024
Jan. 31, 2024
Jan. 23, 2024
Jan. 15, 2024
Dec. 22, 2023
May 30, 2023
Jun. 01, 2022
Feb. 04, 2022
Jun. 30, 2024
Discover Growth Fund LLC – John Burke [Member]                              
Non – Current Liabilities [Line Items]                              
Convertible note amount (in Dollars)                           $ 2,000,000  
Convertible percentage                           35.00%  
Interest percentage                           12.00%  
Maturity date                           Feb. 04, 2023  
Discover Growth Fund [Member]                              
Non – Current Liabilities [Line Items]                              
Convertible note amount (in Dollars)                           $ 2,000,000  
RB Capital Partners Inc [Member]                              
Non – Current Liabilities [Line Items]                              
Convertible note amount (in Dollars)       $ 150,000 $ 100,000     $ 600,000         $ 1,000,000    
Interest percentage       7.00% 7.00%     8.00%         5.00%    
Maturity date       May 16, 2026 May 06, 2026     Jan. 31, 2026         May 31, 2024    
Convertible fixed price (in Dollars per share)       $ 0.1 $ 0.1     $ 0.1         $ 0.5    
AJB Capital Investment LLC [Member]                              
Non – Current Liabilities [Line Items]                              
Convertible note amount (in Dollars)                     $ 1,680,000        
Interest percentage                     12.00%        
Maturity date                     May 01, 2024        
TwnBrooks Inc [Member]                              
Non – Current Liabilities [Line Items]                              
Convertible note amount (in Dollars)     $ 27,500     $ 55,000     $ 25,000 $ 27,500          
Convertible percentage     35.00%     65.00%     65.00% 65.00%          
Interest percentage     9.00%     9.00%     9.00% 9.00%          
Maturity date     Nov. 20, 2024     Oct. 15, 2024     Jul. 23, 2024 Jul. 15, 2024          
Lowest trading days           10 days     10 days 10 days          
ILUS [Member]                              
Non – Current Liabilities [Line Items]                              
Convertible note amount (in Dollars) $ 63,250 $ 91,530         $ 6,405,750                
Convertible percentage 65.00% 65.00%         70.00%                
Interest percentage 13.00% 13.00%         7.00%                
Maturity date Mar. 30, 2025 Mar. 15, 2025                          
Lowest trading days 10 days 10 days         10 days                
Conversion amount (in Dollars)             $ 650,000                
Maximum [Member] | Discover Growth Fund [Member]                              
Non – Current Liabilities [Line Items]                              
Loan payments (in Dollars)                       $ 450,000      
Minimum [Member] | Discover Growth Fund [Member]                              
Non – Current Liabilities [Line Items]                              
Loan payments (in Dollars)                             $ 450,000
v3.24.2.u1
Other Non Current Liabilities (Details) - USD ($)
Mar. 15, 2023
Jun. 30, 2024
Dec. 22, 2023
Jan. 26, 2023
Dec. 31, 2022
Dec. 02, 2022
Feb. 04, 2022
Other Non Current Liabilities [Line Items]              
Exercise price per share             $ 0.275
Purchase of warrants   200,000          
Discover Growth Fund [Member]              
Other Non Current Liabilities [Line Items]              
Convertible note amount             $ 2,000,000
AJB Capital Investments [Member]              
Other Non Current Liabilities [Line Items]              
Convertible note amount     $ 1,680,000        
Warrant [Member]              
Other Non Current Liabilities [Line Items]              
Exercise price per share   $ 0.275     $ 0.07    
Market price per share $ 0.04            
Purchase of warrants       650,000   30,000,000 20,000,000
Warrant [Member] | AJB Capital Investments [Member]              
Other Non Current Liabilities [Line Items]              
Convertible note amount           $ 1,200,000  
Warrant [Member] | Jefferson Street Capital [Member]              
Other Non Current Liabilities [Line Items]              
Convertible note amount       $ 100,000      
v3.24.2.u1
Other Non Current Liabilities (Details) - Schedule of Other Non Current Liabilities - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Other Non Current Liabilities [Abstract]    
Retirement benefits to pay $ 274,575 $ 145,662
Bank Borrowings 320,972 0
Provision for Convertible Notes 1,249,055 1,155,338
Interest on Convertible Notes 0 820,455
Total $ 1,844,602 $ 2,121,455
v3.24.2.u1
Stockholder´ Equity (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 14, 2024
May 21, 2024
May 15, 2024
May 08, 2024
May 06, 2024
Apr. 15, 2024
Apr. 11, 2024
Apr. 03, 2024
Apr. 02, 2024
Apr. 01, 2024
Mar. 27, 2024
Mar. 19, 2024
Feb. 23, 2024
Feb. 19, 2024
Feb. 08, 2024
Feb. 02, 2024
Feb. 01, 2024
Jan. 25, 2024
Jan. 22, 2024
Jan. 18, 2024
Jan. 05, 2024
Jan. 03, 2024
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Mar. 26, 2024
Dec. 31, 2023
Aug. 31, 2019
Stockholder´ Equity [Line Items]                                                              
Common stock authorized                                             200,000,000       200,000,000     200,000,000  
Common stock, par value (in Dollars per share)                                             $ 0.001       $ 0.001     $ 0.001  
Common stock shares issued                                             133,006,691       133,006,691     127,129,694  
Common stock shares outstanding                                             133,006,691       133,006,691     127,129,694  
Aggregate price (in Dollars)                                             $ 0 $ 0              
Acquire interest rate of subsidiaries and affiliates                     51.00%                                        
Common Stock [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Common stock authorized                                                         (3,500,000,000)    
Common stock, par value (in Dollars per share)                                                         $ 0.001    
Converted shares                                               5,000,000 10,000,000            
Issued shares                                                 55,300,000 63,850,000          
Preferred Stock [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Preferred stock share authorized                                             235,741,000       235,741,000        
Twn Brooks Inc [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Issued shares                                         3,250,000                    
Share issued price (in Dollars per share)                               $ 0.0172         $ 0.0072                    
Aggregate price (in Dollars)                               $ 38,700         $ 23,400                    
Kyle Comerford [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Issued shares                                       6,349,206                      
Aggregate price (in Dollars)                                       $ 20,000                      
James Gibbons [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Converted shares                                     50,000                        
Common stock shares issued                                     5,000,000                        
TwnBrooks Inc [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Converted shares                 3,365,882 3,365,882                                          
Issued shares   2,000,000       4,000,000         8,736,538         2,250,000     2,500,000                        
Share issued price (in Dollars per share)   $ 0.0086       $ 0.0108         $ 0.0125               $ 0.0166                        
Aggregate price (in Dollars)   $ 17,200       $ 43,200         $ 109,207               $ 41,500                        
Convertible aggregate price (in Dollars)                 $ 22,888 $ 22,888                                          
Issuance of convertible promissory note (in Dollars)   $ 27,500       $ 55,000                                                  
RB Capital Partners LLC [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Issued shares                                 50,000,000                            
Aggregate price (in Dollars)                                 $ 200,000                            
Luki Ventures Inc [Member] | Restricted Stock [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Restricted shares (in Dollars)                         $ 350,000                                    
Alex Blondel [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Converted shares                         350,000,000                                    
Barbara J Whidby [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Issued shares                       26,566,901                                      
Aggregate price (in Dollars)                       $ 97,500                                      
1800 Diagonal Lending LLC [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Convertible aggregate price (in Dollars) $ 59,946.24                                                            
YAII PN, LTD [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Accrued interest (in Dollars)                                           $ 600,685                  
Ilustrato [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Percentage of acquired control on outstanding shares                                         91.50%                    
AJB Capital Investments LLC [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Issued shares                                   75,000,000                          
RB Capital Partners LLC [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Converted shares     72,000,000                                                        
Issued shares         18,000,000                                                    
Aggregate price (in Dollars)         $ 72,000                         $ 633,000                          
Convertible aggregate price (in Dollars)     $ 288,000                                                        
Kevin Van Hoesen [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Issued shares               16,000,000                                              
Aggregate price (in Dollars)               $ 100,000                                              
John-Paul Backwell [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Converted shares             200,000                                                
Issued shares             20,000,000                                                
Daniel Link [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Issued shares             7,500,000                                                
Converted preferred shares             75,000                                                
Alexander Kolyakin [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Issued shares       50,400,000                                                      
Converted preferred shares       504,000                                                      
1800 Diagonal Lending LLC [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Converted shares 11,385,800                                                            
A L Shola Al Modea Safety And Security L L C [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Membership interest rate description                                                     AL Shola Al Modea Safety and Security LLC, the only entity in which the Company does not own 100% but only 51% of the membership interests        
Common Stock [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Common stock authorized                                             3,500,000,000       3,500,000,000       2,000,000,000
Common stock, par value (in Dollars per share)                                                             $ 0.001
Converted shares                                         150,753,425                    
Common stock shares issued                                             2,107,852,860       2,107,852,860        
Common stock shares outstanding                                             2,107,852,860       2,107,852,860        
Designated Class A, B and C [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Preferred stock share authorized                                             30,000,000       30,000,000        
Preferred Stock [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Preferred stock, par value (in Dollars per share)                                             $ 0.001       $ 0.001        
Preferred stock shares issued                                             78,928,925       78,928,925        
Preferred stock outstanding                                             78,928,925       78,928,925        
Preferred Class A [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Preferred stock share authorized                                             10,000,000       10,000,000        
Converted shares                                                     30,000,000 30,000,000      
Number Of shares issued per unit                                                     1        
Common Stock, voting rights                                                     500        
Preferred stock shares issued                                             10,000,000       10,000,000        
Preferred Class A [Member] | Common Stock [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Converted shares                                                     3        
Preferred Class B [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Preferred stock share authorized                                             100,000,000       100,000,000        
Preferred stock, par value (in Dollars per share)                                             $ 0.001       $ 0.001        
Converted shares                                                     356,000,000 340,000,000      
Number Of shares issued per unit                                                     1        
Common Stock, voting rights                                                     100        
Preferred Class B [Member] | Common Stock [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Converted shares                                                     100        
Preferred Stock Class C [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Preferred stock share authorized                                             10,000,000       10,000,000        
Converted shares                                                     2        
Number Of shares issued per unit                                                     1        
Common Stock, voting rights                                                     100        
Preferred Stock Class D [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Preferred stock share authorized                                             60,741,000       60,741,000        
Preferred stock, par value (in Dollars per share)                                             $ 0.001       $ 0.001        
Converted shares                                                     500        
Number Of shares issued per unit                                                     1        
Common Stock, voting rights                                                     500        
Preferred Stock Class E [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Preferred stock share authorized                                             5,000,000       5,000,000        
Preferred stock, par value (in Dollars per share)                                             $ 0.001       $ 0.001        
Preferred shares dividend rate                                                     6.00%        
Preferred shares redemption price (in Dollars per share)                                             $ 1       $ 1        
Preferred stock redeemption percentage                                                     2.25%        
Preferred Stock Class F [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Preferred stock share authorized                                             50,000,000       50,000,000        
Preferred stock, par value (in Dollars per share)                                             $ 0.001       $ 0.001        
Converted shares                                                     100        
Number Of shares issued per unit                                                     1        
Preferred Stock Class F [Member] | George Joe Chudina [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Issued shares                             37,500                                
Convertible Common Stock [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Converted shares                                         150,753,425                    
Preferred Class F [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Converted shares                                                     145,575,000 166,825,000      
Preferred Class F [Member] | George Joe Chudina [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Aggregate price (in Dollars)                             $ 30,000                                
Preferred Class F [Member] | Sheila A [Member]                                                              
Stockholder´ Equity [Line Items]                                                              
Issued shares                           125,000                                  
Aggregate price (in Dollars)                           $ 170,000                                  
v3.24.2.u1
Net Loss Per Share (Details) - Schedule of Net Loss Per Share - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Numerator        
Net income / (loss) (in Dollars) $ (700,568) $ (3,454,630) $ (2,725,402) $ (4,655,215)
Net Income attributable to common stockholders (in Dollars)     $ (2,725,402) $ (4,655,215)
Denominator        
Weighted average shares outstanding 1,959,529,013 1,444,380,699 1,959,529,013 1,444,380,699
Number of shares used for basic EPS computation     1,959,529,013 1,444,380,699
Basic EPS (in Dollars per share) $ 0 $ 0 $ 0 $ 0
Numerator        
Net income / (loss) (in Dollars) $ (700,568) $ (3,454,630) $ (2,725,402) $ (4,655,215)
Net Income attributable to common stockholders (in Dollars)     $ (2,725,402) $ (4,655,215)
Denominator        
Number of shares used for basic EPS computation     2,107,852,860 1,379,080,699
Number of shares used for diluted EPS computation     33,013,100,035 32,289,577,874
Diluted EPS (in Dollars per share) $ 0.00 $ 0.00 $ 0 $ 0
Conversion of Class A preferred stock to common stock [Member]        
Denominator        
Conversion of Class preferred stock to common stock     30,000,000 30,000,000
Conversion of Class B preferred stock to common stock [Member]        
Denominator        
Conversion of Class preferred stock to common stock     356,000,000 340,000,000
Conversion of Class C preferred stock to common stock [Member]        
Denominator        
Conversion of Class preferred stock to common stock     0 0
Conversion of Class D preferred stock to common stock [Member]        
Denominator        
Conversion of Class preferred stock to common stock     30,370,500,000 30,370,500,000
Conversion of Class E preferred stock to common stock [Member]        
Denominator        
Conversion of Class preferred stock to common stock     3,172,175 3,172,175
Conversion of Class F preferred stock to common stock [Member]        
Denominator        
Conversion of Class preferred stock to common stock     145,575,000 166,825,000
v3.24.2.u1
Related Party Transactions (Details) - USD ($)
6 Months Ended
Dec. 08, 2022
Dec. 05, 2022
Jun. 30, 2024
May 14, 2024
Apr. 03, 2024
Dec. 31, 2023
Sep. 15, 2023
May 04, 2023
Apr. 12, 2023
Related Party Transactions [Line Items]                  
Average of total assets (in Dollars)     $ 120,000            
Percentage of average total assets     1.00%            
Interest rate     1.00%            
Amounts due (in Dollars)     $ 13,780,865     $ 8,825,966      
Maximum borrowing capacity (in Dollars)     1,000,000            
Working capital (in Dollars)     $ 100,000            
Issued shares of common stock     133,006,691     127,129,694      
Krishnan Krishnamoorthy [Member]                  
Related Party Transactions [Line Items]                  
Issued shares of common stock               2,250,000  
Grant-date and fair market value (in Dollars per share)               $ 0.0721  
Carsten Kjems Falk [Member]                  
Related Party Transactions [Line Items]                  
Issued shares of common stock             1,250,000 2,250,000  
Grant-date and fair market value (in Dollars per share)             $ 0.27 $ 0.0721  
Daniel Link [Member]                  
Related Party Transactions [Line Items]                  
Fair market value (in Dollars)         $ 300,000        
Nicolas Link [Member]                  
Related Party Transactions [Line Items]                  
Issued shares of common stock             2,000,000 2,750,000  
Grant-date and fair market value (in Dollars per share)             $ 0.27 $ 0.0721  
Louise Bennett [Member]                  
Related Party Transactions [Line Items]                  
Cancelled shares of common stock 10,000,000                
Issued shares of common stock             350,000 500,000  
Grant-date and fair market value (in Dollars per share)             $ 0.27 $ 0.0721  
John-Paul Backwell [Member]                  
Related Party Transactions [Line Items]                  
Issued shares of common stock             2,000,000 2,250,000  
Grant-date and fair market value (in Dollars per share)       $ 0.07     $ 0.27 $ 0.0721  
Fair market value (in Dollars)       $ 35,000          
Samsara Luggage Inc. [Member]                  
Related Party Transactions [Line Items]                  
Fair market value (in Dollars)         $ 900,000        
Quality Industrial Corp [Member]                  
Related Party Transactions [Line Items]                  
Amounts due (in Dollars)     $ 1,836,396     $ 333,133      
Executive Officer [Member]                  
Related Party Transactions [Line Items]                  
Interest rate     5.00%            
Class F Preferred Stock [Member]                  
Related Party Transactions [Line Items]                  
Issued preferred shares     1,455,750     1,618,250      
Class F Preferred Stock [Member] | Krishnan Krishnamoorthy [Member]                  
Related Party Transactions [Line Items]                  
Issued preferred shares   35,000              
Staff compensation for an aggregate price (in Dollars)   $ 273,700              
Class F Preferred Stock [Member] | Carsten Kjems Falk [Member]                  
Related Party Transactions [Line Items]                  
Issued preferred shares   25,000              
Staff compensation for an aggregate price (in Dollars)   $ 195,500              
Class F Preferred Stock [Member] | Daniel Link [Member]                  
Related Party Transactions [Line Items]                  
Issued preferred shares   75,000              
Staff compensation for an aggregate price (in Dollars)   $ 586,500              
Class F Preferred Stock [Member] | Nicolas Link [Member]                  
Related Party Transactions [Line Items]                  
Issued preferred shares   250,000              
Staff compensation for an aggregate price (in Dollars)   $ 1,955,000              
Class F Preferred Stock [Member] | Louise Bennett [Member]                  
Related Party Transactions [Line Items]                  
Cancelled shares of common stock 1,300,000                
Class F Preferred Stock [Member] | John-Paul Backwell [Member]                  
Related Party Transactions [Line Items]                  
Issued preferred shares                 100,000
Cancelled shares of common stock 800,000                
Fair market value (in Dollars)                 $ 429,000
Series B [Member] | Daniel Link [Member]                  
Related Party Transactions [Line Items]                  
Issued shares of common stock         10,000        
Series B [Member] | Samsara Luggage Inc. [Member]                  
Related Party Transactions [Line Items]                  
Issued shares of common stock         30,000        
Common Stock [Member] | John-Paul Backwell [Member]                  
Related Party Transactions [Line Items]                  
Issued shares of common stock       500,000          
v3.24.2.u1
Legal Proceedings (Details) - USD ($)
6 Months Ended
Aug. 22, 2023
May 31, 2021
Jun. 30, 2024
Oct. 17, 2024
Sep. 17, 2024
Aug. 17, 2024
Jul. 17, 2024
Jun. 17, 2024
May 23, 2017
Legal Proceedings [Line Items]                  
Percentage of convert share     10.00%            
Due paid               $ 75,000  
Restricted shares (in Shares)   1,000,000 350,000            
Issue shares of common stock (in Shares)     75,000,000            
ILUS [Member]                  
Legal Proceedings [Line Items]                  
Restricted shares, amount     $ 75,000            
Steve Nicol [Member]                  
Legal Proceedings [Line Items]                  
Promissory note                 $ 12,000
Black Ice Advisors LLC [Member]                  
Legal Proceedings [Line Items]                  
Principal amount $ 4,000   $ 4,000            
Judgement amount $ 3,772,000                
Subsequent Event [Member]                  
Legal Proceedings [Line Items]                  
Due paid             $ 75,000    
ILUS [Member]                  
Legal Proceedings [Line Items]                  
Preferred stock shares converted (in Shares)     15,000,000            
Restricted shares (in Shares)     15,000,000            
Forecast [Member]                  
Legal Proceedings [Line Items]                  
Due paid       $ 75,000 $ 75,000 $ 75,000      
v3.24.2.u1
Subsequent Events (Details) - Subsequent Event [Member] - USD ($)
Aug. 13, 2024
Aug. 05, 2024
Jul. 31, 2024
Jul. 11, 2024
Jul. 10, 2024
Jul. 08, 2024
Jul. 02, 2024
Jul. 01, 2024
Subsequent Events [Line Items]                
Aggregate price               $ 15,275
Issuance of convertible promissory note               55,000
Larson Elmore [Member]                
Subsequent Events [Line Items]                
Shares issued (in Shares)           15,000,000    
John-Paul Backwell [Member]                
Subsequent Events [Line Items]                
Compensation shares (in Shares)         200,000      
RB Capital Partners LLC [Member]                
Subsequent Events [Line Items]                
Common stock as compensation to RB Capital Partners (in Shares)       100,000,000        
Compensation aggregate price       $ 200,000        
Twn Brooks Inc. [Member]                
Subsequent Events [Line Items]                
Principal amount               $ 27,500
Convertible percentage               35.00%
Average days               10 days
Interest rate per annum               9.00%
Matures date               Jan. 01, 2025
Twn Brooks Inc. One [Member]                
Subsequent Events [Line Items]                
Principal amount               $ 27,500
Convertible percentage               35.00%
Average days               10 days
Interest rate per annum               9.00%
Matures date               Jan. 01, 2025
RB Capital Partners Inc [Member]                
Subsequent Events [Line Items]                
Principal amount $ 65,000           $ 200,000  
Interest rate per annum 7.00%           7.00%  
Matures date Aug. 13, 2026           Jul. 02, 2026  
Conversion price per share (in Dollars per share) $ 0.1           $ 0.1  
Convertible Notes Payable [Member]                
Subsequent Events [Line Items]                
Aggregate price               $ 15,275
Issuance of convertible promissory note               $ 55,000
Convertible Debt [Member]                
Subsequent Events [Line Items]                
Shares issued (in Shares)   5,852,564 5,986,979          
Convertible note aggregate price   $ 28,531.25 $ 28,737.5          
Common Stock [Member]                
Subsequent Events [Line Items]                
Shares issued (in Shares)               3,250,000
Shares issued price per share (in Dollars per share)               $ 0.0047
Common Stock [Member] | Convertible Notes Payable [Member]                
Subsequent Events [Line Items]                
Shares issued (in Shares)               3,250,000
Shares issued price per share (in Dollars per share)               $ 0.0047

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