HTOOW Fusion Fuel Green PLC

Exhibit 2.1

 

 

 

 

 

STOCK PURCHASE AGREEMENT

 

 

by and among

 

 

QUALITY INDUSTRIAL CORP., a Nevada corporation,

 

 

FUSION FUEL GREEN PLC, an Irish public limited company,

 

 

ILUSTRATO PICTURES INTERNATIONAL INC.

 

and

 

OTHER SELLERS

 

 

November 18, 2024

 

 

 

 

 

TABLE OF CONTENTS

 

		Page
ARTICLE I.	PURCHASE AND SALE OF THE SELLERS’ SHARES	2
Section 1.01	Purchase and Sale of the Sellers’ Shares	2
Section 1.02	Closing	2
Section 1.03	[Reserved]	2
Section 1.04	Closing Deliverables	2
Section 1.05	Directors and Officers	4
Section 1.06	Tax Treatment	4
ARTICLE II.	PURCHASE PRICE	5
Section 2.01	Purchaser Price	5
Section 2.02	Purchaser Price Adjustment	5
ARTICLE III.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	6
Section 3.01	Organization and Power	6
Section 3.02	Organizational Documents	7
Section 3.03	Governmental Authorizations	7
Section 3.04	Corporate Authorization	7
Section 3.05	Non-Contravention	7
Section 3.06	Capitalization	8
Section 3.07	Subsidiaries	8
Section 3.08	Financial Statements	9
Section 3.09	Undisclosed Liabilities	9
Section 3.10	Absence of Certain Changes	10
Section 3.11	Litigation	10
Section 3.12	Material Contracts	10
Section 3.13	Benefit Plans	11
Section 3.14	Labor Relations	13
Section 3.15	Taxes	14
Section 3.16	Environmental Matters	15
Section 3.17	Intellectual Property	16
Section 3.18	Real Property; Personal Property	17
Section 3.19	Permits; Compliance with Law	18
Section 3.20	Certain Business Practices	18
Section 3.21	Regulatory Matters	19
Section 3.22	Transactions with Affiliates	19
Section 3.23	Insurance	19
Section 3.24	Brokers	20
Section 3.25	No Additional Representations or Warranties	20
ARTICLE IV.	REPRESENTATIONS AND WARRANTIES OF PURCHASER	20
Section 4.01	Organization and Power	20
Section 4.02	Organizational Documents	21
Section 4.03	Governmental Authorizations	21
Section 4.04	Corporate Authorization	21

 

 

Section 4.05	Non-Contravention	22
Section 4.06	Capitalization	22
Section 4.07	Subsidiaries	23
Section 4.08	[Reserved]	24
Section 4.09	SEC Filings and the Sarbanes-Oxley Act	24
Section 4.10	Financial Statements; Internal Controls	25
Section 4.11	Undisclosed Liabilities	26
Section 4.12	Absence of Certain Changes	27
Section 4.13	Litigation	27
Section 4.14	Material Contracts	27
Section 4.15	Benefit Plans	28
Section 4.16	Labor Relations	30
Section 4.17	Taxes	31
Section 4.18	Environmental Matters	33
Section 4.19	Intellectual Property	33
Section 4.20	Real Property; Personal Property	35
Section 4.21	Permits; Compliance with Law	36
Section 4.22	Certain Business Practices	36
Section 4.23	Regulatory Matters	36
Section 4.24	Anti-Takeover Arrangements	37
Section 4.25	Transactions with Affiliates	37
Section 4.26	Insurance	37
Section 4.27	Valid Issuance	37
Section 4.28	Brokers	38
Section 4.29	Shell Company Status	38
Section 4.30	Listing and Maintenance Requirements	38
Section 4.31	No Additional Representations or Warranties	38
ARTICLE V.	REPRESENTATIONS AND WARRANTIES OF THE SELLERS	38
Section 5.01	Purchase Entirely for Own Account	39
Section 5.02	Capacity; Enforceability	39
Section 5.03	Ownership of Sellers’ Shares	39
Section 5.04	Reliance Upon Seller Representations	39
Section 5.05	Receipt of Information	39
Section 5.06	Investment Experience	40
Section 5.07	Accredited Seller Status	40
Section 5.08	Restricted Securities	40
Section 5.09	Non-Contravention	40
Section 5.10	No Additional Representation or Warranties	40
ARTICLE VI.	COVENANTS	40
Section 6.01	Conduct of Business of the Company	40
Section 6.02	Conduct of Business of Purchaser	43
Section 6.03	Access to Information; Confidentiality	45
Section 6.04	Purchaser Financing	46
Section 6.05	[Reserved]	46
Section 6.06	Post-Closing Agreements and Other Deliverables	46
Section 6.07	[Reserved]	47
Section 6.08	Purchaser Stockholders Approval; Standstill	47
Section 6.09	Nasdaq Listing	48
Section 6.10	[Reserved]	49

 

 

Section 6.11	Reasonable Best Efforts	49
Section 6.12	Consents; Filings; Further Action	49
Section 6.13	Public Announcements	50
Section 6.14	Fees and Expenses	50
Section 6.15	Takeover Statutes	50
Section 6.16	Notification of Certain Matters	51
Section 6.17	Certain Litigation	51
Section 6.18	[Reserved]	52
Section 6.19	Tax Matters	52
Section 6.20	Amended Purchaser Charter	52
ARTICLE VII.	CONDITIONS	52
Section 7.01	Conditions to Each Party’s Obligation to Consummate the Transactions	52
Section 7.02	Conditions to Obligations of Purchaser	52
Section 7.03	Conditions to Obligation of the Company and the Sellers	54
Section 7.04	Frustration of Closing Conditions	55
ARTICLE VIII.	UNWINDING, TERMINATION, AMENDMENT AND WAIVER	55
Section 8.01	Unwinding of the Transactions	55
Section 8.02	Termination by Mutual Consent; Automatic Termination	55
Section 8.03	Termination by any of Purchaser, the Sellers or the Company	55
Section 8.04	Termination by the Company or the Sellers	56
Section 8.05	Termination by Purchaser	56
Section 8.06	Effect of Termination	57
Section 8.07	Fees and Expenses Following Termination	57
ARTICLE IX.	SURVIVAL; INDEMNIFICATION	57
Section 9.01	Survival	57
Section 9.02	Indemnification by the Sellers	58
Section 9.03	Indemnification by the Company	58
Section 9.04	Indemnification by the Purchaser	59
Section 9.05	Indemnification Procedures	59
Section 9.06	Limitation on Indemnification Obligations	60
Section 9.07	Exclusive Remedy	61
Section 9.08	Mitigation	61
Section 9.09	Tax Treatment	61
ARTICLE X.	MISCELLANEOUS	62
Section 10.01	Certain Definitions	62
Section 10.02	Interpretation	68
Section 10.03	[Reserved]	69
Section 10.04	Governing Law	69
Section 10.05	Submission to Jurisdiction; Service	69
Section 10.06	Waiver of Jury Trial	69
Section 10.07	Notices	70
Section 10.08	Amendment	71
Section 10.09	Extension; Waiver	71
Section 10.10	Entire Agreement	71
Section 10.11	No Third-Party Beneficiaries	71

 

 

Section 10.12	Severability	71
Section 10.13	Rules of Construction	72
Section 10.14	Assignment	72
Section 10.15	Remedies	72
Section 10.16	Specific Performance	73
Section 10.17	Counterparts; Effectiveness	73
Section 10.18	Non-Recourse	73
Section 10.19	Conflicts and Privilege	74

 

Disclosure Schedules

 

Company Disclosure Schedule
Purchaser Disclosure Schedule

Seller Disclosure Schedule

 

 

STOCK PURCHASE AGREEMENT

 

This STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of November 18, 2024 (the “Effective Date”), by and among Fusion Fuel Green PLC, an Irish public limited company (“Purchaser”), Quality Industrial Corp., a Nevada corporation (the “Company”), Ilustrato Pictures International Inc., a Nevada corporation (“ILUS”), and the shareholders of the Company appearing on the signature page hereto (together with ILUS, the “Sellers” and each a “Seller”). Purchaser, the Company, and the Sellers may each be referred to herein as a “Party” and, collectively, as the “Parties.” Capitalized terms used in this Agreement have the meanings specified in Section 10.01 or elsewhere in this Agreement.

 

RECITALS

 

WHEREAS, the Sellers collectively own such number of shares of common stock, par value $0.001 per share (the “Company Common Stock”), and preferred stock, par value $0.001 per share (the “Company Preferred Stock”), of the Company, that represents in the aggregate 69.36% of the issued and outstanding capital stock of the Company (the “Sellers’ Shares”);

 

WHEREAS, the fair value of the Sellers’ Shares is estimated by the Parties to be approximately $21,800,000 as of the date of this Agreement;

 

WHEREAS, the Sellers desire to sell, transfer, and assign to Purchaser, and Purchaser desires to purchase and accept from the Sellers the Sellers’ Shares at Closing pursuant to the terms and conditions outlined in this Agreement;

 

WHEREAS, the board of directors of Purchaser (the “Purchaser Board”), by resolution duly adopted by the majority vote of the entire Purchaser Board at a meeting duly called and held, has (a) approved this Agreement, the transactions contemplated hereby (the “Transactions”) and the Merger, (b) determined that this Agreement, the Transactions and the Merger are advisable and in the best interests of the stockholders of Purchaser;

 

WHEREAS, the board of directors of the Company (the “Company Board”), by written consent of the Company’s sole director, has (a) approved this Agreement, the Transactions and the Merger and (b) determined that this Agreement, the Transactions and the Merger are advisable and in the best interests of the Company’s stockholders and (c) approved the Company’s execution and delivery of this Agreement and the performance of its obligations hereunder;

 

WHEREAS, upon the Closing, the Company will function as a majority-owned operating subsidiary of Purchaser, and Purchaser will consolidate the financial results and information of the Company with its own;

 

WHEREAS, the Purchaser Board has obtained a written opinion from a financial advisor to the effect that, as of the date of such opinion, and based on and subject to the assumptions, limitations, qualifications, and other matters outlined in such opinion, the Transactions are fair, from a financial point of view, to the stockholders of Purchaser (the “Fairness Opinion”), and has provided a copy of the Fairness Opinion to the Company, solely for informational purposes (it being understood and agreed that such written opinion may not be relied upon by the Sellers, the Company or their respective shareholders); and

 

WHEREAS, the Parties intend that after the Closing, and subject to the terms and conditions of an agreement and plan of merger to be mutually agreed upon by Purchaser and the Company (the “Merger Agreement”), and the receipt of any necessary stockholder, regulatory, and Nasdaq consents or approvals, the Company shall merge with and into a newly-formed, wholly-owned Nevada subsidiary of Purchaser (the “Merger”), and whereby upon completion of the Merger, the Company shall be the surviving entity and be the wholly owned subsidiary of Purchaser.

 

 

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants, and agreements outlined in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties, intending to be legally bound, agree as follows:

 

Article I. PURCHASE AND SALE OF THE SELLERS’ SHARES

 

Section 1.01 Purchase and Sale of the Sellers’ Shares.

 

At the Closing, and upon the terms outlined in this Agreement, each Seller shall sell, transfer, convey, assign, and deliver to Purchaser such number of Sellers’ Shares set forth below such Seller’s name on the signature page to this Agreement under the caption “Number of Sellers’ Shares,” free and clear from all Liens. 

 

Section 1.02 Closing.

 

Subject to the satisfaction or waiver of all of the conditions to closing contained in Article VII (other than any conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions), the closing of the Transactions (the “Closing”) shall take place (a) remotely by exchange of documents and signatures (or their electronic counterparts) on the date hereof or (b) at such other place and time as Purchaser, the Sellers and the Company may mutually agree in writing. The date on which the Closing occurs is referred to herein as the “Closing Date.” 

 

Section 1.03 [Reserved]

 

Section 1.04 Closing Deliverables.

 

(a)  Seller Closing Deliverables. At or before the Closing (or to the extent specifically set forth below, after the Closing), each Seller shall deliver, or cause to be delivered, to Purchaser, the following:

 

1.

counterparts to this Agreement duly executed by the Seller;

 

2.

lock-up agreements in form and substance mutually agreeable to Purchaser, the Sellers and the Company (the “Seller Lock-Up Agreements”) executed by each Seller;

 

3.

any stock certificates or book entries representing the Sellers’ Shares;

 

4.

a general release of all claims in favor of the Company, duly executed by Seller;

 

5.

a certificate, signed by an executive officer of the Company, certifying as to the matters set forth in Section 7.02(a)(i) through (iii), Section 7.02(b) (solely with respect to the Company) and Section 7.02(c);

 

 

6.

a certificate, signed by each Seller, certifying as to the matters set forth in Section 7.02(a)(iv) and Section 7.02(b) (solely with respect to such Seller);

 

7.

a certificate of good standing of the Company, certified as of a recent date by the Secretary of State of the State of Nevada;

 

8.

the Company’s cash flow forecasts and working budgets for the 12- month period following the Closing Date; and

 

9.

such other documents or instruments as Purchaser may reasonably request that are reasonable and necessary to consummate the Transactions.

 

(b)  Purchaser Closing Deliverables. At the Closing, Purchaser shall deliver, or cause to be delivered, to the Sellers or the Persons or accounts, as applicable, as set forth on the Seller Allocation Schedule, the following:

 

1.

the Ordinary Shares Consideration;

 

2.

the Preferred Shares Consideration;

 

3.

any stock certificates or book entries representing the Purchaser Shares Consideration;

 

4.

a counterpart to this Agreement duly executed by an authorized officer of Purchaser;

 

5.

the lock-up agreements in form and substance mutually agreeable to Purchaser, the Sellers and the Company (the “Purchaser Lock-Up Agreements”) executed by each officer and director of Purchaser;

 

6.

the Purchaser Preferred Shares Certificate of Designation, which shall be a certified copy as filed with the Companies Registration Office of Ireland or as otherwise required to be effective under Irish Laws;

 

7.

a copy of the written resignation of Frederico Figueira de Chaves as Chief Executive Officer of Purchaser effective as of the Closing Date;

 

8.

written resolution of the Purchaser Board, or such other evidence under Irish Law, appointing John-Paul Backwell as Chief Executive Officer of Purchaser effective as of the Closing Date;

 

9.

Purchaser’s cash flow forecasts and working budgets for the 12-month period following the Closing Date;

 

10.

a certificate, signed by an executive officer of Purchaser, certifying (1) as to the matters set forth in Section 7.03(a), Section 7.03(b), Section 7.03(c) and Section 7.03(d) and (2) any rights of first refusal or similar rights enforceable against Purchaser pursuant to any Contract to which Purchaser is a party shall have been waived or terminated;

 

 

11.

a certificate of good standing of Purchaser, certified as of a recent date by the Companies Registration Office of Ireland (the “CRO”) or its equivalent; and

 

12.

such other documents or instruments as the Company or one or both of the Sellers may reasonably require and are reasonable and necessary to consummate the Transactions.

 

(c)  Company Closing Deliverables. At the Closing, the Company shall deliver, or cause to be delivered, to Purchaser, the following:

 

1.

a counterpart to this agreement duly executed by an authorized officer of the Company on behalf of the Company;

 

2.

all of the books and records of the Company, including all Organizational Documents of the Company and such stock certificates and other documents necessary to reflect that Purchaser as the then-sole owner of all of the Sellers’ Shares; and

 

3.

such other documents or instruments as Purchaser may reasonably request that are reasonable and necessary to consummate the transactions contemplated by this Agreement.

 

Section 1.05 Directors and Officers.

 

(a)  Purchaser Board. Each of Purchaser and the Company shall take all necessary actions so that, immediately upon adjournment of the Purchaser Stockholders Meeting or Additional Purchaser Stockholders Meeting at which the Purchaser Stockholder Approval is obtained, the Purchaser Board shall be comprised of (w) one individual as designated by Purchaser and who shall be designated in writing pursuant to the Merger Agreement; (x) one individual as designated by the Company Board and who shall be designated in writing pursuant to the Merger Agreement; (y) two individuals that qualify as “independent” under the Nasdaq rules as designated by the Company Board and who shall be designated in writing under the Merger Agreement; and (z) one individual that qualifies as “independent” under the Nasdaq rules as designated jointly by the Company Board and Purchaser Board and who is designated in writing under the Merger Agreement, provided that a majority of the persons outlined in (w) through (z) hereof shall qualify as an “independent director” under Nasdaq rules and regulations.

 

(b)  Company Board. The persons serving on the Company Board shall continue to do so until their earlier resignation, removal, or death.

 

Section 1.06 Tax Treatment.

 

Each Seller and Purchaser agree that the Transactions will be treated for U.S. federal income tax purposes and applicable state income tax purposes as a taxable sale by the Seller and a purchase by Purchaser of the assets of the Company (the “Intended Tax Treatment”). Each Party shall file all Tax Returns consistent with the Intended Tax Treatment and take no position inconsistent with such treatment (whether in connection with any audit, examination or other Tax proceeding, on any Tax Return or otherwise) unless required to do so pursuant to a “determination” within the meaning of Section 1313(a) of the Code. From and after the date of this Agreement, none of the Parties shall, nor shall they permit any of their respective Affiliates to, knowingly take any action, cause any action to be taken or omit to take any action which could reasonably be expected to cause the Transactions to fail to qualify for the Intended Tax Treatment.

 

 

Article II. PURCHASE PRICE

 

Section 2.01 Purchase Price.

 

At the Closing, Purchaser shall issue to the Sellers, in accordance with the Seller Allocation Schedule included on Schedule 2.01 (the “Seller Allocation Schedule”), the following securities in full consideration for the Sellers’ Shares (the “Purchase Price”):

 

1.

An aggregate of three million eight hundred eighteen thousand nine hundred sixty-nine (3,818,969) Purchaser Ordinary Shares, constituting 19.99% of the issued and outstanding Purchaser Ordinary Shares (the “Ordinary Shares Consideration”); and

 

2.

An aggregate of four million one hundred seventy-one thousand three hundred twenty-seven (4,171,327) Purchaser Preferred Shares, which shall be convertible into forty-one million seven hundred thirteen thousand two hundred seventy (41,713,270) Purchaser Ordinary Shares (subject to adjustment upon the occurrence of certain events as set forth in the Purchaser Preferred Shares Certificate of Designation (as defined below)), shall have no voting or dividend rights, and shall otherwise have the powers,  preferences, rights, qualifications, limitations, and restrictions as outlined in the Certificate of Designation for the Purchaser Preferred Shares in form and substance mutually agreeable to Purchaser, the Sellers and the Company (the “Purchaser Preferred Shares Certificate of Designation”), with such Purchaser Preferred Shares automatically converting into the underlying Purchaser Ordinary Shares upon the later of (i) approval of Purchaser’s issuance of such underlying Purchaser Ordinary Shares by Purchaser’s stockholders in accordance with applicable Irish Laws and (ii) the clearance of the initial listing application filed by Purchaser with Nasdaq pursuant to Section 6.09(b) with such conversion not occurring before the Stockholder Vote (the “Preferred Shares Consideration” and together with the Ordinary Shares Consideration, the “Purchaser Shares Consideration”),

 

provided always that the Purchaser Ordinary Shares and Purchaser Preferred Shares issued under this Section 2.01 must be issued for at least nominal consideration.

 

Section 2.02 Purchase Price Adjustment.

 

(a)  Notwithstanding anything in this Agreement to the contrary, the Purchase Price set forth in Section 2.01 have been agreed by the Parties based on the assumption that, as of the Closing Date, the aggregate indebtedness for borrowed money of the Purchaser is equal to or less than $1,350,000 (the “Purchaser Closing Debt Cap”).

 

 

(b)  If, as of the Closing Date the amount of Purchaser’s indebtedness for borrowed money is in excess of the Purchaser Closing Debt Cap relating to the period prior to the Closing, then the Purchaser shall issue to the legacy stockholders of the Company, including the Sellers, as soon as practicable following the closing of the Merger, a number of additional Purchaser Ordinary Shares (the “Adjustment Shares”) that is determined by dividing the dollar amount by which the actual indebtedness for borrowed money of the Purchaser exceeds the Purchaser Closing Debt Cap by Applicable Price Per Share (as defined herein below) provided always that the Adjustment Shares issued under this Section 2.02(b) must be issued for at least nominal consideration. The Adjustment Shares will be issued to those stockholders of the Company who are holders of the Company’s equity securities immediately prior to the Closing (“Legacy Company Stockholders”), on a pro rata basis based upon the number of shares of Company Common Stock held by such Legacy Company Stockholders immediately prior to the effective time of the Merger; provided, however, that for this purpose, the Sellers shall be deemed to hold at the effective time of the Merger such number of shares of Company Common Stock (assuming the conversion of Company Preferred Stock held by the Sellers into shares of Company Common Stock in accordance with their terms) as they hold at the time that the Sellers entered into this Agreement. For purposes of this Section 2.02, the term “Applicable Price Per Share” means the quotient obtained by dividing $40,730,000 by the number of Purchaser Ordinary Shares outstanding at the effective time of the Merger on a fully-diluted basis (assuming the conversion, exercise or exchange of all Purchaser Convertible Securities outstanding immediately after the effective time of the Merger). Purchaser shall undertake to prepare and deliver to the Sellers as soon as practicable following the Closing, financial statements of Purchaser for the period ending on the Closing Date (“Closing Purchaser Financial Statements”), which shall have been reviewed by Purchaser’s auditor or such third party as Purchaser and the Sellers may mutually agree.

 

(c)  If the Adjustment Shares issued pursuant to this Section 2.02 cannot be included in the Registration Statement, then Purchaser shall file a separate registration statement on Form F-3 (or, if Form F-3 is not then available to Purchaser, on Form F-1) that registers the issuance of the Adjustment Shares issuable to the Legacy Company Stockholders and use commercially reasonable efforts to cause such other registration statement to become effective as soon as practicable.

 

Article III. REPRESENTATIONS AND WARRANTIES OF THE Company

 

Except as outlined in the corresponding sections of the disclosure schedule to this Agreement to be delivered by the Company to Purchaser on the date hereof (the “Company Disclosure Schedule”) (each of which qualifies representations, warranties, or covenants outlined in the correspondingly numbered Section of this Agreement and any other representations, warranties or covenants where its relevance as an exception to (or disclosure for purposes of) such other representations, warranties or covenants is reasonably apparent on the face of the disclosure) and as described in the forms, reports, statements (including registration statements), certifications, and other documents and materials filed or furnished by the Company with the U.S. Securities and Exchange Commission (“SEC”), the Company hereby represents and warrants to Purchaser as follows:

 

Section 3.01 Organization and Power.

 

Each of the Company and each of its Subsidiaries is duly organized, validly existing, and in good standing under the Law of its jurisdiction of organization. The Company has the requisite corporate power and authority to own, lease, and operate its assets and properties and to carry on its business as now conducted, except where the failure to have such requisite power or authority would not constitute a Company Material Adverse Effect. Each of the Company’s Subsidiaries has the requisite power and authority to own, lease, and operate its assets and properties and to carry on its business as now conducted, except where the failure to have such requisite power or authority would not constitute a Company Material Adverse Effect. Each of the Company and its Subsidiaries is duly qualified to do business as a foreign corporation, limited liability company, or other legal entity and is in good standing in each jurisdiction where such qualification is necessary, except where the failure to be so qualified or in good standing would not constitute a Company Material Adverse Effect.

 

 

Section 3.02 Organizational Documents.

 

The Company has made available to Purchaser true and complete copies of its certificate of incorporation and bylaws as in effect on the date of this Agreement (collectively, the “Company Organizational Documents”), and such Company Organizational Documents are in full force and effect.

 

Section 3.03 Governmental Authorizations.

 

Assuming that the representations and warranties of Purchaser contained in Section 4.04 and of the Sellers contained in Section 5.02 are true and correct, the execution, delivery, and performance of this Agreement by the Company do not and will not require any consent, approval, or other authorization of, or registration or filing with or notification to any Governmental Authority (collectively, “Governmental Authorizations”), other than:

 

1.

such Governmental Authorizations where the failure to obtain such Governmental Authorizations would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect;

 

2.

those required applicable antitrust or similar Laws; and

 

3.

as set forth in Section 3.03 of the Company Disclosure Schedule.

 

Section 3.04 Corporate Authorization.

 

(a)  The Company Board has unanimously (i) determined that this Agreement and the consummation of the Transactions and the Merger are in the best interests of the Company’s stockholders and (ii) approved the Company’s execution and delivery of this Agreement and the performance of its obligations hereunder. The resolutions adopted by the Company Board have not been subsequently rescinded, modified, or withdrawn in any way.

 

(b)  The Company has all necessary corporate power and authority to enter into and deliver this Agreement, to perform its obligations hereunder. The execution, delivery, and performance of this Agreement by the Company and its obligations hereunder have been duly and validly authorized by all necessary corporate action on the part of the Company. Assuming the due and valid authorization, execution, and delivery by the other Parties, this Agreement constitutes a legal, valid, and binding agreement of the Company enforceable against the Company by its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles).

 

Section 3.05 Non-Contravention.

 

Subject to the receipt of the consents, approval, authorizations and other requirements set forth in Section 3.03, and except as set forth on Schedule 3.05 of the Company Disclosure Schedule, the execution, delivery and performance of this Agreement by the Company and the consummation of the Transactions do not and will not (a) contravene or conflict with, or result in any material violation or breach of, any provision of (i) the Company Organizational Documents or (ii) the comparable organizational or governing documents of any of the Subsidiaries of the Company, (b) contravene or conflict with, or result in any material violation or breach of, any Law applicable to the Company or any of its Subsidiaries or by which any Company Assets are bound, assuming that all Governmental Authorizations described in Section 3.03 have been obtained or made, (c) result in any violation, termination, acceleration of any material obligation, cancellation or material breach of, or constitute a default (with or without notice or lapse of time or both) or require any notice or consent under, any Company Material Contracts or Company Real Property Leases to which the Company or any of its Subsidiaries is a party or by which any Company Assets are bound or (d) result in the creation of any Liens (other than Permitted Liens) upon any Company Assets except, in the case of clauses (a)(ii), (b), (c) and (d), as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

 

 

Section 3.06 Capitalization.

 

(a) As of the date of this Agreement, the Company’s authorized capital stock consists of a total of 201,000,000 shares, divided into 200,000,000 shares of Company Common Stock and 1,000,000 shares of Company Preferred Stock, which shares of Company Preferred Stock are further divided into 100 shares of Series A Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”), 200,000 shares of Series B Preferred Stock, par value $0.001 per share, of the Company (the “Series B Preferred Stock. As of the close of business on the date of this Agreement, (i) 121,751,901 shares of Company Common Stock were issued and outstanding, (ii) no shares of Series A Preferred Stock were issued and outstanding, (iii) 20,000 shares of Series B Preferred Stock were issued and outstanding, and (iv) warrants exercisable for up to 250,000 shares of Company Common Stock at a weighted average per share exercise price of $1.164 were issued and outstanding.

 

(b) Except as set forth in Section 3.06(a) or to the extent expressly permitted under Section 6.01 (including as required by applicable Law) (i) there are no other outstanding shares of capital stock of the Company, (ii) there are no outstanding subscriptions, options, warrants, calls, convertible securities, rights of first refusal, preemptive rights, or other similar rights, agreements or commitments relating to the issuance or acquisition of capital stock or limited liability company interests to which the Company or any of its Subsidiaries is a party obligating the Company or any of its Subsidiaries to (A) issue, transfer or sell any shares of capital stock, limited liability company interests or other equity interests of the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, (B) grant, extend or enter into any such subscription, option, warrant, call, convertible securities or other similar right, agreement or arrangement, (C) redeem, repurchase or otherwise acquire any such shares of capital stock, limited liability company or other equity interests, or (D) provide an amount of funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in the Company or any of its Subsidiaries or any other Person.

 

(c) All outstanding shares of Company Common Stock and Company Preferred Stock have been duly authorized and are validly issued, fully paid and non-assessable, and not subject to any preemptive rights.

 

(d) Each outstanding share of capital stock, limited liability company interest, or other equity interests of each Subsidiary of the Company is duly authorized, validly issued, fully paid, and non-assessable, and in each case, to the extent such concepts are applicable to such capital stock, limited liability company interests, or other equity interests, not subject to any preemptive rights.

 

(e) There are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem, or otherwise acquire any shares of Company Common Stock, shares of Company Preferred Stock, or any shares of capital stock or limited liability company interests of any Subsidiary of the Company.

 

Section 3.07 Subsidiaries.

 

(a) Section 3.07(a) of the Company Disclosure Schedule sets forth a complete and accurate list of each Subsidiary of the Company.

 

 

(b) Except as outlined in Section 3.07(b) of the Company Disclosure Schedule, each of the Subsidiaries of the Company is majority-owned by the Company, directly or indirectly, free and clear of any Liens (other than Permitted Liens). The Company does not own, directly or indirectly, any capital stock or limited liability company interests of, or any other securities convertible or exchangeable into or exercisable for capital stock or limited liability company interests of, any Person other than the Subsidiaries of the Company.

 

Section 3.08 Financial Statements.

 

Section 3.08 of the Company Disclosure Schedule contains true, correct, and complete copies of (i) the audited balance sheet of the Company and its Subsidiaries as of December 31, 2023 and 2022, and the related audited statements of operations, stockholders’ equity and cash flows for the years ending December 31, 2023 and 2022 (the “Company Audited Financial Statements”) and (ii) the unaudited balance sheet of the Company and its Subsidiaries as of June 30, 2024, and the unaudited related statements of operations, stockholders’ equity and cash flows for the period ending on June 30, 2024 (the “Company Unaudited Financial Statements”). The Company Audited Financial Statements and the Company Unaudited Financial Statements fairly present, in all material respects, the financial condition and results of operations of the Company and its consolidated Subsidiaries as of the times and for the periods referred to in the Company Audited Financial Statements and the Company Unaudited Financial Statements and have been prepared in conformity with United States generally accepted accounting principles (“GAAP”) (except for (A) the absence of footnotes and (B) changes resulting from regular year-end adjustments (none of which, individually or in the aggregate, are material)). There are no off-balance sheet arrangements to which the Company or any of its Subsidiaries is a party.

 

Section 3.09 Undisclosed Liabilities.

 

As of the date of this Agreement, except as set forth in Section 3.09 of the Company Disclosure Schedule, to the Knowledge of the Company, there are no liabilities, Liens, or obligations of any kind, whether accrued, contingent, absolute, inchoate or otherwise (collectively, “Liabilities”), of the Company or any of its Subsidiaries, individually or in the aggregate, that are required to be recorded or reflected on a balance sheet prepared in accordance with GAAP, other than:

 

(a) Liabilities reflected or reserved against in the consolidated balance sheet of the Company as of June 30, 2024;

 

(b) Liabilities incurred since June 30, 2024, in the ordinary course of business (none of which is a Liability for tort, material breach of contract or environmental Liability);

 

(c) Liabilities incurred in connection with the Transactions or as permitted or contemplated expressly by this Agreement;

 

(d) Liabilities that will be discharged or paid off prior to or at the Closing;

 

(e) Liabilities incurred pursuant to Contracts or Permits binding on the Company or any of its Subsidiaries (other than those resulting from any breach or default under such Contract or Permit); and

 

(f) Liabilities that would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

 

 

Section 3.10 Absence of Certain Changes.

 

Except as otherwise expressly contemplated or required by this Agreement, or as set forth in Section 3.10 of the Company Disclosure Schedule, from June 30, 2024 to the date of this Agreement, (a) the business of the Company and each of its Subsidiaries has been conducted, in all material respects, in the ordinary course of business, excluding the execution and performance of this Agreement and the discussion, negotiations and transactions related to this Agreement, (b) there has not been any Company Material Adverse Effect and (c) there has not been or occurred any event, condition, action or effect that, if taken after the date of this Agreement, would constitute a breach of Section 6.01.

 

Section 3.11 Litigation.

 

Except as set forth in Section 3.11 of the Company Disclosure Schedule, (a) there are no legal actions, claims, demands, arbitrations, hearings, charges, complaints, sanctions, examinations, indictments, litigations, suits or other civil, criminal, administrative or investigative proceedings before a Governmental Authority (collectively, “Legal Actions”) pending or, to the Knowledge of the Company, threatened, against the Company or any of its Subsidiaries, or any of its or their assets or properties, that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect and (b) there are no Orders outstanding against the Company or any of its Subsidiaries, or any of its or their assets or properties, that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

 

Section 3.12 Material Contracts.

 

(a)  Section 3.12 of the Company Disclosure Schedule sets forth a list of each of the following Contracts to which, as of the date of this Agreement, the Company or any of its Subsidiaries is a party (each, a “Company Material Contract”):

 

(i)  each Contract (A) not to (or otherwise restricting or limiting the ability of the Company or any of its Subsidiaries, if any, to) compete in any line of business or geographic area or (B) to restrict the ability of the Company or any of its Subsidiaries, if any, to conduct business in any geographic area;

(ii)  each Contract that is reasonably likely to require, during the remaining term of such Contract, annual payments by the Company or any of its Subsidiaries that exceed $250,000;

 

(iii)  all Contracts granting to any Person an option or a first refusal, first offer, or similar preferential right to purchase or acquire any Company Assets;

 

(iv)  all material Contracts (A) for the granting or receiving of a license, sublicense, or franchise (in each case, including any such Contracts relating to any Intellectual Property) providing for or resulting in payment over $250,000 per year or (B) under which any Person is obligated to pay or has the right to receive a royalty, license fee, franchise fee or similar payment in which it is reasonably expected to pay or receive a royalty, license fee, franchise fee or similar payment over $250,000, in each case of clause (A) and (B);

 

(v)  all partnerships, joint ventures, or other similar agreements or arrangements;

 

(vi)  any agreement relating to indebtedness for borrowed money or the deferred purchase price of property (in either case, whether incurred, assumed, guaranteed, or secured by any asset), except any such agreement with an aggregate outstanding principal amount not exceeding $100,000;

 

 

(vii)  any agreement for the disposition or acquisition by the Company or any of its Subsidiaries with material obligations of the Company or any of its Subsidiaries (other than confidentiality obligations) remaining to be performed, or material Liabilities of the Company or any of its Subsidiaries continuing, after the date of this Agreement, of any material business or any material amount of assets other than in the ordinary course of business;

 

(viii)  any agreement, other than operating agreements of Subsidiaries of the Company that have been made available to Purchaser, restricting or limiting the payment of dividends or the making of distributions to stockholders, including intercompany dividends or distributions other than such restrictions or limitations that are required by applicable Law or the Company Organizational Documents;

 

(ix)  any Contract with an employee of the Company or any Subsidiary involving annual payments over $100,000;

 

(x)  any Contract for the development of Intellectual Property other than those entered into in the ordinary course of business with Company employees and contractors; and

 

(xi)  all material agreements with any Governmental Authority.

 

(b)  A true and complete copy of each Company Material Contract (including any related amendments) entered into prior to the date of this Agreement has been made available to Purchaser prior to the date of this Agreement. Each Company Material Contract is a valid and binding agreement of the Company or its applicable Subsidiary, except where the failure to be valid and binding would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) neither the Company or such Subsidiary nor, to the Knowledge of the Company, any other party, is in breach of or default under any such Company Material Contract, (ii) as of the date of this Agreement, there are no material disputes in connection with any such Company Material Contract and (iii) as of the date of this Agreement, no party under any Company Material Contract has given written notice of its intent to terminate or otherwise seek a material amendment to such Company Material Contract.

 

Section 3.13 Benefit Plans.

 

(a)  Except as set forth in Section 3.13(a) of the Company Disclosure Schedule, the Company does not have or maintain any Company Benefit Plans. For purposes of this Agreement, a “Company Benefit Plan” is, whether or not written, (i) any “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (ii) any compensation, stock purchase, stock option, equity or equity-based compensation, retention, severance, employment, individual consulting, change-of-control, transaction bonus, bonus, incentive, deferred compensation and other employee benefit plan, agreement, arrangement, program or policy, whether or not subject to ERISA, (iii) any plan, agreement, program or policy providing vacation benefits, medical, dental, vision or prescription benefits, disability or sick leave benefits, life insurance, employee assistance program, supplemental unemployment benefits and post-employment or retirement benefits (including compensation or pension benefits), in each case (A) under which any current or former director, manager, officer, employee or individual independent contractor of the Company or any of its Subsidiaries has any right to benefits and for which the Company or any of its Subsidiaries has any Liability or (B) which are maintained, sponsored or contributed to by the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries makes or is required to make contributions or with respect to which the Company or any of its Subsidiaries has any material Liability.

 

 

(b)  With respect to each material Company Benefit Plan, if applicable, the Company has made available to Purchaser true and complete copies of the most recent summary plan description.

 

(c)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, neither the Company nor any of its Subsidiaries maintains, sponsors, or contributes to (or is required to sponsor, maintain, or contribute to), or has any Liability, including on account of an ERISA Affiliate, under or with respect to, (i) any “defined benefit plan” (as defined in Section 3(35) of ERISA) that is subject to Section 412 or Section 430 of the Code or Title IV of ERISA, (ii) any “multiemployer plan” (as defined in Section 3(37) of ERISA and 4001(a)(3) of ERISA), (iii) any “multiple employer plan” (within the meaning of Section 210 of ERISA or Section 413(c) of the Code) or that is or has been subject to Section 4063 or 4064 of ERISA, or (iv) any “multiple employer welfare arrangement” (as defined in Section 3(40)(A) of ERISA). Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) neither the Company nor any of its Subsidiaries has any Liability as a result of any time being considered a single employer with any other Person under Section 414 of the Code, (ii) no Company Benefit Plan is a voluntary employee benefit association under Section 501(c)(9) of the Code, and (iii) neither the Company nor any of its Subsidiaries has engaged in any transaction described in Sections 4069 or 4212(c) of ERISA or to which Section 4204 of ERISA applied.

 

(d)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, to the Knowledge of the Company, each Company Benefit Plan complies with all applicable requirements of ERISA, the Code, and other applicable Laws and has been administered in accordance with its terms and such Laws.

 

(e)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, to the Knowledge of the Company, neither the Company nor any of its Subsidiaries has any Liability with respect to, and no Company Benefit Plan provides retiree or post-employment health, medical, life insurance, or death benefits to current or former employees or other individual service providers of the Company or any of its Subsidiaries beyond their retirement or other termination of service, other than coverage mandated by COBRA or Section 4980B of the Code, or any similar state group health plan continuation Law, the premium cost of which is fully paid by such current or former employees or other individual service providers or their dependents.

 

(f)  Neither the execution and delivery of this Agreement nor the consummation of the Transactions or the Merger could (either alone or in combination with another event) (i) result in any material payment from the Company or any of its Subsidiaries becoming due, or increase the amount of any compensation due, to any current or former employee, director, manager or individual independent contractor of the Company or any of its Subsidiaries, (ii) materially increase any benefits otherwise payable under any Company Benefit Plan, (iii) result in the acceleration of the time of payment, vesting of any material compensation or benefits or forgiveness of material indebtedness with respect to any current or former employee, director, manager or individual independent contractor of the Company or any of its Subsidiaries, or (iv) result in any funding, through a grantor trust or otherwise, of any material compensation or benefits to any current or former employee, director, manager or individual independent contractor of the Company or any of its Subsidiaries under any Company Benefit Plan.

 

(g)  Neither the execution and delivery of this Agreement nor the consummation of the Transactions or the Merger could (either alone or in combination with another event) cause any amount to fail to be deductible because of Section 280G of the Code or be characterized as an “excess parachute payment” (as such term is defined in Section 280G(b)(1) of the Code).

 

 

(h)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) each Company Benefit Plan that constitutes in any part a “nonqualified deferred compensation” (as defined in Section 409A(d)(1) of the Code) has been operated and maintained, in form and operation, in all respects in accordance with Section 409A of the Code and applicable guidance of the Department of Treasury and Internal Revenue Service, and no amount under any such Company Benefit Plan has been, is or is reasonably expected to be subject to any Tax set forth under Section 409A(a)(1)(B) of the Code, and (ii) no person is entitled to any gross-up, make-whole or other additional payment from the Company or any of its Subsidiaries in respect of any Tax (including taxes imposed under Section 4999 or 409A of the Code).

 

Section 3.14 Labor Relations.

 

(a)  (i) No employee of the Company or any of its Subsidiaries is represented by a union and, to the Knowledge of the Company, no union organizing efforts are currently being conducted, (ii) neither the Company nor any of its Subsidiaries is a party to, or is currently negotiating any entry into, any collective bargaining agreement or other labor Contract, and (iii) no strike, picket, work stoppage, work slowdown or other organized labor dispute exists or, to the Knowledge of the Company, is threatened, in respect of the Company or any of its Subsidiaries.

 

(b)  Except as would not, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect, each of the Company and its Subsidiaries is, and has been since the Company Incorporation Date, in compliance in all respects with all applicable Laws regarding labor, employment and employment practices, including but not limited to all Laws relating to: (i) the hiring, promotion, assignment and termination of employees (including but not limited to timing and usage of employment applications, drug testing and pre-employment testing); (ii) discrimination; (iii) harassment; (iv) retaliation; (v) equal employment opportunities; (vi) disability; (vii) labor relations; (viii) wages and hours; (ix) the Fair Labor Standards Act of 1938 and applicable state and local wage and hour Laws (collectively, “FLSA”); (x) hours of work; (xi) payment of wages (including but not limited to the timing of payments, recordkeeping and reporting of wages to employees); (xii) immigration; (xiii) workers’ compensation; (xiv) employee benefits; (xv) background and credit checks; (xvi) working conditions; (xvii) occupational safety and health; (xviii) family and medical leave; (xix) classification of employees; (xx) unfair competition/noncompetition; (xxi) any bargaining or other obligations under the National Labor Relations Act; and (xxii) COVID-19.

 

(c)  Neither the Company nor any of its Subsidiaries has incurred any material Liability or obligation under the Worker Adjustment and Retraining Notification Act or any similar state or local Law (collectively, the “WARN Act”) that remains unsatisfied.

 

(d)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, there are no Legal Actions against the Company or any of its Subsidiaries or, to the Company’s Knowledge, investigations, pending or threatened relating to any allegations of harassment, sexual misconduct or discrimination by any employee with the title of senior vice president or above (or equivalent title based on role, responsibility or pay grade) of the Company or any of its Subsidiaries.

 

 

(e)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, there are no pending or, to the Company’s Knowledge, threatened, Legal Actions against the Company or any of its Subsidiaries brought by or on behalf of any applicant for employment, any current or former employees or other individual service providers of the Company or any of its Subsidiaries, any current or former leased employee, intern, volunteer or “temp” of the Company or any of its Subsidiaries, or any Person alleging to be a current or former employee, or any group or class of the foregoing, or any Governmental Authority, alleging: (i) violation of any labor or employment Laws; (ii) breach of any collective bargaining agreement; (iii) breach of any express or implied Contract of employment; (iv) wrongful termination of employment; or (v) any other discriminatory, wrongful or tortious conduct in connection with any employment relationship, including before the Equal Employment Opportunity Commission.

 

(f)  Since January 1, 2022, no executive officer has terminated employment with the Company and, to the Company’s Knowledge, no executive officer intends to terminate employment with the Company or is otherwise likely to become unavailable to continue as an executive officer of the Company.

 

Section 3.15 Taxes.

 

(a)  (i) All income and other material Tax Returns required to be filed by or concerning the Company or any of its Subsidiaries have been timely filed (taking into account all applicable extensions), and all such Tax Returns are true, complete, and correct in all material respects, (ii) the Company and its Subsidiaries have fully and timely paid (or have had paid on their behalf) all material Taxes due and payable (whether or not shown to be due on any Tax Return) and have made adequate provision in accordance with GAAP for all material Taxes not yet due and payable in the most recent financial statements of the Company and its Subsidiaries, and (iii) the Company and its Subsidiaries have complied in all material respects with all applicable Laws relating to the withholding and payment over to the appropriate Governmental Authority of all Taxes required to be withheld by the Company and its Subsidiaries.

 

(b)  (i) There are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection, assessment, or reassessment of, any material Taxes due from the Company or any of its Subsidiaries for any taxable period and no request for any such waiver or extension is currently pending, (ii) no audit is pending or threatened in writing concerning any material Taxes due from or concerning the Company or any of its Subsidiaries, and (iii) no claim in writing has been made by any Governmental Authority in a jurisdiction where the Company and its Subsidiaries does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.

 

(c)  There are no Liens for Taxes upon the assets or properties of the Company or any of its Subsidiaries, except for Permitted Liens.

 

(d)  Neither the Company nor any of its Subsidiaries has participated in any listed transaction within the meaning of Treasury Regulations Section 1.6011-4(b) (or any similar provision of state, local, or non-U.S. Tax Law).

 

(e)  The Company has not been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two years ending on the date of this Agreement that was purported or intended to be governed by Section 355 of the Code.

 

(f)  Neither the Company nor any of its Subsidiaries has any Liability for the Taxes of any Person (other than any of the Company or its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign Law), as a transferee, successor, by Contract (other than pursuant to any ordinary course Contract, the principal purpose of which does not relate to Taxes) or otherwise.

 

 

(g)  Neither the Company nor any of its Subsidiaries will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion of such period) ending after the Closing Date as a result of (i) any change in method of accounting adopted prior to the Closing for a taxable period ending on or prior to the Closing Date, (ii) any intercompany transaction or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any similar provision of state or local income Tax law) occurring or in existence prior to the Closing, (iii) any installment sale or open transaction disposition made prior to the Closing, (iv) any item of deferred revenue arising prior to the Closing, (v) any election under Section 965 of the Code made prior to the Closing, (vi) any prepaid amounts received prior to the Closing Date, or (vii) any agreement entered into with any Governmental Authority with respect to Taxes prior to the Closing.

 

(h)  Neither the Company nor its Subsidiaries has taken any action that could reasonably be expected to prevent the Transactions from qualifying for the Intended Tax Treatment. To the Knowledge of the Company, there are no facts or circumstances, other than any facts and circumstances to the extent that such facts and circumstances exist or arise as a result of or related to any act or omission occurring after the date of this Agreement of Purchaser or any of its Affiliates not contemplated by this Agreement, that could reasonably be expected to prevent the Transactions from qualifying for the Intended Tax Treatment.

 

(i)  Notwithstanding the foregoing, nothing in this Section 3.15 shall be construed as a representation or warranty concerning the amount, availability, or usability of any net operating loss, capital loss, Tax basis, Tax asset, Tax accounting method, Tax filing position or Tax attribute in any Tax period, or portion thereof, beginning on or after Closing Date. This Section 3.15 and Section 3.13 set forth the sole and exclusive representations and warranties regarding Tax matters of the Company and its Subsidiaries.

 

Section 3.16 Environmental Matters.

 

Except as set forth in Section 3.16 of the Company Disclosure Schedule:

 

(a)  The Company and its Subsidiaries comply with, and for the past three years, have complied with, all applicable Environmental Laws.

 

(b)  No claims, proceedings (whether civil, criminal, regulatory, or administrative), or complaints have been made or issued or, to the Company’s knowledge, are contemplated or threatened by any Governmental Authority or any Third Party (including any employee) about the Company or its Subsidiaries about any liability under any Environmental Laws or relating to Hazardous Substances; neither the Company nor any of its Subsidiaries has received any written notice or request for information from any Governmental Authority or other Third Party related to any actual or alleged Liability under any Environmental Law, including, but not limited to, any inquiry, investigation, or remedial or corrective obligations or otherwise about Hazardous Substances.

 

(c)  No Hazardous Substances have been or are being spilled, leached, released, emitted, discharged, escaped, or disposed of into the environment from or on the property owned or operated by the Company or any of its Subsidiaries, including any Company Real Property. As of the date of this Agreement, no condition exists on any property owned or operated by the Company and its Subsidiaries, including any Company Real Property, or any other location, in each case which has given rise to or would reasonably be expected to give rise to, any Liability for the Company relating to environmental or Hazardous Substances matters or Environmental Laws, including such liability on the part of the Company or any of its Subsidiaries to make good, repair, reinstate or clean up any property now or previously owned, occupied or used by the Company or its Subsidiaries, including Company Real Property.

 

 

(d)  The representations and warranties outlined in Article III are the sole and exclusive representations and warranties relating to environmental matters, including Environmental Laws, environmental Permits, and Hazardous Substances.

 

Section 3.17 Intellectual Property.

 

(a)  Each of the Company and its Subsidiaries owns, is licensed to use, pursuant to valid, enforceable, and binding Contracts, or otherwise has the right to use all Intellectual Property used, held for use, or necessary for the operation of the business of the Company and its Subsidiaries (collectively, the “Company Intellectual Property”) free and clear of all Liens (other than Permitted Liens), except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Section 3.17(a) of the Company Disclosure Schedule sets forth a true and complete list of the following that are owned or purported to be owned by the Company or any of its Subsidiaries: (i) patents and patent applications; (ii) registered trademarks and applications therefor; (iii) registered copyrights and applications therefor; and (iv) domain name registrations ((i) - (iv), the “Company Registered IP”). Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, the execution, delivery, and performance of this Agreement by the Company and the consummation of the Transactions do not and the consummation of the Transactions and the Merger will not encumber, impair or extinguish any of the Company Intellectual Property.

 

(b)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) none of the Company Intellectual Property owned or purported to be owned by the Company or any of its Subsidiaries (“Company Owned Intellectual Property”) (A) has been adjudged invalid or unenforceable in whole or in part, or (B) is the subject of any cancellation or reexamination proceeding or any other proceeding challenging its ownership, use, registrability, validity, and enforceability, and (ii) to the Knowledge of the Company, all Company Registered IP is subsisting, in full force and effect, and, to the Knowledge of the Company, valid and enforceable, and all renewal fees and other maintenance fees have been paid. No material contractual restrictions exist on the disclosure, use, license, or transfer of any Company Owned Intellectual Property.

 

(c)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) the conduct of the business of the Company and its Subsidiaries does not infringe upon, misappropriate or otherwise violate, and has not, since the Company Incorporation Date, infringed upon, misappropriated, or otherwise violated, the Intellectual Property rights of any Third Party and (ii) no Legal Action is pending, asserted in writing, or, to the Knowledge of the Company, threatened, against the Company or any of its Subsidiaries that the conduct of the business of the Company or its Subsidiaries infringes upon, misappropriates or otherwise violates the Intellectual Property rights of any Third Party. To the Knowledge of the Company, no Person is infringing upon, misappropriating, or otherwise violating, or has, since the Company Incorporation Date, infringed upon, misappropriated, or otherwise violated, any Intellectual Property owned or purported to be owned by the Company or any of its Subsidiaries.

 

(d)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, the Company, and its Subsidiaries have taken reasonable steps in accordance with standard industry practice to maintain and protect the confidentiality of all Company Intellectual Property that is material to the business of the Company and its Subsidiaries and the value of which is contingent upon confidentiality being maintained. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, none of the Company Owned Intellectual Property that is material to the business of the Company and its Subsidiaries and the value of which is contingent upon confidentiality being maintained, has been disclosed other than to Third Parties that are bound by customary, written confidentiality agreements entered into in the ordinary course of business consistent with past practice and that is, to the Knowledge of the Company, valid and enforceable.

 

 

(e)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, all Persons who have contributed, developed or conceived any Company Owned Intellectual Property have done so pursuant to a valid and enforceable Contract (subject to enforceability exceptions for bankruptcy and insolvency and subject to principles of equity) that protects the confidential information of the Company and its Subsidiaries and assigns to the Company (or one of its Subsidiaries, as applicable) exclusive ownership of the Person’s contribution, development or conception, other than Intellectual Property excluded by Law or non-assignable moral rights.

 

(f) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) the Company and its Subsidiaries have sufficient rights to use all Software, including middleware, databases, and systems, information technology equipment, and associated documentation used or held for use in connection with the operation of the business of the Company and its Subsidiaries (the “Company IT Assets”), (ii) in each case, the Company IT Assets operate and perform in all material respects in accordance with their documentation and functional specifications and are sufficient or configurable to effectively perform all operations necessary for the current operation of the business of the Company and its Subsidiaries, and all Company IT Assets are owned or licensed under valid licenses and operated by and are under the control of the Company and its Subsidiaries, (iii) the Company IT Assets have not materially malfunctioned or failed in the past three years, to the Knowledge of the Company, do not contain any viruses, bugs, faults or other devices or effects that (A) enable or assist any Person to access without authorization or disable or erase the Company IT Assets, or (B) otherwise materially adversely affect the functionality of the Company IT Assets, (iv) the Company and its Subsidiaries have taken commercially reasonable steps to provide for the remote-site back-up of data and information critical to the conduct of the business of the Company and its Subsidiaries and have in place commercially reasonable disaster recovery and business continuity plans, procedures and facilities, (v) no Person has gained unauthorized access to any IT Assets in the past three years, (vi) the Company and its Subsidiaries have maintained, continue to maintain, and caused their vendors to maintain, safeguards, security measures and procedures against the unauthorized access, disclosure, destruction, loss, or alteration of customer data or information (including any personal or device-specific information) in its possession or control that comply with any applicable contractual and legal requirements and meet industry standards, and (vii) the Company and its Subsidiaries have in place with the third-party owners and operators of all data centers that provide services related to the business of the Company and its Subsidiaries written agreements that ensure that such Third Parties adhere to and are in compliance with commercially reasonable standards and requirements.

 

Section 3.18 Real Property; Personal Property.

 

(a)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) the Company and its Subsidiaries have good and marketable title to or have a valid and enforceable right to use or a valid and enforceable leasehold interest in, all real property (including all buildings, fixtures and other improvements to such property) used by the business of the Company and its Subsidiaries (the “Company Real Property”) and (ii) the ownership of or leasehold interest in any Company Real Property is not subject to any Lien (except in all cases for Permitted Liens). Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, neither the Company nor any of its Subsidiaries has leased, subleased, licensed, sublicensed or otherwise granted to any Person the right to use or occupy any Company Real Property or any portion of any Company Real Property, there are no outstanding options, rights of first offer or rights of first refusal to purchase any Company Real Property or any portion of or interest in any Company Real Property, and neither the Company nor any of its Subsidiaries is a party to any Contract to sell, transfer, or encumber any Company Real Property.

 

 

(b)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, each of the material leases, subleases, and other agreements under which the Company or any of its Subsidiaries use or occupy any material real property (the “Company Real Property Leases”) is valid and binding (except as may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles). No termination event or condition, or uncured default on the part of the Company or its Subsidiaries exists under any Company Real Property Lease.

 

(c)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) the Company and its Subsidiaries have good and marketable title to or a valid and enforceable leasehold interest in all Company Assets and (ii) none of the Company’s or any of its Subsidiaries’ ownership of or leasehold interest in any such Company Assets is subject to any Liens (except in all cases for Permitted Liens).

 

Section 3.19 Permits; Compliance with Law.

 

(a)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, each of the Company and its Subsidiaries has all material franchises, grants, authorizations, licenses, registrations, easements, variances, exceptions, consents, certificates, approvals, waivers, notices, and other permits of any Governmental Authority (“Permits”) necessary (but excluding any Permits required under Environmental Laws, the representations and warranties to which are addressed solely in Section 3.16) for each of the Company and its Subsidiaries to own, lease and operate their respective properties and assets or to carry on their respective business as it is now being conducted (collectively, the “Company Permits”). All such Company Permits are in full force and effect in all material respects, and no suspension or cancellation of any of the Company Permits is pending or, to the Knowledge of the Company, has been threatened in writing against the Company or any of its Subsidiaries.

 

(b)  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, each of the Company and its Subsidiaries has for the past five years been in compliance in all material respects with (i) all Laws applicable to the Company or such Subsidiary or by which any of the Company Assets are bound and (ii) all Laws applicable to, and the terms and conditions of, any Company Permits.

 

Section 3.20 Certain Business Practices.

 

(a)  None of the Company or its Subsidiaries, nor any of their respective directors, managers, or officers or, to the Knowledge of the Company, any employee, agent, or representative thereof, has in the past three years offered, paid, promised to pay, or authorized the payment of any money or any other thing of value to any Person (i) with the intention of inducing improper conduct on the part of the recipient, (ii) acceptance of which would violate the policies of the recipient’s employer or cause the recipient to breach a duty owed to his or her employer, or (iii) to otherwise secure an undue or improper advantage for the Company or its Subsidiaries in violation of any Anti-Corruption Law.

 

 

(b)  None of the Company or its Subsidiaries, nor any of their respective directors, managers, or officers or, to the Knowledge of the Company, any employee, agent, or representative thereof in the past three years (i) has been or is a Sanctioned Person, (ii) has (acting for or on behalf of the Company or its Subsidiaries) transacted business with or for the benefit of a Sanctioned Person or otherwise violated applicable Sanctions, or (iii) violated any applicable Ex-Im Law.

 

(c)  The operations of the Company and its Subsidiaries have been and are conducted in compliance with applicable Anti-Money Laundering Laws, including any financial recordkeeping and reporting requirements.

 

(d)  To the Knowledge of the Company, none of the Company or its Subsidiaries has been, in the last three years, the subject of any allegation, voluntary disclosure, investigation, prosecution, or enforcement action related to any Anti-Corruption Laws, Sanctions, or Ex-Im Laws.

 

Section 3.21 Regulatory Matters.

 

Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (a) the Company and its Subsidiaries currently conduct, and have for the past seven years conducted, their respective businesses in compliance with all Laws applicable to their respective operations, activities or services and any Orders to which they are a party or are subject, including any settlement agreements or corporate integrity agreements, (b) except for routine matters arising in the ordinary course of business, none of the Company or any of its Subsidiaries has received any written notice, citation, suspension, revocation, limitation, warning, or request for repayment or refund issued by a Governmental Authority that alleges or asserts that the Company or any of its Subsidiaries has violated any Laws or that requires or seeks to adjust, modify or alter the Company’s or any of its Subsidiary’s operations, activities, services or financial condition that has not been fully and finally resolved to the Governmental Authority’s satisfaction without further Liability to the Company and its Subsidiaries and (c) there are no restrictions imposed by any Governmental Authority upon the Company’s or any of its Subsidiaries’ business, activities or services that would restrict or prevent the Company or any of its Subsidiaries from operating as it currently operates.

 

Section 3.22 Transactions with Affiliates.

 

Except for this Agreement and any other Ancillary Agreement, or as outlined in Section 3.22 of the Company Disclosure Schedule, there are no transactions, arrangements, or Contracts between the Company or any Subsidiary of the Company, on the one hand, and any stockholder, officer, director, manager or Affiliate (other than the Company and its Subsidiaries) of the Company, on the other hand, other than (a) employment relationships, equity arrangements, and compensation, benefits, travel advances, and employee loans in the ordinary course of business and (b) any Contract providing for the indemnification or reimbursement of expenses of (i) any member of the Company Board or other governing body of the Company or any of its Subsidiaries and (ii) any officer of the Company or any of its Subsidiaries.

 

Section 3.23 Insurance.

 

All material fire and casualty, general liability, business interruption, product liability, and sprinkler and water damage insurance policies maintained by or on behalf of the Company or any of its Subsidiaries are in full force and effect, and all premiums payable under such policies have been duly paid to date. As of the date of this Agreement, none of the Company or its Subsidiaries have received any written notice of default or cancellation of any such policy.

 

 

Section 3.24 Brokers.

 

Except for the advisor(s) of the Company as outlined in Section 3.24 of the Company Disclosure Schedule, no broker, finder, adviser, or investment banker is entitled to any brokerage, success, finder’s or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Company or any of its Subsidiaries.

 

Section 3.25 No Additional Representations or Warranties.

 

Except as otherwise expressly provided in Article IV (as modified by the Purchaser Disclosure Schedule), the Company hereby expressly disclaims and negates any other express or implied representation or warranty whatsoever (whether at Law or in equity) concerning Purchaser, its Affiliates, and any matter relating to any of them, including their affairs, the condition, value or quality of the assets, liabilities, financial condition or results of operations, or concerning the accuracy or completeness of any other information made available to the Company, its affiliates or any of their respective Representatives by, or on behalf of, the Company, and any such representations or warranties are expressly disclaimed. Without limiting the generality of the foregoing, except as expressly outlined in this Agreement, the Company hereby acknowledges and agrees that neither Purchaser nor any other Person on behalf of Purchaser has made or makes any representation or warranty, whether express or implied, concerning any projections, forecasts, estimates or budgets made available to the Company, its Affiliates or any of their respective Representatives of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of Purchaser (including the reasonableness of the assumptions underlying any of the foregoing), whether or not included in any management presentation or in any other information made available to the Company, its Affiliates or any of their respective Representatives or any other Person, and that any such representations or warranties are expressly disclaimed.

 

Article IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Except as outlined in the corresponding sections of the disclosure schedule to this Agreement to be delivered by Purchaser to the Company and the Sellers on the date hereof (the “Purchaser Disclosure Schedule”) (each of which qualifies representations, warranties, or covenants outlined in the correspondingly numbered Section of this Agreement and any other representations, warranties or covenants where its relevance as an exception to (or disclosure for purposes of) such other representations, warranties or covenants is reasonably apparent on the face of the disclosure) and as described in the forms, reports, statements (including registration statements), certifications, and other documents and materials filed or furnished by Purchaser with the SEC, Purchaser (including each of its Subsidiaries, as applicable) hereby represents and warrants to the Company and the Sellers as follows:

 

Section 4.01 Organization and Power.

 

Purchaser and each of its Subsidiaries is duly organized, validly existing, and in good standing under the Law of its jurisdiction of organization. Purchaser has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted, except where the failure to have such requisite power or authority would not constitute a Purchaser Material Adverse Effect. Each of the Subsidiaries of Purchaser has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted, except where the failure to have such requisite power or authority would not constitute a Purchaser Material Adverse Effect. Each of Purchaser and its Subsidiaries is duly qualified to do business as a foreign corporation, limited liability company, or other legal entity and is in good standing in each jurisdiction where such qualification is necessary, except where the failure to be so qualified or in good standing would not constitute a Purchaser Material Adverse Effect.

 

 

Section 4.02 Organizational Documents.

 

Purchaser has made available to the Company true and complete copies of the certificate of incorporation and bylaws of Purchaser as in effect on the date of this Agreement (collectively, the “Purchaser Organizational Documents”).

 

Section 4.03 Governmental Authorizations.

 

Assuming that the representations and warranties of the Company contained in Section 3.04 and of the Sellers contained in Section 5.02 are true and correct, the execution, delivery, and performance of this Agreement by Purchaser and the consummation by Purchaser of the Transactions do not and will not require any Governmental Authorizations, other than:

 

(a)  any filings or reports that may be required in connection with this Agreement, the Ancillary Agreements and the Transactions under the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or state securities Laws or “blue sky” Laws;

 

(b)  compliance with Nasdaq rules and regulations;

 

(c)  such other Governmental Authorizations, where the failure to obtain such Governmental Authorizations would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect; and

 

(d)  as set forth in Section 4.03 of the Purchaser Disclosure Schedule.

 

Section 4.04 Corporate Authorization.

 

(a)  The Purchaser Board, by resolution duly adopted by the majority vote of the Purchaser Board at a meeting duly called and held, has (i) approved and adopted this Agreement, the Ancillary Agreements to which it is a party, and the Transactions, (ii) determined that this Agreement, the Transactions and the Merger are advisable and in the best interests of the stockholders of Purchaser, (iii) approved, adopted and declared advisable the payment of the Purchaser Shares Consideration, (iv) directed that (x) the approval of the issuance of the Purchaser Ordinary Shares underlying the Preferred Shares Consideration pursuant to the conversion of the Preferred Shares Consideration into Purchaser Ordinary Shares in accordance with the Purchaser Preferred Shares Certificate of Designation (“Preferred Stock Conversion”), (y) the constitution of Purchaser in form and substance mutually agreeable to Purchaser, the Sellers and the Company, including the change of the name of Purchaser to such name as shall be designated by the Sellers (the “Amended Purchaser Charter”), and (z) the election of directors in accordance with Section 1.05(a) be submitted for consideration at the Purchaser Stockholders Meeting, and (v) recommended to the stockholders of Purchaser that they approve the Preferred Stock Conversion, the Amended Purchaser Charter and the election of directors in accordance with Section 1.05(a) (the “Purchaser Board Recommendation”).

 

(b)  Purchaser has all necessary corporate power and authority to enter into and deliver this Agreement, to perform its obligations hereunder, and to consummate the Transactions and the Merger. The execution, delivery, and performance of this Agreement by Purchaser and the consummation by Purchaser of the Transactions have been duly and validly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly and validly executed and delivered by Purchaser and constitutes a legal, valid, and binding agreement of Purchaser enforceable against Purchaser in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles).

 

 

Section 4.05 Non-Contravention.

 

(a)  The receipt of the consents, approval, authorizations and other requirements set forth in Section 4.03, and except as set forth on Section 4.05(a) of the Purchaser Disclosure Schedule, the execution, delivery and performance of this Agreement by Purchaser and the consummation of the Transactions do not and will not (i) contravene or conflict with, or result in any violation or breach of, any provision of (A) the Purchaser Organizational Documents or (B) the comparable organizational or governing documents of any of the Subsidiaries of Purchaser, (ii) contravene or conflict with, or result in any material violation or breach of, any Permit or Law applicable to either Purchaser or any of its Subsidiaries or by which any Purchaser Assets are bound, assuming that all Governmental Authorizations described in Section 4.03 have been obtained or made, (iii) result in any violation, termination, acceleration of any material obligation, cancellation or breach of, or constitute a default (with or without notice or lapse of time or both) or require any notice or consent under, any Purchaser Material Contracts or Purchaser Real Property Leases to which Purchaser or any of its Subsidiaries is a party or by which any Purchaser Assets are bound or (iv) result in the creation of any Liens (other than Permitted Liens) upon any of the Purchaser Assets except, in the case of clauses (iii) and (iv), as would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect. Neither Purchaser nor any of its Subsidiaries has received any written notice from any Governmental Authority regarding any actual, alleged, possible or potential violation of, or failure of Purchaser or any of its Subsidiaries to comply with any Permit or Law.

 

(b)  Notwithstanding the foregoing, there is no Contract to which Purchaser is a party that purports to have a material adverse effect (or could be construed to result in a material adverse effect) on Purchaser Intellectual Property following consummation of the Transactions or the Merger.

 

Section 4.06 Capitalization.

 

(a)  As of the date of this Agreement, Purchaser’s authorized capital stock consists of (i) 100,000,000 Purchaser Ordinary Shares, (ii) 2,125,000 Class B ordinary shares with a nominal value of US$0.0001 each in the capital of Purchaser (“Purchaser Class B Shares”), (iii) 10,000,000 Purchaser Preferred Shares, and (iv) 25,000 deferred ordinary shares with a nominal value of €1.00 each (“Purchaser Deferred Shares”). As of the close of business on the date of this Agreement, (A) 19,104,398 Purchaser Ordinary Shares were issued and outstanding, (B) no Purchaser Class B Shares were issued or outstanding, (C) no Purchaser Preferred Shares were issued or outstanding, (D) no Purchaser Deferred Shares were issued or outstanding and such Purchaser Deferred Shares have been cancelled in their entirety; (E) 882,500 Purchaser Ordinary Shares are available for issuance under the Purchaser Equity Plan, including (1) 77,585 Purchaser Ordinary Shares reserved for issuance pursuant to outstanding vested Purchaser RSUs, (2) 14,615 Purchaser Ordinary Shares reserved for issuance pursuant to outstanding unvested Purchaser RSUs and (3) 1,946,866 Purchaser Ordinary Shares reserved for issuance pursuant to outstanding unexercised Purchaser Stock Options to purchase Purchaser Ordinary Shares at a weighted average per share exercise price of $7.46, (F) Purchaser Warrants to purchase 9,347,121 Purchaser Ordinary Shares at a weighted average per share exercise price of $10.96 were issued and outstanding, and (G) a certain amount of Purchaser Ordinary Shares to be reserved for issuance pursuant to a promissory note of Purchaser pursuant to the terms and conditions set forth on Section 4.06(a) of the Purchaser Disclosure Schedule.

 

 

(b)  Except (i) as set forth in Section 4.06(a) of the Purchaser Disclosure Schedule and (ii) to the extent expressly permitted under Section 6.02 (including as required by applicable Law) and as set forth in Section 4.06(a), (x) there are no other outstanding shares of capital stock of Purchaser (subject to any exercise of Purchaser Stock Options or Purchaser Warrants after the date of this Agreement each in accordance with their terms) and (y) there are no outstanding subscriptions, options, warrants, calls, convertible securities, rights of first refusal, preemptive rights, or other similar rights, agreements or commitments (other than this Agreement) relating to the issuance or acquisition of capital stock to which Purchaser or any of its Subsidiaries is a party obligating Purchaser or any of its Subsidiaries to (1) issue, transfer or sell any shares of capital stock or other equity interests of either of Purchaser or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, (2) grant, extend or enter into any such subscription, option, warrant, call, convertible securities or other similar right, agreement or arrangement, (3) redeem, repurchase or otherwise acquire any such shares of capital stock or other equity interests, or (4) provide an amount of funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in Purchaser or any of its Subsidiaries or any other Person.

 

(c)  All outstanding Purchaser Ordinary Shares have been duly authorized and are validly issued, fully paid, non-assessable, and not subject to any preemptive rights. All outstanding Purchaser Ordinary Shares, Purchaser Stock Options, and Purchaser Warrants were offered, sold, and issued in compliance with applicable securities laws and were not issued in violation of any material respect of the Purchaser Organizational Documents.

 

(d)  Each outstanding share of capital stock or other equity interests of each Subsidiary of Purchaser is duly authorized, validly issued, fully paid, and non-assessable, in each case, to the extent such concepts are applicable to such capital stock or other equity interests, and not subject to any preemptive rights.

 

(e)  Except for this Agreement and as set forth in Section 4.05(a) of the Purchaser Disclosure Schedule, there are no outstanding contractual obligations of Purchaser or any of its Subsidiaries to repurchase, redeem, or otherwise acquire any capital stock of Purchaser, including Purchaser Ordinary Shares or capital stock of any Subsidiary of Purchaser.

 

(f)  There are no voting trusts, proxies, or similar agreements, arrangements, or commitments to which Purchaser or any of its Subsidiaries is a party concerning the voting of any shares of capital stock or other equity interests of either of Purchaser or any of its Subsidiaries. There are no bonds, debentures, notes, or other instruments of indebtedness of Purchaser or any of its Subsidiaries that entitle the holder of such instruments of indebtedness to vote together with stockholders of Purchaser on any matters concerning Purchaser or any of its Subsidiaries.

 

(g)  Section 4.06(g) of the Purchaser Disclosure Schedule sets forth a true, complete, and correct list of all Persons who, as of the date of this Agreement, hold Purchaser Stock Options or Purchaser Warrants, indicating, concerning each such holder, the number of Purchaser Ordinary Shares subject to such Purchaser Stock Option and Purchaser Warrant and the exercise price, the date of grant, the vesting schedule and the expiration date of each Purchaser Stock Option and Purchaser Warrant.

 

Section 4.07 Subsidiaries.

 

(a)  Section 4.07(a) of the Purchaser Disclosure Schedule sets forth a complete and accurate list of each Subsidiary of Purchaser. Purchaser has made the organizational documents of each such Subsidiary available to the Company.

 

 

(b)  Except as set forth in Section 4.07(b) of the Purchaser Disclosure Schedule, each of the Subsidiaries of Purchaser is wholly owned by Purchaser, directly or indirectly, free and clear of any Liens (other than Permitted Liens). Purchaser does not own, directly or indirectly, any capital stock or other equity securities of, or any other securities convertible or exchangeable into or exercisable for capital stock or other equity securities of, any Person other than the Subsidiaries of Purchaser. Purchaser has not agreed to, is not obligated to make, and is not bound by any Contract under which it may become obligated to make any future investment in or capital contribution to any Person other than the Subsidiaries of Purchaser.

 

Section 4.08 [Reserved].

 

Section 4.09 SEC Filings and the Sarbanes-Oxley Act.

 

(a)  Purchaser has filed with or furnished to the SEC each report, statement, schedule, form, certification, or other document (including exhibits and all other information incorporated in such documents) or filing required by applicable Law to be filed with or furnished by Purchaser to the SEC and will use its commercially reasonable efforts to file all such reports, statements, schedules, forms, certifications and other documents that it is required to file after the date of this Agreement and before the Closing. Purchaser has delivered to the Company accurate and complete copies of all reports, statements (including registration and proxy statements), schedules, forms, certifications, or other document (including exhibits and all other information incorporated in such documents) filed by Purchaser with the SEC since December 10, 2020 (the documents referred to in this Section 4.09(a), as they may have been supplemented, modified or amended since the initial filing date and together with all exhibits and information incorporated by reference in such documents, the “Purchaser SEC Reports”), other than such documents that can be obtained on the SEC’s website at www.sec.gov. No Subsidiary of Purchaser is required to file or furnish any report, statement, schedule, form, registration statement, proxy statement, certification, or other document with, or make any other filing with, or furnish any other material to, the SEC.

 

(b)  As of its filing date (or, if amended, supplemented, modified, or superseded by a filing before the date of this Agreement, on the date of such filing), each Purchaser SEC Report complied, and each such Purchaser SEC Report filed after the date of this Agreement and before the end of the Restricted Period will comply, in all material respects with the applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC promulgated thereunder that apply to each such Purchaser SEC Report.

 

(c)  As of its filing date (or, if amended, supplemented, modified, or superseded by another filing before the date of this Agreement, on the date of such filing), each Purchaser SEC Report filed on or before the date of this Agreement did not and each such Purchaser SEC Report filed after the date of this Agreement and before the end of the Restricted Period will not contain any untrue statement of a material fact or omit to state any material fact required to be stated in such Purchaser SEC Report or necessary to make the statements made in such Purchaser SEC Report, in the light of the circumstances under which they were made, not misleading. Each Purchaser SEC Report that is a registration statement, as amended or supplemented, if applicable, filed pursuant to the Securities Act, as of the date such registration statement, amendment, or supplement became effective, did not and each such Purchaser SEC Report filed after the date of this Agreement and before the end of the Restricted Period, as of the date such registration statement, amendment, or supplement becomes effective, will not contain any untrue statement of a material fact or omit to state any material fact required to be noted in such Purchaser SEC Report or necessary to make the statements in such Purchaser SEC Report not misleading.

 

 

(d)  As of the date of this Agreement, Purchaser has not received, and there are no outstanding or unresolved comments in, any comment letters received by Purchaser from the SEC concerning the Purchaser SEC Reports and to Purchaser’s Knowledge, none of the Purchaser SEC Reports have been the subject of any review of, or is the subject of any ongoing review by, the SEC.

 

(e)  Neither Purchaser nor any of its Subsidiaries is a party to, has any commitment to become a party to, any joint venture, off-balance sheet partnership, or any similar Contract (including any Contract or arrangement relating to any transaction or relationship between or among Purchaser and its Subsidiaries, on the one hand, and any unconsolidated Affiliate, including any structured finance, special purpose or limited purpose entity or Person, on the other hand, or any “off-balance sheet arrangements” (as defined in Item 303(a) of SEC Regulation S-K).

 

(f)  Except as set forth in Section 4.09(f) of the Purchaser Disclosure Schedule, Purchaser (i) is in compliance with, in all material respects, all current listing and corporate governance requirements of Nasdaq and (ii) Purchaser has not received any correspondence from any officials or staff of Nasdaq relating to the delisting or maintenance of the listing of the Purchaser Ordinary Shares on Nasdaq.

 

Section 4.10 Financial Statements; Internal Controls.

 

(a)  The audited consolidated financial statements and unaudited consolidated interim financial statements of Purchaser and its consolidated Subsidiaries included in the Purchaser SEC Reports:

 

(i) complied in all material respects with applicable accounting requirements and the rules and regulations of the SEC;

 

(ii) were prepared in accordance with International Financial Reporting Standards (“IFRS”) applied consistently (except as may be indicated in the notes to those financial statements); and

 

(iii) fairly presented in all material respects the consolidated financial position of Purchaser and its consolidated Subsidiaries as of the dates of such financial statements and their consolidated results of operations and cash flows for the periods then ended (subject, in the case of any unaudited interim financial statements, to regular year-end adjustments and the absence of notes). Since January 1, 2021, Purchaser maintains and has maintained disclosure controls and procedures as defined in Rule 13a-15 under the Exchange Act. Such disclosure controls and procedures are reasonably designed and reasonably effective to ensure that all information (both financial and non-financial) relating to Purchaser and its Subsidiaries required to be disclosed in Purchaser’s periodic reports under the Exchange Act is made known to Purchaser’s principal executive officer and its principal financial officer by others within Purchaser or any of its Subsidiaries, and such disclosure controls and procedures are effective in timely alerting Purchaser’s principal executive officer and its principal financial officer to such information required to be included in Purchaser’s periodic reports required under the Exchange Act. Purchaser maintains a system of “internal control over financial reporting” (as defined in Rules 13a-15(f) under the Exchange Act) reasonably sufficient (A) to provide reasonable assurance (1) that transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS consistently applied, (2) that transactions are executed only in accordance with the authorization of management, and (3) regarding prevention or timely detection of the unauthorized acquisition, use or disposition of Purchaser’s properties or assets that could have a material effect on the financial statements and (B) such that all material information is accumulated and communicated to its management as appropriate to allow timely decisions regarding required disclosure. From January 1, 2021, until the date of this Agreement, Purchaser has disclosed to Purchaser’s auditors and the audit committee of the Purchaser Board and made available to the Company and the Sellers before the date of this Agreement (x) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Purchaser’s or any of its Subsidiaries’ ability to record, process, summarize and report financial information in any material respect and (y) any fraud, whether or not material, that involves management or other employees who have a significant role in Purchaser internal control over financial reporting. From January 1, 2021, until the date of this Agreement, to the Knowledge of Purchaser, neither Purchaser nor any of its Subsidiaries has received any written complaint, allegation, assertion, or claim regarding the accounting or auditing practices, procedures, methodologies, or methods of Purchaser or its Subsidiaries or their respective internal accounting controls.

 

 

(b)  Except as set forth in Section 4.10(b) of the Purchaser Disclosure Schedule, there are no off-balance sheet arrangements to which Purchaser or any of its Subsidiaries is a party.

 

(c)  To the Knowledge of Purchaser, Purchaser’s independent registered accounting firm has at all times since the date Purchaser became subject to the applicable provisions of the Sarbanes-Oxley Act been: (i) a registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act); (ii) “Independent” concerning Purchaser within the meaning of Regulation S-X under the Exchange Act; and (iii) in compliance with subsections (g) through (l) of Section 10A of the Exchange Act and the rules and regulations promulgated by the SEC and the Public Company Accounting Oversight Board under the Exchange Act.

 

(d)  There have been no formal investigations regarding financial reporting or accounting policies and practices discussed with, reviewed by, or initiated at the direction of the chief executive officer, chief financial officer, principal accounting officer, general counsel, or similar officer of Purchaser, the Purchaser Board or any committee of the Purchaser Board, other than ordinary course audits or reviews of accounting policies and practices or internal control over financial reporting required by the Sarbanes-Oxley Act.

 

(e)  Purchaser has not been and is not currently determined to be a “shell company” as defined in Rule 12b-2 promulgated under the Exchange Act.

 

Section 4.11 Undisclosed Liabilities.

 

As of the date of this Agreement, except as set forth in Section 4.11 of the Purchaser Disclosure Schedule, there are no Liabilities of Purchaser or any of its Subsidiaries, individually or in the aggregate, that are required to be recorded or reflected on a balance sheet prepared in accordance with IFRS, other than:

 

(a)  Liabilities reflected or reserved against in the consolidated balance sheet of Purchaser and its consolidated Subsidiaries as of December 31, 2023, or the related footnotes outlined in the Purchaser SEC Reports;

 

(b) Liabilities incurred since December 31, 2023, in the ordinary course of business (none of which is a Liability for tort, breach of contract or environmental Liability);

 

(c)  Liabilities incurred in connection with the Transactions or as permitted or contemplated expressly by this Agreement; and

 

(d)  Liabilities that would not, individually or in the aggregate, reasonably be expected to be material to Purchaser and its Subsidiaries.

 

 

Section 4.12 Absence of Certain Changes.

 

Except as otherwise expressly contemplated or required by this Agreement, or as set forth in Section 4.12 of the Purchaser Disclosure Schedule, from December 31, 2023, to the date of this Agreement, (a) the business of Purchaser and each of its Subsidiaries has been conducted, in all material respects, in the ordinary course of business, (b) there has not been any Purchaser Material Adverse Effect and (c) there has not been or occurred any event, condition, action or effect that, if taken after the date of this Agreement, would constitute a breach of Section 6.02.

 

Section 4.13 Litigation.

 

Except as set forth in Section 4.13 of the Purchaser Disclosure Schedule, from December 31, 2023, through the date of this Agreement, (a) there have been no Legal Actions pending or, to the Knowledge of Purchaser, threatened against Purchaser or any of its Subsidiaries or any of their assets or properties that would, individually or in the aggregate, reasonably be expected to be material to Purchaser and its Subsidiaries and (b) there are no Orders applicable to Purchaser or any of its Subsidiaries or any of their assets or properties that would, individually or in the aggregate, reasonably be expected to be material to Purchaser and its Subsidiaries.

 

Section 4.14 Material Contracts.

 

(a)  Section 4.14(a) of the Purchaser Disclosure Schedule sets forth a list of each of the following Contracts to which, as of the date of this Agreement, Purchaser or any of its Subsidiaries is a party (each, a “Purchaser Material Contract”):

 

(i) any “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC as determined as of the date of this Agreement);

 

(ii) each Contract (A) not to (or otherwise restricting or limiting the ability of Purchaser or any of its Subsidiaries to) compete in any line of business or geographic area or (B) to restrict the ability of Purchaser or any of its Subsidiaries to conduct business in any geographic area;

 

(iii) each Contract (other than any Purchaser Benefit Plan) providing for or resulting in payments by Purchaser or any of its Subsidiaries that exceeded $250,000 in the calendar year ended December 31, 2023, or that is reasonably likely to require, during the remaining term of such Contract, annual payments by Purchaser or any of its Subsidiaries that exceed $250,000;

 

(iv) all Contracts granting to any Person an option or a first refusal, first offer, or similar preferential right to purchase or acquire any Purchaser Assets;

 

(v) all material Contracts (A) for the granting or receiving of a license, sublicense or franchise (in each case, including any such Contracts relating to any Intellectual Property) providing for or resulting in payment over $250,000 per year or (B) under which any Person is obligated to pay or has the right to receive a royalty, license fee, franchise fee or similar payment in which it is reasonably expected to pay or receive a royalty, license fee, franchise fee or similar payment over $250,000, in each case of clause (A) and (B), other than agreements with employees, non-exclusive licenses granted to Purchaser’s or its Subsidiaries’ customers, and non-exclusive licenses to commercially available, off-the-shelf Software that have been granted on standardized, generally available terms;

 

 

(vi) all partnerships, joint ventures, or other similar agreements or arrangements;

 

(vii) any agreement with any director, officer, or stockholder of Purchaser or any Subsidiary thereof that is required to be described under Item 404 of Regulation S-K of the SEC in the Purchaser SEC Reports;

 

(viii) any agreement relating to indebtedness for borrowed money or the deferred purchase price of property (in either case, whether incurred, assumed, guaranteed, or secured by any asset), except any such agreement with an aggregate outstanding principal amount not exceeding $1,000,000;

 

(ix) any agreement for the disposition or acquisition by Purchaser or any of its Subsidiaries with material obligations of Purchaser or any of its Subsidiaries (other than confidentiality obligations) remaining to be performed, or material Liabilities of Purchaser or any of its Subsidiaries continuing, after the date of this Agreement, of any material business or any material amount of assets other than in the ordinary course of business;

 

(x) any agreement restricting or limiting the payment of dividends or the making of distributions to stockholders, including intercompany dividends or distributions other than such restrictions or limitations that are required by applicable Law; and

 

(xi) all material agreements with any Governmental Authority.

 

(b)  Section 4.14(b) of the Purchaser Disclosure Schedule sets forth all Contracts granting to any Person an option or a first refusal, first offer, or similar preferential right to purchase or acquire any material assets of Purchaser, a true and complete copy of which have been made available to the Company.

 

(c)  A true and complete copy of each Purchaser Material Contract (including any related amendments) entered into before the date of this Agreement has been filed as an exhibit (by reference or otherwise) to the Purchaser Annual Report on Form 20-F for the fiscal year ended December 31, 2023, filed with the SEC on April 30, 2024, or disclosed by Purchaser in a subsequent Purchaser SEC Report or made available to the Company before the date of this Agreement. Each Purchaser Material Contract is a valid and binding agreement of Purchaser or its applicable Subsidiary, except where the failure to be valid and binding would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect. Except as would not be material to Purchaser, (i) neither Purchaser or such Subsidiary nor, to the Knowledge of Purchaser, any other party, is in breach of or default under any such Purchaser Material Contract, (ii) as of the date of this Agreement, there are no material disputes concerning any such Purchaser Material Contract and (iii) as of the date of this Agreement, no party under any Purchaser Material Contract has given written notice of its intent to terminate or otherwise seek a material amendment to such Purchaser Material Contract.

 

Section 4.15 Benefit Plans.

 

(a)  Section 4.15(a) of the Purchaser Disclosure Schedule lists all material Purchaser Benefit Plans. For purposes of this Agreement a “Purchaser Benefit Plan” is, whether or not written, (i) any “employee benefit plan” within the meaning of Section 3(3) of ERISA, (ii) any compensation, stock purchase, stock option, equity or equity-based compensation, retention, severance, employment, individual consulting, change-of-control, transaction bonus, bonus, incentive, deferred compensation and other employee benefit plan, agreement, arrangement, program or policy, whether or not subject to ERISA, (iii) any plan, agreement, program or policy providing vacation benefits, medical, dental, vision or prescription benefits, disability or sick leave benefits, life insurance, employee assistance program, supplemental unemployment benefits and post-employment or retirement benefits (including compensation or pension benefits), in each case (A) under which any current or former director, manager, officer, employee or individual independent contractor of Purchaser or any of its Subsidiaries has any right to benefits and for which Purchaser or any of its Subsidiaries has any Liability or (B) that are maintained, sponsored or contributed to by Purchaser or any of its Subsidiaries or to which Purchaser or any of its Subsidiaries makes or is required to make contributions or with respect to which Purchaser or any of its Subsidiaries has any material Liability.

 

 

(b)  With respect to each material Purchaser Benefit Plan, if applicable, Purchaser has made available to the Company true and complete copies of (i) the current plan document and any amendments to it and for any unwritten plan, a summary of the material terms, (ii) the most recent summary plan description, (iii) the most recent annual report on Form 5500 (including all schedules), (iv) if the Purchaser Benefit Plan is intended to qualify under Section 401(a) of the Code, the most recent determination or opinion letter received from the IRS, and (v) all material non-routine correspondence concerning any Purchaser Benefit Plan with a Governmental Authority within the last three years.

 

(c)  Neither Purchaser nor any of its Subsidiaries maintains, sponsors, or contributes to (or is required to sponsor, maintain, or contribute to), or has within the preceding six years maintained, sponsored or contributed to, or has any Liability, including on account of an ERISA Affiliate, under or with respect to, (i) any “defined benefit plan” (as defined in Section 3(35) of ERISA) that is subject to Section 412 or Section 430 of the Code or Title IV of ERISA, (ii) any “multiemployer plan” (as defined in Section 3(37) of ERISA and 4001(a)(3) of ERISA), (iii) any “multiple employer plan” (within the meaning of Section 210 of ERISA or Section 413(c) of the Code) or that is or has been subject to Section 4063 or 4064 of ERISA, or (iv) any “multiple employer welfare arrangement” (as defined in Section 3(40)(A) of ERISA). Neither Purchaser nor any of its Subsidiaries has any Liability due to being considered a single employer with any other Person under Section 414 of the Code. No Purchaser Benefit Plan is a voluntary employee benefit association under Section 501(c)(9) of the Code. Neither Purchaser nor its Subsidiaries has engaged in any transaction described in Sections 4069 or 4212(c) of ERISA or to which Section 4204 of ERISA applied.

 

(d)  Each Purchaser Benefit Plan complies with all applicable requirements of ERISA, the Code, and other applicable Laws and has been administered in all material respects in accordance with its terms and such Laws. Concerning each Purchaser Benefit Plan that is intended to qualify under Section 401(a) of the Code, (i) such Purchaser Benefit Plan has received a favorable determination or opinion letter has been issued by the IRS concerning such qualification, (ii) its related trust has been determined to be exempt from taxation under Section 501(a) of the Code and (iii) to the Knowledge of Purchaser, no event has occurred since the date of such qualification or exemption that would reasonably be expected to affect such qualification or exemption adversely.

 

(e)  Neither Purchaser nor any of its Subsidiaries has any Liability with respect to, and no Purchaser Benefit Plan provides, retiree or post-employment health, medical, life insurance or death benefits to current or former employees or other individual service providers of Purchaser or any of its Subsidiaries beyond their retirement or other termination of service, other than coverage mandated by COBRA or Section 4980B of the Code, or any similar state group health plan continuation Law, the premium cost of which is fully paid by such current or former employees or other individual service providers or their dependents. No Purchaser Benefit Plan is maintained (or governed by the Laws) outside of the United States or provides benefits to any service provider based or providing substantial services (in whole or in part) outside of the United States.

 

 

(f)  Neither the execution and delivery of this Agreement nor the consummation of the Transactions, the transactions contemplated thereby or the Merger could (either alone or in combination with another event) (i) result in any payment from Purchaser or any of its Subsidiaries becoming due, or increase the amount of any compensation due, to any current or former employee, director, manager or individual independent contractor of Purchaser or any of its Subsidiaries, (ii) increase any benefits otherwise payable under any Purchaser Benefit Plan, (iii) result in the acceleration of the time of payment, vesting of any compensation or benefits or forgiveness of indebtedness with respect to any current or former employee, director, manager or individual independent contractor of Purchaser or any of its Subsidiaries, (iv) result in any funding, through a grantor trust or otherwise, of any compensation or benefits to any current or former employee, director, manager or individual independent contractor of Purchaser or any of its Subsidiaries under any Purchaser Benefit Plan or (v) result in any breach or violation of or default under or limit Purchaser’s or the Company’s right to amend, modify or terminate any Purchaser Benefit Plan.

 

(g)  Each Purchaser Benefit Plan that constitutes in any part a “nonqualified deferred compensation” (as defined in Section 409A(d)(1) of the Code) has been operated and maintained, in form and operation, in all respects in accordance with Section 409A of the Code and applicable guidance of the Department of Treasury and Internal Revenue Service, and no amount under any such Purchaser Benefit Plan has been, is or is reasonably expected to be subject to any Tax set forth under Section 409A(a)(1)(B) of the Code. No person is entitled to any gross-up, make-whole, or other additional payment from Purchaser or any of its Subsidiaries regarding any Tax (including taxes imposed under Section 4999 or 409A of the Code).

 

(h)  Since January 1, 2021, there have been no pending or, to the Knowledge of Purchaser, threatened material claims, investigations, audits, or litigation against or involving any Purchaser Benefit Plan other than ordinary claims for benefits by participants and beneficiaries.

 

(i)  Each Purchaser Benefit Plan can be terminated at any time for any or no reason by Purchaser or any of its Subsidiaries without any past, present or future Liability or obligation to Purchaser or any of its Subsidiaries (other than solely administrative expenses related to such termination).

 

Section 4.16 Labor Relations.

 

(a)  Since January 1, 2021, (i) no employee of Purchaser or any of its Subsidiaries is or has been represented by a labor organization, works council, trade union, labor association or other employee representative, and, to the Knowledge of Purchaser, no labor organization, works council, trade union, labor association or other employee representative organizing efforts are currently being or have been, conducted, (ii) neither Purchaser nor any of its Subsidiaries is or has been a party to, or is currently negotiating any entry into, any collective bargaining agreement or other labor Contract, and (iii) there have been no actual or, to the Knowledge of Purchaser, threatened, strike, picket, work stoppage, work slowdown or other organized labor dispute in respect of Purchaser or any of its Subsidiaries.

 

(b)  Each of Purchaser and its Subsidiaries is, and has been since January 1, 2021, in compliance in all material respects with all Laws regarding labor, employment and employment practices, including but not limited to all Laws relating to: (i) the hiring, promotion, assignment and termination of employees (including but not limited to timing and usage of employment applications, drug testing and pre-employment testing); (ii) discrimination; (iii) harassment; (iv) retaliation; (v) equal employment opportunities; (vi) disability; (vii) labor relations; (viii) wages and hours; (ix) the FLSA; (x) hours of work; (xi) payment of wages (including but not limited to the timing of payments, recordkeeping and reporting of wages to employees); (xii) immigration; (xiii) workers’ compensation; (xiv) employee benefits; (xv) background and credit checks; (xvi) working conditions; (xvii) occupational safety and health; (xviii) family and medical leave; (xix) classification of employees; (xx) unfair competition/noncompetition; (xxi) any bargaining or other obligations under the National Labor Relations Act and any similar Law or regulation of any country or jurisdiction applicable to the Company or any of its Subsidiaries.

 

 

(c)  Neither Purchaser nor any of its Subsidiaries has incurred any material Liability or obligation under the WARN Act, or any similar Law or regulation of any country or jurisdiction applicable to the Company or any of its subsidiaries, that remains unsatisfied.

 

(d)  Since January 1, 2021, (i) no allegations of harassment, sexual misconduct, or discrimination have been made against any employee with the title of vice president or above (or equivalent title based on role, responsibility, or pay grade) of Purchaser or any of its Subsidiaries through Purchaser’s anonymous employee hotline or any formal human resources communication channels at Purchaser or any of its Subsidiaries, and (ii) there are no Legal Actions against Purchaser or any of its Subsidiaries or, to Purchaser’s Knowledge, investigations, pending or threatened relating to any allegations of harassment, sexual misconduct or discrimination by any employee with the title of vice president or above (or equivalent title based on role, responsibility or pay grade) of Purchaser or any of its Subsidiaries. Since January 1, 2021, neither Purchaser nor any of its Subsidiaries has entered into any settlement agreements related to allegations of harassment, sexual misconduct, or discrimination by any employee with the title of vice president or above (or equivalent title based on role, responsibility or pay grade) of Purchaser or any of its Subsidiaries.

 

(e)  There are no pending or, to Purchaser’s Knowledge, threatened Legal Actions against Purchaser or any of its Subsidiaries brought by or on behalf of any applicant for employment, any current or former employees or other individual service providers of Purchaser or any of its Subsidiaries, any current or former leased employee, intern, volunteer or “temp” of Purchaser or any of its Subsidiaries, or any person alleging to be a current or former employee, or any group or class of the foregoing, or any Governmental Authority, alleging: (i) violation of any labor or employment Laws; (ii) breach of any collective bargaining agreement; (iii) breach of any express or implied contract of employment; (iv) wrongful termination of employment; or (v) any other discriminatory, wrongful or tortious conduct in connection with any employment relationship, including before the Equal Employment Opportunity Commission.

 

(f)  Since January 1, 2021, all individuals who perform or have performed services for Purchaser or any of its Subsidiaries have been classified correctly in applicable Law in all material respects (i) as employees or individual independent contractors and (ii) for employees, as an “exempt” employee or a “non-exempt” employee (within the meaning of the FLSA and state Law), and no such individual has been improperly included or excluded from any Purchaser Benefit Plan, and neither Purchaser nor any of its Subsidiaries has notice of any pending or, to Purchaser’s Knowledge, threatened, inquiry or audit from any Governmental Authority concerning any such classifications.

 

(g)  Except as disclosed in Section 4.16(g) of the Purchaser Disclosure Schedule, since January 1, 2021, no executive officer has terminated employment with Purchaser, and no executive officer intends to terminate employment with Purchaser except as required under this Agreement.

 

Section 4.17 Taxes.

 

(a)  (i) All income and other material Tax Returns required to be filed by or with respect to Purchaser and its Subsidiaries have been timely filed (taking into account all applicable extensions), and all such Tax Returns are true, complete and correct in all material respects, (ii) Purchaser and its Subsidiaries have fully and timely paid (or have had paid on their behalf) all material Taxes due and payable (whether or not shown to be due on any Tax Return) and have made adequate provision in accordance with IFRS for all material Taxes not yet due and payable in the most recent financial statements contained in the Purchaser SEC Reports, and (iii) Purchaser and its Subsidiaries have complied in all material respects with all applicable Laws relating to the withholding and payment over to the appropriate Governmental Authority of all Taxes required to be withheld by Purchaser and its Subsidiaries.

 

 

(b)  (i) There are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection, assessment or reassessment of, any material Taxes due from Purchaser and its Subsidiaries for any taxable period and no request for any such waiver or extension is currently pending, (ii) no audit is pending or threatened in writing with respect to any material Taxes due from or with respect to Purchaser and its Subsidiaries, (iii) no claim in writing has been made by any Governmental Authority in a jurisdiction where Purchaser and its Subsidiaries do not file Tax Returns that it is or may be subject to taxation by that jurisdiction, and (iv) all material deficiencies for Taxes asserted or assessed in writing against Purchaser or any of its Subsidiaries have been fully and timely paid or properly reflected under IFRS in the most recent financial statements contained in the Purchaser SEC Reports.

 

(c)  There are no Liens for Taxes upon the assets or properties of Purchaser and its Subsidiaries, except for Permitted Liens.

 

(d)  Neither Purchaser nor its Subsidiaries has participated in any listed transaction within the meaning of Treasury Regulations Section 1.6011-4(b) (or any similar provision of state, local or non-U.S. Tax Law).

 

(e)  Purchaser has not been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date of this Agreement that was purported or intended to be governed by Section 355 of the Code.

 

(f)  Neither Purchaser nor its Subsidiaries has any Liability for the Taxes of any Person (other than either Purchaser and its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign Law), as a transferee, successor, by Contract (other than pursuant to customary provisions in any ordinary course Contract, the principal purpose of which does not relate to Taxes) or otherwise.

 

(g)  Neither Purchaser nor its Subsidiaries will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion of any taxable period) ending after the Closing Date as a result of (i) any change in method of accounting adopted prior to the Closing for a taxable period ending on or prior to the Closing Date, (ii) any intercompany transaction or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any similar provision of state or local income Tax law) occurring or in existence prior to the Closing, (iii) any installment sale or open transaction disposition made prior to the Closing, (iv) any item of deferred revenue arising prior to the Closing, (v) any election under Section 965 of the Code made prior to the Closing, (vi) any prepaid amounts received prior to the Closing Date, or (vii) any agreement entered into with any Governmental Authority with respect to Taxes prior to the Closing.

 

(h)  The unpaid Taxes of Purchaser do not exceed the reserves therefor (other than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth in the most recent financial statements contained in the Purchaser SEC Reports and will not exceed such reserves as adjusted for the passage of time through and including the Closing Date in accordance with the past custom and practices of Purchaser in filing its Tax Returns. Since December 31, 2021, Purchaser has not incurred any material Tax liability outside the ordinary course of business.

 

 

(i)  Neither Purchaser nor any of its Subsidiaries has taken any action that could reasonably be expected to prevent the Transactions from qualifying for the Intended Tax Treatment. To the Knowledge of Purchaser, there are no facts or circumstances, other than any facts and circumstances to the extent that such facts and circumstances exist or arise as a result of or related to any act or omission occurring after the date of this Agreement of the Company or any of its Affiliates not contemplated by this Agreement, that could reasonably be expected to prevent the Transactions from qualifying for the Intended Tax Treatment.

 

(j)  Notwithstanding the foregoing, nothing in this Section 4.17 shall be construed as a representation or warranty with respect to the amount, availability or usability of any net operating loss, capital loss, Tax basis, Tax asset, Tax accounting method, Tax filing position or Tax attribute in any Tax period, or portion thereof, beginning on or after Closing Date. This Section 4.17 and Section 4.15 set forth the sole and exclusive representations and warranties regarding Tax matters of Purchaser.

 

Section 4.18 Environmental Matters.

 

(a)  Purchaser and its Subsidiaries are in compliance and for the past three years have complied with all applicable Environmental Laws, in all material respects;

 

(b)  Purchaser and its Subsidiaries possess all material Permits required under Environmental Laws necessary for their respective operations as currently conducted, and are in compliance with such Permits, which are, and through the Closing Date shall remain, in full force and effect;

 

(c)  Neither Purchaser nor any Subsidiary of Purchaser has received any notice or request for information from any Governmental Authority or other Third Party related to any actual or alleged Liability under Environmental Law, including any investigatory, remedial or corrective obligations or otherwise pertaining to Hazardous Substances;

 

(d)  To the Knowledge of Purchaser, no condition exists on any property owned or operated by Purchaser and its Subsidiaries or any other location, in each case, that has given rise to, or would reasonably be expected to give rise to, any Liability for Purchaser or any of its Subsidiaries relating to environmental or Hazardous Substances matters or Environmental Laws; and

 

(e)  To the Knowledge of Purchaser, the Transactions and the Merger do not require notice to, or approval from, any Governmental Authority under any Environmental Law.

 

Section 4.19 Intellectual Property.

 

(a)  Purchaser and its Subsidiaries own, are licensed to use, pursuant to valid, enforceable and binding Contracts, or otherwise have the right to use all Intellectual Property used, held for use or necessary for the operation of the business of the Purchaser and its Subsidiaries (collectively, the “Purchaser Intellectual Property”) free and clear of all Liens (other than Permitted Liens), except as would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect. Section 4.19(a) of the Purchaser Disclosure Schedule sets forth a true and complete list of the following that are owned or purported to be owned by either Purchaser or any of its Subsidiaries: (i) patents and patent applications; (ii) registered trademarks and applications therefor; (iii) registered copyrights and applications therefor; and (iv) domain name registrations ((i) - (iv), the “Purchaser Registered IP”). Except as would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect, the execution, delivery, and performance of this Agreement by Purchaser do not, and the consummation by Purchaser of the Transactions and the consummation of the Transactions and the Merger will not, encumber, impair or extinguish any of the Purchaser Intellectual Property.

 

 

(b)  Except as would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect, none (i) of the Purchaser Intellectual Property owned or purported to be owned by Purchaser or any of its Subsidiaries (“Purchaser Owned Intellectual Property”) (A) has been adjudged invalid or unenforceable in whole or in part, or (B) is the subject of any cancellation or reexamination proceeding or any other proceeding challenging its ownership, use, registrability, validity and enforceability, and (ii) to the Knowledge of Purchaser, all Purchaser Registered IP is subsisting, in full force and effect, and, to the Knowledge of Purchaser, valid and enforceable, and all renewal fees and other maintenance fees have been paid. There exist no material contractual restrictions on the disclosure, use, license or transfer of any Purchaser Owned Intellectual Property.

 

(c)  (i) To the Knowledge of Purchaser, the conduct of the business of Purchaser and its Subsidiaries does not infringe upon, misappropriate or otherwise violate, and has not, since January 1, 2021 infringed upon, misappropriated, or otherwise violated, the Intellectual Property rights of any Third Party, (ii) no Legal Action is pending, asserted in writing, or, to the Knowledge of Purchaser, threatened against Purchaser or any of its Subsidiaries that the conduct of the business of Purchaser or any of its Subsidiaries infringes upon, misappropriates or otherwise violates the Intellectual Property rights of any Third Party and (iii) to the Knowledge of Purchaser, no Person is infringing upon, misappropriating or otherwise violating, or has, since January 1, 2021, infringed upon, misappropriated, or otherwise violated, any Intellectual Property owned by Purchaser or any of its Subsidiaries.

 

(d)  Purchaser and its Subsidiaries have taken reasonable steps in accordance with normal industry practice to maintain and protect the confidentiality of all Purchaser Intellectual Property that is material to the business of Purchaser and its Subsidiaries and the value of which is contingent upon confidentiality being maintained. Except as would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect, none of the Purchaser Owned Intellectual Property that is material to the business of Purchaser and its Subsidiaries and the value of which is contingent upon confidentiality being maintained, has been disclosed other than to Third Parties that are bound by customary, written confidentiality agreements entered into in the ordinary course of business consistent with past practice and that are valid and enforceable.

 

(e)  Except as would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect, all Persons who have contributed, developed or conceived any Purchaser Owned Intellectual Property have done so pursuant to a valid and enforceable Contract (subject to enforceability exceptions for bankruptcy and insolvency and subject to principles of equity) that protects the confidential information of Purchaser and its Subsidiaries and assigns to Purchaser (or one of its Subsidiaries, as applicable) exclusive ownership of the Person’s contribution, development or conception, other than Intellectual Property excluded by Law or non-assignable moral rights.

 

(f)  Except as would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect, (i) Purchaser and its Subsidiaries have sufficient rights to use all of the Software, including middleware, databases, and systems, information technology equipment, and associated documentation used or held for use in connection with the operation of the business of the Company and its Subsidiaries used or held for use in connection with the operation of the business of Purchaser and its Subsidiaries (the “Purchaser IT Assets”), (ii) in each case, the Purchaser IT Assets operate and perform in all material respects in accordance with their documentation and functional specifications and are sufficient or configurable to effectively perform all operations necessary for the current operation of the business of Purchaser and its Subsidiaries, and all Purchaser IT Assets are owned or licensed under valid licenses and operated by and are under the control of Purchaser and its Subsidiaries, (iii) the Purchaser IT Assets have not materially malfunctioned or failed in the past three years and, to the Knowledge of Purchaser, do not contain any viruses, bugs, faults or other devices or effects that (A) enable or assist any Person to access without authorization or disable or erase the Purchaser IT Assets, or (B) otherwise materially adversely affect the functionality of the Purchaser IT Assets, (iv) Purchaser and its Subsidiaries have taken commercially reasonable steps to provide for the remote-site back-up of data and information critical to the conduct of the business of Purchaser and its Subsidiaries and have in place commercially reasonable disaster recovery and business continuity plans, procedures and facilities, (v) no Person has gained unauthorized access to any Purchaser IT Assets in the past three years, (vi) Purchaser and its Subsidiaries have maintained, continue to maintain, and caused their vendors to maintain, safeguards, security measures and procedures against the unauthorized access, disclosure, destruction, loss, or alteration of customer data or information (including any personal or device-specific information) in its possession or control that comply with any applicable contractual and legal requirements and meet industry standards, and (vii) Purchaser and its Subsidiaries have in place with the third-party owners and operators of all data centers that provide services related to the business of Purchaser and its Subsidiaries written agreements that ensure that such Third Parties adhere to and are in compliance with commercially reasonable standards and requirements.

 

 

Section 4.20 Real Property; Personal Property.

 

(a)  Section 4.20(a) of the Purchaser Disclosure Schedule sets forth a true and complete list of the address for each owned and leased Purchaser Real Property of the Company and its Subsidiaries. Purchaser and its Subsidiaries have good and marketable title to, or have a valid and enforceable right to use or a valid and enforceable leasehold interest in, all real property (including all buildings, fixtures and other improvements) used by the business of Purchaser and its Subsidiaries (the “Purchaser Real Property”) and the ownership of or leasehold interest in any Purchaser Real Property is not subject to any Lien (except in all cases for Permitted Liens). Neither Purchaser nor any of its Subsidiaries have leased, subleased, licensed, sublicensed or otherwise granted to any Person the right to use or occupy any Purchaser Real Property or any portion of Purchaser Real Property, there are no outstanding options, rights of first offer or rights of first refusal to purchase any Purchaser Real Property or any portion of or interest, and neither Purchaser nor any of its Subsidiaries are parties to any Contract to sell, transfer, or encumber any Purchaser Real Property.

 

(b)  Each of the leases, subleases, and other agreements under which Purchaser or any of its Subsidiaries use or occupy or have the right to use or occupy, now or in the future, any Purchaser Real Property (the “Purchaser Real Property Leases”) is valid and binding (except as may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles). No termination event or breach or default on the part of each of Purchaser or its Subsidiaries exists under any Purchaser Real Property Lease and no event has occurred or circumstance exists which, with the delivery of notice, the passage of time or both, would constitute such a termination event or breach or default under any Purchaser Real Property Lease. Neither Purchaser nor any of its Subsidiaries have collaterally assigned or granted any other security interest in any Purchaser Real Property Lease or any interest therein. Purchaser has made available to the Company and the Sellers true and complete copies of each Purchaser Real Property Lease document (including all amendments, extensions, renewals, guaranties, and other agreements with respect thereto).

 

(c)  Purchaser and its Subsidiaries have good and marketable title to, or a valid and enforceable leasehold interest in, all Purchaser Assets.

 

(d)  None of Purchaser’s or any of its Subsidiaries’ ownership of or leasehold interest in any such Purchaser Assets is subject to any Liens (except in all cases for Permitted Liens).

 

 

Section 4.21 Permits; Compliance with Law.

 

(a)  Except as would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect, Purchaser and its Subsidiaries is in possession of all material Permits necessary for each of Purchaser and its Subsidiaries to own, lease and operate their respective properties and assets or to carry on their respective business as it is now being conducted (collectively, the “Purchaser Permits”). All such Purchaser Permits are in full force and effect in all material respects and no revocation, termination, suspension, or cancellation of any of the Purchaser Permits is pending or, to the Knowledge of Purchaser, has been threatened in writing, against Purchaser or any of its Subsidiaries.

 

(b)  Except as would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect, Purchaser and each of its Subsidiaries has at all times since January 1, 2021, been in compliance in all material respects with (i) all Laws applicable to Purchaser or such Subsidiary or by which any of the Purchaser Assets is bound and (ii) all Laws applicable to, and the terms and conditions of, any Purchaser Permits.

 

Section 4.22 Certain Business Practices.

 

(a)  Neither Purchaser nor its Subsidiaries, nor any of their respective directors, managers, or officers or, to the Knowledge of Purchaser, any employee, agent, or representative thereof, has in the past three years offered, paid, promised to pay, or authorized the payment of any money or any other thing of value to any Person (i) with the intention of inducing improper conduct on the part of the recipient, (ii) acceptance of which would violate the policies of the recipient’s employer or cause the recipient to breach a duty owed to his or her employer, or (iii) to otherwise secure an undue or improper advantage for Purchaser or its Subsidiaries in violation of any Anti-Corruption Law.

 

(b)  Neither Purchaser nor its Subsidiaries, nor any of their respective directors, managers, or officers or, to the Knowledge of Purchaser, any employee, agent, or representative thereof in the past three years (i) has been or is a Sanctioned Person, (ii) has (acting for or on behalf of Purchaser or its Subsidiaries) transacted business with or for the benefit of a Sanctioned Person or otherwise violated applicable Sanctions, or (iii) violated any applicable Ex-Im Law.

 

(c)  The operations of Purchaser and its Subsidiaries have been and are conducted in compliance with applicable Anti-Money Laundering Laws, including any financial recordkeeping and reporting requirements, and Purchaser’s books and records fairly and accurately reflect, in reasonable detail, their transactions and disposition of assets consistent with the requirements of the U.S. Foreign Corrupt Practices Act of 1977, as amended.

 

(d)  To the Knowledge of Purchaser, neither Purchaser nor its Subsidiaries has been, in the last three years, the subject of any allegation, voluntary disclosure, investigation, prosecution, or enforcement action related to any Anti-Corruption Laws, Sanctions, or Ex-Im Laws.

 

Section 4.23 Regulatory Matters.

 

(a)  (i) Purchaser and its Subsidiaries currently conduct, and have at all times since January 1, 2021, conducted, their respective business in compliance in all material respects with all Laws applicable to their respective operations, activities or services and any Orders to which they are a party or are subject, including any settlement agreements or corporate integrity agreements, (ii) except for routine matters arising in the ordinary course of business, neither Purchaser nor any of its Subsidiaries has received any written notice, citation, suspension, revocation, limitation, warning, or request for repayment or refund issued by a Governmental Authority that alleges or asserts that Purchaser or any of its Subsidiaries has violated any Laws or that requires or seeks to adjust, modify or alter Purchaser’s or any of its Subsidiary’s operations, activities, services or financial condition that has not been fully and finally resolved to the Governmental Authority’s satisfaction without further Liability to Purchaser and its Subsidiaries and (iii) there are no restrictions imposed by any Governmental Authority upon Purchaser’s or any of its Subsidiaries’ business, activities or services that would restrict or prevent Purchaser or any of its Subsidiaries from operating as it currently operates.

 

 

(b)  Purchaser and each of its Subsidiaries and, to the Knowledge of Purchaser, all of their respective directors, managers, officers, agents, and employees, comply in all material respects with, and Purchaser and each of its Subsidiaries have compliance programs including policies and procedures reasonably designed to cause Purchaser and its Subsidiaries and their respective directors, managers, officers, agents and employees to comply in all material respects with, to the extent applicable, all Laws.

 

Section 4.24 Anti-Takeover Arrangements.

 

There is no stockholder rights plan, “poison pill”, anti-takeover plan, or other similar plan, device, or arrangement to which Purchaser or any of its Subsidiaries is a party or by which they are bound concerning any capital stock of Purchaser or any of its Subsidiaries.

 

Section 4.25 Transactions with Affiliates.

 

Except as disclosed in the Purchaser SEC Reports or Section 4.25 of the Purchaser Disclosure Schedule, from the date of filing on April 30, 2024, of the Purchaser Annual Report on Form 20-F for the fiscal year ended December 31, 2023, through the date hereof, no event has occurred that would be required to be reported by Purchaser pursuant to Item 404 of Regulation S-K and there are no transactions, arrangements or Contracts between Purchaser or any of its Subsidiaries, on the one hand, and any stockholder, officer, director, manager or Affiliate of Purchaser, on the other hand, other than employment relationships, equity arrangements and compensation, benefits, travel advances and employee loans in the ordinary course of business.

 

Section 4.26 Insurance.

 

Valid and currently effective insurance policies cover purchaser and its Subsidiaries, and all premiums payable under such policies have been duly paid to date. Neither Purchaser nor its Subsidiaries has received written notice of default or cancellation of any such policy. All material fire and casualty, general liability, business interruption, product Liability, and sprinkler and water damage insurance policies maintained by or on behalf of Purchaser or any of its Subsidiaries (“Purchaser Insurance Policies”) provide adequate coverage for all normal risks incident to the business of Purchaser and its Subsidiaries and their respective properties and assets, except for any such failures to maintain Purchaser Insurance Policies that, individually or in the aggregate, are not reasonably be expected to have a Purchaser Material Adverse Effect.

 

Section 4.27 Valid Issuance.

 

The Purchaser Ordinary Shares and Purchaser Preferred Shares to be issued in connection with this Agreement will, when issued in accordance with the provisions of this Agreement, be validly issued, fully paid and nonassessable.

 

 

Section 4.28 Brokers.

 

No broker, finder, adviser or investment banker is entitled to any brokerage, success, finder’s or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Purchaser or any of its Subsidiaries.

 

Section 4.29 Shell Company Status.

 

Purchaser is not, and has never been, an issuer identified in Rule 144(i)(1)(i) of the Securities Act.

 

Section 4.30 Listing and Maintenance Requirements.

 

Except as disclosed in Section 4.30 of the Purchaser Disclosure Schedule, the Purchaser Ordinary Share are registered pursuant to Section 12(b) of the Exchange Act, and Purchaser has taken no action designed to, or that to its Knowledge is likely to have the effect of, terminating the registration of the Purchaser Ordinary Shares under the Exchange Act nor has Purchaser received any notification that the SEC is contemplating terminating such registration. Except as disclosed in the Purchaser SEC Reports, Purchaser has not, in the 12 months preceding the date hereof, received notice from Nasdaq that Purchaser is not in compliance with the listing or maintenance requirements of Nasdaq.

 

Section 4.31 No Additional Representations or Warranties.

 

Except as otherwise expressly provided in Article III (as modified by the Company Disclosure Schedule), Purchaser hereby expressly disclaims and negates any other express or implied representation or warranty whatsoever (whether at Law or in equity) concerning the Sellers, the Company, their Affiliates, and any matter relating to any of them, including their affairs, the condition, value or quality of the assets, liabilities, financial condition or results of operations, or concerning the accuracy or completeness of any other information made available to Purchaser, its respective Affiliates or any of their respective Representatives by, or on behalf of, Purchaser, and any such representations or warranties are expressly disclaimed. Without limiting the generality of the foregoing, except as expressly outlined in this Agreement, Purchaser hereby acknowledges and agrees that none of the Sellers, the Company, nor any other Person on behalf of the Sellers or the Company has made or makes any representation or warranty, whether express or implied, concerning any projections, forecasts, estimates or budgets made available to Purchaser, its Affiliates or any of their respective Representatives of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of the Company (including the reasonableness of the assumptions underlying any of the foregoing), whether or not included in any management presentation or in any other information made available to Purchaser, its respective Affiliates or any of their respective Representatives or any other Person, and that any such representations or warranties are expressly disclaimed.

 

ARTICLE V. REPRESENTATION AND WARRANTIES OF THE SELLERS

 

Except as set forth in the corresponding sections of the disclosure schedule to this Agreement to be delivered by the Sellers to the Company and Purchaser on the date hereof (the “Seller Disclosure Schedule”) (each of which qualifies representations, warranties or covenants outlined in the correspondingly numbered Section of this Agreement and any other representations, warranties or covenants where its relevance as an exception to (or disclosure for purposes of) such other representations, warranties or covenants is reasonably apparent on the face of the disclosure), or as set forth below, each Seller hereby represents and warrants to Purchaser as follows:

 

 

Section 5.01 Purchase Entirely for Own Account. The Seller understands and acknowledges that this Agreement is made with the Seller in reliance upon the Seller’s representations to Purchaser, which by execution of this Agreement the Seller hereby confirms, that the Purchaser Shares Consideration to be issued to the Seller pursuant to Section 1.01 will be acquired by the Seller for investment purposes only for the Seller’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Seller does not have a present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Seller represents that it has no contract, undertaking, agreement, or arrangement with any Person to sell, transfer, or grant participation to such Person or any third Person concerning the Purchaser Shares Consideration.

 

Section 5.02 Capacity; Enforceability. The Seller is at least 21 years of age and has the full right, power, and authority, and is of sufficient legal capacity to enter into and deliver this Agreement and each Ancillary Agreement to which he is a party, to carry out his obligations hereunder and thereunder and to consummate the Transactions and the transactions contemplated thereby. This Agreement and each Ancillary Agreement to which the Seller is a party has been duly executed and delivered by the Seller and constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms and conditions (except as the enforceability may be limited by (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles), and the execution and delivery by the Seller of this Agreement and each Ancillary Agreement to which he is a party, and the performance by the Seller of its obligations hereunder and thereunder, do not and will not (i) violate or a conflict with (A) the terms of any agreement or instrument to which the Seller is a party or by which he is bound and/or (B) any statute, regulation, law, order, writ, injunction, judgment, or decree to which the Seller is subject, or (ii) require any authorization or approval under or pursuant to any of the foregoing that have not been obtained.

 

Section 5.03 Ownership of Sellers’ Shares. The Seller represents that, as of the date hereof, the Seller is the sole and exclusive record and beneficial owner of the Sellers’ Shares as set forth opposite the Seller’s name on Section 5.03 of the Seller Disclosure Schedule, free and clear of all Liens (other than Permitted Liens), that no other Person has, or is entitled to, any right concerning any of the Sellers’ Shares, and that, upon consummation of the Transactions, Purchaser will acquire good and valid legal and beneficial title to all of Sellers’ Shares, free and clear of all Liens, other than restrictions on transfer imposed by federal and state securities laws. All Sellers’ Shares set forth on Schedule 5.03 of the Seller Disclosure Schedule constitute, in the aggregate, 69.36% of the issued and outstanding shares of capital stock of the Company on a fully diluted basis.

 

Section 5.04 Reliance Upon Seller Representations. The Seller understands that the issuance of the Purchaser Shares Consideration has not been registered under the Securities Act on the ground that the sale provided for in this Agreement and the issuance of the Purchaser Shares Consideration hereunder is exempt from registration under the Securities Act pursuant to Regulation D promulgated thereunder or another exemption from registration under the Securities Act and applicable state securities laws.

 

Section 5.05 Receipt of Information. The Seller believes that he has received all the necessary or appropriate information to decide whether to invest in the Purchaser Shares Consideration. The Seller further represents that he has had an opportunity to ask questions and receive answers from Purchaser regarding the terms and conditions of the acquisition of the Purchaser Shares Consideration and the business, properties, prospects, and financial condition Purchaser, the Company and their Affiliates and to obtain additional information (to the extent Purchaser and its Affiliates possessed such information or could acquire it without unreasonable effort or expense) necessary to verify the accuracy of any information furnished to the Seller or to which the Seller had access. The foregoing, however, does not limit or modify the representations and warranties of the Purchaser in Article IV or the rights of the Seller to rely thereon.

 

 

Section 5.06 Investment Experience. The Seller confirms that he has the knowledge and experience in financial and business matters such that he is capable of evaluating the merits and risks of acquisition of the Purchaser Shares Consideration and of making an informed investment decision and understands that (i) investment in and acquisition of the Purchaser Shares Consideration is suitable only for an investor that can bear the economic consequences of losing such investor’s entire investment, (ii) the acquisition of the Purchaser Shares Consideration to be received by the Seller hereunder is a speculative investment which involves a high degree of risk of loss of the entire investment, and (iii) there are substantial restrictions on the transferability of the Purchaser Shares Consideration and, accordingly, it may not be possible for the Seller to liquidate his investment in case of emergency.

 

Section 5.07 Accredited Seller Status. The Seller is an “accredited investor” as such term is defined in Rule 501 promulgated under the Securities Act.

 

Section 5.08 Restricted Securities. The Seller understands that a limited market currently exists for the resale of the Purchaser Shares Consideration, and it may only be possible to sell the Purchaser Shares Consideration within the sale of all of the stock or assets of Purchaser. Purchaser has no present intention of undertaking any such sale and no assurance can be given that any such sale will occur in the near-term future or at all.

 

Section 5.09 Non-Contravention. Except as set forth on Schedule 5.09 of the Seller Disclosure Schedule, the execution, delivery, and performance of this Agreement by the Seller and the consummation of the Transactions do not and will not (a) contravene or conflict with, or result in any material violation or breach of, any Law applicable to the Seller (b) result in any violation, termination, acceleration of any material obligation, cancellation or material breach of, or constitute a default (with or without notice or lapse of time or both) or require any notice or consent under, any Contracts to which the Seller is a party or (c) result in the creation of any Liens (other than Permitted Liens) upon the Sellers’ Shares owned by the Seller except, in the case of clauses (a), (b), and (c), as would not prevent, or materially impair or delay, the ability of the Seller to consummate the Transactions or otherwise perform any of their obligations under this Agreement.

 

Section 5.10 No Additional Representation or Warranties. Except as specifically provided in this Agreement, neither the Seller nor any of the Seller’s Affiliates have made, or are making, any representation or warranty whatsoever to Purchaser or any of its Affiliates and, except in the case of fraud, no such party shall be liable in respect of the accuracy or completeness of any information or documents (including any projections on the future performance of the businesses of the Company) provided to Purchaser or any of its Affiliates.

 

Article Vi. COVENANTS

 

Section 6.01 Conduct of Business of the Company.

 

During the Restricted Period, except (i) as expressly contemplated or permitted by this Agreement or any Ancillary Agreement, (ii) as set forth in Section 6.01 of the Company Disclosure Schedule, (iii) as required by Law, or (iv) as consented to in writing by Purchaser, such consent not to be unreasonably withheld, conditioned or delayed, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to (A) conduct its operations in the ordinary course of business consistent with past practice in all material respects and (B) maintain and preserve intact in all material respects its business organization, the Company Assets, the Company Permits and the Company Real Property, retain the services of its current officers and employees (it being understood that no material increases in any compensation or benefits, including any incentive, retention or similar compensation shall be made in respect thereof except to the extent such increase is required in the ordinary course of business consistent with past practice) and preserve material business relationships with its customers, suppliers, agents, employees and other Persons. Without limiting the generality of the foregoing, and except (1) as otherwise expressly contemplated or permitted by this Agreement or any Ancillary Agreement, (2) as set forth in Section 6.01 of the Company Disclosure Schedule, (3) as required by applicable Law, or (4) as consented to in writing by Purchaser, such consent not to be unreasonably withheld, conditioned or delayed, during the Restricted Period the Company shall not, and shall not permit any of its Subsidiaries to, take any of the following actions:

 

 

(a) Organizational Documents. Amend any of the Company Organizational Documents or any of the comparable organizational documents of any of the Company’s Subsidiaries (including partnership agreements and limited liability company agreements) in any material respect;

 

(b) Dividends. Make, declare, or pay any dividend or distribution on any shares of its capital stock, other than dividends, distributions, and intercompany debt settlements by wholly-owned Subsidiaries of the Company in the ordinary course of business and any dividends required to be declared, paid, or accrued on the Company Preferred Stock;

 

(c) Capital Stock. (i) Adjust, split, combine, or reclassify its capital stock, (ii) redeem, purchase, or otherwise acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock, (iii) issue, deliver or sell any additional shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock or such securities (other than pursuant to the exercise of Convertible Securities of the Company outstanding as of the date of this Agreement and in accordance with their terms), or (iv) enter into any Contract concerning the sale, voting, registration or repurchase of its capital stock;

 

(d) Indebtedness; Guarantees. Incur, assume, or guarantee any indebtedness for borrowed money other than (i) pursuant to any indebtedness instrument outstanding as of the date of this Agreement and made available to Purchaser or (ii) pursuant to equipment financing in the ordinary course of business and consistent with past practice not in excess of $250,000;

 

(e) Tax. File any material amended Tax Return, settle any material Tax claim or assessment, surrender in writing any right to claim a material refund of Taxes, consent to (or request) any extensions or waiver of the limitation period applicable to any material Tax claim or assessment, or enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local, or non-U.S. Law) or any voluntary disclosure agreement with any Governmental Authority, in each case, concerning a material amount of Taxes;

 

(f) Accounting. Materially change its accounting policies or procedures or any of its methods of reporting income, deductions, or other items for material accounting purposes or revalue any of its material assets, in each case, other than as required by changes in GAAP or applicable Law or as may be reasonably necessary to comply with GAAP or applicable Law after the date of this Agreement;

 

(g) Dispositions. Sell, lease, exclusively license, transfer, pledge, encumber, grant, or dispose of any Company Assets, including any Intellectual Property rights and the capital stock of Subsidiaries of the Company, that are material to the Company and its Subsidiaries, taken as a whole, other than (i) in connection with products or services offered or provided in the ordinary course of business, (ii) in connection with the financing of capital equipment, (iii) the disposition of used, obsolete or excess equipment in the ordinary course of business, (iv) expirations of Company Registered IP in accordance with the applicable statutory term, grants of non-exclusive licenses of Company Owned Intellectual Property, or dispositions of non-material Company Owned Intellectual Property, or (v) transactions among the Company and any of its Subsidiaries;

 

 

(h) Acquisitions. Acquire by merger, consolidation, acquisition of equity interests or assets, or otherwise, any business, any material assets or properties, or any corporation, partnership, limited liability company, joint venture or other business organization or division of such business organization;

 

(i) Contracts. (i) Enter into any Contract that if in effect as of the date of this Agreement would be a Company Material Contract or Company Real Property Lease, other than in the ordinary course of business (unless such Contract would otherwise be prohibited under this Section 6.01), (ii) enter into any Contract that would limit or otherwise restrict the Company or any of its Subsidiaries or any of their successors from engaging or competing in any line of business or in any geographic area in any material respect, (iii) terminate, cancel or request any material change in or waive any material rights under any Company Material Contract or Company Real Property Lease other than the expiration of any Company Material Contract or Company Real Property Lease in accordance with its terms, or (iv) terminate, amend or waive any provisions of any confidentiality or standstill agreements in place with any Third Party;

 

(j) Loans. (i) Make any loans, advances or capital contributions to (other than business advances in the ordinary course of business), or investments in, any other Person (including any of its officers, directors, employees, agents or consultants), other than by the Company or a wholly owned Subsidiary of the Company to, or in, the Company or any of its wholly owned Subsidiaries in the ordinary course of business or (ii) make any material change in the Company’s existing borrowing or lending arrangements for or on behalf of such Persons;

 

(k) Legal Actions. Commence, initiate, waive, release, assign, settle or compromise any Legal Action or enter into any settlement agreement or other understanding or agreement with any Governmental Authority (other than in the case of this clause, entry into commercial agreements not relating to a dispute with such Governmental Authority in the ordinary course of business), relating to the Company or any of its Subsidiaries, other than any such waiver, release, assignment, settlement or compromise with a Person that is not a Governmental Authority that is limited only to the payment of money or another form of value that, collectively in respect of such waiver, release, assignment, settlement or compromise, is not more than $100,000 individually or in the aggregate (excluding any amounts paid or payable by an insurance provider);

 

(i) Affiliate Transactions. Enter into or amend any arrangement or Contract with any Affiliate, director, manager, officer, or stockholder of the Company that would reasonably be expected to materially delay or prevent the consummation of the Transactions or the Merger;

 

(j) Inhibiting Transactions. Take any action that would reasonably be expected to result in any of the conditions to the Transactions outlined in Article VII of this Agreement not being satisfied or satisfaction of those conditions being materially delayed;

 

(k) Compensation and Benefits. Except (i) as otherwise provided in Section 6.01(k) of the Company Disclosure Schedule or (ii) in the ordinary course of business consistent with past practice (it being understood and agreed, for the avoidance of doubt, that in no event shall the exception in this clause (ii) be deemed or construed as permitting the Company to take any action that is not permitted by any other provision of this Section 6.01), (A) materially increase the compensation or benefits payable or to become payable to any current or former employee of the Company or any directors, managers or officers, (B) grant any equity or equity-based incentive award, retention, severance or termination pay or change in control or transaction bonus to any current or former Company Employee or any directors, managers or officers, (C) renew or enter into or amend any new employment or severance agreement with any current or former Company Employee or any directors, managers or officers, (D) establish, adopt, or enter into, materially amend or terminate any Company Benefit Plan or any employee benefit plan, agreement, policy or program that, if in effect on the date of this Agreement, would be a Company Benefit Plan, (E) enter into, terminate, amend or negotiate any collective bargaining agreement or other agreement or Contract with any labor organization, works council, trade union, labor association or other employee representative, (F) implement any employee layoffs that could trigger any Liability or notice requirements under the WARN Act or (G) take any action to accelerate the vesting, payment, or funding of any compensation or benefits to any current or former Company Employee or any directors, managers or officers, except, in each case, to the extent required by applicable Law or this Agreement; or

 

 

(l) Related Actions. Agree in writing or otherwise enter into a binding agreement to do any of the foregoing.

 

Section 6.02 Conduct of Business of Purchaser.

 

During the Restricted Period, except (i) as expressly contemplated or permitted by this Agreement or any Ancillary Agreement, (ii) as set forth in Section 6.02 of the Purchaser Disclosure Schedule, (iii) as required by Law, or (iv) as consented to in writing by the Company, such consent not to be unreasonably withheld, conditioned or delayed, Purchaser shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to (A) conduct its operations in the ordinary course of business consistent with past practice in all material respects, (B) conduct its business in a manner that would maintain the status of Purchaser Ordinary Shares for trading on Nasdaq, and (C) maintain and preserve intact in all material respects its business organization, the Purchaser Assets, the Purchaser Permits and Purchaser Real Property, retain the services of its current officers and employees (it being understood that no material increases in any compensation, including any incentive, retention or similar compensation shall be made in respect thereof except to the extent such increase is required in the ordinary course of business consistent with past practice) and preserve material business relationships with its customers, suppliers, agents, employees and other Persons. Without limiting the generality of the foregoing, and except (1) as otherwise expressly contemplated or permitted by this Agreement or any Ancillary Agreement, (2) as set forth in Section 6.02 of the Purchaser Disclosure Schedule, (3) as required by applicable Law, or (4) as consented to in writing by the Company, such consent not to be unreasonably withheld, conditioned or delayed, during the Restricted Period Purchaser shall not, and shall not permit any of its Subsidiaries to, take any of the following actions:

 

(a) Organizational Documents. Amend, or seek approval from the stockholders of Purchaser to amend, any of the Purchaser Organizational Documents or any of the comparable organizational documents of any of Purchaser’s Subsidiaries (including partnership agreements and limited liability company agreements);

 

(b) Dividends. Make, declare, or pay any dividend or distribution on any shares of its capital stock other than dividends, distributions, and intercompany debt settlements by wholly owned Subsidiaries of Purchaser in the ordinary course of business;

 

(c) Capital Stock. (i) adjust, split, combine, or reclassify its capital stock, (ii) redeem, purchase, or otherwise acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock, (iii) issue, deliver or sell any additional shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock or such securities (other than pursuant to the exercise of Convertible Securities of Purchaser outstanding as of the date of this Agreement and in accordance with their terms), or (iv) enter into any Contract concerning the sale, voting, registration or repurchase of its capital stock other than the Registration Statement;

 

 

(d) Compensation and Benefits. Except (i) as otherwise provided in Section 6.02(d) of the Purchaser Disclosure Schedule or (ii) in the ordinary course of business consistent with past practice (it being understood and agreed, for the avoidance of doubt, that in no event shall the exception in this clause (ii) be deemed or construed as permitting Purchaser or any of its Subsidiaries to take any action that is not permitted by any other provision of this Section 6.02), (A) materially increase the compensation or benefits payable or to become payable to any current or former Purchaser Employee or any directors, managers or officers, (B) grant any equity or equity-based incentive award, retention, severance or termination pay or change in control or transaction bonus to any current or former Purchaser Employee or any directors, managers or officers, (C) renew or enter into or amend any new employment or severance agreement with any current or former Purchaser Employee or any directors, managers or officers, (D) establish, adopt, enter into, materially amend or terminate any Purchaser Benefit Plan or any employee benefit plan, agreement, policy or program that, if in effect on the date of this Agreement, would be a Purchaser Benefit Plan, (E) enter into, terminate, amend or negotiate any collective bargaining agreement or other agreement or Contract with any labor organization, works council, trade union, labor association or other employee representative, (F) implement any employee layoffs that could trigger any Liability or notice requirements under the WARN Act or (G) take any action to accelerate the vesting, payment, or funding of any compensation or benefits to any current or former Purchaser Employee or any directors, managers or officers, except, in each case, to the extent required by applicable Law, this Agreement or in terms of any Purchaser Benefit Plan in effect on the date of this Agreement and set forth on Section 6.02(d) of the Purchaser Disclosure Schedule that has been made available to the Company and the Sellers as of the date of this Agreement;

 

(e) Dispositions. Except as otherwise provided in Section 6.02(e) of the Purchaser Disclosure Schedule, sell, lease, exclusively license, transfer, pledge, encumber, grant, or dispose of any Purchaser Assets, including any Intellectual Property rights and the capital stock of Subsidiaries of Purchaser, that are material to Purchaser and its Subsidiaries, taken as a whole, other than (i) in connection with products or services offered or provided in the ordinary course of business, (ii) the disposition of used, obsolete or excess equipment in the ordinary course of business, (iii) expirations of Purchaser Registered IP in accordance with the applicable statutory term, grants of non-exclusive licenses of Purchaser Owned Intellectual Property, or dispositions of non-material Purchaser Owned Intellectual Property, in each case in the ordinary course of business, or (iv) transactions among Purchaser and any of its Subsidiaries;

 

(f) Acquisitions. Except as set forth in Section 6.02(f) of the Purchaser Disclosure Schedule, acquire by merger, consolidation, acquisition of equity interests or assets, or otherwise, any business, any material assets or properties, or any corporation, partnership, limited liability company, joint venture or other business organization or division of such business organization;

 

(g) Contracts. (i) Enter into any Contract that is in effect as of the date of this Agreement would be a Purchaser Material Contract or Purchaser Real Property Lease, other than in the ordinary course of business (unless such Contract would otherwise be prohibited under this Section 6.02), (ii) enter into any Contract that would limit or otherwise restrict Purchaser or any of its Subsidiaries or any of their successors from engaging or competing in any line of business or in any geographic area in any material respect, (iii) terminate, cancel or request any material change in or waive any material rights under any Purchaser Material Contract or Purchaser Real Property Lease other than the expiration of any Purchaser Material Contract or Purchaser Real Property Lease in accordance with its terms in the ordinary course of business (unless such action would otherwise be prohibited under this Section 6.02), or (iv) terminate, amend or waive any provisions of any confidentiality or standstill agreements in place with any Third Parties;

 

(h) Indebtedness; Guarantees. Incur, assume, or guarantee any indebtedness for borrowed money other than (i) pursuant to any indebtedness instrument outstanding as of the date of this Agreement and made available to the Company and the Sellers or (ii) pursuant to promissory notes issued in connection with any acquisition agreed to by Purchaser in writing, which acquisition is made pursuant to the terms set forth in Section 6.02(f);

 

 

(i) Loans. (i) Make any loans, advances, or capital contributions to (other than business advances in the ordinary course of business) or investments in any other Person (including any of its officers, directors, managers, employees, agents, or consultants), other than by Purchaser or a wholly owned Subsidiary of Purchaser to, or in, Purchaser or any of its wholly owned Subsidiaries in the ordinary course of business or (ii) make any material change in Purchaser’s or any of its Subsidiaries existing borrowing or lending arrangements for or on behalf of such Persons;

 

(j) Tax. Make or change or rescind any material Tax election, file any material amended Tax Return, change or adopt any material method of Tax accounting, settle any material Tax claim or assessment, surrender any right to claim a material refund of Taxes, consent to (or request) any extensions or waiver of the limitation period applicable to any material Tax claim or assessment, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local, or non-U.S. Law) or any voluntary disclosure agreement with any Governmental Authority, in each case, concerning a material amount of Taxes, or incur any Taxes outside of the ordinary course of business;

 

(k) Accounting. Materially change its accounting policies or procedures or any of its methods of reporting income, deductions, or other items for material accounting purposes or revalue any of its material assets, in each case, other than as required by changes in IFRS or applicable Law or as may be reasonably necessary to comply with IFRS or applicable Law after the date of this Agreement;

 

(l) Legal Actions. Commence, initiate, waive, release, assign, settle, or compromise any Legal Action or enter into any settlement agreement or other understanding or agreement with any Governmental Authority (other than in the case of this clause, entry into commercial agreements not relating to a dispute with such Governmental Authority in the ordinary course of business), pertaining to Purchaser or any of its Subsidiaries;

 

(m) Affiliate Transactions. Enter into or amend any arrangement or Contract with any Affiliate, director, officer, or stockholder of Purchaser that would reasonably be expected to materially delay or prevent the consummation of the Transactions or the Merger or that would be required to be described under Item 404 of Regulation S-K of the SEC;

 

(n) Inhibiting Transactions. Take any action that would reasonably be expected to result in any of the conditions to the Transactions outlined in Article VII not being satisfied or satisfaction of those conditions being materially delayed; or

 

(o) Related Actions. Agree in writing or otherwise enter into a binding agreement to do any of the foregoing.

 

Section 6.03 Access to Information; Confidentiality.

 

(a)  Through the Restricted Period (or if earlier, the date on which this Agreement is terminated pursuant to Article VIII), the Company shall, and shall cause its Subsidiaries to, (i) provide to Purchaser and its Representatives access to at reasonable times upon prior notice the officers, employees, properties, books, and records of the Company and its Subsidiaries, and (ii) furnish promptly such information concerning the Company and its Subsidiaries as Purchaser or its Representatives may reasonably request.

 

 

(b)  Through the Restricted Period (or if earlier, the date on which this Agreement is terminated pursuant to Article VIII), Purchaser shall, and shall cause its Subsidiaries to (i) provide to the Sellers, the Company and their respective Representatives access to at reasonable times upon prior notice the officers, employees, properties, books and records of Purchaser and its Subsidiaries, and (ii) furnish promptly such information concerning Purchaser and its Subsidiaries as the Sellers, the Company or their respective Representatives may reasonably request.

 

(c)  Notwithstanding the foregoing, neither Purchaser nor the Company, or their respective Subsidiaries, shall be required to provide such access if it reasonably determines that such access would (i) materially disrupt or impair the ordinary course business or operations of Purchaser or the Company, as applicable, or any of its Subsidiaries, (ii) violate any legally-binding obligation concerning confidentiality, non-disclosure or privacy, (iii) constitute a violation of any applicable Law or (iv) result in the disclosure of any trade secrets of Third Parties. Nothing in this Agreement shall require the Company or Purchaser or any of their respective Subsidiaries to disclose information to the extent such information would result in a waiver of attorney-client privilege, work product doctrine, or similar privilege or violate any confidentiality obligation of such Party (provided, however, that such Party shall use reasonable best efforts to permit such disclosure to be made in a manner consistent with the protection of such privilege or to obtain any consent required to allow such disclosure to be made without violation of such confidentiality obligations, as applicable).

 

(d)  Purchaser, Sellers, and the Company shall comply with and use their reasonable best efforts to cause their respective Representatives to comply with all their respective obligations under the Confidentiality Agreement concerning the information disclosed under this Section 6.03.

 

 Section 6.04 Purchaser Financing. After the date of this Agreement, Purchaser shall use commercially reasonable efforts to raise at least $5,000,000 in one or more financing transactions (the “Purchaser Financing”) 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 (or such lesser amount as agreed to by the Parties in writing) to the Company, which loans shall be (i) forgiven upon the Preferred Stock Conversion or (ii) repaid if the Transactions are unwound in accordance with Section 8.01. Purchaser and the Company shall cooperate to structure such allocation of proceeds and the use of such proceeds on a mutually agreeable basis. The Purchaser shall utilize its portion of the net proceeds of the Purchaser Financing to pay off any indebtedness for borrowed money, accounts payable and other liabilities.

 

 Section 6.05 [Reserved]

 

Section 6.06 Post-Closing Agreements and other Deliverables.

 

(a)  Merger Agreement. Following the Closing Date, Purchaser and the Company, and Purchaser and Sellers shall ensure that the Company, enter into the Merger Agreement with respect to the Merger on terms and conditions to be mutually agreed upon by Purchaser on the one hand and the Company and the Sellers on the other hand.

 

(b)  Voting Agreement. Within ten (10) days of the date of this Agreement, Purchaser shall also cause its officers and directors who hold shares of Purchaser (including vested Convertible Securities that are convertible or exchangeable for Purchaser Ordinary Shares) (collective, “Purchaser Insiders”) to execute and deliver a voting agreement in form and substance mutually agreeable to Purchaser, the Sellers and the Company.

 

 

(c)  Use of Proceeds from August 2024 Subscription Agreement. Any proceeds received by Purchaser in connection with that certain Subscription Agreement, dated as of August 28, 2024, between Purchaser and the investor signatory thereto (the “August 2024 Subscription Agreement”) shall be used to repay certain funds that were received by certain Subsidiaries of Purchaser or entities organized under Portuguese law by Purchaser as set forth in Section 6.06(d) of the Purchaser Disclosure Schedule, up to the lesser of (a) the amount of such funds that must be repaid pursuant to the terms and conditions for the receipt of such funds, or (b) €10 million.

 

(d)  Adjustment of Shares Issuable to Sellers. In the event that (i) any shares or securities of Purchaser are issued in connection with the August 2024 Subscription Agreement prior to the effectiveness of the Merger, (ii) the proceeds therefrom are used to repay certain funds that were received by certain Subsidiaries of Purchaser or entities organized under Portuguese law by Purchaser as set forth in Section 6.06(d) of the Purchaser Disclosure Schedule, and (iii) the terms and conditions for the consummation of the Merger pursuant to this Agreement and the Merger Agreement are satisfied, then, within three (3) Business Days of the Merger, Purchaser shall issue a number of Purchaser Ordinary Shares to the Sellers that shall cause their percentage ownership of Purchaser to be the percentage that the Sellers would have owned but for the occurrence of any such issuances in connection with the August 2024 Subscription Agreement as to which the proceeds therefrom were used to repay certain funds as set forth in Section 6.06(d) of the Purchaser Disclosure Schedule.

 

Section 6.07 [Reserved].

 

Section 6.08 Purchaser Stockholders Approval; Standstill.

 

(a)  As promptly as practicable following the Closing Date and the execution and delivery of the Merger Agreement, and after reasonable consultation with the Company, Purchaser shall duly call, convene and hold a special meeting of the holders of the Purchaser Ordinary Shares (the “Purchaser Stockholders Meeting”), to be held on a date no later than 45 days after effective date of a registration statement on Form F-4 or such other applicable form filed with the SEC (the “Registration Statement” and such effective date, the “Registration Statement Effective Date”), unless otherwise required by applicable Laws, in accordance with Irish Laws, including the Irish Companies Act of 2014 (the “ICA”), and the Purchaser Organizational Documents, and as promptly as practicable after the mailing of the Proxy Statement, Purchaser shall solicit proxies from the holders of Purchaser Ordinary Shares to vote in accordance with the recommendation of the Purchaser Board (the “Purchaser Stockholder Approval”) with respect to (i) the Preferred Stock Conversion in compliance with all applicable Laws and regulations, including, but not limited to, the Irish Laws, including the ICA and the rules and regulations of Nasdaq, (ii) the Amended Purchaser Charter, (iii) the election of directors in accordance with Section 1.05(a), (iv) if the Parties determine that approval of the Merger by Purchaser’s stockholders is required, the Merger, (v) approval to opt out of Rule 9 of the Irish Takeover Panel Act, 1997, Takeover Rules, 2022, (vi) the adjournment of such meeting as permitted by this Section 6.08(a), and (vii) any other proposal or proposals that Purchaser reasonably deems necessary or desirable to consummate the Transactions and the Merger (the “Purchaser Proposals”). Purchaser shall use its best efforts to obtain the Purchaser Stockholder Approval by the 45^th day after the Registration Statement Effective Date (the “Initial Purchaser Stockholder Meeting Deadline”), including, without limitation, by causing (x) the Purchaser Board not to withdraw the Purchaser Board Recommendation, (y) the Purchaser Insiders to be present at the Purchaser Stockholders Meeting for quorum purposes and (z) such Purchaser Insiders to vote their respective Purchaser Ordinary Shares in accordance with the Purchaser Board Recommendation; provided, however, for the avoidance of doubt, Purchaser may postpone or adjourn the Purchaser Stockholders Meeting: (A) with the consent of the Company; (B) for the absence of a quorum (other than due to the failure of Purchaser Insiders); or (C) to allow reasonable additional time (not to exceed 20 days) for the filing and distribution of any supplemental or amended disclosure with respect to the Transactions or the Merger that the Purchaser Board has determined in good faith (after consultation with its outside legal counsel) is necessary under applicable Laws and for such supplemental or amended disclosure to be disseminated to and reviewed by Purchaser’s stockholders prior to the Purchaser Stockholders Meeting. Prior to the mailing of the Registration Statement, Purchaser shall be entitled to engage a proxy solicitor that is reasonably satisfactory to the Company and the Sellers, and Purchaser shall keep the Company and the Sellers reasonably informed regarding its solicitation efforts and proxy tallies following the mailing of the Proxy Statement. In connection with the foregoing, the Purchaser Board shall take all necessary action to ensure that the restrictions on business combinations that are provided for in the ICA, and any other similar Law applicable to Purchaser, will not apply to this Agreement, the Transactions, and the transactions contemplated thereby and the Merger, including by approving this Agreement, and the Ancillary Agreements to which Purchaser is a party. Purchaser shall also promptly deliver to the Company a copy of each non-objecting beneficial owners list of Purchaser that is obtained by Purchaser in connection with the Purchaser Stockholders Meeting.

 

 

(b)  If, despite Purchaser’s reasonable best efforts, the Purchaser Stockholder Approval is not obtained by the Initial Purchaser Stockholder Meeting Deadline, Purchaser shall, during the period beginning on the Initial Purchaser Stockholder Meeting Deadline and continuing for 180 days thereafter (the “Extended Purchaser Meeting Deadline”), cause one or more additional Purchaser Stockholders Meetings to be held so as to obtain the Purchaser Stockholder Approval.

 

(c)  Notwithstanding anything in this Agreement to the contrary, from and after the date hereof until (i) the date on which the Purchaser Preferred Shares issued under this Agreement convert into Purchaser Ordinary Shares, (ii) the date on which Purchaser repurchases the Purchaser Shares Consideration from the Sellers in exchange for the Sellers’ Shares in accordance with Section 6.08(b), and (iii) the date, if any, on which this Agreement is terminated pursuant to Article VIII, whichever is earlier (such period of time, the “Restricted Period”), Purchaser hereby covenants and agrees that it will not, without the prior written consent of the Sellers, directly or indirectly sell, transfer, convey, mortgage, pledge, assign or in any way further encumber or alienate the Sellers’ Shares acquired by Purchaser pursuant to this Agreement. In furtherance of the aforementioned covenant, the Parties agree to take such actions as may be necessary to have the Sellers’ Shares certificated (the “Sellers’ Share Certificates”) at the Closing and Purchaser agrees to deliver such Sellers’ Share Certificates to a third-party agent on terms and conditions to be mutually agreed upon by Purchaser on the one hand and the Company and the Sellers on the other hand to hold in escrow until the expiration of the Restricted Period such that (i) if the Purchaser Stockholder Approval is not obtained, then the Sellers’ Share Certificates will be delivered to Sellers, and (ii) upon occurrence of the Purchaser Stockholder Approval, the Sellers’ Share Certificates will be delivered to Purchaser.

 

Section 6.09 Nasdaq Listing.

 

(a)  Purchaser shall use reasonable best efforts to ensure that the Purchaser Ordinary Shares shall have been continually listed on Nasdaq as of and from the date of this Agreement through the Closing Date. Purchaser shall take all steps necessary to cause the Purchaser Ordinary Shares issued to Sellers’ in connection with the Transactions to be approved for listing (subject to notice of issuance) on Nasdaq at or after the Closing pursuant to Nasdaq rules and regulations.

 

(b)  As soon as practicable after the Effective Date, and in any case no less than six weeks prior to the Purchaser Stockholders Meeting, Purchaser will file an initial listing application with Nasdaq. Purchaser, the Sellers and the Company shall use their commercially reasonable efforts to respond to any questions or comments of the staff of Nasdaq.

 

 

Section 6.10 [Reserved].

 

Section 6.11 Reasonable Best Efforts.

 

Upon the terms and subject to the conditions set forth in this Agreement and in accordance with applicable Law (but subject, for the avoidance of doubt, to Section 6.12, which sets forth the exclusive obligations of the Parties with respect to the subject matter of such section), each of the Parties shall, and shall use reasonable best efforts to cause its Affiliates to, use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to ensure that the conditions applicable to such Party set forth in Article VII are satisfied and to consummate the Transactions as promptly as practicable in accordance with the terms of this Agreement, including without limitation using its reasonable best efforts to (a) execute and deliver to each other such other documents, and do such other acts and things, as one or more other Parties may reasonably request for the purpose of consummating the Transactions and the Merger and (b) ensure that its representations and warranties remain true and correct in all material respects through the Closing Date.

 

Section 6.12 Consents; Filings; Further Action.

 

(a)  Subject to the terms and conditions of this Agreement, Purchaser, the Sellers and the Company shall (and shall cause their respective Subsidiaries to) each use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other Parties in doing all things necessary, proper or advisable under applicable Laws to (i) make any necessary filings promptly after the signing of this Agreement and obtain all necessary actions, waivers, registrations, permits, authorizations, Orders, consents and approvals from Governmental Authorities, the expiry or early termination of any applicable waiting periods, and make all necessary registrations and filings (including filings with Governmental Authorities, if any) and take all steps as may be reasonably necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Authorities, in order to consummate the Transactions, obtain the Purchaser Stockholder Approval, effect the Preferred Stock Conversion, and consummate the Merger as promptly as practicable and in any event prior to the Termination Date, including without limitation any requirements under applicable antitrust or similar laws, and (ii) deliver required notices or any necessary additional instruments to, and obtain required consents, waivers or any additional instruments necessary from, any Third Parties in order to consummate the Transactions, obtain the Purchaser Stockholder Approval, effect the Preferred Stock Conversion, and consummate the Merger as promptly as practicable.

 

(b)  Subject to applicable Laws and the requirements of applicable Governmental Authorities, Purchaser, the Sellers and the Company and their respective counsel shall (i) cooperate in good faith with each other in connection with any filing or submission with a Governmental Authority in connection with the Transactions, the Preferred Stock Conversion, and the Merger and in connection with any related investigation or other inquiry by or before a Governmental Authority, including any proceeding initiated by a private Person, (ii) to the extent legally permissible, have the right to review in advance, and each shall consult the other on, any material filing made with, or written materials to be submitted to, any Governmental Authority in connection with the Transactions, the Preferred Stock Conversion, and the Merger and of any material communication received or given in connection with any proceeding by a private Person, in each case regarding any of the Transactions, the Preferred Stock Conversion, and the Merger, (iii) promptly inform each other of any material communication (or any other material correspondence or memoranda) received from, or given to, the U.S. Department of Justice, the U.S. Federal Trade Commission, or any other Governmental Authority and (iv) where legally permissible, promptly furnish each other with copies of all correspondence, filings and substantive written communications between them or their Subsidiaries or Affiliates, on the one hand, and any Governmental Authority or its respective staff, on the other hand, with respect to the Transactions, the Preferred Stock Conversion, and the Merger. In furtherance of the foregoing and subject to applicable Laws and the requirements of Governmental Authorities, Purchaser and the Company shall (with respect to any in-person discussion or meeting, remote video meeting or substantive telephonic discussion or meeting) provide to the other and its counsel with reasonable advance notice of and the opportunity to participate in any material discussion or meeting with any Governmental Authority in respect of any filing, investigation or other inquiry in connection with the Transactions, the Preferred Stock Conversion, and the Merger. Notwithstanding anything to the contrary in this Section 6.12(b), Purchaser, Sellers and the Company may, as each deems advisable and necessary, (x) reasonably designate any competitively sensitive material provided to the other under this Section 6.12 as “Antitrust Counsel Only Material” and (y) redact materials to be provided to the other Party as necessary to comply with contractual arrangements, to address good faith legal privilege or confidentiality concerns, to comply with applicable Law, or to remove references concerning the valuation of Purchaser or the Company and their respective Subsidiaries.

 

 

Section 6.13 Public Announcements.

 

The Parties shall consult with each other before issuing any press release or otherwise making any public statements or other public communication about this Agreement, any Ancillary Agreement or any of the Transactions or the Merger. No Party shall issue any such press release or make any such public statement prior to such consultation and any such release or public statement or other public communication shall be subject to the prior mutual approval of Purchaser, the Sellers and the Company (which approval shall not be unreasonably withheld, conditioned or delayed by either Party), except to the extent required by applicable Law or the Nasdaq rules, in which case that Party shall use its reasonable best efforts to consult with the other Parties before issuing any such release or making any such public statement. Notwithstanding the foregoing, without the prior consent of the others, a Party may (a) communicate with its respective customers, vendors, suppliers, financial analysts, investors and members of the media in a manner consistent with its past practice in compliance with applicable Law to the extent such communications consist of information included in a press release or other document previously approved for external distribution by the other, (b) issue public statements or disseminate information to the extent solely related to the operation of the business of such Party and (c) make any proposed release or statement to the extent that any such proposed release or statement is substantially equivalent to the information that has previously been made public without breach of the obligation under this Section 6.13. Purchaser and the Company will issue a joint press release announcing the execution of this Agreement, and Purchaser will file with the SEC a Report on Form 6-K within four Business Days after the date of execution of this Agreement announcing its entry into this Agreement.

 

Section 6.14 Fees and Expenses.

 

Except as otherwise provided in this Agreement, whether or not the Transactions are consummated, all expenses (including those payable to Representatives) incurred by any Party or on its behalf in connection with this Agreement, the Ancillary Agreements and the Transactions (“Expenses”) shall be paid by the Party incurring those Expenses. For the avoidance of doubt, the Company will not have any liability with respect to any Expenses of Purchaser.

 

Section 6.15 Takeover Statutes.

 

From the date of this Agreement through the Closing (or if earlier, the date on which this Agreement is terminated pursuant to Article VIII), if any takeover statute is or becomes applicable to this Agreement or any of the Transactions, each of Purchaser and the Company shall use their respective reasonable best efforts (a) to ensure that this Agreement and the Transactions may be consummated as promptly as practicable upon the terms and subject to the conditions set forth in this Agreement and (b) to otherwise act to eliminate or minimize the effects of such takeover statute.

 

 

Section 6.16 Notification of Certain Matters.

 

The Company and the Sellers shall give prompt notice to Purchaser, and Purchaser shall give prompt notice to the Company and the Sellers, of (a) the occurrence of any event known to it or him that would reasonably be expected to, individually or in the aggregate, cause to be unsatisfied in any material respect at any time prior to the Closing any condition, with respect to Purchaser, set forth in Sections 7.01 and 7.02, and with respect to the Company or the Sellers, set forth in Sections 7.01 or 7.03 or (b) any action, suit, proceeding, inquiry or known investigation pending or, to the Knowledge of the Company, the Sellers or Purchaser, threatened, that questions or challenges the validity of this Agreement or the ability of any Party to consummate the Transactions or the Merger; provided, however, that the delivery of any notice pursuant to this Section 6.16 shall not limit or otherwise affect the remedies available under this Agreement to the Party receiving such notice nor shall the Party giving such notice be prejudiced with respect to any such matters solely by virtue of having given such notice.

 

Section 6.17 Certain Litigation.

 

(a)  Purchaser shall assume the control and defense at its sole expense of all stockholder litigation against Purchaser, any of its Subsidiaries or any of the directors, managers, or officers of Purchaser or its Subsidiaries, in each case, arising out of or in connection with this Agreement, the Ancillary Agreements or the Transactions (collectively, the “Stockholder Litigation (Purchaser)”); provided, however, that (i) Purchaser shall promptly as practicable notify the Company and the Sellers of such Stockholder Litigation (Purchaser) and (ii) Purchaser shall keep the Company and the Sellers reasonably informed with respect to the status of such Stockholder Litigation (Purchaser). The Company shall assume the control and defense at its sole expense of all stockholder litigation against the Company, any of its Subsidiaries or any of the directors, managers or officers of the Company or its Subsidiaries, in each case, arising out of or in connection with this Agreement, the Ancillary Agreements or the Transactions (collectively, the “Stockholder Litigation (Company)”); provided, however, that (i) the Company shall promptly as practicable notify Purchaser of such Stockholder Litigation (Company) and (ii) the Company shall keep Purchaser reasonably informed concerning the status of such Stockholder Litigation (Company).

 

(b)  Purchaser shall obtain the prior written consent of the Company (which shall not be unreasonably withheld, conditioned, or delayed) before entering into any settlement, understanding, or other agreement relating to such Stockholder Litigation (Purchaser). The Company shall obtain the prior written consent of Purchaser (which shall not be unreasonably withheld, conditioned, or delayed) before entering into any settlement, understanding, or other agreement relating to such Stockholder Litigation (Company).

 

(c)  Each Party shall cooperate, and cause its Affiliates to cooperate, in defense of any Stockholder Litigation (Purchaser) or any Stockholder Litigation (Company) and shall furnish or cause to be furnished such records, information, and testimony, and attend, at each Party’s own expense, such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection with such Stockholder Litigation (Purchaser) or such Stockholder Litigation (Company).

 

 

Section 6.18 Reserved.

 

Section 6.19 Tax Matters.

 

From the date hereof until the Closing Date, Purchaser shall be responsible for preparing and filing, or causing to be prepared and timely filed, all Tax Returns of Purchaser that are required to be filed after the date hereof but on or prior to the Closing Date. All Tax Returns described in this Section 6.19 shall be prepared in a manner consistent with past practice (unless otherwise required by applicable Law or this Agreement). Purchaser shall pay any Taxes reflected on such Tax Returns described in this Section 6.19.

 

Section 6.20 Amended Purchaser Charter.

 

Within three Business Days of obtaining the Purchaser Stockholder Approval, Purchaser shall duly amend and restate its constitution as the Amended Purchaser Charter by filing the Amended Purchaser Charter with the Companies Registration Office of Ireland or as otherwise required to be effective under Irish Laws.

 

Article VII. CONDITIONS

 

Section 7.01 Conditions to Each Party’s Obligation to Consummate the Transactions.

 

The respective obligation of each Party to effect, or cause to be effected, the Transactions is subject to the satisfaction on or before the Closing of each of the following conditions, unless waived in writing by each of Purchaser, the Sellers, and the Company:

 

(a)

Approvals. The Parties shall have received (i) all approvals of any Governmental Authority necessary to consummate the Transactions, (ii) all approvals required by Nasdaq, and (iii) all consents, waivers or any additional instruments from any Third Parties necessary to consummate the Transactions.

 

(b)

No Orders. There shall not have been enacted, promulgated or made effective after the date of this Agreement any Law or Orders by a Governmental Authority of competent jurisdiction that enjoins or otherwise prohibits or makes illegal or any Legal Action by any Governmental Authority seeking to enjoin or prohibit or make unlawful, consummation of the Transactions and there shall not be in effect any injunction (whether temporary, preliminary or permanent) by any Governmental Authority of competent jurisdiction that enjoins or otherwise prohibits consummation of the Transactions.

 

(c)

Irish Stamp Duty. Complete review and consideration of Irish Stamp Duty implications.

 

Section 7.02 Conditions to Obligations of Purchaser.

 

The obligations of Purchaser to effect, or cause to be effected, the Transactions are also subject to the satisfaction on or before the Closing of the following conditions, unless waived in writing by Purchaser:

 

(a)  Representations and Warranties.

 

(w)

Each of the representations and warranties of the Company set forth in Sections 3.06(a), (b), and (g) (Capitalization) shall be true and correct in all respects (except for (A) any inaccuracies that individually or in the aggregate are de minimis or (B) to the extent any such representation and warranty expressly speaks as of a specified date, in which case, subject to the qualifications as set forth in the preceding clause (A), as of such date) as of the Closing as though then made on such date;

 

 

(x)

Each of the representations and warranties of the Company set forth in Section 3.01 (Organization and Power), Section 3.04 (Corporate Authorization), Section 3.06 (Capitalization) (other than subsections (a), and (b) and (g)), and Section 3.24 (Brokers) (A) that are not qualified by references to “material” or any other materiality qualifications shall be true and correct in all material respects as of the Closing as though made on such date (except to the extent any such representation and warranty expressly speaks as of a specified date, in which case as of such date) and (B) that are qualified by references to “material” or any other materiality qualifications shall be true and correct in all respects as of the Closing as though made on such date (except to the extent any such representation and warranty expressly speaks as of a specified date, in which case as of such date);

 

(y)

The remaining representations and warranties of the Company contained in Article III (Representations and Warranties of the Company) shall be true and correct, in each case as of the Closing as though made on such date (except to the extent any such representation and warranty expressly speaks as of a specified date, in which case as of such date), except where the failure of any such representations and warranties to be so true and correct (without regard to any materiality, in all material respects, Company Material Adverse Effect, or similar qualifications set forth in any such representation or warranty) would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect; and

 

(z)

The representations and warranties of the Sellers contained in Article V (Representations and Warranties of the Sellers) shall be true and correct, in each case as of the Closing as though made on such date (except to the extent any such representation and warranty expressly speaks as of a specified date, in which case as of such date), except where the failure of any such representations and warranties to be so true and correct would not, individually or in the aggregate, reasonably be expected to prevent, or materially impair or delay, the ability of the Sellers to consummate the Transactions or otherwise perform any of their obligations under this Agreement.

 

(b)  Performance of Obligations. The Company and each Seller shall have performed in all material respects all obligations and covenants required to be performed by it or him at or before the Closing under this Agreement.

 

(c)  Absence of Company Material Adverse Effect. There shall not have been a Company Material Adverse Effect.

 

(d)  Receipt of Other Deliverables. Purchaser shall have received each of the agreements, instruments, and other documents set forth in Section 1.04(b).

 

 

Section 7.03 Conditions to Obligations of the Company and Sellers.

 

The obligations of the Company and Sellers to effect, or cause to be effected, the Transactions is also subject to the satisfaction on or before the Closing of the following conditions unless waived in writing by the Company and Sellers:

 

(a)

Representations and Warranties.

 

(i)

Each of the representations and warranties of Purchaser set forth in Sections 4.06(a), (b) and (g) (Capitalization) shall be true and correct in all respects (except for (A) any inaccuracies that individually or in the aggregate would not reasonably be expected to be Material or (B) to the extent any such representation and warranty expressly speaks as of a specified date, in which case, subject to the qualifications as set forth in the preceding clause (A), as of such date) as of the Closing as though then made on such date;

 

(ii)

each of the representations and warranties of Purchaser set forth in Section 4.01 (Organization and Power), Section 4.04 (Corporate Authorization), Section 4.06 (Capitalization) (other than subsections (a) and (b) and (g)), Section 4.24 (Anti-Takeover Arrangements), and Section 4.28 (Brokers) shall be true and correct in all respects as of the Closing as though made on such date (except to the extent any such representation and warranty expressly speaks as of a specified date, in which case as of such date), except where the failure of any such representations and warranties to be so true and correct would not, individually or in the aggregate, reasonably be expected to be Material; and

 

(iii)

the remaining representations and warranties of Purchaser contained in Article IV (Representations and Warranties of Purchaser) shall be true and correct in all respects, in each case as of the Closing as though made on such date (except to the extent any such representation and warranty expressly speaks as of a specified date, in which case as of such date), except where the failure of any such representations and warranties to be so true and correct would not, individually or in the aggregate, reasonably be expected to be Material.

 

(b)

Performance of Obligations Purchaser shall have performed in all material respects all obligations and covenants required to be performed by it at or before the Closing under this Agreement.

 

(c)

Absence of Purchaser Material Adverse Effect. There shall not have been a Purchaser Material Adverse Effect.

 

(d)

Listing. The Purchaser Ordinary Shares (i) shall be listed on Nasdaq and (ii) shall not have been suspended, as of the Closing Date, by the SEC or Nasdaq from trading on Nasdaq, nor shall Purchaser (A) have received any notice or communication from Nasdaq noting noncompliance with listing requirements or threatening suspension or delisting of the Purchaser Ordinary Shares from trading or (B) failed to meet any of the applicable continued listing requirements required in order to be in compliance with all such Nasdaq listing and maintenance requirements.

 

(e)

Purchaser Lock-Up. Purchaser shall have received and delivered to the Company an executed Purchaser Lock-Up Agreement from each director and officer of Purchaser.

 

 

(f)

Purchaser Preferred Shares Certificate of Designation. The Purchaser Preferred Shares Certificate of Designation shall have been filed with the Companies Registration Office of Ireland (the “CRO”) or its equivalent.

 

(g)

Receipt of Other Deliverables. The Company shall have received each of the agreements, instruments, and other documents set forth in Section 1.04(a).

 

Section 7.04 Frustration of Closing Conditions.

 

Neither the Company and the Sellers, on the one hand, nor Purchaser, on the other hand, may rely, either as a basis for not consummating the Transactions or for terminating this Agreement and abandoning the Transactions, on the failure of any condition set forth in Section 7.01, Section 7.02 or Section 7.03, as the case may be, to be satisfied if such failure was principally caused by such Party’s breach of any provision of this Agreement or failure to use the efforts to consummate the Transactions, as required by and subject to this Agreement.

 

Article VIII. UNWINDING, TERMINATION, AMENDMENT AND WAIVER

 

Section 8.01 Unwinding of the Transactions.

 

Upon the occurrence of any of the events set forth below, Purchaser shall repurchase from the Sellers the Purchaser Shares Consideration from the Sellers in whole and not in part, and in exchange of such repurchase of the Purchaser Shares Consideration, Purchaser shall transfer and assign, or caused to be transferred and assigned, back to each Seller the number of Sellers’ Shares set forth below such Seller’s signature on the signature page hereto under the caption “Number of Sellers’ Shares” (such transactions collectively, the “Purchaser Repurchase”):

 

(a)  Failure to Obtain Purchaser Shareholder Approval. If, despite Purchaser’s reasonable best efforts, the Purchaser Stockholder Approval is not obtained by the Extended Purchaser Meeting Deadline, then, within 15 calendar days after the Extended Purchaser Meeting Deadline, Purchaser shall complete the Purchaser Repurchase;

 

(b)  Failure to Allocate Cash from Purchaser Financing. If Purchaser fails to allocate cash raised from the Purchaser Financing to the Company in compliance with Section 6.04 of this Agreement, and Purchaser continues to fail to do so within 5 calendar days after written notice from the Company, then Purchaser shall within 10 calendar days after the date of the Company’s notice to complete the Purchaser Repurchase.

 

Section 8.02 Termination by Mutual Consent; Automatic Termination.

 

(a) This Agreement may be terminated at any time before the Closing by mutual written consent of Purchaser, the Sellers and the Company.

 

(b) This Agreement shall automatically terminate upon Purchaser’s repurchase the Purchaser Shares Consideration from the Sellers pursuant to Section 8.01.

 

Section 8.03 Termination by any of Purchaser, the Sellers or the Company.

 

This Agreement may be terminated by either Purchaser, the Sellers or the Company at any time before the end of the Restricted Period, by written notice from such Party to the other Parties:

 

 

(a) if the Closing has not occurred on or before the date that is thirty (30) days from the date of this Agreement (the “Termination Date”), except that the right to terminate this Agreement under this Section 8.02(a) shall not be available to any Party who is then in material breach of this Agreement and such breach shall have proximately caused the failure to consummate the Transactions on or before the Termination Date; or

 

(b) if any Law or Order is enacted, issued, promulgated or entered by a Governmental Authority of competent jurisdiction (including Nasdaq) that permanently enjoins or otherwise prohibits the consummation of the Transactions and (in the case of any Order) such Order has become final and non-appealable.

 

Section 8.04 Termination by the Company or the Sellers.

 

This Agreement may be terminated and the Transactions abandoned by the Company or the Sellers at any time before the Closing:

 

(a) if Purchaser breaches any of its representations, warranties, covenants or agreements contained in this Agreement, which breach (i) would give rise to the failure to satisfy the conditions set forth in Section 7.01 or Section 7.03 at the Closing and (ii) such breach cannot be or has not been cured by the Termination Date; provided, however, that the Company shall not have the right to terminate this Agreement pursuant to this Section 8.03(a) if the Company is then in breach of any of its representations, warranties, covenants or agreements contained in this Agreement that would result in the conditions precedent to Closing set forth in Section 7.01 or Section 7.02 not being satisfied; or

 

(b) if all of the conditions set forth in Section 7.01 and Section 7.02 have been satisfied (other than any condition the failure of which to be satisfied has been principally caused by the breach of this Agreement by Purchaser or any of its Affiliates and conditions that, by their nature, are to be satisfied at Closing and which are, at the time of termination, capable of being satisfied) and Purchaser has failed to fulfill its obligations and agreements contained in this Agreement to consummate the Closing following written notice of such satisfaction from the Company and the Sellers and that the Company and the Sellers are ready, willing and able to consummate the Closing.

 

Section 8.04 Termination by Purchaser.

 

This Agreement may be terminated and the Transactions abandoned by Purchaser at any time before the Closing:

 

(a) if the Company or any Seller breaches any of its representations, warranties, covenants or agreements contained in this Agreement, which breach (i) would give rise to the failure to satisfy the conditions set forth in Section 7.01 or Section 7.02 at the Closing and (ii) such breach cannot be or has not been cured by the Termination Date; provided, however, that Purchaser shall not have the right to terminate this Agreement pursuant to this Section 8.04(a) if Purchaser is then in breach of any of its representations, warranties, covenants or agreements contained in this Agreement that would result in the conditions precedent to Closing set forth in Section 7.01 or Section 7.03 not to be satisfied; or

 

(b) if all of the conditions set forth in Section 7.01 and Section 7.03 have been satisfied (other than any condition the failure of which to be satisfied has been principally caused by the breach of this Agreement by the Company, a Seller or any of their Affiliates and conditions that, by their nature, are to be satisfied at Closing and which are, at the time of termination, capable of being satisfied) and the Company or one or both Sellers has failed to fulfill its, his or their obligations and agreements contained in this Agreement to consummate the Closing following written notice of such satisfaction from Purchaser and that Purchaser is ready, willing and able to consummate the Closing.

 

 

Section 8.05 Effect of Termination.

 

If this Agreement is validly terminated pursuant to this Article VIII, except as set forth in this Section 8.05, it shall, to the fullest extent permitted by applicable Law, become void and of no further force and effect, with no Liability (except as provided in Section 8.06) on the part of any Party (or any stockholder, Affiliates or Representative of such Party), except that, if such termination results from (a) fraud or (b) the willful and material (i) failure of any Party to perform its covenants, obligations or agreements contained in this Agreement or (ii) breach by any Party of its representations or warranties contained in this Agreement, then such Party shall be liable for any damages incurred or suffered by the other Parties as a result of such failure or breach. The provisions of Section 6.03(d) (Confidentiality), Section 6.14 (Fees and Expenses), Section 8.05 (Effect of Termination), Section 8.06 (Fees and Expenses Following Termination), and Article X (Miscellaneous) shall survive any valid termination of this Agreement.

 

Section 8.06 Fees and Expenses Following Termination.

 

In the event this Agreement is terminated, all Expenses incurred in connection with this Agreement, the Ancillary Agreements, and the Transactions shall be paid in accordance with the provisions of Section 6.14; provided, however, that if this Agreement is terminated by the Company or the Sellers pursuant to Section 8.03(b) or by Purchaser pursuant to Section 8.04(b), the non-terminating Party shall be required to pay a breakup fee of $100,000 to the terminating party.

 

ARTICLE IX

SURVIVAL; INDEMNIFICATION

 

Section 9.01 Survival.

 

(a)  The representations and warranties and any other agreement contemplated in this Agreement agreed to by the Company shall survive until the earlier of (i) the conversion of the Purchaser Preferred Shares into Purchaser Ordinary Shares; or (ii) a period of 24 months following the Closing Date, except for the representations and warranties contained in Section 3.01 (Organization and Power), Section 3.06 (Capitalization), Section 3.04 (Capacity; Enforceability); and Section 3.15 (Taxes), which shall survive until the expiration of the applicable statute of limitations; provided, however, that such survival period shall not apply to claims to the extent involving fraud, willful misconduct or intentional misrepresentation on the part of the Company.

 

(b)  The representations and warranties and any other agreement contemplated by this Agreement agreed to by Purchaser shall survive until the earlier of (i) the conversion of the Purchaser Preferred Shares into Purchaser Ordinary Shares; or (ii) for a period of 24 months from the Closing Date, except for representations and warranties contained in Section 4.01 (Organization and Power), Section 4.04 (Corporate Authorization), Section 4.06 (Capitalization), and Section 4.28 (Brokers), which will continue in full force and effect until the expiration of the applicable statute of limitations; provided, however, that such survival period shall not apply to claims to the extent involving fraud, willful misconduct or intentional misrepresentation on the part of Purchaser.

 

 

(c)  The representation and warranties and any other agreement contemplated by this Agreement agreed to by the Sellers shall survive until the earlier of (i) the conversion of the Purchaser Preferred Shares into Purchaser Ordinary Shares; or (ii) for a period of 24 months from the Closing Date, except for representations and warranties contained in Section 5.02 (Capacity; Enforceability); Section 5.03 (Capitalization); and Section 5.07 (Accredited Seller Status), which will continue in full force and effect until the expiration of the applicable statute of limitations; provided, however, that such survival period shall not apply to claims to the extent involving fraud, willful misconduct or intentional misrepresentation on the part of the Sellers.

 

Section 9.02 Indemnification by the Sellers.

 

(a)  Subject to the provisions and limitations of this Article IX, from and after the Closing Date, each Seller, severally and not jointly, shall indemnify and hold harmless Purchaser and its Affiliates (the “Purchaser Indemnified Parties”) and the Company and its Affiliates (other than the Sellers) (the “Company Indemnified Parties” and, together with the Purchaser Indemnified Parties, the “Indemnified Parties”) from and against any and all claims, liabilities, damages, losses, demands, obligations, deficiencies, costs, and expenses of any nature whatsoever, including, without limitation, reasonable attorneys’ fees, accountants’ fees, and all costs of investigation, and other expenses of defending any actions or claims, amounts of judgment and amounts paid in settlement, whether or not involving a Third Party Claim (collectively referred to as the “Damages”), suffered by an Indemnified Party resulting from, arising out of or based upon (without duplication) (i) any inaccuracy in or breach of any of the representations or warranties made by the Seller in this Agreement or in any Ancillary Agreement to which he is a party or (ii) any breach or non-fulfillment of any covenants, agreements or obligation of the Sellers set forth in this Agreement or in any Ancillary Agreement to which he is a party (each claim for indemnification made by an Indemnified Party pursuant to this Article IX, a “Claim”).

 

(b)  The Indemnified Parties shall not be entitled to assert any Claim for indemnification pursuant to this Section 9.02 for Claims for indemnification with time restrictions under Section 9.01(a) after the dates provided in ‎Section 9.01(a); provided, however, that if on or prior to such date a Notice of Claim (as defined below) shall have been provided pursuant to Section 9.05 hereof for such indemnification, the Indemnified Parties shall continue to have the right to be indemnified with respect to such indemnification claim until such claim for indemnification has been satisfied or otherwise resolved as provided in this Article IX.

 

Section 9.03 Indemnification by the Company

 

(a)  Subject to the provisions of this Article IX, from and after the Closing Date, the Company shall indemnify and hold harmless the Seller Indemnified Parties and the Purchaser Indemnified Parties from and against any and all Damages suffered by the Seller Indemnified Parties and the Purchaser Indemnified Parties resulting from, arising out of or based upon (without duplication) (i) any inaccuracy in or breach of any of the representations or warranties made by the Company in this Agreement or in any Ancillary Agreement to which the Company is a party or (ii) any breach or non-fulfillment of any covenants, agreements or obligations of the Company set forth herein or in any Ancillary Agreement to which the Company is a party.

 

(b)  None of the Seller Indemnified Parties or the Purchaser Indemnified Parties shall be entitled to assert any claim for indemnification pursuant to this Section 9.03 after the dates provided in Section 9.01(a); provided, however, that if on or prior to such date a Notice of Claim shall have been given pursuant to Section 9.05 for such indemnification, such Indemnified Parties shall continue to have the right to be indemnified with respect to such indemnification claim until such claim for indemnification has been satisfied or otherwise resolved as provided in this Article IX.

 

 

Section 9.04 Indemnification by Purchaser

 

(a)  Subject to the provisions of this Article IX, from and after the Closing Date, Purchaser shall indemnify and hold harmless the Seller Indemnified Parties and the Company Indemnified Parties from and against any and all Damages suffered by the Seller Indemnified Parties and the Company Indemnified Parties resulting from, arising out of or based upon (without duplication) (i) any inaccuracy in or breach of any of the representations or warranties made by Purchaser in this Agreement or in any Ancillary Agreement to which Purchaser is a party or (ii) any breach or non-fulfillment of any covenants, agreements or obligations of Purchaser set forth herein or any or in any Ancillary Agreement to which Purchaser is a party.

 

(b)  None of the Seller Indemnified Parties or the Company Indemnified Parties shall be entitled to assert any claim for indemnification pursuant to this Section 9.04 after the dates provided in Section 9.01(b); provided, however, that if on or prior to such date a Notice of Claim shall have been given pursuant to Section 9.05 for such indemnification, such Indemnified Parties shall continue to have the right to be indemnified with respect to such indemnification claim until such claim for indemnification has been satisfied or otherwise resolved as provided in this Article IX.

 

Section 9.05 Indemnification Procedures.

 

(a)  Upon obtaining knowledge of any claim or demand that has given rise to a Claim under Section 9.02, Section 9.03 or Section 9.04, the Indemnified Party or Parties shall give written notice (“Notice of Claim”) of such Claim to the applicable indemnifying party (each, an “Indemnifying Party”). In each case, such Notice of Claim shall specify in reasonable detail such information as the Indemnified Parties may have with respect to such Claim (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same); provided, however, that, subject to the limitations set forth in Section 9.01, Section 9.02, Section 9.03 and Section 9.04, no failure or delay by the party giving the Notice of Claim shall reduce or otherwise affect the obligation of the Indemnifying Party unless and to the extent the Indemnifying Party is thereby prejudiced.

 

(b)  Within 30 Business Days of receiving a Notice of Claim, the Indemnifying Party may object to such Claim, stating in reasonable detail the bases for such objection. Any objection to a Notice of Claim must be signed by one or more representatives of the Indemnifying Party or its counsel and shall set forth in reasonable detail the items as to which disagreement exists (the “Disputed Matters”). If an objection is delivered, the Indemnified Party and the Indemnifying Party shall negotiate in good faith to resolve in writing any Disputed Matters.

 

 

(c)  If any lawsuit or other action is filed or instituted against any of the Indemnified Parties with respect to a matter subject to indemnity hereunder (a “Third Party Claim”), notice thereof (a “Third Party Notice”) shall be given to the Indemnifying Party as promptly as practicable (and in any event within 15 calendar days after the service of the citation or summons). Subject to the limitations set forth in Section 9.01, Section 9.02, Section 9.03 and Section 9.04, the failure of the Indemnified Parties to give timely notice hereunder shall not affect rights to indemnification hereunder, except to the extent the Indemnifying Party has actually been prejudiced as a result. After receipt of a Third Party Notice, if the Indemnifying Party provides evidence reasonably satisfactory to the Indemnified Party that it has the ability to pay the amounts claimed in the Third Party Claim and that the Third Party Claim relates to a matter for which indemnification is proper under this Agreement, the Indemnifying Party shall be entitled, if it so elects, (i) to take control of the defense and investigation of such Third Party Claim, (ii) to employ and engage attorneys of its own choice to handle and defend the Third Party Claim (the selection of such attorneys to be subject to approval of the Indemnified Party, such approval not to be unreasonably withheld, conditioned or delayed), at the Indemnifying Party’s cost, risk and expense, and (iii) to compromise or settle such Third Party Claim; provided, however, that such Third Party Claim shall not be compromised or settled without the written consent of the Indemnified Party, which consent shall not be unreasonably withheld, conditioned or delayed. The Indemnified Party shall, and shall cause its Affiliates to, cooperate in all reasonable respects with the Indemnifying Party and such attorneys in the investigation, trial and defense of such lawsuit or action and any appeal arising therefrom for which the Indemnifying Party has assumed the defense; and the Indemnified Party may, at the Indemnified Party’s own cost, participate in the investigation, trial and defense of such lawsuit or action and any appeal arising therefrom. The Parties shall also cooperate with each other in any notifications to insurers. If the Indemnifying Party fails to assume the defense of such claim within 30 calendar days after receipt of the Third Party Notice (or within such shorter period of time as may be necessary to prudently defend such claim), the Indemnified Party against which such claim has been asserted will (upon delivering notice to such effect to the Indemnifying Party) have the right to undertake the defense, compromise or settlement of such claim and the Indemnifying Party shall have the right to participate therein at the Indemnifying Party’s cost; provided, however, that such claim shall not be compromised or settled without the written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, conditioned or delayed. In the event the Indemnified Party assumes the defense of the claim, the Indemnified Party will keep the Indemnifying Party informed (including, as necessary, updates from counsel) of the progress of any such defense, compromise or settlement, when and as reasonably requested by the Indemnifying Party. Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume control of such defense (unless otherwise agreed to in writing by the Indemnified Party) and shall pay the fees and expenses of counsel retained by the Indemnified Party to the extent such underlying claim is indemnifiable under this Article IX if (A) the Claim relates to or arises in connection with any criminal or quasi criminal proceeding, action, indictment, allegation or investigation, (B) the claim seeks an injunction or equitable or other non-monetary relief against the Indemnified Party, (C) the Indemnified Party reasonably believes that there exists or could arise a conflict of interest that, under applicable principles of legal ethics, could prohibit a single lawyer or law firm from representing both the Indemnified Party and the Indemnifying Party in such claim or action, and such conflict has not been timely waived upon petition by the Indemnified Party, (D) the Indemnifying Party failed or is failing to vigorously prosecute or defend such claim, or (E) the Indemnified Party reasonably believes that the Damages relating to the claim would exceed the maximum amount that such Indemnified Party would then be entitled to recover under the applicable provisions of Article IX.

 

(d)  All Claims by Indemnified Parties shall be net of any insurance proceeds actually received as a result of the matter for which indemnification is claimed.

 

(e)  Once Damages are agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article IX, the Indemnifying Party shall satisfy its obligations within 15 Business Days of such agreement or final, non-appealable adjudication by wire transfer of immediately available funds to an account designated by such Indemnified Party.

 

Section 9.06 Limitation on Indemnification Obligations. Notwithstanding anything in this Agreement to the contrary, the liability of the Company, the Sellers and Purchaser to the Indemnified Parties with respect to claims for indemnification pursuant to Sections 9.02(a)(i), 9.03(a)(i) and 9.04(a)(i) (but not with respect to the Fundamental Representations for which recovery shall not be so limited) is subject to the following limitations:

 

1.

None of the Indemnifying Parties shall, in the aggregate, be liable to the Indemnified Parties for Damages arising under Sections 9.02(a)(i), 9.03(a)(i) and 9.04(a)(i) (other than with respect to acts of fraud or willful misconduct or the Fundamental Representations for which recovery shall not be so limited) to the extent that the amounts otherwise indemnifiable for such breaches exceeds $4,000,000.

 

 

2.

The Indemnifying Parties shall not be liable to the Indemnified Parties for Damages arising under Sections 9.02(a)(i), 9.03(a)(i) and 9.04(a)(i) (other than with respect to acts of fraud, willful misconduct or the breach of Fundamental Representations for which recovery shall not be so limited) until and unless the aggregate amounts indemnifiable for such breaches exceeds $400,000. In the event the Indemnified Parties’ claim for Damages, in the aggregate, exceeds $400,000, the Indemnified Parties shall be entitled to those amounts in excess of $400,000, except for fraud, willful misconduct or the breach of Fundamental Representations, which shall be unlimited.

 

3.

With respect to Sellers’ indemnification obligations to the Indemnified Parties under Section 9.02(a)(i), notwithstanding other limitations provided under this Section 9.06, shall be the shared obligations of the Sellers on a pro rata basis.

 

Section 9.07 Exclusive Remedy.

 

The rights of the Indemnified Parties under this Article IX shall be the exclusive remedy of such Indemnified Parties with respect to Claims resulting from any breach by the Indemnifying Parties of any representation, warranty, covenant or agreement contained in this Agreement; provided, however, that this Section 9.06 is not intended in any way to limit or restrict the right of any Party to separately seek equitable remedies, including injunctive relief or to pursue a claim for fraud or other non-waivable rights of action.

 

Section 9.08 Mitigation.

 

The Party seeking indemnification under this ‎Article IX shall (a) to the extent required by applicable Law, use commercially reasonable efforts to mitigate any Damages that form the basis of a Claim hereunder and (b) use commercially reasonable efforts to seek recovery from available insurance policies in respect of the Damages which form the basis of a Claim hereunder; provided, that in no event shall the Indemnified Party be required to commence or threaten litigation against any third party in respect of such recovery or take any other action if it would reasonably be expected to be detrimental to such Party. In the event an Indemnified Party receives insurance proceeds after having received payment from (or on behalf of) an Indemnifying Party pursuant to this ‎Article IX, then to the extent such insurance proceeds were not taken into account in determining the amount of Damages required to be paid by the Indemnifying Party to such Indemnified Party, the Indemnified Party shall refund to the Agreement Party up to the lesser of (i) the amount of such insurance proceeds so received and (ii) the amount of the indemnification payment received by the Indemnified Party from the Indemnifying Party with respect thereto pursuant to this ‎Article IX, in each case after deducting therefrom the amount of any costs or expenses incurred in procuring such recovery (including any applicable premium adjustments), net of any Taxes imposed on the Indemnified Party that arise from having received amounts under the applicable insurance policies; provided that the amount the Indemnified Party is required to refund pursuant to this sentence shall not exceed the amount by which the indemnification payment actually paid to the Indemnified Party in respect of such Damages pursuant to this ‎Article IX would have been reduced pursuant to this ‎Section 9.07 had such recovery been received prior to the date of such indemnification payment.

 

Section 9.09 Tax Treatment.

 

All amounts paid with respect to indemnity claims under this Agreement shall be treated by the parties hereto for all Tax purposes as adjustments to the Purchase Price, unless otherwise required by Law.

 

 

Article X.

MISCELLANEOUS

 

Section 10.01 Certain Definitions.

 

For purposes of this Agreement:

 

(a) “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with, such first Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), when used with respect to any Person, means the power to direct or cause the direction of the management or policies of such Person, directly or indirectly, whether through the ownership of voting securities, by Contract or otherwise.

 

(b) “Ancillary Agreements” means, collectively, this Agreement, the Purchaser Preferred Shares Certificate of Designation, the Seller Lock-Up Agreements, the Purchaser Lock-Up Agreements and any other agreements, documents or certificates entered into or delivered pursuant hereto or thereto.

 

(c) “Anti-Corruption Laws” means the U.S. Foreign Corrupt Practices Act of 1977 (as amended), the United Kingdom Bribery Act 2010, and any other applicable anti-bribery or anti-corruption Law.

 

(d) “Anti-Money Laundering Laws” means any applicable laws, regulations or orders relating to anti-money laundering, counter-terrorist financing, or record-keeping and reporting requirements in any jurisdiction in which the Company or any its Subsidiaries is located or conducting business including, but not limited to, the UK Proceeds of Crime Act 2002, the Money Laundering Control Act of 1986, the Bank Secrecy Act of 1970, and the USA PATRIOT Act of 2001 (as amended and updated).

 

(f)  “Business Day” means any day other than Saturday, Sunday or a day on which commercial banks in New York, New York are authorized or required by Law to close, and shall consist of the time period from 12:01 a.m. through 12:00 midnight New York City time.

 

(g)  “Code” means the Internal Revenue Code of 1986 (or any similar provision of applicable state, local, or non-U.S. Law).

 

(h)  “Company Assets” means any material assets of the Company or any of its Subsidiaries.

 

(i)  “Company Incorporation Date” means September 30, 2010.

 

 

(j)  “Company Material Adverse Effect” means any change, event, violation, inaccuracy, effect or circumstance (each, an “Effect”) that, individually or in the aggregate with any one or more other Effects, would reasonably be expected to (i) result in a material adverse effect on the business, assets, Liabilities, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole or (ii) prevent, or materially impair or delay the ability of the Company to consummate the Transactions or otherwise perform any of its obligations under this Agreement; provided, however, no Effect (by itself or when aggregated or taken together with any and all other Effects) resulting from, arising out of, attributable to, or related to any of the following shall be deemed to be or constitute a “Company Material Adverse Effect,” and no Effect (by itself or when aggregated or taken together with any and all other such Effects) resulting from, arising out of, attributable to, or related to any of the following shall be taken into account when determining whether a “Company Material Adverse Effect” has occurred or may, would or could occur: (A) general economic conditions (or changes in such conditions) in the United States or any other country or region in the world, or conditions in the global economy generally; (B) conditions (or changes in such conditions) in the securities markets, credit markets, currency or cryptocurrency markets or other financial markets in the United States or any other country or region in the world; (C) conditions (or changes in such conditions) in the industries in which the Company and its Subsidiaries conduct business; (D) changes in political conditions in the United States or any other country or region in the world or acts of war, sabotage or terrorism (including any escalation or general worsening of any such acts of war, sabotage or terrorism) in the United States or any other country or region in the world; (E) earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events in the United States or any other country or region in the world; (F) pandemics, epidemics or disease outbreaks or any escalation or worsening of any of the foregoing (including, for the avoidance of doubt, any effect resulting from, arising out of or otherwise related to COVID-19 (including any impact of any associated shutdown, shelter in place or non-essential business order or other similar measures mandated or recommended by any applicable Governmental Authority)); (G) the announcement of this Agreement or the pendency or consummation of the Transactions, including, in any such case, the impact on relationships, contractual or otherwise, with customers, suppliers, vendors, lenders, investors, licensors, licensees, venture partners or employees (other than, in each case, for purposes of any representation or warranty set forth in Section 3.03 or Section 3.05); (H) changes in Law or other legal or regulatory conditions, or the interpretation of such Law or regulatory conditions, or changes in GAAP or other accounting standards (or the interpretation of such standards), or that result from any action taken for the purpose of complying with any of the foregoing; (I) any actions taken or failure to take action, in each case, to which Purchaser has expressly requested or consented to, or compliance with the terms of, or the taking of any action required or contemplated by, this Agreement, or the failure to take any action prohibited by this Agreement; or (L) the impact on the Company of any action taken by, or at the request of, Purchaser including, any breach of this Agreement by Purchaser; provided, further, that any Effect relating to or arising out of or resulting from any change or event referred to in clauses (A) through (F) or (H) above may constitute, and be taken into account in determining the occurrence of, a Company Material Adverse Effect if and only to the extent that such change or event has a disproportionate impact on the Company and its Subsidiaries as compared to other participants that operate in the industry in which the Company and its Subsidiaries operate.

 

(k)  “Confidentiality Agreement” means that certain non-disclosure agreement, dated as of October 2, 2024, by and between Purchaser and the Company.

 

(l)  “Contract” means any written or oral contract, agreement, indenture, note, bond, loan, lease, sublease, mortgage, license, sublicense, obligation or other binding arrangement.

 

(m)  “Convertible Securities” means the Company’s or Purchaser’s outstanding other securities exchangeable or convertible into shares of their respective common stock or ordinary shares, including preferred stock or options

 

(n)  “COVID-19” means the Coronavirus, SARS-CoV-2 or COVID-19, and all related strains, mutations or variations, including any resurgence or any evolutions or mutations of COVID-19 and/or related or associated epidemics, pandemics, disease outbreaks or public health emergencies.

 

 

(o)  “Environmental Laws” means all Laws relating to (i) pollution, contamination, protection of the environment or health and safety (regarding Hazardous Substances), (ii) emissions, discharges, disseminations, releases or threatened releases of Hazardous Substances into the environment, including air (indoor or outdoor), surface water, groundwater, soil, land surface or subsurface, buildings, facilities, real or personal property or fixtures or (iii) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of, or exposure to, Hazardous Substances. “Environmental Laws” includes the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq., the Clean Water Act, 33 U.S.C. § 1251 et seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. § 136 et seq., the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq., the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq., the Safe Drinking Water Act, 42 U.S.C. § 300f et seq., the Endangered Species Act, 16 U.S.C. § 1531 et seq., the Solid Waste Disposal Act, as amended by the Resource Conservation and Control Act, 42 U.S.C. § 6901 et seq. and all applicable analogous state or local statutes or ordinances. The term “Environmental Laws” also includes similar environmental laws enacted in the European Union or any other foreign jurisdiction that apply to Purchaser or any other Party.

 

(p)  “ERISA Affiliate” means, with respect to any Person, any trade or business (whether or not incorporated) that is treated as a single employer with such Person within the meaning of Section 4001 of ERISA or Sections 414(b), (c), (m) or (o) of the Code.

 

(q)  “Ex-Im Laws” means all applicable Laws, rules and regulations relating to export, re-export, transfer or import controls (including the Export Administration Regulations administered by the U.S. Department of Commerce, and customs and import Laws administered by U.S. Customs and Border Protection).

 

(r)  “Governmental Authority” means (i) any federal, state, local, foreign or international government or governmental authority, regulatory or administrative agency, governmental or quasi-governmental commission, department, board, bureau, agency or instrumentality, court, tribunal, arbitrator, arbitral body (public or private) or other similar authority; (ii) any political subdivision of any of the foregoing; and (iii) any regulatory body exercising authority over an applicable Person comparable to any of the foregoing, or any instrumentality of any the foregoing.

 

(s)  “Hazardous Substances” means any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral, or gas, in each case, whether naturally occurring or manmade, that is defined or regulated as hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect under any Environmental Law, including but not limited to any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation, polychlorinated biphenyls, mold, and perfluoroalkyl and polyfluoroalkyl substances.

 

(t)  “Intellectual Property” means all intellectual property and other similar proprietary rights in any jurisdiction throughout the world, including any and all (i) inventions (whether or not patentable), invention disclosures, patents and patent applications (including divisionals, provisionals, continuations, continuations-in-part, and renewal applications), and any renewals, extensions, or reissues; (ii) trademarks, service marks, trade dress, logos, slogans, trade names, assumed names, corporate names, domain names and other source identifiers, including all registrations and applications for registration of the foregoing, and all goodwill associated with any of the foregoing; (iii) copyrights (including all registrations and applications for registration), copyrightable subject matter, original works of authorship, and moral rights; (iv) rights in Software, (v) trade secrets, including confidential and proprietary information and know-how (including processes, formulae, techniques, methods, algorithms, data, databases, designs, drawings, specifications, and material proprietary customer and business data); and (vi) rights to sue and recover and retain damages, costs and attorneys’ fees for the past, present and future infringement, misappropriation or other violation of any of the foregoing.

 

 

(u)  “Irish Laws” means such laws, rules, regulations, orders, administrative decrees and Orders promulgated by the Republic of Ireland.

 

(v)  “Knowledge” means, when used with respect to Purchaser or the Company, the knowledge of the Persons set forth in Section 10.01(w) of the Purchaser Disclosure Schedule or the Company Disclosure Schedule, respectively, in each case, after reasonable inquiry of the direct reports of such individual, which requires the reasonable inquiry of a Person having operational and management knowledge of each applicable Subsidiary.

 

(w)  “Law” means any federal, state, national, foreign, material local, municipal, or other law, statute, act, ordinance, code, regulation, or rule of any Governmental Authority and any Orders.

 

(x)  “Liens” means any mortgages, deeds of trust, liens, pledges, security interests, capital leases, subleases, licenses, covenants, claims, hypothecations, options, rights of first offer or refusal, charges, or other encumbrances in respect of any property or asset.

 

(y)  “Material” means an Effect that would reasonably be expected to result in a cost of more than $250,000 on the business, assets, Liabilities, results of operations, or financial condition of the Company and its Subsidiaries, taken as a whole.

 

(z)  “Nasdaq” means The Nasdaq Stock Market LLC.

 

(aa)  “Orders” means any orders, decisions, judgments, writs, injunctions, or decrees issued by any court, agency, or other Governmental Authority.

 

(bb)  “Purchaser Assets” means any material assets of Purchaser or any of its Subsidiaries.

 

(cc)  “Purchaser Employee” each individual who is an employee, independent contractor or other individual service provider of Purchaser or any of its Subsidiaries.

 

(dd)  “Purchaser Equity Plan” means the Fusion Fuel Green PLC 2021 Equity Incentive Plan.

 

(ee)  “Purchaser Material Adverse Effect” means any Effect that, individually or in the aggregate with any one or more other Effects, would reasonably be expected to (i) result in a material adverse effect on the business, assets, Liabilities, results of operations or condition (financial or otherwise) of Purchaser and its Subsidiaries, taken as a whole or (ii) prevent, or materially impair or delay, the ability of Purchaser to consummate the Transactions or otherwise perform any of its obligations under this Agreement; provided, however, solely with respect to clause (i), no Effect (by itself or when aggregated or taken together with any and all other Effects) directly resulting from, arising out of, attributable to, or related to any of the following shall be deemed to be or constitute a

 

(ff)  “Purchaser Material Adverse Effect,” and no Effect (by itself or when aggregated or taken together with any and all other such Effects) directly resulting from, arising out of, attributable to, or related to any of the following shall be taken into account when determining whether a

 

 

(gg)  “Purchaser Material Adverse Effect” has occurred or may, would or could occur: (A) general economic conditions (or changes in such conditions) in the United States or any other country or region in the world, or conditions in the global economy generally; (B) conditions (or changes in such conditions) in the securities markets, credit markets, currency markets or other financial markets in the United States or any other country or region in the world; (C) conditions (or changes in such conditions) in the industries in which Purchaser and its Subsidiaries conduct business; (D) changes in political conditions in the United States or any other country or region in the world or acts of war, sabotage or terrorism (including any escalation or general worsening of any such acts of war, sabotage or terrorism) in the United States or any other country or region in the world; (E) earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events in the United States or any other country or region in the world; (F) pandemics, epidemics or disease outbreaks or any escalation or worsening of any of the foregoing (including, for the avoidance of doubt, any effect resulting from, arising out of or otherwise related to COVID-19 (including any the impact of any associated shutdown, shelter in place or non-essential business order or other similar measures mandated or recommended by any applicable Governmental Authority)); (G) the announcement of this Agreement or the pendency or consummation of the Transactions, including, in any such case, the impact on relationships, contractual or otherwise, with customers, suppliers, vendors, lenders, investors, licensors, licensees, venture partners or employees (other than, in each case, for purposes of any representation or warranty set forth in Section 4.03 or Section 4.05); (H) changes in Law or other legal or regulatory conditions, or the interpretation of such changes, or changes in IFRS or other accounting standards (or the interpretation of such changes), or that result from any action taken for the purpose of complying with any of the foregoing; (I) any actions taken or failure to take action, in each case, to which the Company has expressly requested or consented to, or compliance with the terms of, or the taking of any action required or contemplated by, this Agreement, or the failure to take any action prohibited by this Agreement; (J) any failure by Purchaser or any of its Subsidiaries to meet any internal or external projections or forecasts or any decline in the price of Purchaser Ordinary Shares (but excluding, in each case, the underlying causes of such failure or decline, as applicable, which may themselves constitute or be taken into account in determining whether there has been, or would be, a Purchaser Material Adverse Effect); or (K) the impact on Purchaser of any action taken by, or at the request of, the Company, including any breach of this Agreement by the Company; provided, further, that any Effect relating to or arising out of or resulting from any change or event referred to in clauses (A) through (F) or (H) above may constitute, and be taken into account in determining the occurrence of, a Purchaser Material Adverse Effect if and only to the extent that such change or event has a disproportionate impact on Purchaser and its Subsidiaries as compared to other participants that operate in the industry in which Purchaser and its Subsidiaries operate.

 

(hh)  “Purchaser Ordinary Shares” means Class A ordinary shares with a nominal value of US$0.0001 each in the capital of Purchaser.

 

(ii)  “Purchaser Preferred Shares” means the preferred shares with a nominal value of US$0.0001 each in the capital of Purchaser.

 

(jj)  “Purchaser Stock Option” means an option to purchase Purchaser Ordinary Shares issued by Purchaser pursuant to the Purchaser Equity Plan.

 

(kk)  “Purchaser RSU” means a restricted stock unit award issued by Purchaser pursuant to the Purchaser Equity Plan that provides for issuing Purchaser Ordinary Shares upon vesting.

 

(ll)  “Purchaser Warrant” means a warrant issued by Purchaser to purchase Purchaser Ordinary Shares.

 

 

(mm)  “Permitted Liens” means (i) statutory Liens for Taxes, assessments or other charges by Governmental Authorities not yet due and payable or the amount or validity of which is being contested in good faith and by appropriate proceedings, and for which adequate reserves have been maintained in accordance with IFRS, (ii) mechanics’, materialmen’s, carriers’, workmen’s, warehouseman’s, repairmen’s, landlords’ and similar Liens granted or which arise in the ordinary course of business which are not yet due and payable or the amount or validity of which is being contested in good faith and by appropriate proceedings, and for which adequate reserves have been maintained in accordance with IFRS, (iii) zoning, entitlement, building and other land use Liens applicable to real property which are not violated by the current use, occupancy or operation of such real property, (iv) covenants, conditions, restrictions, easements and similar matters of record affecting title to any real property which would do not materially impair the value, current use, occupancy or operation of such real property, (v) Liens arising under worker’s compensation, unemployment insurance, social security, retirement and similar Laws, (vi) Liens on goods in transit incurred pursuant to documentary letters of credit, (vii) non-exclusive, non-perpetual licenses of Intellectual Property granted by the applicable Party, and (viii) such other Liens that would not, individually or in the aggregate, reasonably be expected to (A) with respect to Purchaser, result in a Purchaser Material Adverse Effect, or (B) with respect to the Company, result in a Company Material Adverse Effect.

 

(nn)  “Person” means any natural person, corporation, company, partnership, association, limited liability company, limited partnership, limited liability partnership, trust, or other legal entity or organization, including a Governmental Authority.

 

(oo)  “Proxy Statement” means the proxy statement/prospectus that shall constitute a proxy statement of Purchaser relating to the matters to be submitted to the stockholders of Purchaser at the Purchaser Stockholders Meeting, including all amendments or supplements thereto.

 

(pp)  “Representatives” means, when used concerning any Person, the directors, officers, employees, consultants, accountants, legal counsel, investment bankers or other financial advisors, agents, and other representatives of such Person.

 

(qq)  “Sanctioned Person” means any Person who is the target of Sanctions, including by virtue of being: (a) listed on any Sanctions-related list of designated or blocked Persons; (b) a Governmental Authority of, resident in, or organized under the Laws of a country or territory that is the target of comprehensive Sanctions (as of the date of this Agreement, Cuba, Iran, North Korea, Syria, and the Crimea region and so-called Donetsk People’s Republic and Luhansk People’s Republic in Ukraine); or (c) 50% or more owned or controlled by any of the preceding.

 

(rr)  “Sanctions” means trade, economic and financial sanctions Laws, regulations, embargoes, and restrictive measures, including those administered, enacted or enforced by (i) the United States (including the Department of Treasury, Office of Foreign Assets Control), (ii) the European Union and its member states, (iii) the United Nations or (iv) His Majesty’s Treasury.

 

(ss)  “Software” means all computer software (in object or source code format), libraries, data and databases, related specifications, documentation, and materials.

 

(tt)  “Subsidiary” means, when used concerning any Person, any other Person that such Person directly or indirectly owns or has the power to vote or control more than 50% of the voting stock or other interests the holders of which are generally entitled to vote for the election of the board of directors or other applicable governing body of such other Person.

 

(uu)  “Tax Returns” means any and all reports, returns, declarations, claims for refund, elections, disclosures, estimates, information reports or returns, or statements required to be supplied to a Governmental Authority in connection with Taxes, including any schedule, attachment or amendment to all reports, returns, declarations, claims for refund, elections, disclosures, estimates, information reports or returns or statements required to be supplied to a Governmental Authority in connection with Taxes.

 

 

(vv)  “Taxes” means any and all federal, state, provincial, local, foreign, and other taxes, levies, fees, imposts, duties, and similar governmental charges (including any interest, fines, assessments, penalties, or additions to tax imposed in connection or concerning the preceding) including (x) taxes imposed on, or measured by, income, franchise, profits or gross receipts, and (y) ad valorem, value-added, capital gains, sales, goods and services, use, real or personal property, capital stock, license, branch, payroll, estimated withholding, employment, social security (or similar), unemployment, compensation, escheat, abandoned and unclaimed property, utility, severance, production, excise, stamp, occupation, premium, windfall profits, transfer and gains taxes, and customs duties.

 

(ww)  “Third Party” means, with respect to the Company, any Person or group other than the Company and its Affiliates, and, concerning Purchaser, any Person or group other than Purchaser and its Affiliates.

 

Section 10.02 Interpretation.

 

Unless the express context otherwise requires, as used in this Agreement:

 

(a) terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa;

 

(b) the terms “Dollars” and “$” mean U.S. dollars;

 

(c) references to a specific Section, Subsection, Recital, Schedule, or Exhibit shall refer, respectively, to Sections, Subsections, Recitals, Schedules, or Exhibits of this Agreement;

 

(d) wherever the word “include,” “includes,” or “including” is used in this Agreement, it shall be deemed to be followed by the phrase “without limitation”;

 

(e) references to any gender shall include each other gender or neuter;

 

(f) references to any Person shall include such Person’s heirs, executors, personal representatives, administrators, successors, and assigns; provided, however, that nothing contained in this Section 10.02 is intended to authorize any assignment or transfer not otherwise permitted by this Agreement;

 

(g) references to a Person in a particular capacity or capacities shall exclude such Person in any other capacity;

 

(h) with respect to the determination of any period of time, (i) the word “from” means “from and including,” and the words “to” and “until” each means “to but excluding,” and (ii) time is of the essence;

 

(i) the word “or” shall be disjunctive but not exclusive;

 

(j) references to any Law or Order shall be deemed to refer to such Law or Order as amended, modified, codified, reenacted, supplemented, or superseded in whole or in part and in effect from time to time, and also to all rules and regulations promulgated under such Law or Order;

 

(k) references to any Contract means such Contract as amended, supplemented, or modified (including by any waiver) in accordance with the terms of such Contract;

 

 

(l) the headings contained in this Agreement are intended solely for convenience and shall not affect the rights of the Parties;

 

(m) references to several days refer to calendar days unless Business Days are specified, in which case, if the last day for the giving of any notice or the performance of any act required or permitted under this Agreement is a day that is not a Business Day, then the time for the giving of such notice or the performance of such action shall be extended to the next succeeding Business Day;

 

(n) references to “ordinary course of business” shall refer to ordinary course of business consistent with past practice; and

 

(o) references to documents, instruments, or agreements means such document, instrument, or agreement as amended or otherwise modified from time to time in accordance with the terms of such agreement, document, or instrument, and if applicable, this Agreement.

 

Section 10.03 Reserved

 

Section 10.04 Governing Law.

 

This Agreement and all matters arising out of or relating to it, the Transactions, and the Merger (including its interpretation, construction, performance, and enforcement) shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to any choice or conflict of law provision or rule that would cause the application of the Laws of any jurisdictions other than those of the State of New York.

 

Section 10.05 Submission to Jurisdiction; Service.

 

To the fullest extent permitted by applicable Law, each Party hereby irrevocably and unconditionally submits, for itself or himself and its or his property, to the exclusive jurisdiction of the federal courts located in the State of New York (collectively with any appellate courts thereof, the “Courts”), in any action, suit or proceeding directly or indirectly arising out of or relating to this Agreement, the Transactions or the Merger or to interpret, apply or enforce this Agreement, the Transactions or the Merger or for recognition or enforcement of any judgment relating thereto, and each Party hereby irrevocably and unconditionally (a) agrees not to commence any such action, suit or proceeding except in such Courts, (b) agrees that any claim in respect of any such action, suit or proceeding may be heard and determined in such Courts, (c) waives any objection which it or he may now or hereafter have to the laying of venue of any such action, suit or proceeding in such Courts, and (d) waives the defense of an inconvenient forum to the maintenance of any such action, suit or proceeding in such Courts. To the fullest extent permitted by applicable Law, each Party agrees that a final judgment in any such action, suit, or proceeding shall be conclusive and may be enforced in other jurisdictions by action, suit, or proceeding on the judgment or in any other manner provided by Law. Each Party irrevocably consents to service of process in the manner provided for notices in Section 10.07 or any other manner permitted by applicable Law.

 

Section 10.06 Waiver of Jury Trial.

 

EACH PARTY HEREBY ACKNOWLEDGES AND AGREES THAT ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS OR THE MERGER OR TO INTERPRET, APPLY OR ENFORCE THIS AGREEMENT, THE TRANSACTIONS OR THE MERGER OR FOR RECOGNITION OR ENFORCEMENT OF A JUDGMENT RELATING THERETO IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE, IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY SUCH ACTION, SUIT OR PROCEEDING.

 

 

EACH PARTY HEREBY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) SUCH PERSON HAS CONSIDERED THE IMPLICATION OF THIS WAIVER, (C) SUCH PERSON MAKES THIS WAIVER VOLUNTARILY AND (D) SUCH PERSON HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATION OF THIS SECTION 10.06.

 

Section 10.07 Notices. All notices and other communications required or otherwise provided under this Agreement shall be in writing and shall be addressed as follows (or at such other address for a Party as shall be specified by like notice):

 

If to Purchaser to:

 

Fusion Fuel Green PLC

Attention: Chief Executive Officer

Email: fchaves@fusion-fuel.eu

 

with a copy (which shall not constitute notice) to:

 

Bevilacqua PLLC

1050 Connecticut Avenue, NW

Washington, DC 20036

Attention: Louis A. Bevilacqua

Email: lou@bevilacquapllc.com

 

If to the Company to:

 

Quality Industrial Corp.

Attention: John-Paul Backwell

Telephone: +44 75 4882 9069

Email: jp.backwell@qualityindustrialcorp.com

 

with a copy (which shall not constitute notice) to:

 

Lucosky Brookman LLP

101 Wood Avenue South, 5th Floor

Woodbridge, NJ 08830

Attention: Joseph Lucosky; Christopher Haunschild

Email: jlucosky@lucbro.com; chaunschild@lucbro.com

 

If to Sellers to:

 

ILUSTRATO PICTURES INTERNATIONAL INC.

Attention: Nicolas Link

Telephone: +971 58 589 4069

Email: nick.link@ilus-group.com

 

 

All such notices or communications shall be deemed to have been delivered and received (a) if delivered in person, on the day of such delivery, (b) if by electronic mail, on the day on which such electronic mail was sent and duly delivered, (c) if by certified or registered mail (return receipt requested), postage prepaid, on the third Business Day after mailing or (d) if by reputable overnight delivery service, on the first Business Day after mailing.

 

Section 10.08 Amendment.

 

This Agreement may be amended or modified in whole or part only if such amendment or modification is in writing and signed by Purchaser, the Sellers, and the Company.

 

Section 10.09 Extension; Waiver.

 

At any time before the Preferred Stock Conversion, Purchaser, on the one hand, and the Company and the Sellers, on the other hand, may (a) extend the time for the performance of any of the obligations of the other Party, (b) waive any inaccuracies in the representations and warranties of the other Party contained in this Agreement or any document delivered under this Agreement, or (c) subject to applicable Law, waive compliance with any of the covenants or conditions contained in this Agreement. Any agreement on the part of a Party to any extension or waiver shall be valid only if set forth in an instrument in writing signed by such Party granting the waiver or extension. The failure of any Party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

 

Section 10.10 Entire Agreement.

 

This Agreement (and its exhibits), the Company Disclosure Schedule, the Purchaser Disclosure Schedule, the certificates delivered under this Agreement, any other Ancillary Agreements, and the Confidentiality Agreement contain all of the terms, conditions, and representations and warranties agreed to by the Parties relating to the subject matter of this Agreement and supersede all prior or contemporaneous agreements, negotiations, correspondence, undertakings, understandings, representations and warranties, both written and oral, among the Parties concerning the subject matter of this Agreement. No representation, warranty, inducement, promise, understanding, or condition not set forth in such documents has been made or relied upon by any of the Parties.

 

Section 10.11 No Third-Party Beneficiaries.

 

Except as provided in Section 6.10 (Directors’ and Officers’ Indemnification and Insurance), this Agreement shall be for the sole benefit of the Parties and their respective successors and permitted assigns and is not intended, nor shall be construed, to give any Person, other than the Parties and their respective successors and assigns, any legal or equitable right, benefit or remedy of any nature whatsoever by reason this Agreement.

 

Section 10.12 Severability.

 

The provisions of this Agreement shall be deemed severable, and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions of this Agreement. If any provision of this Agreement, or the application of that provision to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted for that provision to carry out, so far as may be valid and enforceable, the intent and purpose of the invalid or unenforceable provision and (b) the remainder of this Agreement and the application of that provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of that provision, or the application of that provision, in any other jurisdiction. Upon such a determination, the Parties shall negotiate in good faith to modify this Agreement to effect the Parties' original intent as closely as possible in a reasonably acceptable manner so that the Transactions may be consummated as originally contemplated to the fullest extent possible.

 

 

Section 10.13 Rules of Construction.

 

The Parties have participated jointly in negotiating and drafting this Agreement with the benefit of outside legal counsel. If an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement. Subject to and without limiting the introductory language to Article III, Article IV, and Article V, each Party has or may have set forth information in the Company Disclosure Schedule, the Purchaser Disclosure Schedule, and the Seller Disclosure Schedule, as applicable, in a section of such disclosure schedule that corresponds to the section of this Agreement to which it relates. The fact that any item of information is disclosed in the Company Disclosure Schedule, the Purchaser Disclosure Schedule, or the Seller Disclosure Schedule shall not constitute an admission by the Company, Purchaser, or the Sellers, respectively, that such item is material that such item has had or would have a Company Material Adverse Effect or a Purchaser Material Adverse Effect, as the case may be, or that the disclosure of such be construed to mean that such information is required to be disclosed by this Agreement.

 

Section 10.14 Assignment.

 

This Agreement shall be binding upon and shall inure to the benefit of the Parties and their permitted successors and assigns. No Party may assign or delegate all or any portion of its rights or Liabilities under this Agreement without the prior written consent of the other Parties, and any attempted or purported assignment or delegation in violation of this Section 10.14 shall be null and void.

 

Section 10.15 Remedies.

 

No failure or delay on the part of any Party in the exercise of any right under this Agreement shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty, or agreement within, nor shall any single or partial exercise of any such right preclude any other or further exercise of any other right. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available except as otherwise provided in Section 10.16; the exercise by a Party of any one remedy shall not preclude the exercise by it of any other remedy to the extent permitted.

 

 

Section 10.16 Specific Performance.

 

The Parties acknowledge and agree that irreparable injury would occur if any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached, and further agree that, (a) monetary damages to a Party caused by the non-occurrence of the Closing or another Party’s failure to perform the covenants and other agreements set forth herein that are to be performed after the Closing, including damages related to reputational harm, customer or employee losses, increased costs, harm to the Company’s or Purchaser’s business, as applicable, and/or a reduction in the actual or perceived value of the Company or Purchaser, as applicable, or any of their direct or indirect Subsidiaries, would be difficult or impossible to calculate, (b) the provisions of Article IX are not intended to and do not adequately compensate a Party for the harm that would result from a breach by another Party, and will not be construed to diminish or otherwise impair in any respect a Party’s right to an injunction, specific performance or other equitable relief, and (c) the right of specific performance is an integral part of this Agreement and without that right the Parties would not have entered into this Agreement. Further, it is explicitly agreed that each Party shall, to the fullest extent permitted by Law, have the right to an injunction, specific performance, or other equitable relief concerning the other Parties’ obligations to consummate the Transactions and to perform the covenants and other agreements set forth herein that are to be performed after the Closing. It is further agreed that the Parties shall be entitled to an injunction or injunctions, specific performance, or other equitable relief to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Courts and the Parties waive any requirement for the posting of any bond or similar collateral in connection with any such equitable relief to the fullest extent permitted by Law. Each Party agrees that it or he will not oppose the granting of an injunction or specific performance on the basis that (i) the injured Party has an adequate remedy at law or (ii) an award of specific performance is not an appropriate remedy for any reason at law or equity. The equitable remedies described in this ‎Section 10.16 shall be in addition to, and not in lieu of, any other remedies at law or in equity that the Parties to this Agreement may elect to pursue.

 

Section 10.17 Counterparts; Effectiveness.

 

This Agreement may be executed in any number of counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement. The exchange of copies of this Agreement and signature pages by email in .pdf or .tif format (including any electronic signature complying with the U.S. ESIGN Act of 2000, e.g., www.docusign.com) or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, or by combination of such means, shall constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all purposes. Such execution and delivery shall be considered valid, binding, and effective for all purposes.

 

Section 10.18 Non-Recourse.

 

This Agreement may only be enforced against the named Parties. All legal proceedings, Legal Actions, obligations, losses, damages, claims or causes of action (whether in contract, in tort, in law or in equity, or granted by statute whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or otherwise) that may be based upon, arise under, out or by reason of, be connected with, or relate in any manner to (a) this Agreement or any of the Ancillary Agreements, (b) the negotiation, execution or performance of this Agreement or any of the Ancillary Agreements (including any representation or warranty made in connection with, or as an inducement to, this Agreement or any of the Ancillary Agreements), (c) any breach or violation of this Agreement (including the failure of any representation and warranty to be true or accurate) or any of the Ancillary Agreements, and (d) any failure of the Transactions or the Ancillary Agreements, in the case of clauses (a) and (b), may be made only against (and are those solely of) the Persons that are expressly named as parties to this Agreement, and the Confidentiality Agreement, and then only to the extent of the specific obligations of such Persons set forth in this Agreement, or the Confidentiality Agreement, as applicable. In furtherance and not in limitation of the foregoing, and notwithstanding any other provision of this Agreement to the contrary, each Party covenants, agrees and acknowledges that (except to the extent named as a party, the Confidentiality Agreement, and then only to the extent of the specific obligations of such parties set forth in this Agreement, or the Confidentiality Agreement, as applicable) no recourse under this Agreement, any related document or any documents or instruments delivered in connection with this Agreement or any related document shall be had against any Company Affiliate or the Purchaser Affiliate, whether in contract, tort, equity, law or granted by statute whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or otherwise.

 

 

Section 10.19 Conflicts and Privilege Company Counsel.

 

(a) Each Party hereby agrees, on its own behalf and on behalf of its stockholders, directors, officers, employees and affiliates, that Lucosky Brookman LLP (“LB”) may serve as counsel to the Company in connection with the negotiation, preparation, execution and delivery of this Agreement, and the Ancillary Agreements and the consummation of the Transactions and the Merger and that, following consummation of the Transactions, LB may serve as counsel to any Seller Indemnifying Party, any Company stockholder or any stockholder, director, officer, employee or affiliate of any Seller Indemnifying Party or any stockholder of the Company in any action, suit or proceeding directly or indirectly arising out of or relating to this Agreement, the Ancillary Agreements, the Transactions or the Merger or to interpret, apply or enforce this Agreement, the Ancillary Agreements, the Transactions or the Merger or for recognition or enforcement of any judgment relating thereto or any other matter, notwithstanding such representation (or continued representation) of the Company and each of the Parties hereby consents thereto and waives any conflict of interest arising therefrom, and each of the Parties shall cause any of its respective Affiliates to consent to waive any conflict of interest arising from such representation to the fullest extent permitted by Law.

 

(b) Purchaser further agrees that, as to all communications among LB, the Company, the Sellers, or the Company’s stockholders that relate in any way to this Agreement, the Ancillary Agreements, the Transactions or the Merger, the attorney-client privilege and the expectation of client confidence belong to the relevant Seller Indemnifying Party or the Company’s stockholders and may be controlled by such Seller Indemnifying Party or the Company’s stockholders and shall not pass to or be claimed by the Purchaser.

 

Section 10.20 Conflicts and Privilege Purchaser Counsel.

 

(a) Each of the parties to this Agreement hereby agrees, on its own behalf and on behalf of its stockholders, directors, officers, employees and affiliates, that Bevilacqua PLLC (“BPLLC”) may serve as counsel to Purchaser in connection with the negotiation, preparation, execution and delivery of this Agreement and the Ancillary Agreements and the consummation of the Transactions and the Merger, and that, following consummation of the Transactions and the Merger, BPLLC may serve as counsel to any Purchaser Indemnified Party, any Purchaser Stockholder or any stockholder, director, officer, employee or affiliate of any Purchaser Indemnified Party or any Purchaser Stockholder in any action, suit or proceeding directly or indirectly arising out of or relating to this Agreement, the Ancillary Agreements, the Transactions or the Merger or to interpret, apply or enforce this Agreement, the Ancillary Agreements, the Transactions or the Merger or for recognition or enforcement of any judgment relating thereto or any other matter, notwithstanding such representation (or continued representation) of Purchaser and each of the Parties to this Agreement hereby consents thereto and waives any conflict of interest arising therefrom, and each of such Parties shall cause any of its respective Affiliates to consent to waive any conflict of interest arising from such representation to the fullest extent permitted by Law.

 

(b) The Company and each of the Sellers further agrees that, as to all communications among BPLLC, Purchaser, the Purchaser Indemnified Parties or the Purchaser Stockholders that relate in any way to this Agreement, the Ancillary Agreements, the Transactions or the Merger, the attorney-client privilege and the expectation of client confidence belongs to the relevant Purchaser Indemnified Parties or the Purchaser Stockholders and may be controlled by such Purchaser Indemnified Parties or Purchaser Stockholders and shall not pass to or be claimed by the Company or the Sellers.

 

[Signature Pages Follow]

 

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first above written.

 

PURCHASER

 

FUSION FUEL GREEN PLC

 

By:	/s/ Frederico Figueira De Chaves
	Name:	Frederico Figueira De Chaves
	Title:	Chief Executive Officer

 

THE COMPANY

 

QUALITY INDUSTRIAL CORP.

 

By:	/s/ John-Paul Backwell
	Name:	John-Paul Backwell
	Title:	Chief Executive Officer

 

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first above written.

 

SELLERS

 

ILUSTRATO PICTURES INTERNATIONAL INC.

 

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

 

Number of Sellers’ Shares:

 

57,669,078 Shares of Company Common Stock

20,000 Shares of Series B Preferred Stock

 

NICOLAS LINK

 

/s/ Nicolas Link

 

Number of Sellers’ Shares:

 

4,750,000 Shares of Company Common Stock

0 Shares of Series B Preferred Stock

 

JOHN-PAUL BACKWELL

 

/s/ John-Paul Backwell

 

Number of Sellers’ Shares:

 

4,750,000 Shares of Company Common Stock

0 Shares of Series B Preferred Stock

 

CARSTEN KJEMS FALK

 

/s/ Carsten Kjems Falk

 

Number of Sellers’ Shares:

 

4,500,000 Shares of Company Common Stock

0 Shares of Series B Preferred Stock

 

 

KRISHNAN KRISHNAMOORTHY

 

/s/ Krishnan Krishnamoorthy

 

Number of Sellers’ Shares:

 

2,250,000 Shares of Company Common Stock

0 Shares of Series B Preferred Stock

 

EXCHANGE LISTING LLC

 

/s/ Peter Goldstein

 

Number of Sellers’ Shares:

 

1,543,256 Shares of Company Common Stock

0 Shares of Series B Preferred Stock

 

SANJEEB SAFIR

 

/s/ Sanjeeb Safir

 

Number of Sellers’ Shares:

 

1,000,000 Shares of Company Common Stock

0 Shares of Series B Preferred Stock

 

RASMUS REFER

 

/s/ Rasmus Refer

 

Number of Sellers’ Shares:

 

1,000,000 Shares of Company Common Stock

0 Shares of Series B Preferred Stock

 

LOUISE BENNETT

 

/s/ Louise Bennett

 

Number of Sellers’ Shares:

 

850,000 Shares of Company Common Stock

0 Shares of Series B Preferred Stock

 

[Signature Page to Stock Purchase Agreement]

 

 

 

Exhibit 23.1

 

 

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To Whom It May Concern:

 

We consent to the incorporation by reference in the Registration Statements on Form F-3 (File Nos. 333-251990, 333-264714, and 333-276880) and Registration Statement on Form S-8 (File No. 333-258543) of our report dated March 10, 2025, relating to the financial statements of Quality Industrial Corp. as of and for the years ended December 31, 2023, and 2022.

 

We also consent to the references to us under the headings “Experts” in such Registration Statement.

 

Very truly yours,

 

/s/ Bush & Associates CPA LLC

 

Bush & Associates CPA LLC (PCAOB 6797)
Henderson, Nevada
March 10, 2025

 

 

179 N. Gibson Rd., Henderson, NV 89014 ● 702.703.5979 ● www.bushandassociatescpas.com

 

Exhibit 99.1

 

3.D. Risk Factors

 

You should carefully consider the following risk factors and all of the information contained in this document before you decide whether to invest in our securities. One or more of a combination of these risks could materially impact our business, financial condition or results of operations. In any such case, the market price of our securities could decline, and you may lose all or part of your investment. Additional risks and uncertainties not currently known to us or that we currently do not consider to be material may also materially and adversely affect our business, financial condition or results of operations.

 

As used in this item, unless otherwise indicated or the context otherwise requires, references to:

 

●

“Al Shola Gas” are to Al Shola Al Modea Gas Distribution LLC, a UAE company.

 

●

“Class A Ordinary Shares” are to the Company’s Class A ordinary shares with a nominal value of $0.0001 each.

 

●

“Fusion Fuel,” “we,” “us,” “our,” “the Company,” or “our company” are to Fusion Fuel Green PLC, a public limited company incorporated in Ireland, including its consolidated subsidiaries.

 

●

“Fusion Fuel Portugal” are to Fusion Fuel Portugal, S.A., a public limited company domiciled in Portugal.

 

●

“Nasdaq” are to The Nasdaq Stock Market LLC.

 

●

“QIND” are to Quality Industrial Corp., a Nevada corporation.

 

●

“SEC” are to the U.S. Securities and Exchange Commission.

 

●

“Series A Preferred Shares” are to the Company’s Series A Convertible Preferred Shares with a nominal value of $0.0001 each.

 

●

“UAE” are to the United Arab Emirates.

 

Summary Risk Factors

 

Risks Related to Our Business

 

●

The Company’s recent restructuring may fail to prevent the long-term continuation of its history of net losses.

 

●

The Company’s shift in business strategy may not yield the intended results.

 

●

The Company may face challenges in integrating QIND and realizing expected synergies.

 

●

The Company and QIND will incur substantial costs related to the merger and integration of their businesses.

 

●

The unaudited pro forma combined consolidated financial information of the Company and QIND is preliminary and the actual consideration received in the acquisition of a 69.36% stake in QIND or in the projected acquisition of the other outstanding capital shares of QIND, as well as the actual financial condition and results of operations of the combined company, may differ materially.

 

●

The Company’s and QIND’s directors, executive officers and principal shareholders will have substantial control over the Company after the Preferred Shares Conversion and the consummation of the merger of QIND with the Company, which could limit other stockholders’ ability to influence the outcome of corporate matters and key transactions, including a change of control.

 

 

●

Certain of the Company’s and QIND’s directors and executive officers may have other interests that may differ from, or are in addition to, the interests of the Company’s shareholders.

 

●

We are in default under one of our promissory notes, and our failure to pay the required redemption price may result in a material adverse effect on our financial condition and business operations.

 

●

Our current level of indebtedness could adversely affect our financial condition or liquidity, and we could have difficulty fulfilling our obligations under our indebtedness, which may have a material adverse effect on us.

 

●

Our promissory notes and any other credit or similar agreements into which we may enter in the future may restrict our operations, particularly our ability to respond to changes or to take certain actions regarding our business.

 

●

We will need to obtain additional funding to continue operations. If we fail to obtain the necessary financing or fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations and we may be forced to significantly delay, scale back or discontinue our operations.

 

●

We have a substantial amount of goodwill and intangible assets on our balance sheet. Future write-offs of goodwill and intangible assets may have the effect of decreasing our earnings or increasing our losses.

 

●

Our business operations may be adversely affected by information systems interruptions or cybersecurity intrusions.

 

●

The success of our business depends on our ability to maintain and enhance our reputation and brand.

 

●

Our long-term success depends, in part, on our ability to operate and expand internationally, and our business is susceptible to risks associated with international operations.

 

●

Risks associated with climate change and other environmental impacts, and increased focus and evolving views of our customers, shareholders, and other stakeholders on climate change issues, could negatively affect our business and operations.

 

●

We may be adversely affected by the effects of inflation.

 

●

Relatively high interest rates may adversely impact our business.

 

●

During the course of the audit of our consolidated financial statements, we identified material weaknesses in our internal control over financial reporting. If we fail to establish and maintain an effective system of internal control over financial reporting, our ability to accurately and timely report our financial results or prevent fraud may be adversely affected, and investor confidence and the market price of the Class A Ordinary Shares may be adversely impacted.

 

●

We are dependent on our management team, and the loss of any key member of this team may prevent us from implementing our business plan in a timely manner, or at all.

 

●

If we are unable to attract and retain key employees and hire qualified management, technical, engineering, and sales personnel, our ability to compete and successfully grow our business could be harmed.

 

 

Risks Related to Our Planned Hydrogen Business

 

●

Demand for hydrogen engineering and advisory services is uncertain and dependent on government policies.

 

●

The Company will face intense competition in the hydrogen engineering and advisory services sector.

 

●

Supply chain disruptions and cost increases could negatively impact the Company’s hydrogen business.

 

●

The Company’s hydrogen business will be subject to complex and evolving regulatory requirements.

 

●

Legal and contractual risks could adversely impact the hydrogen business.

 

●

The transition to a hydrogen advisory and engineering business may involve intellectual property risks.

 

●

If we are not able 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.

 

●

Our ability to operate and our growth potential could be materially and adversely affected if we cannot attract, employ, and retain technical personnel at a competitive cost.

 

●

If we are unable to keep pace with technology developments in our industry, this could adversely affect our ability to win, maintain and grow market share.

 

●

Our hydrogen services activities are subject to a number of development risks, operational hazards, regulatory approvals and other risks which may not be fully covered by insurance, and which could cause cost overruns and delays that could have a material adverse effect on our business, results of operations, financial condition, liquidity and prospects.

 

●

Our business is subject to the risks of earthquakes, fires, floods, tsunamis, pandemics, and other natural catastrophic events and to interruption by man-made problems such as technogenic catastrophic events, computer viruses or terrorism.

 

Risks Related to Our Gas Distribution Business

 

●

Our gas distribution business is subject to numerous operational, regulatory and market risks that could adversely impact its financial performance and long-term viability.

 

●

We are dependent on the availability of raw materials, parts, and components used in our products.

 

●

Increases in the price of commodities could impact the cost or price of our products, which could impact our ability to sustain and grow earnings.

 

●

We may be subject to loss in market share and market acceptance as a result of performance failures, manufacturing errors, delays, or shortages.

 

●

The markets in which we operate are highly competitive, which could reduce sales and operating margins.

 

●

A substantial decrease in the price of gas could significantly lower our gross profit or cash flow.

 

●

If gas prices rise, we may be unable to pass along the cost increases to our customers.

 

●

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 overruns, operating cost inflation, labor availability and productivity, supplier and contractor pricing and performance, and potential claims for liquidated damages.

 

●

Trends in 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.

 

 

●

Our business is dependent on capital spending by our customers, and reductions in capital spending could have a material adverse effect on our gas distribution business, consolidated results of operations, and consolidated financial condition.

 

●

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.

 

●

Demand for the products we distribute could decrease if the manufacturers of those products were to sell a substantial amount of goods directly to end users in the markets we serve.

 

●

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.

 

●

Our operations are subject to hazards inherent in the gas industry and, as a result, we are exposed to potential liabilities that may affect our financial condition and reputation.

 

●

We are subject to increased risks associated with our investments in emerging markets, particularly in the Middle East region and specifically in the UAE. These risks encompass significant political, social, and economic uncertainties in the region. Given the volatile nature of these markets, instabilities in these regions could significantly adversely affect the value of our investments.

 

●

We are exposed to risks from potentially unpredictable legal and regulatory environments in the UAE and Middle East region.

 

●

We are exposed to risks arising from potential changes in the UAE’s visa legislation, which could adversely impact our business operations.

 

●

We are subject to risks associated with potential unlawful or arbitrary governmental actions in the UAE, which could negatively impact our operations and financial performance.

 

●

We are subject to the risk of international sanctions, which could significantly impact our business activities, results of operations and financial condition.

 

Risks Related to the Ownership of Our Securities 

 

●

We may not be able to maintain a listing of the Class A Ordinary Shares and publicly-traded warrants on Nasdaq.

 

●

Our operating results and share price may fluctuate, and you could lose all or part of your investment.

 

●

We do not currently intend to pay dividends on our securities and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of the Class A Ordinary Shares. In addition, any distribution of dividends must be in accordance with the rules and restrictions applying under Irish law.

 

●

In certain limited circumstances, dividends paid by the Company may be subject to Irish dividend withholding tax.

 

●

Class A Ordinary Shares or publicly-traded warrants received by means of a gift or inheritance could be subject to Irish capital acquisitions tax.

 

●

A transfer of the Class A Ordinary Shares or publicly-traded warrants, other than one effected by means of the transfer of book-entry interests in the Depositary Trust Company, may be subject to Irish stamp duty.

 

 

●

If the Class A Ordinary Shares or publicly-traded warrants are not eligible for deposit and clearing within the facilities of DTC, then transactions in the Class A Ordinary Shares and publicly-traded warrants may be disrupted.

 

●

Irish law differs from the laws in effect in the United States and U.S. investors may have difficulty enforcing civil liabilities against us, our directors or members of senior management.

 

●

The jurisdiction and choice of law clauses set forth in the Company’s Amended and Restated Warrant Agreement, and the Company’s status as an Irish company, may have the effect of limiting the ability of a holder of our publicly-traded warrants to effectively pursue its legal rights against the Company in any United States court.

 

●

An investment in our securities may result in uncertain U.S. federal income tax consequences.

 

●

As an Irish public limited company, certain capital structure decisions regarding the Company will require the approval of the shareholders of the Company, which may limit the Company’s flexibility to manage its capital structure.

 

●

Provisions of the Company’s constitution, as well as provisions of Irish law, could make an acquisition of us more difficult, limit attempts by our shareholders to replace or remove our current directors, and limit the market price of the Class A Ordinary Shares.

 

●

Attempted takeovers of the Company will be subject to the Irish Takeover Rules and will be under the supervisory jurisdiction of the Irish Takeover Panel. Accordingly, the Company’s board of directors may be limited by the Irish Takeover Rules in its ability to defend an unsolicited takeover attempt.

 

●

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies.

 

●

As a foreign private issuer, we are permitted to rely on exemptions from certain Nasdaq corporate governance standards applicable to domestic U.S. issuers. This may afford less protection to holders of our shares.

 

●

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

 

Risks Related to Our Business

 

The Company’s recent restructuring may fail to prevent the long-term continuation of its history of net losses.

 

The Company has historically incurred significant net losses and anticipates that these losses may continue for at least the next 12 to 18 months as it navigates a period of substantial transition. The Company’s financial results have been impacted by multiple factors. Historically, the Company’s business model centered around the development and sale of its “green hydrogen” technology solutions. However, on November 11, 2024, Fusion Fuel Portugal, which operated substantially all of our former business activities, filed for insolvency in Portugal. As a result, the production and sale of our green hydrogen product line and related R&D activities ceased and will no longer be continued. On November 26, 2024, we closed on the acquisition of a 69.36% stake in QIND, a company primarily operating as a gas distributor through its 51% ownership of Al Shola Gas. These recent structural changes introduce significant uncertainties, particularly regarding revenue generation and cost management.

 

The Company must successfully integrate new business units and establish its revised strategy focused on providing full-service energy engineering and advisory solutions, as well as industrial gas applications. Our planned hydrogen business has recently been incorporated and has generated no revenues. While Al Shola Gas, the Company’s newly-acquired indirect subsidiary through its acquisition of QIND, has historically generated revenue, there is no assurance that it will continue to do so or that such revenues will offset the losses that our hydrogen business may incur, or that the Company’s acquisition of QIND will not fail due to certain post-closing conditions and other acquisition risks. There is also no assurance that the planned hydrogen business will ever be able to generate meaningful revenue or achieve profitability.

 

 

There is also a risk that if the Company fails to achieve profitability within a reasonable timeframe, it may be required to undertake additional cost-cutting measures, restructure its operations further, or seek additional financing under unfavorable terms, including potentially dilutive equity offerings. The continued incurrence of losses and the lack of assurance regarding future profitability may have a material adverse effect on the Company’s stock price, investor confidence, and ability to attract and retain business partners, further affecting its long-term viability.

 

Given these factors, the Company’s ability to become profitable remains uncertain, and there can be no assurance that it will be able to generate sufficient revenues, secure additional funding, or reduce its operational expenses to a level that would allow it to achieve and sustain profitability in the foreseeable future.

 

The Company’s shift in business strategy may not yield the intended results.

 

The Company’s previous business model was rooted in proprietary technology development, while its planned focus on engineering services, advisory solutions, and industrial gas applications places it in highly competitive industries. The market for energy engineering and advisory solutions is mature, with numerous well-established competitors that have significant operational experience, customer relationships, and brand recognition. Unlike its prior focus on innovation and proprietary hydrogen solutions, the Company must now compete based on service quality, cost-effectiveness, and operational efficiency. There is no guarantee that the Company will be able to establish a competitive market position or differentiate itself effectively.

 

Additionally, the Company’s ongoing restructuring efforts require significant investments in operational integration, workforce realignment, and technology adaptation. The transition to an advisory and engineering service-based business model may necessitate additional expenditures before any meaningful revenue generation can be realized. As a result, the Company may continue to incur operating losses, and its cash flow from operations may remain negative for an extended period.

 

The Company’s ability to achieve profitability is further complicated by its reliance on securing new contracts, successfully penetrating new markets, and maintaining compliance with regulatory requirements in multiple jurisdictions. Moreover, the Company’s access to financing remains a critical factor in sustaining operations. The Company’s ability to access necessary capital depends on market conditions, investor confidence, and meeting contractual conditions. Any delays or restrictions in accessing these funds could further exacerbate financial challenges and extend the period during which the Company remains unprofitable.

 

The Company may face challenges in integrating QIND and realizing expected synergies.

 

The acquisition of a 69.36% stake in QIND marks a major shift in the Company’s business strategy, transitioning from proprietary hydrogen technology to energy engineering, advisory solutions, and industrial gas distribution. This integration presents significant challenges, including aligning business strategies, consolidating financial reporting, and managing leadership changes. Any failure to integrate operations efficiently, achieve expected cost synergies, or navigate regulatory complexities could lead to financial strain, reduced investor confidence, and operational inefficiencies.

 

Successfully executing this transition depends on effective workforce integration, streamlined operations, and the ability to leverage synergies between the Company’s planned and existing businesses. Unforeseen integration costs, regulatory compliance risks, and difficulties in generating revenue could further delay profitability. If the anticipated strategic benefits fail to materialize, the acquisition could weaken the Company’s financial position rather than strengthen it, resulting in prolonged losses, additional financing needs, and increased market volatility.

 

In addition, the acquisition of the Company’s stake in QIND is subject to certain post-closing conditions, including obtaining shareholder approval for the conversion of the Series A Preferred Shares into Class A Ordinary Shares, securing Nasdaq listing clearance, and consummating the planned merger of QIND into a newly formed wholly owned subsidiary of the Company. As consideration for the Company’s stake in QIND, the Company issued certain QIND shareholders 3,818,969 Class A Ordinary Shares, constituting 19.99% of the issued and outstanding Company’s Class A Ordinary Shares, and an aggregate of 4,171,327 Series A Preferred Shares, with provisions for the Series A Preferred Shares to convert into 41,713,270 Class A Ordinary Shares, subject to adjustment, upon the later of shareholder approval and Nasdaq listing clearance (the “Preferred Shares Conversion”). If the Company fails to meet certain conditions within the specified timeframes, including obtaining shareholder approval for the conversion of the Series A Preferred Shares, it may be required to unwind the transaction, repurchase the Company’s shares from the former QIND shareholders, and return the acquired shares. Such an outcome would result in substantial financial and operational disruption, including potential liquidity constraints, increased debt obligations, legal disputes, and damage to the Company’s reputation.

 

 

The Company and QIND will incur substantial costs related to the merger and integration of their businesses.

 

The Company and QIND have incurred and expect to incur a number of non-recurring costs in furtherance of the legal requirements to consummate the merger and integration of their businesses, including legal, financial advisory, accounting, consulting, and other advisory fees; regulatory filing fees; financial printing and other transaction-related costs. Additionally, there may be ongoing expenses related to facilities and systems consolidation, employment-related obligations, and efforts to maintain employee morale and retain key personnel. These costs may stem from the complex integration of numerous processes, policies, operations, technologies, and systems across areas such as purchasing, accounting, finance, payroll, compliance, treasury and vendor management, risk management, business operations, pricing, and employee benefits.

 

While the Company and QIND estimate a certain level of integration costs, many factors beyond their control could increase the total amount and timing of these expenses. Additionally, many of these costs are inherently difficult to estimate with precision. As a result, assuming that the merger of the Company and QIND becomes effective, the combined company may need to take charges against earnings following their merger, and the amount and timing of such charges are uncertain. There can be no assurance that the transaction and integration costs will not outweigh any benefits of the merger and integration, assuming that they occur.

 

The unaudited pro forma combined consolidated financial information of the Company and QIND is preliminary and the actual consideration received in the acquisition of a 69.36% stake in QIND or in the projected acquisition of the other outstanding capital shares of QIND, as well as the actual financial condition and results of operations of the combined company, may differ materially.

 

The unaudited pro forma combined consolidated financial information of the Company and QIND that was attached as Exhibit 99.6 to the Report on Form 6-K/A that was furnished by the Company to the SEC on March 10, 2025, and of which this document is an exhibit, was presented for illustrative purposes only and is not necessarily indicative of what the combined company’s actual financial condition or results of operations would have been had the acquisition of a 69.36% stake in QIND or in the projected acquisition of the other outstanding capital shares of QIND been completed on the dates indicated. The unaudited pro forma combined consolidated financial information reflects adjustments, which are based upon preliminary estimates. Among other things, the actual value of the consideration that the Company receives may vary significantly from the value used in preparing the unaudited pro forma combined consolidated financial information. Accordingly, the final acquisition accounting adjustments may differ materially from the pro forma adjustments reflected in the unaudited pro forma combined consolidated financial information.

 

The Company’s and QIND’s directors, executive officers and principal shareholders will have substantial control over the Company after the Preferred Shares Conversion and the consummation of the merger of QIND with the Company, which could limit other stockholders’ ability to influence the outcome of corporate matters and key transactions, including a change of control.

 

Upon the consummation of the Preferred Shares Conversion and the merger of QIND with the Company, the Company’s executive officers, directors and principal shareholders and their affiliates are expected to own more than 70.0% of the outstanding Class A Ordinary Shares. This significant concentration of ownership may have a negative impact on the trading price of the Class A Ordinary Shares because investors often perceive disadvantages in owning stock in companies with controlling shareholders. In addition, these shareholders will be able to exercise a significant level of control over all matters requiring shareholder approval, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions. They may also have interests that differ from other shareholders of the Company and may vote in a way with which other shareholders of the Company disagree and which may be adverse to the Company’s interests. This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of the Company, could deprive the Company’s shareholders of an opportunity to receive a premium for their common stock as part of a sale of the Company and might ultimately affect the market price of the Class A Ordinary Shares.

 

 

Certain of the Company’s and QIND’s directors and executive officers may have other interests that may differ from, or are in addition to, the interests of the Company’s shareholders.

 

In addition to the conflicts of interest described above, the Company’s shareholders should be aware that some of the Company’s and QIND’s directors and executive officers may have other interests and arrangements that are different from, or in addition to, those of the Company’s shareholders. These interests and arrangements may create potential conflicts of interest.

 

We are in default under one of our promissory notes, and our failure to pay the required redemption price may result in a material adverse effect on our financial condition and business operations.

 

On November 11, 2024, Fusion Fuel Portugal entered into insolvency proceedings. A convertible promissory note issued by the Company to an investor on May 7, 2024 in the original principal amount of $1,150,000 (the “May 2024 Note”) provides for certain customary events of default, including, among other things, the bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors that are instituted by or against the Company or any subsidiary of the Company (a “Bankruptcy Event of Default”). As a result of the commencement of the insolvency proceedings, on November 11, 2024, a Bankruptcy Event of Default may be deemed to have occurred under the terms of the May 2024 Note.

 

Upon the occurrence of a Bankruptcy Event of Default, the Company must promptly pay to the holder of the May 2024 Note an amount in cash representing (i) all outstanding principal, unpaid interest and unpaid late charges on such principal and interest accrued up to the date of redemption, multiplied by (ii) 125%, in addition to any and all other amounts due. After the occurrence and during a Bankruptcy Event of Default, the May 2024 Note will accrue interest at the rate of 18.0% per annum. As of the date of the commencement of the insolvency proceedings, the outstanding balance under the May 2024 Note was approximately $140,000. As a result of the Bankruptcy Event of Default, the Company became liable to the holder of the May 2024 Note for at least $175,000.

 

On November 25, 2024, the holder of the May 2024 Note notified the Company of the Bankruptcy Event of Default. The Company has commenced discussions with the holder of the May 2024 Note concerning a forbearance agreement or waiver. However, there can be no assurance that the Company will reach any agreement or obtain any waiver. As of the date of this prospectus, the Company has not reached any agreement or obtained any waiver with respect to this matter.

 

In addition, as a result of our entry into the Securities Purchase Agreement, dated as of January 10, 2025 (the “January 2025 Purchase Agreement”), with certain institutional investors, the issuance of the January 2025 Notes (as defined below), our entry into the Securities Purchase Agreement, dated as of February 28, 2025 (the “February 2025 Purchase Agreement”), and the issuance of the March 2025 Notes (as defined below), we may also be in breach of a restrictive covenant under the May 2024 Note prohibiting the Company from incurring additional indebtedness under the May 2024 Note except under certain circumstances. The January 2025 Purchase Agreement provides that on or before February 9, 2025, unless extended with the written consent of the Required Holders (as defined in the January 2025 Purchase Agreement), the Company is required to obtain the consent of the holder of the May 2024 Note to the transactions contemplated by the January 2025 Purchase Agreement and the specified transaction documents. The February 2025 Purchase Agreement provides that on or before April 2, 2025, unless extended with the written consent of the Required Holders (as defined in the February 2025 Purchase Agreement), the Company is required to obtain the consent of the holder of the May 2024 Note to the transactions contemplated by the February 2025 Purchase Agreement and the specified transaction documents. As of the date of this report, we have not obtained such consent.

 

If we are unable to obtain a waiver or forbearance from the May 2024 Note holder on its loan, we may continue to be liable for the repayment of the entire May 2024 Note’s balance, including default interest, late charges, and the redemption premium described above, which may have a material adverse impact on our business, operations or financial condition.

 

 

Our current level of indebtedness could adversely affect our financial condition or liquidity, and we could have difficulty fulfilling our obligations under our indebtedness, which may have a material adverse effect on us.

 

As of the date of this document, we had outstanding indebtedness totaling more than $2 million, compared to total cash of less than $1 million and 2023 comprehensive loss of approximately €31.0 million. Our current level of indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect of our indebtedness and other financial commitments. The level of our indebtedness and other financial commitments could have other important consequences for our business, including:

 

●

making it more difficult for us to satisfy our obligations with respect to indebtedness and other financial commitments;

 

●

increasing our vulnerability to adverse changes in general economic, industry, and competitive conditions;

 

●

requiring us to dedicate a significant portion of our cash flows from operations to make payments on our indebtedness and other financial commitments, thereby reducing the availability of our cash flows to fund working capital and other general corporate purposes;

 

●

limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

 

●

restricting us from capitalizing on business opportunities;

 

●

placing us at a competitive disadvantage compared to our competitors that have less debt;

 

●

limiting our ability to borrow additional funds for working capital, acquisitions, debt service requirements, execution of our business strategy, or other general corporate purposes;

 

●

requiring us to provide additional credit support, such as letters of credit or other financial guarantees, to our customers or suppliers, thereby limiting our availability of funds;

 

●

limiting our ability to enter into certain commercial arrangements because of concerns of counterparty risks; and

 

●

limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors that have less debt.

 

The occurrence of any one or more of these circumstances could have a material adverse effect on us.

 

Our ability to make scheduled payments on and to refinance our indebtedness, including on our outstanding promissory notes, depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business, and other factors (many of which are beyond our control), including the availability of financing in the international banking and capital markets. We cannot be certain that our business will generate sufficient cash flows from operations or that future borrowings will be available to us in an amount sufficient to enable us to service our debt, including the outstanding notes, to refinance our debt, or to fund our other liquidity needs.

 

If we are unable to meet our debt service obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, including the outstanding notes. Failure to successfully restructure or refinance our debt could cause us to default on our debt obligations and would impair our liquidity. Our ability to restructure or refinance our debt will depend on the condition of the capital markets, which is outside of our control, and our financial condition at such time. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants that could further restrict our business operations.

 

Moreover, in the event of a default of our debt service obligations, if not cured or waived, the holders of our outstanding promissory notes could elect to declare all the funds borrowed to be due and payable, together with accrued and unpaid interest and late charges, based on a formula that will require a fixed or variable additional amount to be paid in addition to unpaid principal, interest and late charges. Our assets or cash flows may not be sufficient to fully repay borrowings under our outstanding debt instruments if accelerated upon an event of default. Any such default, event of default if not cured or waived, or declaration of acceleration could force us into bankruptcy, reorganization, insolvency, or liquidation.

 

 

Our promissory notes and any other credit or similar agreements into which we may enter in the future may restrict our operations, particularly our ability to respond to changes or to take certain actions regarding our business.

 

Our promissory notes contain a number of restrictive covenants that impose operating and financial restrictions on us and limit our ability to engage in acts that may be in our long-term interest, including restrictions on our ability to incur or repay other debt, create liens and encumbrances, engage in certain fundamental changes, dispose of assets, repurchase our stock, and engage in transactions with affiliates, in each case subject to limitations and exceptions.

 

Our promissory notes also contain customary events of default, such as the failure to pay obligations when due, failure to issue shares upon conversions as required, a material breach of representations and warranties or covenants, the initiation of bankruptcy or insolvency proceedings by the Company or its subsidiaries, and defaults on other indebtedness. In the event of a default of our debt service obligations, if not cured or waived, the holders of the applicable indebtedness, including holders of our outstanding notes, could elect to declare all the funds borrowed to be due and payable, together with accrued and unpaid interest and late charges, based on a formula that will require a fixed or variable additional amount to be paid in addition to unpaid principal, interest and late charges. Our assets or cash flows may not be sufficient to fully repay borrowings under our outstanding debt instruments if accelerated upon an event of default. Any such default, event of default if not cured or waived, or declaration of acceleration could force us into bankruptcy, reorganization, insolvency, or liquidation.

 

Our promissory notes are convertible into Class A Ordinary Shares. Our promissory notes contain full-ratchet antidilution provisions, i.e., the conversion price under our promissory notes will be reduced to equal any lower price per share of any securities issued by the Company, subject to certain exceptions. As a result, we may be unable to raise needed capital from investors seeking prices at a discount to the conversion prices of our outstanding convertible securities. If we are able to sell securities at a lower price than the applicable conversion price under our promissory notes, the effect of the full-ratchet provisions under our promissory notes may cause significant dilution to our existing shareholders.

 

As a result of these restrictions and default conditions, we may be limited in how we conduct business, unable to raise additional debt or equity financing to operate during general economic or business downturns, or unable to compete effectively or to take advantage of new business opportunities. In the event that our promissory notes’ holders accelerated the repayment of borrowings, we may not have sufficient assets to repay that indebtedness. Any forced repayment under our promissory notes would likely have a material adverse effect on us, potentially including forcing us into bankruptcy or liquidation.

 

In addition, we may enter into other credit agreements or other debt arrangements from time to time which contain similar or more extensive restrictive covenants and events of default, in which case we may face similar or additional limitations as a result of the terms of those credit agreements or other debt arrangements.

 

We will need to obtain additional funding to continue operations. If we fail to obtain the necessary financing or fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations and we may be forced to significantly delay, scale back or discontinue our operations.

 

We will require additional capital to fund our operations, and if we fail to obtain necessary financing, our business plan may not be successful.

 

Our operations have consumed substantial amounts of cash since inception, and we expect they will continue to consume substantial amounts of cash as we aggressively build our platform and our internal marketing, compliance and other administrative functions. We will require additional capital to maintain our business operations, and we may also need to raise additional funds sooner if our operating and other expenses are higher than we expect.

 

Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we currently expect.

 

A lack of available capital may prevent us from expanding our operations or otherwise capitalizing on our business opportunities, or to remain in operation. As a result, our business, financial condition and results of operations could be materially adversely affected.

 

 

We have a substantial amount of goodwill and intangible assets on our balance sheet. Future write-offs of goodwill and intangible assets may have the effect of decreasing our earnings or increasing our losses.

 

Our assets have grown recently through the acquisition of a controlling interest in QIND as of November 26, 2024. As a result of this acquisition, as of November 26, 2024, our goodwill and intangible assets were approximately $11.4 million, or 68.9% of total assets on a pro forma basis. 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 standards, it may materially and adversely affect our operating results, financial condition, and the price of our common stock.

 

Our business operations may be adversely affected by information systems interruptions or cybersecurity intrusions. 

 

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 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. Our 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 cybersecurity 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.

 

The success of our business depends on our ability to maintain and enhance our reputation and brand.

 

We believe that our reputation in our industry is of significant importance to the success of our business. A well-recognized brand is critical to increasing our customer base and, in turn, increasing our revenue. Since the industry is highly competitive, our ability to remain competitive depends to a large extent on our ability to maintain and enhance our reputation and brand, which could be difficult and expensive. To maintain and enhance our reputation and brand, we need to successfully manage many aspects of our business, such as cost-effective marketing campaigns to increase brand recognition and awareness in a highly competitive market. We cannot assure you, however, that these activities will be successful and achieve the brand promotion goals we expect. If we fail to maintain and enhance our reputation and brand, or if we incur excessive expenses in our efforts to do so, our business, financial conditions and results of operations could be adversely affected.

 

 

Our long-term success depends, in part, on our ability to operate and expand internationally, and our business is susceptible to risks associated with international operations.

 

We 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:

 

●

Costs, risks, and uncertainties associated with tailoring our services in international jurisdictions as needed to better address both the needs of customers and the threats of local competitors;

 

●

Risks of economic instability, including due to inflation;

 

●

Uncertainties in forecasting revenues and expenses in markets where we have not previously operated;

 

●

Costs and risks associated with local and national laws and regulations governing the industries in which we operate, health and safety, climate change and sustainability, and labor and employment;

 

●

Operational and compliance challenges caused by distance, language, and cultural differences;

 

●

Costs and risks associated with compliance with international tax laws and regulations;

 

●

Costs and risks associated with compliance with the U.S. Foreign Corrupt Practices Act and other laws in the United States related to conducting business outside the United States, as well as the laws and regulations of non-U.S. jurisdictions governing bribery and other corrupt business activities;

 

●

Costs and risks associated with human trafficking, modern slavery and forced labor reporting, training and due diligence laws and regulations in various jurisdictions;

 

●

Currency exchange rate fluctuations and restrictions on currency repatriation;

 

●

Competition with companies that understand the local market better than we do or that have preexisting relationships with regulators and customers in those markets;

 

●

Adverse effects resulting from the United Kingdom’s exit from the European Union (commonly known as “Brexit”);

 

●

Reduced or varied protection for intellectual property rights in some countries;

 

●

Disruption of operations from labor and political disturbances;

 

●

Withdrawal from or renegotiation of international trade agreements and other restrictions on the trade between the United States and other countries;

 

●

Changes in tariff and trade barriers; and

 

●

Geopolitical events, including natural disasters, climate change, public health issues, political instability, terrorism, insurrection, or war.

 

Entry into certain transactions with foreign entities now or in the future may be subject to government regulations, including review related to foreign direct investment by U.S. or foreign government entities. If a transaction with a foreign entity is subject to regulatory review, such regulatory review might limit our ability to enter into the desired strategic alliance and thus our ability to carry out our long-term business strategy.

 

Operating in international markets also requires significant management attention and financial resources. The investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability and could instead result in increased costs without a corresponding benefit. We cannot guarantee that our international operations or expansion efforts will be successful.

 

 

Risks associated with climate change and other environmental impacts, and increased focus and evolving views of our customers, shareholders, and other stakeholders on climate change issues, could negatively affect our business and operations.

 

The effects of climate change create short and long-term financial risks to our business, both in the UAE as a result of our acquisition of QIND and its ownership of 51% of Al Shola Gas, and globally. We have significant operations located in regions that have been, and may in the future be, exposed to significant weather events and other natural disasters. Climate-related changes can increase variability in or otherwise impact natural disasters, including weather patterns, with the potential for increased frequency and severity of significant weather events (e.g., flooding, hurricanes, and tropical storms), natural hazards (e.g., increased flooding risk), rising mean temperature and sea levels, and long-term changes in precipitation patterns (e.g., drought, desertification, and/or poor water quality). We expect climate change could affect our facilities, operations, employees, and communities in the future, particularly at facilities in coastal areas and areas prone to extreme weather events and water scarcity. Our suppliers are also subject to natural disasters that could affect their ability to deliver or perform under our contracts, including as a result of disruptions to their workforce and critical infrastructure. Disruptions also impact the availability and cost of materials needed for manufacturing and could increase insurance and other operating costs.

 

Increased worldwide focus on climate change has led to legislative and regulatory efforts to combat both potential causes and adverse impacts of climate change, including regulation of greenhouse gas emissions. New or more stringent laws and regulations related to greenhouse gas emissions and other climate change related concerns may adversely affect us, our suppliers, and our customers. Some of our facilities are, for example, engaged in manufacturing processes that produce greenhouse gas emissions, including carbon dioxide, or rely on products from others that do so. We have worked for years to reduce our reliance on fossil-based energy sources, to decrease our greenhouse gas emissions, to reduce our consumption of water and production of waste, and to ensure our compliance with environmental regulations where we operate, enhancing our record of environmental sustainability. However, new and evolving laws and regulations could mandate different or more restrictive standards, could require capital investments to transition to low carbon technologies, could adversely impact our ongoing operations, and could require changes on a more accelerated time frame. Our suppliers may face similar challenges and incur additional compliance costs that are passed on to us. These direct and indirect costs may adversely impact our results.

 

We may be adversely affected by the effects of inflation.

 

Inflation in wages, materials, parts, equipment, and other costs has the potential to adversely affect our results of operations, cash flows and financial position by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers for our products and services. In addition, the existence of inflation in the economy has the potential to result in higher interest rates, which could result in higher borrowing costs, supply shortages, increased costs of labor, weakening exchange rates and other similar effects. We have experienced inflationary pressures on our supply chain due to increased shipping costs, increased energy prices for manufacture of our commercial products as well as increased prices from suppliers of raw materials. We have so far been able to offset inflationary pressure to consumers, but it cannot be guaranteed that our results of operations will not be adversely affected by inflation in the future and could reduce sales, operating margins, and overall financial performance.

 

Relatively high interest rates may adversely impact our business.

 

Due to recent increases in inflation, the U.S. Federal Reserve has raised its benchmark interest rate. Increases in the federal benchmark rate have resulted in an increase in market interest rates, which may increase our interest expense and the costs of refinancing any existing indebtedness or obtaining new debt. Consequently, relatively high interest rates will increase cost of capital and the cost of borrowings for any other corporate purpose. As a result, if we need or seek significant borrowings and interest rates remain elevated or increase, the cost of such borrowing to us could be significant, which may have a significant adverse impact on our financial condition and results of operations.

 

 

Significant fluctuations in foreign currency exchange rates may harm our financial results.

 

We are exposed to fluctuations in foreign currency exchange rates. Any significant change in the value of the currencies of the countries in which we do business could affect our ability to sell products and services competitively and control our cost structure, which could have a material adverse effect on our results of operations.

 

We may not have adequate insurance for potential liabilities, including liabilities arising from litigation.

 

In the ordinary course of business, we have and, in the future, may become the subject of various claims, lawsuits and administrative proceedings seeking damages or other remedies concerning our commercial operations, the products we distribute, employees and other matters, including potential claims by individuals alleging exposure to hazardous materials as a result of the products we distribute or our operations. Some of these claims may relate to the activities of businesses that we have acquired, even though these activities may have occurred prior to our acquisition of such businesses. Our products and services are primarily for use in the energy industry, which is subject to inherent risks that could result in death, personal injury, property damage, pollution, or loss of production. In addition, defects in our products or services could result in death, personal injury, property damage, pollution or damage to equipment and facilities. Actual or claimed defects in our products or services may give rise to claims against us for losses and expose us to claims for damages.

 

We maintain insurance to cover certain of our potential losses, and we are subject to various self-retentions, deductibles, and caps under our insurance. It is possible, however, that judgments could be rendered against us in cases in which we would be uninsured and beyond the amounts that we currently have reserved or anticipate incurring for such matters. Even a partially uninsured claim, if successful and of significant size, could have a material adverse effect on our business, results of operations and financial condition. Furthermore, we may not be able to continue to obtain insurance on commercially reasonable terms in the future, and we may incur losses from interruption of our business that exceed our insurance coverage. Finally, even in cases where we maintain insurance coverage, our insurers may raise various objections and exceptions to coverage which could make uncertain the timing and amount of any possible insurance recovery.

 

Changes in tax laws or exposure to additional income tax liabilities could have a material impact on our company, the results of operations, financial conditions and cash flows.

 

We are subject to income taxes, as well as non-income-based taxes in the jurisdictions in which we operate, as well as other jurisdictions in which we intend to have operations. The tax laws in these jurisdictions could change on a prospective or retroactive basis, and any such changes could adversely affect us and our effective tax rate.

 

Taxation regulation in territories around the world can also change. Furthermore, any changes made by tax authorities, together with other legislative changes, could lead to disagreements between jurisdictions with respect to the proper allocation of profits between such jurisdictions. We therefore continuously monitor changes to tax regulation and double tax treaties between the territories in which we operate. We also maintain a comprehensive transfer pricing policy to govern the flow of funds between various tax territories.

 

We are further subject to ongoing tax audits in the various jurisdictions in which we operate. We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provisions. However, there can be no assurance that we will accurately predict the outcomes of these audits, which could have a material impact on our business, financial condition, results of operations, and cash flows.

 

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 business, financial condition, results of operations, and cash flows.

 

 

During the course of the audit of our consolidated financial statements, we identified material weaknesses in our internal control over financial reporting. If we fail to establish and maintain an effective system of internal control over financial reporting, our ability to accurately and timely report our financial results or prevent fraud may be adversely affected, and investor confidence and the market price of the Class A Ordinary Shares may be adversely impacted.

 

We are subject to reporting obligations under U.S. securities laws. The SEC adopted rules pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requiring every public company to include a management report on such company’s internal control over financial reporting in its annual report, which contains management’s assessment of the effectiveness of its internal control over financial reporting.

 

We, in connection with the preparation of our consolidated financial statements for the fiscal year ended December 31, 2023, identified the following material weaknesses: (1) clearly defined control processes, roles and segregation of duties and sufficient financial reporting and accounting personnel within our business processes to ensure appropriate financial reporting, and (2) the design and operating effectiveness of IT general controls for information systems that are significant to the preparation of our consolidated financial statements. See Item 15. Controls and Procedures -Disclosure Controls and Procedures”. Our management is currently in the process of evaluating the steps necessary to remediate the ineffectiveness. However, measures that we implement may not fully address the material weaknesses in our internal control over financial reporting and we may not be able to conclude that the material weaknesses have been fully remedied.

 

Failure to correct the material weaknesses and other control deficiencies or failure to discover and address any other control deficiencies could result in inaccuracies in our consolidated financial statements and could also impair our ability to comply with applicable financial reporting requirements and make related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations, and prospects, as well as the trading price of the Class A Ordinary Shares, may be materially and adversely affected. Due to the material weaknesses in our internal control over financial reporting as described above, our management concluded that our internal control over financial reporting was not effective as of December 31, 2023. This could adversely affect the market price of the Class A Ordinary Shares due to a loss of investor confidence in the reliability of our reporting processes.

 

We are dependent on our management team, and the loss of any key member of this team may prevent us from implementing our business plan in a timely manner, or at all.

 

Our success depends largely upon the continued services of our executive officers and other key personnel, particularly John-Paul Backwell, our Chief Executive Officer; Frederico Figueira de Chaves, our Interim Chief Financial Officer, Chief Strategy Officer and Head of Hydrogen Solutions and a director of the Company; and Jeffrey E. Schwarz, the Chairman of our board of directors. Our executive officers or key employees could terminate their employment with us at any time without penalty. In addition, we do not maintain key person life insurance policies on any of our employees or any of our contract parties. The loss of one or more of these executive officers or key employees could seriously harm our business and may prevent us from implementing our business plan in a timely manner, or at all.

 

If we are unable to attract and retain key employees and hire qualified management, technical, engineering, and sales personnel, our ability to compete and successfully grow our business could be harmed.

 

We believe that our success and our ability to reach our strategic objectives are highly dependent on the contributions of our key management, technical, engineering, and sales personnel. The loss of members of our key personnel, whether voluntarily or involuntarily, could significantly limit our ability to achieve its strategic objectives by delaying the development and introduction of our products and services and negatively impact our business, prospects, and operating results. Our future success also depends on our ability to attract, retain and motivate highly skilled employees, particularly employees with electrical and/or mechanical engineering skills or gas management specialties that would enable us to effectively deliver our hydrogen and gas distribution solutions to clients on time and on budget, as well as client relationship managers with relevant regional and international experience. Competition for these executives in our industry is intense and we may experience difficulty in recruiting and retaining such individuals. Many of the companies with which we compete for experienced executives and key personnel also have greater resources than we have. As a result, we may be unable to attract or retain the industry professionals that are critical to our success, resulting in harm to our key client relationships, loss of key information, expertise or know-how and unanticipated recruitment and retaining costs. Additionally, our ability to achieve revenue growth in the future will depend, in part, on our success in recruiting and retaining client development executives. Such executives may require significant on-boarding time and effort in order to achieve full productivity, which may impair business and revenue growth. Additionally, the loss of the services of our key personnel could make it more difficult to successfully operate its business and pursue our business goals. In addition, we do not have “key person” life insurance policies covering any of our key employees.

 

 

We are a holding company. Our material assets are our cash balances, loans receivables from our direct subsidiaries and equity interest in our direct and indirect subsidiaries and we are accordingly dependent upon distributions from them to pay taxes and cover our corporate and other overhead expenses.

 

We are a holding company and will have no material assets other than our cash balances and equity interest in our direct and indirect subsidiaries. We have no independent means of generating revenue. To the extent that we need funds and a subsidiary is restricted from making such distributions or payment under applicable law or regulation or under the terms of any financing arrangements due to restrictive covenants or otherwise, or are otherwise unable to provide such funds, our liquidity and financial condition could be materially adversely affected.

 

Risks Related to Our Planned Hydrogen Business

 

Demand for hydrogen engineering and advisory services is uncertain and dependent on government policies.

 

The Company’s planned hydrogen business is highly dependent on the growth and adoption of hydrogen as a viable energy source. While global decarbonization efforts and policy initiatives support hydrogen development, the pace and scale of adoption remain uncertain. Many hydrogen projects rely on government incentives, grants, and regulatory mandates to be economically viable. Any reduction, delay, or withdrawal of such incentives could significantly impact demand for the Company’s services. Additionally, competition from alternative energy sources, such as battery storage and traditional renewables, may limit market growth, making it difficult for the Company to secure a strong customer base. If the hydrogen industry does not expand as anticipated, the Company’s ability to generate revenue and achieve profitability could be adversely affected.

 

The Company will face intense competition in the hydrogen engineering and advisory services sector.

 

The hydrogen industry is becoming increasingly competitive, with numerous established energy companies and engineering firms offering similar services. Many of these competitors have greater financial resources, established customer relationships, and extensive industry expertise, which may make it difficult for the Company to secure contracts and differentiate itself in the market. The Company’s ability to compete depends on its ability to demonstrate technical expertise, secure strategic partnerships, and deliver cost-effective solutions. Additionally, if competitors gain market dominance, the Company may struggle to maintain pricing power, reducing its potential profitability. Failure to compete effectively in this rapidly evolving sector could result in lower-than-expected revenue and limit the Company’s long-term viability.

 

Supply chain disruptions and cost increases could negatively impact the Company’s hydrogen business.

 

The Company’s ability to execute hydrogen projects efficiently will depend on the availability of critical components, including electrolyzers, storage systems, and engineering materials. Global supply chain disruptions, inflationary pressures, tariffs, or shortages in key materials could lead to increased project costs and delays, reducing profitability. Additionally, sourcing specialized hydrogen-related equipment may require long lead times, which could impact project execution schedules and result in penalties or contract cancellations. The Company must also manage currency fluctuations and geopolitical risks that could affect its supply chain. If the Company is unable to secure reliable supply channels or mitigate cost increases, its financial condition and ability to compete in the hydrogen market could be significantly impacted.

 

The Company’s hydrogen business will be subject to complex and evolving regulatory requirements.

 

Hydrogen production, storage, and transportation are heavily regulated industries, requiring multiple permits, safety certifications, and compliance with environmental laws. The Company must adhere to stringent regulatory standards across different jurisdictions, which could lead to delays, increased compliance costs, or restrictions on project development. Additionally, evolving policies on hydrogen safety, emissions, and energy infrastructure could impose new compliance burdens that require costly operational adjustments. Failure to obtain necessary approvals or comply with applicable laws could result in project cancellations, legal liabilities, or fines, materially impacting the Company’s ability to execute its business strategy.

 

 

Legal and contractual risks could adversely impact the hydrogen business.

 

The Company’s hydrogen engineering and advisory business exposes it to potential legal risks, including contractual disputes, liability claims, and regulatory enforcement actions. Given the complexity of hydrogen projects, disagreements over project specifications, delays, or performance guarantees could result in costly litigation or reputational damage. Additionally, as hydrogen is a highly combustible gas, the Company must adhere to strict safety protocols to mitigate the risk of accidents, fires, or leaks. Any failure to meet safety standards could lead to liability claims, project cancellations, or regulatory penalties. If the Company becomes involved in legal disputes or compliance violations, it could face significant financial losses and operational disruptions.

 

The transition to a hydrogen advisory and engineering business may involve intellectual property risks.

 

As the Company shifts from proprietary hydrogen technology development to advisory and engineering services, it may face challenges related to intellectual property (IP) rights. The discontinuation of the HEVO product line and the insolvency of Fusion Fuel Portugal may lead to disputes over former IP assets, patents, or trade secrets. Additionally, the Company must ensure that it does not infringe on third-party IP while developing its planned hydrogen solutions. Any IP-related legal challenges could result in costly litigation, reputational harm, or limitations on the Company’s ability to commercialize its services. Protecting its IP while navigating potential disputes will be critical to the Company’s long-term success in the hydrogen industry. There is no assurance that the Company will succeed in protecting its IP, and if fails to do so, the Company’s results of operations and financial condition may be materially adversely affected.

 

If we are not able 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.

 

The market for our services is characterized by continual technological developments to provide better and more reliable performance and services. If we are not able 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.

 

Our ability to operate and our growth potential could be materially and adversely affected if we cannot attract, employ, and retain technical personnel at a competitive cost.

 

Many of the services that we provide and the products that we sell are complex and highly engineered and often must perform or be performed in harsh conditions. We believe that our success depends upon our ability to attract, employ, and retain technical personnel with the ability to design, utilize, and enhance these services and products. A significant increase in the wages paid by competing employers could result in a reduction of our skilled labor force, increases in the wage rates that we must pay, or both. If either of these events were to occur, our cost structure could increase, our margins could decrease, and any growth potential could be impaired.

 

If we are unable to keep pace with technology developments in our industry, this could adversely affect our ability to win, maintain and grow market share.

 

The energy industry is subject to the introduction of new technologies, some of which may be subject to patent or other intellectual property protections. We cannot be certain that we will be able to provide services relating to new technologies on a timely basis or at an acceptable cost. The energy industry is highly competitive and dominated by a few large players that have resources to invest in new technologies. Our ability to continually provide competitive solutions and services can impact our ability to win, maintain and grow our market share and to negotiate acceptable commercial terms with our potential clients. If we are unable to acquire or develop competitive technology or deliver it to our clients in a timely and cost-competitive manner in the markets we serve, it could adversely affect our financial condition, results of operations and cash flows.

 

 

Our hydrogen services activities are subject to a number of development risks, operational hazards, regulatory approvals and other risks which may not be fully covered by insurance, and which could cause cost overruns and delays that could have a material adverse effect on our business, results of operations, financial condition, liquidity and prospects.

 

Siting, development, and delivery of hydrogen services are subject to the risks of delay or cost overruns inherent in any industrial development project resulting from numerous factors, including but not limited to the following:

 

●

Difficulties or delays in obtaining, or failure to obtain, sufficient debt or equity financing on reasonable terms;

 

●

Failure to obtain all necessary government and third-party permits, approvals and licenses for the construction and operation of any of the proposed facilities;

 

●

Failure to secure land plots and offshore sites required for the siting and construction of any of the proposed facilities;

 

●

Failure to enter into power purchase agreements that generate sufficient revenue to support the financing and operation of the project;

 

●

Difficulties in engaging qualified contractors necessary to the construction of the contemplated project;

 

●

Shortages of equipment, material or skilled labor;

 

●

Natural disasters and catastrophes, such as hurricanes, explosions, fires, floods, industrial accidents, hostile military action and terrorism;

 

●

Unscheduled delays in the delivery of ordered materials;

 

●

Work stoppages, industrial and labor disputes;

 

●

Competition with other domestic and international hydrocarbon fuel suppliers and alternative energy providers;

 

●

Political and regulatory change in the countries in which we operate;

 

●

Unanticipated changes in domestic and international marked demand for and supply of hydrogen, which will depend in part on supplies of and prices for alternative energy sources, coal, natural gas, LNG, crude oil and diesel, and the discovery of new sources of natural resources; and

 

●

Adverse general economic conditions.

 

Delays beyond the estimated development periods, as well as cost overruns, could increase the cost of completion beyond the amounts that are estimated, which could require additional sources of financing to fund the activities until the proposed project becomes operational (which could cause further delays). The need for more financing may also make the project uneconomic. Delays could also trigger penalties or termination of agreements with third parties, cause a delay in receipt of revenues projected from the project or cause a loss of one or more clients. As a result, any significant delay, whatever the cause, could be detrimental to our ability to provide valuable hydrogen services, and could therefore have a material adverse effect on our business, results of operations, financial condition, liquidity and prospects.

 

 

Our business is subject to the risks of earthquakes, fires, floods, tsunamis, pandemics, and other natural catastrophic events and to interruption by man-made problems such as technogenic catastrophic events, computer viruses or terrorism.

 

Hydrogen facilities and operations are vulnerable to damage or interruption from earthquakes, fires, floods, pandemics, power losses, natural gas explosions, telecommunications failures, terrorist attacks, acts of war, human errors, break-ins and similar events. For example, a significant natural disaster, such as a hurricane, earthquake, tsunami or flood, could have a material adverse effect on any hydrogen project, and insurance coverage may be insufficient to compensate us for losses that may occur. In addition, acts of terrorism, which may be targeted at power stations as crucial elements of a country’s infrastructure, could cause disruptions in our clients’ business or the economy as a whole. Hydrogen energy transport IT infrastructure may also be vulnerable to computer viruses, break-ins, denial-of-service attacks and similar disruptions from unauthorized tampering with our or our clients’ IT systems, which could lead to interruptions, delays and loss of critical data. We may not have sufficient protection or recovery plans in the event such a disaster should occur. As our clients rely heavily on physical infrastructure, computer and communications systems to conduct their business, such disruptions could negatively impact our ability to provide our hydrogen services and either directly or indirectly disrupt our clients’ or supplier’s businesses, which could have a material adverse effect on our business, results of operations and financial condition.

 

Risks Related to Our Gas Distribution Business

 

Our gas distribution business is subject to numerous operational, regulatory and market risks that could adversely impact its financial performance and long-term viability.

 

The Company’s gas distribution business, primarily operated through Al Shola Gas, is subject to various operational, regulatory, and market risks that could adversely impact its financial performance and long-term viability. The distribution of liquefied petroleum gas (“LPG”) and other industrial gases involves significant logistical challenges, including supply chain dependencies, fluctuating commodity prices, and transportation risks. Any disruptions in the supply of gas due to geopolitical instability, supplier constraints, or global market fluctuations could result in increased costs or an inability to meet customer demand, negatively affecting revenue and profitability. Additionally, the business must maintain extensive infrastructure, including storage facilities, transport fleets, and distribution networks, all of which require continuous investment and maintenance. Unexpected equipment failures, regulatory compliance issues, or safety incidents could lead to operational delays, legal liabilities, or reputational harm.

 

Moreover, the gas distribution industry is highly regulated, with stringent safety and environmental requirements governing the storage, handling, and transportation of flammable and hazardous materials. Compliance with evolving regulations may require costly upgrades to infrastructure, operational adjustments, or additional licensing, increasing the Company’s expenses. Non-compliance with these regulations could result in fines, operational restrictions, or liability claims in the event of accidents or environmental hazards. Additionally, as governments worldwide advocate for decarbonization and renewable energy alternatives, demand for LPG and other traditional gas products may decline over time, forcing the Company to adapt its business model or risk revenue erosion. If the Company fails to effectively manage these risks, its gas distribution business could face financial strain, operational challenges, and reduced market competitiveness.

 

We are dependent on the availability of raw materials, parts, and components used in our products.

 

While we manufacture certain parts and components used in our products, we also require substantial amounts of raw materials and purchases of certain parts and components from suppliers. The availability of and prices for raw materials, parts and components may be subject to curtailment or change due to, among other things, suppliers’ allocations to other purchasers, interruptions in production by suppliers, including due to geopolitical or civil unrest, unfavorable economic or industry conditions, labor disruptions, supply chain disruptions, catastrophic weather events, natural disasters, the occurrence of a contagious disease or illness, changes in exchange rates and prevailing price levels. Any change in the supply of, or price for, these raw materials or parts and components could materially affect us and our financial condition, results of operations and cash flow.

 

 

Increases in the price of commodities could impact the cost or price of our products, which could impact our ability to sustain and grow earnings.

 

Our manufacturing processes 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, significant amounts of plastic, aluminum, steel, and other raw materials. In the past raw material prices have experienced 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.

 

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 be required to repair or replace products in use or to reimburse customers for products that fail to work or meet strict performance criteria. To date, we have experienced some product failures related to electronic and mechanical components within equipment and vehicles. These are either repaired under warranty or at cost to the customer or under a 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, other environmental factors, the impact of epidemics or pandemics, 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 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.

 

The markets in which we operate are highly competitive, which could reduce sales and operating margins.

 

Most of our products are sold in competitive markets. Maintaining and improving a competitive position will require continued investment in manufacturing, engineering, quality standards, marketing, customer service and support and distribution networks. We may not be successful in maintaining our competitive position. Our competitors may develop products and methods that are more efficient or may adapt quicker to new technologies or evolving customer requirements. We may not be able to compete successfully with existing competitors or with new competitors. Pricing pressures may require us to adjust the prices of products to stay competitive. Failure to continue competing successfully could reduce sales, operating margins, and overall financial performance.

 

A substantial decrease in the price of gas could significantly lower our gross profit or cash flow.

 

We distribute gas and, as a result, our business may be significantly affected by the price and supply of gas. When gas prices are lower, the prices that we charge customers for products may decline, which affects our gross profit and cash flow. The gas industry as a whole is cyclical and at times pricing and availability of gas can be volatile due to numerous factors beyond our control, including general domestic and international economic conditions, labor costs, sales levels, competition, consolidation of steel producers, import duties and tariffs and currency exchange rates. When gas prices decline, customer demands for lower prices and our competitors’ responses to those demands could result in lower sale prices and, consequently, lower gross profit or cash flow.

 

 

If gas prices rise, we may be unable to pass along the cost increases to our customers.

 

We maintain inventories of gas to accommodate the lead time requirements of our customers. Accordingly, we purchase gas in an effort to maintain our inventory at levels that we believe to be appropriate to satisfy the anticipated needs of our customers based upon historic buying practices, contracts with customers and market conditions. Our commitments to purchase gas are generally at prevailing market prices in effect at the time we place our orders. If gas prices increase between the time that we order gas and the time of delivery of such products to us, our suppliers may impose surcharges that require us to pay for increases in gas prices during such period. Demand for the gas we distribute, the actions of our competitors, and other factors will influence whether we will be able to pass such gas cost increases and surcharges on to our customers, and we may be unsuccessful in doing so.

 

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 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 gas 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 sources of disruption. These issues may also result in cost overruns, delays, and project losses.

 

Providing services on an integrated basis may also require us to assume additional risks associated with operating cost inflation, labor availability and productivity, supplier pricing and performance, and potential claims for liquidated damages. We rely on third-party subcontractors and equipment providers to assist us with the completion of these types of contracts. To the extent that we cannot engage subcontractors or acquire equipment or materials in a timely manner and on reasonable terms, our ability to complete a project in accordance with stated deadlines or at a profit may be impaired. If the amount we are required to pay for these goods and services exceeds the amount we have estimated in bidding for fixed-price work, we could experience losses in the performance of these contracts. These delays and additional costs may be substantial, and we may be required to compensate our customers for these delays. This may reduce the profit to be realized or result in a loss on a project.

 

Trends in 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, gas companies. The level of exploration, development, and production activity is directly affected by trends in gas prices, which historically have been volatile and are likely to continue to be volatile. Prices for gas are subject to large fluctuations in response to relatively minor changes in the supply of and demand for 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 gas prices by 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 price of gas include:

 

●

the level of supply and demand for gas;

 

●

the cost of, and constraints associated with, producing and delivering gas;

 

●

governmental regulations and other actions, including economic sanctions and policies of governments regarding the exploration for and production and development of their gas reserves;

 

●

weather conditions, natural disasters, and health or similar issues, such as pandemics or epidemics;

 

●

worldwide political and military actions, and economic conditions, including potential recessions; and

 

●

increased demand for alternative energy and use of electric vehicles and increased emphasis on decarbonization, including government initiatives, such as the variety of tax credits contained in the U.S. Inflation Reduction Act of 2022, 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 gas 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 customers capital spending include:

 

●

gas prices, which are impacted by the factors described in the preceding risk factor;

 

●

the inability of our customers to access capital on economically advantageous terms, which may be impacted by, among other things, a decrease of investors’ interest in hydrocarbon producers because of environmental and sustainability initiatives;

 

●

changes in customers’ capital allocation, including an increased allocation to the production of renewable energy or other sustainability efforts, leading to less focus on gas production growth;

 

●

restrictions on our customers’ ability to get their gas to market due to infrastructure limitations;

 

●

consolidation of our customers;

 

●

customer personnel changes; and

 

●

adverse developments in the business or operations of our customers, including write-downs of gas reserves and borrowing base reductions under customers’ credit facilities.

 

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 manufacturing, such as proppants (primarily sand), chemicals, metals, and gels, are normally readily available. Shortages of raw materials as a result of high levels of demand or loss of suppliers 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 of operations. In addition, price increases imposed by our vendors for raw materials and transportation providers used in our business, and the inability to pass these increases through to our customers, could have a material adverse effect on our business and consolidated results of operations.

 

 

Demand for the products we distribute could decrease if the manufacturers of those products were to sell a substantial amount of goods directly to end users in the markets we serve.

 

Our products are purchased through distributors and not directly from manufacturers. If those customers were to purchase the products that we sell directly from manufacturers, or if manufacturers sought to increase their efforts to sell directly to end users, our business, results of operations and financial condition could be materially and adversely affected. These or other developments that remove us from, or limit our role in, the distribution chain, may harm our competitive position in the marketplace and reduce our sales and earnings.

 

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. There 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 gas industry and, as a result, we are exposed to potential liabilities that may affect our financial condition and reputation.

 

Risks inherent to the gas industry, such as equipment malfunctions and failures, equipment misuse and defects, explosions and uncontrollable flows of gas and natural disasters, can cause personal injury, loss of life, suspension of operations, damage to formations, damage to facilities, business 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 gas production, pollution, and other environmental damages. The frequency 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.

 

Our customers could seek damages for losses associated with these errors, defects, or other performance problems. Our insurance policies may not be adequate to cover all liabilities. Further, insurance may not be generally available in the future or, if available, insurance premiums may make such insurance commercially unjustifiable. Moreover, even if we are successful in defending a claim, it could be time-consuming and costly to defend.

 

We are subject to increased risks associated with our investments in emerging markets, particularly in the Middle East region and specifically in the UAE. These risks encompass significant political, social, and economic uncertainties in the region. Given the volatile nature of these markets, instabilities in these regions could significantly adversely affect the value of our investments.

 

Almost all of our gas operations are conducted, and almost of our gas assets are located in 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, there 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:

 

●

an increase in inflation and the cost of living;

 

●

a devaluation in the currency of any country in which we have operations;

 

●

external acts of warfare and civil clashes or other hostilities involving nations in the region;

 

●

governmental actions or interventions, including tariffs, protectionism, and subsidies;

 

●

difficulties and delays in obtaining governmental or other approvals, new permits and consents for our operations or renewing existing ones;

 

●

potential lack of transparency or reliability in jurisdictions where we operate;

 

●

cancellation of contractual rights;

 

●

lack of infrastructure;

 

●

expropriation or nationalization of assets;

 

●

inability to repatriate profits and/or dividends;

 

●

continued regional political instability and unrest, including government or military regime change, riots or other forms of civil disturbance or violence, including through acts of terrorism;

 

●

military strikes or the outbreak of war or other hostilities involving nations in the region;

 

●

a material curtailment of the industrial and economic infrastructure development that is currently underway across the Middle East region;

 

●

increased government regulations, or adverse governmental activities, with respect to price, import and export controls, the environment, customs and immigration, capital transfers, foreign exchange and currency controls, labor policies, land and water use and foreign ownership;

 

●

changing tax regimes, including the imposition of taxes in currently tax favorable jurisdictions;

 

●

arbitrary, inconsistent, or unlawful government action, including capricious application of tax laws and selective tax audits;

 

●

limited availability of capital or debt financing; and

 

●

slowing regional and global economic environment.

 

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 achieve profitable operations if such events or circumstances were to occur.

 

Investors should also be aware that emerging markets are subject to greater risks than more developed markets, including in some cases significant legal, economic, and political risks. Accordingly, investors should exercise particular care in evaluating the risks involved and must decide for themselves whether, considering those risks, their investment is appropriate. Generally, investment in developing markets is only suitable for sophisticated investors who fully appreciate the significance of the risks involved.

 

 

To the extent that economic growth or performance in the countries in which we operate slows or begins to decline, or political conditions become sufficiently unstable to have a material adverse effect on our operations, our business, financial condition, and results of operations may be materially adversely affected.

 

We are exposed to risks from potentially unpredictable legal and regulatory environments in the UAE and Middle East region.

 

We currently operate in the UAE, an emerging market economy, which is in various stages of developing legal and regulatory systems that are not yet as fully matured and/or established as those of Western Europe and the United States. Some emerging market countries are also in the process of transitioning to a market economy and, as a result, are experiencing changes in their economies and their government policies (including, without limitation, policies relating to foreign ownership, repatriation of profits, property and contractual rights and planning and permit granting regimes) that may affect our business in those countries. Such countries are also characterized by less comprehensive legal and regulatory environments and systems. Existing laws and regulations may be applied inconsistently with anomalies in their interpretation or implementation. Such anomalies could affect our ability to enforce our rights under our contracts or to defend our business against claims by others.

 

There can be no assurance that if laws or regulations were imposed on the products and services offered by us it would not increase our costs, or adversely affect the way in which we conduct our business or otherwise have a material adverse effect on our results of operations and financial condition.

 

Any of the above factors, alone or in combination, may have a material adverse effect on our business, results of operations and financial condition.

 

We are exposed to risks arising from potential changes in the UAE’s visa legislation, which could adversely impact our business operations.

 

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.

 

We are subject to risks associated with potential unlawful or arbitrary governmental actions in the UAE, which could negatively impact our operations and financial performance.

 

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. 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. Any such action taken may have a material adverse effect on our business, results of operations and financial condition.

 

We are subject to the risk of international sanctions, which could significantly impact our business activities, results of operations and financial condition.

 

European, 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 is not subject to such sanctions as of the date of this report. The terms of legislation and other rules and regulations which establish sanctions regimes are often broad in scope and difficult to interpret.

 

If the UAE were in the future to violate European, 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 U.S. or international capital markets. Any such sanction could have a material adverse effect on our business, results of operations and financial condition.

 

 

Risks Related to the Ownership of Our Securities

 

We may not be able to maintain a listing of the Class A Ordinary Shares and publicly-traded warrants on Nasdaq.

 

We must meet certain financial and liquidity criteria to maintain our listing on Nasdaq. If we violate Nasdaq’s listing requirements, or if we fail to meet any of Nasdaq’s continued listing standards, the Class A Ordinary Shares and publicly-traded warrants may be delisted. In addition, our board of directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing.

 

Following the receipt of a number of notices of noncompliance with the Nasdaq listing rules, including Nasdaq Listing Rule 5550(b)(1), requiring minimum stockholders’ equity of $2,500,000, Nasdaq Listing Rule 5620(a), requiring the Company to hold an annual shareholder meeting (the “Annual Meeting Requirement”), and Nasdaq Listing Rule 5550(a)(2), requiring the Company to have a minimum bid price of $1.00 (the “Minimum Bid Price Requirement”), a Nasdaq Hearings Panel found the Company in compliance with Nasdaq Listing Rule 5550(b)(1), requiring minimum stockholders’ equity of $2,500,000, and granted the Company’s request for an exception to evidence compliance with other applicable criteria for continued listing on Nasdaq. The decision requires that on or before June 29, 2025, the Company will be required to demonstrate compliance with the Annual Meeting Requirement by holding an annual shareholder meeting. In addition, on or before July 28, 2025, the Company will be required to demonstrate compliance with the Minimum Bid Price Requirement, which will require that the Class A Ordinary Shares have a closing bid price at or above $1.00 per share for a minimum of 10 consecutive business days. There is no assurance that the Company will be able to meet these requirements. In addition, even if we meet these requirements, there is no assurance that we will be able to continue to meet these or other requirements of the Nasdaq listing rules in order to maintain the listing of the Class A Ordinary Shares and publicly-traded warrants.

 

A delisting of the Class A Ordinary Shares and publicly-traded warrants from Nasdaq may materially impair our shareholders’ ability to buy and sell the Class A Ordinary Shares and publicly-traded warrants and could have an adverse effect on the market price of, and the efficiency of the trading market for, the Class A Ordinary Shares and publicly-traded warrants. The delisting of the Class A Ordinary Shares and publicly-traded warrants could significantly impair our ability to raise capital and the value of any investment in our securities. If Nasdaq delists the Class A Ordinary Shares or publicly-traded warrants, we could face significant material adverse consequences, including:

 

●

a limited availability of market quotations for the Class A Ordinary Shares and publicly-traded warrants;

 

●

a reduced level of trading activity in the secondary trading market for the Class A Ordinary Shares and publicly-traded warrants;

 

●

a limited amount of news and analyst coverage;

 

●

a decreased ability to issue additional securities or obtain additional financing in the future;

 

●

stamp duty may be chargeable on transfers of Class A Ordinary Shares and publicly-traded warrants at a rate of 1% of the greater of the price paid or market value of the Class A Ordinary Shares and publicly-traded warrants transferred; and

 

●

our securities would not be “covered securities” under the National Securities Markets Improvement Act of 1996, which is a federal statute that prevents or pre-empts the states from regulating the sale of certain securities, including securities listed on Nasdaq, in which case our securities would be subject to regulation in each state where we offer and sell securities.

 

Our operating results and share price may fluctuate, and you could lose all or part of your investment.

 

Our quarterly operating results are likely to fluctuate as a publicly traded company. In addition, securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations. This market volatility, as well as general economic, market, or political conditions, could subject the market price of our the Class A Ordinary Shares and publicly-traded warrants to wide price fluctuations regardless of our operating performance. You may not be able to resell your shares at or above price you paid or at all. Our operating results and the trading price of the Class A Ordinary Shares and publicly-traded warrants may fluctuate in response to various factors, including:

 

●

market conditions in the broader stock market;

 

●

actual or anticipated fluctuations in our quarterly financial and operating results;

 

 

●

introduction of new products or services by us or our competitors;

 

●

issuance of new or changed securities analysts’ reports or recommendations;

 

●

changes in debt ratings;

 

●

results of operations that vary from expectations of securities analysts and investors;

 

●

guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;

 

●

strategic actions by us or our competitors;

 

●

announcement by us, our competitors, or our vendors of significant contracts or acquisitions;

 

●

sales, or anticipated sales, of large blocks of the Class A Ordinary Shares or publicly-traded warrants;

 

●

additions or departures of key personnel;

 

●

regulatory, legal, or political developments;

 

●

public response to press releases or other public announcements by us or third parties, including our filings with the SEC;

 

●

litigation and governmental investigations;

 

●

changing economic conditions;

 

●

changes in accounting principles; and

 

●

other events or factors, including those from natural disasters, pandemic, pet disease, war, acts of terrorism, or responses to these events.

 

These and other factors, many of which are beyond our control, may cause our operating results and the market price and demand for the Class A Ordinary Shares and publicly-traded warrants to fluctuate substantially. While we believe that operating results for any particular quarter are not necessarily a meaningful indication of future results, fluctuations in our quarterly operating results could limit or prevent investors from readily selling the Class A Ordinary Shares or publicly-traded warrants and may otherwise negatively affect the market price and liquidity of the Class A Ordinary Shares or publicly-traded warrants. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes brought securities class action litigation against the company that issued the stock. If any of our shareholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management from our business, which could significantly harm our profitability and reputation. 

 

We do not currently intend to pay dividends on our securities and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of the Class A Ordinary Shares. In addition, any distribution of dividends must be in accordance with the rules and restrictions applying under Irish law.

 

We have not declared or paid any cash dividends on any class of the Class A Ordinary Shares since our formation and do not currently intend to pay cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the sole discretion of our board of directors after considering our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions and other factors our board of directors deems relevant, and subject to compliance with applicable laws, including the Irish Companies Act 2014 (as amended) (the “Irish Companies Act”), which requires Irish companies to have distributable reserves available for distribution equal to or greater than the amount of the proposed dividend. Distributable reserves are the accumulated realized profits of the Company that have not previously been utilized in a distribution or capitalization less accumulated realized losses that have not previously been written off in a reduction or reorganization of capital. Unless the Company creates sufficient distributable reserves from its business activities, the creation of such distributable reserves would involve a reduction of the Company’s share premium account or other undenominated capital account, which would require the approval of (i) 75% of our shareholders present and voting at a shareholder meeting, and (ii) the Irish High Court. In the event that we do not undertake a reduction of capital to create distributable reserves, no distributions by way of dividends, share repurchases or otherwise will be permitted under Irish law until such time as the Company has created sufficient distributable reserves from its business activities. The determination as to whether or not the Company has sufficient distributable reserves to fund a dividend must be made by reference to “relevant financial statements” of the Company. The “relevant financial statements” are either the last set of unconsolidated annual audited financial statements or unaudited financial statements prepared in accordance with the Irish Companies Act, which give a “true and fair view” of the Company’s unconsolidated financial position in accordance with accepted accounting practice in Ireland.

 

 

Moreover, even if we are or become able to declare and pay dividends, we expect to retain all earnings, if any, generated by our operations for the development and growth of our business. Therefore, you are not likely to receive any dividends on the Class A Ordinary Shares for the foreseeable future.

 

As a result, the success of an investment in the Class A Ordinary Shares will depend upon any future appreciation in our value and investors may need to sell all or part of their holdings of Class A Ordinary Shares after price appreciation, which may never occur, as the only way to realize any future gains on their investment. There is no guarantee that the Class A Ordinary Shares will appreciate in value or even maintain the price at which our shareholders have purchased the Class A Ordinary Shares. If the price of the Class A Ordinary Shares declines before we pay dividends, you will incur a loss on your investment, without the likelihood that this loss will be offset in part or at all by potential future cash dividends. Investors seeking cash dividends should not purchase Class A Ordinary Shares.

 

In addition, exchange rate fluctuations may affect the amount of euros that we are able to distribute, and the amount in dollars that our shareholders receive upon the payment of cash dividends or other distributions we declare and pay in euros, if any. These factors could harm the value of the Class A Ordinary Shares, and, in turn, the dollar proceeds that holders receive from the sale of the Class A Ordinary Shares.

 

In certain limited circumstances, dividends paid by the Company may be subject to Irish dividend withholding tax.

 

The Company does not intend to pay dividends on its capital stock in the foreseeable future. If the Company were to declare and pay dividends, in certain limited circumstances, dividend withholding tax may arise in respect of dividends paid on the Class A Ordinary Shares. A number of exemptions from dividend withholding tax exist such that shareholders resident in the U.S. and other countries with which Ireland has entered into a double tax treaty may be entitled to exemptions from dividend withholding tax.

 

The Irish Revenue Commissioners have confirmed that shareholders resident in the U.S. that hold their Class A Ordinary Shares through DTC will not be subject to dividend withholding tax, provided the addressees of the beneficial owners of such Class A Ordinary Shares in the records of the brokers holding such Class A Ordinary Shares are recorded as being in the U.S. (and such brokers have further transmitted the relevant information to a qualifying intermediary appointed by the Company). However, other holders of Class A Ordinary Shares may be subject to dividend withholding tax.

 

Class A Ordinary Shares or publicly-traded warrants received by means of a gift or inheritance could be subject to Irish capital acquisitions tax.

 

Irish capital acquisitions tax (“CAT”) could apply to a gift or inheritance of Class A Ordinary Shares or publicly-traded warrants irrespective of the place of residence, ordinary residence or domicile of the parties. This is because Class A Ordinary Shares and publicly-traded warrants will be regarded as property situated in Ireland. The person who receives the gift or inheritance has primary liability for CAT. Gifts and inheritances passing between spouses are exempt from CAT. Children have a tax-free threshold in respect of taxable gifts or inheritances received from their the Companys.

 

A transfer of the Class A Ordinary Shares or publicly-traded warrants, other than one effected by means of the transfer of book-entry interests in the Depositary Trust Company, may be subject to Irish stamp duty.

 

Transfers of the Class A Ordinary Shares and publicly-traded warrants effected by means of the transfer of book entry interests in the Depositary Trust Company (“DTC”) will not be subject to Irish stamp duty. It is anticipated that the majority of the Class A Ordinary Shares and publicly-traded warrants will be traded through DTC by brokers who hold such shares on behalf of customers. However, if Class A Ordinary Shares or publicly-traded warrants are held directly rather than beneficially through DTC, any transfer of these Class A Ordinary Shares or publicly-traded warrants could be subject to Irish stamp duty. Payment of Irish stamp duty is generally a legal obligation of the transferee. The potential for stamp duty could adversely affect the price of our securities.

 

 

If the Class A Ordinary Shares or publicly-traded warrants are not eligible for deposit and clearing within the facilities of DTC, then transactions in the Class A Ordinary Shares and publicly-traded warrants may be disrupted.

 

The facilities of DTC are a widely used mechanism that allow for rapid electronic transfers of securities between the participants in the DTC system, which include many large banks and brokerage firms. The Class A Ordinary Shares and the publicly-traded warrants are eligible for deposit and clearing within the DTC system. On December 10, 2020, we entered into arrangements with DTC whereby we agreed to indemnify DTC for any Irish stamp duty that may be assessed upon it as a result of its service as a depository and clearing agency for the Class A Ordinary Shares and publicly-traded warrants and, in consideration for such indemnification, DTC agreed to accept the Class A Ordinary Shares and publicly-traded warrants for deposit and clearing within its facilities.

 

However, although DTC has initially accepted the Class A Ordinary Shares and publicly-traded warrants, it generally will have discretion to cease to act as a depository and clearing agency for the Class A Ordinary Shares and/or publicly-traded warrants. If DTC determines at any time that the Class A Ordinary Shares and/or publicly-traded warrants are not eligible for continued deposit and clearance within its facilities, then we believe the Class A Ordinary Shares and/or publicly-traded warrants would not be eligible for continued listing on a U.S. securities exchange and trading in the Class A Ordinary Shares and/or publicly-traded warrants would be disrupted. While we would pursue alternative arrangements to preserve our listing and maintain trading, any such disruption could have a material adverse effect on the trading price of the Class A Ordinary Shares and/or publicly-traded warrants.

 

Irish law differs from the laws in effect in the United States and U.S. investors may have difficulty enforcing civil liabilities against us, our directors or members of senior management.

 

The Company is a company formed under the laws of Ireland, all of its properties are located outside of the United States, a majority of our directors and officers reside outside of the United States and all our assets are and are likely in the future to be located outside of the United States. All of the members of our board of directors and senior management reside outside of the United States and all or a substantial portion of their assets are located outside the United States. As a result, it may not be possible to serve process on these directors, or us, in the United States or to enforce court judgments obtained in the United States against these individuals or us in Ireland based on the civil liability provisions of the U.S. federal or state securities laws. The United States currently does not have a treaty with Ireland providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. Therefore, a final judgment for the payment of money rendered by any U.S. federal or state court based on civil liability, whether or not based solely on U.S. federal or state securities laws, would not automatically be enforceable in Ireland. A judgment obtained against us will be enforced by the courts of Ireland if the following general requirements are met:

 

●

U.S. courts must have had jurisdiction in relation to the particular defendant according to Irish conflict of law rules (the submission to jurisdiction by the defendant would satisfy this rule); and

 

●

the judgment must be final and conclusive and the decree must be final and unalterable in the court which pronounces it.

 

A judgment can be final and conclusive even if it is subject to appeal or even if an appeal is pending. But where the effect of lodging an appeal under the applicable law is to stay execution of the judgment, it is possible that in the meantime the judgment may not be actionable in Ireland. It remains to be determined whether a final judgment given in default of appearance is final and conclusive. Irish courts may also refuse to enforce a judgment of the U.S. courts that meets the above requirements for one of the following reasons:

 

●

the judgment is not for a definite sum of money;

 

●

the judgment was obtained by fraud;

 

●

the enforcement of the judgment in Ireland would be contrary to natural or constitutional justice;

 

●

the judgment is contrary to Irish public policy or involves certain U.S. laws that will not be enforced in Ireland; or

 

●

jurisdiction cannot be obtained by the Irish courts over the judgment debtors in the enforcement proceedings by personal service in Ireland or outside Ireland under Order 11 of the Irish Superior Courts Rules.

 

 

As an Irish company, we are principally governed by Irish law, which differs in some material respects from laws generally applicable to U.S. corporations and shareholders, including, among others, differences relating to interested director and officer transactions and shareholder lawsuits. Likewise, the duties of directors and officers of an Irish company generally are owed to the company only. Shareholders of Irish companies generally do not have a personal right of action against directors or other officers of the company and may exercise such rights of action on behalf of the company only in limited circumstances. Shareholders should also be aware that Irish law does not allow for any form of legal proceedings directly equivalent to the class action available in the United States.

 

Our corporate affairs will be governed by the Company’s constitution, the Irish Companies Act, and the common law of Ireland. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Irish law are governed by the Irish Companies Act and the common law of Ireland. The rights of the Company’s shareholders and the fiduciary responsibilities of our directors under Irish law may not be as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, Ireland has a less developed body of securities laws as compared to the United States, and some states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law.

 

Accordingly, holders of the Class A Ordinary Shares may have more difficulty protecting their interests than would holders of shares of a corporation incorporated in a jurisdiction of the United States.

 

The jurisdiction and choice of law clauses set forth in the Company’s Amended and Restated Warrant Agreement, and the Company’s status as an Irish company, may have the effect of limiting the ability of a holder of our publicly-traded warrants to effectively pursue its legal rights against the Company in any United States court.

 

Our publicly-traded warrants are subject to the terms and conditions of the Amended and Restated Warrant Agreement, dated as of December 10, 2020 (the “Amended and Restated Warrant Agreement”), between the Company and Continental Stock Transfer & Trust Company, a New York corporation (“Continental”). The Amended and Restated Warrant Agreement provides that disputes arising under the Amended and Restated Warrant Agreement are governed by New York law and that the Company consents to jurisdiction in courts of the State of New York or the United States District Court for the Southern District of New York. This provision may limit the ability of holders of our publicly-traded warrants to bring a claim against us other than in courts of the State of New York or the United States District Court for the Southern District of New York and may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds more favorable for disputes under the Amended and Restated Warrant Agreement. To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Irrespective of the ability of a warrant holder to bring an action in any such forum, due to the fact that the Company is an Irish company with all of its properties located outside of the United States, if a warrant holder brings a claim against the Company under the Amended and Restated Warrant Agreement, the Securities Act or the Exchange Act, or otherwise, such warrant holder may have difficulty pursuing its legal rights against the Company in any United States courts having jurisdiction over any such claims.

 

An investment in our securities may result in uncertain U.S. federal income tax consequences.

 

An investment in our securities may result in uncertain U.S. federal income tax consequences. See Item 10.E. Taxation. “Anticipated Material U.S. Federal Income Tax Consequences to U.S. Holders of Company Securities”. Prospective investors are urged to consult their tax advisors with respect to these and other tax consequences when purchasing, holding and disposing of our securities.

 

 

As an Irish public limited company, certain capital structure decisions regarding the Company will require the approval of the shareholders of the Company, which may limit the Company’s flexibility to manage its capital structure.

 

Irish law generally provides that a board of directors may allot and issue shares (or rights to subscribe for or convert into shares) if authorized to do so by a company’s constitution or by an ordinary resolution. Such authorization may be granted for up to the maximum of a company’s authorized but unissued share capital and for a maximum period of five years, at which point it must be renewed by another ordinary resolution. The Company’s constitution authorized the board of directors of the Company to allot shares up to the full amount of the Company’s authorized but unissued share capital until December 31, 2023. At the Company’s annual general meeting in September 2023, the shareholders granted the board of directors of the Company the authority to allot shares up to 20% of the Company’s authorized but unissued share capital until December 31, 2024. At an extraordinary general meeting of the Company in March 2024, the shareholders extended this authority and granted the board of directors of the Company the authority to allot shares up to the full amount of the Company’s authorized but unissued share capital until March 19, 2029. This authorization will need to be renewed by ordinary resolution by March 19, 2029 unless otherwise renewed prior thereto. Under Irish law, an allotment authority may be given for up to five years at each renewal, but governance considerations may result in renewals for shorter periods or for less than the maximum permitted number of shares being sought or approved.

 

While Irish law also generally provides shareholders with pre-emptive rights when new shares are issued for cash, it is possible for the Company’s constitution, or for shareholders of the Company in a general meeting, to exclude such pre-emptive rights. Following the Company’s extraordinary general meeting in March 2024, pre-emptive rights are currently excluded until March 19, 2029. This exclusion will need to be renewed by special resolution by March 19, 2029 unless otherwise renewed prior thereto.

 

Provisions of the Company’s constitution, as well as provisions of Irish law, could make an acquisition of us more difficult, limit attempts by our shareholders to replace or remove our current directors, and limit the market price of the Class A Ordinary Shares.

 

The Company’s constitution, together with certain provisions of the Irish Companies Act, could delay, defer or prevent a third party from acquiring us, even where such a transaction would be beneficial to the holders of ordinary shares, or could otherwise adversely affect the market price of the Class A Ordinary Shares. For example, certain provisions of the Company’s constitution:

 

●

require that our board of directors be classified into three classes of directors with staggered three-year terms;

 

●

permit our board of directors to establish the number of directors and fill any vacancies and newly created directorships;

 

●

permit our board of directors to issue preferred shares with such rights and preferences as they may designate, subject to applicable law;

 

●

permit our board of directors to adopt a shareholder rights plan upon such terms and conditions as it deems expedient and in our best interests; and

 

●

impose advance notice requirements for shareholder proposals and director nominations to be considered at annual shareholder meetings.

 

We believe these provisions, if implemented in compliance with applicable law, may provide some protection to holders of ordinary shares from coercive or otherwise unfair takeover tactics. These provisions are not intended to make us immune from takeovers. They will, however, apply even if some holders of ordinary shares consider an offer to be beneficial and could delay or prevent an acquisition that our board of directors determines is in the best interest of the holders of ordinary shares. Certain of these provisions may also prevent or discourage attempts to remove and replace incumbent directors.

 

In addition, mandatory provisions of Irish law could prevent or delay an acquisition of the Company by a third party. For example, Irish law does not permit shareholders of an Irish public limited company to take action by written consent with less than unanimous consent. Furthermore, an effort to acquire us may be subject to various provisions of Irish law relating to mandatory bids, voluntary bids, requirements to make a cash offer and minimum price requirements, as well as substantial acquisition rules and rules requiring the disclosure of interests in ordinary shares in certain circumstances.

 

Irish law differs from the laws in effect in the United States with respect to defending unwanted takeover proposals and may give our board of directors less ability to control negotiations with hostile offerors.

 

 

Attempted takeovers of the Company will be subject to the Irish Takeover Rules and will be under the supervisory jurisdiction of the Irish Takeover Panel. Accordingly, the Company’s board of directors may be limited by the Irish Takeover Rules in its ability to defend an unsolicited takeover attempt.

 

Due to the listing of the Class A Ordinary Shares on Nasdaq, the Company is subject to the Irish Takeover Panel Act, 1997, Irish Takeover Rules 2013 (“Irish Takeover Rules”), under which the Company is not permitted to take certain actions that might “frustrate” an offer for Class A Ordinary Shares once the board of directors has received an offer, or has reason to believe an offer is or may be imminent, without the approval of more than 50% of shareholders entitled to vote at a general meeting of our shareholders or the consent of the Irish Takeover Panel. This could limit the ability of the Company’s board of directors to take defensive actions even if it believes that such defensive actions would be in our best interests or the best interests of our shareholders.

 

The Irish Takeover Rules are administered by the Irish Takeover Panel, which has supervisory jurisdiction over such transactions. Among other matters, the Irish Takeover Rules operate to ensure that no offer is frustrated or unfairly prejudiced and, in situations involving multiple bidders, that there is a level playing field. For example, pursuant to the Irish Takeover Rules, the board of directors of the Company will not be permitted, without shareholder approval, to take certain actions which might frustrate an offer for Class A Ordinary Shares once the board of directors of the Company has received an approach that might lead to an offer or has reason to believe that an offer is, or may be, imminent.

 

Under the Irish Takeover Rules, if an acquisition of Class A Ordinary Shares were to increase the aggregate holdings of the acquirer (together with its concert parties) to 30% or more of the voting rights of the Company, such acquirer and, in certain circumstances, its concert parties would be required (except with the consent of the Irish Takeover Panel) to make an offer for the outstanding Class A Ordinary Shares at a price not less than the highest price paid by such acquirer or its concert parties for Class A Ordinary Shares during the previous 12 months. This requirement would also be triggered by the acquisition of Class A Ordinary Shares by any person holding (together with its concert parties) between 30% and 50% of the voting rights of the Company if the effect of such acquisition were to increase that person’s voting rights by 0.05% within a 12-month period.

 

Anti-takeover provisions in the Company’s constitution could make an acquisition of the Company more difficult. As discussed in the preceding risk factor, the Company’s constitution contains provisions that may delay or prevent a change of control, discourage bids at a premium over the market price of Class A Ordinary Shares, adversely affect the market price of Class A Ordinary Shares, and adversely affect the voting and other rights of shareholders of the Company.

 

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies.

 

Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

 

●

the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;

 

●

the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;

 

●

the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

 

●

the selective disclosure rules by issuers of material nonpublic information under Regulation FD.

 

 

We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a semi-annual basis and disclose material events on Forms 6-K furnished to the SEC. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.

 

As a foreign private issuer, we are permitted to rely on exemptions from certain Nasdaq corporate governance standards applicable to domestic U.S. issuers. This may afford less protection to holders of our shares.

 

We are exempted from certain corporate governance requirements of Nasdaq by virtue of being a foreign private issuer. As a foreign private issuer, we are permitted to follow the governance practices of our home country in lieu of certain corporate governance requirements of Nasdaq. As a result, the standards applicable to us are considerably different than the standards applied to domestic U.S. issuers. We have elected to follow corporate governance practices under Irish law in lieu of the requirements of Nasdaq Listing Rule 5635(b), Nasdaq Rule 5635(c), and Nasdaq Listing Rule 5635(d)(2), which require companies to obtain shareholder approval prior to, respectively:

 

●

the issuance of securities when the issuance or potential issuance will result in a change of control of the Company;

 

●

the issuance of securities when a stock option or purchase plan is to be established or materially amended or other equity compensation arrangement made or materially amended, pursuant to which stock may be acquired by officers, directors, employees, or consultants; or

 

●

conducting a transaction, other than a public offering, involving the sale, issuance or potential issuance by the Company of ordinary shares (or securities convertible into or exercisable for ordinary shares), which alone or together with sales by officers, directors or Substantial Shareholders (as defined by the Nasdaq Listing Rules) of the Company, equals 20% or more of the Class A Ordinary Shares or 20% or more of the voting power outstanding before the issuance at a price that is less than a price that is the lower of: (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement; or (ii) the average Nasdaq Official Closing Price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement.

 

Irish law and generally accepted business practices in Ireland do not require that shareholders approve such transactions. Accordingly, shareholder approval is not required for these types of transactions by the Company. As a result, our shareholders may not be provided with the benefits of certain corporate governance requirements of Nasdaq and may not have the same protections afforded to shareholders of other companies that are subject to these Nasdaq requirements.

 

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

 

While we qualified as a foreign private issuer as of June 30, 2024, the determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. In the future, we would lose our foreign private issuer status if we were to fail to meet the requirements necessary to maintain our foreign private issuer status as of the relevant determination date. For example, if more than 50% of our securities are held by U.S. residents and more than 50% of either our directors or executive officers are residents or citizens of the United States, we could lose our foreign private issuer status.

 

The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may be significantly more than costs we incur as a foreign private issuer. If we are not a foreign private issuer, we will be required to file periodic reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive in certain respects than the forms available to a foreign private issuer. We would be required under current SEC rules to prepare our financial statements in accordance with U.S. GAAP, rather than IFRS. Such conversion of our financial statements to U.S. GAAP would involve significant time and cost, and we would still be required to prepare financial statements in accordance with IFRS as required by Irish law. In addition, we may lose our ability to rely upon exemptions from certain corporate governance requirements on U.S. stock exchanges that are available to foreign private issuers such as the ones described above and exemptions from procedural requirements related to the solicitation of proxies.

 

 

There is a risk that we will be a passive foreign investment company for any taxable year, which could result in adverse U.S. federal income tax consequences to U.S. investors in our shares.

 

In general, a non-U.S. corporation is a passive foreign investment company, or PFIC, for any taxable year in which (i) 75% or more of its gross income consists of passive income or (ii) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the production of, passive income. For purposes of the above calculations, a non-U.S. corporation that owns at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets of the other corporation and received directly its proportionate share of the income of the other corporation. Passive income generally includes dividends, interest, rents, royalties and certain gains. Cash is a passive asset for these purposes.

 

Based on the expected composition of our income and assets and the value of our assets, we do not expect to be a PFIC for our current taxable year. However, the proper application of the PFIC rules to a company with a business such as ours is not entirely clear. Because our PFIC status for any taxable year will depend on the composition of our income and assets and the value of our assets from time to time (which may be determined, in part, by reference to the market price of our shares, which could be volatile), there can be no assurance that we will not be a PFIC for our current taxable year or any future taxable year.

 

If we were a PFIC for any taxable year during which a U.S. investor holds shares, certain adverse U.S. federal income tax consequences could apply to such U.S. investor, including (i) the treatment of all or a portion of any gain on disposition of the Class A Ordinary Shares as ordinary income, (ii) the application of a deferred interest charge on such gain and the receipt of certain dividends and (iii) the obligation to comply with certain reporting requirements.

 

We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies, and our shareholders could receive less information than they might expect to receive from more mature public companies.

 

We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act (the “JOBS Act”). As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act in the assessment of the emerging growth company’s internal control over financial reporting. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

 

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year during which we have total annual gross revenues of at least $1.235 billion; (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act; (iii) the date on which we have, during the preceding three year period, issued more than US$1.0 billion in non-convertible debt; or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act, which could occur if the market value of the Class A Ordinary Shares that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.

 

Because we will be subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies, our shareholders could receive less information than they might expect to receive from more mature public companies. We cannot predict if investors will find the Class A Ordinary Shares less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of the Class A Ordinary Shares.

 

 

Substantial future sales or issuances of the Class A Ordinary Shares or securities convertible into, or exercisable or exchangeable for, the Class A Ordinary Shares, or the perception in the public markets that these sales or issuances may occur, may depress our stock price. Also, future issuances of the Class A Ordinary Shares or rights to purchase Class A Ordinary Shares could result in additional dilution of the percentage ownership of our shareholders and could cause our stock price to fall.

 

The conversion or exercise of our outstanding convertible or exercisable securities and resale of the underlying Class A Ordinary Shares, and any other future issuances of the Class A Ordinary Shares or securities convertible into, or exercisable or exchangeable for, the Class A Ordinary Shares, would result in a decrease in the ownership percentage of existing shareholders, i.e., dilution, which may cause the market price of the Class A Ordinary Shares to decline. We cannot predict the effect, if any, of future issuances, conversions, or exercises of our securities, on the price of the Class A Ordinary Shares. In all events, future issuances of the Class A Ordinary Shares would result in the dilution of your holdings. In addition, the perception that new issuances of our securities are likely to occur, or the perception that holders of securities convertible or exercisable for Class A Ordinary Shares are likely to sell their securities, could adversely affect the market price of the Class A Ordinary Shares. The effect of such dilution may be magnified as to all shares that are not or may eventually not be subject to restrictions on resale as enumerated below.

 

On November 18, 2024, the Company entered into Stock Purchase Agreement, dated as of November 18, 2024 (the “QIND Purchase Agreement”), among the Company, QIND, Ilustrato Pictures International Inc., a Nevada corporation (“Ilustrato”), and certain other stockholders of QIND (together with Ilustrato, the “QIND Sellers”). Under the QIND Purchase Agreement, the QIND Sellers agreed to sell 78,312,334 shares of common stock and 20,000 shares of Series B Preferred Stock of QIND, constituting approximately 69.36% of the capital stock of QIND, to the Company. In exchange, the Company was required to issue 3,818,969 Class A Ordinary Shares (the “Ordinary Shares Consideration”), constituting 19.99% of the issued and outstanding Class A Ordinary Shares, and an aggregate of 4,171,327 Series A Preferred Shares to the QIND Sellers. On November 26, 2024, the conditions to the closing of the transactions contemplated by the QIND Purchase Agreement (the “QIND Closing”) were satisfied in all material respects. As a result, the Company issued the Ordinary Shares Consideration and 4,171,327 Series A Preferred Shares. The Preferred Shares Conversion, in which the Series A Preferred Shares will automatically convert into 41,713,275 Class A Ordinary Shares, subject to adjustment, will occur upon the later of approval of the Company’s issuance of the underlying Class A Ordinary Shares by the Company’s shareholders in accordance with applicable Irish law (the “Shareholder Approval”), and the clearance of an initial listing application filed by the Company with Nasdaq. If such conditions for the Preferred Shares Conversion occur, the Company will be required to issue a number of Class A Ordinary Shares that will represent more than 50% of the issued and outstanding Class A Ordinary Shares, which will substantially dilute the percentage ownership of our shareholders prior to the Preferred Shares Conversion.

 

Under the Senior Convertible Notes, dated as of March 3, 2025, in the aggregate original principal amount of $1,300,000 (the “March 2025 Notes”), which have an aggregate original principal amount of $1,300,000, the Company may be required to issue up to approximately 3,342,411 Class A Ordinary Shares (subject to rounding up of fractional shares to the nearest whole number), upon full conversion of all principal and interest through maturity, at the initial conversion price of $0.4364 per share, which is subject to downward adjustment upon the occurrence of certain events, and assuming that no event of default occurs under the March 2025 Notes. Upon an event of default under the March 2025 Notes, the March 2025 Notes provide that the interest rate will increase to 22% until the default is cured, which will increase the number of shares issuable upon conversion of accrued and unpaid interest. In addition, from and after the occurrence of an event of default, any of the March 2025 Note holders may convert any portion of the amounts outstanding under the March 2025 Notes into a number of Class A Ordinary Shares equal to 115% of the converted dollar amount at the March 2025 Notes’ alternate conversion price, which is equal to the lowest of (a) the conversion stated above, subject to downward adjustment; and (b) the greater of (x) a floor price, which is initially equal to $0.0793, subject to downward adjustment to equal 20% of the lower of the closing price or the average closing price for the five consecutive trading days immediately prior to every six-month anniversary of the issuance date of the March 2025 Notes, and (y) 80% of the lowest volume weighted average price (“VWAP”) of the Class A Ordinary Shares during the five consecutive trading days immediately prior to the date on which the Company receives written notice of such conversion from such holder. As a result, in order to discharge the Company’s indebtedness under the March 2025 Notes, the Company may elect to or be required to issue additional Class A Ordinary Shares at the applicable floor price. In addition, we are required to issue up to 2,864,397 Class A Ordinary Shares upon exercise of the Company’s warrants, dated as of March 3, 2025 (the “March 2025 Warrants”), at the initial exercise price. Such share amounts under both the March 2025 Notes and the March 2025 Warrants may be required to be further increased upon the effect of full-ratchet antidilution provisions, without any increase in cash or other additional consideration. Conversions and exercises of the March 2025 Notes and the March 2025 Warrants may therefore result in significant dilution of outstanding Class A Ordinary Shares.

 

 

Under the Senior Convertible Notes, dated as of January 10, 2025, in the aggregate original principal amount of $1,231,250 (the “January 2025 Notes”), which have an aggregate original principal amount of $1,231,250, the Company may be required to issue up to approximately 2,469,845 Class A Ordinary Shares (subject to rounding up of fractional shares to the nearest whole number), upon full conversion of all principal and interest through maturity, at the initial conversion price of $0.559 per share, which is subject to downward adjustment upon the occurrence of certain events, assuming that no event of default occurs under the January 2025 Notes. Upon an event of default under the January 2025 Notes, the January 2025 Notes provide that the interest rate will increase to 22% until the default is cured, which will increase the number of shares issuable upon conversion of accrued and unpaid interest. In addition, from and after the occurrence of an event of default, any of the January 2025 Note holders may convert any portion of the amounts outstanding under the January 2025 Notes into a number of Class A Ordinary Shares equal to 115% of the converted dollar amount at the January 2025 Notes’ alternate conversion price, which is equal to the lowest of (a) the conversion price stated above, subject to downward adjustment; and (b) the greater of (x) a floor price, which is initially equal to $0.1118, subject to downward adjustment to equal 20% of the lower of the closing price or the average closing price for the five consecutive trading days immediately prior to every six-month anniversary of the issuance date of the January 2025 Notes, and (y) 80% of the lowest VWAP of the Class A Ordinary Shares during the five consecutive trading days immediately prior to the date on which the Company receives written notice of such conversion from such holder. As a result, in order to discharge the Company’s indebtedness under the January 2025 Notes, the Company may elect to or be required to issue additional Class A Ordinary Shares at the applicable floor price. In addition, we are required to issue up to 2,292,040 Class A Ordinary Shares upon exercise of the Company’s warrants, dated as of January 10, 2025 (the “January 2025 Warrants”), at the initial exercise price. Such share amounts under both the January 2025 Notes and January 2025 Warrants may be required to be further increased upon the effect of full-ratchet antidilution provisions, without any increase in cash or other additional consideration. Conversions and exercises of the January 2025 Notes and the January 2025 Warrants may therefore result in significant dilution of outstanding Class A Ordinary Shares.

 

Under the Securities Subscription Agreement, dated November 21, 2023, by and between the Company and the investor party to such agreement (the “November 2023 Subscription Agreement”), up to $18.85 million of convertible promissory notes remain issuable to such investor. The actual conversion price under such promissory notes will be the higher of (a) a minimum conversion price initially based on a percentage of the last closing price of the Class A Ordinary Shares immediately preceding the issuance of the promissory notes, subject to adjustment, and (b) 90% of the VWAP of the Class A Ordinary Shares on a single trading day selected by the holder out of the five trading days immediately prior to the conversion date, subject to adjustment. The actual number of shares issuable upon exercise of the warrants to be issued with the promissory notes would be equal to the quotient of (a) 30% of the principal amount of the related promissory note issued to the holder at closing divided by (b) 130% of the VWAP of the Class A Ordinary Shares for the five trading days immediately preceding the applicable closing date, and such warrants will have an exercise price equal to 130% of the VWAP of the Class A Ordinary Shares for the five trading days immediately preceding the applicable closing date. Subject to these provisions, and assuming a minimum conversion price of $0.10 per share, the promissory notes that may be issuable under the November 2023 Subscription Agreement would be convertible by the holders into an aggregate of up to 188,500,000 Class A Ordinary Shares. Additionally, assuming all $18.85 million of such promissory notes are issued pursuant to the November 2023 Subscription Agreement, we would also be required to issue to the investor warrants to purchase an aggregate of up to 37,700,000 Class A Ordinary Shares (assuming an exercise price of $0.15 per share) pursuant to the terms of the November 2023 Subscription Agreement.

 

Such conversions and exercises could cause the holders of the March 2025 Notes, the March 2025 Warrants, the January 2025 Notes, the January 2025 Warrants, and the holder of the investor under the November 2023 Subscription Agreement, or their designees, to collectively own more than 90% of the Class A Ordinary Shares outstanding based on 23,409,484 Class A Ordinary Shares outstanding as of March 5, 2025, resulting in severe dilution of outstanding Class A Ordinary Shares.

 

 

We also expect that significant additional capital may be needed in the future to continue our planned operations, including expanding research and development, hiring new personnel, marketing our products, and continuing activities as an operating public company. To the extent we raise additional capital by issuing equity securities, our shareholders may experience substantial dilution. We may sell Class A Ordinary Shares, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell Class A Ordinary Shares, convertible securities, or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and new investors could gain rights superior to our existing shareholders.

 

Future issuances of debt securities, which would rank senior to the Class A Ordinary Shares upon our bankruptcy or liquidation, and future issuances of preferred shares, which could rank senior to the Class A Ordinary Shares for the purposes of dividends and liquidating distributions, may adversely affect the level of return you may be able to achieve from an investment in the Class A Ordinary Shares.

 

In the future, we may attempt to increase our capital resources by offering debt securities. Upon bankruptcy or liquidation, holders of our debt securities, and lenders with respect to other borrowings we may make, would receive distributions of our available assets prior to any distributions being made to holders of the Class A Ordinary Shares. Moreover, if we issue preferred shares, the holders of such preferred shares could be entitled to preferences over holders of Class A Ordinary Shares in respect of the payment of dividends and the payment of liquidating distributions. Because our decision to issue debt or preferred shares in any future offering, or borrow money from lenders, will depend in part on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any such future offerings or borrowings. Holders of the Class A Ordinary Shares must bear the risk that any future offerings we conduct or borrowings we make may adversely affect the level of return, if any, they may be able to achieve from an investment in the Class A Ordinary Shares.

 

If securities or industry analysts either do not publish research about us or publish inaccurate or unfavorable research about us, our business or our market, if they adversely change their recommendations regarding the Class A Ordinary Shares or publicly-traded warrants, or if our operating results do not meet their expectations or any financial guidance we may provide, the trading price or trading volume of the Class A Ordinary Shares or publicly-traded warrants could decline.

 

The trading market for the Class A Ordinary Shares or publicly-traded warrants depends, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over independent analysts. If we obtain independent securities or industry analyst coverage and if one or more of the analysts who covers us downgrades the Class A Ordinary Shares or publicly-traded warrants, changes their opinion of the Class A Ordinary Shares or publicly-traded warrants, or publishes inaccurate or unfavorable research about our business, the price of the Class A Ordinary Shares or publicly-traded warrants would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for the Class A Ordinary Shares or publicly-traded warrants could decrease and we could lose visibility in the financial markets, which could cause the Class A Ordinary Shares or publicly-traded warrants’ price and trading volume to decline. In addition, we may be expected to provide various measures of financial guidance, possibly including guidance related to non-GAAP financial measures, and, if we do not meet any financial guidance that we may provide to the public, if we do not meet expectations of securities analysts or investors, or if our guidance is misunderstood by securities analysts or investors, the trading price of the Class A Ordinary Shares or publicly-traded warrants could decline significantly. Our operating results may fluctuate significantly from period to period as a result of changes in a variety of factors affecting us or our industry, many of which are difficult to predict. As a result, we may experience challenges in forecasting our operating results for future periods.

 

An active trading market of the Class A Ordinary Shares or publicly-traded warrants may not be sustained, and investors may not be able to resell their Class A Ordinary Shares or publicly-traded warrants at or above the price for which they purchased such securities.

 

An active trading market for the Class A Ordinary Shares and publicly-traded warrants may not be sustained. In the absence of an active trading market for the Class A Ordinary Shares or publicly-traded warrants, investors may not be able to sell their Class A Ordinary Shares or publicly-traded warrants, respectively, at or above the price they paid at the time that they would like to sell. In addition, an inactive market may impair our ability to raise capital by selling shares or equity securities and may impair our ability to acquire business partners by using the Class A Ordinary Shares or publicly-traded warrants as consideration, which, in turn, could harm our business.

 

 

37

 

Exhibit 99.2

 

ITEM 4. INFORMATION ON THE COMPANY

 

As used in this item, unless otherwise indicated or the context otherwise requires, references to:

 

●

“Al Shola Gas” are to Al Shola Al Modea Gas Distribution LLC, a UAE company.

 

●

“Class A Ordinary Shares” are to the Company’s Class A ordinary shares with a nominal value of $0.0001 each.

 

●

“Fusion Fuel,” “we,” “us,” “our,” “the Company,” or “our company” are to Fusion Fuel Green PLC, a public limited company incorporated in Ireland, including its consolidated subsidiaries.

 

●

“Fusion Fuel Portugal” are to Fusion Fuel Portugal, S.A., a public limited company domiciled in Portugal.

 

●

“Nasdaq” are to The Nasdaq Stock Market LLC.

 

●

“QIND” are to Quality Industrial Corp., a Nevada corporation.

 

●

“SEC” are to the U.S. Securities and Exchange Commission.

 

●

“Series A Preferred Shares” are to the Company’s Series A Convertible Preferred Shares with a nominal value of $0.0001 each.

 

●

“UAE” are to the United Arab Emirates.

 

4.A.  History and Development of the Company

 

Corporate History of Fusion Fuel Green PLC

 

Fusion Fuel Green PLC was incorporated in Ireland on April 3, 2020 as a private limited company under the name “Dolya Holdco 3 Limited”. On July 14, 2020, the Company changed its name to Fusion Fuel Green Limited. On October 2, 2020, the Company converted into a public limited company incorporated in Ireland under the name “Fusion Fuel Green PLC”. On December 10, 2020, the Company completed a business combination pursuant to that certain Amended and Restated Business Combination Agreement, dated as of August 25, 2020 (the “Business Combination Agreement”), among the Company, HL Acquisitions Corp., a British Virgin Islands business company (“HL”), Fusion Welcome - Fuel, S.A., a public limited company domiciled in Portugal, now known as Fusion Fuel Portugal, S.A. (“Fusion Fuel Portugal”), Fusion Fuel Atlantic Limited, a British Virgin Islands business company and wholly owned subsidiary of the Company (“Merger Sub”), and the shareholders of Fusion Fuel Portugal (“Fusion Fuel Shareholders”). Pursuant to the Business Combination Agreement, (i) Merger Sub merged with and into HL (the “Merger”), with HL being the surviving entity of the Merger and becoming a wholly-owned subsidiary of the Company, and (ii) the Company acquired all of the issued and outstanding shares of Fusion Fuel Portugal. As a result of this business combination transaction, Fusion Fuel Portugal and HL became wholly-owned subsidiaries of the Company and the former security holders of Fusion Fuel Portugal and HL became security holders of the Company.

 

From the date of the consummation of the Business Combination Agreement to November 11, 2024, the Company provided green hydrogen products and services, primarily through Fusion Fuel Portugal and its subsidiaries.

 

On November 11, 2024, Fusion Fuel Portugal filed for insolvency in the civil court of Sintra, Portugal, and is currently undergoing insolvency proceedings. Subsequently, the former production and sale of the Company’s miniaturized PEM electrolyzer product line and research and development activities, which were conducted through Fusion Fuel Portugal and its subsidiaries, ceased and will not be continued. It is expected that the assets held by Fusion Fuel Portugal and its subsidiaries will be disposed of through a liquidation process.

 

Beginning on November 26, 2024, the Company’s operations primarily consisted of the operations of QIND and its 51%-owned subsidiary, Al Shola Gas. See “—Acquisition of Quality Industrial Corp.”.

 

On December 19, 2024, the Company’s shares representing 50% of the share capital of P2X Spain Sociedad Limitada, a Spanish company (formerly Fusion Fuel Spain, S.L.) (“P2X Spain”), were transferred to a third party, subject to an agreement, dated February 7, 2025, among the Company, P2X Spain, Eree Desarrollos Empresariales S.L., and Greatrex Family Enterprises, LDA. The agreement provides that subject to the non-fulfillment of certain conditions on or before August 7, 2025, the parties will acknowledge that such transfer is fully effective and that the third-party transferee has become the sole owner with full legal title to the shares of P2X Spain Sociedad Limitada.

 

 

On February 17, 2025, Bright Hydrogen Solutions was incorporated in Ireland as a private company limited by shares wholly-owned by the Company. Bright Hydrogen Solutions was formed to launch our planned comprehensive hydrogen project solutions service. The former hydrogen business operations and assets of Fusion Fuel Portugal and its subsidiaries will not be part of Bright Hydrogen Solutions’ services due to Fusion Fuel Portugal’s pending insolvency proceedings.

 

Acquisition of Quality Industrial Corp.

 

On November 18, 2024, pursuant to the Stock Purchase Agreement, dated as of November 18, 2024 (the “QIND Purchase Agreement”), among the Company, QIND, Ilustrato Pictures International Inc., a Nevada corporation (“Ilustrato”), and certain other stockholders of QIND (together with Ilustrato, the “QIND Sellers”), the QIND Sellers agreed to sell 78,312,334 shares of common stock and 20,000 shares of Series B Preferred Stock of QIND (the “QIND Sellers’ Shares”), constituting approximately 69.36% of the capital stock of QIND, to the Company. In exchange, the Company was required to issue the Ordinary Shares Consideration, constituting 19.99% of the issued and outstanding Class A Ordinary Shares, and an aggregate of 4,171,327 Series A Preferred Shares, to the QIND Sellers. The QIND Purchase Agreement provided that, subject to the satisfaction or waiver of the conditions set forth in the Purchase Agreement, the Company was required to consummate the transactions (the “QIND Transactions”) contemplated by the Purchase Agreement at the date (the “QIND Closing Date”) of the closing of the QIND Transactions (the “QIND Closing”).

 

The conditions to the QIND Closing included, among other things, the written resignation of Frederico Figueira de Chaves as Chief Executive Officer of the Company effective as of the QIND Closing Date, and the appointment of John-Paul Backwell, the Chief Executive Officer of QIND, as the Chief Executive Officer of the Company effective as of the QIND Closing Date. In addition, the Company, QIND, and each director and officer of the Company that held equity securities in the Company (collectively, the “Company Equityholders”) and each of the QIND Sellers were required to enter into a lock-up agreement which provided that the Company Equityholders and the QIND Sellers will each be prohibited from transferring, entering into short sales, granting proxies or powers of attorney, or offering or agreeing to do any of the foregoing during the 180-day period beginning on the QIND Closing Date, subject to certain exceptions.

 

On November 26, 2024, the conditions to the QIND Closing were satisfied in all material respects, and therefore is considered to be the QIND Closing Date. On that date, the Company instructed its transfer agent to issue the Company Shares Consideration to the QIND Sellers, the Ordinary Shares Consideration was subsequently issued to Ilustrato, and the Series A Preferred Shares were subsequently issued pro-rata to the QIND Sellers, with Ilustrato’s allocation of the Series A Preferred Shares reduced by the Ordinary Shares Consideration. On November 26, 2024, the QIND Sellers delivered to QIND’s transfer agent all of the necessary documentation to effect the transfer of the QIND Sellers’ Shares to the Company, which were subsequently transferred to the Company.

 

The Series A Preferred Shares were issued pursuant to a Certificate of Designation of Preferences, Benefits and Limitations of Series A Convertible Preferred Shares, which was filed with the Companies Registration Office of Ireland on December 13, 2024 (the “Series A Certificate of Designation”). Pursuant to the Series A Certificate of Designation, the Series A Preferred Shares rank on parity with the Class A Ordinary Shares as to distributions of assets upon liquidation. The Series A Preferred Shares will have no voting rights except as required by the Irish Companies Act 2014 (as amended) (the “Irish Companies Act”) and with respect to amendments to the Series A Certificate of Designation or the constitution of the Company that adversely affect the terms of the Series A Preferred Shares. On the later of the date of the Shareholder Approval or the clearance of the initial listing application filed by the Company with Nasdaq, each of the Series A Preferred Shares will automatically convert into ten Class A Ordinary Shares, subject to adjustment upon the occurrence of share dividends, share splits, reverse share splits, or certain similar transactions, or certain corporate transactions of the Company including a merger, sale of all or substantially all assets, purchase of 50% or more of the Class A Ordinary Shares, recapitalization, or acquisition by another person of more than 50% of the outstanding Class A Ordinary Shares (the “Preferred Shares Conversion”). If the Shareholder Approval is not obtained at the Shareholders Meeting (as defined below) by the Extended Meeting Deadline (as defined below), the Company will, subject to applicable law, be required to repurchase all of the outstanding Series A Preferred Shares held by each of the QIND Sellers.

 

 

Pursuant to the QIND Purchase Agreement, following the QIND Closing Date, the Company, QIND, and the QIND Sellers will enter into an agreement and plan of merger (the “QIND Merger Agreement”). The QIND Purchase Agreement states that the parties intend that after the QIND Closing, subject to the terms of the QIND Merger Agreement and the receipt of any necessary shareholder, regulatory, and Nasdaq consents or approvals, QIND will merge into a newly-formed, wholly-owned Nevada subsidiary of the Company (the “QIND Merger”). Upon completion of the QIND Merger, QIND will become the surviving entity and a wholly owned subsidiary of the Company.

 

If, as of the QIND Closing Date, the Company has any indebtedness for borrowed money or liabilities in excess of $1,350,000 relating to the period prior to the QIND Closing (the “Closing Debt Cap”), then the Company will issue to the security holders of QIND immediately prior to the QIND Closing (the “Legacy QIND Security holders”), including the QIND Sellers, as soon as practicable following the closing of the QIND Merger, a number of additional Class A Ordinary Shares (the “Adjustment Shares”) that will be determined by dividing the dollar amount by which the actual indebtedness for borrowed money of the Company exceeds the Closing Debt Cap by the quotient obtained by dividing $40,730,000 by the number of Class A Ordinary Shares outstanding at the effective time of the QIND Merger on a fully-diluted basis. The Adjustment Shares will be issued to the Legacy QIND Security holders on a pro-rata basis based upon the number of shares of QIND common stock held by the Legacy QIND Security holders at the effective time of the QIND Merger; provided, however, that for this purpose, the QIND Sellers will be deemed to hold at the effective time of the QIND Merger such number of shares of QIND common stock (assuming the conversion of QIND preferred stock held by the QIND Sellers into shares of QIND common stock in accordance with their terms) as they held at the time that the QIND Sellers entered into the Purchase Agreement.

 

In addition, in connection with the QIND Purchase Agreement, the board of directors of the Company approved resolutions that: (i) approved the QIND Purchase Agreement, the Series A Certificate of Designation, the QIND Transactions, and the QIND Merger; (ii) approved the payment of the Company Shares Consideration, (iii) directed that the issuance of the Class A Ordinary Shares underlying the Series A Preferred Shares pursuant to the Preferred Shares Conversion, the amendment and restatement of the constitution of the Company, including the change of the name of the Company to such name as shall be designated by the QIND Sellers (the “Amended Company Charter”), and the election of the New Directors (as defined below) be submitted for consideration at the Shareholders Meeting, and (iv) recommended to the shareholders of the Company that they approve the Preferred Shares Conversion, the Amended Company Charter, and the election of the New Directors (the “Board Recommendation”).

 

Stock Purchase Agreement – Covenants

 

The QIND Purchase Agreement provides that the following covenants will apply:

 

●

Within ten days of the date of the QIND Purchase Agreement, the Company will cause its officers and directors who hold shares or convertible securities of the Company (the “Company Insiders”) to execute a voting agreement.

 

●

After the date of the QIND Purchase Agreement, the Company will use commercially reasonable efforts to raise at least $5,000,000 in one or more financing transactions (the “Company Financing”). QIND and the QIND Sellers are required to support and assist the Company in connection with the Company Financing. 50% of the proceeds from the Company Financing will be set aside and made available expressly for QIND 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 the Company existing immediately prior to the QIND Closing to use for its working capital and corporate needs. To split the net proceeds of the Company Financing as described above, the Company will make loans of one-half of the net proceeds (or such lesser amount as agreed to by the parties to the QIND Purchase Agreement) to QIND. Such loans will be (i) forgiven upon the Preferred Shares Conversion or (ii) repaid if the QIND Transactions are unwound in accordance with the QIND Purchase Agreement. The Company and QIND are required to cooperate to structure such allocation of proceeds and the use of such proceeds on a mutually agreeable basis. The Company will utilize its portion of the net proceeds of the Company Financing to pay off any indebtedness for borrowed money, accounts payable and other liabilities.

 

●

Any proceeds received by the Company in connection with the Subscription Agreement, dated as of August 28, 2024, between the Company and the investor signatory thereto (the “August 2024 Subscription Agreement”), must be used to repay certain funds that were received by certain subsidiaries of the Company or entities organized under Portuguese law by the Company, up to the lesser of (a) the amount of such funds that must be repaid pursuant to the terms and conditions for the receipt of such funds, or (b) €10 million. In the event that (i) any shares or securities of the Company are issued in connection with the August 2024 Subscription Agreement prior to the effectiveness of the QIND Merger, (ii) the proceeds are used to repay certain funds that were received by certain subsidiaries of the Company or entities organized under Portuguese law by the Company, and (iii) the satisfaction of the terms and conditions for the consummation of the QIND Merger pursuant to the QIND Purchase Agreement and the QIND Merger Agreement, then, within three business days of the QIND Merger, the Company will issue a number of Class A Ordinary Shares to the QIND Sellers that will cause their percentage ownership of the Company to be the percentage that the QIND Sellers would have owned but for the occurrence of any such issuances in connection with the August 2024 Subscription Agreement as to which the proceeds were used to repay the funds.

 

 

●

From the date of the QIND Purchase Agreement through the period ending on the earlier of (i) the Preferred Shares Conversion, (ii) the repurchase of the Company Shares Consideration from the QIND Sellers in exchange for the QIND Sellers’ Shares, and (iii) the termination of the QIND Purchase Agreement (the “Restricted Period”), the Company will not sell, transfer, or otherwise encumber the QIND Sellers’ Shares acquired under the QIND Purchase Agreement without the prior written consent from the QIND Sellers. In addition, during the Restricted Period, the Company will not, without the written consent of QIND, which may not be unreasonably withheld, and QIND will not, without the written consent of the Company, which may not be unreasonably withheld, among other things: (i) Declare any dividends; (ii) adjust, split, combine, reclassify, redeem, purchase, acquire, issue (other than pursuant to the exercise or conversion of convertible securities outstanding on the date of the QIND Purchase Agreement), or enter into any contract with respect to the sale, voting, registration, or repurchase of capital stock; (iii) incur more than a certain amount and/or type of indebtedness; (iv) sell any assets; (v) acquire material assets, properties, or business organizations; (vi) enter into certain types of contracts; (vii) make certain loans; (viii) commence, settle, or take certain other actions with respect to legal actions pending before any governmental or regulatory body; (ix) enter into transactions with any affiliate or shareholder that would reasonably be expected to materially delay or prevent the consummation of the QIND Transactions or the QIND Merger or that would be required to be described under Item 404 of Regulation S-K of the SEC in the Company or QIND’s SEC filings; or (x) increase or extend the compensation of any employees, directors, or officers or take certain other actions with respect to employees of the Company or QIND.

 

●

As soon as practicable after the date of the QIND Purchase Agreement, and in any case no less than six weeks prior to the Shareholders Meeting, Purchaser will file an initial listing application with Nasdaq. The Company, the QIND Sellers and QIND are required to use their commercially reasonable efforts to respond to any questions or comments of the staff of Nasdaq.

 

●

The Company will deliver the certificates representing the QIND Sellers’ Shares to a third-party agent on terms and conditions to be mutually agreed upon by the parties to the QIND Purchase Agreement to hold in escrow until the expiration of the Restricted Period such that (i) if the Shareholder Approval is not obtained, then such certificates will be delivered to the QIND Sellers, and (ii) upon occurrence of the Shareholder Approval, such certificates will be delivered to the Company.

 

●

The Company will be required to take all steps necessary to cause the Class A Ordinary Shares issued to the QIND Sellers in connection with the QIND Transactions to be approved for listing (subject to notice of issuance) on Nasdaq at or after the QIND Closing pursuant to Nasdaq rules and regulations.

 

●

The Company, QIND, and the QIND Sellers will enter into the QIND Merger Agreement.

 

●

As promptly as practicable following the QIND Closing Date and the execution and delivery of the QIND Merger Agreement, and after reasonable consultation with QIND, the Company will duly call, convene and hold a special meeting of the holders of the Class A Ordinary Shares (the “Shareholders Meeting”), to be held on a date (the “Initial Meeting Deadline”) no later than 45 days after the effective date (the “Registration Statement Effective Date”) of a registration statement on Form F-4 or such other applicable form (the “Registration Statement”) to be filed with the SEC, unless otherwise required by applicable laws, in accordance with Irish law, including the Irish Companies Act, and the Company’s organizational documents. As promptly as practicable after the mailing of a proxy statement/prospectus relating to the matters to be submitted to the shareholders of the Company at the Shareholders Meeting (the “Proxy Statement”), the Company will solicit proxies from the holders of Class A Ordinary Shares to vote in accordance with the recommendation of the board of directors (the “Shareholder Approval”) with respect to (i) the Preferred Shares Conversion in compliance with all applicable laws and regulations, including, but not limited to, Irish law, including the Irish Companies Act, and the rules and regulations of Nasdaq, (ii) the Amended Company Charter, (iii) the election of the New Directors, (iv) if the parties to the QIND Purchase Agreement determine that approval of the QIND Merger by the Company’s shareholders is required, the QIND Merger, (v) approval to opt out of Rule 9 of the Irish Takeover Panel Act, 1997, Takeover Rules, 2022, (vi) the adjournment of such meeting in accordance with the terms and conditions of the QIND Purchase Agreement, and (vii) any other proposal or proposals that the Company reasonably deems necessary or desirable to consummate the QIND Transactions and the QIND Merger. The Company will be required to use its best efforts to obtain the Shareholder Approval by the Initial Meeting Deadline, including, without limitation, by causing (x) the Company’s board of directors not to withdraw the Board Recommendation, (y) the Company Insiders to be present at the Shareholders Meeting for quorum purposes, and (z) the Company Insiders to vote their respective Class A Ordinary Shares in accordance with the Board Recommendation. The QIND Purchase Agreement provides that the Company may postpone or adjourn the Shareholders Meeting: (A) with the consent of QIND; (B) for the absence of a quorum (other than due to the failure of Company Insiders); or (C) to allow reasonable additional time (not to exceed 20 days) for the filing and distribution of any supplemental or amended disclosure with respect to the QIND Transactions or the QIND Merger that the board has determined in good faith (after consultation with its outside legal counsel) is necessary under applicable laws and for such supplemental or amended disclosure to be disseminated to and reviewed by the Company’s shareholders prior to the Shareholders Meeting. Prior to the mailing of the Registration Statement, the Company will be entitled to engage a proxy solicitor that is reasonably satisfactory to QIND and the QIND Sellers, and the Company will keep QIND and the QIND Sellers reasonably informed regarding its solicitation efforts and proxy tallies following the mailing of the Proxy Statement. In connection with the above, the board will be required to take all necessary action to ensure that the restrictions on business combinations that are provided for in the Irish Companies Act, and any other similar law applicable to the Company, will not apply to the QIND Purchase Agreement, the QIND Transactions, and the QIND Merger, including by approving the QIND Purchase Agreement and certain related agreements, documents and certificates to which the Company is or will be a party.

 

 

●

If, despite the Company’s reasonable best efforts, the Shareholder Approval is not obtained by the Initial Meeting Deadline, the Company will be required, during the period beginning on the Initial Meeting Deadline and continuing for 180 days thereafter (the “Extended Meeting Deadline”), cause one or more additional shareholder meetings to be held so as to obtain the Shareholder Approval.

 

●

If the Registration Statement cannot include any Adjustment Shares required to be issued pursuant to the QIND Purchase Agreement, then the Company will be required to file a separate registration statement that registers the issuance of the Adjustment Shares and use commercially reasonable efforts to cause such other registration statement to become effective as soon as practicable.

 

●

Each of the Company and QIND must take all necessary actions so that, immediately upon adjournment of the Shareholders Meeting or additional shareholders meeting held prior to the Extended Meeting Deadline at which the Shareholder Approval is obtained, the board will be comprised of: (w) one individual as designated by the Company and who shall be designated in writing pursuant to the QIND Merger Agreement; (x) one individual as designated by QIND and who shall be designated in writing pursuant to the QIND Merger Agreement; (y) two individuals that qualify as “independent” under the Nasdaq rules as designated by QIND and who shall be designated in writing under the QIND Merger Agreement; and (z) one individual that qualifies as “independent” under the Nasdaq rules as designated jointly by the Company and QIND and who is designated in writing under the QIND Merger Agreement, provided that a majority of these designees must qualify as an “independent director” under Nasdaq rules and regulations (collectively, the “New Directors”).

 

●

Within three business days of obtaining the Shareholder Approval, the Company will file the Amended Company Charter with the Companies Registration Office of Ireland or as otherwise required to be effective under Irish law.

 

Stock Purchase Agreement – Unwinding and Termination Provisions

 

The QIND Purchase Agreement contains the following unwinding and termination provisions:

 

●

The Company will be required to repurchase the Company Shares Consideration from the QIND Sellers, in whole, and return the QIND Sellers’ Shares to the QIND Sellers, (i) within 15 calendar days after the Extended Meeting Deadline if despite the Company’s reasonable best efforts, the Shareholder Approval is not obtained by the Extended Meeting Deadline; or (ii) if the Company fails to allocate cash raised from the Company Financing in compliance with the QIND Purchase Agreement, and the Company continues to fail to do so within five calendar days after written notice from QIND, then within 10 calendar days after the date of QIND’s notice to complete such repurchase. The QIND Purchase Agreement will automatically terminate upon such repurchase.

 

●

The QIND Purchase Agreement may be terminated by any party before the end of the Restricted Period, by written notice, if (a) the QIND Closing does not occur by the date that is 30 days from the date of the QIND Purchase Agreement, provided that the party seeking termination is not in material breach of the QIND Purchase Agreement, or (b) a law or order by any governmental or regulatory body (including Nasdaq) permanently prohibits the consummation of the QIND Transactions.

 

 

If the QIND Purchase Agreement is validly terminated, it will become void without further obligations or liabilities, except if termination results from fraud or willful and material failure to perform or breach, then the responsible party will be liable for damages as a result of such breach. Certain provisions, including confidentiality, fees and expenses, and miscellaneous terms, will continue to apply after termination.

 

The QIND Purchase Agreement also contains customary representations, warranties, and covenants, including customary restrictive covenants. The QIND Purchase Agreement provides for mutual indemnification provisions. Indemnification obligations with respect to claims relating to breaches of required representations under the QIND Purchase Agreement or certain related agreements, documents, or certificates are limited to claims of maximum damages of $4,000,000 and claims exceeding $400,000, except that no such limits apply with respect to claims of breach of certain representations considered to be fundamental under the QIND Purchase Agreement or with respect to claims of acts of fraud or willful misconduct. Indemnification obligations under the QIND Purchase Agreement will survive until the earlier of the Preferred Shares Conversion or 24 months following the QIND Closing Date, except that indemnification for claims of breach of certain representations considered to be fundamental under the QIND Purchase Agreement or with respect to claims of acts of fraud, willful misconduct or intentional misrepresentation will survive until the expiration of the applicable statute of limitations. The QIND Sellers’ indemnification obligations will be shared on a pro-rata basis.

 

Corporate History of Quality Industrial Inc.

 

QIND was incorporated in the state of Nevada on May 4, 1998. On May 28, 2022, Ilustrato acquired 77.4% of the outstanding shares of QIND. In connection with Ilustrato’s acquisition of QIND, QIND’s name was changed from Wikisoft Corp. to Quality Industrial Corp. by way of a short-form merger with QIND’s wholly-owned subsidiary, Quality Industrial Corp. Since August 4, 2022, OTC Markets Group Inc. has provided quotation services for QIND’s common stock under the ticker symbol “QIND”.

 

On March 27, 2024, QIND entered into a Stock Purchase Agreement, dated as of March 27, 2024, between QIND and Al Shola Gas (the “ASG Purchase Agreement”), to acquire a 51% interest in Al Shola Gas. The closing of the transaction took place upon the execution of the ASG Purchase Agreement. The parties agreed to a purchase price of $10,000,000, to be paid by QIND to Al Shola Gas, as follows: (1) $9 million will be paid in the form of national exchange-listed stock or cash, in eight quarterly tranches over a period of 24 months, beginning from the first quarter following QIND’s uplist to a national exchange. Stock value will be protected by make whole agreement(s), and each tranche will be subject to a 12-month leak-out agreement. (2) $1 million cash will be paid within 12 months of closing and at the soonest possible time.

 

Pursuant to the terms of the ASG Purchase Agreement, QIND will elect two non-paid directors of Al Shola Gas, including Chairman of the Board, and one non-paid director of Al Shola Gas will be elected by the other Al Shola Gas shareholders. QIND obtained immediate control of Al Shola Gas upon execution of the ASG Purchase Agreement. Full operational control of Al Shola Gas will be retained by existing management unless the board of directors designated under the ASG Purchase Agreement determines otherwise due to a breach of the ASG Purchase Agreement, ongoing poor performance, or if structural changes are recommended in line with the laws governed by the ASG Purchase Agreement which will be decided and approved by the board of directors designated under the ASG Purchase Agreement. Al Shola Gas will make payment along with interest, if any, to the Company from revenue proceeds before disbursement of dividends in four yearly equal installments, starting in 2025. A separate loan agreement will be signed. The Company will have the right but not the obligation to purchase the remaining 49% of Al Shola Gas’s shares for a two-year period from the closing date at an amount prorated to the purchase price. The board of directors of Al Shola Gas will determine a mutually agreed management fee and intercompany charges to the Company for services.

 

 

Corporate Information

 

Our corporate address and registered office are located at The Victorians, 15-18 Earlsfort Terrace, Saint Kevin’s, Dublin 2, D02 YX28, Ireland. The phone number of our registered office is +353 1 920 1000.

 

Our agent for service of process in the United States is Jeffrey E. Schwarz, whose business address and telephone number are: Our agent for service of process in the United States is Jeffrey E. Schwarz, whose business address and telephone number are: P.O. Box #347, East Hampton, NY 11937, (917) 742-2521.

 

Our websites can be found at https://www.fusion-fuel.eu, www.qualityindustrialcorp.com and https://alsholagas.ae. The information contained on our websites is not a part of this Annual Report, nor is such content incorporated by reference herein, and should not be relied upon in determining whether to make an investment in the Class A Ordinary Shares or publicly-traded warrants.

 

The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

 

4.B. Business Overview

 

Overview of the Former Green Hydrogen Business

 

From its inception until November 11, 2024, the Company was the provider of a miniaturized PEM electrolyzer, which the Company referred to as the “HEVO,” which could be attached to the back of CPV solar modules, creating a single solar to green hydrogen system. This combination of CPV solar modules and HEVOs was the Company´s first product and was called the HEVO-Solar. In 2023, the Company began commercializing a solution which the Company referred to as the HEVO-Chain solution. This product was built around the concept of the HEVOs working in sequence, making it easily scalable, and allowing it to operate with any type of electrical energy input. The Company shifted its offering to focus solely on the HEVO-Chain solution for any new proposals to clients given it was significantly easier to install and license, its lower space requirements and the fact that it could be used with any power input. The Company began to generate revenues from its electrolyzer system sales in 2023.

 

From 2022 until November 11, 2024, the Company operated a solar-to-green hydrogen demonstration and R&D plant in Evora, Portugal. In Benavente, Portugal, the Company operated an industrial electrolyzer production factory, which the Company sold subject to a lease-back contract in a €9.3 million transaction that generated net proceeds of approximately €7.5 million. As of the end of 2023, the Company had been contracted to provide its electrolyzer technology for five green hydrogen projects ranging from 300 kW to 1.25 MW of electrolyzer capacity, and engineering and procurement services ranging from providing engineering designs and specifications, providing the balance of plant equipment, and turnkey project delivery, subject to obtaining government support or grants through a tender process. On February 16, 2024, the Company announced that it had received notification from the European Commission that the Company’s HEVO-Portugal project was among 33 entities selected for approval under the Important Projects of Common European Interest Hy2Infra program.

 

The Company’s in-house production facility in Benavente, Portugal began the first production of the Company’s 4th generation HEVOs and its HEVO-Chain cube solution. This solution encased the HEVO in dedicated cube structures or in containers depending on project requirements.

 

During 2023, the Company took steps to deliver hydrogen production plants using its HEVO technology and related services and equipment for three different projects. The Company delivered the first full plant to a client, the Exolum Torrejon plant in Madrid, Spain. The Company also started the delivery of services, materials and equipment for Consejo Superior de Investigaciones Científicas (“CSIC”), the largest public institution dedicated to research in Spain, and for a building materials company operating in Spain. The Exolum Torrejon project used the Company’s HEVO-Solar solution. The CSIC project was designed to use a mix of HEVO-Solar and HEVO-Chain equipment. The Company’s third commercial project was a pure HEVO-Chain project. For all three projects, the Company undertook a substantial amount of the engineering work required for project completion and providing the balance of plant equipment.

 

Prior to November 11, 2024, the Company developed a series of projects in Portugal for which it aimed to secure key elements that make a project viable such as land, grant, permits, and potentially offtake agreements, before selling the project to a third party who would then make the capital investment to begin construction. The Company was in discussions and negotiations with various parties regarding the sale and/or an investment commitment for these projects. For these projects, the Company aimed to secure a provision contract with the final investor, whether with electrolyzer provisions, engineering or procurement services, or all three for certain cases.

 

On November 11, 2024, Fusion Fuel Portugal filed for insolvency in the civil court of Sintra, Portugal, and is currently undergoing insolvency proceedings. Subsequently, the former production and sale of the Company’s miniaturized PEM electrolyzer product line and research and development activities, which were conducted through Fusion Fuel Portugal and its subsidiaries, ceased and will not be continued. It is expected that the assets held by Fusion Fuel Portugal and its subsidiaries will be disposed of through a liquidation process. As a result, all business operations of the Company’s former green hydrogen business ceased as of November 11, 2024, and are not expected to be resumed.

 

 

Overview of the Planned Hydrogen Business

 

We plan to provide comprehensive green hydrogen project solutions, including advisory services, engineering, equipment sales, and project oversight. We expect to offer end-to-end project management, supporting clients from the initial feasibility stage through to operation and maintenance. By designing plants specifically for clients’ needs, without relying on predetermined specifications, we anticipate that we will ensure every solution is purpose-built. Our hydrogen service will specialize in sustainability and innovation, aiming to become a leading provider of green hydrogen technologies globally.

 

We will support plant owners and developers with end-to-end or partial solutions as they navigate the complexities of bringing a green hydrogen project to life, developing long-lasting client relationships. The range of our services will be comprehensive and include advising on each hydrogen project’s concept and proposal, engineering front-end loading (FEL) I – III studies, equipment procurement and sourcing, construction and regulatory compliance, and operation and maintenance procedures. Due to our experience from our legacy hydrogen business, we believe that our knowledge of the industry creates additional value for future projects.

 

We will provide comprehensive solutions for engineering, procurement, and construction (EPC) for hydrogen projects.

We will ensure that projects are delivered on schedule, within budget, and meet the required specifications. This service will include the integration of key technologies for the electrolyzers, balance of system, balance of plant, energy storage, fuel cells, and hydrogen supply infrastructure.

 

Our advisory services will include specialized expertise, strategic guidance, and technical insights to stakeholders involved in green hydrogen projects. We will assist in planning, development, feasibility, financing, and implementation of hydrogen-related projects. In an advisory capacity, we may work across various stages of a hydrogen project, from early-stage feasibility assessments to project financing and post-implementation solutions such as management consulting or operations.

 

In the initial phase of these planned services, we will staff specialist functions on a project-by-project basis to maintain low fixed costs. These specialists will fulfill highly specialized roles that can directly impact the quality of the project delivered to a client and need careful selection and oversight. Over time, we plan to bring certain of these functions in-house. We will look to outsource administrative functions where possible and for as long as possible. Where possible, specialists in this area will be hired on a project-by-project basis. Hydrogen project activities require in-depth knowledge of local regulations and practices. Depending on the size of contracts and potential risks involved, a senior legal hire may be required in a later phase of these services.

 

Overview of the Gas Distribution Business

 

Through our operating subsidiary, QIND, an industrial company specializing in the energy sector, and its operating subsidiary, 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.

 

Al Shola Gas is based in Dubai, UAE, offering a broad range of specialized services, including:

 

●

Central Gas Systems (LPG):

 

●

Design, supply, construction, operation, and maintenance (certified by Dubai Civil Defense)

 

●

Design consultancy and project management

 

●

Repair and preventive maintenance

 

●

Billing and monitoring systems

 

 

●

LPG Supply and Distribution:

 

●

Supply of LPG in cylinders and bulk formats

 

●

LPG System Projects:

 

●

Design, supply, and installation of aboveground and underground LPG tanks, including all pipeline and instrumentation components

 

●

Installation and commissioning of LPG, propane, and synthetic natural gas-compatible systems

 

●

Pressure-reducing and distribution stations

 

●

Gas leak detection systems

 

●

LPG metering stations

 

●

Vaporizer systems

 

●

Deluge and sprinkler systems, along with other gas safety systems

 

Al Shola Gas specializes in the design, implementation, and maintenance of various LPG pipeline networks for commercial and industrial clients. We comply with Dubai Civil Defense regulations and international safety standards, offering warranty and safety certification as mandated by relevant regulations.

 

LPG Distribution – Cylinders

 

Al Shola Gas maintains an extensive LPG cylinder distribution network in Dubai, supported by a fleet of delivery trucks. Our centralized call center, along with a dedicated administrative team, allows it to distribute over 20,000 LPG cylinders each month.

 

LPG Distribution – Bulk Gas

 

Al Shola Gas is an approved supplier of bulk LPG, sourcing from the Emirates General Petroleum Corporation. We distribute more than 500,000 liters of bulk LPG each month. Our fleet consists of two 18,000-liter capacity trucks and one 25,000-liter capacity truck to support our bulk LPG supply operations.

 

Intellectual Property

 

Fusion Fuel Portugal filed two patents in 2020 and three provisional patents in 2022. Its rights to these patents are expected to be liquidated in connection with its entry into insolvency proceedings on November 11, 2024.

 

Al Shola Gas does not possess registered intellectual property rights. Its intellectual property lies in its specific design and engineering processes, personnel, capabilities, compliance, and certifications, which have established it as a trusted service provider and supplier in its region. Al Shola Gas holds the ISO 9001 Quality Management System certification.

  

Competition

 

Our planned hydrogen services business will encounter competition from various established energy companies and engineering firms providing similar services. Many of these competitors possess greater financial resources, established customer relationships, and extensive industry expertise, which could hinder the Company's ability to secure contracts and stand out in the market. The Company’s competitiveness relies on its capacity to showcase technical expertise, forge strategic partnerships, and deliver cost-effective solutions.

 

Al Shola Gas’s competitors are primarily UAE-based companies that specialize in gas distribution systems, such as Royal Development for Gas Works, Al Fanar Gas, and Lahej & Sultan.

 

Employees

 

The Company has approximately 130 employees. The employees are not represented by a labor union or collective bargaining agreement. We believe that our relationship with our employees is good.

 

 

Laws and Regulations

 

Hydrogen service providers worldwide must comply with a complex regulatory framework governing production, transportation, storage, and distribution, with specific requirements varying by jurisdiction. Key regulations include environmental and sustainability mandates (e.g., the European Union’s Renewable Energy Directive (RED III), U.S. Inflation Reduction Act incentives), safety and transport standards (e.g., Accord Dangereux Routier (ADR) in Europe, Department of Transportation in the U.S., and the UN Recommendations on the Transport of Dangerous Goods), infrastructure rules (e.g., the Alternative Fuels Infrastructure Regulation in the European Union, Japan’s Basic Hydrogen Strategy), and market regulations ensuring open access and certification compliance (e.g., Guarantees of Origin in the European Union, China’s hydrogen certification system).

 

LPG distribution and engineering service providers in Dubai are primarily regulated by the Dubai Municipality and Dubai Civil Defense, which enforce strict safety, storage, and transportation requirements in accordance with local laws. Licensing for LPG distributors and engineering firms necessitates compliance with technical standards, environmental guidelines, and periodic safety inspections. Across the broader Middle East, regulations vary by country but generally adhere to international safety standards, such as those set by the International Organization for Standardization (ISO). Gulf Cooperation Council countries, including Saudi Arabia, Qatar, and Oman, impose stringent controls on the importation, storage, and sale of LPG, with regulatory oversight from national energy and safety authorities.

 

Seasonality

 

Our business lines can be affected by seasonal trends. During specific holiday periods, business development may see a slowdown in negotiations and discussions with counterparties and clients, which could also affect the supply chain. Revenues from our planned hydrogen services may be influenced by seasonality, as solar radiation fluctuates throughout the year, leading to variations in hydrogen sales revenue from month to month.

 

The seasonality of revenue derived from LPG distribution services in the Middle East is typically not pronounced; nevertheless, demand fluctuations may still arise. Consumption of LPG may increase during winter months when the population in the region reaches its peak, resulting in higher gas consumption in residential facilities, hotels, and restaurants. A seasonal variation may be observed during the summer months when the demand for LPG can decline due to the extreme heat prevalent in the region, which generally leads to lower tourist activity and a decreased population density.

 

4.C.  Organizational Structure

 

The following is a list of the subsidiaries of the Company:

 

●

Quality Industrial Corp., our 69.36%-owned subsidiary, a Nevada corporation formed on May 4, 1998.

 

●

Al Shola Al Modea Gas Distribution LLC, 51%-owned by Quality Industrial Corp., formed in the United Arab Emirates on March 18, 1990.

 

●

Bright Hydrogen Solutions Limited, our wholly-owned subsidiary, a private limited company incorporated in Ireland on February 17, 2025.

 

●

Fusion Fuel Portugal, S.A., our wholly-owned subsidiary, formed in Portugal on July 26, 2018.

 

●

Fusion Fuel USA, Inc., our wholly-owned subsidiary, a Delaware corporation formed on April 21, 2021.

 

●

Fusion Fuel Australia, PTY Ltd., our wholly-owned subsidiary, formed in Australia on July 1, 2021.

 

●

Fusion Fuel Australia – Pilot PTY Ltd., wholly-owned by Fuel Australia, PTY Ltd, formed on July 1, 2021 in Australia.

 

●

Fusion Fuel Morocco, S.A.S., our wholly-owned subsidiary, formed in Morocco on May 31, 2022.

 

●

Hanoi Asset Management, S.L., our wholly-owned subsidiary, formed in Spain on March 16, 2023.

 

●

Fuel Cell Évora I, Unipessoal LDA, wholly-owned by Fusion Fuel Portugal, formed in Portugal on January 1, 2021.

 

●

Fuel Cell Évora II, Unipessoal LDA, wholly-owned by Fusion Fuel Portugal, formed in Portugal on January 1, 2021.

 

●

Hevo Sines, Unipessoal LDA, wholly-owned by Fusion Fuel Portugal, formed in Portugal on June 1, 2022.

 

●

Hevo Sines II, Unipessoal LDA, wholly-owned by Fusion Fuel Portugal, formed in Portugal on June 1, 2022.

 

●

Hevo Sines III, Unipessoal LDA, wholly-owned by Fusion Fuel Portugal, formed in Portugal on May 18, 2022.

 

●

Hevo Portugal, Unipessoal, LDA, wholly-owned by Fusion Fuel Portugal, formed in Portugal on September 1, 2022.

 

●

Hevo II Industria, Unipessoal LDA, wholly-owned by Fusion Fuel Portugal, formed in Portugal on November 1, 2022.

 

●

Hevo Aveiro, Unipessoal LDA, wholly-owned by Fusion Fuel Portugal, formed in Portugal on June 28, 2023.

 

 

The following diagram depicts our organizational structure as of March 10, 2025.

 

Fusion Fuel Green PLC (Ireland) Fusion Fuel Portugal, S.A . ( Portugal ) Fuel Cell Évora I, Unipessoal LDA ( Portugal ) Fusion Fuel Australia – Pilot PTY Ltd. ( Australia) 100% 100% 100% 100% Fusion Fuel Australia, PTY Ltd. ( Australia) 100% Fusion Fuel USA, Inc. ( Delaware) 100% 100% Hanoi Asset Management, S.L. ( Spain) Fusion Fuel Morocco, S.A.S. ( Morocco ) Fuel Cell Évora II, Unipessoal LDA ( Portugal ) 100% Hevo Sines, Unipessoal LDA ( Portugal ) 100% Hevo Sines II, Unipessoal LDA ( Portugal ) 100% Hevo Sines III, Unipessoal LDA ( Portugal ) 100% Hevo Portugal, Unipessoal LDA ( Portugal ) 100% 100% Hevo II Industria, Unipessoal LDA ( Portugal ) 100% Hevo Aveiro, Unipessoal LDA ( Portugal ) 69.36% Quality Industrial Corp. (Nevada) Al Shola Al Modea Gas Distribution LLC (United Arab Emirates) 51% Bright Hydrogen Solution Ltd. (Ireland ) 100%

 

 

4.D. Plants, Property and Equipment

 

On January 1, 2021, Fusion Fuel Portugal entered into a sub-lease agreement for space of 4,156 square meters of office, logistical, and industrial activities. Parking plots are also included. The sub-lease has an initial term of five years, with automatic renewal for additional terms of five years until either party notifies the other party of its intention not to renew. Either party can choose to terminate the agreement after 20 months once adequate communication is provided to the other party. The total monthly rent determined by the sub-lease is fixed at €0.03 million.

 

On December 20, 2022, Fusion Fuel Portugal entered into a sale-and-leaseback agreement for its facility at Benavente, Portugal. The leaseback arrangement has an initial term of 20 years and will be automatically renewed for a further ten years unless the Company provides sufficient notice to terminate. The monthly rent determined by the lease is fixed at €0.06 million.

 

During 2021, 2022 and 2023, Fusion Fuel Portugal along with its subsidiary entities entered into various land, equipment and vehicle leases in the ordinary course of business.

 

Prior to November 11, 2024, the Company owned or leased certain hydrogen plants and other tangible fixed assets. See Item 4.B. Business Overview. “Overview of the Former Green Hydrogen Business”. On November 11, 2024, Fusion Fuel Portugal entered into insolvency proceedings. It is expected that any material tangible fixed assets, including leased properties, held by Fusion Fuel Portugal and its subsidiaries will be disposed of through a liquidation process.

 

As of December 31, 2023, QIND has a virtual office at 315 Montgomery Street, 94104 San Francisco, California. The cost per month is $113 and is renewed annually.

 

As of December 31, 2023, Al Shola Gas leases facilities for terms ranging from 1 to 5 years at the addresses listed below, along with their respective square foot sizes and annual rent amounts per facility. In total, ASG leases properties that exceed 20,000 square feet.

 

Location		Lease Term		Area Sq. Ft.				Annual Rent
Office at Hamsah Building, O/112, Zabeel Road, Dubai, UAE		1 Year			1,222			$	25,663
Warehouse No. 19, Baghdad Street, Al Qusais Industrial Area 2, Al Qusais, Dubai, UAE		1 Year			6,400			$	7,115
Warehouse Plot No: 987-1006, Al Layan 1, DIC, Dubai, UAE		5 Years			10,010			$	30,518
Employee accommodation 17 units Plot No: 438-0, Muhaisanah Second, DIC, Dubai, UAE		1 Year			2,928				94,496
Total					20,550			$	157,792

 

 

12

 

 

Exhibit 99.4

 

 

 

 

 

 

QUALITY INDUSTRIAL CORP.

 

FINANCIAL STATEMENTS

 

DECEMBER 31, 2023 & DECEMBER 31, 2022

 

 

 

 

 

 

 

 

 

 

QUALITY INDUSTRIAL CORP.

 

FINANCIAL STATEMENTS

 

DECEMBER 31, 2023 & DECEMBER 31, 2022

 

TABLE OF CONTENTS

 

	PAGES
INDEPENDENT AUDITOR’S REPORT	1
FINANCIAL STATEMENTS:
CONSOLIDATED BALANCE SHEETS	2
CONSOLIDATED STATEMENT OF OPERATIONS	3
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	4
CONSOLIDATED STATEMENT OF CASH FLOWS	5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	6-16

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Shareholders

Quality Industrial Corp. (QIND)

 

OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS

 

We have audited the accompanying consolidated balance sheets of Quality Industrial Corp. (QIND) (the “Company”) as of December 31, 2023, and 2022, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 

BASIS FOR OPINION

 

These consolidated financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

SUBSTANTIAL DOUBT ABOUT THE COMPANY’S ABILITY TO CONTINUE AS A GOING CONCERN

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses from operations and has a net capital deficiency for the period ended December 31, 2023, that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

CRITICAL AUDIT MATTERS

 

The critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

 

/s/ Bush & Associates CPA LLC

Bush & Associates CPA LLC

We have served as the Company’s auditor since 2024.

Henderson, Nevada

March 10, 2025

PCAOB ID Number 6797

 

 

QUALITY INDUSTRIAL CORP.

CONSOLIDATED BALANCE SHEETS

(AUDITED)

 

				December 31, 2023				December 31, 2022
ASSETS
Current assets
Cash and cash equivalents		4			2,492				3,136
Other current assets		5			2,000,000				10,958
Total current assets					2,002,492				14,094
Non- Current assets
Property Plant & Equipment					—				—
Capital WIP					—				—
Furniture, Fixtures & Office Equipment					—				—
Lease Hold Improvements & Building					—				—
Right of Use assets					—				—
Long term Investment		6			6,500,000				1,000,000
Related Party Receivable					333,133				—
Total non-current assets					6,833,133				1,000,000
Total Assets					8,835,625				1,014,094
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued liabilities					166,577				27,803
Other Current Liabilities		7			5,615,440				79,230
Total current liabilities					5,782,017				107,033
Long Term liabilities
Convertible Notes, Net of discount		8			2,310,109				1,100,000
Other long-term liabilities					—				—
Total Long-Term Liabilities					2,310,109				1,100,000
Total Liabilities					8,092,126				1,207,033
Stockholders’ Equity		9
Preferred stock; $0.001 par value; 1,000,000 shares authorized; 0 and 0 shares issued and outstanding as of December 31, 2022, and December 31, 2021, respectively					—				—
Common stock; $0.001 par value; 200,000,000 shares authorized; 127,129,694 and 102,883,709 shares issued and outstanding as of December 31, 2023, and December 31, 2022, respectively					127,132				102,886
Additional paid-in capital					17,248,964				12,174,975
Stock Payable					—				—
Retained Earnings/ accumulated Deficit					(16,632,597	)			(12,470,800	)
Minority Interest					—				—
Total stockholders’ Equity					743,499				(192,939	)
Total liabilities and stockholders’ Equity					8,835,625				1,014,094

 

The accompanying notes are an integral part of these audited consolidated financial statements.

 

 

QUALITY INDUSTRIAL CORP.

CONSOLIDATED STATEMENT OF OPERATIONS

(AUDITED)

 

				For the Years Ended
				Dec 31, 2023				Dec 31, 2022
Revenue				$	—				—
Cost of revenues					—				—
Gross profit				$	—				—
Operating expenses
Professional fees					315,011				294,700
General and administrative		10			2,380,310				126,846
Total operating expenses					2,695,321				421,546
Profit/Loss from Operations				$	(2,695,321	)		$	(421,546	)
Other Non-Operating expense
Interest on Convertible Notes					137,448				33,838
Interest expense					8,999				—
Commitment and Conversion Fees					1,237,245				—
Loss on License Agreement					—				104,550
Discount on Convertible Notes					82,784
Depreciation					—				—
Total Non-Operating Expenses				$	1,466,476				138,388
Non-Operating Income		11
Other Non-Operating Income					—				—
Gain on settlement & forgiveness of debt									457,071
Total Non-Operating Income					0				457,071
Net loss/ profit				$	(4,161,797	)		$	(102,863	)
Net profit per common share - basic and diluted					(0.03	)			(0.00	)
Weighted average common shares outstanding					114,665,519				100,703,471

 

The accompanying notes are an integral part of these audited consolidated financial statements. 

 

 

QUALITY INDUSTRIAL CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(AUDITED)

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 

 

		Common Stock								Additional Paid-in				Accumulated				Total Stockholders’
		Shares				Amount				Capital				Deficit				Equity
Balance, December 31, 2022			102,833,709			$	102,886				12,174,975			$	(12,470,800	)		$	(192,939	)
Common stock issued for cash			6,410,971				6,411				1,993,589				—				2,000,000
Common stock issued to Management			15,600,000				15,600				2,217,400				—				2,233,000
Common stock issued for services			1,693,256				1,693				721,042				—				722,735
Common stock issued as commitment shares			300,000				300				125,700				—				126,000
Common stock issued against Note conversion			241,758				242				16,258				—				16,500
Net Income															(4,161,797	)			(4,161,797	)
Balance, December 31, 2023			127,129,694			$	127,132				17,248,964			$	(16,632,597	)		$	743,499

 

		Common Stock								Additional Paid-in				Stock				Accumulated				Total Stockholders’
		Shares				Amount				Capital				Payable				Deficit				Equity
Balance, December 31, 2021			94,738,209			$	94,740			$	11,904,190			$	395,101			$	(12,763,038	)		$	(369,007	)
Common stock issued for cash			3,595,500				3,596				92,970				—				—				96,566
Common stock issued for license agreement			2,550,000				2,550				102,000				—				—				104,550
Imputed interest			—				—				1,498				—				—				1,498
Reclassification of imputed interest			—				—				(6,283	)			—				—				(6,283	)
Reversal stock Payable			—				—				—				(395,101	)			395,101			$	—
Common stock issued			2,000,000				2,000				80,600				—				—				82,600
Net Income			—				—				—				—				(102,863	)			(102,863	)
Balance, December 31, 2022			102,833,709			$	102,886				12,174,975				—			$	(12,470,800	)		$	(192,939	)

 

The accompanying notes are an integral part of these audited consolidated financial statements.

 

 

QUALITY INDUSTRIAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(AUDITED)

 

		For the years Ended
		December 31, 2023				December 31, 2022
Cash Flows from Operating Activities
Net profit			(4,161,797	)			(102,863	)
Adjustments to reconcile net loss to net cash used in operating activities:
Finance Cost			146,447				33,839
Stock Based Compensation Management			2,233,000				—
Non-cash expenses			931,476				—
Loss on license agreement			—				104,550
Settlement and forgiveness of debt							(457,071	)
Increase in Current assets			(2,343,125	)			(10,780	)
Decrease in Prepaid assets			—				210,293
Increase/(Decrease) in Accounts payable			138,774				(179,618	)
Increase/(Decrease) in Current Liabilities			5,414,033				(13,486	)
Net cash generated from/(used in) operating activities		$	2,358,808				(415,136	)
Cash Flows from Investing Activities
Long term Investment			(5,500,000	)			(1,000,000	)
Long Term Borrowings			—				—
Net cash used in investing activities		$	(5,500,000	)			(1,000,000	)
Cash Flows from Financing Activities
Issuance of Convertible Note			1,402,670				1,100,000
Related party line of Credit			—				(295,000	)
Loss on license agreement			—				(104,550	)
Settlement and forgiveness of debt							457,071
Long term Borrowings			—				—
Subsidiary			—				—
Finance Cost			(146,447	)			(33,839	)
Repayment of Note			(115,675	)			—
Proceeds from issuance of common stock			2,000,000				278,931
Net cash generated from financing activities		$	3,140,548				1,402,613
Net (decrease) in Cash			(644	)			(12,523	)
Beginning cash balance			3,136				15,659
Ending cash balance		$	2,492				3,136

 

The accompanying notes are an integral part of these audited consolidated financial statements. 

 

 

NOTE 1: OUR HISTORY

 

Quality Industrial Corp. (“we”, “our”, the “Company”) was incorporated in the state of Nevada in May 1998 as Sensor Technologies Inc. We aim to be a global leader in the manufacture and assembly of industrial equipment and precision engineered technology for the industrial, oil & gas, and utility sectors.

 

In March 2006 the Company changed its name to Bixby Energy Systems Inc. The Company changed its name to Power Play Development Corporation in September 2006. In April 2007 the Company changed its name to National League of Poker, Inc. In October 2011 the Company changed its name back to Power Play Development Corporation. In March 2018 the Company changed its name to Bluestar Technologies, Inc. In March 2018, the Company then changed its name to Wikisoft Corp.

 

In May 2016, the Company’s Board of Directors terminated the services of all prior officers and directors and the board appointed Robert Stevens as the Board Appointed Receiver for the Company. This was a private receivership where the receiver was appointed by the board to act on behalf of the Company and no court filings were ever made in connection with the receivership. On April 16, 2019, in connection with the Merger described below, Robert Stevens resigned from all his positions with the Company and the board appointed receivership was concluded. At that time Rasmus Refer was appointed as the Company’s CEO and Director, and he resigned from such positions in August and November 2020, respectively. Rasmus Refer was previously the CEO of the Company until August 31, 2020, and Director of the Company until November 30, 2020, where Carsten Kjems Falk was appointed as CEO and Paul C. Quintal sole director were appointed thereafter as described in detail below.

 

On May 28, 2022, we changed ownership, when Ilustrato Pictures International, Inc. (“ILUS”) at the time acquired 77% of the outstanding shares in our Company. Modern Art Foundation Inc. (“Modern Art”), Rene Lauritsen and Fastbase Holding Inc. agreed to transfer 77,669,078 shares of common stock in the Company to Ilustrato Pictures International, Inc. (“Ilustrato”). Pursuant to a Stock Transfer Agreement, Ilustrato purchased the shares for an aggregate amount of $500,000. Mr. Nicolas Link who is the CEO of ILUS, is the beneficial owner. Consequently, ILUS 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. Also, during the year with the Change of Control, Mr. Nicolas Link, beneficial owner of ILUS, was appointed as our Executive Chairman of the Board, Mr. John-Paul Backwell was appointed as our Chief Executive Officer, Mr. Carsten Falk was appointed as our Chief Commercial Officer, Mr. Krishnan Krishnamoorthy was appointed as our Chief Financial Officer and finally, Mrs. Louise Bennett was appointed Chief Operations Officer. The Officers and Director of the Company have an employee agreement with the parent Company ILUS. The agreements also govern their employment agreements in Quality Industrial Corp. All salaries are paid by ILUS, and stock-based compensation is as a combination from both companies.

 

In line with the change in control and business direction, our Company changed its name to Quality Industrial Corp. with the ticker QIND, with a market effective date of August 4, 2022. As a result of these transactions, Quality Industrial Corp. is now a public company focused on the Industrial, Oil & Gas and Utility Sectors and is the Industrial and Manufacturing subsidiary of ILUS.

  

NOTE 2. SUMMARY OF SIGNIFICANT POLICIES

 

Basis of Presentation and Principles of consolidation

 

The accompanying consolidated financial statements represent the results of operations, financial position, and cash flows of QIND and all of its majority — owned or controlled subsidiary are prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP). All significant inter-company accounts and transactions have been eliminated.

 

Use of estimates

 

A critical accounting estimate is an estimate that: (i) is made in accordance with generally accepted accounting principles, (ii) involves a significant level of estimation uncertainty and (iii) has had or is reasonably likely to have a material impact on the Company’s financial condition or results of operations.

 

 

The Company’s Consolidated Financial Statements 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.

 

Significant estimates include estimates used to review the Company’s, impairments and estimations of long-lived assets, revenue recognition of Contract based revenue, allowances for uncollectible accounts, and the valuations of non-cash capital stock issuances. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

Fair value of financial instruments

 

The carrying value of cash, accounts payable, warrants, accrued expenses, and debt, short term as well as long term, is recorded at fair value. Management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments.

 

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable.

 

●

Level 1. Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.

 

●

Level 2. Quoted prices for similar assets and liabilities in active markets; quoted prices included for identical or similar assets and liabilities that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. These are typically obtained from readily available pricing sources for comparable instruments.

 

●

Level 3. Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.

 

Revenue Recognition

 

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

 

The principal activity of the Company is to engage in general trading, manufacturing and fabrication or steel and steel products and mainly manufacturing of pressure vessels, tanks, heat exchangers and construction of storage tanks and piping. Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods or services before transferring them to the customer.

 

 

Stock-based compensation

 

The Company recognizes all stock-based compensation using the fair value provisions prescribed by ASC Topic 718, Compensation - Stock Compensation. Accordingly, compensation costs for awards of stock-based compensation settled in shares are determined based on the fair value of the share-based instrument at the time of grant and are recognized as expense over the vesting period of the share-based instrument, net of estimated forfeitures.

  

In accordance with ASC 718, the Company will generally apply the same guidance to both employee and non-employee share-based awards. However, the Company will also follow specific guidance for share-based awards to non-employees related to the attribution of compensation cost and the inputs to the option-pricing model for expected term. Non-employee share-based payment equity awards are measured at the grant-date fair value of the equity instruments, similar to employee share-based payment equity awards.

 

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

 

Earnings (loss) per share

 

The Company reports earnings (loss) per share in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 260-10 “Earnings Per Share,” which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive.

 

Particulars		December 31, 2023				December 31, 2022
Basic and diluted EPS*
Numerator
Net income/(loss)			(4,161,797	)			(102,863	)
Net Income attributable to common stockholders			(4,161,797	)			(102,863	)
Denominator
Weighted average shares outstanding			114,665,519				100,703,471
Number of shares used for basic EPS computation			127,129,694				102,883,709
Basic EPS			(0.03	)			(0.00	)
Number of shares used for diluted EPS computation*			127,379,694				102,883,709
Diluted EPS			(0.03	)			(0.00	)

 

*

Includes 250,000 issued warrants.

 

Income taxes

 

The Company accounts for income tax positions in accordance with Accounting Standards Codification Topic 740-10-50, “Income Taxes” (“ASC Topic 740”). This standard prescribes a recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There was no material impact on the Company’s financial position or results of operations as a result of the application of this standard. Deferred tax assets have not been created as major income of the company belongs to the subsidiary, which is registered in income tax-free jurisdiction since the losses incurred cannot be utilized in the future, rendering deferred tax assets irrelevant, The profits of a foreign subsidiary corporation are ordinarily not subject to tax in the United States as in accordance with the general Internal Revenue Service rule, foreign subsidiaries are not considered U.S. corporations even if they are wholly owned.

 

 

Recently issued accounting pronouncements

 

The Company has evaluated all other recent accounting pronouncements and believes that none of them are expected to have a material effect on the Company’s financial position, results of operations or cash flows.

 

Off-Balance Sheet Arrangements

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

  

NOTE 3. GOING CONCERN

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

 

Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated financial statements are issued and determined. The Company’s ability to continue as a going concern is dependent on the Company’s ability to continue to generate sufficient revenues and raise capital within one year from the date of filing.

 

QIND has planned 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.

 

NOTE 4. CASH AND CASH EQUIVALENTS

 

For purposes of the statements of cash flows, in accordance with ASC 230-10-20 the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. There was $2,492 and $3,169 in cash and cash equivalents as of December 31, 2023, and December 31, 2022, respectively.

 

NOTE 5. CURRENT ASSETS

 

Other Current Assets

 

Year		December 31, 2023				December 31, 2022
Prepaid assets			—				10,442
Buy Back Commitment			2,000,000				—
Other Misc. current assets			—				516
Total other current assets		$	2,000,000			$	10,958

 

 

NOTE 6. NON-CURRENT ASSETS

 

The company holds long-term investments of $6,500,000 and $1,000,000 as of December 31, 2023, and 2022, respectively. These investments were made for the acquisition of Quality International. On April 1, 2024, the Board of Directors of the Company approved the cancellation of the agreement with Quality International Co Ltd FZC signed on January 18, 2023, and as amended on July 27, 2023. The company is in the process of unwinding the transaction, with management aiming to recover the investment or parts of it. However, if recovery proves unattainable, the investment may need to be written off in the later years.

 

Related party advances

 

As of December 31, 2023, and December 31, 2022, the Company had amounts due from Ilustrato Pictures International, Inc. (“ILUS”), a majority shareholder of the Company, of $333,133 and $0, respectively. These figures are related to an intercompany loan agreement executed by and between the Company and ILUS on June 15, 2022. The maximum principal amount to be borrowed by either party from each other under the agreement is $1,000,000. The purpose of the agreement is to provide for working capital to either the Company or ILUS through cash advances on an unsecured basis requested by either party at any time and from time to time in amounts of up to $100,000 and the agreement shall automatically be renewed for successive one-year terms thereafter unless terminated. The intercompany loan agreement has a term of one year from the date of execution and all cash advances mature and become payable on the termination date. Any unpaid principal accrues simple interest from the date of each cash advance until payment in full at a rate equal to 1% per annum.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

NOTE 7. CURRENT LIABILITIES

 

Current Liabilities as mentioned in the below table includes short term Liabilities.

 

Other Payable Current		December 31, 2023				December 31, 2022
Mahavir Loan			3,235,000				—
Artelliq loan			2,144,554				—
Other current liabilities			235,886				79,230
Total		$	5,615,440				79,230

 

On July 27, 2023, our Company borrowed from Mahavir Investments Limited, the principal amount of $3,000,000 (the “Mahavir Loan”). The Mahavir Loan bears interest at 20% per annum and is payable in nine tranches. We have the right to prepay the Mahavir Loan at any time. The loan matures on April 30, 2024. The $3,000,000 was paid to Quality International as tranche payment of the amended purchase agreement.

 

On August 25, 2023, the Company issued to Artelliq Software Trading 6,410,971 shares of our common stock for $2,000,000 pursuant to a share purchase and buy back agreement signed on August 21, 2023. The $2,000,000 was paid to Quality International as tranche payment of the amended purchase agreement.

 

NOTE 8. 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 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 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.

 

●

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 July 31, 2023, the Company issued to 1800 Diagonal Lending Ltd. a promissory note in the principal amount of $174,867 (the “Diagonal Lending Note”). The Diagonal Lending Note had a one-time interest amount of $22,732. The Company will prepay the Diagonal Lending Note in nine monthly payments each in the amount of $21,955.45. The promissory note matures on February 28, 2024, with a total payback to the Holder of $197,599. 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.

 

●

On August 15, 2023, the Company issued to 1800 Diagonal Lending Ltd. a promissory note in the principal amount of $118,367 (the “Diagonal Lending Note”). The Diagonal Lending Note had a one-time interest amount of $15,387.71. The Company will prepay the Diagonal Lending Note in nine monthly payments each in the amount of $14,861.64. The promissory note matures on May 30, 2024, with a total payback to the Holder of $133,754.71 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.

 

 

●

On December 20, 2023, the Company issued a two-year convertible promissory note in the principal amount of $100,000 to RB Capital Partners Inc. The Note bears interest at 10% 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 December 20, 2023, the Company issued a one-year convertible promissory note in the principal amount of $100,000 to Sean Levi. The Note bear a minimum of Twenty percent (20%) interest which will be charged on the day the company receives the IPO funding, and thereafter Fifteen percent (15%) per annum will be charged. The Note is for a period of 1 year and cannot be converted until six (6) months from the date first written above has passed. 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 the price of 25% of the listing price, or if the company does not uplist, at a 50% discount of the market price.

   

Further, the holding company, QIND, formerly known as Wikisoft Corp, entered into loan agreement with Fastbase Inc, the details of the loan agreement along with Forgiveness of Debt are as follows:

 

On June 1, 2020, the Company entered into a loan agreement with Fastbase Inc, in the amount of $30,215. The amount bears no interest and is due upon request.

 

On September 1, 2020, the Company entered into a loan agreement with Fastbase Inc, in the amount of $15,000. The note bears an interest rate of 4.25% and is due on September 1, 2022.

 

On October 24, 2020, the Company entered into a loan agreement with Fastbase Inc in the amount of $7,875. The note bears an interest rate of 4.25% and is due on January 1, 2023. On April 29, 2022, the Company paid the loan in full as well as accrued interest of $506. As of June 30, 2022, the balance of principal owed was $0.

 

On December 3, 2020, the Company entered into a loan agreement with Fastbase Inc. in the amount of $10,000. The note bears an interest rate of 4.25% and is due on January 1, 2023. On January 20, 2022, the Company paid the loan in full as well as accrued interest of $477.

 

On May 15, 2022, the Company entered into a loan agreement with Fastbase Inc in the amount of $37,000. The note bears an interest rate of 3% and is due on January 1, 2024. On May 25, 2022, the loan was forgiven in full as well as accrued interest of $30, and a gain on forgiveness of debt of $37,030 was recorded.

 

On May 25, 2022, we entered into a Debt Conversion Agreement (the “Agreement”) with our prior officer and director, Rasmus Refer. Pursuant to the Agreement, we transferred our 51% interest in Etheralabs LLC to Mr. Refer. In exchange, Mr. Refer agreed to cancel $300,041 in loans including interest owed by our company to Mr. Refer.

 

On July 28, 2022, the Company entered into a Debt Conversion agreement with Enza International and converted the full amount of Debt $82,570 into 2,000,000 shares of Common Stock.

 

Options and Warrants

 

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

 

On April 19, 2023, the Company issued a common share purchase warrant to Exchange Listing 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.

 

NOTE 9. STOCKHOLDERS’ EQUITY

 

The Company’s authorized capital stock consists of 200,000,000 shares of common stock and 1,000,000 shares of preferred stock, par value $0.001 per share.

 

As of December 31, 2023, and December 31, 2022, there were 127,129,694 and 102,883,709 shares of common stock issued and outstanding, respectively.

  

As of December 31, 2023, and December 31, 2022, there were 0 and 0 shares of preferred stock of the Company issued and outstanding, respectively.

 

●

On January 3, 2022, the Company issued 500,000 shares of common stock for $20,523 cash to White Lion Capital LLC pursuant to the Company’s Registration Statement on Form S-1 SEC File No. 333-258341 declared effective by the SEC on August 5, 2021.

 

●

On January 10, 2022, the Company issued 500,000 shares of common stock for $15,975 cash to White Lion Capital LLC pursuant to the Company’s Registration Statement on Form S-1 SEC File No. 333-258341 declared effective by the SEC on August 5, 2021.

 

●

On February 28, 2022, the Company entered into a definitive agreement to acquire 51% of Etheralabs LLC for 2,550,000 of the Company’s common stock valued at $104,550.

 

●

On March 10, 2022, the Company issued 500,000 shares of common stock for $7,688 cash to White Lion Capital LLC pursuant to the Company’s Registration Statement on Form S-1 SEC File No. 333-258341 declared effective by the SEC on August 5, 2021.

 

●

On March 21, 2022, the Company issued 750,000 shares of common stock for $13,638 cash to White Lion Capital LLC pursuant to the Company’s Registration Statement on Form S-1 SEC File No. 333-258341 declared effective by the SEC on August 5, 2021.

 

●

On March 29, 2022, the Company issued 750,000 shares of common stock for $11,725 cash. As of March 31, 2022, the cash had not been received and was recorded as stock receivable.

 

●

On April 22, 2022, the Company issued 595,500 shares of common stock for $27,017 cash to White Lion Capital LLC pursuant to the Company’s Registration Statement on Form S-1 SEC File No. 333-258341 declared effective by the SEC on August 5, 2021.

 

●

On July 28, 2022, the Company issued 2,000,000 shares of common stock for $82,572 cash for debt conversion to Enza International Ltd.

 

●

On August 3, 2022, we issued a two-year convertible promissory note to RB Capital LLC in the principal amount of $1,100,000. The note is convertible into common stock at the rate of $1.00 and bears 7% interest per annum.

 

●

On March 17, 2023, the Company issued to RB Capital Partners Inc. a two-year convertible promissory note in the principal amount of $200,000 (the “March 2023 Note”). The March 2023 Note bears interest at 7% per annum. The Company has the right to prepay the March 2023 Note at any time. All principal on the March 2023 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 4, 2023, the Company issued to Nicolas Link 2,750,000 shares of our common stock with a grant-date and fair market value of the award as of June 1, 2022, at $0.0721 pursuant to his employee contract.

 

●

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

  

●

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

 

●

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

 

●

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

 

●

On May 8, 2023, the Company issued to Exchange Listing LLC 1,543,256 shares of our common stock for $1,543 for consultancy services for the planned uplist to NYSE with a grant-date and fair value of the award, at $0.41 pursuant to a share purchase agreement signed on April 19, 2023.

 

●

On June 1, 2023, the Company issued to Jefferson Street Capital LLC 150,000 shares of our common stock with a grant-date and fair value of the award as of May 23, 2023, at $0.60 pursuant to a share purchase agreement signed on May 23, 2023.

 

●

On July 17, 2023, the Company issued to Sky Holdings Ltd. 300,000 shares of our common stock with a grant-date and fair value of the award as of June 16, 2023, at $0.42 pursuant to a share purchase agreement signed on June 16, 2023.

 

●

On July 31, 2023, the Company issued to 1800 Diagonal Lending Ltd. a promissory note in the principal amount of $174,867 (the “Diagonal Lending Note”). The Diagonal Lending Note had a one-time interest amount of $22,732. The Company will prepay the Diagonal Lending Note in nine monthly payments each in the amount of $21,955.45. The promissory note matures on February 28, 2024, with a total payback to the Holder of $197,599. 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.

 

●

On August 15, 2023, the Company issued to 1800 Diagonal Lending Ltd. a promissory note in the principal amount of $118,367 (the “Diagonal Lending Note”). The Diagonal Lending Note had a one-time interest amount of $15,387.71. The Company will prepay the Diagonal Lending Note in nine monthly payments each in the amount of $14,861.64. The promissory note matures on May 30, 2024, with a total payback to the Holder of $133,754.71 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.

 

●

On August 25, 2023, the Company issued to Artelliq Software Trading 6,410,971 shares of our common stock for $2,000,000 pursuant to a share purchase and buy back agreement signed on August 21, 2023. The $2,000,000 was paid to Quality International as tranche payment 2.2 of the amended purchase agreement.

 

●

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

 

●

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

 

 

●

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

 

●

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

 

●

On December 26, 2023, the Company issued to Jefferson Street Capital LLC 241,758 shares of our common stock for $15,000, pursuant to a convertible note signed on May 23, 2023.

 

NOTE 10. OPERATING EXPENSES

 

General and Administrative Expenses		December 31, 2023				December 31, 2022
Salaries and compensation to employees*			2,363,000				60,000
Rent			1,655				1,555
Office Expenses			14,323				64,414
IT support			1,331				877
Total		$	2,380,309			$	126,846

 

*

Stock-based compensation to staff for the fiscal year ended December 31, 2023, and 2022, was $2,233,000 and $0 respectively.

 

NOTE 11. NON-OPERATING INCOME

 

The Company Earned other income in 2023 and 2022 as a result of gain on settlement and forgiveness of debt.

 

The table below presents the breakdown of non-Operating income:

 

Non-Operating income		December 31, 2023				December 31, 2022
Gain on settlement and Forgiveness of Debt			—				457,071
Total		$	—			$	457,071

 

Misc. Income:

 

Gain on settlement & forgiveness of debt:

 

On May 15, 2022, the Company entered into a loan agreement with Fastbase Inc in the amount of $37,000. The note bears an interest rate of 3% and is due on January 1, 2024. On May 25, 2022, the loan was forgiven in full as well as accrued interest of $30, and a gain on forgiveness of debt of $37,030 was recorded.

 

On May 25, 2022, the company entered into a Debt Conversion Agreement (the “Agreement”) with our prior officer and director, Rasmus Refer. Pursuant to the Agreement, we transferred our 51% interest in Etheralabs LLC to Mr. Refer. In exchange, Mr. Refer agreed to cancel $300,041 in loans including interest owed by our company to Mr. Refer.

 

We made a gain on forgiveness of accrued salary in Q1, 2022, to our current officer Mr. Falk since he waived his right to receive the outstanding amounts for the fiscal year 2021 of $120,000.

 

 

NOTE 12. PURCHASE OF MEMBERSHIP INTEREST IN ETHERALABS LLC

 

On February 28, 2022, the Company entered into a definitive agreement to acquire 51% of Etheralabs LLC for 2,550,000 of the Company’s common stock valued at $104,550 with a lock-up. The shares will be restricted with a lock-up period for 2 years. Etheralabs LLC is a New York City based venture lab and ecosystem that invests in, builds, and deploys disruptive technologies across the Blockchain space, and the transaction includes a global access to Etheralabs´ full stack of technologies across the Blockchain and global funding landscape. Etheralabs’ ecosystem allows development and finance partnerships throughout the blockchain world and beyond, and connects the blockchain community, investors and venture capital to relevant data intelligence and direct investment opportunities. The Company intends to ensure that Etheralabs future product and technology roadmap supports wikiprofile.com and the upcoming Wikifunding platform aiming to accelerate matching investors to startups.

 

On May 25, 2022, the Company entered into an agreement to transfer its 51% ownership interest in Etheralabs LLC to settle $300,000 of Line of credit — related party debt, as well as $41 of interest.

 

The Membership interest in Etheralabs consisted of intangible assets of licensed know-how with no tangible value attached and was never in operations and no revenue was generated during the 3 months Wikisoft held the Membership Interest. The transfer of ownership did not qualify for presentation as a discontinued operation in accordance with ASC 205-20.

 

NOTE 13. SUBSEQUENT EVENTS

 

In accordance with ASC 855-10-50 the company lists events which are deemed to have a determinable significant effect on the balance sheet at the time of occurrence or on the future operations, and without disclosure of it, the financial statements would be misleading.

 

On January 11, 2024, the Company issued to Jefferson Street Capital LLC 281,426 shares of our common stock for $15,000, pursuant to a convertible note signed on May 23, 2023.

 

On January 19, 2024, the Company issued to Jefferson Street Capital LLC 307,692 shares of our common stock for $15,000, pursuant to a convertible note signed on May 23, 2023.

 

On February 6, 2022, 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 the rate of at a discount of thirty-five percent (35%) to the volume weight average trading (“VWAP”) of the Company’s common stock for the five (5) days before any conversion and bears 10% interest per annum. 

 

On February 13, 2024, the Company issued to Jefferson Street Capital LLC 307,692 shares of our common stock for $15,000, pursuant to a convertible note signed on May 23, 2023.

 

On March 8, 2024, we issued a one-year convertible promissory note Jefferson Street Capital LLC in the principal amount of $,000. The note is convertible into common stock at the rate of $0.35 and bears 7% interest per annum.

 

As of 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 and was established in 1980. The company is one of the region’s leading suppliers and contractors of LPG centralized pipeline systems and is approved by The General Directorate of Civil Defense, Government of Dubai, as a Central Gas Contractor and LPG Supplier.

 

On April 1, 2024, after several failed effort negotiations with the purpose of restructuring the deal and obtaining information from the selling shareholders of Quality International, the QI Purchase Agreement with Quality International was terminated by Quality International and subsequently the Board of Directors of the Company approved the cancellation of the agreement with Quality International Co Ltd FZC signed on January 18, 2023, and amended on July 27, 2023.

 

2.

Financial Statement Schedules

 

All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission (the “Commission”) are either not required under the related instructions, are not applicable (and therefore have been omitted), or the required disclosures are contained in the financial statements included herein.

 

 

16

Exhibit 99.5

 

QUALITY INDUSTRIAL CORP.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

		September 30, 2024 Unaudited				December 31, 2023 Audited
ASSETS
Current Assets
Cash & Cash Equivalents		$	221,627			$	2,492
Inventory			1,112,230				-
Accounts Receivable			2,347,060				-
Deposits, Advances & Prepayments			665,898				-
Other Current Assets			2,000,000				2,000,000
Total Current Assets			6,346,815				2,002,492
Non-Current Assets
Related Party Receivables			1,943,472				333,133
Long Term Investments			-				6,500,000
Property, Plant and Equipment			67,200				-
Right-of-Use assets			224,040				-
Goodwill			8,479,222				-
Total Non-current Assets			10,713,934				6,833,133
Total Assets			17,060,749				8,835,625
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts Payable			1,124,987				166,577
			-				-
Operating Lease Liabilities			69,490				-
Convertible Notes, net of discount			2,625,922				2,310,109
Other Payables - Current			5,753,149				5,379,554
Other Current Liabilities			549,586				235,886
Total Current Liabilities			10,123,134				8,092,126
Non-Current Liabilities
Operating Lease Liabilities – Non-Current Portion			163,731				-
Other Payables – Long-term			4,820,706				-
Total Long-Term Liabilities			4,984,437				0
Total Liabilities			15,107,571				8,092,126
Stockholders’ Equity
Preferred stock; $0.001 par value; 1,000,000 shares authorized; 20,000 and 0 shares issued and outstanding as of as of September 30, 2024, and December 31, 2023, respectively			20				-
Common stock; $0.001 par value; 200,000,000 shares authorized; 119,659,784 and 127,129,694 shares issued and outstanding as of September 30, 2024, and December 31, 2023, respectively			119,662				127,132
Additional paid-in capital			17,889,959				17,248,964
Accumulated Deficit			(16,787,119	)			(16,632,597	)
Noncontrolling interest			730,656				-
Total stockholders’ Equity			1,953,178				743,499
Total liabilities and stockholders’ Equity		$	17,060,749			$	8,835,625

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

QUALITY INDUSTRIAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

		For the Three Months Ended								For the Nine Months Ended
		30-Sep-24 Unaudited				30-Sep-23 Unaudited				30-Sep-24 Unaudited				30-Sep-23 Unaudited
Revenue		$	2,662,050							$	5,979,256			$
Cost of revenues			1,581,288				-				3,649,996				-
Gross profit			1,080,762				-				2,329,260				-
Operating expenses
Professional fees			205,815				130,708				288,386				243,069
General and administrative			981,768				1,679,225				1,810,376				3,188,383
Total operating expenses			1,187,583				1,809,933				2,098,762				3,431,452
Income (loss) from operations			(106,821	)			(1,809,933	)			230,498				(3,431,452	)
Other (income) expenses
Interest expense			140,833				129,336				306,684				174,574
Other Income							0				(427,554	)			0
Total other (income) expense, net			140,833				129,336				(120,870	)			174,574
Net Income (Loss) before Provision of Income Tax			(247,654	)			(1,939,269	)			351,368				(3,606,026	)
Corporate Income Tax			36,096				0				79,985				0
Net Income (Loss)			(283,750	)			(1,939,269	)			271,383				(3,606,026	)
Less: net income attributable to noncontrolling interest			185,357				-				425,905				-
Net income (loss) attributable to QIND stockholders		$	(469,107	)			(1,939,269	)		$	(154,522	)			(3,606,026	)
Weighted average common shares outstanding			130,785,139				118,283,503				130,785,139				118,283,503
Net income (loss) per common share - basic and diluted		$	(0.00	)			(0.02	)			(0.00	)			(0.03	)

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

QUALITY INDUSTRIAL CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(UNAUDITED)

 

For the Nine Months Ended September 30, 2024

 

		Preferred Stock								Common Stock								Additional Paid-in				Minority				Accumulated				Total Stockholders’
		Shares				Amount				Shares				Amount				Capital				Interest				Deficit				Equity
Balance, December 31, 2023			—				—				127,129,694				127,132				17,248,964								(16,632,597	)			743,499
Common stock issued for conversion of notes			—				—				896,809				897				48,603				—								49,500
Minority Interest			—				—				—				—				—				1,464,816				—				1,464,816
Net Income			—				—				—				—				—				0				206,690				206,690
Balance, March 31, 2024			—				—				128,026,503				128,029				17,297,567				1,464,816				(16,425,907	)			2,464,505
Common stock issued for services			—				—				650,000				650				48,975				—				—				49,625
Common stock issued as commitment fees			—				—				500,000				500				23,676				—				—				24,176
Common stock issued for conversion of notes and accrued interest			—				—				4,310,186				4,310				151,533				—				—				155,863
Cancellation of shares for transfer of assets			—				—				(480,000	)			(480	)			(47,520	)			—				—				(48,000	)
Minority Interest			—				—																(1,166,414	)							(1,166,414	)
Net Income			—				—																240,548				107,895				348,443
Balance, June 30, 2024											133,006,691				133,009				17,474,251				538,950				(16,318,012	)			1,828,198
Common stock issued for conversion of notes and accrued interest											2,653,093				2,653				116,229												118,882
Common stock cancelled											(20,000,000	)			(20,000	)															(20,000	)
Series B shares issued			20,000				20												19,980												20,000
Common stock issued as staff compensation											1,000,000				1,000				64,000												65,000
Common stock issued as commitment											2,500,000				2,500				185,000												187,500
Common stock issued for services											500,000				500				30,499												30,999
Minority Interest			—				—																6,349								6,349
Net Income			—				—																185,357				(469,107	)			(283,750	)
Balance, September 30, 2024			20,000				20				119,659,784				119,662				17,889,959				730,656				(16,787,119	)			1,953,178

 

For the Nine Months Ended September 30, 2023

 

		Preferred Stock								Common Stock								Additional Paid-in				Accumulated				Total Stockholders’
		Shares				Amount				Shares				Amount				Capital				Deficit				Equity
Balance, December 31, 2022			—				—				102,883,709				102,886				12,174,975				(12,470,800	)			(192,939	)
Common stock issued for cash			—				—				—				—				—				—				—
Imputed Interest			—				—				—				—				—				—				—
Net Loss			—				—				—				—				—				(84,536	)			(84,536	)
Balance, March 31, 2023			—				—				102,883,709				102,886				12,174,975				(12,555,336	)			(277,475	)
Common stock issued for services											1,693,256				1,693				721,042								722,735
Common stock issued as staff compensation											10,000,000				10,000				711,000								721,000
Net Income																							(1,582,221	)			(1,582,221	)
Balance, June 30, 2023			—				—				114,576,965				114,579				13,607,017				(14,137,557	)			(415,961	)
Common stock issued for cash			—				—				6,410,971				6,411				1,993,589				—				2,000,000
Common stock issued for services			—				—				300,000				300				125,700				—				126,000
Common stock issued as staff compensation			—				—				5,600,000				5,600				1,506,400				—				1,512,000
Net Income																							(1,939,269	)			(1,939,269	)
Balance, September 30, 2023			—				—				126,887,936				126,890				17,232,706				(16,076,826	)			1,282,770	)

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

QUALITY INDUSTRIAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

		September 30, 2024				September 30, 2023
Cash flows from operating activities
Loss for the period			271,383				(3,606,026	)
Adjustment to reconcile net gain (loss) to net cash
Finance cost			306,684				174,574
Non-Cash Stock Compensation Expense			0				0
Stock issued for Services			104,125				0
Amortization			0				0
Commitment fees			0				847,192
Corporate Income Tax Expense			79,985				0
Depreciation-PPE			58,880				0
Other income			(427,554	)			0
Discount on convertible Notes			24,723				39,872
Changes in Assets and Liabilities, net
Current Assets			(4,125,188	)			(347,081	)
Other Current Liabilities			2,031,008				99,390
Net cash (used in) provided by operating activities			(1,675,954	)			(2,792,079	)
Cash flows from investing activities
Addition of Fixed Assets			(126,080	)			0
Right of use Assets			(224,040	)			0
Changes in Non-current assets			(3,589,561	)			(500,000	)
Changes in Non-Current Liabilities			4,820,706				970,000
Net cash used in investing activities			881,025				470,000
Cash flows from financing activities
Common Stock issued			(7,470	)			11,693
Lease Finance			163,731				0
Preferred Stock Issued			20				0
Finance cost			(306,684	)			0
Discount on convertible Notes			0				0
Additional Paid-up Capital			640,995				1,432,042
Changes in Retained Earnings & MI			523,472				880,487
Note converted			0				0
Net cash generated from financing activities			1,014,064				2,324,222
Net increase/(decrease) in cash and cash equivalents			219,135				2,143
Cash and cash equivalents at the beginning of the period			2,492				3,136
Cash and cash equivalents at end of the period			221,627				5,279

 

The accompanying notes are an integral part of these unaudited consolidated financial statements. 

 

 

QUALITY INDUSTRIAL CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 1: OUR HISTORY

 

The Company was incorporated in the state of Nevada under the name Sensor Technologies, Inc. on May 4, 1998. In March 2006 the Company changed its name to Bixby Energy Systems Inc. In September 2006, the Company changed its name to Power Play Development Corporation. In April 2007, the Company changed its name to National League of Poker, Inc. In October 2007 the Company changed its name back to Power Play Development Corporation. In October 2011 the Company changed its name to Bluestar Technologies, Inc. In March 2018, the Company then changed its name to Wikisoft Corp.

 

In May 2016, the Company’s Board of Directors terminated the services of all prior officers and directors and the board appointed Robert Stevens as the Board Appointed Receiver for the Company. This was a private receivership where the receiver was appointed by the board to act on behalf of the Company and no court filings were ever made in connection with the receivership. On April 16, 2019, in connection with the Merger described below, Robert Stevens resigned from all of his positions with the Company and the board-appointed receivership was concluded. At that time Rasmus Refer was appointed as the Company’s CEO and Director, and he resigned from such positions in August and November 2020, respectively. On August 31, 2020, Carsten Kjems Falk was appointed as CEO, and Paul C Quintal was on December 1, 2021, appointed as the sole director of the Company.

 

On April 11, 2019, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with WikiSoft Acquisition Corp., a Delaware corporation which was then the Company’s wholly owned subsidiary (“Merger Sub”) and WikiSoft Corp., a privately held Delaware corporation (“WikiSoft DE”). In connection with the closing of this merger transaction, Merger Sub merged with and into WikiSoft DE (the “Merger”) on April 24, 2019. Pursuant to the Merger, the Company acquired WikiSoft DE which then became its wholly owned subsidiary.

 

On March 19, 2020, the Company entered into an Agreement and Plan of Merger (the “Short Form Merger Agreement”) with WikiSoft DE, pursuant to which it was agreed that the Company would merge with and into WikiSoft DE, with the Company surviving. Thereafter, on March 25, 2020, WikiSoft DE merged with and into the Company, with the Company (i.e., WikiSoft Corp. - the NV corporation) surviving pursuant to a Certificate of Ownership and Merger filed in with Delaware Secretary of State, whereby the then wholly owned subsidiary (WikiSoft DE) merged with and into the Company, with the Company surviving. On March 25, 2020, the Company filed Articles of Conversion in Nevada, whereby the then subsidiary (WikiSoft DE) merged with and into the Company, with the Company surviving. Prior to the Merger, the Company did not have any business operations, and at the closing of the Merger, the Company’s business was as described in detail below.

 

Wikisoft Corp. had a vision to become one of the largest portals of information for businesses and business professionals. Built on open-source software, the portal wikiprofile.com, was initially launched in January 2018, and the portal was relaunched in June 2021.

 

We changed ownership on May 28, 2022, when ILUS at the time, acquired 77.4% of the outstanding shares in our Company. Consequently, ILUS 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. Also, during the year, Mr. Nicolas Link, beneficial owner of ILUS, was appointed as our Executive Chairman of the Board, Mr. John-Paul Backwell was appointed as our Chief Executive Officer and Mr. Carsten Falk resigned as our Chief Executive Officer and was appointed as our Chief Commercial Officer.

 

In line with the change in control and business direction, our Company changed its name to Quality Industrial Corp. with the ticker QIND, with a market effective date of August 4, 2022. As a result of these transactions, Quality Industrial Corp. is a public company focused on the industrial, oil & gas and utility sectors and a subsidiary to ILUS. The Company filed articles of merger with the Secretary of State of Nevada in order to effectuate a merger with our wholly owned subsidiary, Quality Industrial Corp. Shareholder approval was not required under Section 92A.180 of the Nevada Revised Statutes. As part of the merger, our board of directors authorized a change in our name to “Quality Industrial Corp.” and our Articles of Incorporation have been amended to reflect this name change. Our common stock trades under the symbol “QIND.”

 

 

After ILUS acquired control of QIND, on May 28, 2022, ILUS signed a binding letter of intent on June 28, 2022, for the Company to acquire control of Quality International, an international process manufacturing company, manufacturing custom solutions for the oil & gas, petrochemical & refinery, chemical & fertilizer, power & desalination, water & wastewater, and offshore industries.

 

On March 9, 2023, we changed the SIC code of the Company to SIC 3590 - Misc. Industrial & Commercial Machinery and Equipment to reflect the new business direction.

 

On March 27, 2024, the Company signed a definitive Share Purchase Agreement with Al Shola Gas LLC (“ASG” or the “ASG Acquisition”). ASG is an Engineering and Distribution Company in the LPG Industry in the U.A.E. and was established in 1980. The company are one of the leading suppliers & contractors of LPG centralized pipeline systems. Al Sholas gas LLC has been consolidated since acquired on March 27, 2024.

 

On April 1, 2024, after several failed effort negotiations with the purpose of restructuring the deal and obtaining information from the selling shareholders of Quality International, the QI Purchase Agreement with Quality International was terminated by Quality International and subsequently the Board of Directors of the Company approved the cancellation of the agreement with Quality International Co Ltd FZC signed on January 18, 2023, and amended on July 27, 2023. Quality International Co Ltd FZC is no longer consolidated with our financial statements.

 

NOTE 2. SUMMARY OF SIGNIFICANT POLICIES

 

Basis of Presentation and Principles of consolidation

 

The accompanying consolidated financial statements represent the results of operations, financial position, and cash flows of QIND, and all of its majority-owned and controlled subsidiary are prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP). The accounts of ASG have been included since acquired on March 27, 2024. All significant inter-company accounts and transactions have been eliminated.

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for interim financial information. It is management’s opinion that the accompanying unaudited condensed consolidated financial statements are prepared in accordance with instructions for Form 10-Q and include all adjustments (consisting only of normal recurring accruals) which are necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Annual Report on Form 10-K of Quality Industrial Corp. as of and for the year ended December 31, 2023, filed with the SEC on April 8, 2024. The results of operations for the Nine months ended September 30, 2024, are not necessarily indicative of the results to be expected for the full year or for future periods.

 

Use of estimates

 

A critical accounting estimate is an estimate that: (i) is made in accordance with generally accepted accounting principles, (ii) involves a significant level of estimation uncertainty and (iii) has had or is reasonably likely to have a material impact on the Company’s financial condition or results of operations.

 

The Company’s consolidated financial statements 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.

 

  

Significant estimates include estimates used to review the Company’s, impairments and estimations of long-lived assets, revenue recognition of contract-based revenue, allowances for uncollectible accounts, and the valuations of non-cash capital stock issuances. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

Accounts receivable

 

Accounts receivables are recorded at the invoice amount less an allowance for credit losses. The allowance is an estimate based on historical collection experience, current and future economic and market conditions, and a review of the current status of each customer’s trade accounts receivable. Management evaluates the aging of the accounts receivable balances and the financial condition of its customers and all other forward-looking information that is reasonably available to estimate the amount of accounts receivable that may not be collected in the future and before recording the appropriate provision.

 

The duration of such receivables extends from 30 days to beyond 90 days. Payments are received only when a project is completed, and approvals are obtained. Provisions are created based on the estimated irrecoverable amounts determined by referring to past default experience and future economic and market conditions.

 

Inventories

 

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

 

Property, Plant & Equipment

 

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

 

Property, Plant and Equipment		Years
Machinery			5 – 15
Vehicles			5 – 10
Furniture, Fixtures & Office Equipment			3 – 5

 

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

 

Depreciation expense for the three months ended September 30, 2024, and 2023 was $19,694 and $0, respectively. Depreciation expense for the Nine months ended September 30, 2024, and 2023 was $58,880 and $0, respectively.

 

 

Deposits

 

Advances have been paid to the suppliers and subcontractors in the ordinary course of business for the procurement of specialized material and equipment required in the process of designing, engineering and installing Central Gas distribution and monitoring systems. The Company is engaged in the design, engineering, supply and monitoring of Central Gas systems supplying and installing equipment such as pressure regulators, pipelines, safety equipment, tapping points, metering units, valves and storage tanks. To undertake these projects, the Company is required to make upfront investments in materials and machinery. These projects involve many processes and take substantial time to complete. We estimate that the deposit will be utilized in the next 12 months, however, some will only be returned upon cancellation such as office lease deposit, internet and utilities.

 

End-of-service benefits

 

Employee end-of-service benefits in our subsidiary Al Shola Gas amounting to $1134,884 as of September 30, 2024, are provided to employees, in the UAE when they leave a job. Eligibility begins after one year of continuous service and varies based on contract type and length of service. These liabilities are included in other current liabilities on the accompanying consolidated balance sheet.  

 

Employee end of service benefits Al Shola Gas		September 30, 2024 (unaudited)
Balance at Beginning			154,261
Add: charge for the period			88,236
Less: Settlement for the period			(107,613	)
Balance at the end of the period			134,884

 

Goodwill

 

Goodwill represents the cost of acquired companies in excess of the fair value of the net assets at the acquisition date and is subject to annual impairment. Goodwill is the excess of the purchase price paid for an acquired entity and the amount of the price not assigned to acquired assets and liabilities. It arises when an acquirer pays a high price to acquire a business. This asset only arises from an acquisition, and it cannot be generated internally. Goodwill is an intangible asset, and so is listed within the long-term assets section of the acquirers’ balance sheet.

 

The Company accounts for business combinations by estimating the fair value of consideration paid for acquired businesses and assigning that amount to the fair values of assets acquired and liabilities assumed, with the remainder assigned to goodwill. If the fair value of assets acquired and liabilities assumed exceeds the fair value of consideration paid, a gain on bargain purchase is recognized. The estimates of fair values are determined utilizing customary valuation procedures and techniques, which require us, among other things, to estimate future cash flows and discount rates. Such analyses involve significant judgments and estimations.

 

The Company follows the guidance prescribed in Accounting Standards Codification (“ASC”) 350, Goodwill and Other Intangible Assets, to test goodwill and intangible assets for impairment annually if an event occurs or circumstances change which indicates that its carrying amount may not exceed its fair value.

 

Fair value of financial instruments

 

The carrying value of cash, accounts payable, warrants, accrued expenses, and debt, short term as well as long term, is recorded at fair value. Management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments.

 

 

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable.

 

●

Level 1. Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.

 

●

Level 2. Quoted prices for similar assets and liabilities in active markets; quoted prices included for identical or similar assets and liabilities that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. These are typically obtained from readily available pricing sources for comparable instruments.

 

●

Level 3. Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.

 

Revenue Recognition

 

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

 

The principal activity of the Company is to engage in general trading, manufacturing and fabrication or steel and steel products and mainly manufacturing of pressure vessels, tanks, heat exchangers and construction of storage tanks and piping. Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods or services before transferring them to the customer.

 

Stock-based compensation

 

The Company recognizes all stock-based compensation using the fair value provisions prescribed by ASC Topic 718, Compensation - Stock Compensation. Accordingly, compensation costs for awards of stock-based compensation settled in shares are determined based on the fair value of the share-based instrument at the time of grant and are recognized as expense over the vesting period of the share-based instrument, net of estimated forfeitures.

 

In accordance with ASC 718, the Company will generally apply the same guidance to both employee and non-employee share-based awards. However, the Company will also follow specific guidance for share-based awards to non-employees related to the attribution of compensation cost and the inputs to the option-pricing model for expected term. Non-employee share-based payment equity awards are measured at the grant-date fair value of the equity instruments, similar to employee share-based payment equity awards.

 

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

 

 

Earnings (loss) per share

 

The Company reports earnings (loss) per share in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 260-10 “Earnings Per Share,” which provides for the calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive.

 

Particulars		Three Months Ended September 30, 2024 (unaudited)				Three Months Ended September 30, 2023 (unaudited)				Nine Months Ended September 30, 2024 (unaudited)				Nine Months Ended September 30, 2023 (unaudited)
Basic and diluted EPS*
Numerator
Net income/(loss)			(283,750	)			(1,939,269	)			271,383				(3,606,026	)
Net Income attributable to common stockholders			(469,107	)			(1,939,269	)			(154,522	)			(3,606,026	)
Denominator
Weighted average shares outstanding			130,785,139				118,283,503				130,785,139				118,283,503
Number of shares used for basic EPS computation			130,785,139				118,283,503				130,785,139				118,283,503
Basic EPS			(0.00	)			(0.02	)			(0.00	)			(0.03	)
Number of shares used for diluted EPS computation*			139,659,784				118,533,503				139,659,784				118,283,503
Diluted EPS			(0.00	)			(0.02	)			(0.00	)			(0.03	)

 

*	Includes 250,000 issued warrants and 20,000 series B stock converting at 1:1000.

 

Income taxes

 

The Company accounts for income tax positions in accordance with Accounting Standards Codification Topic 740-10-50, “Income Taxes” (“ASC Topic 740”). This standard prescribes a recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There was no material impact on the Company’s financial position or results of operations as a result of the application of this standard. Deferred tax assets have not been created the majority of the company’s income belongs to the subsidiary, which is registered in an income tax-free jurisdiction since any losses incurred cannot be utilized in the future, rendering deferred tax assets irrelevant, The profits of a foreign subsidiary corporation are ordinarily not subject to tax in the United States as in accordance with the general Internal Revenue Service rule, foreign subsidiaries are not considered U.S. corporations even if they are wholly owned.

 

Recently issued accounting pronouncements

 

The Company has evaluated all other recent accounting pronouncements and believes that none of them are expected to have a material effect on the Company’s financial position, results of operations, or cash flows.

 

Off-Balance Sheet Arrangements

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to stockholders.

 

 

Lease liabilities 

 

The Company accounts for leases under ASC Topic 842, Leases (Topic 842). Under Topic 842, at the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include, if any, the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease term reflects the Company exercising the option to terminate. 

 

The variable lease payments that do not depend on an index or a rate are recognized as expenses in the period on which the event or condition that triggers the payment occurs. 

 

In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments, or a change in the assessment to purchase the underlying asset. 

 

The Company’s subsidiary, Al Shola Gas, has entered into commercial vehicles. These leases generally have a lease term of 4 years. The Company’s obligations under its leases are secured by the lessor’s title to the leased assets. There are no restrictions placed upon the Company by entering into these leases. The Company also has leases with terms of 12 months or less which the Company has elected to not apply Topic 842 to short-term leases. 

 

The Company has a Lease arrangement for which the liability has been recorded separately. The Company determines whether an arrangement contains a lease at inception. A lease liability and corresponding right of use (ROU) asset are recognized for qualifying leased assets based on the present value of fixed and certain index-based lease payments at lease commencement. 

 

The Company’s obligations under its leases are secured by the lessor’s title to the leased assets. There are no restrictions placed upon the Company by entering into these leases. The Company determines if an arrangement is or contains a lease at contract inception and recognizes an ROU asset and a lease liability based on the present value of fixed, and certain index-based lease payments at the lease commencement date. Variable payments are excluded from the present value of lease payments and are recognized in the period in which the payment is made.

 

The Company generally uses its incremental borrowing rate as the discount rate for measuring its lease liabilities, as the Company cannot determine the interest rate implicit in the lease because it does not have access to certain lessor-specific information. Lease expense is recognized on a straight-line basis over the lease term. The Company does not have significant finance leases. The Company has elected not to separate payments for lease components from payments for non-lease components for all classes of leases.

 

When accounting for finance leases in accordance with ASC 842, the entity recognizes interest on the lease liability and amortization of the ROU asset in the income statement and classify payments of the principal portion of the lease liability as financing activities and payments of interest on the lease liability as operating activities. 

 

Reclassifications

 

Certain reclassifications have been made to the December 31, 2023, balance sheet to conform to the September 30, 2024, presentation. These reclassifications had no impact on the net loss or loss per share as previously reported.

 

NOTE 3. GOING CONCERN

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

 

 

Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated financial statements are issued and determined. The Company’s ability to continue as a going concern is dependent on the Company’s ability to continue to generate sufficient revenues and raise capital within one year from the date of filing.

 

QIND has planned 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.

 

NOTE 4. CURRENT ASSETS

 

Cash and Cash Equivalents

 

For purposes of the statements of cash flows, in accordance with ASC 230-10-20, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. The Company held no cash equivalents as of September 30, 2024, and December 31, 2023. There were $221,627 and $2,492 in cash and cash equivalents as of September 30, 2024, and September 30, 2023, respectively.

 

		September 30, 2024				December 31, 2023
Cash and Cash Equivalents
Cash in hand			70,790				2,389
Cash at bank			150,837				103
Total		$	221,627			$	2,492

 

Accounts Receivables

 

Accounts receivable arises from our subsidiary Al Shola Gas consolidated as of March 31, 2024. The duration of such receivables extends from 30 days to beyond 90 days. Payments are received only when a project is completed, and approvals are obtained. Provisions are created based on the estimated irrecoverable amounts determined by referring to past default experience.

 

Accounts Receivables Ageing Al Shola Gas		September 30, 2024 (unaudited)
1-30 days			659,891
31-60 days			376,289
61-90 days			335,287
+90 days			975,593
Total		$	2,347,060

 

Other Current Assets

 

On August 25, 2023, the Company issued 6,410,971 shares of our common stock to Artelliq Software Trading for $2,000,000 pursuant to a share purchase and buyback agreement signed on August 21, 2023. The $2,000,000 was paid to Quality International as a tranche payment under the amended purchase agreement. 

 

 

NOTE 6. NON-CURRENT ASSETS

 

Related Party Receivables

 

As of September 30, 2024, and December 31, 2023, the Company had amounts due from Ilustrato Pictures International, Inc. (“ILUS”), a majority shareholder of the Company, of $1,943,472 and $333,133, respectively. As of September 30, 2024, $443,472 is related to an intercompany loan agreement executed by and between the Company and ILUS on June 15, 2022. The maximum principal amount to be borrowed by either party from each other under the agreement is $1,000,000. The purpose of the agreement is to provide for working capital to either the Company or ILUS through cash advances on an unsecured basis requested by either party at any time and from time to time in amounts of up to $100,000 and the agreement shall automatically be renewed for successive one-year terms after that unless terminated. The intercompany loan agreement has a term of one year from the date of execution and all cash advances mature and become payable on the termination date. Any unpaid principal accrues simple interest from the date of each cash advance until payment in full at a rate equal to 1% per annum. The remaining $1,500,000 relates to an asset purchase agreement the Company signed on June 21, 2024, with Ilustrato Pictures International Inc. to acquire the long-term investment of $1,500,000 in Quality International. ILUS has agreed to reimburse the Company for the $1,500,000 invested into Quality International that was subsequently canceled and not returned.

  

Long Term Investments

 

As of September 30, 2024, and December 31, 2023, Long Term investments were $0 and $6,500,000, respectively.

 

On July 27, 2023, our Company borrowed from Mahavir Investments Limited the principal amount of $3,000,000 (the “Mahavir Loan”). The Mahavir Loan bore interest at 20% per annum, payable in nine tranches. We had the right to prepay the Mahavir Loan at any time. The loan matured on April 30, 2024. The $3,000,000 was paid to Quality International as a tranche payment of the amended purchase agreement in connection with an investment.

  

On August 25, 2023, the Company issued to Artelliq Software Trading 6,410,971 shares of our common stock for $2,000,000 pursuant to a share purchase and buyback agreement signed on August 21, 2023. The $2,000,000 was paid to Quality International as a tranche payment of the amended purchase agreement.

 

The loan agreements with Mahavir and Artelliq were unwound with the cancellation of the agreement with Quality International and was not an obligation of the Company as of March 31, 2024, including accrued interest. The liability balances were charged against the investment as part of the cancellation with Quality International on April 1, 2024.

 

Goodwill

 

The Company acquired a 51% interest in Al Shola Gas on March 27, 2024, with the issuance of $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 Seller. Payment in eight quarterly tranches over 24 months, beginning from the first quarter following uplist to a National Exchange. Stock value is to be protected by a make whole agreement/s and each tranche is subject to a mutually agreed 12-month leak-out agreement. Within 12 months of closing and at the soonest possible time, $1 million cash payment to the Seller.

 

The Company acquired 51% of Al Shola Gas LLC for $10,000,000 and now owns 51% of the Net Assets of Al Shola Gas. The net assets of Al Shola Gas were $2,981,918 on March 31, 2024, of which $1,520,778 (51%) is owned by QIND. The remaining $1,461,140 (49%) of net assets are held by a minority interest or noncontrolling interest. The purchase price of $10,000,000 minus the net assets held by the Company in Al Shola Gas equating to $8,479,222 is part of the Company’s Goodwill. The noncontrolling interest has been presented separately on the accompanying consolidated balance sheet and statement of operations.

 

 

NOTE 7. CURRENT LIABILITIES

 

Accounts Payable

 

Accounts payable with a total of $1,124,987 as of September 30, 2024, include Trade and Other Payables in our subsidiary Al Shola Gas International amounting to $855,204 as of September 30, 2024.

 

Al Shola Gas Accounts Payables Ageing		September 30, 2024 (unaudited)
0-30 days			94,049
31-60 days			226,984
61-90 days			37,759
+90 days			766,195
Total		$	1,124,987

 

Operating Lease Liabilities - Current

 

As disclosed, we acquired 51% of the outstanding shares of ASG on March 27, 2024. In connection with this acquisition, we acquired right-of-use assets of $224,040 and operating lease liabilities of $233,221 associated with lease agreements with a term extending beyond twelve months for vehicles. 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%. During the three and nine months ended September 30, 2024, we recognized rent expense of $55,861.

 

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 July 31, 2023, the Company issued to 1800 Diagonal Lending Ltd. a promissory note in the principal amount of $174,867 (the “Diagonal Lending Note”). The Diagonal Lending Note had a one-time interest amount of $22,732. The Company will prepay the Diagonal Lending Note in nine monthly payments each in the amount of $21,955.45. The promissory note matures on February 28, 2024, with a total payback to the Holder of $197,599. 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. The note has been repaid in full.

 

On August 15, 2023, the Company issued to 1800 Diagonal Lending Ltd. a promissory note in the principal amount of $118,367 (the “Diagonal Lending Note”). The Diagonal Lending Note had a one-time interest amount of $15,387.71. The Company will prepay the Diagonal Lending Note in nine monthly payments each in the amount of $14,861.64. The promissory note matures on May 30, 2024, with a total payback to the Holder of $133,754.71 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. The note has been repaid in full.

 

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. During the six months ended September 30, 2024, the lender elected to convert $77,000 of principal and $35,863 of accrued interest into 3,009,680 shares of common stock at a conversion price of $.0375.

 

 

On December 20, 2023, the Company issued a two-year convertible promissory note in the principal amount of $100,000 to RB Capital Partners Inc. The Note bears interest at 10% 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 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 5 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 in commitment shares to be issued at a 25% discount to the IPO price. These shares are to be issued upon uplist to the NYSE 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 January 18, 2024, we issued a convertible promissory note 1800 Diagonal Lending LLC in the principal amount of $174,867 and a one-time interest charge of $22,732. Accrued, unpaid Interest and outstanding principal, subject to adjustment, shall be paid in nine (9) payments each of $21,955 (a total payback to the Holder of $197,599). 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 before the Conversion Date. The note has been repaid in full.

 

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 the rate of at a discount of thirty-five percent (35%) to the volume weight 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 upon completion of a listing of the Company on a Senior Exchange.

 

On March 12, 2024, we issued a convertible promissory note to 1800 Diagonal Lending LLC in the principal amount of $118,367 and a one-time interest charge of $15,387. Accrued, unpaid Interest and outstanding principal, subject to adjustment, shall be paid in nine (9) payments each in the amount of $14,861.56 commencing April 15, 2024 (a total payback to the Holder of $133,754). 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. The note has been repaid in full

 

On May 21, 2024, we issued a one-year convertible promissory note 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 increase to additional paid-in capital. The discount will be amortized into interest expense over the term of the promissory note. As of September 30, 2024, the unamortized discount was approximately $21,000.

 

On July 3, 2024, we issued a convertible promissory note 1800 Diagonal Lending LLC in the principal amount of $179,400. A one-time interest charge of thirteen percent with a total of $23,322 was applied on the Issuance Date. The first payment shall be due August 15, 2024, with eight subsequent payments due on the 15th of each month thereafter. Accrued, unpaid Interest and outstanding principal, subject to adjustment, shall be paid in nine (9) payments each of $22,524.67 (a total payback to the Holder of $202,722). 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.

 

 

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 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 30th 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.

 

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 and six months ended September 30, 2024, amortization related to these discounts totaled $3,807 and $20,916, respectively, which has been reflected within interest expense on the consolidated statements of operations. As of September 30, 2024, total unamortized debt discounts were $148,397 which has been presented net of the convertible notes on the accompanying consolidated balance sheet.

 

A summary of these outstanding convertible notes and accrued interest is summarized below:

 

Debt & Interest Payable

 

Lender		Date of Issue				Maturity Date		Principal Amount				Paid				Converted				Outstanding				Interest
RB Capital Partners Inc.			3 Aug 2022			31 Dec 2024			1,100,000				-				-				1,100,000				166,636
RB Capital Partners Inc.			17 Mar 2023			16 Mar 2025			200,000				-				-				200,000				21,624
Jefferson			23 May 2023			31 Dec 2024			220,000				-				175,000				45,000				19,465
Sky Holdings			16 Jun 2023			31 Dec 2024			550,000				-				77,000				473,000				49,875
RB Capital Partners Inc.			21 Dec 2023			20 Dec 2024			100,000				-				-				100,000				7,802
Sean Levi			8 Jan 2024			8 Jan 2025			100,000				-				-				100,000				14,615
Exchange Listing LLC			6 Feb 2024			31 Dec 2024			35,000				-				-				35,000				2,280
Jefferson			21 May 2024			21 Feb 2025			71,500				-				-				71,500				2,595
1800 Diagonal Lending			3 Jul 2024			25 Apr 2025			179,400				39,456				-				139,944				5,706
1800 Diagonal Lending			25 Sep 2024			30 Jun 2025			115,000				-				-				115,000				206
J.J. Astor & Co			25 Sep 2024			30 Jun 2025			405,000				10,125				-				394,875				-
Less: Interest Paid																									(50,760	)
Total									3,075,900				49,581				252,000				2,774,319				240,042

 

 

Discount on Convertible Notes

 

Lender		Date of Issue		Maturity Date		Discount
1800 Diagonal Lending		18 Jan 2024		30 Oct 2024			20,117
1800 Diagonal Lending		12 Mar 2024		15 Dec 2024			13,617
Jefferson		21 May 2024		21 Feb 2025			6,500
J.J. Astor & Co		20 Sep 2024		4 Jul 2025			105,000
1800 Diagonal Lending		25 Sep 2024		30 Jun 2025			15,000
1800 Diagonal Lending		3 Jul 2024		25 Apr 2025			23,400
Jefferson Capital (JC)		21 May 2024		21 Feb 2025			24,179
Less: Amortized							(59.416	)
Balance as of September 30, 2024							148,397

 

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 bank debt totaling approximately $566,805. As of September 30, 2024, total current borrowings outstanding were $246,099.

 

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 Seller of which 5,500,000 is the current portion.

 

Other Payables - Current		September 30, 2024 (unaudited)				December 31, 2023
Mahavir Loan			0				3,235,000
Artelliq loan			0				2,144,554
Payable Al Shola Gas			5,500,000
Other payables			253,149
Total		$	5,753,149			$	5,379,554

 

Other Liabilities - Current

 

Other Current Liabilities		September 30, 2024				December 31, 2023
Accrued Interest on Convertible note			240,042				154,032
Payroll Liabilities COO*			73,675				52,354
Audit fee provision			21,000				29,500
Retirement benefits			134,884				0
Corporate Tax payable			79,985				0
Total			549,586				235,886

 

*

Excludes $7,500 recorded under other payables.

 

 

NOTE 8. NON-CURRENT LIABILITIES

 

Operating Lease Liabilities - Non-Current portion

 

As disclosed, we acquired 51% of the outstanding shares of ASG on March 27, 2024. In connection with this acquisition, we acquired right-of-use assets of $222,730 and operating lease liabilities of $229,359 associated with lease agreements with a term extending beyond twelve months for vehicles. 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%. During the three and six months ended September 30, 2024, we recognized rent expense of $3,367.

 

The following is a summary of future lease payments required under the lease agreements:

 

		DUSTER				X TRAIL				KICKS				URWAN				MICROBUS				SUNNY				ASX				YARIS				Renault				Total
Year 2024			1,392				1,440				1,412				4,417				3,716				2,234				1,238				1,014				2,040				18,902
Year 2025			4,404				6,055				8,879				18,576				15,627				9,393				5,207				4,265				8,578				80,983
Year 2026			4,770				6,558				9,616				20,118				16,924				10,173				2,295				1,120				9,290				80,862
Year 2027			1,676				4,074				6,850				8,868				7,460				6,320				0				0				10,061				45,307
Year 2028			0				0				0				0				0				0				0				0				7,167				7,167
			12,242				18,126				26,756				51,978				43,726				28,119				8,741				6,399				37,135				233,221

 

Supplemental Information

 

Weighted average remaining lease term (in years)			2.70
Weighted average discount rate			8	%

 

Other Payables - Long term

 

In connection with the ASG Acquisition, we acquired bank debt totaling approximately $566,805. As of September 30, 2024, total long-term borrowings outstanding were $320,706.

 

The Company acquired a 51% interest in Al Shola Gas on March 27, 2024, with the issuance of $9,000,000 note payable and $1,000,000 in cash. The payable is due as follows: $9 million in National Exchange listed stock or cash to be paid to Seller of which 4,500,000 is the Non-current portion.

 

NOTE 9. STOCKHOLDERS’ EQUITY

 

The Company’s authorized capital stock consists of 200,000,000 shares of common stock and 1,000,000 shares of preferred stock, par value $0.001 per share.

 

As of September 30, 2024, and December 31, 2023, there were 119,659,784 and 127,129,694 shares of common stock issued and outstanding, respectively.

 

As of September 30, 2024, and December 31, 2023, there were 20,000 and 0 shares of preferred stock of the Company issued and outstanding, respectively.

 

 

For the Nine months ended September 30, 2023:

 

On March 17, 2023, the Company issued to RB Capital Partners Inc. a two-year convertible promissory note in the principal amount of $200,000 (the “March 2023 Note”). The March 2023 Note bears interest at 7% per annum. The Company has the right to prepay the March 2023 Note at any time. All principal on the March 2023 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 4, 2023, the Company issued to Nicolas Link 2,750,000 shares of our common stock with a grant date and fair market value of the award as of June 1, 2022, at $0.0721 pursuant to his employee contract.

 

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

 

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

 

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

 

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

 

On May 8, 2023, the Company issued to Exchange Listing LLC 1,543,256 shares of our common stock for $1,543 for consultancy services for the planned uplist to NYSE with a grant date and fair value of the award, at $0.41 pursuant to a share purchase agreement signed on April 19, 2023.

 

On June 1, 2023, the Company issued to Jefferson Street Capital LLC 150,000 shares of our common stock with a grant date and fair value of the award as of May 23, 2023, at $0.60 pursuant to a share purchase agreement signed on May 23, 2023.

 

On July 17, 2023, the Company issued to Sky Holdings Ltd. 300,000 shares of our common stock with a grant-date and fair value of the award as of June 16, 2023, at $0.42 pursuant to a share purchase agreement signed on June 16, 2023.  

 

On August 25, 2023, the Company issued to Artelliq Software Trading 6,410,971 shares of our common stock for $2,000,000 pursuant to a share purchase and buy back agreement signed on August 21, 2023. The $2,000,000 was paid to Quality International as tranche payment 2.2 of the amended purchase agreement.

 

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

 

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

 

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

 

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

 

For the Nine months ended September 30, 2024:

 

On January 11, 2024, the Company issued 281,426 shares of our common stock to Jefferson Street Capital LLC for the conversion of $15,000 of principal and $1,500 of conversion fees, pursuant to a convertible note signed on May 23, 2023.

 

 

On January 19, 2024, the Company issued 307,692 shares of our common stock to Jefferson Street Capital LLC for the conversion of $15,000 of principal and $1,500 of conversion fees, pursuant to a convertible note signed on May 23, 2023.

 

On February 15, 2024, the Company issued 307,692 shares of our common stock for the conversion of $15,000 of principal and $1,500 of conversion fees to Jefferson Street Capital LLC, pursuant to a convertible note signed on May 23, 2023.

 

On April 26, 2024, we entered into an asset purchase agreement with Mr. Refer, the previous owner of the legacy business. Mr. Refer bought the intangible legacy assets of Wikisoft for a total consideration of 480,000 common stocks to Quality Industrial Corp. (“QIND”) with a fair market value of $0.10 per common stock or $48,000. The shares were returned to the treasury. The legacy assets had no book value; therefore, we have recognized a gain of $48,000 related to this asset purchase.

 

On May 7, 2024, the Company issued 416,141 shares of our common stock to Jefferson Street Capital LLC for the conversion of $15,000 of principal and $1,500 of conversion fees, pursuant to a convertible note signed on May 23, 2023.

 

On April 30, 2024, the Company issued 150,000 fully vested shares of our common stock to Paul Keely for services with a fair market value of $13,125 based on the market price of our stock on the date of grant

 

On May 14, 2024, the Company issued 500,000 fully vested shares of our common stock to John-Paul Backwell, our CEO, pursuant to his employment contract with a fair market value of $36,500 based on the market price of our stock on the date of grant.

 

On June 3, 2024, the Company issued 500,000 commitment shares of our common stock to Jefferson Street Capital, pursuant to a convertible note signed on May 21, 2024, with a relative fair value of $24,179

 

On June 5, 2024, the Company issued 884,365 shares of our common stock to Jefferson Street Capital LLC for the conversion of $25,000 of principal and $1,500 of conversion fees, pursuant to a convertible note signed on May 20, 2024.

 

On July 9, 2024, the Company issued 884,365 shares of our common stock to Jefferson Street Capital LLC for the conversion of $25,000 of principal and $1,500 of conversion fees, pursuant to a convertible note signed on May 20, 2024.

 

On August 9, 2024, the Company issued 884,365 shares of our common stock to Jefferson Street Capital LLC for the conversion of $25,000 of principal and $1,500 of conversion fees, pursuant to a convertible note signed on May 20, 2024.

 

On September 9, 2024, the Company issued 1,000,000 fully vested shares of our common stock to Sanjeeb Safir, pursuant to his employment contract signed on September 2, 2024, with a fair market value of $65,000 based on the market price of our stock on the date of grant.

 

On September 13, 2024, the Company issued 500,000 fully vested shares of our common stock to Safeguard Investments LLC, pursuant to a Consultancy contract signed on August 31, 2024, with a fair market value of $32,500 based on the market price of our stock on the date of grant.

 

On September 21, 2024, the Company cancelled 20,000,000 shares of common stock issued to Ilustrato Pictures International Inc. The shares were reissued to Ilustrato Pictures International Inc.as 20,000 series B preferred stock converting at 1:1000.

 

On September 21, 2024, the Company issued 2,500,000 shares of our common stock with a fair market value of $0.075 per share and a total value of $187,000 to JJ Astor Co., pursuant to a convertible note signed on September 21, 2024.

 

 

On September 24, 2024, the Company issued 884,365 shares of our common stock to Jefferson Street Capital LLC for the conversion of $25,000 of principal and $1,500 of conversion fees, pursuant to a convertible note signed on May 20, 2024.

  

NOTE 10. BUSINESS COMBINATION DISCLOSURE

 

In Accordance with ASC 805-10-50, ASC 805-30-50, and ASC 805-10-25-6

 

On March 27, 2024, QIND entered into a definitive Stock Purchase Agreement with the shareholders of AL SHOLA AL MODEA GAS DISTRIBUTION L.L.C to acquire 51% of the shares, a United Arab Emirates headquartered company (“ASG” or “AL SHOLA GAS”). AL SHOLA GAS is a revenue-generating company in the business of gas system installation and gas supply for commercial and domestic consumers.

 

QIND acquired majority ownership of AL SHOLA GAS, effective as of March 27, 2024, resulting in AL SHOLA GAS becoming a subsidiary in a transaction accounted for as a business combination. The Company and its auditors considered all pertinent facts pursuant to ASC 805-10-25-6 that the Share Purchase Agreement signing date is the acquisition date of the company, with the value of $10,000,000 and the payment plan outlined in the agreement. Pursuant to the terms of the Share Purchase Agreement, QIND will occupy two non-paid board seats including Chairman of the Board of Al Shola Gas and there shall be one other non-paid board seat for existing Al Shola Gas shareholders. QIND obtained immediate control with the execution of the Agreement. Existing shareholders and management will retain full operational control unless the new Board of Directors determines otherwise due to a breach of the Agreement, ongoing poor performance, or if structural changes are recommended in line with the laws governed by the Agreement which will be decided and approved by the new Board of Directors of the Company.

 

The audited pro forma financial statements of AL SHOLA GAS for the periods ended December 31, 2023, have been filed through 8-K on June 7, 2024. The acquired business contributed revenues of $10,839,209 and earnings of $(2,370,229) in total consisting of $(4,161,797) to parent company QIND and $1,791,568 to the shareholders of AL SHOLA GAS, respectively, for the year ended December 31, 2023.

 

In accordance with ASC 805-30-50-1 (b) and ASC 805-20-50-1(c), the following table summarizes the consideration transferred to acquire AL SHOLA GAS and the amounts of identified assets acquired and liabilities assumed at the acquisition date, as well as the fair value of the noncontrolling interest in AL SHOLA GAS at the acquisition date:

 

The Payment Schedule signed on March 27, 2024, outlines a series of payment requirements as follows:

 

●

Tranche 1: $9 million in National Exchange listed stock or cash to be paid to Seller. Payment in eight quarterly tranches over a period of 24 months, beginning from the first quarter following uplist to a National Exchange. Stock value is to be protected by a make whole agreement/s and each tranche is subject to a mutually agreed 12-month leak-out agreement.

 

●

Tranche 2: Within 12 months of closing and at the soonest possible time, $1 million cash payment to the Seller.

 

Consideration paid		September 30, 2024				March 31, 2024
Total			0				0

 

As of September 30, 2024, $10,000,000 payable to the shareholders of AL SHOLA GAS was outstanding.

 

 

Fair value of Consideration

 

Cash or National Exchange listed stock		$	9,000,000
Cash		$	1,000,000
Total		$	10,000,000

 

Goodwill calculation of acquisition

 

Date of Acquisition		USD
Cash and cash equivalents		$	111,767
Trade receivables & Other receivables			2,699,826
Inventories			1,315,937
Deposits, prepayments and advances			551,588
Property, plant, and equipment			102,682
Right of use assets			222,130
Trade and other payables			(885,036	)
Lease liabilities			(229,359	)
Bank borrowings			(907,637	)
Total identifiable net assets		$	2,981,918
Non-Controlling Share (49%)			1,461,140
Parent Share (51%)			1,520,778
Goodwill		$	8,479,222

 

During the quarter ended March 31, 2024, we consolidated this acquired business since January 1, 2024, rather than since the acquisition date of March 27, 2024. The impact on our March 31, 2024, results would have resulted in revenue of $3,086,519 cost of revenues of $1,942,279, net income available of $488,083, and earnings per share of $0.00.

 

NOTE 11. SUBSEQUENT EVENTS

 

In accordance with ASC 855-10-50, the company lists events that are deemed to have a determinable significant effect on the balance sheet at the time of occurrence or on future operations, and without disclosure of it, the financial statements would be misleading.

 

On October 16, 2024, the Company entered into a Share Purchase Agreement with Safeguard Investments LLC, pursuant to which the Investor acquired 1,000,000 shares of the Company’s Common Stock for a purchase price of $30,000.

 

On October 22, 2024, the Company issued 1,092,118 shares of our common stock to Jefferson Street Capital LLC for the conversion of $10,000 of principal and $1,500 of conversion fees, pursuant to a convertible note signed on May 20, 2024.

 

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 require 30-day written notice of termination Such 30-day period ended, and the Term Sheet was definitively canceled, on November 11, 2024.

 

On November 18, 2024, Quality Industrial Corp., a Nevada corporation (the “Company”), Fusion Fuel Green PLC, an Irish public limited company (the “Fusion Fuel”), Ilustrato Pictures International Inc., a Nevada corporation , a stockholder of the Company (“Ilustrato”), and certain other stockholders of the Company (together with Ilustrato, the “Sellers” and the Sellers together with the Company and Fusion Fuel, the “Parties”), entered into a Stock Purchase Agreement, dated as of November 18, 2024 (the “Purchase Agreement”). Under the Purchase Agreement, the Sellers will transfer an aggregate of 78,312,334 shares of common stock and 20,000 shares of Series B Preferred Stock of the Company, constituting approximately 69.36% of the capital stock of the Company, to Fusion Fuel (the “Transferred Shares”). Fusion Fuel will issue 3,818,969 Class A ordinary shares and 4,171,327 preferred shares to the Sellers, subject to adjustment, with provisions for the preferred shares to convert into 41,713,270 ordinary shares subject to shareholder approval and Nasdaq listing clearance. The Purchase Agreement also provides for a post-closing merger of the Company into a newly formed subsidiary of Fusion Fuel, resulting in the Company becoming a wholly-owned subsidiary of Fusion Fuel. The transaction is subject to customary closing conditions, including regulatory approvals. The Parties have also agreed to several post-closing covenants, including actions related to shareholder meetings and financing arrangements. The agreement contains customary representations, warranties, and indemnification provisions, and certain unwinding and termination rights.

 

 

23

 

Exhibit 99.6

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION AS OF

AND FOR THE SIX MONTHS ENDED JUNE 30, 2024, AND FOR THE YEAR ENDED DECEMBER 31, 2023

 

Unaudited Pro Forma Financial Information

 

On November 18, 2024, Fusion Fuel Green PLC, an Irish public limited company (“Fusion Fuel” or “HTOO”), entered into a Stock Purchase Agreement, dated as of November 18, 2024 (the “Purchase Agreement”), with Quality Industrial Corp., a Nevada corporation (“QIND”), Ilustrato Pictures International Inc., a Nevada corporation (“Ilustrato”), and certain stockholders of QIND (together with Ilustrato, the “Sellers”). Pursuant to the Purchase Agreement, on November 26, 2024, Fusion Fuel acquired beneficial ownership of a 69.36% stake in QIND (the “Acquisition”), and in exchange, Fusion Fuel issued 3,818,969 of its Class A ordinary shares (“Class A Ordinary Shares”) (representing 19.99% of the Company’s issued shares), and 4,171,327 of Fusion Fuel’s Series A Convertible Preferred Shares (“Series A Preferred Shares”), which will convert into 41,713,270 Class A Ordinary Shares upon Fusion Fuel shareholder approval and approval of an initial listing application by The Nasdaq Stock Market LLC (“Nasdaq”).

 

Pursuant to the Purchase Agreement, the Company, QIND, and the Sellers will enter into an agreement and plan of merger (the “Merger Agreement”). Subject to the terms of the Merger Agreement and the receipt of any necessary shareholder, regulatory, and Nasdaq consents or approvals, QIND will merge into a newly-formed, wholly-owned Nevada subsidiary of the Company (the “Merger”). Upon completion of the Merger, Quality will become the surviving entity and a wholly owned subsidiary of the Company.

 

The following unaudited pro forma condensed combined financial information combines the historical consolidated financial position and results of operations of Fusion Fuel and QIND and gives effect to the Acquisition and the Merger in the manner described below.

 

The Acquisition and the Merger are considered to be a business combination accounted for under International Financial Reporting Standards (“IFRS”) acquisition method of accounting. In accordance with IFRS 3 - Business Combinations, Fusion Fuel has been identified as the accounting acquirer, and QIND as the target, for accounting purposes. Consequently, the accompanying pro forma financial statements consolidate QIND into Fusion Fuel’s financial statements for the periods presented.

 

The assets acquired or to be acquired, and liabilities assumed or to be assumed, have been recorded at their estimated fair values at the date of the Acquisition. The purchase price has been allocated on a preliminary basis to the assets acquired or to be acquired and the liabilities assumed or to be assumed based upon estimates of their respective fair values, which are subject to potential adjustment upon finalization of the purchase price allocation.

 

The following unaudited condensed combined pro forma balance sheet as of June 30, 2024 gives effect to the Acquisition and the Merger as if each had been completed as of June 30, 2024. The unaudited pro forma condensed combined statements of operations and other comprehensive income for the six months ended June 30, 2024 and for the fiscal year ended 2023 were prepared as if the Acquisition and the Merger had occurred as of January 1, 2023. The pro forma information has been prepared by our management, and it may not be indicative of the results that actually would have occurred had the Acquisition and the Merger been in effect on the dates indicated, nor does it purport to indicate the results that may be obtained in the future. The pro forma information is based on provisional amounts allocated by management to various assets and liabilities acquired and may be eventually different than currently presented.

 

 

Unaudited Condensed Combined Pro Forma Balance Sheet as of June 30, 2024

(U.S. dollars)

 

		HTOO				QIND				Pro-forma adjustment for Merger												Consolidated Pro-Forma
										Initial 69.36%				Transaction costs				Remaining 30.64%				100% Wholly owned
ASSETS
Current assets
Assets held for sale			891,139				-																891,139
Cash and cash equivalents			439,856				101,243								(198,688	)5							342,412
Other current assets			10,342,795				5,768,429																16,111,224
Total current assets			11,673,790				5,869,672								(198,688	)							17,344,774
Non-current assets
Other receivables			1,258,574				-																1,258,574
Property, plant and equipment			26,008,776				289,311																26,298,087
Related party receivables			-				1,866,551																1,866,551
Goodwill & other intangible assets			4,951,479				8,479,222				14,121,9481												27,552,649
Total non-current assets			32,218,829				10,635,084				14,121,948												56,975,861
Total assets			43,892,619				16,504,756				14,121,948				(198,688	)							74,320,636
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable			15,183,669				894,307																16,077,976
Related party payables			-				30,155																30,155
Other current liabilities			5,598,329				7,787,757																13,386,086
Total current liabilities			20,781,997				8,712,219																29,494,216
Non-current liabilities
Lease operating non-current			10,668,938				143,367																10,812,305
Deferred income - grant			10,459,402				-																10,459,402
Other payables – long-term			-				5,820,972																5,820,972
Total long-term liabilities			21,128,339				5,964,339																27,092,678
Total liabilities			41,910,337				14,676,558																56,586,895
Stockholders’ equity
Preferred stock			-				-				4172								(417	)7			-
Common stock			2,317				133,009				(132,627	)3							4,1717				6,871
Additional paid-in capital			248,984,767				17,474,251				(2,085,151	)4							(3,754	)7			264,370,112
Retained earnings/accumulated deficit			(247,004,802	)			(16,318,012	)			16,318,012				(198,688	)5			560,247	8			(246,643,242	)
Noncontrolling interest			-				538,950				21,2976								(560,247	)8			-
Total stockholders’ equity			1,982,283				1,828,198				14,121,948				(198,688	)			-				17,733,741
Total liabilities and stockholders’ equity			43,892,619				16,504,756				14,121,948				(198,688	)			-				74,320,636

 

 

Unaudited Condensed Combined Pro Forma Statement of Operations and Other Comprehensive Income for the year ended December 31, 2023

(U.S. dollars)

 

For the year ended December 31, 2023		HTOO				QIND				Pro-forma adjustment				Consolidated
										Transaction costs
Revenue			4,481,822				-				-				4,481,822
Cost of revenues			21,727,430				-				-				21,727,430
Gross profit			(17,245,608	)			-				-				(17,245,608	)
Total operating expenses			22,842,112				2,704,320				198,6885				25,745,119
Income (loss) from operations			(40,087,720	)			(2,704,320	)			(198,688	)			(42,990,727	)
Other (income) expenses			(6,977,679	)			1,457,477				-				(5,520,202	)
Profit / (loss) before tax			(33,110,041	)			(4,161,797	)			(198,688	)			(37,470,526	)
Income tax expense			172,017				-				-				172,017
Total comprehensive income / (loss) for the year			(33,282,058	)			(4,161,797	)			(198,688	)			(37,642,543	)

 

 

Unaudited Condensed Combined Pro Forma Statement of Operations and Other Comprehensive Income for the Six Months ended June 30, 2024
(U.S. dollars)

 

For the six months ended June 30, 2024		HTOO				QIND				Pro-forma adjustment				Consolidated
										Transaction costs
Revenue			-				3,317,206				-				3,317,206
Cost of revenues			(212,512	)			2,068,708				-				1,856,196
Gross profit			212,512				1,248,498				-				1,461,010
Total operating expenses			8,705,734				825,430				198,6885				9,729,851
Income (loss) from operations			(8,493,221	)			423,068				(198,688	)			(8,268,841	)
Other (income) expenses			57,473				30,736				-				88,209
Profit / (loss) before tax			(8,550,694	)			392,332				(198,688	)			(8,357,050	)
Corporate tax			34,954				43,889				-				78,843
Total comprehensive income / (loss) for the year			(8,585,648	)			348,443				(198,688	)			(8,435,892	)

 

i.

Basis of Presentation

 

The unaudited pro forma condensed combined financial statements were prepared using the acquisition method of accounting and are based on Fusion Fuel and QIND’s historical consolidated financial statements as adjusted to give effect to the Acquisition and the Merger and the shares issued or to be issued as part of the Acquisition and the Merger.

 

The unaudited pro forma condensed combined balance sheet as of June 30, 2024, gives effect to the Acquisition as if it had occurred on June 30, 2024. The unaudited pro forma condensed combined statements of operations and other comprehensive income for the year ended December 31, 2023, and for the six months ended June 30, 2024, are presented as if the Acquisition had occurred on January 1, 2023.

 

Historical financial information has been adjusted in the pro forma balance sheet to pro forma events that are:

 

(1) directly attributable to the (a) Acquisition and (b) the Merger; and

(2) factually supportable.

 

The pro forma adjustments presented in the pro forma condensed combined balance sheet and statements of operations and other comprehensive income are described in Note (iii) - Pro Forma Adjustments.

 

ii.

Preliminary Purchase Price Allocation

 

On November 26, 2024, Fusion Fuel completed the Acquisition pursuant to the Purchase Agreement. Under the terms of the Purchase Agreement, 78,312,334 shares of common stock and 20,000 shares of Series B Preferred Stock of QIND were sold, representing approximately 69.36% of QIND’s equity value. On the date of the Merger, the remaining outstanding capital stock of QIND will be exchanged for Class A Ordinary Shares of Fusion Fuel, and QIND will be merged into a wholly-owned subsidiary of Fusion Fuel.

 

 

The purchase price for the Acquisition was structured through a share swap whereby Fusion Fuel issued 3,818,969 Class A Ordinary Shares (representing 19.99% of the Company’s issued shares), and 4,171,327 Series A Convertible Preferred Shares, which will convert into 41,713,270 Class A Ordinary Shares upon shareholder and Nasdaq approval.

 

The pro forma financial statements have been prepared on the basis of the acquisition method, in accordance with IFRS 3, whereby QIND’s historical financial results have been adjusted for the effects of fair value measurements as of the date of the Acquisition. The acquirer has been identified as Fusion Fuel Green PLC, and the target as Quality Industrial Corp.

 

The purchase price was preliminarily allocated based on the estimated fair value of net assets acquired or to be acquired and liabilities assumed or to be assumed at the date of the Acquisition. The preliminary purchase price allocation is subject to further refinement and may require adjustments to arrive at the final purchase price allocation.

 

The net assets of QIND were $1.8 million including goodwill and other intangible assets as of June 30, 2024, of which $1.3 million (69.36%) would have been owned by Fusion Fuel if the Acquisition had occurred on June 30, 2024. The remaining $0.56 million (30.64%) of the net assets will be held by minority interest pending the consummation of the Merger.

 

The dollar value of the purchase price paid equates to approximately $15,389,898 for 69.36% of QIND. The purchase price, minus the net assets held by Fusion Fuel would result in an implied goodwill and other intangible assets value of $22.6 million if the Acquisition had occurred on June 30, 2024. This $22.6 million can be broken into legacy QIND goodwill of $8.5 million and an additional $14.1 million, arising from the Acquisition.

 

Once transaction closing requirements have been met, i.e. once HTOO shareholders and Nasdaq approve the transaction, the 4,171,328 Series A Convertible Preferred Shares will convert on a 1-for-10 basis into Series A Ordinary Shares, the parties will enter into the Merger Agreement, and the non-controlling interest (remaining 30.64%) will be subsumed into HTOO. QIND will, at this point be considered a wholly owned subsidiary of HTOO.

 

iii.

Pro Forma Transaction Accounting Adjustments

 

The pro-forma adjustments are based on our preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro-forma condensed combined financial information:

 

To give effect of consolidation as per general accepted principles of consolidation, purchase consideration, goodwill and minority interest has been recorded.

 

1.

To record purchase price in excess of fair value of net assets acquired or to be acquired, based on a preliminary purchase price allocation.

 

2.

To record the issuance of 4,171,328 Series A Preferred Shares at a price per share of $0.338 based on the last reported sale price of Fusion Fuel’s Class A Ordinary Shares on Nasdaq on November 18, 2024. The Series A Preferred Shares convert into common shares on a 1-for-10 basis.

 

3.

To record the issuance of 3,818,969 Class A Ordinary Shares at a price per of $0.338 based on the last reported sale price of Fusion Fuel’s Class A Ordinary Shares on Nasdaq on November 18, 2024.

 

4.

To record the additional paid in capital recorded in the Acquisition.

 

5.

To record costs associated with the Acquisition.

 

6.

To represent the value of QIND that is not directly owned by HTOO at the time the Acquisition closes.

 

7.

To account for the conversion of Series A Preferred Shares into Class A Ordinary Shares on a 1-for-10 basis once transaction closing requirements are met and the Merger to be consummated as soon as practicable following such conversion, at which point QIND will become a wholly owned subsidiary of HTOO.

 

8.

To account for the additional 30.64% equity value of QIND that will be subsumed into HTOO and will no longer be considered non-controlling interest following the Merger.

 

 

5

 

v3.25.0.1

Document And Entity Information	6 Months Ended
	Jun. 30, 2024
Document Information Line Items
Entity Central Index Key	0001819794
Document Type	6-K/A
Amendment Description	Amendment No. 1
Document Fiscal Year Focus	2024
Entity File Number	001-39789
Entity Registrant Name	Fusion Fuel Green PLC
Amendment Flag	true
Document Period End Date	Jun. 30, 2024
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31

v3.25.0.1

Condensed Consolidated Statement of Financial Position (Unaudited) € in Thousands	Jun. 30, 2024 EUR (€)	Dec. 31, 2023 EUR (€)
Non-current assets
Property, plant and equipment	€ 24,296	€ 24,776
Intangible assets	4,625	5,076
Other receivables	1,176	1,176
Total non-current assets	30,097	31,028
Current assets
Assets held for sale	832	833
Trade receivables	230
Prepayments and other receivables	3,364	4,919
Inventory	5,316	3,672
Income Accruals	752	752
Cash and cash equivalents	411	1,147
Total current assets	10,905	11,323
Total assets	41,002	42,351
Non-current liabilities
Trade and other payables - Leases	9,966	9,958
Deferred income	9,771	9,299
Total non-current liabilities	19,737	19,257
Current liabilities
Trade and other payables	14,183	15,312
Provisions	609	609
Contract liabilities		587
Deferred income	1,353
Cost accruals	1,626	1,764
Derivative financial instruments – warrants	456	765
Loans and borrowings	1,186	1,326
Total current liabilities	19,413	20,363
Total liabilities	39,150	39,620
Net assets	1,852	2,731
Equity
Share capital	2	2
Share premium	226,795	220,157
Share-based payments reserve	5,797	5,365
Retained earnings	(222,794)	(191,776)
Profit and loss	(7,948)	(31,016)
Total equity	1,852	2,731
Total equity and liabilities	€ 41,002	€ 42,350

v3.25.0.1

Condensed Consolidated Statement of Profit and Loss and Other Comprehensive Income (Unaudited) € in Thousands	6 Months Ended
	Jun. 30, 2024 EUR (€) € / shares	Jun. 30, 2023 EUR (€) € / shares
Profit or loss [abstract]
Revenue
Cost of sales	197	(7,298)
Gross profit	197	(7,298)
Operating expenses
Administration expenses	(7,015)	(10,814)
Share-based payment expense	(1,045)	(1,207)
Operating loss	(7,863)	(19,319)
Net finance income
Finance income / (costs)	(71)	37
Interest receivable and similar income	29	29
Interest payable and similar expense	(320)	(277)
Derivative financial instruments at FVTPL	309	5,283
Net finance income/(costs)	(53)	5,072
Share of losses of equity-accounted investees		(205)
Loss before tax	(7,916)	(14,452)
Income tax expense	(32)	(159)
Total comprehensive loss for the year	€ (7,948)	€ (14,611)
Basic loss per share (in Euro per share) | (per share)	€ (0.47)	€ (0.57)
Diluted loss per share (in Euro per share) | (per share)	€ (0.47)	€ (0.57)

v3.25.0.1

Condensed Consolidated Statement of Changes in Equity (Unaudited) - EUR (€) € in Thousands	Number of shares outstanding	Share capital	Share premium	Share-based payment reserve	Retained earnings	Total
Balance at Dec. 31, 2021		€ 2	€ 213,477	€ 463	€ (164,430)	€ 49,512
Balance (in Shares) at Dec. 31, 2021	13,123,723
Loss during the year					(27,347)	(27,347)
Total comprehensive income for the year					(27,347)	(27,347)
Issue of share capital:
ATM – share sales			3,679			3,679
ATM – share sales (in Shares)	681,926
Share based payments:
Equity-settled share-based compensation				3,509		3,509
Balance at Dec. 31, 2022		2	217,156	3,972	(191,777)	29,353
Balance (in Shares) at Dec. 31, 2022	13,805,649
Loss during the year					(31,016)	(31,016)
Total comprehensive income for the year
Total comprehensive income for the year (in Shares)
Issue of share capital:
Equity incentive plan
Equity incentive plan (in Shares)	10,000
ATM – share sales			3,001			3,001
ATM – share sales (in Shares)	1,103,368
Share based payments:
Share based payments				(1,042)		(1,042)
Share based payments:
Equity-settled share-based compensation				2,435		2,435
Balance at Dec. 31, 2023		2	220,157	5,365	(222,793)	2,731
Balance (in Shares) at Dec. 31, 2023	14,919,017
Loss during the year					(7,948)	(7,948)
Total comprehensive income for the year		2	220,157	5,365	(230,741)	(5,217)
Total comprehensive income for the year (in Shares)	14,919,017
Macquarie - Convertible Note			84			84
Macquarie - Convertible Note (in Shares)	89,792
Issue of share capital:
Equity incentive plan			613			613
Equity incentive plan (in Shares)	107,500
ATM – share sales			5,941			5,941
ATM – share sales (in Shares)	2,345,452
Share based payments:
Share based payments				(613)		(613)
Share based payments:
Equity-settled share-based compensation				1,045		1,045
Balance at Jun. 30, 2024		€ 2	€ 226,795	€ 5,797	€ (230,741)	€ 1,852
Balance (in Shares) at Jun. 30, 2024	17,461,761

v3.25.0.1

Condensed Consolidated Statements of Cash Flows (Unaudited) - EUR (€) € in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities
Net loss for the period	€ (7,948)	€ (14,611)
Equity settled share-based payment transactions	1,045	1,207
Fair value movement in warrants	(309)	(5,283)
Depreciation and amortization	1,535	1,192
Net finance income	42	(66)
Share of losses of equity-accounted investee		205
Impairment losses on property, plant and equipment		205
Impairment on inventory	(272)	7,188
Total adjustments	(5,908)	(9,963)
Changes in working capital:
Decrease /(increase) in receivables	1,203	2,599
Increase in inventories	(1,645)	(4,319)
Increase/(decrease) in payables and accruals	(2,073)	5,591
Interest and similar expenses - paid	(289)	(277)
Taxes received	784
Net cash used by operating activities	(7,928)	(6,369)
Cash flows from investing activities
Purchase of tangible assets	(8)	(5,073)
Proceeds from sale of assets	440
Development expenditure	(110)	(341)
Receipt of government grants	472
Investment in equity-accounted investees		(135)
Net cash (used) /from investing activities	794	(5,549)
Cash flows from financing activities
Proceeds from issuance of shares	5,942	2,405
Proceeds from loans and borrowings	1,186	2,686
Payment of lease liabilities	(691)	(630)
Net cash provided by financing activities	6,437	4,461
Net (decrease) in cash and cash equivalents	(698)	(7,457)
Cash and cash equivalents at beginning of period	1,147	8,164
Effects of movements in exchange rates on cash held	(38)	(17)
Cash and cash equivalents at end of period	411	690
Add restricted cash		2,395
Cash and cash equivalents at end of period including restricted cash	€ 411	€ 3,085

v3.25.0.1

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2024
Summary of Significant Accounting Policies [Abstract]
Summary of significant accounting policies	1. Summary of significant accounting policies   Business activity   Fusion Fuel Green plc (the “Parent” or “Company”) was incorporated in Ireland on April 3, 2020. The Company and its subsidiaries are collectively referred to as the “Group”. The registered office of the Company is The Victorians, 15-18 Earlsfort Terrace, Saint Kevin’s, Dublin 2, D02 YX28, Ireland.   The Company is a leading provider of full-service energy engineering and advisory solutions, specializing in green hydrogen and industrial gas applications. Through its two operating companies, Fusion Fuel offers a broad portfolio of services, including the design, supply, installation, and maintenance of energy systems, as well as the transport and distribution of liquefied petroleum gas. The Company serves a diverse customer base spanning commercial buildings, mixed-use developments, heavy industries, and food service sectors, while continuing to drive innovation in the renewable energy space. Fusion Fuel is committed to advancing the global energy transition by delivering sustainable, efficient, and reliable energy solutions.   The business activity of the Group changed significantly in the months following the reporting period in review. These changes will be detailed further in our subsequent events disclosures within this report. During the reporting period in review, the Group’s mission was to produce hydrogen with zero carbon emissions, thereby contributing to a future of sustainable and affordable clean energy and the reversal of climate change. The hydrogen was produced using renewable energy resulting in zero carbon emissions (“Green Hydrogen”) with components built in-house and using the know-how and accumulated experience of its team’s strategic and continuous investment in research and development (“R&D”) around solar technologies.   The Company has a well-established risk management process which is managed through its management team, finance committee and board of directors. The key risks are evaluated throughout the period with key business leaders tasked to manage each risk as required. These risks are assessed through a risk matrix which evaluates each risk’s impact and likelihood.   Basis of presentation   The unaudited condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” (IAS 34). In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The condensed consolidated financial statements and accompanying notes were prepared in conformity with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) which requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Group’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 20-F for the fiscal year ended December 31, 2023 (the “2023 Form 20-F”). These condensed consolidated financial statements are presented in Euro, the functional and presentation currency of the Company. All financial information presented in euro has been rounded to the nearest thousand, unless otherwise stated.   As a result of rounding, numbers or percentages may not add up to the total.   Use of estimates   Preparation of condensed consolidated financial statements in conformity with IFRS requires the use of estimates and judgments that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. IFRS requires the Company to make estimates and judgments in several areas, including, but not limited to, revenue, expenses, assets and liabilities, income taxes and the accompanying disclosures. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, onerous contract provisions, impairment of capitalized development costs, impairment of property, plant and equipment and the valuation of inventory. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates as there are changes in circumstances, facts and experience. Actual results could differ materially from those estimates. Significant accounting policies   There have been no material changes to the Company’s significant accounting policies as compared to the significant accounting policies described in the 2023 Form 20-F.   New standards or amendments   There were no new standards effective for the period commencing 1 January 2023 that had a material impact on the Group. A number of new standards, amendments to standards and interpretations are not yet effective for the period and have not yet been applied in preparing the unaudited condensed consolidated financial statements. The Group is in the process of assessing the impact on the financial statements of these new standards and amendments. Management currently expects no material impact on the Group’s financial statements on adoption of these amendments.   Segment information   The Group manages its operations as a single segment for purposes of assessing performance and making operating decisions. The Group’s focus is on the research and development around solar technologies. The Executive Committee, and in particular the Chief Financial Officer, is the chief operating decision maker that regularly reviews the consolidated operating results and makes decisions about the allocation of the Group’s resources.   At the Market Issuance Sales Agreement (“ATM”)   On June 6, 2022, the Parent entered into an At the Market Issuance Sales Agreement (“the ATM”) with B. Riley Securities, Inc., Fearnley Securities Inc., and H.C. Wainwright & Co., LLC, pursuant to which the Company may offer and sell, from time to time, through or to the agents, acting as agent or principal, Class A ordinary shares of the Company having an aggregate offering price of up to $30 million under the Company’s Form F-3 registration statement. During 2023, the Parent sold 1,103,368 class A ordinary shares for net proceeds of $3.3 (€3.2) million and paid $0.1 million (€0.1 million) in commissions to agents as part of these trades.   During the six months ended June 30, 2024, the Parent sold 2,345,452 class A ordinary shares for net proceeds of $6.4 million (€5.9 million) and paid $0.2 million (€0.2 million) in commissions to agents as part of these trades.   Finance update   Convertible promissory note (the “Placement Note”)   On November 27, 2023, the Parent entered into an agreement for financing of up to $20 million of senior convertible notes with Belike Nominees Pty Ltd., a Macquarie Group entity (“Macquarie Group”). This facility has a two-year term and amounts will be drawn down in tranches.   On May 7, 2024, the Company consummated the initial tranche in the amount of $1,150,000 and issued to the Investors, a Placement Note in such amount. The holders of the Placement Note are entitled at any time and from time to time to convert all or any portion of the outstanding and unpaid principal, interest and late fees if any into validly issued, fully paid and non-assessable Class A Ordinary Shares of the Company (“Placement Note Shares”) in accordance with a predefined conversion rate. The estimated number of convertible shares of 1,120,329 was determined based on the share price as of May 1, 2024.   In addition, the Parent also agreed to issue to the Investors, for no additional consideration, private warrants (the “Placement Warrants”) to purchase 208,582 Company’s Class A ordinary shares, $0.0001 par value per share (“Class A Ordinary Shares”). This amount is included in the number of Placement Note Shares above.   During the six months ended June 30, 2024, Placement Note Shares of an amount of 89,792 were issued by the company to the Macquarie Group for total proceeds of $0.9 (€0.8) million. See subsequent events note to the financial statements for further information pertaining to status of the promissory notes and other finance updates at date of review sign-off.   Going concern   In adopting the going concern basis in preparing the consolidated financial statements, the Directors have considered the Group’s cash on hand, its future cash generation projections and plans, together with factors likely to affect its future performance, as well as the Group’s principal risks and uncertainties.   On November 27, 2023, the Parent entered into an agreement for financing of up to $20 million of senior convertible notes with Belike Nominees Pty Ltd., a Macquarie Group entity. This facility has a two-year term and it’s expected that amounts will be drawn down in tranches. The first tranche of $1.15 million was drawn down in May 2024. No other tranches have been drawn down to date.   In February 2024, Parent raised net proceeds of $6,398,264 through the ATM facility.   On November 11, 2024, Fusion Fuel Portugal, S.A. (“Fusion Fuel Portugal”), a wholly owned subsidiary of the Group filed for insolvency in the civil court of Sintra, Portugal and is currently undergoing insolvency proceedings.   An event of default was triggered as per the terms of the May 2024 Note, due to Fusion Fuel Portugal’s insolvency filing. As of that date, the outstanding balance was approximately $0.14 million. The Company has initiated discussions with the noteholder regarding a forbearance agreement or waiver, but no assurance can be given that an agreement will be reached.   On November 26, 2024, Parent completed the acquisition of a 69.36% stake in Quality Industrial Corp., a Nevada corporation (“Quality” or “QIND”), pursuant to a Stock Purchase Agreement dated November 18, 2024. The transaction involved issuing 3,818,969 Class A Ordinary Shares (representing 19.99% of the Company’s issued shares), and 4,171,327 Series A Convertible Preferred Shares, which will convert into 41,713,270 Class A shares upon shareholder and Nasdaq approval.   On 19 December 2024, Fusion Fuel Green Plc. transferred to EREE Desarrollos Empresariales S.L., 1,500 shares of P2X Spain Sociedad Ltd. representing 50% of its share capital, by virtue of the public deed executed before the Notary of Madrid. This is the entirety of Fusion Fuel Green Plc´s holdings in the company. The P2X Spain Sociedad Ltd. transfer deed contains the following two conditions that must be fulfilled for the sale and purchase to be completed. The first is the transfer of €370,100 when P2X Spain Sociedad Ltd. signs their deal with another company in Spain and a second payment of €145,000 with the closure of the consortium agreement in relation to the ECO2Fly Project of which P2X Spain Sociedad Ltd. is a member.   On January 10, 2025, the Parent entered into an agreement with an institutional investor for a $25 million equity line of credit, which, upon the satisfaction of certain conditions, will provide the Company with access to additional capital to support its operational and strategic growth initiatives.   On January 13, 2025, the Parent entered into an agreement for financing of $1.28 million of senior convertible notes private placement with a group of institutional investors.   Following the insolvency of Fusion Fuel Portugal and the acquisition of a controlling stake in QIND, the Group has replaced a loss-making operating entity with a profit generating entity, being QINDs subsidiary; Al-Shola Gas (Al Shola Al Modea Gas Distribution LLC). In addition to the acquisition, the Group also incorporated a fully owned entity called Bright Hydrogen Solutions Limited whose principal activity will be the provision of engineering and advisory services and the supply of equipment.   The Group expects to continue to incur net losses for the next 12-18 months and is highly dependent on its ability to find additional sources of funding in the form of debt or equity financing to fund its planned operations. The Group’s success depends on the performance of its two operating subsidiaries, Al-Shola Gas and Bright Hydrogen Solutions. There is no assurance that the Group’s subsidiaries will be successful, especially Bright Hydrogen Solutions as it’s a newly incorporated business with no track record to date. Al-Shola Gas on the other hand has been operating since 1980 years and has been profitable for many years. In addition, Al-Shola Gas announced additional contracts for expected increases in sales in the region of USD 3.5m for fiscal 2025. These conditions raise significant doubt about the Group’s ability to continue as a going concern and therefore, to continue realizing their assets and discharging their liabilities in the normal course of business absent the mitigating actions set out below. Based upon its current operating and financial plans, management is hopeful it will have sufficient access to financial resources to fund operations, having considered the Group’s available cash resources, the agreement with Belike Nominees Pty Ltd, the recently announced equity line of credit, expected inflows from realised by its two operating subsidiaries, future financing options available to the Group (debt and/or equity), the planned operations of the Group and the ability to adjust its plans if required.   The inability to consummate further tranches of the financing agreement with Belike Nominees Pty Ltd, utilise the equity line of credit and capitalize on the market sentiment afforded to us following the acquisition of a controlling stake in QIND and resolution of compliance issues with Nasdaq would have a negative impact on the Group’s financial conditions and ability to pursue its business strategies. If the Group is unable to operationalize or obtain alternative funding, the Group could be forced to delay, reduce, or eliminate some or all of its research and development programs or strategic partnerships efforts, which could adversely affect its business prospects, or the Group may be unable to continue operations. Although management intends to pursue plans to obtain alternative funding to finance its operations, there is no assurance that the Group will be successful in obtaining sufficient funding on terms acceptable to the Group to fund continuing operations, if at all.   The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this material uncertainty. Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Group will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.   For this reason, the Directors adopt the going concern basis in preparing the unaudited condensed consolidated financial statements.

v3.25.0.1

Administration Expenses	6 Months Ended
	Jun. 30, 2024
Administration Expenses [Abstract]
Administration expenses	2. Administration expenses       For the six months ended June 30, 2024     For the  six months ended June 30, 2023       €’000     €’000   Wages and salaries     3,676       4,943   Depreciation and amortization     1,535       1,192   Professional fees     515       879   Consulting fees     326       895   Other expenses     962       2,904         7,015       10,814

v3.25.0.1

Share-Based Payments	6 Months Ended
	Jun. 30, 2024
Share-Based Payments [Abstract]
Share-based payments	3. Share-based payments   2021 Equity Incentive Plan   On August 5, 2021, the Company’s Board of Directors adopted and approved the 2021 Equity Incentive Plan (the 2021 Plan), which authorized the Company to grant up to 1,000,000 Class A ordinary shares in the form of incentive share options, non-qualified share options, share appreciation rights, restricted awards, performance share awards, cash awards and other share awards. The types of share-based awards, including the rights amount, terms, and exercisability provisions of grants are determined by the Company’s Board of Directors. Restricted Share Units (RSUs)   The Company did not grant RSU’s to employees, directors and consultants during the six -month period ended June 30, 2024 (2023: 68,273). The table below shows the number of RSUs granted covering an equal number of the Company’s Class A ordinary shares and the weighted-average grant date fair value of the RSUs granted:       Number of RSUs     Weighted average Grant date fair value per share   RSUs outstanding December 31, 2022     87,642     $ 11.43   Granted     68,273     $ 3.57   Vested (1)     (86,566 )   $ 9.27   Forfeited     (14,396 )   $ 12.73   RSUs outstanding December 31, 2023     54,953     $ 6.63   Correction of prior period RSUs outstanding (2)     4,329       n.a   RSUs outstanding December 31, 2023     59,282     $ 6.63   Granted     -     $ -   Vested (1)     (39,281 )   $ 8.86   Forfeited     (1,100 )   $ 9.37   RSUs outstanding June 30, 2024     18,901     $ 9.5     (1) No ordinary shares were issued in connection with the RSUs that vested during the six-month period ended June 30, 2024 and the year ended December 31, 2023.   (2) RSUs outstanding as at December 31, 2023 has been amended due to a prior period error.   The fair value of the RSUs is determined on the date of grant based on the market price of the Company’s ordinary shares on that date. The fair value of RSUs is expensed rateably over the vesting period, which is generally three years for employees and consultants. The total expense recognized related to the RSUs was €0.07 million for the period ended June 30, 2023 (2023: €0.2 million). Total unamortized compensation expense related to the RSUs was €0.03 million as of June 30, 2024, which is expected to be recognized over a remaining weighted average vesting period of 0.7 years as of June 30, 2024.   Share options   On January 3, 2022, the Company announced that under the 2021 Plan, its Board of Directors (“the Board”) approved an award of options for five of its senior managers. With regard to each senior manager, the award comprises three elements:   ● A grant of an option to purchase 200,000 Class A ordinary shares having an exercise price of $10.50 per share to vest over a three-year period.   ● A grant of an option to purchase an additional 200,000 Class A ordinary shares having an exercise price of $10.50 per share to vest once Parent’s share price closed at or above $18.00 during twenty trading days out of any thirty consecutive trading day period.   ● Eligibility to receive an option to purchase up to an additional 50,000 Class A ordinary shares having an exercise price equal to the average last sales price of the Class A ordinary shares over the five (5) consecutive trading day period ending on the date of grant, but in no event to be lower than $10.50 per share, for each of calendar years 2022, 2023 and 2024, each to be granted based on individual performance at the discretion of the Compensation Committee of the board of directors.   All options granted will expire on December 31, 2028.   The Company granted 143,628 options to employees, directors and consultants during the six-month period ended June 30, 2024 (2023: 143,628). The fair value of the options granted during the six-month period ended June 30, 2024 were estimated using the Black-Scholes option-pricing model. The inputs for the Black-Scholes model require management’s significant assumptions. The risk-free interest rate was based on a normalized estimate of the 7-year U.S. treasury yield. Expected share volatility has been based on historical volatility information of reasonably comparable guideline public companies and itself. The Company expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price. Expected dividend yield is based on the fact that the Company has never paid cash dividends and its future ability to pay cash dividends on its shares may be limited by the terms of any future debt or preferred securities. The Company has elected to account for forfeitures as they occur.   The range of assumptions that the Company used to determine the grant date fair value of employee and director options granted were as follows:       Tranche 1     Tranche 2     Directors   Volatility     70.91 %     70.91 %     75.32 % Expected term in years     7       7       6.92   Dividend rate     0 %     0 %     0 % Risk-free interest rate     1.58 %     1.58 %     1.58   Hurdle price     -     $ 18       -   Exercise price   $ 10.50     $ 10.50     $ 6.45   Share price   $ 9.42     $ 9.42     $ 5.03   Fair value of option on grant date   $ 6.14     $ 6.18     $ 3.31     The table below shows the number of options granted covering an equal number of the Company’s Class A ordinary shares and the weighted-average grant date fair value of the options granted:       Number of options     Weighted average Grant date fair value per share   Options outstanding December 31, 2022     1,666,667     $ 5.21   Granted     154,074     $ 2.87   Vested     (354,074 )   $ 4.71   Forfeited     (666,667 )   $ 6.16   Options outstanding December 31, 2023     800,000     $ 6.14   Granted     143,628     $ 2.87   Vested     (71,814 )   $ 2.87   Forfeited     -     $ -   Options outstanding June 30, 2024     871,814     $ 5.87     There were 871,814 unvested employee and director options outstanding as of June 30, 2024. Total expense recognized related to the employee and director share options was €1 million for the period ended June 30, 2024. Total unamortized compensation expense related to employee and director share options was €2.8 million as of June 30, 2024, expected to be recognized over a remaining weighted average vesting period of 2.4 years as of June 30, 2024. Incentive shares   As part of their compensation package, the non-executive directors that were appointed in December 2020 were granted 5,000 shares for each year of service to the Company.       Number of shares     Weighted average Grant date fair value per share   Incentive shares outstanding December 31, 2022     5,000     $     23   Granted     -     $ -   Vested     -     $ -   Forfeited     -     $ -   Incentive shares outstanding December 31, 2023     5,000     $ 23   Granted     -     $ -   Vested     -     $ -   Incentive shares outstanding June 30, 2024     5,000       23     The above shares vest at the discretion of the board of directors. No incentive shares were granted in the six-months period ended June 30,2024. The total expense for these shares recognised in the six-month period ended June 30, 2024 was €0.06 million (2023: €0.03).   As of June 30, 2024, there was no unrecognised share-based payment expense related to the incentive shares. The shares have been recorded at their fair value at June 30, 2024.   Reconciliation to statement of profit or loss – for the six months ended June 30   €’000   2024     2023   RSUs     75       204   Incentive shares     6       28   Options     964       975   Share-based payment expense     1,045       1,207

v3.25.0.1

Taxation	6 Months Ended
	Jun. 30, 2024
Taxation [Abstract]
Taxation	4. Taxation   The Group generated tax losses during the six-month periods ended June 30, 2024 and 2023. The current tax expense booked for the six-month period ended June 30, 2024 is €0.03 million (2023: €0.16 million). The Group recognised a deferred tax expense of €nil for each period. During the six-month periods ended June 30, 2024 and 2023, the Group’s Portuguese operations were subject to a statutory tax rate of 21%. In Ireland, the headline corporate income tax rate for trading companies is 12.5%, with a rate of 25% applicable to other non-trading sources.

v3.25.0.1

Inventory	6 Months Ended
	Jun. 30, 2024
Inventory [Abstract]
Inventory	5. Inventory       2024     2023       €’000     €’000   Raw materials     1,867       1,968   Work in progress     776       1,704   Finished product     2,673       -   Total Inventory     5,316       3,672     Inventories of €0.81 million (2023: €3.5) were consumed during the six-month periods ended June 30, 2024, which includes conversion and other costs incurred in bringing the inventory to its present condition. The cost of scrapped materials through the normal production cycle amounted to €0.02 million (2023: €0.1). These items were recognised as an expense during the six-month periods ended June 30, 2024 and 2023, in ‘cost of sales’.

v3.25.0.1

Cash and Cash Equivalents	6 Months Ended
	Jun. 30, 2024
Cash and Cash Equivalents [Abstract]
Cash and cash equivalents	6. Cash and cash equivalents       2024     2023       €’000     €’000   Cash and cash equivalents     25       860   Restricted cash     386       287         411       1,147     The restricted cash relates to amounts from the Agency for Competitiveness and Innovation (“IAPMEI”) as grant aid towards our C-5 development projects. This cash is subject to a variety of conditions relating to its disbursements and remains restricted until such time that project development commences.

v3.25.0.1

Intangible Assets	6 Months Ended
	Jun. 30, 2024
Intangible Assets [Abstract]
Intangible assets	7. Intangible assets   * The additions relate to materials acquired during the period for the purpose of developing our HEVO technology.       Completed Development Technology     Product development in progress     Intellectual property and patents registration     Software     Total   2024   €’000     €’000     €’000     €’000     €’000   Cost                               At January 1, 2024     2,996       1,346       1,911       190       6,443   Additions – other*     2       110       -       -       112   Transfer during the year     685       (685 )     -       -       -   At June 30, 2024     3,683       771       1,910       190       6,554                                             Amortisation & impairment                                         At January 1, 2024     (1,321 )     -       (3 )     (43 )     (1,367 ) Amortisation charge     (552 )     -       (1 )     (9 )     (562 ) At June 30, 2024     (1,873 )     -       (4 )     (52 )     (1,929 )                                           Net book value                                         At June 30, 2024     1,810       771       1,907       138       4,625                                             2023                                         Cost                                         At January 1, 2023     2,995       717       1,911       80       5,703   Additions – other*     2       629               109       740   At December 31, 2023     2,996       1,346       1,911       190       6,443                                             Amortisation                                         At January 1, 2023     (330 )     -       (2 )     (20 )     (352 ) Amortisation charge     (990 )             (1 )     (23 )     (1,014 ) At December 31, 2023     (1,321 )     -       (3 )     (43 )     (1,367 )                                           Net book value                                         At January 1, 2023     2,664       717       1,908       60       5,350   At December 31, 2023     1,676       1,346       1,907       147       5,076   Intellectual property of €1.9 million (2023: €1.9 million) and capitalised project development costs of €1.45 million (2023: €1.35 million) are considered to be of indefinite life and accordingly are not amortized. Completed development technology represents the costs incurred on bringing our first generation HEVO electrolyzer to market and is being amortised over a useful life of 3 years.   Research and development expenditure (excluding those related to wages and salaries) of €0.87 million (2023: €0.94 million) have been recognised during the six-month periods ended June 30, 2024.   The Group considers that there have been no indicators of impairment during the period. The annual impairment analysis will be performed as at December 31, 2024.

v3.25.0.1

Property, Plant and Equipment	6 Months Ended
	Jun. 30, 2024
Property, Plant and Equipment [Abstract]
Property, plant and equipment	8. Property, plant and equipment       Assets under construction     Plant and machinery     Office and other equipment     Right of use assets     Total   2024   €’000     €’000     €’000     €’000     €’000   Cost                               At January 1, 2024     14,726       5,846       422       11,984       32,978   Additions during the year     6       2       1       27       36   Transfer to inventory     -                               -   Revaluation of ROU assets     -       -       -       455       455   At June 30, 2024     14,731       5,848       423       12,466       33,469                                             Depreciation                                         At January 1, 2024     (3,317 )     (2,985 )     (185 )     (1,715 )     (8,202 ) Charge for year     -       (410 )     (47 )     (515 )     (972 ) Impairment charge     -       -       -       -       -   At June 30, 2024     (3,317 )     (3,395 )     (231 )     (2,230 )     (9,173 )                                           Net book values                                         At June 30, 2024     11,414       2,453       192       10,236       24,296   At December 31, 2023     11,409       2,861       237       10,269       24,776                                             2023                                         Cost                                         At January 1, 2023     15,106       1,337       389       8,762       25,594   Additions during the year     8,314       243       33       3,072       11,662   Transfer to inventory     (161 )                             (161 ) Reclassification to assets held for sale     (3,957 )     -       -       -       (3,957 ) Disposals     (310 )     -       -       -       (310 ) Reclassifications     (4,266 )     4,266               150       150   At December 31, 2023     14,726       5,846       422       11,984       32,978                                             Depreciation                                         At January 1, 2023     (2,324 )     (1,148 )     (84 )     (765 )     (4,321 ) Charge for year     -       (472 )     (101 )     (950 )     (1,523 ) Impairment charge     (4,117 )     (1,365 )     -       -       (5,482 ) Reclassification to assets held for sale     3,124                               3,124   At December 31, 2023     (3,317 )     (2,985 )     (185 )     (1,715 )     (8,202 )                                           Net book values                                         At December 31, 2023     11,409       2,861       237       10,269       24,776   At December 31, 2022     12,782       189       305       7,997       21,273     Depreciation expense on property and equipment was €0.97 million and €0.68 million for the six-month periods ended June 30, 2024 and 2023, respectively. Assets under construction includes costs mostly related to construction of costs incurred on the Group’s Benavente production facility.   During the six-month periods ended June 30, 2024, the Company extended its leases on the Lisbon and Irish offices, resulting in a revaluation of the right-of-use assets of €0.45 million.

v3.25.0.1

Prepayments and Other Receivables	6 Months Ended
	Jun. 30, 2024
Prepayments and Other Receivables [Abstract]
Prepayments and other receivables	9. Prepayments and other receivables       2024     2023       €’000     €’000   Prepayments     577       585   VAT recoverable     1,075       1,387   Trade receivables     -       1,473   Grant receivable     803       803   Other receivables     909       671         3,364       4,919

v3.25.0.1

Trade and Other Payables	6 Months Ended
	Jun. 30, 2024
Trade and Other Payables [Abstract]
Trade and other payables	10. Trade and other payables       2024     2023       €’000     €’000   Trade payables (1)     10,993       11,015   Amounts owed to related parties (2)     1,363       2,113   Lease liability – current     876       826   Payroll taxes     775       1,163   Other     176       196         14,183       15,312     (1) Included in this figure is an amount relating to a facility agreement with KEME for €690,073 at the time it was entered into. The purpose of this agreement is to enable KEME to finance their hydrogen production plant and was negotiated along with the Equipment supply and installation services contract. Interest is accrued at a rate of 7%. Under this agreement, we transferred €0.53 million on May 17, 2023. This amount remains outstanding at June 30, 2024. As part of the Equipment supply and installation services contract, KEME made an advanced payment of €1.1 million during the first quarter of 2023. As no revenue has been recognised to date for this contract, the net payable position at June 30, 2024 to KEME was €0.53 million.   (2) This amount relates to a balance owing to an affiliate, MagP Inovação, S.A. (“MagP”). Please refer to the 2023 Form 20-F for details of the Group’s relationship with MagP.

v3.25.0.1

Provisions	6 Months Ended
	Jun. 30, 2024
Provisions [Abstract]
Provisions	11. Provisions       Onerous contract provisions     Warranties     Total       €’000     €’000     €’000   At January 1, 2023     8,403       -       8,403   Provisions made during the year     -       -       -   Provisions used during the year     (4,972 )     -       (4,972 ) Provisions reversed during the year     (2,822 )     -       (2,822 ) Transfers     (197 )     197       -   At December 31, 2023     412       197       609   Movements during the period     -       -       -   At June 30, 2024     412       197       609

v3.25.0.1

Deferred Income	6 Months Ended
	Jun. 30, 2024
Deferred Income [Abstract]
Deferred Income	12. Deferred income       2024     2023   Current   €’000     €’000   Grant – C5 (IAPMEI)     -       -   Income deferrals - customers     1,353       -         1,353       -   Non-Current                 Grant – C5 (IAPMEI)     9,771       9,299         9,771       9,299     During the period end June 30, 2024, €2.0 million previously received in relation to the C-14 grant award was reclassified from PPE and subsequently recognised under deferred income. This grant funding can only be spent on a specific project and cannot be used by the Group in the ordinary course of business. As no project expenditure has been incurred to date, this amount will be recognised as deferred income until such time that it can be offset against project expenditure. Customer income referrals relate to cash received from various customers and will remain in deferred income until such a time that the revenue can be recognised in line with the Company’s revenue recognition accounting policy.

v3.25.0.1

Publicly Floated Warrants	6 Months Ended
	Jun. 30, 2024
Publicly Floated Warrants [Abstract]
Publicly floated warrants	13. Publicly floated warrants   The functional currency of the Company is the Euro and as the exercise price of the Company’s share purchase warrants is fixed in US Dollars, these warrants are considered a liability as a variable amount of cash in the Company’s functional currency will be received on exercise. Accordingly, these warrants are classified and accounted for as a derivative liability at fair value through profit or loss.   As of June 30, 2024 and December 31, 2023 there were 8,869,633 warrants outstanding. The warrants entitle the holder to purchase one Class A ordinary share of Parent at an exercise price of $11.50 per share. Until warrant holders acquire the Parent’s Class A ordinary shares upon exercise of such warrants, they have no rights with respect to the Parent’s Class A ordinary shares. The warrants expire on December 10, 2025, or earlier upon redemption or liquidation in accordance with their terms.   The fair value of the tradeable warrants is determined with reference to the prevailing market price for warrants that are trading on the NASDAQ under the ticker HTOOW.       Total no. of warrants   In issue at December 31, 2022     8,869,633   Exercise of warrants during the year     -   In issue at December 31, 2023     8,869,633   Exercise of warrants during the period     -   In issue at June 30, 2024     8,869,633     The fair value of the warrants as at June 30, 2024 and December 31, 2023 was $0.29 and $0.92 respectively. See reconciliation of fair values below.       €’000   Balance – December 31, 2021     15,271   Fair value movement on warrants unexercised (including exchange differences)     (7,620 ) Balance – December 31, 2022     7,651   Fair value movement on warrants unexercised (including exchange differences)*     (6,886 ) Balance – December 31, 2023     765   Fair value movement on warrants unexercised (including exchange differences)*     (309 ) Balance – June 30, 2024     456     * recognised in profit or loss - Adjustments to the fair value of derivatives – warrants ** recognised in profit or loss - Other finance income *** recognised in equity – Share premium

v3.25.0.1

Financial Instruments and Risk Management	6 Months Ended
	Jun. 30, 2024
Financial Instruments and Risk Management [Abstract]
Financial instruments and risk management	14. Financial instruments and risk management   The Group’s operations expose it to various financial risks that include credit risk, liquidity risk and market risk. The Group has a risk management framework in place which seeks to limit the impact of these risks on the financial performance of the Group. It is the policy of the Group to manage these risks in a non-speculative manner. These unaudited condensed consolidated financial statements do not include all financial risk management information and disclosures required in the annual financial statements and should be read in conjunction with the 2023 Form 20-F. There have been no changes in the Group’s risk management policies in the period.    Accounting classifications and fair value   The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:   ● Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities; ● Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and ● Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.   The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. There were no transfers between fair value levels during the period. As at June 30, 2024, the tradeable warrants are measured at fair value using Level 1 inputs. The fair value of the tradeable warrants is measured based on quoted market prices at each reporting date. Until the Group disposed of all its positions, the short-term investments were previously measured at fair value using Level 1 inputs.       Carrying value     Fair value       Cash and receivables     Liabilities     Total carrying amount     Level 1     Level 2     Level 3     Total       €’000     €’000     €’000     €’000     €’000     €’000     €’000   30 June 2024                                           Cash and cash equivalents     411       -       411       -       -       -           Other receivables*     909       -       909       -       -       -           Trade payables     -       (10,994 )     (10,994 )     -       -       -           Warrants     -       (456 )     (456 )     (456 )     -       -       (456 ) Amounts owed to related parties     -       (1,363 )     (1,363 )     -       -       -           Loans and borrowings     -       (1,186 )     (1,186 )                                 Other payables**     -       (176 )     (176 )     -       -       -                 1,320       (14,175 )     (12,855 )     (456 )     -       -       (456 ) 31 December 2023                                                         Cash and cash equivalents     1,147       -       1,147       -       -       -       -   Trade receivables     1,473       -       1,473       -       -       -       -   Other receivables*     671       -       671       -       -       -       -   Trade payables     -       (11,015 )     (11,015 )     -       -       -       -   Warrants     -       (765 )     (765 )     (765 )     -       -       (765 ) Amounts owed to related parties     -       (2,113 )     (2,113 )     -       -       -       -   Loans and borrowings     -       (1,326 )     (1,326 )     -       -       -       -   Other payables**     -       (195 )     (195 )     -       -       -       -         3,291       (15,414 )     (12,123 )     (765 )     -       -       (765 )   * Prepayments and VAT have been excluded as they are not classified as a financial asset. ** Employment taxes have been excluded as these are statutory liabilities. Cash and cash equivalents including the short-term bank deposits   For cash and cash equivalents, all of which have a maturity of less than six months, the carrying value is deemed to reflect a reasonable approximation of fair value.   Other receivables and payables   For the receivables and payables with a remaining term of less than one year or on demand balances, the carrying amount less impairment allowances, where appropriate, is a reasonable approximation of fair value.   Foreign exchange risk   The Group uses the Euro as its functional currency. Foreign exchange rate risk is the risk that the fair value of Group assets or liabilities, or future expected cash flows will fluctuate because of changes in foreign currency exchange rates. While the Company’s shares are listed in US dollars, the currency of the primary operating environment of the Group is the Euro, and its exposure to the risk of changes in foreign currency would arise primarily when revenue or expense is denominated in a currency other than the Euro. The Company currently has no operations outside of the Eurozone, so the effect of the translation of foreign operations is not significant to the Group. At June 30, 2024 and December 31, 2023, the Company had USD and EUR cash balances of approximately $0.02 million (December 2023: $0.3 million), and €3 million (December 2023: €7.8 million) respectively. The following significant exchange rates have been applied during the period.       Average rate     Period-end spot rate       2024     2023     2024     2023   Euro                         USD     1.0808       1.081       1.0705       1.0866

v3.25.0.1

Loss Per Ordinary Share	6 Months Ended
	Jun. 30, 2024
Loss Per Ordinary Share [Abstract]
Loss per ordinary share	15. Loss per ordinary share       2024     2023   Basic loss per Class A ordinary share     (0.47 )     (1.03 ) Diluted (loss) per Class A ordinary share     (0.47 )     (1.03 ) Number of ordinary shares used for loss per share (weighted average)                 Basic     16,964,586       14,439,644   Diluted     16,964,586       14,439,644     Basic loss per share is calculated by dividing the loss for the year attributable to ordinary equity holders of the parent by the weighted average number of Class A ordinary shares outstanding during the period.   Diluted loss per share is calculated by dividing the loss attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of Class A ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into Class A ordinary shares.   The diluted loss per share reflects the basic loss per share since the effects of potentially dilutive securities are anti-dilutive. For the periods included in these financial statements the Group was loss-making, therefore, the following anti-dilutive instruments are excluded in the calculation of diluted weighted average number of ordinary shares outstanding:       30 June 2024     31 December 2023   Warrants     9,092,121       8,869,633   RSUs - outstanding     18,901       54,952   RSUs – vested but no ordinary shares issued     150,771       115,820   Incentive shares     5,000       5,000   Share options     1,626,256       1,482,628

v3.25.0.1

Subsequent Events	6 Months Ended
	Jun. 30, 2024
Subsequent Events [Abstract]
Subsequent events	17. Subsequent events   The following subsequent events occurred post the relevant reporting period and the issuance of the Financial Statements.   Subscription agreement - Hydrogenial S.A.   On August 28, 2024, the Company entered into a Subscription Agreement with Hydrogenial S.A. (“Hydrogenial” or the “Investor”) for a $33.5 million investment, involving the purchase of 43,790,850 Class A shares and warrants for an additional 13,137,254 shares. The Investor failed to fund the transaction by the contractual closing date of September 30, 2024. The funding deadline was subsequently extended to October 25, 2024, at which date, the investor failed to fund.   On November 6, 2024, the Company’s subsidiary, Fusion Fuel Portugal, filed a €27 million damages claim against Hydrogenial’s CEO, in the Lisbon civil court, citing financial misrepresentation and the resulting pending insolvency of Fusion Fuel Portugal (see below). Despite the claim and insolvency, the Investor’s funding obligation remains in effect and management continue to have active discussions regarding the funding of the subscription agreement.   Insolvency of operating subsidiary   On November 11, 2024, Fusion Fuel Portugal, S.A. (“Fusion Fuel Portugal”), a wholly owned subsidiary of the Group filed for insolvency in the civil court of Sintra, Portugal, with a process number of 17685/24.5T8 SNT, and is currently undergoing insolvency proceedings. In Portugal, the courts typically appoint an insolvency administrator in the 3 to 5 working days after the filing. At this point, the insolvency administrator takes control of the company and defines the next steps for its activities and creditors. The insolvency administrator was appointed on November 14, 2024.   The Company no longer controls Fusion Fuel Portugal, S.A, for accounting purposes, and therefore, expects that it will be deconsolidated prospectively from 11 November 2024 in the 2024 financial statements.   Default notice on Belike Nominees Pty Ltd promissory notes   On May 7, 2024, Belike Nominees Pty Ltd issued a $1.15 million Placement Note (“May 2024 Note”), which included default provisions for bankruptcy or insolvency events.   The Placement Note provides for certain customary events of default (each, an “Event of Default”), including, among other things, the bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors that are instituted by or against the Company or any subsidiary of the Company (a “Bankruptcy Event of Default”).   As a result of Fusion Fuel Portugal’s insolvency filing on November 11, 2024, a Bankruptcy Event of Default may have been triggered, requiring immediate repayment at 125% of the outstanding amount, with an 18% annual default interest rate. As of that date, the outstanding balance was approximately $0.14 million. The Company has initiated discussions with the noteholder regarding a forbearance agreement or waiver, but no assurance can be given that an agreement will be reached.   Merger with Quality Industrial Corp.   On November 26, 2024, Parent completed the acquisition of a 69.36% stake in Quality Industrial Corp., a Nevada corporation (“Quality” or “QIND”), pursuant to a Stock Purchase Agreement dated November 18, 2024. The transaction involved issuing 3,818,969 Class A Ordinary Shares (representing 19.99% of the Company’s issued shares), and 4,171,327 Series A Convertible Preferred Shares, which will convert into 41,713,270 Class A shares upon shareholder and Nasdaq approval. As per SEC guidelines, the Company is required to disclose pro forma combined balance sheet and statement of operations for the two entities as at their most recent audited financial statements, to give effect to the Acquisition as if it had occurred on December 31, 2023. See disclosure note 18 for more details.   QIND is focused on acquisitions in the industrial, oil & gas, and utility sectors and seeks to pursue and execute acquisitions which accelerate their growth strategy. The entity has 6 employees. It has a clear acquisition strategy in place, targeting acquisitions to drive long-term value creation for shareholders. On March 27, 2024, QIND entered into a definitive Stock Purchase Agreement with the shareholders of Al Shola Al Modea Gas Distribution LLC (“ASG” or “Al Shola Gas”) to acquire a 51% interest in ASG. The Closing of the transaction took place upon the execution of the definitive Stock Purchase Agreement. Al Shola Gas is an engineering and distribution company in the LPG industry in the United Arab Emirates and was established in 1980 with around 120 employees. The company is one of the region’s leading suppliers and contractors of LPG centralized pipeline systems and is approved by The General Directorate of Civil Defense, Government of Dubai, as a Central Gas Contractor and LPG Supplier. Al Shola Gas is ISO 9001 certified and offers a wide range of services including Consultation, Design, Supply, Installation, Maintenance, Distribution and Commissioning of Central Gas Systems. ASG provides a wide range of bespoke solutions across all LPG related requirements.   Sale of Group´s interest in P2X Spain Sociedad Ltd. (previously Fusion Fuel Spain S.L.)   On 19 December 2024, Fusion Fuel Green Plc. transferred to EREE Desarrollos Empresariales S.L., 1,500 shares of P2X Spain Sociedad Ltd. representing 50% of its share capital, by virtue of the public deed executed before the Notary of Madrid. This is the entirety of Fusion Fuel Green Plc´s holdings in the company. The P2X Spain Sociedad Ltd. transfer deed contains the following two conditions that must be fulfilled for the sale and purchase to be completed. The first is the transfer of €370,100 when P2X Spain Sociedad Ltd. signs their deal with another company in Spain and a second payment of €145,000 with the closure of the consortium agreement in relation to the ECO2Fly Project of which P2X Spain Sociedad Ltd. is a member.   Equity line of credit and Convertible note – Keystone Capital & other investors   On January 10, 2025, the Company entered into a Securities Purchase Agreement with institutional investors for the private placement of senior convertible notes and warrants. The company issued senior convertible notes with an aggregate principal amount of $1.28 million at a 20% original issue discount, resulting in net proceeds of $1.025 million. The notes bear interest at 8% per annum, increasing to 22% upon default, and mature on July 10, 2026. The notes are convertible at the holder’s option into Class A Ordinary Shares at a conversion price of $0.559 per share, subject to adjustments, including full-ratchet antidilution protections and price resets based on market conditions. In the event of default, the notes may be converted at 80% of the lowest volume-weighted average price over the five trading days preceding the conversion, subject to a floor price of $0.1118 per share. The agreement restricts the company from entering into variable rate transactions, issuing new debt, declaring dividends, or conducting more than one reverse share split without investor consent. Investors have certain redemption rights in cases of change of control, asset sales, or subsequent equity placements, with redemptions occurring at a 15% premium to the greater of the outstanding amount or an alternate conversion-based calculation.   Additionally, the company entered into a registration rights agreement and $25 million equity line of credit (ELOC) arrangement. Under the ELOC, Parent may register Class A Ordinary Shares for resale, with restrictions on issuing new securities for 90 trading days following the effectiveness of the resale registration statement. Investors have a right of first refusal on any subsequent financing transactions through July 10, 2025. The company is required to reserve at least 150% of the maximum number of shares issuable upon conversion of the notes and exercise of the related warrants. The January 2025 warrants, issued in conjunction with the notes, allow investors to purchase 2,292,040 Class A Ordinary Shares at an initial exercise price of $0.559 per share, with similar antidilution protections and price adjustments. Nasdaq equity and minimum bid-price compliance   On November 5, 2024, Nasdaq’s Listing Qualifications Staff issued a Staff Determination Notice denying Fusion Fuel’s request to transfer to the Nasdaq Capital Market, following its failure to regain compliance with Nasdaq’s $10 million stockholders’ equity requirement by the November 4, 2024 deadline.   Previously, the Company had been notified on May 8, 2024, that it was non-compliant with Nasdaq Listing Rule 5450(b)(1)(A), having reported $3,022,125 in stockholders’ equity in its 2023 Form 20-F. Additionally, on August 1, 2024, the Company received notice of non-compliance with Nasdaq’s $1.00 minimum bid price rule, as its stock had traded below this threshold for 31 consecutive business days.   The Company attend a hearing before Nasdaq’s Hearings Panel on January 8, which temporarily stays any delisting action. On January 30, Nasdaq approved Fusion Fuel Green PLC’s request to transfer its listing to The Nasdaq Capital Market, granting the company an additional 180-day grace period, until July 28, 2025, to regain compliance with the $1 minimum bid price requirement.   If, at any time before this deadline, the stock maintains a closing bid price of at least $1 per share for 10 consecutive business days Nasdaq will confirm compliance, and the issue will be resolved.

v3.25.0.1

Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023	6 Months Ended
	Jun. 30, 2024
Audited Pro Forma Combined Financial Information [Abstract]
Audited pro forma combined financial information as of the year ended December 31, 2023	18. Audited pro forma combined financial information as of the year ended December 31, 2023   On November 26, 2024, Parent completed the acquisition (the “Acquisition”) of a 69.36% stake in Quality Industrial Corp., a Nevada corporation (“Quality” or “QIND”), pursuant to a Stock Purchase Agreement dated November 18, 2024. The transaction involved issuing 3,818,969 Class A Ordinary Shares (representing 19.99% of the Company’s issued shares), and 4,171,327 Series A Convertible Preferred Shares, which will convert into 41,713,270 Class A shares upon shareholder and Nasdaq approval.   The Acquisition was considered to be a business combination accounted for under International Financial Reporting Standards (“IFRS”) acquisition method of accounting. In accordance with IFRS 3 - Business Combinations, Fusion Fuel has been identified as the accounting acquirer, and Quality as the target, for accounting purposes. Consequently, Fusion Fuel will consolidate Quality into its financial statements for the year ended 2024.   Accordingly, the assets acquired, and liabilities assumed have been recorded at their estimated fair values at the date of the Acquisition. The purchase price has been allocated on a preliminary basis to the assets acquired and the liabilities assumed based upon estimates of their respective fair values, which are subject to potential adjustment upon finalization of the purchase price allocation.   The following audited combined pro forma balance sheet as of December 31, 2023, gives effect to the Acquisition as if it had been completed as of December 31, 2023. The pro forma information has been prepared by our management, and it may not be indicative of the results that actually would have occurred had the transaction been in effect on the dates indicated, nor does it purport to indicate the results that may be obtained in the future. The pro forma information is based on provisional amounts allocated by management to various assets and liabilities acquired and may be eventually different than currently presented.     HTOO     QIND     Pro-forma adjustment     Consolidated Pro-Forma       31-Dec-23     31-Dec-23     Share issuance (69.36%)     Transaction costs     Share conversion     31-Dec-23   ASSETS                                     Current Assets                                     Cash and Cash Equivalents     1,267,023       2,492               (198,688) 5              1,070,827   Inventory     4,057,220       -                               4,057,220   Other Current Assets     7,185,958       2,000,000                               9,185,958   Total Current Assets     12,510,202       2,002,492       -       (198,688 )             14,314,006                                                     Non-Current Assets                                                 Long Term Investments     1,299,135       6,500,000                               7,799,135   Property, Plant and Equipment     27,379,320       -                               27,379,320   Related Party Receivables     -       333,133                               333,133   Goodwill & other Intangible assets     5,608,644       -       14,874,243 1                      20,482,887   Total Non-current Assets     34,287,100       6,833,133       14,874,243       -               55,994,476   Total Assets     46,797,302       8,835,625       14,874,243       (198,688 )             70,308,482                                                     LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                 Current Liabilities                                                 Accounts Payable     16,920,104       166,577                               17,086,681   Other Payables - current     1,464,828       5,379,554                               6,844,382   Convertible Notes, net of discount     -       2,310,109                               2,310,109   Other Current Liabilities     4,116,218       235,886                               4,352,104   Total Current Liabilities     22,501,149       8,092,126       -       -               30,593,275                                                     Non-Current Liabilities                                                 Lease Operating Non-Current Portion     11,002,787                                       11,002,787   Deferred income - Grant     10,274,954                                       10,274,954   Total Long-term Liabilities     21,277,741       -       -       -               21,277,741   Total Liabilities     43,778,890       8,092,126       -       -               51,871,016                                                     Stockholders’ Equity                                                 Preferred stock     -       -       417 2              (417) 7      -   Common stock     2,131       127,132       (126,750) 3              4,171 7      6,684   Additional paid-in capital     249,202,406       17,248,964       (1,859,864) 4              (3,754) 7      264,587,752   Retained Earnings/ accumulated Deficit     (246,186,125 )     (16,632,597 )     16,632,597     (198,688) 5      227,844 8      (246,156,969 ) Noncontrolling interest     -       -       227,844 6              (227,844) 8      -   Total stockholders’ Equity     3,018,412       743,499       14,874,243       (198,688 )     -       18,437,466   Total liabilities and stockholders’ Equity     46,797,302       8,835,625       14,874,243       (198,688 )     -       70,308,482       HTOO     QIND     Pro-forma adjustment     Consolidated   All figures are in $ USD unless otherwise stated   31-Dec-23     31-Dec-23     Transaction costs     31-Dec-23                             Revenue     4,481,822       -       -       4,481,822                                     Cost of revenues     21,727,430       -       -       21,727,430                                     Gross profit     (17,245,608 )     -       -       (17,245,608 )                                   Total operating expenses     22,842,112       2,704,320       198,688       25,745,119                                     Income (loss) from operations     (40,087,720 )     (2,704,320 )     (198,688 )     (42,990,727 )                                   Other (income) expenses     (6,977,679 )     1,457,477       -       (5,520,202 )                                   Operating profit before tax     (33,110,041 )     (4,161,797 )     (198,688 )     (37,470,526 )   i. Basis of Presentation   The audited pro forma combined financial statements are based on Fusion Fuel and Quality’s historical consolidated audited financial statements as adjusted to give effect to the Acquisition and the shares issued as part of the Acquisition. The audited pro forma condensed combined financial information for the year ended December 31, 2023 was prepared using the acquisition method of accounting and gives effect to the Acquisition as if it had occurred on December 31, 2023.   Historical financial information has been adjusted in the pro forma balance sheet to pro forma events that are:   (1) directly attributable to the Acquisition; and (2) factually supportable.   The pro forma adjustments presented in the pro forma combined balance sheet and statement of operations are described in Note (iii) - Pro Forma Adjustments.   ii. Preliminary Purchase Price Allocation   On November 26, 2024, Fusion Fuel completed the acquisition of Quality, pursuant to a Stock Purchase Agreement dated November 18, 2024. Under the terms of the agreement, 78,312,334 shares of common stock and 20,000 shares of Series B Preferred Stock of Quality were sold, representing approximately 69.36% of Quality’s equity value.   The purchase price was structured through a share swap whereby Fusion Fuel issued 3,818,969 Class A Ordinary Shares (representing 19.99% of the Company’s issued shares), and 4,171,327 Series A Convertible Preferred Shares, which will convert into 41,713,270 Class A shares upon shareholder and Nasdaq approval.   The pro forma financial statements have been prepared on the basis of the acquisition method, in accordance with IFRS 3, whereby Quality’s historical financial results have been adjusted for the effects of fair value measurements as of the acquisition date. The acquirer has been identified as Fusion Fuel Green PLC, and the target as Quality Industrial Corp.   The purchase price was preliminarily allocated based on the estimated fair value of net assets acquired and liabilities assumed at the date of the acquisition. The preliminary purchase price allocation is subject to further refinement and may require adjustments to arrive at the final purchase price allocation. The net assets of Quality were $743,499 as of December 31, 2023, of which $515,655 (69.36%) would have been owned by Fusion Fuel if the Acquisition had occurred on December 31, 2023. The remaining $227,844 (30.64%) of the net assets are held by minority interest.   The dollar value of the purchase price paid equates to approx. $15,389,898 for 69.36% of Quality. The purchase price, minus the net assets held by Parent would result in an implied goodwill value of $14,874,243 if the acquisition had occurred on December 31, 2023.   Once transaction closing requirements have been met, i.e. once HTOO board and Nasdaq approve the transaction, the 4,171,328 Series A Convertible Preferred Shares will convert on a 1-for-10 basis into Series A Ordinary Shares and the non-controlling interest (remaining 30.64%) will be subsumed into HTOO. QIND will at this point be considered a wholly owned subsidiary of HTOO.   iii. Pro Forma Transaction Accounting Adjustments   The pro-forma adjustments are based on our preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the audited pro-forma condensed combined financial information:   To give effect of consolidation as per general accepted principles of consolidation, purchase consideration, goodwill and minority interest has been recorded.   1. To record purchase price in excess of fair value of net assets acquired, based on a preliminary purchase price allocation.   2. To record the issuance of 4,171,328 Series A Convertible Preferred Shares of the Company, at a price per of $0.338. These Preferred Ordinary Shares convert into common shares on a 1-for-10 basis.   3. To record the issuance of 3,818,969 Series A Ordinary Shares of the Company, at a price per of $0.338.   4. To record the additional paid in capital recorded in the Acquisition.   5. To record costs associated with the Acquisition.   6. To represent the value of QIND that is not directly owned by HTOO at the time the Acquisition closes.   7. To account for the conversion of preferred shares into common shares at a 10 for 1 ratio once transaction closing requirements are met, at which point QIND becomes a wholly owned subsidiary of HTOO.   8. To account for the additional 30.64% equity value of QIND that has been subsumed into HTOO and is no longer considered non-controlling interest, post transaction closing requirements are met.

v3.25.0.1

Group Companies	6 Months Ended
	Jun. 30, 2024
Group Companies [Abstract]
Group companies	19. Group companies   Entity name   Country of incorporation   Principal activities   Group interest at June 30, 2023   Fusion Fuel Portugal, S.A.   Portugal   Operating company     100 % Fuel Cell Évora, Unipessoal LDA   Portugal   Hydrogen production     100 %  Fuel Cell Évora I, Unipessoal LDA   Portugal   Hydrogen production     100 % Fusion Fuel USA, Inc.   United States   Operating company     100 % Fusion Fuel Spain, S.L.   Spain   Hydrogen production     50 % Fusion Fuel Australia, PTY Ltd   Australia   Hydrogen production     100 % Fusion Fuel Australia – Pilot PTY Ltd   Australia   Hydrogen production     100 % Hevo Sines, Unipessoal LDA   Portugal   Hydrogen production     100 % Hevo Sines II, Unipessoal LDA   Portugal   Hydrogen production     100 % Hevo Sines III, Unipessoal LDA   Portugal   Hydrogen production     100 % Hevo Portugal, Unipessoal, LDA   Portugal   Hydrogen production     100 % Hanoi Asset Management, S.L.   Spain   No activity to date     100 % Hevo Aveiro, Unipessoal LDA   Portugal   Hydrogen production     100 %   Note that the group companies have significantly changed post the reporting period due to the insolvency of Fusion Fuel Portugal, the merger with QIND and the subsequent incorporations of Bright Hydrogen Solutions.

v3.25.0.1

Approval of Financial Statements	6 Months Ended
	Jun. 30, 2024
Approval of Financial Statements [Abstract]
Approval of financial statements	20. Approval of financial statements   The directors approved the unaudited condensed consolidated financial statements on February 27, 2025

v3.25.0.1

Accounting Policies, by Policy (Policies)	6 Months Ended
	Jun. 30, 2024
Accounting Policies [Abstract]
Business activity	Business activity Fusion Fuel Green plc (the “Parent” or “Company”) was incorporated in Ireland on April 3, 2020. The Company and its subsidiaries are collectively referred to as the “Group”. The registered office of the Company is The Victorians, 15-18 Earlsfort Terrace, Saint Kevin’s, Dublin 2, D02 YX28, Ireland. The Company is a leading provider of full-service energy engineering and advisory solutions, specializing in green hydrogen and industrial gas applications. Through its two operating companies, Fusion Fuel offers a broad portfolio of services, including the design, supply, installation, and maintenance of energy systems, as well as the transport and distribution of liquefied petroleum gas. The Company serves a diverse customer base spanning commercial buildings, mixed-use developments, heavy industries, and food service sectors, while continuing to drive innovation in the renewable energy space. Fusion Fuel is committed to advancing the global energy transition by delivering sustainable, efficient, and reliable energy solutions. The business activity of the Group changed significantly in the months following the reporting period in review. These changes will be detailed further in our subsequent events disclosures within this report. During the reporting period in review, the Group’s mission was to produce hydrogen with zero carbon emissions, thereby contributing to a future of sustainable and affordable clean energy and the reversal of climate change. The hydrogen was produced using renewable energy resulting in zero carbon emissions (“Green Hydrogen”) with components built in-house and using the know-how and accumulated experience of its team’s strategic and continuous investment in research and development (“R&D”) around solar technologies. The Company has a well-established risk management process which is managed through its management team, finance committee and board of directors. The key risks are evaluated throughout the period with key business leaders tasked to manage each risk as required. These risks are assessed through a risk matrix which evaluates each risk’s impact and likelihood.
Basis of presentation	Basis of presentation The unaudited condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” (IAS 34). In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The condensed consolidated financial statements and accompanying notes were prepared in conformity with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) which requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Group’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 20-F for the fiscal year ended December 31, 2023 (the “2023 Form 20-F”). These condensed consolidated financial statements are presented in Euro, the functional and presentation currency of the Company. All financial information presented in euro has been rounded to the nearest thousand, unless otherwise stated. As a result of rounding, numbers or percentages may not add up to the total.
Use of estimates	Use of estimates Preparation of condensed consolidated financial statements in conformity with IFRS requires the use of estimates and judgments that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. IFRS requires the Company to make estimates and judgments in several areas, including, but not limited to, revenue, expenses, assets and liabilities, income taxes and the accompanying disclosures. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, onerous contract provisions, impairment of capitalized development costs, impairment of property, plant and equipment and the valuation of inventory. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates as there are changes in circumstances, facts and experience. Actual results could differ materially from those estimates.
Significant accounting policies	Significant accounting policies There have been no material changes to the Company’s significant accounting policies as compared to the significant accounting policies described in the 2023 Form 20-F.
New standards or amendments	New standards or amendments There were no new standards effective for the period commencing 1 January 2023 that had a material impact on the Group. A number of new standards, amendments to standards and interpretations are not yet effective for the period and have not yet been applied in preparing the unaudited condensed consolidated financial statements. The Group is in the process of assessing the impact on the financial statements of these new standards and amendments. Management currently expects no material impact on the Group’s financial statements on adoption of these amendments.
Segment information	Segment information The Group manages its operations as a single segment for purposes of assessing performance and making operating decisions. The Group’s focus is on the research and development around solar technologies. The Executive Committee, and in particular the Chief Financial Officer, is the chief operating decision maker that regularly reviews the consolidated operating results and makes decisions about the allocation of the Group’s resources.
At the Market Issuance Sales Agreement (“ATM”)	At the Market Issuance Sales Agreement (“ATM”) On June 6, 2022, the Parent entered into an At the Market Issuance Sales Agreement (“the ATM”) with B. Riley Securities, Inc., Fearnley Securities Inc., and H.C. Wainwright & Co., LLC, pursuant to which the Company may offer and sell, from time to time, through or to the agents, acting as agent or principal, Class A ordinary shares of the Company having an aggregate offering price of up to $30 million under the Company’s Form F-3 registration statement. During 2023, the Parent sold 1,103,368 class A ordinary shares for net proceeds of $3.3 (€3.2) million and paid $0.1 million (€0.1 million) in commissions to agents as part of these trades. During the six months ended June 30, 2024, the Parent sold 2,345,452 class A ordinary shares for net proceeds of $6.4 million (€5.9 million) and paid $0.2 million (€0.2 million) in commissions to agents as part of these trades.
Finance Update	Finance update Convertible promissory note (the “Placement Note”) On November 27, 2023, the Parent entered into an agreement for financing of up to $20 million of senior convertible notes with Belike Nominees Pty Ltd., a Macquarie Group entity (“Macquarie Group”). This facility has a two-year term and amounts will be drawn down in tranches. On May 7, 2024, the Company consummated the initial tranche in the amount of $1,150,000 and issued to the Investors, a Placement Note in such amount. The holders of the Placement Note are entitled at any time and from time to time to convert all or any portion of the outstanding and unpaid principal, interest and late fees if any into validly issued, fully paid and non-assessable Class A Ordinary Shares of the Company (“Placement Note Shares”) in accordance with a predefined conversion rate. The estimated number of convertible shares of 1,120,329 was determined based on the share price as of May 1, 2024. In addition, the Parent also agreed to issue to the Investors, for no additional consideration, private warrants (the “Placement Warrants”) to purchase 208,582 Company’s Class A ordinary shares, $0.0001 par value per share (“Class A Ordinary Shares”). This amount is included in the number of Placement Note Shares above. During the six months ended June 30, 2024, Placement Note Shares of an amount of 89,792 were issued by the company to the Macquarie Group for total proceeds of $0.9 (€0.8) million. See subsequent events note to the financial statements for further information pertaining to status of the promissory notes and other finance updates at date of review sign-off.
Going concern	Going concern In adopting the going concern basis in preparing the consolidated financial statements, the Directors have considered the Group’s cash on hand, its future cash generation projections and plans, together with factors likely to affect its future performance, as well as the Group’s principal risks and uncertainties. On November 27, 2023, the Parent entered into an agreement for financing of up to $20 million of senior convertible notes with Belike Nominees Pty Ltd., a Macquarie Group entity. This facility has a two-year term and it’s expected that amounts will be drawn down in tranches. The first tranche of $1.15 million was drawn down in May 2024. No other tranches have been drawn down to date. In February 2024, Parent raised net proceeds of $6,398,264 through the ATM facility. On November 11, 2024, Fusion Fuel Portugal, S.A. (“Fusion Fuel Portugal”), a wholly owned subsidiary of the Group filed for insolvency in the civil court of Sintra, Portugal and is currently undergoing insolvency proceedings. An event of default was triggered as per the terms of the May 2024 Note, due to Fusion Fuel Portugal’s insolvency filing. As of that date, the outstanding balance was approximately $0.14 million. The Company has initiated discussions with the noteholder regarding a forbearance agreement or waiver, but no assurance can be given that an agreement will be reached. On November 26, 2024, Parent completed the acquisition of a 69.36% stake in Quality Industrial Corp., a Nevada corporation (“Quality” or “QIND”), pursuant to a Stock Purchase Agreement dated November 18, 2024. The transaction involved issuing 3,818,969 Class A Ordinary Shares (representing 19.99% of the Company’s issued shares), and 4,171,327 Series A Convertible Preferred Shares, which will convert into 41,713,270 Class A shares upon shareholder and Nasdaq approval. On 19 December 2024, Fusion Fuel Green Plc. transferred to EREE Desarrollos Empresariales S.L., 1,500 shares of P2X Spain Sociedad Ltd. representing 50% of its share capital, by virtue of the public deed executed before the Notary of Madrid. This is the entirety of Fusion Fuel Green Plc´s holdings in the company. The P2X Spain Sociedad Ltd. transfer deed contains the following two conditions that must be fulfilled for the sale and purchase to be completed. The first is the transfer of €370,100 when P2X Spain Sociedad Ltd. signs their deal with another company in Spain and a second payment of €145,000 with the closure of the consortium agreement in relation to the ECO2Fly Project of which P2X Spain Sociedad Ltd. is a member. On January 10, 2025, the Parent entered into an agreement with an institutional investor for a $25 million equity line of credit, which, upon the satisfaction of certain conditions, will provide the Company with access to additional capital to support its operational and strategic growth initiatives. On January 13, 2025, the Parent entered into an agreement for financing of $1.28 million of senior convertible notes private placement with a group of institutional investors. Following the insolvency of Fusion Fuel Portugal and the acquisition of a controlling stake in QIND, the Group has replaced a loss-making operating entity with a profit generating entity, being QINDs subsidiary; Al-Shola Gas (Al Shola Al Modea Gas Distribution LLC). In addition to the acquisition, the Group also incorporated a fully owned entity called Bright Hydrogen Solutions Limited whose principal activity will be the provision of engineering and advisory services and the supply of equipment. The Group expects to continue to incur net losses for the next 12-18 months and is highly dependent on its ability to find additional sources of funding in the form of debt or equity financing to fund its planned operations. The Group’s success depends on the performance of its two operating subsidiaries, Al-Shola Gas and Bright Hydrogen Solutions. There is no assurance that the Group’s subsidiaries will be successful, especially Bright Hydrogen Solutions as it’s a newly incorporated business with no track record to date. Al-Shola Gas on the other hand has been operating since 1980 years and has been profitable for many years. In addition, Al-Shola Gas announced additional contracts for expected increases in sales in the region of USD 3.5m for fiscal 2025. These conditions raise significant doubt about the Group’s ability to continue as a going concern and therefore, to continue realizing their assets and discharging their liabilities in the normal course of business absent the mitigating actions set out below. Based upon its current operating and financial plans, management is hopeful it will have sufficient access to financial resources to fund operations, having considered the Group’s available cash resources, the agreement with Belike Nominees Pty Ltd, the recently announced equity line of credit, expected inflows from realised by its two operating subsidiaries, future financing options available to the Group (debt and/or equity), the planned operations of the Group and the ability to adjust its plans if required. The inability to consummate further tranches of the financing agreement with Belike Nominees Pty Ltd, utilise the equity line of credit and capitalize on the market sentiment afforded to us following the acquisition of a controlling stake in QIND and resolution of compliance issues with Nasdaq would have a negative impact on the Group’s financial conditions and ability to pursue its business strategies. If the Group is unable to operationalize or obtain alternative funding, the Group could be forced to delay, reduce, or eliminate some or all of its research and development programs or strategic partnerships efforts, which could adversely affect its business prospects, or the Group may be unable to continue operations. Although management intends to pursue plans to obtain alternative funding to finance its operations, there is no assurance that the Group will be successful in obtaining sufficient funding on terms acceptable to the Group to fund continuing operations, if at all. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this material uncertainty. Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Group will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. For this reason, the Directors adopt the going concern basis in preparing the unaudited condensed consolidated financial statements.

v3.25.0.1

Administration Expenses (Tables)	6 Months Ended
	Jun. 30, 2024
Administration Expenses [Abstract]
Schedule of Administration Expenses	For the six months ended June 30, 2024     For the  six months ended June 30, 2023       €’000     €’000   Wages and salaries     3,676       4,943   Depreciation and amortization     1,535       1,192   Professional fees     515       879   Consulting fees     326       895   Other expenses     962       2,904         7,015       10,814

v3.25.0.1

Share-Based Payments (Tables)	6 Months Ended
	Jun. 30, 2024
Share-Based Payments [Abstract]
Schedule of Weighted-Average Grant Date Fair Value of the Rsus Granted	The table below shows the number of RSUs granted covering an equal number of the Company’s Class A ordinary shares and the weighted-average grant date fair value of the RSUs granted:     Number of RSUs     Weighted average Grant date fair value per share   RSUs outstanding December 31, 2022     87,642     $ 11.43   Granted     68,273     $ 3.57   Vested (1)     (86,566 )   $ 9.27   Forfeited     (14,396 )   $ 12.73   RSUs outstanding December 31, 2023     54,953     $ 6.63   Correction of prior period RSUs outstanding (2)     4,329       n.a   RSUs outstanding December 31, 2023     59,282     $ 6.63   Granted     -     $ -   Vested (1)     (39,281 )   $ 8.86   Forfeited     (1,100 )   $ 9.37   RSUs outstanding June 30, 2024     18,901     $ 9.5     (1) No ordinary shares were issued in connection with the RSUs that vested during the six-month period ended June 30, 2024 and the year ended December 31, 2023.   (2) RSUs outstanding as at December 31, 2023 has been amended due to a prior period error.
Schedule of Grant Date Fair Value of Employee and Director Options Granted	The range of assumptions that the Company used to determine the grant date fair value of employee and director options granted were as follows:       Tranche 1     Tranche 2     Directors   Volatility     70.91 %     70.91 %     75.32 % Expected term in years     7       7       6.92   Dividend rate     0 %     0 %     0 % Risk-free interest rate     1.58 %     1.58 %     1.58   Hurdle price     -     $ 18       -   Exercise price   $ 10.50     $ 10.50     $ 6.45   Share price   $ 9.42     $ 9.42     $ 5.03   Fair value of option on grant date   $ 6.14     $ 6.18     $ 3.31
Schedule of Weighted Average Grant Date Fair Value	The table below shows the number of options granted covering an equal number of the Company’s Class A ordinary shares and the weighted-average grant date fair value of the options granted:       Number of options     Weighted average Grant date fair value per share   Options outstanding December 31, 2022     1,666,667     $ 5.21   Granted     154,074     $ 2.87   Vested     (354,074 )   $ 4.71   Forfeited     (666,667 )   $ 6.16   Options outstanding December 31, 2023     800,000     $ 6.14   Granted     143,628     $ 2.87   Vested     (71,814 )   $ 2.87   Forfeited     -     $ -   Options outstanding June 30, 2024     871,814     $ 5.87
Schedule of Non-Executive Directors that were Appointed	As part of their compensation package, the non-executive directors that were appointed in December 2020 were granted 5,000 shares for each year of service to the Company.       Number of shares     Weighted average Grant date fair value per share   Incentive shares outstanding December 31, 2022     5,000     $     23   Granted     -     $ -   Vested     -     $ -   Forfeited     -     $ -   Incentive shares outstanding December 31, 2023     5,000     $ 23   Granted     -     $ -   Vested     -     $ -   Incentive shares outstanding June 30, 2024     5,000       23
Schedule of Reconciliation to Statement of Profit or Loss	Reconciliation to statement of profit or loss – for the six months ended June 30   €’000   2024     2023   RSUs     75       204   Incentive shares     6       28   Options     964       975   Share-based payment expense     1,045       1,207

v3.25.0.1

Inventory (Tables)	6 Months Ended
	Jun. 30, 2024
Inventory [Abstract]
Schedule of Inventory	2024     2023       €’000     €’000   Raw materials     1,867       1,968   Work in progress     776       1,704   Finished product     2,673       -   Total Inventory     5,316       3,672

v3.25.0.1

Cash and Cash Equivalents (Tables)	6 Months Ended
	Jun. 30, 2024
Cash and Cash Equivalents [Abstract]
Schedule of Cash and Cash Equivalents	2024     2023       €’000     €’000   Cash and cash equivalents     25       860   Restricted cash     386       287         411       1,147

v3.25.0.1

Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2024
Intangible Assets [Abstract]
Schedule of Intangible Assets	Completed Development Technology     Product development in progress     Intellectual property and patents registration     Software     Total   2024   €’000     €’000     €’000     €’000     €’000   Cost                               At January 1, 2024     2,996       1,346       1,911       190       6,443   Additions – other*     2       110       -       -       112   Transfer during the year     685       (685 )     -       -       -   At June 30, 2024     3,683       771       1,910       190       6,554                                             Amortisation & impairment                                         At January 1, 2024     (1,321 )     -       (3 )     (43 )     (1,367 ) Amortisation charge     (552 )     -       (1 )     (9 )     (562 ) At June 30, 2024     (1,873 )     -       (4 )     (52 )     (1,929 )                                           Net book value                                         At June 30, 2024     1,810       771       1,907       138       4,625                                             2023                                         Cost                                         At January 1, 2023     2,995       717       1,911       80       5,703   Additions – other*     2       629               109       740   At December 31, 2023     2,996       1,346       1,911       190       6,443                                             Amortisation                                         At January 1, 2023     (330 )     -       (2 )     (20 )     (352 ) Amortisation charge     (990 )             (1 )     (23 )     (1,014 ) At December 31, 2023     (1,321 )     -       (3 )     (43 )     (1,367 )                                           Net book value                                         At January 1, 2023     2,664       717       1,908       60       5,350   At December 31, 2023     1,676       1,346       1,907       147       5,076

v3.25.0.1

Property, Plant and Equipment (Tables)	6 Months Ended
	Jun. 30, 2024
Property, Plant and Equipment [Abstract]
Schedule of Property, Plant and Equipment	Assets under construction     Plant and machinery     Office and other equipment     Right of use assets     Total   2024   €’000     €’000     €’000     €’000     €’000   Cost                               At January 1, 2024     14,726       5,846       422       11,984       32,978   Additions during the year     6       2       1       27       36   Transfer to inventory     -                               -   Revaluation of ROU assets     -       -       -       455       455   At June 30, 2024     14,731       5,848       423       12,466       33,469                                             Depreciation                                         At January 1, 2024     (3,317 )     (2,985 )     (185 )     (1,715 )     (8,202 ) Charge for year     -       (410 )     (47 )     (515 )     (972 ) Impairment charge     -       -       -       -       -   At June 30, 2024     (3,317 )     (3,395 )     (231 )     (2,230 )     (9,173 )                                           Net book values                                         At June 30, 2024     11,414       2,453       192       10,236       24,296   At December 31, 2023     11,409       2,861       237       10,269       24,776                                             2023                                         Cost                                         At January 1, 2023     15,106       1,337       389       8,762       25,594   Additions during the year     8,314       243       33       3,072       11,662   Transfer to inventory     (161 )                             (161 ) Reclassification to assets held for sale     (3,957 )     -       -       -       (3,957 ) Disposals     (310 )     -       -       -       (310 ) Reclassifications     (4,266 )     4,266               150       150   At December 31, 2023     14,726       5,846       422       11,984       32,978                                             Depreciation                                         At January 1, 2023     (2,324 )     (1,148 )     (84 )     (765 )     (4,321 ) Charge for year     -       (472 )     (101 )     (950 )     (1,523 ) Impairment charge     (4,117 )     (1,365 )     -       -       (5,482 ) Reclassification to assets held for sale     3,124                               3,124   At December 31, 2023     (3,317 )     (2,985 )     (185 )     (1,715 )     (8,202 )                                           Net book values                                         At December 31, 2023     11,409       2,861       237       10,269       24,776   At December 31, 2022     12,782       189       305       7,997       21,273

v3.25.0.1

Prepayments and Other Receivables (Tables)	6 Months Ended
	Jun. 30, 2024
Prepayments and Other Receivables [Abstract]
Schedule of Prepayments and Other Receivables	2024     2023       €’000     €’000   Prepayments     577       585   VAT recoverable     1,075       1,387   Trade receivables     -       1,473   Grant receivable     803       803   Other receivables     909       671         3,364       4,919

v3.25.0.1

Trade and Other Payables (Tables)	6 Months Ended
	Jun. 30, 2024
Trade and Other Payables [Abstract]
Schedule of Trade and Other Payables	2024     2023       €’000     €’000   Trade payables (1)     10,993       11,015   Amounts owed to related parties (2)     1,363       2,113   Lease liability – current     876       826   Payroll taxes     775       1,163   Other     176       196         14,183       15,312     (1) Included in this figure is an amount relating to a facility agreement with KEME for €690,073 at the time it was entered into. The purpose of this agreement is to enable KEME to finance their hydrogen production plant and was negotiated along with the Equipment supply and installation services contract. Interest is accrued at a rate of 7%. Under this agreement, we transferred €0.53 million on May 17, 2023. This amount remains outstanding at June 30, 2024. As part of the Equipment supply and installation services contract, KEME made an advanced payment of €1.1 million during the first quarter of 2023. As no revenue has been recognised to date for this contract, the net payable position at June 30, 2024 to KEME was €0.53 million.   (2) This amount relates to a balance owing to an affiliate, MagP Inovação, S.A. (“MagP”). Please refer to the 2023 Form 20-F for details of the Group’s relationship with MagP.

v3.25.0.1

Provisions (Tables)	6 Months Ended
	Jun. 30, 2024
Provisions [Abstract]
Schedule of Provisions	Provisions     Onerous contract provisions     Warranties     Total       €’000     €’000     €’000   At January 1, 2023     8,403       -       8,403   Provisions made during the year     -       -       -   Provisions used during the year     (4,972 )     -       (4,972 ) Provisions reversed during the year     (2,822 )     -       (2,822 ) Transfers     (197 )     197       -   At December 31, 2023     412       197       609   Movements during the period     -       -       -   At June 30, 2024     412       197       609

v3.25.0.1

Deferred Income (Tables)	6 Months Ended
	Jun. 30, 2024
Deferred Income [Abstract]
Schedule of Deferred Income	2024     2023   Current   €’000     €’000   Grant – C5 (IAPMEI)     -       -   Income deferrals - customers     1,353       -         1,353       -   Non-Current                 Grant – C5 (IAPMEI)     9,771       9,299         9,771       9,299

v3.25.0.1

Publicly Floated Warrants (Tables)	6 Months Ended
	Jun. 30, 2024
Publicly Floated Warrants [Abstract]
Schedule of Fair Value of the Tradeable Warrants	The fair value of the tradeable warrants is determined with reference to the prevailing market price for warrants that are trading on the NASDAQ under the ticker HTOOW.       Total no. of warrants   In issue at December 31, 2022     8,869,633   Exercise of warrants during the year     -   In issue at December 31, 2023     8,869,633   Exercise of warrants during the period     -   In issue at June 30, 2024     8,869,633
Schedule of Fair Value of the Warrants	The fair value of the warrants as at June 30, 2024 and December 31, 2023 was $0.29 and $0.92 respectively. See reconciliation of fair values below.       €’000   Balance – December 31, 2021     15,271   Fair value movement on warrants unexercised (including exchange differences)     (7,620 ) Balance – December 31, 2022     7,651   Fair value movement on warrants unexercised (including exchange differences)*     (6,886 ) Balance – December 31, 2023     765   Fair value movement on warrants unexercised (including exchange differences)*     (309 ) Balance – June 30, 2024     456

v3.25.0.1

Financial Instruments and Risk Management (Tables)	6 Months Ended
	Jun. 30, 2024
Financial Instruments and Risk Management [Abstract]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3	The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. There were no transfers between fair value levels during the period. As at June 30, 2024, the tradeable warrants are measured at fair value using Level 1 inputs. The fair value of the tradeable warrants is measured based on quoted market prices at each reporting date. Until the Group disposed of all its positions, the short-term investments were previously measured at fair value using Level 1 inputs.       Carrying value     Fair value       Cash and receivables     Liabilities     Total carrying amount     Level 1     Level 2     Level 3     Total       €’000     €’000     €’000     €’000     €’000     €’000     €’000   30 June 2024                                           Cash and cash equivalents     411       -       411       -       -       -           Other receivables*     909       -       909       -       -       -           Trade payables     -       (10,994 )     (10,994 )     -       -       -           Warrants     -       (456 )     (456 )     (456 )     -       -       (456 ) Amounts owed to related parties     -       (1,363 )     (1,363 )     -       -       -           Loans and borrowings     -       (1,186 )     (1,186 )                                 Other payables**     -       (176 )     (176 )     -       -       -                 1,320       (14,175 )     (12,855 )     (456 )     -       -       (456 ) 31 December 2023                                                         Cash and cash equivalents     1,147       -       1,147       -       -       -       -   Trade receivables     1,473       -       1,473       -       -       -       -   Other receivables*     671       -       671       -       -       -       -   Trade payables     -       (11,015 )     (11,015 )     -       -       -       -   Warrants     -       (765 )     (765 )     (765 )     -       -       (765 ) Amounts owed to related parties     -       (2,113 )     (2,113 )     -       -       -       -   Loans and borrowings     -       (1,326 )     (1,326 )     -       -       -       -   Other payables**     -       (195 )     (195 )     -       -       -       -         3,291       (15,414 )     (12,123 )     (765 )     -       -       (765 )   * Prepayments and VAT have been excluded as they are not classified as a financial asset. ** Employment taxes have been excluded as these are statutory liabilities.
Schedule of Significant Exchange Rates	At June 30, 2024 and December 31, 2023, the Company had USD and EUR cash balances of approximately $0.02 million (December 2023: $0.3 million), and €3 million (December 2023: €7.8 million) respectively. The following significant exchange rates have been applied during the period.     Average rate     Period-end spot rate       2024     2023     2024     2023   Euro                         USD     1.0808       1.081       1.0705       1.0866

v3.25.0.1

Loss Per Ordinary Share (Tables)	6 Months Ended
	Jun. 30, 2024
Loss Per Ordinary Share [Abstract]
Schedule of Loss Per Share	2024     2023   Basic loss per Class A ordinary share     (0.47 )     (1.03 ) Diluted (loss) per Class A ordinary share     (0.47 )     (1.03 ) Number of ordinary shares used for loss per share (weighted average)                 Basic     16,964,586       14,439,644   Diluted     16,964,586       14,439,644
Schedule of Weighted Average Number of Ordinary Shares	30 June 2024     31 December 2023   Warrants     9,092,121       8,869,633   RSUs - outstanding     18,901       54,952   RSUs – vested but no ordinary shares issued     150,771       115,820   Incentive shares     5,000       5,000   Share options     1,626,256       1,482,628

v3.25.0.1

Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 (Tables)	6 Months Ended
	Jun. 30, 2024
Audited Pro Forma Combined Financial Information [Abstract]
Schedule of Pro Forma Information is Based on Provisional Amounts	The pro forma information is based on provisional amounts allocated by management to various assets and liabilities acquired and may be eventually different than currently presented.     HTOO     QIND     Pro-forma adjustment     Consolidated Pro-Forma       31-Dec-23     31-Dec-23     Share issuance (69.36%)     Transaction costs     Share conversion     31-Dec-23   ASSETS                                     Current Assets                                     Cash and Cash Equivalents     1,267,023       2,492               (198,688) 5              1,070,827   Inventory     4,057,220       -                               4,057,220   Other Current Assets     7,185,958       2,000,000                               9,185,958   Total Current Assets     12,510,202       2,002,492       -       (198,688 )             14,314,006                                                     Non-Current Assets                                                 Long Term Investments     1,299,135       6,500,000                               7,799,135   Property, Plant and Equipment     27,379,320       -                               27,379,320   Related Party Receivables     -       333,133                               333,133   Goodwill & other Intangible assets     5,608,644       -       14,874,243 1                      20,482,887   Total Non-current Assets     34,287,100       6,833,133       14,874,243       -               55,994,476   Total Assets     46,797,302       8,835,625       14,874,243       (198,688 )             70,308,482                                                     LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                 Current Liabilities                                                 Accounts Payable     16,920,104       166,577                               17,086,681   Other Payables - current     1,464,828       5,379,554                               6,844,382   Convertible Notes, net of discount     -       2,310,109                               2,310,109   Other Current Liabilities     4,116,218       235,886                               4,352,104   Total Current Liabilities     22,501,149       8,092,126       -       -               30,593,275                                                     Non-Current Liabilities                                                 Lease Operating Non-Current Portion     11,002,787                                       11,002,787   Deferred income - Grant     10,274,954                                       10,274,954   Total Long-term Liabilities     21,277,741       -       -       -               21,277,741   Total Liabilities     43,778,890       8,092,126       -       -               51,871,016                                                     Stockholders’ Equity                                                 Preferred stock     -       -       417 2              (417) 7      -   Common stock     2,131       127,132       (126,750) 3              4,171 7      6,684   Additional paid-in capital     249,202,406       17,248,964       (1,859,864) 4              (3,754) 7      264,587,752   Retained Earnings/ accumulated Deficit     (246,186,125 )     (16,632,597 )     16,632,597     (198,688) 5      227,844 8      (246,156,969 ) Noncontrolling interest     -       -       227,844 6              (227,844) 8      -   Total stockholders’ Equity     3,018,412       743,499       14,874,243       (198,688 )     -       18,437,466   Total liabilities and stockholders’ Equity     46,797,302       8,835,625       14,874,243       (198,688 )     -       70,308,482   1. To record purchase price in excess of fair value of net assets acquired, based on a preliminary purchase price allocation.   2. To record the issuance of 4,171,328 Series A Convertible Preferred Shares of the Company, at a price per of $0.338. These Preferred Ordinary Shares convert into common shares on a 1-for-10 basis.   3. To record the issuance of 3,818,969 Series A Ordinary Shares of the Company, at a price per of $0.338.   4. To record the additional paid in capital recorded in the Acquisition.   5. To record costs associated with the Acquisition.   6. To represent the value of QIND that is not directly owned by HTOO at the time the Acquisition closes.   7. To account for the conversion of preferred shares into common shares at a 10 for 1 ratio once transaction closing requirements are met, at which point QIND becomes a wholly owned subsidiary of HTOO.   8. To account for the additional 30.64% equity value of QIND that has been subsumed into HTOO and is no longer considered non-controlling interest, post transaction closing requirements are met.
Schedule of Operations	HTOO     QIND     Pro-forma adjustment     Consolidated   All figures are in $ USD unless otherwise stated   31-Dec-23     31-Dec-23     Transaction costs     31-Dec-23                             Revenue     4,481,822       -       -       4,481,822                                     Cost of revenues     21,727,430       -       -       21,727,430                                     Gross profit     (17,245,608 )     -       -       (17,245,608 )                                   Total operating expenses     22,842,112       2,704,320       198,688       25,745,119                                     Income (loss) from operations     (40,087,720 )     (2,704,320 )     (198,688 )     (42,990,727 )                                   Other (income) expenses     (6,977,679 )     1,457,477       -       (5,520,202 )                                   Operating profit before tax     (33,110,041 )     (4,161,797 )     (198,688 )     (37,470,526 )

v3.25.0.1

Group Companies (Tables)	6 Months Ended
	Jun. 30, 2024
Group Companies [Abstract]
Schedule of Group Companies	Entity name   Country of incorporation   Principal activities   Group interest at June 30, 2023   Fusion Fuel Portugal, S.A.   Portugal   Operating company     100 % Fuel Cell Évora, Unipessoal LDA   Portugal   Hydrogen production     100 %  Fuel Cell Évora I, Unipessoal LDA   Portugal   Hydrogen production     100 % Fusion Fuel USA, Inc.   United States   Operating company     100 % Fusion Fuel Spain, S.L.   Spain   Hydrogen production     50 % Fusion Fuel Australia, PTY Ltd   Australia   Hydrogen production     100 % Fusion Fuel Australia – Pilot PTY Ltd   Australia   Hydrogen production     100 % Hevo Sines, Unipessoal LDA   Portugal   Hydrogen production     100 % Hevo Sines II, Unipessoal LDA   Portugal   Hydrogen production     100 % Hevo Sines III, Unipessoal LDA   Portugal   Hydrogen production     100 % Hevo Portugal, Unipessoal, LDA   Portugal   Hydrogen production     100 % Hanoi Asset Management, S.L.   Spain   No activity to date     100 % Hevo Aveiro, Unipessoal LDA   Portugal   Hydrogen production     100 %

v3.25.0.1

Summary of Significant Accounting Policies (Details)											6 Months Ended		24 Months Ended
	Jan. 13, 2025 USD ($)	Jan. 10, 2025 USD ($)	Dec. 19, 2024 EUR (€) shares	Nov. 26, 2024 shares	May 01, 2024 shares	Feb. 28, 2024 USD ($)	Dec. 31, 2023 EUR (€) shares	Dec. 31, 2023 USD ($) shares	Nov. 27, 2023 USD ($)	Jun. 06, 2022 USD ($)	Jun. 30, 2024 EUR (€)	Jun. 30, 2024 USD ($) $ / shares shares	Dec. 31, 2025 USD ($)	May 07, 2024 USD ($)	Mar. 31, 2024 USD ($)
Summary of Significant Accounting Policies [Line Items]
Initial tranche amount														$ 1,150,000
Convertible shares (in Shares) | shares					1,120,329
Drawn down Amount
Net proceeds atm facility						$ 6,398,264
Outstanding balance												$ 140,000
Percentage of share capital			50.00%
Payment received for agreement (in Euro) | €			€ 145,000
Equity line of credit		$ 25,000,000
Belike Nominees Pty Ltd [Member]
Summary of Significant Accounting Policies [Line Items]
Senior convertible notes									$ 20,000,000
P2X Spain Sociedad Ltd [Member]
Summary of Significant Accounting Policies [Line Items]
Purchase warrant placement (in Shares) | shares			1,500
Payment received for agreement (in Euro) | €			€ 370,100
AT the Market Issuance Sales Agreement [Member]
Summary of Significant Accounting Policies [Line Items]
Aggregate offering price										$ 30,000,000
Nonadjusting Event Member [Member] | Belike Nominees Pty Ltd [Member]
Summary of Significant Accounting Policies [Line Items]
Drawn down Amount															$ 1,150,000
Class A Ordinary Shares [Member]
Summary of Significant Accounting Policies [Line Items]
Purchase warrant placement (in Shares) | shares				3,818,969
Percentage of issued shares				19.99%
Converted shares (in Shares) | shares				41,713,270
Class A Ordinary Shares [Member] | AT the Market Issuance Sales Agreement [Member]
Summary of Significant Accounting Policies [Line Items]
Number of shares sold (in Shares) | shares							1,103,368	1,103,368				2,345,452
Net proceeds							€ 3,200,000	$ 3,300,000			€ 5,900,000	$ 6,400,000
Fee and commission expense							€ 100,000	$ 100,000			200,000	$ 200,000
Quality Industrial Corp., a Nevada corporation [Member]
Summary of Significant Accounting Policies [Line Items]
Percentage of acquisition				69.36%
Quality Industrial Corp., a Nevada corporation [Member] | Series A Convertible Preferred Shares [Member]
Summary of Significant Accounting Policies [Line Items]
Purchase warrant placement (in Shares) | shares				4,171,327
Placement Warrants [Member]
Summary of Significant Accounting Policies [Line Items]
Purchase warrant placement (in Shares) | shares												208,582
Purchase warrant per share (in Dollars per share) | $ / shares												$ 0.0001
Placement note [member] | Macquarie Group [Member]
Summary of Significant Accounting Policies [Line Items]
Net proceeds											€ 800,000	$ 900,000
Purchase warrant placement (in Shares) | shares												89,792
Forecast [Member]
Summary of Significant Accounting Policies [Line Items]
Senior convertible notes	$ 1,280,000
Percentage of issued shares				19.99%
Increase in sales													$ 3,500,000
Forecast [Member] | Series A Convertible Preferred Shares [Member]
Summary of Significant Accounting Policies [Line Items]
Purchase warrant placement (in Shares) | shares				4,171,327

v3.25.0.1

Administration Expenses - Schedule of Administration Expenses (Details) - EUR (€) € in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Administration Expenses [Abstract]
Wages and salaries	€ 3,676	€ 4,943
Depreciation and amortization	1,535	1,192
Professional fees	515	879
Consulting fees	326	895
Other expenses	962	2,904
Administration Expenses	€ 7,015	€ 10,814

v3.25.0.1

Share-Based Payments (Details)		6 Months Ended				12 Months Ended
	Dec. 31, 2020	Jun. 30, 2024 EUR (€)	Jun. 30, 2024 $ / shares shares	Jun. 30, 2023 EUR (€) shares	Jun. 30, 2023 $ / shares	Dec. 31, 2023	Dec. 31, 2022	Aug. 05, 2021 shares
Share-Based Payments [Line Items]
Vesting period		8 months 12 days
Total expense recognized related		€ 1,000,000
Unamortized compensation expense		€ 2,800,000
Option to purchase			871,814			800,000	1,666,667
Price per share (in Dollars per share) | $ / shares			$ 10.5		$ 10.5
Option to grant shares	5,000
Options outstanding (in Shares) | shares				871,814
Weighted average vesting period		2 years 4 months 24 days
Shares recognised		€ 60,000.00		€ 30.00
RSUs [Member]
Share-Based Payments [Line Items]
Grant shares						68,273
Vesting period		3 years
Total expense recognized related		€ 70,000.00		€ 200,000
Unamortized compensation expense		€ 30,000.00
RSUs [Member] | 2021 Equity Incentive Plan [Member]
Share-Based Payments [Line Items]
Grant shares		68,273		68,273
Share options [member]
Share-Based Payments [Line Items]
Trading days		20 days
Consecutive trading days		30 days
Share options [member] | Ordinary shares [Member]
Share-Based Payments [Line Items]
Option to purchase			200,000
Exercise price per share (in Dollars per share) | $ / shares			$ 10.5
Additional purchase (in Shares) | shares			200,000
Employee [Member]
Share-Based Payments [Line Items]
Option to grant shares		143,628		143,628
Ordinary shares [Member]
Share-Based Payments [Line Items]
Consecutive trading days		5 years
Ordinary shares [Member] | 2021 Equity Incentive Plan [Member]
Share-Based Payments [Line Items]
Authorized shares (in Shares) | shares								1,000,000
Ordinary shares [Member] | Share options [member]
Share-Based Payments [Line Items]
Price per share (in Dollars per share) | $ / shares			$ 18
Ordinary shares [Member] | Share options [member]
Share-Based Payments [Line Items]
Additional purchase (in Shares) | shares			50,000

v3.25.0.1

Share-Based Payments - Schedule of Weighted-Average Grant Date Fair Value of the Rsus Granted (Details)		6 Months Ended	12 Months Ended
		Jun. 30, 2024 $ / shares	Dec. 31, 2023 $ / shares
Restricted share units [member]
Schedule of Weighted-Average Grant Date Fair Value of the Rsus Granted [Line Items]
Number of shares, beginning balance		59,282	87,642
Number of shares, ending balance		18,901	59,282
Number of RSUs, Correction of prior period RSUs outstanding	[1]		4,329
Number of RSUs, Granted			68,273
Number of RSUs, Vested	[2]	(39,281)	(86,566)
Number of RSUs, Forfeited		(1,100)	(14,396)
Share options [member]
Schedule of Weighted-Average Grant Date Fair Value of the Rsus Granted [Line Items]
Weighted average grant date fair value per share (in Dollars per share)		$ 6.63	$ 11.43
Weighted average grant date fair value per share (in Dollars per share)		9.5	$ 6.63
Weighted average Grant date fair value per share, Correction of prior period RSUs outstanding	[1]
Weighted average Grant date fair value per share, Granted (in Dollars per share)			$ 3.57
Weighted average Grant date fair value per share, Vested (in Dollars per share)	[2]	8.86	9.27
Weighted average Grant date fair value per share, Forfeited (in Dollars per share)		$ 9.37	$ 12.73
Revision of Prior Period, Adjustment [Member] | Restricted share units [member]
Schedule of Weighted-Average Grant Date Fair Value of the Rsus Granted [Line Items]
Number of shares, beginning balance		54,953
Number of shares, ending balance			54,953
Revision of Prior Period, Adjustment [Member] | Share options [member]
Schedule of Weighted-Average Grant Date Fair Value of the Rsus Granted [Line Items]
Weighted average grant date fair value per share (in Dollars per share)		$ 6.63
Weighted average grant date fair value per share (in Dollars per share)			$ 6.63
[1] RSUs outstanding as at December 31, 2023 has been amended due to a prior period error. [2] No ordinary shares were issued in connection with the RSUs that vested during the six-month period ended June 30, 2024 and the year ended December 31, 2023.

v3.25.0.1

Share-Based Payments - Schedule of Grant Date Fair Value of Employee and Director Options Granted (Details)	6 Months Ended
	Jun. 30, 2024 $ / shares
Tranche 1 [Member]
Schedule of Grant Date Fair Value of Employee and Director Options Granted [Line Items]
Volatility	70.91%
Expected term in years	7
Dividend rate	0.00%
Risk-free interest rate	1.58%
Hurdle price
Exercise price	10.5
Share price	9.42
Fair value of option on grant date	$ 6.14
Tranche 2 [Member]
Schedule of Grant Date Fair Value of Employee and Director Options Granted [Line Items]
Volatility	70.91%
Expected term in years	7
Dividend rate	0.00%
Risk-free interest rate	1.58%
Hurdle price	$ 18
Exercise price	10.5
Share price	9.42
Fair value of option on grant date	$ 6.18
Directors [Member]
Schedule of Grant Date Fair Value of Employee and Director Options Granted [Line Items]
Volatility	75.32%
Expected term in years	6.92
Dividend rate	0.00%
Risk-free interest rate	1.58%
Hurdle price
Exercise price	6.45
Share price	5.03
Fair value of option on grant date	$ 3.31

v3.25.0.1

Share-Based Payments - Schedule of Weighted Average Grant Date Fair Value (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2024 $ / shares	Dec. 31, 2023 $ / shares
Schedule of Number of Options Granted [Abstract]
Number of options, beginning balance	800,000	1,666,667
Weighted average Grant date fair value per share, beginning balance (in Dollars per share)	$ 6.14	$ 5.21
Number of options, granted	143,628	154,074
Weighted average Grant date fair value per share, granted (in Dollars per share)	$ 2.87	$ 2.87
Number of options, Vested	(71,814)	(354,074)
Weighted average Grant date fair value per share, Vested	2.87	4.71
Number of options, Forfeited		(666,667)
Weighted average Grant date fair value per share, Forfeited (in Dollars per share)		$ 6.16
Number of options, ending balance	871,814	800,000
Weighted average Grant date fair value per share, ending balance (in Dollars per share)	$ 5.87	$ 6.14

v3.25.0.1

Share-Based Payments - Schedule of Non-Executive Directors that were Appointed (Details) - Non Executive Directors [Member]	6 Months Ended	12 Months Ended
	Jun. 30, 2024 $ / shares	Dec. 31, 2023 $ / shares
Schedule of Non-Executive Directors that were Appointed [Line Items]
Number of shares, beginning balance	5,000	5,000
Weighted average grant date fair value per share	23	23
Number of shares, ending balance	5,000	5,000
Weighted average grant date fair value per share	23	23
Number of shares, Granted
Weighted average Grant date fair value per share, Granted (in Dollars per share)
Number of shares, Vested
Weighted average Grant date fair value per share, Vested (in Dollars per share)
Number of shares, Forfeited
Weighted average Grant date fair value per share, Forfeited (in Dollars per share)

v3.25.0.1

Share-Based Payments - Schedule of Reconciliation to Statement of Profit or Loss (Details) - EUR (€) € in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Schedule of Reconciliation to Statement of Profit or Loss [Line Items]
Share-based payment expense	€ 1,045	€ 1,207
RSUs [Member]
Schedule of Reconciliation to Statement of Profit or Loss [Line Items]
Share-based payment expense	75	204
Incentive shares [Member]
Schedule of Reconciliation to Statement of Profit or Loss [Line Items]
Share-based payment expense	6	28
Options [Member]
Schedule of Reconciliation to Statement of Profit or Loss [Line Items]
Share-based payment expense	€ 964	€ 975

v3.25.0.1

Taxation (Details) - EUR (€) € in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Taxation [Abstract]
Current tax expense (in Euro)	€ 30	€ 160
Deferred tax expense (in Euro)
Statutory tax rate	21.00%	21.00%
Corporate income tax rate	12.50%
Rate of applicable	25.00%

v3.25.0.1

Inventory (Details) - EUR (€) € in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Inventories [Abstract]
Inventories	€ 810	€ 3,500
Inventory cost materials	€ 20	€ 100

v3.25.0.1

Inventory - Schedule of Inventory (Details) - EUR (€) € in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023
Schedule of Inventories [Abstract]
Raw materials	€ 1,867		€ 1,968
Work in progress	776		1,704
Finished product	2,673
Total Inventory	€ 5,316	€ 3,672	€ 3,672

v3.25.0.1

Cash and Cash Equivalents - Schedule of Cash and Cash Equivalents (Details) - EUR (€) € in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023
Cash and Cash Equivalents [Abstract]
Cash and cash equivalents	€ 25	€ 860
Restricted cash	386	287
Total cash and cash equivalents	€ 411	€ 1,147	€ 3,085

v3.25.0.1

Intangible Assets (Details) - EUR (€) € in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Intangible Assets [Abstract]
Intellectual property	€ 1,900	€ 1,900
Capitalised project development costs	€ 1,450	1,350
Amortized over a useful life	3 years
Research and development expenditure	€ 870	€ 940

v3.25.0.1

Intangible Assets - Schedule of Intangible Assets (Details) - EUR (€) € in Thousands		6 Months Ended	12 Months Ended
		Jun. 30, 2024	Dec. 31, 2023	Jan. 01, 2023
Schedule of Intangible Assets [Line Items]
Beginning balance		€ 5,076
Ending balance		4,625	€ 5,076
Net book value		4,625	5,076	€ 5,350
Completed Development Technology [Member]
Schedule of Intangible Assets [Line Items]
Net book value		1,810	1,676	2,664
Product development in progress [Member]
Schedule of Intangible Assets [Line Items]
Net book value		771	1,346	717
Intellectual property and patents registration [Member]
Schedule of Intangible Assets [Line Items]
Net book value		1,907	1,907	1,908
Software [Member]
Schedule of Intangible Assets [Line Items]
Net book value		138	147	€ 60
Cost [Member]
Schedule of Intangible Assets [Line Items]
Beginning balance		6,443	5,703
Additions – other	[1]	112	740
Transfer during the year
Ending balance		6,554	6,443
Cost [Member] | Completed Development Technology [Member]
Schedule of Intangible Assets [Line Items]
Beginning balance		2,996	2,995
Additions – other	[1]	2	2
Transfer during the year		685
Ending balance		3,683	2,996
Cost [Member] | Product development in progress [Member]
Schedule of Intangible Assets [Line Items]
Beginning balance		1,346	717
Additions – other	[1]	110	629
Transfer during the year		(685)
Ending balance		771	1,346
Cost [Member] | Intellectual property and patents registration [Member]
Schedule of Intangible Assets [Line Items]
Beginning balance		1,911	1,911
Additions – other	[1]
Transfer during the year
Ending balance		1,910	1,911
Cost [Member] | Software [Member]
Schedule of Intangible Assets [Line Items]
Beginning balance		190	80
Additions – other	[1]		109
Transfer during the year
Ending balance		190	190
Amortisation & impairment [Member]
Schedule of Intangible Assets [Line Items]
Beginning balance		(1,367)	(352)
Amortisation charge		(562)	(1,014)
Ending balance		(1,929)	(1,367)
Amortisation & impairment [Member] | Completed Development Technology [Member]
Schedule of Intangible Assets [Line Items]
Beginning balance		(1,321)	(330)
Amortisation charge		(552)	(990)
Ending balance		(1,873)	(1,321)
Amortisation & impairment [Member] | Product development in progress [Member]
Schedule of Intangible Assets [Line Items]
Beginning balance
Amortisation charge
Ending balance
Amortisation & impairment [Member] | Intellectual property and patents registration [Member]
Schedule of Intangible Assets [Line Items]
Beginning balance		(3)	(2)
Amortisation charge		(1)	(1)
Ending balance		(4)	(3)
Amortisation & impairment [Member] | Software [Member]
Schedule of Intangible Assets [Line Items]
Beginning balance		(43)	(20)
Amortisation charge		(9)	(23)
Ending balance		€ (52)	€ (43)
[1] The additions relate to materials acquired during the period for the purpose of developing our HEVO technology.

v3.25.0.1

Property, Plant and Equipment (Details) - EUR (€) € in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Property, Plant and Equipment [Abstract]
Depreciation expense on property and equipment	€ 970	€ 680
Revaluation of right-of-use assets	€ 450

v3.25.0.1

Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - EUR (€) € in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Cost
Charge for year	€ (970)	€ (680)
Revaluation of ROU assets	450
Net book values
Net book value	24,296		€ 24,776	€ 21,273
Assets under construction [Member]
Net book values
Net book value	11,414		11,409	12,782
Plant and machinery [Member]
Net book values
Net book value	2,453		2,861	189
Office and other equipment [Member]
Net book values
Net book value	192		237	305
Right of use assets [Member]
Net book values
Net book value	10,236		10,269	€ 7,997
Cost [Member]
Cost
Beginning balance	32,978	25,594	25,594
Additions during the year	36		11,662
Transfer to inventory			(161)
Revaluation of ROU assets	455		(3,957)
Disposals			(310)
Reclassifications			150
Ending balance	33,469		32,978
Cost [Member] | Assets under construction [Member]
Cost
Beginning balance	14,726	15,106	15,106
Additions during the year	6		8,314
Transfer to inventory			(161)
Revaluation of ROU assets			(3,957)
Disposals			(310)
Reclassifications			(4,266)
Ending balance	14,731		14,726
Cost [Member] | Plant and machinery [Member]
Cost
Beginning balance	5,846	1,337	1,337
Additions during the year	2		243
Revaluation of ROU assets
Disposals
Reclassifications			4,266
Ending balance	5,848		5,846
Cost [Member] | Office and other equipment [Member]
Cost
Beginning balance	422	389	389
Additions during the year	1		33
Revaluation of ROU assets
Disposals
Ending balance	423		422
Cost [Member] | Right of use assets [Member]
Cost
Beginning balance	11,984	8,762	8,762
Additions during the year	27		3,072
Revaluation of ROU assets	455
Disposals
Reclassifications			150
Ending balance	12,466		11,984
Depreciation [Member]
Cost
Beginning balance	(8,202)	(4,321)	(4,321)
Charge for year	(972)		(1,523)
Impairment charge			(5,482)
Revaluation of ROU assets			3,124
Ending balance	(9,173)		(8,202)
Depreciation [Member] | Assets under construction [Member]
Cost
Beginning balance	(3,317)	(2,324)	(2,324)
Charge for year
Impairment charge			(4,117)
Revaluation of ROU assets			3,124
Ending balance	(3,317)		(3,317)
Depreciation [Member] | Plant and machinery [Member]
Cost
Beginning balance	(2,985)	(1,148)	(1,148)
Charge for year	(410)		(472)
Impairment charge			(1,365)
Ending balance	(3,395)		(2,985)
Depreciation [Member] | Office and other equipment [Member]
Cost
Beginning balance	(185)	(84)	(84)
Charge for year	(47)		(101)
Impairment charge
Ending balance	(231)		(185)
Depreciation [Member] | Right of use assets [Member]
Cost
Beginning balance	(1,715)	€ (765)	(765)
Charge for year	(515)		(950)
Impairment charge
Ending balance	€ (2,230)		€ (1,715)

v3.25.0.1

Prepayments and Other Receivables - Schedule of Prepayments and Other Receivables (Details) - EUR (€) € in Thousands	Jun. 30, 2024	Dec. 31, 2023
Prepayments and accrued income other than contract assets [abstract]
Prepayments	€ 577	€ 585
VAT recoverable	1,075	1,387
Trade receivables		1,473
Grant receivable	803	803
Other receivables	909	671
Prepayments and other receivables	€ 3,364	€ 4,919

v3.25.0.1

Trade and Other Payables (Details) - EUR (€)	3 Months Ended	6 Months Ended
	Mar. 31, 2023	Jun. 30, 2024	Dec. 31, 2023	May 17, 2023
Trade and other payables [Line Items]
Facility agreement cost		€ 690,073
Interest accrued		7.00%
Trade and other payable		€ 14,183,000	€ 15,312,000
Advanced payment	€ 1,100,000
KEME [Member]
Trade and other payables [Line Items]
Trade and other payable		€ 530,000		€ 530,000

v3.25.0.1

Trade and Other Payables - Schedule of Trade and Other Payables (Details) - EUR (€) € in Thousands		Jun. 30, 2024	Dec. 31, 2023
Schedule of Trade and Other Payables [Abstract]
Trade payables	[1]	€ 10,993	€ 11,015
Amounts owed to related parties	[2]	1,363	2,113
Lease liability – current		876	826
Payroll taxes		775	1,163
Other		176	196
Trade and other payable		€ 14,183	€ 15,312
[1] Included in this figure is an amount relating to a facility agreement with KEME for €690,073 at the time it was entered into. The purpose of this agreement is to enable KEME to finance their hydrogen production plant and was negotiated along with the Equipment supply and installation services contract. Interest is accrued at a rate of 7%. Under this agreement, we transferred €0.53 million on May 17, 2023. This amount remains outstanding at June 30, 2024. As part of the Equipment supply and installation services contract, KEME made an advanced payment of €1.1 million during the first quarter of 2023. As no revenue has been recognised to date for this contract, the net payable position at June 30, 2024 to KEME was €0.53 million. [2] This amount relates to a balance owing to an affiliate, MagP Inovação, S.A. (“MagP”). Please refer to the 2023 Form 20-F for details of the Group’s relationship with MagP.

v3.25.0.1

Provisions - Schedule of Provisions (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 30, 2023
Provisions - Schedule of Provisions (Details) [Line Items]
Balance		$ 8,403
Balance	$ 609	609
Provisions made during the year
Provisions used during the year		(4,972)
Provisions reversed during the year		(2,822)
Transfers
Movements during the period
Onerous contract provisions [Member]
Provisions - Schedule of Provisions (Details) [Line Items]
Balance		8,403
Balance	412	412
Provisions made during the year
Provisions used during the year		(4,972)
Provisions reversed during the year		(2,822)
Transfers		(197)
Movements during the period
Warranties [Member]
Provisions - Schedule of Provisions (Details) [Line Items]
Balance
Balance	197	197
Provisions made during the year
Provisions used during the year
Provisions reversed during the year
Transfers		$ 197
Movements during the period

v3.25.0.1

Deferred Income (Details) € in Millions	6 Months Ended
	Jun. 30, 2024 EUR (€)
Deferred Income [Abstract]
Advanced amount	€ 2.0

v3.25.0.1

Deferred Income - Schedule of Deferred Income (Details) - EUR (€) € in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023
Schedule of Deferred Income [Line Items]
Deferred income, current	€ 1,353
Deferred income, non current	9,771	€ 9,299	€ 9,299
Grant – C5 (IAPMEI) [Member]
Schedule of Deferred Income [Line Items]
Deferred income, current
Deferred income, non current	9,771		€ 9,299
Income deferrals - customers [Member]
Schedule of Deferred Income [Line Items]
Deferred income, current	€ 1,353

v3.25.0.1

Publicly Floated Warrants (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Publicly Floated Warrants (Details) [Line Items]
Fair value of the warrants	$ 0.29	$ 0.92
Warrants [member]
Publicly Floated Warrants (Details) [Line Items]
Warrants outstanding	8,869,633	8,869,633
Exercise price	$ 11.5

v3.25.0.1

Publicly Floated Warrants - Schedule of Fair Value of the Tradeable Warrants (Details) - Warrants [member] - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2022
Publicly Floated Warrants - Schedule of Fair Value of the Tradeable Warrants (Details) [Line Items]
Balance	8,869,633	8,869,633
Exercise of warrants during the period (in Dollars per share)
Balance	8,869,633

v3.25.0.1

Publicly Floated Warrants - Schedule of Fair Value of the Warrants (Details) - EUR (€) € in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023	Dec. 31, 2022
Schedule of Fair Value of the Warrants [Abstract]
Balance Beginning	€ 765	€ 7,651	€ 15,271
Fair value movement on warrants unexercised (including exchange differences)	(309)	(6,886)	(7,620)
Balance Ending	€ 456	€ 765	€ 7,651

v3.25.0.1

Financial Instruments and Risk Management (Details) $ in Thousands, € in Millions	Jun. 30, 2024 EUR (€)	Jun. 30, 2024 USD ($)	Dec. 31, 2023 EUR (€)	Dec. 31, 2023 USD ($)
Financial Instruments and Risk Management [Abstract]
Cash in hand	€ 3.0	$ 20	€ 7.8	$ 300

v3.25.0.1

Financial Instruments and Risk Management - Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 (Details) - EUR (€) € in Thousands		Jun. 30, 2024	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Cash and receivables, carrying amount		€ 1,320	€ 3,291
Liabilities, carrying amount		(14,175)	(15,414)
Total carrying amount		(12,855)	(12,123)
Total Fair value		(456)	(765)	€ (7,651)	€ (15,271)
Cash And Cash Equivalent [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Cash and receivables, carrying amount		411	1,147
Liabilities, carrying amount
Total carrying amount		411	1,147
Total Fair value
Other Receivables [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Cash and receivables, carrying amount	[1]	909	671
Liabilities, carrying amount	[1]
Total carrying amount	[1]	909	671
Total Fair value	[1]
Trade payables [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Cash and receivables, carrying amount
Liabilities, carrying amount		(10,994)	(11,015)
Total carrying amount		(10,994)	(11,015)
Total Fair value
Warrants [member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Cash and receivables, carrying amount
Liabilities, carrying amount		(456)	(765)
Total carrying amount		(456)	(765)
Total Fair value		(456)	(765)
Amounts Owed Tor Related Parties [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Cash and receivables, carrying amount
Liabilities, carrying amount		(1,363)	(2,113)
Total carrying amount		(1,363)	(2,113)
Total Fair value
Loans and borrowings [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Cash and receivables, carrying amount
Liabilities, carrying amount		(1,186)	(1,326)
Total carrying amount		(1,186)	(1,326)
Total Fair value
Other Payables [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Cash and receivables, carrying amount	[2]
Liabilities, carrying amount	[2]	(176)	(195)
Total carrying amount	[2]	(176)	(195)
Total Fair value	[2]
Trade receivables [member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Cash and receivables, carrying amount			1,473
Liabilities, carrying amount
Total carrying amount			1,473
Total Fair value
Level 1 of fair value hierarchy [member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value		(456)	(765)
Level 1 of fair value hierarchy [member] | Cash And Cash Equivalent [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 1 of fair value hierarchy [member] | Other Receivables [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value	[1]
Level 1 of fair value hierarchy [member] | Trade payables [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 1 of fair value hierarchy [member] | Warrants [member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value		(456)	(765)
Level 1 of fair value hierarchy [member] | Amounts Owed Tor Related Parties [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 1 of fair value hierarchy [member] | Loans and borrowings [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 1 of fair value hierarchy [member] | Other Payables [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value	[2]
Level 1 of fair value hierarchy [member] | Trade receivables [member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 2 of fair value hierarchy [member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 2 of fair value hierarchy [member] | Cash And Cash Equivalent [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 2 of fair value hierarchy [member] | Other Receivables [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value	[1]
Level 2 of fair value hierarchy [member] | Trade payables [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 2 of fair value hierarchy [member] | Warrants [member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 2 of fair value hierarchy [member] | Amounts Owed Tor Related Parties [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 2 of fair value hierarchy [member] | Loans and borrowings [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 2 of fair value hierarchy [member] | Other Payables [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value	[2]
Level 2 of fair value hierarchy [member] | Trade receivables [member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 3 of fair value hierarchy [member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 3 of fair value hierarchy [member] | Cash And Cash Equivalent [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 3 of fair value hierarchy [member] | Other Receivables [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value	[1]
Level 3 of fair value hierarchy [member] | Trade payables [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 3 of fair value hierarchy [member] | Warrants [member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 3 of fair value hierarchy [member] | Amounts Owed Tor Related Parties [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 3 of fair value hierarchy [member] | Loans and borrowings [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
Level 3 of fair value hierarchy [member] | Other Payables [Member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value	[2]
Level 3 of fair value hierarchy [member] | Trade receivables [member]
Schedule of Unobservable Inputs In Fair Value Measurement Within Level3 [Line Items]
Total Fair value
[1] Prepayments and VAT have been excluded as they are not classified as a financial asset. [2] Employment taxes have been excluded as these are statutory liabilities.

v3.25.0.1

Financial Instruments and Risk Management - Schedule of Significant Exchange Rates (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Schedule of Significant Exchange Rates [Abstract]
Average rate	1.0808	1.081
Period-end spot rate	1.0705	1.0866

v3.25.0.1

Loss Per Ordinary Share - Schedule of Loss Per Share (Details)	6 Months Ended
	Jun. 30, 2024 € / shares shares	Jun. 30, 2024 $ / shares shares	Jun. 30, 2023 € / shares shares	Jun. 30, 2023 $ / shares shares
Schedule of Loss Per Share [Abstract]
Basic loss per Class A ordinary share | (per share)	€ (0.47)	$ (0.47)	€ (0.57)	$ (1.03)
Diluted (loss) per Class A ordinary share | (per share)	€ (0.47)	$ (0.47)	€ (0.57)	$ (1.03)
Basic	16,964,586	16,964,586	14,439,644	14,439,644
Diluted	16,964,586	16,964,586	14,439,644	14,439,644

v3.25.0.1

Loss Per Ordinary Share - Schedule of Weighted Average Number of Ordinary Shares (Details) - shares	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Warrants [Member]
Schedule of Weighted Average Number of Ordinary Shares [Line Items]
Anti dilutive shares	9,092,121	8,869,633
R S U Outstanding Member [Member]
Schedule of Weighted Average Number of Ordinary Shares [Line Items]
Anti dilutive shares	18,901	54,952
Rsus Vested [Member]
Schedule of Weighted Average Number of Ordinary Shares [Line Items]
Anti dilutive shares	150,771	115,820
Incentive Shares Member [Member]
Schedule of Weighted Average Number of Ordinary Shares [Line Items]
Anti dilutive shares	5,000	5,000
Share options [Member]
Schedule of Weighted Average Number of Ordinary Shares [Line Items]
Anti dilutive shares	1,626,256	1,482,628

v3.25.0.1

Subsequent Events (Details)									6 Months Ended
	Jan. 10, 2025 USD ($) $ / shares shares	Dec. 19, 2024 EUR (€) shares	Nov. 26, 2024 shares	Nov. 11, 2024 USD ($)	Nov. 06, 2024 EUR (€)	Nov. 05, 2024 USD ($)	Aug. 28, 2024 USD ($) shares	Aug. 01, 2024 USD ($) $ / shares	Jun. 30, 2024 EUR (€)	Jun. 30, 2024 EUR (€) $ / shares	Jun. 30, 2023 EUR (€)	May 07, 2024 USD ($)	Mar. 27, 2024	Dec. 31, 2023 EUR (€)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 EUR (€)	Dec. 31, 2021 EUR (€)
Subsequent Events [Line Items]
Percentage of share capital		50.00%
Payment received for agreement (in Euro) | €		€ 145,000
Net proceeds amount (in Dollars) | €									€ 5,942,000		€ 2,405,000
Stockholders equity (in Dollars) | €									€ 1,852,000	€ 1,852,000				€ 2,731,000		€ 29,353,000	€ 49,512,000
Minimum bid price (in Dollars per share) | $ / shares										€ 1
Business days									10 days
Class A Ordinary Shares [Member]
Subsequent Events [Line Items]
Shares issued (in Shares) | shares			3,818,969
Percentage of issued shares			19.99%
Converted shares (in Shares) | shares			41,713,270
Belike Nominees Pty Ltd [Member]
Subsequent Events [Line Items]
Default provisions (in Dollars)												$ 1,150,000
Quality Industrial Corp., a Nevada corporation [Member]
Subsequent Events [Line Items]
Percentage of acquisition			69.36%
Al Shola Gas [Member]
Subsequent Events [Line Items]
Interest rate													51.00%
Nasdaq Equity and Minimum Bid-Price Compliance [Member]
Subsequent Events [Line Items]
Stockholders equity (in Dollars)															$ 3,022,125
Subsequent Events [Member]
Subsequent Events [Line Items]
Investment amount (in Dollars)							$ 33,500,000
Shares issued (in Shares) | shares							43,790,850
Additional shares (in Shares) | shares							13,137,254
Minimum bid price (in Dollars per share) | $ / shares								$ 1
Business days								31 days
Amount of minimum bid price requirement (in Dollars)								$ 1
Forecast [Member]
Subsequent Events [Line Items]
Shares issued (in Shares) | shares		1,500	4,171,327
Amount damages claim (in Euro) | €					€ 27,000,000
Repayment outstanding rate				125.00%
Interest rate	8.00%			18.00%
Outstanding balance value (in Dollars)				$ 140,000
Percentage of issued shares			19.99%
Converted shares (in Shares) | shares			41,713,270
Percentage of share capital		50.00%
Payment received for agreement (in Euro) | €		€ 370,100
Aggregate principal amount (in Dollars)	$ 1,280,000
Original issue discount percentage	20.00%
Net proceeds amount (in Dollars)	$ 1,025,000.000
Percentage of notes interest rate	22.00%
Maturity date	July 10, 2026
Conversion price (in Dollars per share) | $ / shares	$ 0.559
Weighted average price rate	80.00%
Trading days	5 days
Floor price (in Dollars per share) | $ / shares	$ 0.1118
Reverse stock split (in Shares) | shares	1
Redemptions occurring percentage	15.00%
Equity line of credit (in Dollars)	$ 25,000,000
Percentage of shares issuable upon conversion of notes	150.00%
Nasdaq stockholder's equity requirement (in Dollars)						$ 10,000,000
Forecast [Member] | Class A Ordinary Shares [Member]
Subsequent Events [Line Items]
Shares issued (in Shares) | shares	2,292,040		3,818,969
Trading days	90 days
Par value (in Dollars per share) | $ / shares	$ 0.559
Forecast [Member] | Bottom of Range [Member]
Subsequent Events [Line Items]
Working days				3 days
Forecast [Member] | Top of Range [Member]
Subsequent Events [Line Items]
Working days				5 days
Forecast [Member] | Quality Industrial Corp., a Nevada corporation [Member]
Subsequent Events [Line Items]
Percentage of acquisition			69.36%
Forecast [Member] | P2X Spain Sociedad Ltd [Member]
Subsequent Events [Line Items]
Payment received for agreement (in Euro) | €		€ 145,000

v3.25.0.1

Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 (Details) $ / shares in Units, € in Thousands		6 Months Ended	12 Months Ended
	Nov. 26, 2024 shares	Jun. 30, 2024 USD ($) $ / shares shares	Dec. 31, 2023 USD ($)	Jun. 30, 2024 EUR (€)	Jun. 30, 2024 USD ($)	Dec. 31, 2023 EUR (€)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 EUR (€)	Dec. 31, 2021 EUR (€)
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Percentage of completed the acquisition		69.36%	69.36%
Net assets of quality (in Dollars) | €				€ 1,852		€ 2,731		€ 29,353	€ 49,512
Net assets (in Dollars)				€ 1,852		€ 2,731	$ 515,655
Minority interest (in Dollars) | $					$ 227,844
Minority interest percentage		30.64%
Purchase price paid (in Dollars) | $		$ 15,389,898
Implied goodwill (in Dollars) | $			$ 14,874,243
Class A Ordinary Shares [Member]
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Percentage of issued shares	19.99%
Issued shares	3,818,969
Converted shares	41,713,270
Series A Convertible Preferred Shares [Member]
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Issuance of convertible preferred shares		4,171,328
issuance convertible preferred shares (in Dollars per share) | $ / shares		$ 0.338
Series A Ordinary Shares [Member]
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Issuance of ordinary shares		3,818,969
Issuance of ordinary shares price (in Dollars per share) | $ / shares		$ 0.338
Fusion Fuel if the Acquisition [Member]
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Net assets of quality (in Dollars) | $							$ 743,499
Forecast [Member]
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Percentage of completed the acquisition	69.36%
Percentage of issued shares	19.99%
Forecast [Member] | Class A Ordinary Shares [Member]
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Issued shares	3,818,969
Forecast [Member] | Series A Convertible Preferred Shares [Member]
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Issued shares	4,171,327
Forecast [Member] | Class A Shares [Member]
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Converted shares	41,713,270
Forecast [Member] | Common stock [Member]
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Issued shares	78,312,334
Forecast [Member] | Series B Preferred Stock [Member]
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Issued shares	20,000
Forecast [Member]
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Percentage of completed the acquisition	69.36%
Percentage of issued shares	19.99%
Forecast [Member] | Class A Ordinary Shares [Member]
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Issued shares	3,818,969
Forecast [Member] | Series A Convertible Preferred Shares [Member]
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Issued shares	4,171,327
Forecast [Member] | Class A Shares [Member]
Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 [Line Items]
Converted shares	41,713,270

v3.25.0.1

Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 - Schedule of Pro Forma Information is Based on Provisional Amounts (Details) $ in Thousands	Dec. 31, 2023 USD ($)
HTOO [Member]
Current Assets
Cash and Cash Equivalents	$ 1,267,023
Inventory	4,057,220
Other Current Assets	7,185,958
Total current assets	12,510,202
Non-Current Assets
Long Term Investments	1,299,135
Property, Plant and Equipment	27,379,320
Related Party Receivables
Goodwill & other Intangible assets	5,608,644
Total non-current assets	34,287,100
Total assets	46,797,302
Current Liabilities
Accounts Payable	16,920,104
Other Payables - current	1,464,828
Convertible Notes, net of discount
Other Current Liabilities	4,116,218
Total current liabilities	22,501,149
Non-Current Liabilities
Lease Operating Non-Current Portion	11,002,787
Deferred income - Grant	10,274,954
Total Long-term Liabilities	21,277,741
Total liabilities	43,778,890
Stockholders’ Equity
Preferred stock
Common stock	2,131
Additional paid-in capital	249,202,406
Retained Earnings/ accumulated Deficit	(246,186,125)
Noncontrolling interest
Total equity	3,018,412
Total equity and liabilities	46,797,302
QIND [Member]
Current Assets
Cash and Cash Equivalents	2,492
Inventory
Other Current Assets	2,000,000
Total current assets	2,002,492
Non-Current Assets
Long Term Investments	6,500,000
Property, Plant and Equipment
Related Party Receivables	333,133
Goodwill & other Intangible assets
Total non-current assets	6,833,133
Total assets	8,835,625
Current Liabilities
Accounts Payable	166,577
Other Payables - current	5,379,554
Convertible Notes, net of discount	2,310,109
Other Current Liabilities	235,886
Total current liabilities	8,092,126
Non-Current Liabilities
Total Long-term Liabilities
Total liabilities	8,092,126
Stockholders’ Equity
Preferred stock
Common stock	127,132
Additional paid-in capital	17,248,964
Retained Earnings/ accumulated Deficit	(16,632,597)
Noncontrolling interest
Total equity	743,499
Total equity and liabilities	8,835,625
Pro-forma adjustment Transaction costs [Member]
Current Assets
Cash and Cash Equivalents	(198,688)	[1]
Total current assets	(198,688)
Non-Current Assets
Total non-current assets
Total assets	(198,688)
Current Liabilities
Total current liabilities
Non-Current Liabilities
Total Long-term Liabilities
Total liabilities
Stockholders’ Equity
Retained Earnings/ accumulated Deficit	(198,688)	[1]
Total equity	(198,688)
Total equity and liabilities	(198,688)
Consolidated Pro-Forma 31-Dec-23 [Member]
Current Assets
Cash and Cash Equivalents	1,070,827
Inventory	4,057,220
Other Current Assets	9,185,958
Total current assets	14,314,006
Non-Current Assets
Long Term Investments	7,799,135
Property, Plant and Equipment	27,379,320
Related Party Receivables	333,133
Goodwill & other Intangible assets	20,482,887
Total non-current assets	55,994,476
Total assets	70,308,482
Current Liabilities
Accounts Payable	17,086,681
Other Payables - current	6,844,382
Convertible Notes, net of discount	2,310,109
Other Current Liabilities	4,352,104
Total current liabilities	30,593,275
Non-Current Liabilities
Lease Operating Non-Current Portion	11,002,787
Deferred income - Grant	10,274,954
Total Long-term Liabilities	21,277,741
Total liabilities	51,871,016
Stockholders’ Equity
Preferred stock
Common stock	6,684
Additional paid-in capital	264,587,752
Retained Earnings/ accumulated Deficit	(246,156,969)
Noncontrolling interest
Total equity	18,437,466
Total equity and liabilities	70,308,482
Pro-forma adjustment Share issuance [Member]
Current Assets
Total current assets
Non-Current Assets
Goodwill & other Intangible assets	14,874,243	[2]
Total non-current assets	14,874,243
Total assets	14,874,243
Current Liabilities
Total current liabilities
Non-Current Liabilities
Total Long-term Liabilities
Total liabilities
Stockholders’ Equity
Preferred stock	417	[3]
Common stock	(126,750)	[4]
Additional paid-in capital	(1,859,864)	[5]
Retained Earnings/ accumulated Deficit	16,632,597
Noncontrolling interest	227,844	[6]
Total equity	14,874,243
Total equity and liabilities	14,874,243
Pro-forma adjustment Share conversion [Member]
Stockholders’ Equity
Preferred stock	(417)	[7]
Common stock	4,171	[7]
Additional paid-in capital	(3,754)	[7]
Retained Earnings/ accumulated Deficit	227,844	[8]
Noncontrolling interest	(227,844)	[8]
Total equity
Total equity and liabilities
[1] To record costs associated with the Acquisition. [2] To record purchase price in excess of fair value of net assets acquired, based on a preliminary purchase price allocation. [3] To record the issuance of 4,171,328 Series A Convertible Preferred Shares of the Company, at a price per of $0.338. These Preferred Ordinary Shares convert into common shares on a 1-for-10 basis. [4] To record the issuance of 3,818,969 Series A Ordinary Shares of the Company, at a price per of $0.338. [5] To record the additional paid in capital recorded in the Acquisition. [6] To represent the value of QIND that is not directly owned by HTOO at the time the Acquisition closes. [7] To account for the conversion of preferred shares into common shares at a 10 for 1 ratio once transaction closing requirements are met, at which point QIND becomes a wholly owned subsidiary of HTOO. [8] To account for the additional 30.64% equity value of QIND that has been subsumed into HTOO and is no longer considered non-controlling interest, post transaction closing requirements are met.

v3.25.0.1

Audited Pro Forma Combined Financial Information As Of The Year Ended December 31, 2023 - Schedule of Operations (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
HTOO [Member]
Schedule of Operations [Line Items]
Revenue	$ 4,481,822
Cost of revenues	21,727,430
Gross profit	(17,245,608)
Total operating expenses	22,842,112
Income (loss) from operations	(40,087,720)
Other (income) expenses	(6,977,679)
Operating profit before tax	(33,110,041)
QIND [Member]
Schedule of Operations [Line Items]
Revenue
Cost of revenues
Gross profit
Total operating expenses	2,704,320
Income (loss) from operations	(2,704,320)
Other (income) expenses	1,457,477
Operating profit before tax	(4,161,797)
Pro-forma adjustment Transaction costs [Member]
Schedule of Operations [Line Items]
Revenue
Cost of revenues
Gross profit
Total operating expenses	198,688
Income (loss) from operations	(198,688)
Other (income) expenses
Operating profit before tax	(198,688)
Consolidated 31-Dec-23 [Member]
Schedule of Operations [Line Items]
Revenue	4,481,822
Cost of revenues	21,727,430
Gross profit	(17,245,608)
Total operating expenses	25,745,119
Income (loss) from operations	(42,990,727)
Other (income) expenses	(5,520,202)
Operating profit before tax	$ (37,470,526)

v3.25.0.1

Group Companies - Schedule of Group Companies (Details)	6 Months Ended
	Jun. 30, 2024
Fusion Fuel Portugal, S.A. [Member]
Schedule of Group Companies [Line Items]
Country of incorporation	Portugal
Principal activities	Operating company
Group interest	100.00%
Fuel Cell Évora, Unipessoal LDA [Member]
Schedule of Group Companies [Line Items]
Country of incorporation	Portugal
Principal activities	Hydrogen production
Group interest	100.00%
Fuel Cell Évora I, Unipessoal LDA [Member]
Schedule of Group Companies [Line Items]
Country of incorporation	Portugal
Principal activities	Hydrogen production
Group interest	100.00%
Fusion Fuel USA, Inc. [Member]
Schedule of Group Companies [Line Items]
Country of incorporation	United States
Principal activities	Operating company
Group interest	100.00%
Fusion Fuel Spain, S.L. [Member]
Schedule of Group Companies [Line Items]
Country of incorporation	Spain
Principal activities	Hydrogen production
Group interest	50.00%
Fusion Fuel Australia, PTY Ltd [Member]
Schedule of Group Companies [Line Items]
Country of incorporation	Australia
Principal activities	Hydrogen production
Group interest	100.00%
Fusion Fuel Australia – Pilot PTY Ltd [Member]
Schedule of Group Companies [Line Items]
Country of incorporation	Australia
Principal activities	Hydrogen production
Group interest	100.00%
Hevo Sines, Unipessoal LDA [Member]
Schedule of Group Companies [Line Items]
Country of incorporation	Portugal
Principal activities	Hydrogen production
Group interest	100.00%
Hevo Sines II, Unipessoal LDA [Member]
Schedule of Group Companies [Line Items]
Country of incorporation	Portugal
Principal activities	Hydrogen production
Group interest	100.00%
Hevo Sines III, Unipessoal LDA [Member]
Schedule of Group Companies [Line Items]
Country of incorporation	Portugal
Principal activities	Hydrogen production
Group interest	100.00%
Hevo Portugal, Unipessoal, LDA [Member]
Schedule of Group Companies [Line Items]
Country of incorporation	Portugal
Principal activities	Hydrogen production
Group interest	100.00%
Hanoi Asset Management, S.L. [Member]
Schedule of Group Companies [Line Items]
Country of incorporation	Spain
Principal activities	No activity to date
Group interest	100.00%
Hevo Aveiro, Unipessoal LDA [Member]
Schedule of Group Companies [Line Items]
Country of incorporation	Portugal
Principal activities	Hydrogen production
Group interest	100.00%

---