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
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Our financial statements included in this Form 10-Q are as follows:
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.
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.
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.
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.
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.
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.
(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 |
| ● | 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.
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:
| 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.
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 | |
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 | |
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.
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.
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.
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 |
| ● | 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
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 | ) |
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.
NOTE 11: CONSOLIDATION BASIS
Following companies are consolidating basis of Mergers &
Acquisitions as of June 30, 2024:
| 2) | ILUS
International UK Ltd. |
| 4) | Firebug
Mechanical Equipment LLC. |
| 5) | Bull
Head Products Inc. |
| 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 |
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.
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
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.
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.
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:
| 2. | Industrial
& Manufacturing |
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, 20