Fusion Fuel to acquire majority stake in Quality Industrial Corp.

Fusion Fuel (HTOO) Green has signed a binding agreement to acquire an approximately 70% ownership interest in Quality Industrial Corp. from its controlling shareholders. QIND operates in the gas supply and services sector, with expertise across the industrial and utility value chain. This acquisition, which the Company expects to close shortly, marks a pivotal step in Fusion Fuel’s strategy to build a full-service energy engineering business, combining capabilities in both the traditional and clean energy sectors to meet the evolving demands of the global power and utilities market. To acquire this stake in QIND, at the close the Company will issue a combination of 19.99% of its ordinary shares, along with convertible preferred shares, resulting in the QIND sellers holding a stake of approximately 70% of Fusion Fuel on an as-converted, fully diluted basis, which will provide for significant alignment of ownership interests and foster long-term growth. The preferred shares, however, cannot be converted until the Company’s shareholders approve their conversion to ordinary shares. QIND, whose operations are headquartered in Dubai, United Arab Emirates, is an industrial company specializing in the energy sector. In 2023, its operating business, Al Shola Gas, reported $11 million in revenue and $1.8 million in net income. Leading into the fourth quarter, operating business revenue and net income were up 19.5% and 12.4%, respectively, compared with the same nine months ending in 2023. Al Shola Gas currently services nearly 40,000 customers across the Middle East from its seven operating facilities, with a fleet of vehicles and over 100 employees. It holds international certifications and approvals from local government entities, supporting an extensive list of clientele that includes prominent organizations such as Emirates Airlines, Emaar Properties, the Government of Dubai, Dubai Properties, WASL Group, and numerous others. Through this transaction, Fusion Fuel aims to integrate complementary expertise and recurring revenue from markets with proven existing demand into its portfolio, enabling the combined entity to serve a broader spectrum of customer needs. The acquisition is anticipated to yield significant synergies, especially between Fusion Fuel’s specialized hydrogen engineering services and QIND’s competencies across the gas and utility value chain. This acquisition will create new opportunities for QIND to expand its offerings in European markets, where demand for gas engineering expertise is consistently growing. It will also allow Fusion Fuel to extend its hydrogen engineering services into the Middle East, a region seeing a growth in demand and significant investment. As recently announced, Fusion Fuel’s Portuguese operating subsidiary-responsible for conducting the most significant part of the Company’s technology development and production-has filed for insolvency. Management views this step as an opportunity to recalibrate its business strategy to better align with current market conditions. In the near term, the Company will focus on enhancing its hydrogen engineering and advisory offerings, where it is uniquely positioned to deliver high-value solutions with low capital expenditure and a highly scalable business model, while prioritizing the integration of the newly acquired gas services business. This approach will enable Fusion Fuel to effectively capitalize on customer demand across traditional and clean energy sectors amid shifting market dynamics. The Purchase Agreement sets forth material terms and conditions for the transaction that, if consummated, would result in Fusion Fuel’s acquisition of approximately 70% of the issued and outstanding share capital of QIND. The closing will be subject to the satisfaction or waiver of certain terms and conditions. If the closing occurs, certain post-closing requirements will become applicable, including stockholder approval of related matters and Nasdaq clearance of a new initial listing application, and failure to satisfy such requirements within a certain period may result in the unwinding of the acquisition by the Company of the shares of QIND. There can be no assurance that the closing will occur, or that post-closing requirements for the acquisition will be met.