NOTE 6. CURRENT LIABILITIES

Accounts Payable

Accounts payable totaled $1,424,754 as of June 30, 2025, including Trade and Other Payables of $733,143 for QIND and $691,611 for our subsidiary, Al Shola Gas. This compares to $801,721 for QIND and $1,315,155 for Al Shola Gas as of December 31, 2024.

SCHEDULE OF ACCOUNTS PAYABLE  

Related Party Payable

On November 18, 2024, Quality Industrial Corp., Fusion Fuel Green PLC, an Irish public limited company, Ilustrato Pictures International Inc., a Nevada corporation, and certain other stockholders of the Company, entered into a Stock Purchase Agreement. Pursuant to section 6.04 of the agreement, Purchaser shall use commercially reasonable efforts to raise at least $5,000,000 in one or more financing transactions, and the Company and Sellers shall support and assist Purchaser in connection with the Purchaser Financing. The Parties agree that 50% of the proceeds from the Purchaser Financing will be set aside and made available expressly for the Company to use for its working capital and corporate needs and the remaining 50% of such funds will be set aside and made available expressly for the businesses of Purchaser existing immediately prior to Closing to use for their working capital and corporate needs. To split the net proceeds of the Purchaser Financing as described above, Purchaser shall make loans of one-half of the net proceeds to the Company, which loans shall be (i) forgiven upon the Preferred Stock Conversion or (ii) repaid if the Transactions are unwound.

As of June 30, 2025, and December 31, 2024, the Company had amounts owed to Fusion Fuel Green PLC amounting to $1,060,684 and $0, respectively.

Operating Lease Liabilities – Current

As disclosed, we acquired 51% of the outstanding shares of ASG on March 27, 2024. These acquired operating leases were valued on the date of acquisition using the present value of the lease payments remaining from the date acquired and an estimated incremental borrowing rate of 8%. As of June 30, 2025, we had a current portion of lease liabilities of $118,652.

Convertible Notes

On August 3, 2022, the Company issued a two-year convertible promissory note in the principal amount of $1,100,000 to RB Capital Partners Inc. The Note bears interest at 7% per annum. The Company has the right to prepay the Note at any time. All principal on the Note is convertible into shares of our common stock after six months from issuance at the election of the holder at a conversion price equal to $1.00 per share.

On March 17, 2023, the Company issued a two-year convertible promissory note in the principal amount of $200,000 to RB Capital Partners Inc. The Note bears interest at 7% per annum. The Company has the right to repay the Note at any time. All principal on the Note is convertible into shares of our common stock after six months from issuance at the election of the holder at a conversion price equal to $1.00 per share.

On May 23, 2023, the Company issued to Jefferson Street Capital LLC a one-year convertible promissory note in the principal amount of $220,000 (the “Jefferson Note”). The Jefferson Note bears interest at 7% per annum. The Company has the right to prepay the Note at any time. All principal on the Jefferson Note is convertible into shares of our common stock after six months from issuance at the election of the holder at a conversion price equal to $0.35 per share. During the six months ended September 30, 2024, the lender elected to convert an aggregate of $100,000 of principal into 2,697,315 shares of common stock.

On June 16, 2023, the Company issued to Sky Holdings Ltd. A six-month convertible promissory note in the principal amount of $550,000. The Note bears interest at 7% per annum. The Company has the right to prepay the Note at any time. All principal on the Note is convertible into shares of our common stock after six months from issuance at the election of the holder at a conversion price equal to $0.35 per share. On May 16, 2024, the promissory note was amended to have a conversion price equal to $0.0375 per share.

On December 20, 2023, QIND issued a two-year convertible promissory note RB Capital Partners Inc. in the principal amount of $100,000 with a maturity date of December 30, 2025. The note bears interest at 10% per annum. QIND has the right to prepay the note at any time. All principal on the note is convertible into shares of QIND common stock after six months from issuance at the election of the holder at a conversion price equal to $1.00 per share.

On December 20, 2023, the Company issued a one-year convertible promissory note in the principal amount of $100,000 to Sean Levi. This Convertible Promissory Note (the “Note”) shall bear a minimum of twenty percent (20%) interest, which will be payable within five business days from when the company receives the IPO funding, and thereafter, fifteen percent (15%) per annum will be charged. The Note is for 1 year and cannot be converted until 6 months from the date first written above has passed. Fifty Percent (50%) of the value of this note is committed to shares to be issued at a 25% discount to the IPO price. These shares are to be issued upon uplist to the NASDAQ and must be held for six (6) months. If QIND does not uplist, then Holder will be issued 200% of the value of this note in QIND stock listed on the OTC Markets. Upon payment in full of the principal, this Note shall be surrendered to the Company for cancellation.

On February 6, 2024, we issued a six-month convertible promissory note to Exchange Listing LLC in the principal amount of $35,000. The note is convertible into common stock at a discount of thirty-five percent (35%) to the volume-weighted average trading (“VWAP”) of the Company’s common stock for the five (5) days before any conversion and bears 10% interest per annum. The maturity date shall be the earlier of (i) six (6) months from the Issue Date or (ii) upon completion of a listing of the Company on a Senior Exchange.

On May 21, 2024, we issued a one-year convertible promissory note to Jefferson Street Capital LLC in the principal amount of $71,500, with equal consecutive payments due monthly beginning on October 21, 2024, that is five (5) months from the Issue Date, with the final payment due on February 21, 2025. The note is convertible into common stock at the rate of $0.03 and bears 10% interest per annum. The promissory note required 500,000 commitment shares to be issued. The relative fair value of these commitment shares of $24,179 was recorded as a debt discount and increased to additional paid-in capital. The discount will be amortized into interest expense over the term of the promissory note.

On September 20, 2024, we entered into a loan agreement with J.J. Astor & Co. The Note is the senior secured with a Principal Amount of $405,000, which shall be payable in forty weekly instalments of $10,125. The note converts at 80% of the average of the four lowest volume-weighted average closing prices of Company Common Stock over the twenty (20) trading days immediately prior to each permitted conversion of the Note.

On September 25, 2024, we issued a convertible promissory note to 1800 Diagonal Lending LLC in the principal amount of $115,000. A one-time interest charge of thirteen percent with a total of $14,950 was applied on the Issuance Date. The first payment shall be due October 30, 2024, with eight subsequent payments due on the 30^th of each month thereafter. Accrued, unpaid Interest and outstanding principal, subject to adjustment, shall be paid in nine (9) payments, each of $14,438.89 (a total payback to the Holder of $129,500). All principal on the Diagonal Lending Note is convertible into shares of our common stock in the event of default, with a conversion price of 65% multiplied by the lowest Trading Price for the Common Stock during the ten (10) Trading Days prior to the Conversion Date. Subsequently, the note has been converted in full.

Certain convertible notes include original issuance discounts or other issuance-type costs, resulting in debt discounts upon execution. These discounts are amortized into interest expense over the term of the convertible note. During the three months ended June 30, 2025, amortization related to these discounts totaled $38,203.

A summary of these outstanding convertible notes and accrued interest as of June 30, 2025, is summarized below:

SUMMARY OF OUTSTANDING CONVERTIBLE NOTES AND ACCRUED INTEREST  

Debt & Interest Payable

Discount on Convertible Notes

Options and Warrants

In accordance with ASC 470, warrants have been classified as a liability and recorded at their fair value.

On April 19, 2023, the Company issued a common share purchase warrant to Exchange Listings LLC (the “Exchange Common Share Purchase Warrant”). The holder is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date of issuance hereof, to purchase from the Company, 200,000 of the Company’s common shares (whereby such number may be adjusted from time to time pursuant to the terms and conditions of the Exchange Common Share Purchase Warrant) at the exercise price of $0.58, per share then in effect.

On May 23, 2023, the Company issued a common share purchase warrant to Jefferson Street Capital LLC (the “Jefferson Common Share Purchase Warrant”). The holder is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date of issuance hereof, to purchase from the Company, 50,000 of the Company’s common shares (whereby such number may be adjusted from time to time pursuant to the terms and conditions of the Jefferson Common Share Purchase Warrant) at the exercise price of $3.50, per share then in effect.

Other Payables Current

In connection with the ASG Acquisition, we acquired short-term bank debt totaling $550,060. As of June 30, 2025, total current borrowings outstanding were $164,854.

The Company acquired a 51% interest in Al Shola Gas on March 27, 2024, with the issuance of a $9,000,000 note payable and $1,000,000 in cash. The note payable is due as follows: $9 million in National Exchange-listed stock or cash to be paid to the Seller, of which $6,425,000 is the current portion as of June 30, 2025.

SCHEDULE OF OTHER PAYABLES CURRENT 

Other Current Liabilities

As of June 30, 2025, and December 31, 2024, the Company’s Other Current Liabilities were $2,150,360 and $803,812, respectively.

SCHEDULE OF OTHER CURRENT LIABILITIES