QIND 10-K & 10-Q changes, risk factors and insider trading
Quality Industrial Corp. · OTC · Misc Industrial & Commercial Machinery & Equipment · CIK 1393781 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We are in default under certain of our outstanding convertible promissory notes, which could result in acceleration of the indebtedness thereunder, enforcement of security interests, dilutive conversions of outstanding amounts into shares of our common stock, and other material adverse consequences.”
New heading “We are dependent on Fusion Fuel and external financing to fund our operations and executive compensation, and there can be no assurance that such support will be available when needed.”
New heading “The conflict in Iran, which escalated sharply in late February 2026, poses material risks to our LPG distribution operations in Dubai.”
Removed heading “We may be subject to loss in market share and market acceptance as a result of performance failures, manufacturing errors, delays, or shortages.”
Removed heading “If we are not able to design, develop and produce commercially competitive products and implement commercially competitive services in a timely manner in response to changes in the market, customer requirements, competitive pressures, developments associated with climate change concerns and energy mix transition, and technology trends, our business and consolidated results of operations could be materially and adversely affected, and the value of our intellectual property may be reduced.”
Removed heading “An unfavorable outcome of any pending contingencies or litigation could adversely affect us.”
Removed heading “Our lack of adequate D&O insurance may also make it difficult for us to retain and attract talented and skilled directors and officers.”
Removed heading “Our officers may voluntarily terminate their relationship with us at any time, and competition for qualified personnel is lengthy, costly, and disruptive.”
Removed heading “Our majority owner Fusion Fuel Green collectively owns a substantial amount of our voting stock.”
Removed heading “Risk Related to COVID-19”
Removed heading “Our business and future operations may be adversely affected by epidemics and pandemics, such as the COVID-19 outbreak.”
Removed heading “General Risk Factors”
Removed heading “Our success depends on our executive management and other key personnel.”
Removed heading “Challenges with respect to labor availability could negatively impact our ability to operate or grow the business.”
Largest changes
“We may face risks related to health epidemics and pandemics or other outbreaks of communicable diseases, which could result in a widespread health crisis that could adversely affect general commercial activity and the economies and financial markets of the world. For example, the outbreak of COVID-19, which originated in China, was declared by the World Health Organization to be a “pandemic,” and spread across the globe. …”see in full comparison
“We are in default under certain of our outstanding convertible promissory notes, which could result in acceleration of the indebtedness thereunder, enforcement of security interests, dilutive conversions of outstanding amounts into shares of our common stock, and other material adverse consequences.”see in full comparison
“In the future we may be subject to litigation, including potential class action and stockholder derivative actions. Risks associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. To date, we have not obtained directors and officers liability (“D&O”) insurance, but we plan to obtain it following an uplist to a National Exchange. …”see in full comparison
“As of December 31, 2025, all eight of our outstanding convertible promissory notes have matured and the amounts due thereunder remain unpaid. …”see in full comparison
“If we are not able to design, develop and produce commercially competitive products and implement commercially competitive services in a timely manner in response to changes in the market, customer requirements, competitive pressures, developments associated with climate change concerns and energy mix transition, and technology trends, our business and consolidated results of operations could be materially and adversely affected, and the value of our intellectual property may be reduced.”see in full comparison
“As of March 31, 2026, our business is subject to significant risks arising from the ongoing armed conflict involving the United States, Israel, and Iran, which has materially disrupted regional energy markets, critical infrastructure, and the maritime supply chains upon which our LPG distribution operations in Dubai fundamentally depend. …”see in full comparison
Full comparison: every changed paragraph (95)
An
investment in our securities
involves a high degree of risk. In addition to the other information contained in this prospectus,Annual Report on
Form 10-K, prospective investors should carefully
consider the following risks before investing in our securities. If any of the following
risks actually occur, as well as other risks
not currently known to us or that we currently consider immaterial, our business, operating
results and financial condition could be materially
adversely affected. As a result, the trading price of our common stock could decline,
and you may lose all or part of your investment
in our common stock. The risks discussed below also include forward-looking statements,
and our actual results may differ substantially
from those discussed in these forward-looking statements. See “Introductory
Notes – Cautionary Note Regarding Forward-Looking Statements” in this
prospectus. Annual Report on Form 10-K. In assessing the risks
below, you should also refer to the other information contained in this prospectus,Annual Report on Form 10-K, including the financial statements
statements and the related notes, before deciding to purchase any of our securities.
We are in default under certain of our outstanding convertible promissory notes, which could result in acceleration of the indebtedness thereunder, enforcement of security interests, dilutive conversions of outstanding amounts into shares of our common stock, and other material adverse consequences.
As of December 31, 2025, all eight of our outstanding convertible promissory notes have matured and the amounts due thereunder remain unpaid. These notes include: (i) a note in the original principal amount of $1,100,000, which matured on August 3, 2024; (ii) a note in the original principal amount of $200,000, which matured on March 17, 2025; (iii) a note in the original principal amount of $220,000, which matured on February 23, 2024; (iv) a note in the original principal amount of $550,000, which matured on December 16, 2023; (v) a note in the original principal amount of $35,000, which matured on or about August 6, 2024; (vi) a note in the original principal amount of $100,000, which matured on December 20, 2024; (vii) a note in the original principal amount of $71,500, which matured on February 21, 2025; and (viii) a note in the original principal amount of $405,000, which matured on July 4, 2025. Including accrued and unpaid interest, default interest, penalties, and other amounts that are owed, as of December 31, 2025, the total balance remaining under these notes was $2,561,240.
The failure to repay these notes at maturity constitutes an event of default under several of the notes and may constitute an event of default under all of them. The consequences of such defaults are material and include, among other things: (a) acceleration of the full outstanding principal amount plus accrued and unpaid interest; (b) accrual of default interest at elevated rates (ranging from 15% to 20% per annum, depending on the note); (c) in the case of the notes that matured on February 23, 2024 and February 21, 2025, the outstanding amount becoming immediately due and payable at 150% to 200% of the then-outstanding principal and accrued interest (not including default due only to non-payment of principal or interest when due); (d) in the case of the note that matured on August 6, 2024, assessment of a liquidated damages charge equal to 25% of the outstanding balance; (e) in the case of the note that matured on June 30, 2025, the outstanding principal amount increasing to 110% of the amount then due plus default interest at 16% per annum, and the holder gaining the right to convert the default amount into shares of our common stock at a conversion price equal to 80% of the average of the four lowest volume weighted average prices over the preceding 20 trading days, with full-ratchet anti-dilution protection; and (f) in the case of all notes containing conversion features, the right of holders to convert outstanding amounts into shares of our common stock at conversion prices that may be substantially below the then-current market price, resulting in significant dilution to existing stockholders.
Additionally, the note that matured on June 30, 2025, is a senior secured obligation of the Company, and default thereunder could result in the lender enforcing its rights, which could materially impair our operations and the value of our assets. The related loan agreement also contains cross-default provisions triggered by defaults on other material agreements, potentially compounding the adverse effects described above.
Several of these notes also contain most-favored-nation provisions, anti-dilution protections, and beneficial ownership limitations that, in the aggregate, could further complicate our ability to restructure or refinance this indebtedness. There can be no assurance that we will be able to negotiate forbearance agreements, obtain waivers, refinance, or otherwise satisfy our obligations under these notes on terms acceptable to us, or at all. If the holders of these notes elect to exercise their remedies, including acceleration, conversion at discounted prices, or enforcement of security interests, such actions could have a material adverse effect on our business, financial condition, results of operations, and the market price of our common stock, and could raise substantial doubt about our ability to continue as a going concern.
We are dependent on Fusion Fuel and external financing to fund our operations and executive compensation, and there can be no assurance that such support will be available when needed.
We anticipate that Fusion Fuel, our parent company, will finance certain investments in connection with the operations of Al Shola Gas, our majority-owned subsidiary. We further anticipate that Fusion Fuel will provide all compensation required by our executive officers, other than our Chief Operating Officer and Managing Director Middle East. In addition, we plan to address cash flow deficits through borrowings and the sale of securities.
However, no assurance can be given that any such financing, executive compensation support, or additional capital will be available, if and when required. Fusion Fuel’s ability to finance our investments and fund executive compensation depends on its own financial condition and liquidity, which are subject to risks and uncertainties beyond our control. Similarly, our ability to raise capital through borrowings or securities sales may be constrained by adverse market conditions, deteriorating creditworthiness, regulatory limitations, or investor sentiment. If we are unable to obtain adequate financing or compensation support from Fusion Fuel, or to raise sufficient capital through borrowings or securities sales, we may be unable to fully fund our operations, retain key executive personnel, or execute our business plan. Any of these outcomes could have a material adverse effect on our business, financial condition, results of operations, and prospects.
We
have obtained growth through the acquisition of Al
Shola Gas. Under existing accounting standards, we are required to periodically review
goodwill assets for possible impairment. In the
event that we are required to write down the value of any assets under these pronouncements,
it may materially and adversely affect our
operating results, financial condition, and the price of our common stock. See the more detailed discussion appearing as part of our Management’s
Discussion and Analysis of Financial Condition and Results of Operations and in our financial footnotes. The percentage
of our goodwill
compared to our total assets as of December 31, 2024,2025, was 46.4%.50.6%.
We
will use cash to pay the principal and interest
on our debt.debt except to the extent that such debt may be convertible into equity. These
payments limit funds otherwise available for working capital, capital expenditures, acquisitions, collaborations, and
other purposes.
As a result of these obligations, our current liabilities may exceed our current assets. We may need to take on additional
debt as we
expand in our industry, which could increase our ratio of debt to equity. The need to service our debt may limit funds available for
for other purposes and our inability to service debt in the future could lead to acceleration of our debt and foreclosure on assets.
Acquisitions
involve special risks, including, without
limitation, the potential assumption of unanticipated liabilities and contingencies, difficulty
in assimilating the operations and personnel
of the acquired businesses, disruption of our existing business, dissipation of our limited
management resources and impairment of relationships
with employees and customers of the acquired business as a result of changes in
ownership. For instance, the cancelled acquisition of
Quality International on April 1, 2024. Such incidents can significantly affect our financial and operational outlook.
Our The
manufacturing processes for gas fuel consume significant amounts
of raw materials, the costs of which are subject to worldwide supply
and demand factors, as well as other factors beyond our control.
Raw material price fluctuations may adversely affect our results. We purchase, directly and indirectly through component purchases, significantIn
amounts of plastic, aluminium, steel, and other raw materials. In the past raw material prices have experienced volatility which has been
unforeseen and unexpected.volatility. Commodity pricing has fluctuated over the past few years and may continue to
do so in the future. Such fluctuations
could have a material effect on our results of operations, balance sheets and cash flows and impact
the comparability of our results between
financial periods.periods
We may be subject to loss in market share and market acceptance as
a result of performance failures, manufacturing errors, delays, or shortages.
There is a risk that, for unforeseen reasons, we may
need to repair or replace products in use, or reimburse customers for products that fail to work or meet strict performance criteria.
To date, we have encountered some product failures related to electronic and mechanical components in equipment and vehicles. These are
either repaired under warranty, at a cost to the customer, or through a relevant maintenance agreement.
Other disruptions in the supply chain process or product
sales and fulfilment systems for any reason, including equipment malfunction, failure to follow specific protocols and procedures, supplier
facility shut-downs, defective raw materials, wars and conflict, natural disasters such as hurricanes, tornadoes or wildfires, property
damage from riots, and other environmental factors and the impact of epidemics or pandemics, such as Covid-19, and actions by businesses,
communities and governments in response, could lead to launch delays, product shortage, unanticipated costs, lost revenues and damage
to our reputation.
We have taken steps to limit remedies for product failure
to the repair or replacement of malfunctioning or non-compliant products or services and also attempt to exclude or minimize exposure
to product and related liabilities by including in our standard agreements warranty disclaimers and disclaimers for consequential and
related damages as well as limitations on our aggregate liability. From time to time, in certain sales transactions, we may negotiate
liability provisions that vary from such standard forms. There is a risk that our contractual provisions may not adequately minimize our
product and related liabilities or that such provisions may be unenforceable. We intend to carry product liability insurance, but the
coverage we secure may not be adequate to cover potential claims. Moreover, to the extent we have to repair, reimburse, or expend funds
to cover customer service issues, our results of operations will be negatively affected.
We
depend on various information technologies to administer,
store, and support multiple business activities. If these systems are damaged,
cease to function properly or are subject to cyber-security
cybersecurity attacks, such as those involving unauthorized access, malicious software and/or
other intrusions, we could experience production downtimes,
operational delays, other detrimental impacts on operations or the ability
to provide products and services to its customers, the compromising
of confidential or otherwise protected information, destruction or
corruption of data, security breaches, other manipulation or improper
use of our systems or networks, financial losses from remedial
actions, loss of business or potential liability, penalties, fines and/or
damage to our reputation. We attempt to mitigate these risks by employing a number of measures, including the retained services of an
IT Manager to assist QIND with cyber security expertise, and who reports directly to our management team overseeing the parent company
and its subsidiaries regarding employee training, technical security controls and maintenance of backup and protective systems. Despite
our efforts to mitigate these risks, ourOur systems, networks, products,
and services remain potentially vulnerable to known or unknown threats,
any of which could have a material adverse effect on the Company
and its financial condition or results of operations. Further, given
the unpredictability, nature, and scope of cyber-securitycybersecurity attacks,
it is possible that potential vulnerabilities could go undetected for
an extended period. We have currently not been subject to cybersecurity breaches in our supply chain, software, or services used in our
products, services, or business. A severe future cybersecurity incident in our supply chain could however reduce
sales, operating margins,
and overall financial performance.
Currently,
we only maintain operations in the United
Arab Emirates,UAE, and plan to continue our efforts to expand globally, in jurisdictions where we do not currently
operate. We expect international
operations and export sales to continue to constitute the majority of our sales and assets in the foreseeable
future. Managing a global
organization is difficult, time consuming and expensive, and any international expansion efforts that we undertake
may not be profitable
in the near or long term. Although we have operating experience in many foreign jurisdictions, we must still continue
to make significant
investments to build our international operations. Our sales from international operations and sales from export
are both subject in varying
degrees to risks inherent in doing business outside the United States. These risks include the following:
We
operate areprimarily in the UAE, which attempts to fix the exchange rate of the UAE currency, UAE Dirham, to the U.S. dollar at a stable
rate. However, we may still be or become exposed to fluctuations in foreign currency
exchange rates, however not with respect to the UAE which is pegged to the U.S. dollar.rates. Any significant change in the value
of the currencies
of the countries in which we might do business against not pegged to the U.S. dollar could affect our ability to sell
products competitively
and control its cost structure, which could have a material adverse effect on our results of operations.
Demand
for our products depends, in part, on the level
of new and planned expenditures by certain of our customers. The level of expenditures
by our customers is dependent on, among other factors,
general economic conditions, availability of credit, economic conditions within
their respective industries and expectations of future
market behavior. Our profitability may be adversely affected during any periods
of unexpected or rapid increases in interest rates and
volatility in commodity prices, including oil,gas, can negatively affect the level
of these activities and impact our subsidiary and can result
in postponement of capital spending decisions or the delay or cancellation
of existing orders. The ability of our customers to finance
capital investment and maintenance may also be affected by the conditions
in their industries. Reduced demand for our products could result
in the delay or cancellation of existing orders or lead to excess manufacturing
capacity, which unfavorably impacts the absorption of
fixed manufacturing costs. This reduced demand could have a material adverse effect
on our financial condition and results of operations.
The conflict in Iran, which escalated sharply in late February 2026, poses material risks to our LPG distribution operations in Dubai.
As of March 31, 2026, our business is subject to significant risks arising from the ongoing armed conflict involving the United States, Israel, and Iran, which has materially disrupted regional energy markets, critical infrastructure, and the maritime supply chains upon which our LPG distribution operations in Dubai fundamentally depend. The conflict, which escalated sharply beginning in late February 2026, has resulted in the effective closure of the Strait of Hormuz — the world’s single most critical energy chokepoint — to most commercial shipping, with Iran threatening to fire on vessels attempting transit and commercial operators, major oil companies, and insurers having substantially withdrawn from the corridor. The closure has been characterized as the largest disruption to global energy supply since the 1970s energy crisis. Approximately 20% of the world’s daily oil and LPG supply normally transits the Strait, and LPG supply chains are among the most acutely exposed commodities, with alternative supply options characterized by market analysts as “very limited”. Attacks by Iranian forces have directly struck Dubai’s Jebel Ali port — the UAE’s principal maritime commercial hub — as well as Abu Dhabi port infrastructure and other UAE facilities, causing direct and material disruption to shipping and logistics operations in the Emirate. Iranian forces have further threatened to designate the UAE’s al-Hosn gas field and additional UAE energy infrastructure as “direct and legitimate targets,” with Iranian state media calling for evacuation of personnel. The UAE’s Habshan complex — one of the world’s largest gas processing facilities — has already been forced to shut down following falling debris from intercepted missiles, and the Bab oilfield was targeted. These developments have caused the Middle East Dubai crude benchmark to reach a record $166.80 per barrel and Brent crude to spike above $119 per barrel, with further price increases possible if supply disruptions are prolonged.
The escalating conflict exposes our Dubai-based LPG distribution and related services business to a range of material and potentially severe operational, financial, and safety risks that could have a material adverse effect on our business, results of operations, financial condition, and prospects. Our ability to procure LPG at commercially viable prices and in sufficient volumes depends critically on regional supply chains and the continued operability of UAE port and infrastructure networks, all of which are currently under severe stress. Importers across the Gulf are scrambling to reroute essential cargoes, with trucking costs from alternative ports projected to increase by multiples of standard ocean freight rates. Insurance premiums for vessels operating in and near the Strait of Hormuz have already reached six-year highs, making transit economically unviable for many commercial operators and further constraining supply availability. Even if active hostilities were to cease, the restoration of normal supply chains is expected to take substantial time, as LPG production facilities, refineries, and port infrastructure that have sustained damage may require years to repair. The war has also materially impaired broader economic activity in Dubai, including disruptions to aviation, tourism, trade, and retail, which could reduce demand for our services. We cannot predict the duration, intensity, or geographic scope of the conflict, the extent of damage to regional energy infrastructure, or the timing of any restoration of the Strait of Hormuz to normal commercial transit. If these conditions persist or worsen, our ability to source, transport, store, and distribute LPG, as well as to maintain continuity of our related services operations, could be significantly impaired, which could materially and adversely affect our revenues, costs, and overall financial performance.
We
occasionally provide integrated gas distribution project management services in
the form of long-term, fixed price contracts that may
require us to assume additional risks associated with cost over-runs,overruns, operating
cost inflation, labor availability and productivity, supplier
and contractor pricing and performance, and potential claims for liquidated
damages.
We
occasionally provide integrated gas distribution project management
services outside our normal discrete business in the form of long-term,
fixed price contracts. Some of these contracts are required by
our customers, primarily international oilgas companies. These services include
acting as project managers as well as service providers and
may require us to assume additional risks associated with cost overruns.
These customers may provide us with inaccurate information in
relation to their reserves, which is a subjective process that involves
location and volume estimation, that may result in cost overruns,
delays, and project losses. In addition, our gas distribution customers
often operate in countries with unsettled political conditions, war, civil unrest,
or other typessources of community issues.disruption. These issues may also
result in cost over-runs,overruns, delays, and project losses.
If we are not able to design, develop and produce commercially competitive
products and implement commercially competitive services in a timely manner in response to changes in the market, customer requirements,
competitive pressures, developments associated with climate change concerns and energy mix transition, and technology trends, our business
and consolidated results of operations could be materially and adversely affected, and the value of our intellectual property may be reduced.
The market for our services and products is characterized
by continual technological developments to provide better and more reliable performance and services. If we are not able to design, develop,
and produce commercially competitive products and to implement commercially competitive services in a timely manner in response to changes
in the market, customer requirements, competitive pressures, developments associated with climate change concerns and energy mix transition,
and technology trends, our business and consolidated results of operations could be materially and adversely affected, and the value of
our intellectual property may be reduced. Likewise, if our proprietary technologies, equipment, facilities, or work processes become obsolete,
we may no longer be competitive, and our business and consolidated results of operations could be materially and adversely affected.
Trends
in oil and natural gas prices affect the level of exploration,
development, and production activity of our customers and the demand for our services
and products, which could have a material adverse
effect on our business, consolidated results of operations, and consolidated financial
condition.
Demand
for our services and products is particularly
sensitive to the level of exploration, development, and production activity of, and the
corresponding capital spending by, oil and natural
gas companies. The level of exploration, development, and production activity is directly affected
by trends in oil and natural gas prices,
which historically have been volatile especially after the Russian invasion of Ukraine and are likely to continue to be volatile. Prices
for oil and natural gas are subject
to large fluctuations in response to relatively minor changes in the supply of and demand for oil
and natural gas, market uncertainty, and a variety
of other economic factors that are beyond our control. Given the long-term nature of
many large-scale development projects, even the
perception of longer-term lower oil and natural gas prices by oil and natural gas companies
can cause them to reduce or defer major expenditures. Any prolonged reductions
of commodity prices or expectations of such reductions
could have a material adverse effect on our business, consolidated results of
operations, and consolidated financial condition.
Factors
affecting the pricesprice of oilgas and natural gas
include:
increased demand for alternative energy and use of electric vehicles and increased emphasis on decarbonization, including government initiatives to promote the use of renewable energy sources and public sentiment around alternatives to fossil fuels such as gas.
Our
business is dependent on capital spending by our customers, and
reductions in capital spending could have a material adverse effect on
our ourgas distribution business, consolidated results of operations, and consolidated
financial condition.
Our
gas distribution business is directly affected by changes in capital
expenditures by our customers, and reductions in their capital spending
could reduce demand for our services and products and have a material
adverse effect on our business, consolidated results of operations,
and consolidated financial condition. Some of the items that may impact
our customerscustomers’ capital spending include:
Constraints in the supply of, prices for, and availability of transportation of raw materials can have a material adverse effect on our gas distribution business and consolidated results of operations.
Raw
materials essential to our gas distribution operations and supplymanufacturing, such as proppants (primarily sand), chemicals, metals, and
gels, are normally readily available. ShortageShortages of raw materials as a result of high levels of demand or loss of suppliers during market challenges
can trigger
constraints in the supply chain of those raw materials, particularly where we have a relationship with a single supplier for
a particular
resource. Many of the raw materials essential to our business require the use of rail, storage, and trucking services to
transport the
materials to our job sites. These services, particularly during times of high demand, may cause delays in the arrival of
or otherwise
constrain our supply of raw materials. These constraints could have a material adverse effect on our business and consolidated results
results of operations. In addition, price increases imposed by our vendors for raw materials and transportation providers used in our business,
business, and the inability to pass these increases through to our customers, could have a material adverse effect on our business and consolidated
consolidated results of operations.
Price reductions by suppliers of gas products sold by us could cause the value of our inventory to decline. Also, such price reductions could cause our customers to demand lower sales prices for these products, possibly decreasing our margins and profitability on sales to the extent that our inventory of such products was purchased at the higher prices prior to supplier price reductions, and we are required to sell such products to our customers at the lower market prices.
The
value of our gas products inventory could decline as a result
of price reductions by manufacturers of products sold by us. We have been selling the same types of products to our customers for many
years (and therefore do not expect that our inventory will become obsolete). However, thereThere is no
assurance that a substantial decline
in product prices would not result in a write-down of our inventory value. Such a write-down could
have a material adverse effect on our
financial condition. Also, decreases in the market prices of products sold by us could cause customers
to demand lower sale prices from
us. These price reductions could reduce our margins and profitability on sales with respect to such
lower-priced products. Reductions
in our margins and profitability on sales could have a material adverse effect on our business, results
of operations, and financial condition.
Our
operations are subject to hazards inherent in the oilgas and gas
industry and, as a result, we are exposed to potential liabilities that may affect
our financial condition and reputation.
Risks
inherent to ourthe gas industry, such as equipment
malfunctions and failures, equipment misuse and defects, explosions and uncontrollable
flows of oil, natural gas or well fluids and natural
disasters, can cause personal injury, loss of life, suspension of operations, damage to formations, damage to facilities, business
interruption interruption
and damage to or destruction of property, equipment, and the environment. These risks could expose us to substantial liability
for personal
injury, wrongful death, property damage, loss of oil and gas production, pollution, and other environmental damages. The frequency
and and
severity of such incidents will affect operating costs, insurability and relationships with customers, employees, and regulators.
In particular,
our customers may elect not to purchase our services if they view our safety record as unacceptable, which could cause
us to lose customers
and substantial revenues. In addition, these risks may be greater for us because we may acquire companies that have
not allocated significant
resources and management focus to safety and have a poor safety record requiring rehabilitative efforts during
the integration process.
Almost all of ourOur
gas operations are conducted, and almost
ofour ourgas assets are, as at the date of this document,are located inin, the UAE, which is defined as an emerging market. While most of the countries
in which we conduct our business have historically not been affected by political instability, thereThere is no assurance
that any political,
social, economic or market conditions affecting such countries in the Middle East region generally (as well as outside the Middle East
region because of interrelationships within the global financial markets) would not have a material adverse
effect on our business, results
of operations and financial condition.
Specific
risks in these countries and the Middle East
region that may have a material impact on our business, results of operations and financial condition include:
Any unexpected changes in the political, social, economic,
or other conditions in which we operate, or neighboring countries may have a material adverse effect on our business, results of operations
and financial condition.
Any
unexpected changes in these or other political, social, economic, or other conditions in which we operate in the UAE or neighboring countries
may have a material adverse effect on our business, results of operations and financial condition. It is not possible to predict the
occurrence of events
or circumstances such as or like those outlined above or the impact of such occurrences and no assurance can be
given that we would be
able to sustainachieve itsprofitable current profit levelsoperations if such events or circumstances were to occur.
Any restrictive changes to the UAE’s visa policies may discourage foreign nationals from choosing to live, work, and invest in the UAE, which would have an adverse effect on our ability to attract skilled personnel, our business, results of operations and financial condition.
A federal decision No. 281 of 2009 issued by the Minister
of the Interior in May 2009 (the “Resolution”), which came into effect on 1 June 2009, standardized the terms of residency
permits issued to expatriate residential property owners across the UAE. The decree allows expatriate property owners to apply for renewable
multiple-entry visas with a validity of six months. The residency permit does not entitle the holder to work in the UAE and is in effect
a long-term visit visa. In order to successfully apply for the new permit, expatriate property owners must satisfy certain criteria, including
a minimum property valuation of at least AED 1 million, earning thresholds and the maintenance of appropriate insurance. While the Resolution
was passed with the intention of standardizing the previous rules and stimulating the domestic market, it is not possible to assess whether
the Resolution has had a positive or negative effect on levels of foreign investment in the UAE market. Separately, the Government, through
the Dubai Land Department, has introduced a two-year residency visa for residential property owners in Dubai, and, while the criteria
for obtaining this residency visa is similar to the residency permit, it provides the holder with UAE residency status, allowing the individual
to obtain an Emirates ID card and a UAE driving license as well as to sponsor dependents (subject to meeting the relevant criteria for
dependent sponsorship). The Government has introduced other new visa measures to make the UAE more appealing to investors, entrepreneurs,
skilled personnel and outstanding students, including the 10-year “Golden” visa. As of the date of this document, we have
not experienced difficulties in attracting skilled personnel, however, any restrictive changes to the UAE’s visa policies may discourage
foreign nationals from choosing to live, work, and invest in the UAE, which would have an adverse effect on our ability to attract skilled
personnel, our business, results of operations and financial condition.
Governmental
authorities in the UAE in which we operate
may have a high degree of discretion and, at times, act selectively or arbitrarily, without hearing or prior notice,
and sometimes in
a manner that is contrary to law or influenced by political or commercial considerations. The governing law covers all areas across Dubai,
including special development zones and free zones and annuls clauses of the resolution issued on January 1, 1964, regulating the expropriation
of private property for public use. Such governmental action could
include, among other things, the withdrawal of building permits, the
expropriation of property without adequate compensation or the forcing
of business acquisitions, combinations, or sales. A new law, titled
“Law No. (2) of 2022 Concerning Acquisition of Real Property for the Public Benefit in the Emirate of Dubai”, however, aims
to ensure that the rights of owners of expropriated property are protected and that they are afforded full and fair compensation according
to a clear set of rules outlined by the new law from 2022. However, anyAny such action taken may have a material adverse effect on our business,
results of
operations and financial condition.
European, US
U.S. and other international sanctions have
in the past been imposed on companies engaging in certain types of transactions with specified
countries or companies or individuals in
those countries. Companies operating in certain countries in the Middle East region have been
subject to such sanctions in the past. The
UAE areis not subject to such sanctions as atof the date of this registration statement.report. The terms of legislation
and other rules and regulations
that establish sanctions regimes are often broad in scope and difficult to interpret.
If
the UAE were in the future to violate European,
US U.S. or international sanctions, penalties could include a prohibition or limitation
on the UAE’s ability to conduct business in certain
jurisdictions or to access the USU.S. or international capital markets. Any such
sanction could have a material adverse effect on our business,
results of operations and financial condition.
An unfavorable outcome of any pending contingencies or litigation
could adversely affect us.
We are currently not involved in pending legal proceedings
arising in the ordinary course of our business. Where it is reasonably possible to do so, we accrue estimates of the probable costs for
the resolution of these matters. These estimates are based upon an analysis of potential results and settlement strategies. It is possible,
however, that future operating results for any quarter or annual period could be affected by changes in assumptions. For additional details
related to this risk, see “Legal Proceedings”.
Changing
laws, regulations and standards relating
to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and new SEC
regulations, are creating uncertainty
for companies such as ours. These new or changed laws, regulations and standards are subject to
varying interpretations in many cases
due to their lack of specificity, and as a result, their application in practice may evolve over
time as new guidance is provided by regulatory
and governing bodies, which could result in continuing uncertainty regarding compliance
matters and higher costs necessitated by ongoing
revisions to disclosure and governance practices. We are committed to maintaining high
standards of corporate governance and public disclosure.
As a result, we intend to invest resources to comply with evolving laws, regulations
and standards, and this investment may result in
increased general and administrative expenses and a diversion of management time and
attention from revenue-generating activities to compliance
activities. If our efforts to comply with new or changed laws, regulations
and standards differ from the activities intended by regulatory
or governing bodies due to ambiguities related to practice, our reputation
may be harmed.
Section
404 of the Sarbanes-Oxley Act requires annual
management assessments of the effectiveness of our internal controls over financial reporting.
We are in the process of documenting and
testing our internal control procedures, and we may identify material weaknesses in our internal
control over financial reporting and
other deficiencies. If material weaknesses and deficiencies are detected, it could cause investors
to lose confidence in our Companyus and
result in a decline in our stock price and consequently affect our financial condition. In addition, if
we fail to achieve and maintain
the adequacy of our internal controls, we may not be able to ensure that we can conclude on an ongoing
basis that we have effective internal
controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover,
effective internal controls, particularly
those related to revenue recognition, are necessary for us to produce reliable financial reports
and are important to helping prevent
financial fraud. If we cannot provide reliable financial reports or prevent fraud, our business
and operating results could be harmed,
investors could lose confidence in our reported financial information, and the trading price of
our Common Stock could drop significantly.
In addition, we cannot be certain that additional material weaknesses or significant deficiencies
in our internal controls will not be
discovered in the future.
The
U.S. Foreign Corrupt Practices Act, the U.K. Bribery
Act and similar anti-bribery laws in other jurisdictions generally prohibit companies
and their intermediaries from making improper payments
for the purpose of obtaining or retaining business. Recent years have seen a substantial
increase in anti-bribery law enforcement activity
with more frequent and aggressive investigations and enforcement proceedings by both
the Department of Justice and the SEC, increased
enforcement activity by non-U.S.
regulators and increases in criminal and civil proceedings brought against companies and individuals.
Our policies mandate compliance
with all anti-bribery laws. Our internal control policies and procedures may not always protect itus from
reckless or criminal acts committed
by employees or third-party intermediaries. Violations of these anti-bribery laws may result in criminal
or civil sanctions, which could
have a material adverse effect on us as well as our financial condition and results of operations.
While we have recorded reserves for potential payments to various tax authorities related to uncertain tax positions, the calculation of such tax liabilities involves the application of complex tax regulations in many jurisdictions. Therefore, any dispute with a tax authority may result in payment that is significantly different from our estimates. If the payment proves to be less than the recorded reserves, the reversal of the liabilities would generally result in tax benefits being recognized in the period when we determine the liabilities to be no longer necessary. Conversely, if the payment proves to be more than the reserves, we could incur additional charges, and these could have a materially adverse effect on the Company’s business, financial condition, results of operations, and cash flows.
The US
U.S. Department of the Treasury’s Office of
Foreign Assets Control (“OFAC”),Control, and the Bureau of Industry and Security at the USU.S. Department
of Commerce (“BIS”)
administer certain laws and regulations that restrict USU.S. persons and, in some instances, non-USnon-U.S. persons, in conducting
activities, transacting
business with, or making investments in certain countries, governments, entities and individuals subject to US U.S.
economic sanctions.
Our
largest shareholder, Fusion Fuel Green,Green PLC, holds substantial control
over the Company and is able to influence all corporate matters,
which shareholders may consider to not always be in their best interests.
Fusion
Fuel Green holds substantial control of our
Company with over 50% of the outstanding shares of common stock. By virtue of the ownership of
common stock, Fusion Fuel Green is able
to exercise significant influence over all matters requiring approval by our stockholders, including
the election of directors, the approval
of significant corporate transactions, and any change of control of our Company.
We
are dependent on the continued services of our director and executive
chairman and officers and if we fail to keep them or fail to attract and
retain qualified senior executives and key technical personnel,
our business may not be able to expand.
We
are dependent on the continued availability of
Executive Chairman,Frederico NicolasFigueira Link,de CEO,Chaves, the Company’s Chairman and director; John-Paul Backwell,
the Company’s Chief Executive Officer and CCO,director; Carsten Kjems Falk, the Company’s Interim Chief Financial Officer and
a director; and Sanjeeb Safir, the Company’s Chief Operating Officer and Managing Director Middle East; and the availability of
new executives to implement
our business plans. The market for skilled employees is highly competitive, especially for employees in our
industry. Although we expect
that our planned compensation programs will be intended to attract and retain the employees required for
us to be successful, there can
be no assurance that we will be able to retain all our key employees or a sufficient number to execute
our plans, nor can there be any
assurance we will be able to continue to attract new employees as required.
Management's Discussion & Analysis (MD&A)
New heading “Impact of Acquisitions”
New heading “Write-offs of Buyback Reserve and Related-Party Receivable”
New heading “Results of Operations”
New heading “Cost of Revenues”
New heading “Summary of Cash Flow”
New heading “Impact of Acquisitions”
Removed heading “Recent Developments”
Removed heading “Results of Operation for the Year Ended December 31, 2024, and 2023”
Largest changes
“ASU 2017-04, Simplifying the Test for Goodwill Impairment, has been effective for fiscal years beginning after December 15, 2019, and has been adopted by the Company. Under this standard, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total goodwill allocated to that reporting unit. The Company applies this simplified one-step impairment test in its annual goodwill assessment. As noted above, no impairment was identified as of December 31, 2025.”see in full comparison
Our business is impacted by the global economic environment, employment levels, consumer confidence, government, and municipal spending. Global instability in securitiessee in full comparisonmarkets andmarkets, the Russian invasion ofUkraineUkraine, and war in the Middle East are among other factors that can impact our financial performance. In particular, changes in the U.S. economicclimate,climate can impact the demand of our products range. TheIndustrialindustrial andManufacturingmanufacturing sectors are impacted by the overall economic environment as addressed in the risk factors. 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.
“Results of Operation for the Year Ended December 31, 2024, and 2023”see in full comparison
“We will require additional financing to fund our operations beyond the near term. Based on our current projections, our existing cash resources will not be sufficient to meet our anticipated operating and other cash needs through December 31, 2026, and for at least 12 months beyond that period, unless we receive such additional financing, including the costs associated with being a public reporting company. …”see in full comparison
“The following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this report. The discussion contains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, management. …”see in full comparison
Full comparison: every changed paragraph (62)
The following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this report. The discussion contains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report, particularly in the sections titled Part II. Item 1A. “Risk Factors” and “Introductory Notes – Cautionary Note Regarding Forward-Looking Statements”.
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 Annual Report on Form 10-K.
Overview
QIND is a Nevada Corporation that is majority-owned
by Fusion Fuel Green PLC (“HTOO”). HTOO functions as QIND’s parent company, and as such it concentrates on providing
strategic management oversight that includes financial, administration, marketing, and human resources support to QIND, which functions
as HTOO’s Industrial subsidiary.
General Macro Economic
Macroeconomic Conditions
Our
business is impacted by the global economic environment,
employment levels, consumer confidence, government, and municipal spending.
Global instability in securities markets andmarkets, the Russian invasion
of UkraineUkraine, and war in the Middle East are among other factors that can
impact our financial performance. In particular, changes in the U.S. economic climate,climate can
impact the demand of our products range. The Industrial
industrial and Manufacturingmanufacturing sectors are impacted by the overall economic environment as
addressed in the risk factors. 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
A
significant component of our growth ishas been through the
acquisition and consolidation of our operating companies in our targeted sectors.
We typically incur upfront costs as we incorporate and
integrate acquired businesses into our operating philosophy and operational excellence.
This includes consolidation of supplies and raw
materials, optimized logistics and production processes, and sales synergies within the
operating businesses with the aim to expand globally.
The benefits of these integration efforts may not positively impact our financial
results instantly but is expected to do so in the medium
to long-term future.
Recent Developments
On March 27, 2024, we 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. It
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 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. Subsequently, the Board of Directors of the Company
approved the cancellation of the agreement with Quality International Co Ltd FZC that was signed on January 18, 2023, and amended on July
27, 2023. The company is in the process of unwinding the remaining part of the transaction consisting of the $2M buy-back commitment,
with management aiming to recover the investment or parts of it. However, the investment may need to be written off if recovery proves
unattainable.
On May 23, 2024, Quality Industrial
Corp. entered into a binding term sheet with Actelis Networks, Inc., a Delaware corporation traded on the NASDAQ under the symbol ASNS,
pursuant to which Actelis would acquire between 61% to 75% of the issued and outstanding shares of the Company’s share capital.
We originally intended to close the transaction, pending regulatory requirements and due diligence, within 60 days. On August 30, 2024,
we agreed to further extend the non-solicitation and no-shop periods provided in the Term Sheet until October 1, 2024, unless mutually
terminated earlier by the parties. On October 10, 2024, ASNS provided the Company with written notice of ASNS’ intent to terminate
the Term Sheet in accordance with the termination provisions thereof, which required 30-day written notice of termination. Such 30-day
period ended, and the Term Sheet was definitively canceled on November 11, 2024.
On November 14, 2024, Ilustrato
Pictures International Inc. (“Ilustrato”) and eight additional sellers agreed to transfer 78,312,334 shares of common stock
and 20,000 series B stock in the Company to Fusion Fuel Green PLC an Irish corporation traded on the NASDAQ under the symbol “HTOO”.
Pursuant to a Share Purchase Agreement, the consideration for the Purchased Shares will be payable in shares of common stock and preferred
stock of HTOO. As a result of this transaction, there was a change in control of the Company when the transaction closed on November 26,
2024. The shares transferred amount to 69.23% voting rights of the outstanding shares in our Company on a fully diluted and as-converted
basis. Consequently, HTOO is now able to unilaterally control the election of our board of directors, all matters upon which shareholder
approval is required and, ultimately, the direction of our Company.
On April 8, 2025, the Company signed an Amendment to
the Share Purchase Agreement, dated March 27, 2024, with the shareholders of Al Shola Al Modea Gas Distribution LLC. The amended Share
Purchase Agreement removed the termination clause 9.14 and amended other clauses of the Share Purchase Agreement, dated March 27, 2024.
The foregoing description of the Amended Share Purchase Agreement is not complete and is qualified in its entirety and filed as Exhibits
2.8 to this form 10-K.
In 2025,
2026, the Company willexpects to allocate
resources to ourits subsidiarymajority-owned subsidiary, Al Shola GasGas, to enhance efficiency, boost sales, and
positively influence their financial performanceperformance, with
primarily through investment from our parent company, Fusion Fuel Green PLC.Fuel. We also plan to investcontinue
investing in new vehicles for our subsidiary to improve their
bulk LPG supply capabilities and increase our revenue. We expect that our
revenue and operating expenses will riseincrease as we implement the
expansionsuch plan related to our subsidiary. This increase will be due to administrative and operating costs linked to our business activities.plans.
Write-offs of Buyback Reserve and Related-Party Receivable
As part of management’s ongoing assessment of asset recoverability, the Company reevaluated the accounting treatment of certain assets arising from prior-period transactions, including (i) a reserve (the “Buyback Reserve” recorded within other current assets in connection with the issuance of shares of common stock pursuant to a certain Share Purchase and Buyback Agreement, dated August 21, 2023, among the Company, Artelliq Software Trading, Ilustrato, Saseendran Kodapully Ramakrishnan, and Quality International Co Ltd FZC, and (ii) a related-party receivable associated with a purchase of a certain asset from the Company by Ilustrato (the “Related-Party Receivable”).
With respect to the Buyback Reserve, the Company determined in fiscal year 2025 that the $2.0 million balance, no longer represented an asset from which future economic benefits were probable. Accordingly, the Company recorded a non-cash write-off of $2.0 million in fiscal year 2025.
With respect to the Related-Party Receivable, management concluded that $1.5 million of the receivable, representing the asset-purchase-related balance, was not recoverable based on a reassessment of collectability. This conclusion was reached following management’s assessment of the recoverability of the receivable, based on information available to the Company and its evaluation of the counterparty’s ability to satisfy the obligation. As a result, the Company recorded a $1.5 million write-off of the Related-Party Receivable in fiscal year 2025. The remaining balance of approximately $0.5 million, primarily representing an intercompany loan, is expected to be recoverable and continues to be recognized as an asset.
As part of its fiscal year 2025 review procedures, management reassessed the recoverability of certain assets, including the Buyback Reserve and the Related-Party Receivable. Based on this reassessment, management determined that the balances were not recoverable and recorded the related write-offs in fiscal year 2025 in accordance with U.S. GAAP. These conclusions were reviewed and approved by the Company’s Board of Directors.
Although the foregoing balances have been written off, the Company may pursue recovery or claw back actions against the applicable counterparties. Any amounts recovered, whether in cash, equity, or other consideration, would be recognized as a gain in the period realized.
Results of Operations
Results of Operation for the Year Ended December 31, 2024, and 2023
Revenue for the year ended December 31, 2025, was $16,307,787, compared to $11,177,567 for the year ended December 31, 2024, representing an increase of $5,130,220, or 45.90%. The increase in reported revenue was primarily attributable to (i) the inclusion of a full year of revenue from the Company’s majority-owned subsidiary, Al Shola Gas, in 2025, compared to consolidation beginning in the second quarter of 2024 following its acquisition, and (ii) higher sales volumes and improved operational performance driven by continued growth in customer demand and expansion of business activities.
Cost of Revenues
Cost of revenues for the year ended December 31, 2025, was $11,519,007, compared to $7,214,304 for the year ended December 31, 2024, representing an increase of $4,304,703, or 59.67%. The increase was primarily due to (i) the inclusion of a full year of revenue from the Company’s majority-owned subsidiary, Al Shola Gas, in 2025, compared to consolidation beginning in the second quarter of 2024 following its acquisition, and (ii) higher revenue during the year ended December 31, 2025.
Gross Profit
We earned $4,788,780 in gross profit for the year ended December 31, 2025, compared with $3,963,263 for the year ended December 31, 2024, representing an increase of $825,517, or 20.83%. The increase in gross profit was primarily attributable to (i) the inclusion of a full year of revenue from the Company’s majority-owned subsidiary, Al Shola Gas, in 2025, compared to consolidation beginning in the second quarter of 2024 following its acquisition, and (ii) higher revenue during the year ended December 31, 2025.
We earned $11,177,567 in revenue for the year ended
December 31, 2024, as compared with revenue of $0 for the year ended December 31, 2023. The addition of revenue is a result of the ASG
acquisition on March 27, 2024. The revenue from Al Shola Gas has been consolidated from April 1, 2024, to December 31, 2024. Al Shola
Gas had revenue for the 12 months ended December 31, 2024, of $14,268,840 compared to $10,839,209 for the 12 months ended December 31,
2023, an increase of 31.1%.
Operating expenses increased to $5,245,558 for the year ended December 31, 2025, from $3,265,008 for the year ended December 31, 2024. The increase was attributable to (i) costs for salary and bonus payments to management totaling $1,380,000 and settlement payments to certain former officers of the Company totaling $606,816; and (ii) an increase of $596,887 in operating expenses resulting from the inclusion of a full year of operations of the Company’s majority-owned subsidiary, Al Shola Gas, in the year ended December 31, 2025, as compared to only three quarters of operations in the year ended December 31, 2024 due to the timing of the Company’s acquisition of Al Shola Gas, which was completed at the end of the first quarter of 2024.
Operating expenses increased
to $3,280,008 for the year ended December 31, 2024, from $2,766,256 for the year ended December 31, 2023. Our General and Administrative
expenses are approximately the same for 2024 and 2023. The expenses in 2024 are however mainly due to General and Administrative expenses
in our subsidiary Al Shola Gas, as opposed to 2023, where General and Administrative expenses were mainly due to shares issued to our
management and Chairman in the amount of $2,233,000. We had an increase in professional fees from $315,011 in 2023, to $849,925 in 2024.
The increase was related to one-off costs for a reaudit of our financials with our new auditor Bush and Associates CPA amounting to $95,000.
Further we had legal one off-costs with our legal counsel, Lucosky Brookman LLP, for legal work carried out in connection with the merger
with our new parent company Fusion Fuel Green PLC amounting to a total of $525,994.
We
anticipate that our operating expenses will increase
as we undertake our subsidiary expansion plan. The increase willis anticipated to be
attributable to administrative and operating costs associated with
our business activities and the professional fees associated with
our reporting obligations.
Net Non-Operating Expenses
We
had hadnet other non-operating expenses
of $687,755$3,981,758 for the year ended December 31, 2024,2025, compared to $1,466,476$275,201 for the year ended December
31, 2024.
Non-operating expenses for the year ended December 31, 2025, increased significantly compared to the year ended December 31, 2024, primarily due to the write-off of non-operating assets totaling $3,502,388. During the year, management performed an assessment of the recoverability of certain non-operating asset balances and determined that these amounts were no longer realizable. Accordingly, the Company recorded a write-off consisting of $2.0 million related to the reversal of the Buyback Reserve, $1,500,000 representing the Related-Party Receivable, and $2,388 related to other miscellaneous non-operating assets.
Our non-operating expenses for
the year ended December 31, 2024, compared to the same periods in 2023, were primarily lower due to Commitment and Conversion Fees for
stock.
We
had other non-operating income
of $427,554$318,706 for the year ended December 31, 2024,2025, compared to $0$427,554 for the same period in 2023.2024. Our
other income for the year ended December
31, 2024,2025, resulted from the reversalrelease of interestclaims payments onunder the loanLucosky agreementsSettlement with Mahavir and Artelliq in the first quarter, which
was unwound with the cancellation of the agreement with Quality International and the sale of intangible assets from the legacy business,
Wikisoft Corp.Agreement.
We incurred net loss of $4,603,645 for the year ended December 31, 2025, compared to a net income of $266,780 for the year ended December 31, 2024, primarily due to the reasons described above for increased cost of revenues and increased operating expenses.
We incurred Net income of $266,780 for the year ended
December 31, 2024, compared to a net loss of $4,232,732 for the same period ended December 31, 2023. The growth in Net income is a result
of the ASG acquisition on March 27, 2024. The Net Income from Al Shola Gas has been consolidated from April 1, 2024, to December 31, 2024.
Al Shola Gas had Net Income for the 12 months ended December 31, 2024, of $2,051,645 compared to $1,743,974 for the 12 months ended December
31, 2023, an increase of 17.6%, which includes a 9% corporate tax provision imposed in the UAE for the FY 2024 as compared with 0% in
2023.
As
of December 31, 2024,2025, and 2023,2024, we had total current
assets of $7,466,617$7,038,913 and $2,002,492,$7,466,617, respectively, and total current liabilities
of $11,363,612$16,753,372 and $5,782,017.$11,223,627. TheAs notes to the consolidated
financial statements provide a breakdown for the periods endedof December 31, 2024,2025, andour 2023,working respectively.capital deficit was $9,714,459 compared to $3,757,010 as of December
31, 2024.
We will require additional financing to fund our operations beyond the near term. Based on our current projections, our existing cash resources will not be sufficient to meet our anticipated operating and other cash needs through December 31, 2026, and for at least 12 months beyond that period, unless we receive such additional financing, including the costs associated with being a public reporting company. Since our own financial resources may be insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities in public offerings, private placements or credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.
As of December 31, 2024, our working capital deficit
was $3,896,995, compared to $3,779,525 as of December 31, 2023.
Net cash provided
by operating activities was $1,154,846 for the fiscal year ended December 31, 2024, as compared with $2,358,808 provided for the
fiscal year ended December 31, 2023.
Net cash used in investing activities was $(5,636)
for the fiscal year ended December 31, 2024, as compared with $(5,500,000) provided for the fiscal year ended December 31, 2023.
Net cash (used in)
provided by Financing activities was $(926,120) for the fiscal year ended December 31, 2024, as compared with $3,140,548 provided for the same period ended 2023.
Our primary liquidity and capital requirements include
working capital for our subsidiary, Al Shola Gas, and general corporate operational needs. Historically, we have met these cash requirements
through cash generated by financing activities.
The Company’s ability to continue as a going
concern depends on its ability to continue to generate sufficient revenues and raise capital within one year from the date of this filing.
Management plans to use borrowings and security sales to mitigate the effects of cash flow deficits; however, no assurance can be given
that debt or equity financing, if and when required, will be available.
The Company’s Debt Obligations as of December
31, 2024 (including convertible and promissory notes):
The
accompanying condensed consolidated financial
statements have been prepared in accordance with accounting principles generally accepted
in the United States of America on a going concern
basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments
in the normal course of business.
For the 12 months ended December 31, 2026, the Company anticipates that Fusion Fuel, the Company’s parent company, will finance certain investments in connection with the operations of our majority-owned subsidiary, Al Shola Gas. In addition, the Company anticipates that Fusion Fuel will provide all compensation required by our executive officers, other than our Chief Operating Officer and Managing Director Middle East, Sanjeeb Safir. Further, management plans to use borrowings and security sales to mitigate the effects of cash flow deficits. However, no assurance can be given that any such financing, compensation, or capital will be available, if and when required.
Summary of Cash Flow
The following table provides detailed information about our net cash flow for fiscal years ended December 31, 2025, and December 31, 2024:
Net cash used in operating activities was $(2,587,934) for the fiscal year ended December 31, 2025, as compared with $1,154,846 provided for the fiscal year ended December 31, 2024. The change was primarily driven by adverse working capital movements, mainly due to an increase in accounts receivable of $2.10 million and a decrease in accounts payable of approximately $0.64 million.
Net cash used in investing activities was $(1,377,470) for the fiscal year ended December 31, 2025, as compared with $(5,636) used for the fiscal year ended December 31, 2024. The change was primarily due to payments to ASG shareholders of $1.00 million, advances for the purchase of property, plant and equipment of $0.30 million, and additions to property, plant and equipment of approximately $0.08 million during the fiscal year ended December 31, 2025..
Net cash provided by financing activities was $4,166,407 for the fiscal year ended December 31, 2025, as compared with net cash used in financing activities $(926,120) used for the fiscal year ended December 31, 2024. The change was primarily due to proceeds from related party loans of $4.43 million, changes in minority interest of $0.45 million, and proceeds from the issuance of common stock of approximately $0.04 million during the fiscal year ended December 31, 2025. These inflows were partially offset by net repayments of convertible notes of $0.49 million, payments for ASG debt of approximately $0.23 million, and a repurchase of shares of the Company’s common stock for $0.03 million during the fiscal year ended December 31, 2025.
Debt
The Company’s debt obligations as of December 31, 2025, were as follows (including convertible and nonconvertible promissory notes).
Impact of Acquisitions
QIND intends to complete future acquisitions, and
we intend to disclose these acquisitions, as they happen, in our ongoing reports with the Securities and Exchange Commission. Over the
next twelve months, management plans to use borrowings and security sales to mitigate the effects of cash flow deficits; however, no assurance
can be given that debt or equity financing, if and when required, will be available.
The “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section is based on the Company’s Consolidated Financial Statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect reported amounts and related disclosures. On an ongoing basis, management evaluates and updates its estimates. Management employs judgment in making its estimates but they are based on historical experience and currently available information and various other assumptions that the Company believes to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results could differ from those estimates. Management believes that its judgment is applied consistently and produces financial information that fairly depicts the results of operations for all periods presented.
What changed in the latest 10-Q
Risk Factors
As a “smaller reporting company,” we are not required to provide the information required by this Item.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Business Developments”
New heading “Results of Operations for the Six Months Ended June 30, 2026, and 2025”
New heading “Operating Expenses”
New heading “Net Income (Loss)”
Removed heading “General Macroeconomic Conditions”
Removed heading “Recent Developments”
Largest changes
“Events of Default and Acceleration. The full indebtedness becomes immediately due and payable upon, among other things: (a) failure to make any payment when due; (b) breach of any undertaking or covenant; (c) any representation proving incorrect or misleading; (d) insolvency or bankruptcy proceedings against ASG or any guarantor; (e) dishonor of any check supplied to the Bank; (f) any material adverse change in the financial position or business of ASG or any guarantor; or (g) any merger, change of ownership or control, or share transfer without RAKBANK’s prior written consent. …”see in full comparison
“Restrictive Covenants. The loan agreement contains restrictive covenants, including requirements that ASG (i) route at least 25% of its monthly business, including POS transactions, through RAKBANK; (ii) deposit all checks and cash through its RAKBANK account; and (iii) not incur any additional bank borrowings for nine months following disbursement. In addition, without the prior written consent of RAKBANK, ASG may not undertake or permit any merger, reorganization, or change of ownership or management control, and no shareholder of ASG may transfer or sell shares without the Bank’s consent. …”see in full comparison
“Our business is impacted by the global economic environment, employment levels, consumer confidence, government, and municipal spending. Global instability in securities markets, the Russian invasion of Ukraine, and war in the Middle East 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. The industrial and manufacturing sectors are impacted by the overall economic environment as addressed in the risk factors. …”see in full comparison
“Guarantee. Safir Ahammed and Sanjeeb Safir, both minority shareholders of ASG, have provided joint and several personal guarantees of all obligations under the loan. Mr. Safir also serves as the Company’s Chief Operating Officer. Their liability extends to the full loan amount plus interest, penalty interest, additional charges, and any interest arising from instalment deferrals or rate increases. …”see in full comparison
“On July 16, 2026, ASG entered into a RAKfinance Loan Application and Agreement (Agreement No. 20757553) with The National Bank of Ras Al Khaimah (P.S.C.) (“RAKBANK”) and received a loan in the principal amount of AED 1,540,500 (approximately $419,469) for the purpose of business expansion. The loan has a tenor of 36 months and bears interest at RAKBANK’s SME Prime Rate plus 5.00% per annum (the “Loan Interest Rate”), calculated on a daily reducing balance basis. …”see in full comparison
“Subsequent to December 31, 2025, military conflict involving Iran, Israel, and the United States escalated in the Middle East region. The Company operates in the United Arab Emirates within the oil and gas sector. Management has evaluated the potential impact of this conflict on the Company’s operations, supply chain, and financial condition and has concluded that, as of March 31, 2026, there has been no material adverse impact. However, the situation remains uncertain, and future developments could affect the Company’s operations and financial results.”see in full comparison
Full comparison: every changed paragraph (74)
Except
as otherwise indicated by the context, references in this Quarterly Report to the “Company,” “we,”
“us,”
“our,” or “QIND” refer to Quality Industrial Corp., a Nevada corporation; and
“common stock” refers
to the Company’s common stock, par value $0.001 per share. References in this
Quarterly Report to “Al Shola Gas” or
“ASG” refer to Al Shola Al Modea Gas Distribution L.L.C., a United
Arab Emirates (“UAE”) company, a 51.0%-owned
subsidiary of the Company. References in this quarterly report to “Fusion
Fuel” are to Fusion Fuel Green PLC, an Irish public
limited company, the Company’sowner parentof company.approximately 51.8% of the common stock as of June 30, 2026. References in this Quarterly Report to “LPG” refer to liquified petroleum gas.
This
Quarterly Report contains forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities
Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),. thatThese involveforward-looking
statements significant
risksare andalso uncertainties.made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In some cases,
these forward-looking statements can be identified by words and phrases such as “may,” “will,” “could,”
“will,would,” “should,” “believes,” “expects,” “anticipates,” “estimates,”
“projects,”
“intends,” “should,” “seeks,” “future,” “continue,” “plan,”
“target,”
“predict,” “potential,” “outlook,” “guidance,” “forecast,”
or the negative form of these words and phrases or other comparable expressions. All
statements other than statements of historical facts
are forward-looking statements, including, without limitation, statements regarding our financial position, business strategy, budgets,
projected costs, plans and objectives of management for future operations, and the assumptions underlying or relating to any such statements.
These forward-looking statements include information
about our possible or assumed future results of operations or our performance. Forward-looking statements are based on management’s current
expectations and assumptions regarding the Company’s business,
the economy, and other future conditions.conditions, and involve significant risks and uncertainties that could cause actual results to differ materially
from those expressed or implied in such statements.
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, those described below and elsewhere in this Quarterly Report and in the sections entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 31, 2026 (the “Annual Report”), and “Risks Related to Our Gas Distribution Business” in Exhibit 99.2 to the Report on Form 6-K furnished by Fusion Fuel with the SEC on July 29, 2026.
Any forward-looking statement made by us in this Quarterly Report speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC.
Forward-looking
statements relate to the future, and are therefore subject to inherent uncertainties, risks, and changes in circumstances that are difficult
to predict. Known and unknown risks, uncertainties and other factors may cause actual results to be materially different from those expressed
or implied by such forward-looking statements.
Risks
and uncertainties that could cause actual results to differ materially from those contemplated in the forward-looking statements include,
but are not limited to:
We
are an industrial company specializing in the energy sector. Through our 51.0%-owned operating subsidiary, Al Shola Al Modea Gas Distribution
L.L.C. (“ASG” or “Al Shola Gas”), we provide comprehensive solutions for the liquefied petroleum gas (“LPG”)
industry. Our services
include consulting, designing, supplying, installing, and maintaining LPG systems, as well as the transportation
and supply of LPG in
both bulk and cylinder formats. We cater to a diverse range of clients, including commercial buildings, mixed-use
apartment complexes,
shopping centers, food courts, heavy industries, labor accommodations, catering units, commercial kitchens, and
dining establishments.
Our mission is to develop a next-generation industrial and energy corporation that meets the increasing global
demand for high-quality,
cost-effective, and sustainable energy solutions.
In addition to the factors described above, our financial performance may be affected by the factors described under “Special Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report and the risk factors described in Part I, Item 1A of the Annual Report and “Risks Related to Our Gas Distribution Business” in Exhibit 99.2 to the Report on Form 6-K furnished by Fusion Fuel with the SEC on July 29, 2026.
General
Macroeconomic Conditions
Our
business is impacted by the global economic environment, employment levels, consumer confidence, government, and municipal spending.
Global instability in securities markets, the Russian invasion of Ukraine, and war in the Middle East 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. The
industrial and manufacturing sectors are impacted by the overall economic environment as addressed in the risk factors. 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.
Subsequent
to December 31, 2025, military conflict involving Iran, Israel, and the United States escalated in the Middle East region. The Company
operates in the United Arab Emirates within the oil and gas sector. Management has evaluated the potential impact of this conflict on
the Company’s operations, supply chain, and financial condition and has concluded that, as of March 31, 2026, there has been no
material adverse impact. However, the situation remains uncertain, and future developments could affect the Company’s operations
and financial results.
Recent
Developments
Subsequent
to March 31, 2026, ASG, the Company’s majority-owned subsidiary, was awarded 16 new LPG engineering subcontracts with an
aggregate expected contract value of approximately $1.14 million as of April 2026. In addition, ASG renewed a number of engineering
and LPG supply contracts that are expected to continue generating recurring annual revenue.
Recent and Planned Developments
Bank Loan
On July 16, 2026, ASG entered into a RAKfinance Loan Application and Agreement (Agreement No. 20757553) with The National Bank of Ras Al Khaimah (P.S.C.) (“RAKBANK”) and received a loan in the principal amount of AED 1,540,500 (approximately $419,469) for the purpose of business expansion. The loan has a tenor of 36 months and bears interest at RAKBANK’s SME Prime Rate plus 5.00% per annum (the “Loan Interest Rate”), calculated on a daily reducing balance basis. The SME Prime Rate is an interest rate determined by RAKBANK in its sole discretion from time to time and is not pegged to any external benchmark or central bank reference rate; RAKBANK may change the SME Prime Rate at any time by notice published in one or more newspapers in the UAE, on notice boards at RAKBANK branches, or on RAKBANK’s website. Accordingly, the Loan Interest Rate is a variable rate subject to change at RAKBANK’s discretion. The approved repayment schedule dated July 22, 2026 reflects an effective Loan Interest Rate of approximately 20.50% per annum. The loan agreement states a repayable balance of AED 2,083,428 (approximately $567,269), calculated as 36 equal monthly installments of AED 57,873 (approximately $15,758), with the first installment due on August 15, 2026. Under the approved repayment schedule, which reflects the daily reducing balance methodology, the aggregate of the 36 scheduled installments (including a reduced final installment) is AED 2,076,988.60 (approximately $565,513). The Loan Shield Insurance Policy (as defined below) premiums payable over the term of the loan are projected to total AED 5,139.26 (approximately $1,399). ASG paid processing fees of AED 42,525 (approximately $11,579) in connection with the loan.
Interest Rate. RAKBANK may change the Loan Interest Rate at any time by notice to ASG to the extent permitted by law. Any rate increase will be achieved by retaining the monthly installment amount and extending the tenor of the loan, rather than increasing the monthly payment, thereby increasing the total cost of borrowing.
Security. The loan is secured by (i) an undated security check of AED 2,083,428, and (ii) a security agreement over bank accounts. The loan agreement also requires ASG to obtain and maintain a credit life insurance policy (the “Loan Shield Insurance Policy”) in an amount equal to the loan amount, assigned in favor of RAKBANK as additional collateral security for all indebtedness under the loan. RAKBANK is authorized to debit premium payments for the Loan Shield Insurance Policy directly from ASG’s bank accounts.
Guarantee. Safir Ahammed and Sanjeeb Safir, both minority shareholders of ASG, have provided joint and several personal guarantees of all obligations under the loan. Mr. Safir also serves as the Company’s Chief Operating Officer. Their liability extends to the full loan amount plus interest, penalty interest, additional charges, and any interest arising from instalment deferrals or rate increases. The guarantee constitutes a primary obligation that continues without limitation until the loan is fully repaid, survives the death or bankruptcy of the guarantor, and remains in place irrespective of whether the guarantor exits or sells his shares in ASG.
Late Payment. If any monthly installment is not received on the relevant due date, RAKBANK may charge late payment interest at 2% above the Loan Interest Rate, plus all costs, charges, and expenses incurred by the Bank in enforcing its rights, including legal expenses.
Restrictive Covenants. The loan agreement contains restrictive covenants, including requirements that ASG (i) route at least 25% of its monthly business, including POS transactions, through RAKBANK; (ii) deposit all checks and cash through its RAKBANK account; and (iii) not incur any additional bank borrowings for nine months following disbursement. In addition, without the prior written consent of RAKBANK, ASG may not undertake or permit any merger, reorganization, or change of ownership or management control, and no shareholder of ASG may transfer or sell shares without the Bank’s consent. In the event of a breach of any covenants or a failure to submit required documents to RAKBANK’s satisfaction, the loan interest rate is subject to increase by 2% per annum, and RAKBANK is authorized to recover additional amounts attributable to the increased rate.
Prepayment. ASG may prepay all or part of the outstanding amounts upon written notice, subject to an additional prepayment charge as detailed in RAKBANK’s Service and Price Guide.
Installment Deferral. Any installment deferral agreed to by RAKBANK in its sole discretion will result in additional interest and an extension of the final repayment date, increasing the total repayable balance.
Events of Default and Acceleration. The full indebtedness becomes immediately due and payable upon, among other things: (a) failure to make any payment when due; (b) breach of any undertaking or covenant; (c) any representation proving incorrect or misleading; (d) insolvency or bankruptcy proceedings against ASG or any guarantor; (e) dishonor of any check supplied to the Bank; (f) any material adverse change in the financial position or business of ASG or any guarantor; or (g) any merger, change of ownership or control, or share transfer without RAKBANK’s prior written consent. Upon acceleration, the Bank may charge additional late payment interest and recover all enforcement costs and legal expenses.
Indemnification. ASG must fully indemnify RAKBANK from any expense, loss, damage, or liability incurred under or in connection with the loan documents, including as a consequence of any event of default.
Set-Off. RAKBANK may, at any time and without notice, combine or consolidate amounts standing to the credit of any ASG accounts and set them off against sums due under the loan, whether such liabilities are actual or contingent, primary or collateral.
Expenses. ASG must reimburse RAKBANK on demand for all expenses incurred in the preparation, execution, enforcement, or preservation of any rights under the loan documents, including administrative costs and legal expenses on a full indemnity basis.
Transaction Costs. ASG is responsible for all transaction costs, registration fees, and similar taxes payable in connection with the loan documents, and must indemnify RAKBANK against any liabilities from delay or omission to pay such taxes.
Governing Law and Jurisdiction. The loan is governed by UAE law, with the exclusive jurisdiction of the Courts of Ras Al Khaimah, subject to RAKBANK’s right to initiate proceedings in any other court of competent jurisdiction.
Business Developments
Subsequent to June 30, 2026, ASG ordered a number of smaller-capacity Bobtail units to further optimize distribution efficiency within highly congested urban corridors, specifically the Deira and Bur Dubai market areas of Dubai, UAE.
During the third quarter of 2026, the Company expects to take delivery of a new LPG Bobtail truck with a capacity of 17,800 liters. The integration of this asset into the Company’s active fleet is projected to increase daily operational capacity from 27 metric tons (MT) to approximately 35 MT. Management anticipates that the addition of this vehicle will mitigate existing logistics bottlenecks, thereby driving incremental volume growth and positively impacting revenues in the periods following deployment.
Management anticipates an increase in revenues during the second half of fiscal 2026, following the resolution of certain project pricing inefficiencies. However, operational challenges persist regarding the procurement of critical materials and specialized equipment. Ongoing supply chain disruptions may delay project installation timelines, thereby extending estimated completion and handover dates for specific active projects.
In
2026, the Company expects to allocate resources to its majority-owned subsidiary, Al Shola Gas, to enhance efficiency, boost sales, and
positively influence financial performance, primarily through investment from our parent company, Fusion Fuel. We plan to continue investing in new vehicles for our subsidiary to improve their bulk LPG
supply capabilities and increase our revenue. We expect that our revenue and operating expenses will increase as we implement such plans.
Results
of Operations for the Three Months Ended MarchJune 31,30, 2026, and 2025
RevenuesRevenue
Revenue decreased to $3,534,006 for the three months ended June 30, 2026, from $4,009,461 for the corresponding period in 2025. The decrease in revenue was primarily attributable to lower sales volumes compared with the corresponding period in the prior year.
Revenue
for the three months ended March 31, 2026, increased to $3,665,660 from $3,621,473 for the three months ended March 31, 2025. The increase
in revenue was a result of an increase of revenue of Al Shola Gas compared with the same quarter last year as a result of higher sales
volumes and improved operational performance driven by continued growth in customer demand and expansion of business activities.
Gross
profit increaseddecreased to $1,000,600$1,031,940 for the three months ended MarchJune 31,30, 2026, from $955,386$1,320,106 for the three months ended MarchJune 31,30, 2025. The
increasedecrease in gross profit was primarily attributable to higherlower revenue during the three months ended MarchJune 31,30, 2026.
Operating
expenses decreasedwere to $824,780$899,810 for the three months ended MarchJune 31,30, 2026, fromcompared $1,902,508to $879,647 for the three months ended MarchJune 31,30, 2025.
The decreaseincrease
in operating expenses for the three-month period was primarily attributable to reducedhigher administrativeprofessional fees and operatingincreased costsdepreciation fromand
amortization the non-recurrence of aggregate discretionary
bonus payments to management of $1,020,000.expenses.
OtherTotal
other expenses decreasedwere to $56,118$48,497 for the three months ended MarchJune 31,30, 2026, fromcompared $285,418to $283,948 for the three months ended MarchJune 31,30, 2025.
The The
decrease in other operating expenses was primarily due to reduced interest and discount-related expenses on convertible notes.
Other
income increasedwas to $36,152$1,375 for the three months ended MarchJune 31,30, 2026, fromwhile $0there was no other income for the threecorresponding monthsperiod ended MarchJune 31, 30,
2025. The increase
in other income was primarily due to credit card fee income recognized during the waiver of $35,000 in fees by a service provider.period.
Net
income was $133,324$64,926 for the three months ended MarchJune 31,30, 2026, whilecompared to net lossincome of $99,191 for the three months ended MarchJune 31,30, 2025, was $1,259,606.2025.
The changedecrease in net income was primarily due to thelower non-recurrence of aggregate discretionary bonus payments to management of $1,020,000.revenue.
Results of Operations for the Six Months Ended June 30, 2026, and 2025
Revenue
Revenue decreased to $7,199,666 for the six months ended June 30, 2026, from $7,630,934 for the corresponding period in 2025. The decrease in revenue was primarily attributable to lower sales volumes compared with the corresponding period in the prior year.
Gross Profit
Gross profit decreased to $2,032,540 for the six months ended June 30, 2026, from $2,275,492 for the six months ended June 30, 2025. The decrease in gross profit was primarily attributable to lower revenue during the six months ended June 30, 2026.
Operating Expenses
Operating expenses were $1,724,590 for the six months ended June 30, 2026, compared to $2,782,155 for the six months ended June 30, 2025. The decrease in operating expenses was primarily attributable to lower administrative and operating costs resulting from the non-recurrence of discretionary bonus payments to management totaling $1,020,000 that were incurred during the corresponding period in 2025.
We anticipate that our operating expenses will increase as we undertake our subsidiary expansion plan. The increase is anticipated to be attributable to administrative and operating costs associated with our business activities and the professional fees associated with our reporting obligations.
Other Expenses
For the six months ended June 30, 2026, total other expenses were $32,311, compared to $569,366 for the same period in 2025. The decrease in other operating expenses was primarily due to reduced interest and discount-related expenses on convertible notes.
Other Income
Other income was $37,527 for the six months ended June 30, 2026, while there was no other income for the corresponding period ended June 30, 2025. The increase in other income was primarily due to the recognition of $35,000 of income arising from the waiver of outstanding consultancy fees by a third-party service provider, together with credit card fee income recognized during the period.
Net Income (Loss)
Net income was $198,150 for the six months ended June 30, 2026, compared to net loss of $(1,160,415) for the six months ended June 30, 2025. The improvement in results for the six-month period was primarily attributable to the non-recurrence of a one-time discretionary bonus payment of $1,020,000 to management, which was awarded during the first quarter of 2025 in connection with the Company’s acquisition by Fusion Fuel and the subsequent capital raising.
As of June 30, 2026, we had cash and cash equivalents of $150,012, total current assets of $7,367,803, and total current liabilities of $18,127,438. Our primary sources of liquidity are financial support from our parent company, Fusion Fuel. We may also obtain additional liquidity through equity issuances and debt financings. Our primary liquidity requirements consist of funding working capital, operating expenses, strategic acquisitions, and the costs associated with being a public reporting company. Based on our current projections, we expect to require additional financing to support our operations, strategic acquisitions, and other growth initiatives beyond the near term.
As
of March 31, 2026, we had cash and cash equivalents of $172,548, total current assets of $7,297,799, and total current liabilities of
$18,036,654.
The
Company will require additional financing to fund ourits operations beyond the near term. Based on our current projections, our existing
cash resources will not be sufficient to meet our anticipated operating and other cash needs through MarchJune 31,30, 2027, and for at least
12 months beyond that period, unless we receive such additional financing,financing is obtained, including the costs associated with being a public reporting company.
company. Since our own financial resources may be insufficient to satisfy our capital requirements, we may seek to sell additional equity
or debt
securities in public offerings, private placements or credit facilities. The sale of additional equity securities could result
in dilution
to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require
us to agree
to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on
terms acceptable
to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability
to expand
our business operations and could harm our overall business prospects.
QIND insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding QIND (13F)
None of the 59 investors we track reported a position in their latest 13F.