Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words "believes," "project," "expects," "anticipates," "estimates," "intends," "strategy," "plan," "may," "will," "would," "will be," "will continue," "will likely result," and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.





Business Overview



Change in Control

On May 28, 2022, Modern Art Foundation Inc. ("Modern Art"), Rene Lauritsen and Fastbase Holding Inc. agreed to transfer 77,669,078 shares of their common stock in our Company, Quality Industrial Corp., to Ilustrato Pictures International Inc. ("ILUS"). Pursuant to a Stock Purchase Agreement, ILUS purchased the shares for an aggregate amount of $500,000. Mr. Nicolas Link is CEO of ILUS which is the beneficial owner.

As a result of this transaction, there has been a change in control of our Company. The 77,669,078 shares transferred amounts to 77% 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.

As a result of the change of control, Mr. Quintal resigned as Chairman of the Board, and Mr. Link was appointed as the Company's Chairman of the Board. There was no known disagreement with Mr. Qunital on any matter relating to our operations, policies or practices.

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.

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 a subsidiary to Ilustrato.





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Change in Business Direction

On June 30, 2022, ILUS signed a binding Letter of Intent for the Company to acquire a 51% interest in an International process Engineering Company and manufacturer of custom solutions for the Oil and Gas, Power/Energy, Water, Desalination, Wastewater, Offshore and Public Safety. It has Oil and Gas industry certifications in place and is on several global preferred vendor lists including but not limited to BP, Shell, Total, Chevron, Sonatrach, Sasol & Gasco.

In the agreed assumed equity valuation, subject to completion of financial due diligence and business valuation ,will be holding 51% of the shareholding of the International process engineering company. As payment, company will receive a combination of cash investment over a period exceeding one year after closing, with convertible preferred shares of QIND which will be tied to lock up and leak out clauses. Quality Industrial Corp. has the right of first refusal to purchase these shares back redeemable at $0.75 per share.

The Agreement is predicated upon the execution and delivery of a definitive Stock Purchase Agreement for the transaction. The transaction is expected to close within thirty (30) business days.

On August 3, 2022, we issue to an accredited investor a two year convertible promissory note in the principal amount of $1,100,000 (the "Note"). The Note bears interest at 7% per annum. We have 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 $1.00 per share.

The Company expects to continue to acquire and drive broad-based market awareness among both sections of our company focusing on the end user of our products. Our marketing channels continue to expand as our number of satisfied customers increase, creating additional referrals to augment our traditional print, online and social media efforts. We also rely heavily on our relationships with trade partners in the construction industry for involvement with their projects.

Our offices are located at 315 Montgomery Street, San Francisco, CA 94104, and our telephone number is 800-706-0806. Our website address is www.qualityindustrialcorp.com and our email address is info@ qualityindustrialcorp.com. Information contained on, or accessible through, the foregoing website is not a part of, and is not incorporated by reference into, this Quarterly Report on Form 10-Q.

Results of Operation for the Six Months Ended June 30, 2022 and 2021





Revenues

We earned no revenues for the six months ended June 30, 2022 or 2021. We recently entered into a binding letter of intent to acquire an International process Engineering Company and will generate revenues for the remainder of 2022 as a result of the consolidation into our financial results. The Company is revenue generating company and manufactures custom solutions for the Oil and Gas, Energy, Water Desalination, Waste-Water, Offshore and Public Safety sectors.





Operating Expenses

Operating expenses decreased from $409,745 for the six months ended June 30, 2021 to $275,084 for the six months ended June 30, 2022. The main reason for the decrease in operating expenses for the 2022 period was considerably less spent on general and administrative expenses and professional fees over the same period in 2021. We have not issued stock for services for the six month ended June 30, 2022.

We anticipate our operating expenses will increase as we undertake our plan of operations associated with the international process engineering company. The increase will be attributable to administrative and operating costs associated with our business activities and the professional fees associated with our reporting obligations.





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Other Income / Expense

We incurred other income of $350,537 for the six months ended June 30, 2022 as compare with other expense of $2,212 for the same period ended 2021. Our other income in 2022 was the result of a gain on settlement and forgiveness of debt, offset mainly by a loss on a license agreement. Our other expense in 2021 was mainly the result of interest expense.





Net Income/Net Loss

We incurred net income of $75,453 for the six months ended June 30, 2022, compared to a net loss of $411,957 for the same period ended June 30, 2021.

Liquidity and Capital Resources

As of June 30, 2022, we had total current assets of $23,413 and total current liabilities of $120,636. We had a working capital deficit of $97,223 as of June 30, 2022. This compares with a working capital deficit of $369,007 as of December 31, 2021.

Net cash used in operating activities was $151,904 for the six months ended June 30, 2022, as compared with $234,848 in cash for the same period ended 2021.

Financing activities provided $150,691 in cash for the six months ended June 30, 2022, as compared with $249,999 in cash provided for the same period ended 2021. Most cash provided in 2022 was from our S-1 equity line with White Lion Capital, which was deregistered on June 22, 2022. The majority of cash provided in 2021 was proceeds from the Credit Agreement with Rasmus Refer, our former officer and director.



Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, liquidation of liabilities, the continued ability to raise capital as and when required, in the normal course of business.





Future Financings.

Because of our limited operating history, it is difficult to predict our capital needs on a monthly, quarterly or annual basis. We do not have financing in place at this time other than capital from our parent company Ilustrato Pictures International Inc.





Critical Accounting Policies.

In December 2001, the SEC requested that all registrants list their most "critical accounting polices" in the Management Discussion and Analysis. The SEC indicated that a "critical accounting policy" is one which is both important to the portrayal of a company's financial condition and results, and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies are disclosed Note 2 of our unaudited financial statements included in this Quarterly Report on Form 10-Q.

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.





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Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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