What changed in this filing

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Item 1. Business

2021-03-31 compared with 2020-03-30 · 189 added, 329 removed, 46 unchanged (92% of the section changed)

6 unchanged sentences

Since its incorporation, the Company has been involved in various lines of business.

2008 and 2013, the Company was in the business of developing oil and gas reserves while increasing the production rate base and

The plan was to continue acquiring oil and gas leases for drilling and to take advantage of other opportunities and

strategic alliances.

Due to declines in production with respect to the Company’s oil and gas leases, the Company sought

to explore its position in the oil industry.

As the operational leases for the Company were not providing sufficient cash flow

from operations to allow management to expand its investment in this industry, other potential opportunities were evaluated.

January 2014, the Company had determined it was in the best interest of stockholders to focus on operating companies with a track

record of positive cash flows and larger existing revenue bases.

The Company’s strategy developed into leveraging management’s

relationships in the business world for investments for the Company.

On January 10, 2014, the Company entered into that certain

Share Purchase Agreement with Quest Solution, Inc., an Oregon corporation (“Quest Solution”), in the technology, software,

and mobile data collection systems business, in order to acquire Quest Solution for a purchase price of $16.0 million , payable

in the form of (i) a promissory note for $5.0 million;

and (ii) a promissory note for $11.0 million.

November 19, 2014, the Company entered into a Stock Purchase Agreement with Bar Code Specialties, Inc., a California corporation

(“BCS”), and David Marin, the sole stockholder of BCS, pursuant to which the Company agreed to purchase all outstanding

shares of common stock of BCS held by Mr.

Marin for an aggregate purchase price of $10.4 million, payable in the form of a five-year

secured subordinated convertible promissory note.

BCS is a company specializing in systems integration and data collection.

the Company focused on the distribution vertical, but quickly grew its operational focus to include retail, manufacturing, food,

and healthcare.

October 1, 2015, the Company acquired the interest in ViascanQdata, Inc.

(“ViascanQData”), a Canadian based operation

in the same business line as OMNIQ.

The purchase price for the shares of ViascanQdata was 5,200,000 shares of Series B Preferred

Stock (which were convertible on a 1:1 basis into common shares, with no other preferential rights) as well as a promissory note

of $1.5 million.

September 30, 2016, the Company sold all of the outstanding shares of Quest Solution Canada Inc., and the consideration received

was $1.0 million in cash of which $575 thousand was received at closing and the balance was received on April 30, 2017.

the Company has redeemed 1 share of Preferred Class B Stock and 1,839,030 shares of Preferred Class C Stock of the Company, as

well as the accrued dividend of $32 thousand thereon.

Lastly, Quest Exchange Ltd., a wholly owned subsidiary of the Company, redeemed

5,200,000 exchangeable shares as part of the divestiture.

Additionally,

as part of the transaction, Viascan Group Inc., the acquirer, assumed $1.0 million of liabilities which the Company had at September

Other consideration that is part of the transaction includes:

release from five employment contracts, inclusive of the former CEO, Gilles Gaudreault.

This release included cancelation

of the contracts as well as the deferred salary and signing bonus provisions which would have inured to the employee.

Company cancelled the intercompany debts of approximately $7.0 million as well.

was also to receive a contingent consideration of 15% of the net value

proceeds, up to a maximum of $2.3 million, received upon a liquidity event or a change

of control of Quest Solution Canada Inc.

for a period of 7 years subsequent to the transaction.

Company also negotiated a right of first refusal for any offer to purchase Quest Solution

for a 7 year period.

In connection with the payments referenced above,

the Company relinquished its right of first refusal.

to December 31, 2018, the Company learned that Quest Solution Canada, Inc.

was sold mostly for the assumption of certain

The Company reached an agreement with Quest Solution Canada requiring it to pay the Company an aggregate

of $200 thousand divided into monthly payments which payments are currently being made.

February 26, 2018, the Company entered into a lease termination agreement with David and Kathy Marin whereby it cancelled the

lease for the premises located at 12272 Monarch St., Garden Grove, California effective as of April 20, 2018.

February 28, 2018, the Company entered into a settlement agreement with George Zicman whereby the Company settled its indebtedness

Zicman in the amount of $1.3 million in full in exchange for 60 monthly payments of $3 thousand each commencing the earlier

of (i) October 26, 2018 or (ii) the date when the Company’s obligation under its promissory note with Scansource, Inc.

the amount of $2.8 million is satisfied and all amounts currently due under the credit agreement with Scansource (currently approximately

$6.0 million) is reduced to $2.0 million.

In addition, the Company issued Mr.

Zicman an aggregate of 5,000 shares of common

stock and 600,000 shares of Series C Preferred Stock with the same rights and restrictions as described below in the description

of the Marin Settlement II Agreement.

The effective date of the agreement is December 30, 2017.

February 28, 2018, the Company entered into a settlement agreement with Kurt Thomet whereby the Company settled its indebtedness

Thomet in the current amount of $5.4 million in full in exchange for 60 monthly payments of $13 thousand each commencing

the earlier of (i) October 26, 2018 or (ii) the date when the Company’s obligation under its promissory note with Scansource,

in the amount of $2.8 million is satisfied and all amounts currently due under the credit agreement with Scansource (currently

approximately $6.0 million) is reduced to $2.0 million.

In addition, the Company issued Mr.

Thomet an aggregate of 25,000

shares of restricted common stock and 1,000,000 shares of Series C Preferred Stock with the same rights and restrictions as described

below in the description of the Marin Settlement II Agreement.

February 28, 2018, the Company entered into two settlement agreements with David and Kathy Marin (the “Marin Settlement

Agreements”).

Pursuant to the first Marin Settlement Agreement (the “Marin Settlement Agreement I”), the Company

and the Marins agreed to reduce the Company’s purchase price for all of the capital stock of Bar Code Specialties, Inc.,

which was acquired by the Company from the Marins in November 2014.

In the 2014 acquisition, the Company had issued David Marin

a promissory note for $11.0 million of which an aggregate of $10.7 million (the “Owed Amount”) was outstanding as

of February 26, 2018 which includes accrued interest earned but not paid.

Pursuant to the Marin Settlement I Agreement, the amount

of the indebtedness owed to Marin was reduced by $9.5 million bringing the total amount owed to $1.2 million.

Section 3.1 of the

original note was amended to provide that the Company shall pay the Marins 60 monthly payments of $20 thousand each commencing

the earlier of (i) October 26, 2018 and (ii) the date that the Company’s obligation to Scansource, Inc., in the amount of

$2.8 million is satisfied and all amounts currently in default under the credit agreement with Scansource (currently approximately

$6.0 Million) is reduced to $2.0 million.

The Marins released their security interest against the Company.

In connection with

the $9.5 million reduction in the purchase price, the Company issued the Marins 3 year warrants to purchase an aggregate of 150,000

shares of Common Stock at an exercise price of $4.00 per-share.

February 28, 2018, the Company entered into an additional settlement agreement with the Marins (the “Marin Settlement Agreement

II”) whereby the Company settled a promissory note owed to the Marins in the original principal amount of $100 thousand

which currently had a balance of $111 thousand in its entirety in exchange for an aggregate of 85,000 shares of the Company’s

Series C Preferred Stock.

The Series C Preferred Shares outstanding are convertible into common stock at the rate of 20 Preferred

Shares to one share of common stock.

The Series C Preferred Stock has a liquidation value and conversion price of $1.00 per share

($20.00 per 20 shares of Preferred Stock which convert to one share of common stock) and automatically converts into Common Stock

at $1.00 per share ($20.00 per 20 shares of Preferred Stock which convert to one share of common stock) in the event that the

Company’s common stock has a closing price of $30 per share for 20 consecutive trading days.

The Preferred Stock

pays a 6% dividend commencing two years from issuance.

During the first two years, the Series C Preferred Stock shall

neither pay nor accrue the dividend.

The Company also agreed to transfer title to a vehicle that was being utilized by Mr.

to David Marin.

In exchange therefor, the $100 thousand Note and the accrued interest thereon was cancelled in its entirety.

of the Marins, Thomet and Zicman entered into a voting agreement with the Company whereby they agreed to vote any shares of common

stock beneficially owned by them as directed by the Company’s CEO and also agreed to a leakout restriction whereby they

each agreed not to sell more than 10% of the common stock beneficially owned during any 30-day period.

June 7, 2018, the Company entered into a settlement agreement (the “Settlement Agreement”) with Jason Griffith, a

creditor and principal stockholder of the Company.

Griffith is the owner of a promissory note in the principal amount of $1.25

million plus he is owed accrued interest of $125 thousand and is owed an additional $215 thousand of accrued dividends on his

Series C Preferred Stock (the $1.6 million as calculated above is collectively referred to as the “Owed Amount”).

Pursuant to the Settlement Agreement, Griffith will convert the Owed Amount into 430,000 shares of the Company’s

restricted common stock and the Owed Amount will be deemed satisfied in full.

Griffith will continue to retain ownership of his

1,800,000 shares of Series C Preferred Stock except that he agrees that all accrued dividends are deemed satisfied and no dividends

will be payable or will accrue on these preferred shares until one year from the date of the Settlement Agreement.

C Preferred Shares outstanding are convertible into common stock at the rate of 20 Preferred Shares to one share of common stock.

The Series C Preferred Stock has a liquidation value and conversion price of $1.00 per share ($20.00 per 20 shares of Preferred

Stock which convert to one share of common stock) and automatically converts into Common Stock at $1.00 per share ($20.00 per

20 shares of Preferred Stock which convert to one share of common stock) in the event that the Company’s common stock has

a closing price of $30 per share for 20 consecutive trading days.

Griffith has agreed that he will not publicly sell more

than 10% of any Shares of Common Stock beneficially owned by him in any 30-day period.

October 5, 2018, the Company entered into a purchase agreement (the “HTS Purchase Agreement”) with Walefar Investments,

(“Walefar”) and Campbeltown Consulting, Ltd.

(“Campbeltown”) (Walefar and Campbeltown are collectively

referred to as the “Sellers”).

Pursuant to the HTS Purchase Agreement, the Company purchased 100% of the capital stock

of HTS Image Processing, Inc.

(“HTS”) from the Sellers.

As consideration, the Company (i) issued to the Sellers 1,122,648

shares of the Company’s common stock, having a value of $5.3 million based on the average closing price of the common

stock for the 20 days’

preceding the HTS Purchase Agreement (the “Per Share Value”), (ii) cash in the amount

of $300 thousand, and (iii) a 12 month convertible promissory note with a principal amount of $700 thousand and an interest rate

of six percent (6%) per year.

The note also provides the Sellers the right to convert all or any portion of the then outstanding

and unpaid principal amount and interest into fully paid and non-assessable shares of the Company’s common stock at a conversion

price of $4.72.

The HTS Purchase Agreement constitutes a “related party transaction”

because of Company director

Shai Lustgarten’s position as Chief Executive Officer of HTS and stock ownership in HTS.

Additionally, Campbeltown is a

“related party”

because Carlos Jaime Nissenson, the beneficial owner of Campbeltown, is a consultant to the Company,

a principal stockholder of the Company, and father of Company director Neev Nissenson.

Carlos Jaime Nissenson was also a stockholder

and director of HTS.

Pursuant to the agreement, Shai Lustgarten received 561,324 shares of the Company’s common stock

and Carlos Jaime Nissenson received 561,324 shares of the Company’s common stock.

May 29, 2019, the Company, Campbeltown and Walefar entered into an Amendment to the HTS Purchase Agreement (the “Amendment”),

which provided for an adjustment to the number of shares of common stock issued to Walefar and Campbeltown in the acquisition

Pursuant to the Amendment, Campbeltown and Walefar agreed to return for cancelation 277,166 and 277,116

shares of common stock respectively.

This Amendment reduced the number of shares issued in the acquisition to 568,415 shares

from 1,122,648 shares and the amount of share consideration to approximately $2.7 million from approximately $5.3 million.

This adjustment was made as a result of a correction in the calculation of working capital and other share give back provisions

of the HTS Purchase Agreement.

This Amendment also reduced the Company’s issued and outstanding common stock to 3,850,451

shares from 4,404,684 shares as of June 4, 2019.

April 4, 2019, the Company entered into a form of Securities Purchase Agreement (the “Securities Purchase Agreement”)

with accredited investors (the “Purchasers”).

Pursuant to the Securities Purchase Agreement, on April 9, 2019 (the

“Closing Date”), the Company sold an aggregate, with the Conversions included, of $5.0 million of units (the “Units”)

resulting in gross proceeds of $5.0 million, before deducting placement agent fees and offering expenses (the “Offering”).

The individual Unit purchase price was $6.00.

Each Unit is comprised of one share of the Company’s common stock,

$0.001 par value per share (the “Common Stock”), and a warrant to purchase one share of Common Stock, and, as a result

of the Offering, the Company issued 833,333 shares of Common Stock (the “Shares”) and warrants (the “Warrants”)

to purchase 833,333 shares of Common Stock (the “Warrant Shares”) at an exercise price equal to $7.00

per Warrant Share, which Warrants are exercisable for a period of five and one-half years from the issuance date.

Both Shai Lustgarten,

the Company’s Chief Executive Officer, and Carlos J.

Nissenson, a consultant to and principal stockholder of the Company,

participated in the Offering by converting $200 thousand each of unpaid principal owed to them from the HTS acquisition (the “Conversions”),

by the Company in exchange for Shares and Warrants on the same terms as all other Purchasers.

With the Conversions included, the

Offering resulted in gross proceeds of $5.0 million.

As a result of the Conversions, a principal amount of $150 thousand is owed

to each Walefar and Campbeltown respectively under the note issued to them as partial consideration in the sale of HTS Image Processing

to the Company on October 5, 2018.

November 18, 2019, the Company filed an amendment to its Certificate of Incorporation, as amended, with the Secretary of

State of Delaware, pursuant to which the Company i) changed its name from Quest Solution, Inc.

2008 to 2013, we were in the business of developing oil and gas reserves.

In January 2014, we determined it was in the best

interest of our stockholders to focus on operating companies with a track record of positive cash flows and larger existing

revenue bases.

Our strategy developed into leveraging management’s relationships in the business world for investments

2014, we have made the following acquisitions resulting in us becoming a leading provider of computerized and machine vision image

processing solutions:

Solutions, Inc.

(January 2014)

Code Specialties, Inc.

(November 2014)

ViascanQdata,

Inc (October 2015 –

later sold in September 2016)

Image Processing, Inc.

(October 2018)

Consulting LLC.

(February 2020)

use patented and proprietary artificial intelligence (AI) technology to deliver data collection, real time surveillance and monitoring

for supply chain management, homeland security, public safety, traffic & parking management and access control applications.

The technology and services we provide helps our clients move people, assets and data safely and securely through airports, warehouses,

schools, national borders, and many other applications and environments.

offer end-to-end solutions that include hardware, software, communications, and full lifecycle management services.

are an established manufacturer and distributor of barcode labels, tags, and ribbons, as well as RFID labels and tags.

tenured team of professionals has the knowledge and expertise to simplify the integration process for our customers, and our team

delivers proven problem-solving solutions backed by numerous customer references.

We offer comprehensive packaged and configurable

software and we are a leading provider of best-in-class mobile and wireless equipment.

customers include government agencies and leading Fortune 500 companies from diverse sectors, including healthcare, food and beverage,

manufacturing, retail, distribution, transportation and logistics, and oil, gas, and chemicals.

Since 2014, our annual

consolidated revenues have grown to more than $50 million with clients in more than 40 countries.

address several billion-dollar markets with double-digit growth, including the Global Safe City market, forecasted to grow to

$29.6 billion by 2022, and the Ticketless Safe Parking market, forecasted to grow to $5.2 billion by 2023.

November 2019, the Company filed an amendment to its Certificate of Incorporation, as amended, with the Secretary of State of

Delaware, pursuant to which we changed our name from Quest Solution, Inc.

to OMNIQ Corp.

and ii) effected

a reverse split of its common stock at a ratio of one (1) for twenty (20), effective November 20, 2019 (the “Reverse Split”).

above section’s discussion of the Company’s securities reflects the consolidation of shares as a result of

the Reverse Split.

the divestiture of Quest Solution Canada Inc., the Company’s strategy has been to focus on operational excellence and cost

reduction, addressing the balance sheet debt load and putting together a business plan that is based on revenue growth and technological

The Company intends to continue to identify synergies within the Company to offer a more complete offering of products,

services and technological solutions to customers throughout the United States.

Furthermore, the market in which OMNIQ operates

is undergoing consolidation and OMNIQ intends to start identifying strategic companies in the data collection, big data analytics

and mobile systems integration market, as well as other complementary technologies for potential future acquisition in order to

become the leading specialty integrator within our served markets.

Company is a provider of products and solutions to two main markets, Supply Chain Management and Smart/Safe City.

has recently expanded its product solutions, which are based on Artificial Intelligence (“AI”) and Machine

Learning algorithms and offer Computer Vision applications.

OMNIQ’s newest product offerings have not only established the

Company as an innovative and technological company, but also one that is, able to offer its fortune 1,000 customers an end-to-end

OMNIQ is a pioneer in providing cutting edge technological solutions to the markets it serves.

The Company, as a world-wide

systems integrator, focuses on design, delivery, deployment and support of fully integrated mobile and automatic identification

data collection solutions.

OMNIQ uses unique Computer Vision technology and additional identification technologies in its solutions.

The Company is also a manufacturer and/or distributor of labels, tags, ribbons and RFID identification tags.

OMNIQ takes a consultative

strategy is to focus on operational excellence and cost reduction, addressing the balance sheet debt and putting together a business

plan that is based on revenue growth and technological leadership.

We intend to continue to identify synergies within

the Company to offer a more complete offering of products, services and technological solutions to customers throughout the United

Furthermore, the market in which OMNIQ operates is undergoing consolidation and OMNIQ intends to start identifying strategic

companies in the data collection, big data analytics and mobile systems integration market, as well as other complementary technologies

for potential future acquisition in order to become the leading specialty integrator within our served markets.

are a provider of products and solutions to two main markets, supply chain management and smart/safe city.

We have expanded our

product solutions, which are based on artificial intelligence and machine learning algorithms, offering computer vision applications.

Our product offerings have established us as an innovative and technological company, and we are able to offer our fortune 1,000

customers an end-to-end solution.

We are a pioneer in providing cutting-edge technology solutions to the markets we serve.

a world-wide systems integrator, we focus on design, delivery, deployment and support of fully integrated mobile and automatic

identification data collection solutions.

We use unique computer vision technology and additional identification technologies

in its solutions.

We also manufacturer and/or distributor labels, tags, ribbons and RFID identification tags.

We take a consultative

approach by offering end-to-end solutions that include software, algorithm, hardware, service contracts, communications and full

lifecycle management services.

OMNIQ simplifies the integration process with its experienced team of professionals.

delivers problem solving solutions backed by numerous customer references.

The Company offers comprehensive packaged and configurable

software some of which is developed by OMNIQ and some of it is sourced from 3 rd parties.

OMNIQ is also a leading providing

of bar code labels and ribbons (media) to its customers.

OMNIQ provides consultative services to companies to select, design and

manufacture the right label for their product offering.

Once a company selects the product, sales are generally highly repeatable

on a regular basis.

OMNIQ’s

newest offering of groundbreaking AI-based vision solutions are currently in use for sensitive Homeland Security anti-terror projects

and automated parking solutions.

by time-critical “friend or foe”

decision-making processes, OMNIQ’s patented algorithms are based on a combination

of cognitive science and machine learning-based pattern recognition technology which is arbitrated through a multi-layered decision-making

process that offers both speed and accuracy.

OMNIQ’s

are able to simplify the integration process because of our experienced team of professionals.

We deliver problem solving solutions

backed by numerous customer references.

We offer comprehensive packaged and configurable software, some of which we developed

and some of it is sourced from third parties.

We are a leading providing of bar code labels and ribbons (media).

consultative services to companies to select, design and manufacture the right label for their product offering.

Once a company

purchases our product, sales generally recur on a regular basis.

groundbreaking AI-based vision solutions are currently in use for sensitive Homeland Security anti-terror projects and automated

parking solutions.

Inspired by time-critical “friend or foe”

decision-making processes, our patented algorithms are

based on a combination of cognitive science and machine learning-based pattern recognition technology which is arbitrated through

a multi-layered decision-making process that offers both speed and accuracy.

experienced team of consulting and integration professionals guide companies through the entire development and deployment process,

from selecting technology to the successful company-wide rollout of a customized solution that fits a company’s unique requirements.

After performing a thorough technical evaluation of the client’s current operations and specific operational problems, OMNIQ’s

After performing a thorough technical evaluation of the client’s current operations and specific operational problems, our

team determines the optimal hardware and software solutions to optimize the client’s operational workflow.

OMNIQ delivers,

ongoing services provided throughout the deployment process and throughout the entire product life cycle.

OMNIQ also delivers

full installation services for all mobile, data collection computers and printing equipment including full staging and kitting

of the equipment.

has been successful in delivering mission critical mobile computing and data collection solutions to Fortune 1000 companies for

We deliver, ongoing

services provided throughout the deployment process and throughout the entire product life cycle.

We also deliver full installation

services for all mobile, data collection computers and printing equipment including full staging and kitting of the equipment.

have been successful in delivering mission critical mobile computing and data collection solutions to Fortune 1000 companies for

over two decades.

1 unchanged sentence

and services to make their business more competitive and profitable.

The result is a continuous flow of opportunities for OMNIQ

to assist customers to evaluate, choose, implement, and support the right mobile and data collection solutions.

As we focus on

what we do best, we believe that there is more than adequate market size, growth and opportunity available to the Company to succeed.

to the solutions offered by OMNIQ is a full suite of configurable packaged software solutions that were internally developed and

provide customers with unique solutions with significant business Return on Investment (“ROI”), including:

The result is a continuous flow of opportunities for us to

assist customers to evaluate, choose, implement, and support the right mobile and data collection solutions.

As we focus on what

we do best, we believe that there is more than adequate market size, growth and opportunity available to the Company to succeed.

to the solutions offered by the Company is a full suite of configurable packaged software solutions that were internally developed

and provide customers with unique solutions with significant business Return on Investment (“ROI”), including:

Software designed to increase productivity in the field.

Remote workers increasingly demand rapid access to

real-time information and up to date data to facilitate and streamline their job functions in the field for which we believe OMNIQ’s

real-time information and up to date data to facilitate and streamline their job functions in the field for which we believe our

Order Entry Software is the answer.

Software packages designed to increase overall productivity.

In the fourth quarter of 2016, OMNIQ introduced

the next generation of Direct Store Delivery (DSD) and Proof of Delivery software called Route Edge TM .

The OMNIQ DSD

and Route Edge TM software packages include proprietary applications for portable devices, computer servers and management

dashboards that extend the power of existing systems out to field associates to enhance routing and delivery efficiency.

Adds intelligence to aging order entry system to maximize profits.

The hand held industry is a

vital link in getting remote orders from the field to corporate.

OMNIQ’s Intelligent Order Entry Software adds this capability

to aging order entry systems.

The hand held industry is a vital link

in getting remote orders from the field to corporate.

Our Intelligent Order Entry Software adds this capability to aging order

entry systems.

Track Device Deployment.

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Enhances document delivery performance.

OMNIQ offers proof-of-delivery capabilities as part of its Mobility

We offer proof-of-delivery capabilities as part of its Mobility

Suite that we believe gives companies an edge over competitors by improving customer service.

5 unchanged sentences

Easy order on-line purchasing portal.

OMNIQ’s Easy Order Solution offers companies a customized portal

that streamlines and simplifies ordering by providing clients with their own unique private on-line store.

Our Easy Order Solution offers companies a customized portal that streamlines

and simplifies ordering by providing clients with their own unique private on-line store.

(Quest Total Solutions as a Service ) :

QTSaaS is a complete mobile services offering that includes hardware,

software, services and wireless data in a bundled subscription payment offering over a period of time.

OMNIQ’s partnership

with Hyperion Partners LLC and wireless carriers allows OMNIQ to offer mobility solutions to our customers on platforms that extend

the market into new mobile applications that previously were not being automated.

QTSaaS is a complete mobile services offering that includes hardware, software,

services and wireless data in a bundled subscription payment offering over a period of time.

Our partnership with Hyperion Partners

LLC and wireless carriers allows us to offer mobility solutions to our customers on platforms that extend the market into new

mobile applications that previously were not being automated.

and Label Business:

1 unchanged sentence

The largest segment of data collection opportunity

for OMNIQ is the barcode label market providing ongoing and repeatable purchasing business.

OMNIQ intends to continue in the label

business in the United States to drive business growth and increased margins.

two markets the Company serves are Smart/Safe City and Supply Chain Management.

OMNIQ’s groundbreaking AI-based vision solutions

are currently in use for sensitive Homeland Security anti-terror projects and discerning customers within the access control,

airport, border crossing, municipality safety and parking industries.

OMNIQ seeks to utilize its expertise and end-to-end software

solutions in markets which we believe provide the greatest opportunity to increase margins.

the Supply Chain Management market, OMNIQ believes it can further develop its existing customer base that is in need of replacing

their legacy systems with a new go-to-market strategy that leverages our field sales and system resources, telemarketing, customer

portals and vertical market and barcode label specialists.

OMNIQ also believes that its base of industry leading customers for

the Company’s barcode label and ribbon (media) products in the manufacturing, distribution, transportation and logistics,

retail and healthcare sectors, which sectors are at the core of OMNIQ’s business are also ideal candidates for the Company’s

machine learning technology.

OMNIQ has been successful in integrating mission critical mobile computing and data collection solutions

for Fortune 1000 companies for over two decades.

The requirements and needs of our customers continue to evolve as they require

new mobile and wireless technologies and services to make their business more competitive and profitable.

The result is a continuous

flow of opportunities for OMNIQ to assist customers to evaluate, choose, implement, and support the right mobile and data collection

As we focus on what we do best, we believe that there is more than adequate market size, growth and opportunity available

to the Company to succeed.

Company believes that integrating its new patented and proprietary AI technology into its existing Supply Chain offerings will

allow for automated logistics monitoring and optimization, creating operational efficiencies at the higher margins associated

with the AI value-creation paradigm for both OMNIQ and its fortune 1000 clientele.

mobile system integration market is characterized by a limited number of large competitors and numerous smaller niche players.

OMNIQ typically pursues larger accounts and national customers, competing most often with the larger channel partners, including

Stratix, Peak Technologies, Lowry, and Barcoding Inc.

For specific solutions, the Company also competes with niche players that

are often focused on a single industry.

Hardware sales are often pressured by competition from online retailers, but the Company

believes that its consultative, integrated solutions approach is a clear differentiator for most prospective customers.

Company’s current direct sales teams are supported by systems engineers averaging over twenty (20) years of experience in

the mobile industry.

The sales organization’s growth in reach mirrors the Company’s addition of new products and services.

Sales team members are organized by industry areas of opportunity, areas of expertise and territory.

OMNIQ’s sales teams

are organized to address national accounts offering a broad array of unique solutions for key lines of business applications,

which allows for upsell and cross sell opportunities to our clients.

For the barcode label (media) business, OMNIQ utilizes a

specialty sales force as well as action as resellers and distributors of OMNIQ manufactured label products to serve the market.

persons are supported internally by sales support personnel who coordinate quotes and logistics and by members of the systems

engineering group and software teams.

for us is the barcode label market providing ongoing and repeatable purchasing business.

We intend to continue in the label business

in the United States of America to drive business growth and increased margins.

Target Markets

markets we serve are Smart/Safe City and Supply Chain Management.

Our groundbreaking AI-based vision solutions are currently in

use for sensitive Homeland Security anti-terror projects and discerning customers within the access control, airport, border crossing,

municipality safety and parking industries.

We seek to utilize our expertise and end-to-end software solutions in markets which

we believe provide the greatest opportunity to increase margins.

the Supply Chain Management market, we believe we can further develop our existing customer base needing to replace their legacy

systems with a new go-to-market strategy leveraging our field sales and system resources, telemarketing, customer portals and

vertical market and barcode label specialists.

We believe our base of industry leading customers for the barcode label and ribbon

(media) products in the manufacturing, distribution, transportation and logistics, retail and healthcare sectors, which sectors

are at the core of our business, are ideal candidates for our machine learning technology.

over two decades, we have been successful in integrating mission critical mobile computing and data collection solutions for Fortune

1000 companies.

The requirements and needs of our customers continue to evolve as they require new mobile and wireless technologies

and services to make their business more competitive and profitable.

The result is a continuous flow of opportunities to assist

customers to evaluate, choose, implement, and support the right mobile and data collection solutions.

As we focus on what we do

best, we believe there is more than adequate market size, growth and opportunity available for us to succeed.

believe integrating our patented and proprietary AI technology into its existing Supply Chain offerings will allow for automated

logistics monitoring and optimization, creating operational efficiencies at higher margins both us and our fortune 1000 clients.

Sales Strategy

direct sales teams are supported by systems engineers averaging over twenty (20) years of experience in the mobile industry.

sales organization’s growth in-reach mirrors the addition of new products and services.

Sales team members are organized

by industry areas of opportunity, areas of expertise and territory.

Our sales teams are organized to address national accounts

offering a broad array of unique solutions for key lines of business applications, which provides opportunities for upsell and

cross sell to our clients.

For the barcode label (media) business, we utilize a specialty sales force, resellers and distributors

of our manufactured private label products.

Salespeople are supported internally

by sales support personnel who coordinate quotes and logistics and by members of the systems engineering group and software teams.

normal sales cycle is one (1) to six (6) months, and typically involves the development of a scope of work and preparation of

a ROI analysis.

OMNIQ prepares templates for this purpose which reduces the sales cycle.

The analyses and proposals include information

on leasing and other financing options, which helps differentiate the Company from its competitors.

The label business sales cycles

are shorter with purchases made more frequently on a transactional basis.

Discussion of Operations

We use Company developed analysis templates which we believe reduce the sales cycle.

The analyses and proposals

include information on leasing and other financing options, which helps differentiate us from our competitors.

The label business

sales cycles are shorter, with purchases made more frequently on a transactional basis.

mobile system integration market is characterized by a limited number of large competitors and numerous smaller niche players.

We typically pursue larger accounts and national customers, competing most often with larger channel partners.

For specific solutions, we also compete with niche players who are often focused

on a single industry.

Hardware sales are competitive because of online retailers.

We believe our consultative, integrated solutions

approach is a clear differentiator for most prospective customers.

OMNIQ’s

operating philosophy is our growth and continued success are the result of management and employees working together in a spirit

of cooperation and teamwork.

Our core values emphasize an environment where safety, diversity, inclusion, talent development,

training and retention are top priorities.

We believe this has enabled us to meet various challenges over the years, and the progress

that has been achieved by us reflects this strong mutual commitment between the Company and its employees.

We believe our employees

are our greatest asset.

We remain focused on furnishing friendly and safe working conditions, providing competitive pay and offering

quality benefits, and producing revenue for the continued growth of the Company and the communities in which we operate, with

an emphasis on the welfare of our employees and their families.

We realize our success is a direct result of the hard work and

dedication of our employees.

Each employee at OMNIQ is a contributing partner in our future growth and we strive to maintain a

mutually beneficial workplace culture that also fosters the professional development of each employee.

of December 31, 2020, we had approximately 61 employees.

Of these employees, 46 are salaried (including commissioned employees)

personnel and 15 are hourly personnel.

Our employees perform the following functions:

sales operations, parts operations, technical

services and office and administrative support.

We believe our relations with our employees are good, and we have never experienced

a work stoppage.

Generally, the total number of employees does not significantly fluctuate throughout the year.

Concentrations

the years ended December 31, 2019 and 2018, one customer accounted for 12.3% and 17.0%, respectively, of the Company’s revenues.

the years ended December 31, 2020 and 2019, one customer accounted for 37.2% and 12.3%, respectively, of the Company’s consolidated

receivable at December 31, 2020 and 2019 are made up of trade receivables due from customers in the ordinary course of business.

Two customers made up 46% of the accounts receivable balance at December 31, 2020 and two customers together represented 20.9%

of the balance of accounts receivable at December 31, 2018, which represented greater than 10% of accounts receivable at December

31, 2019 and 2018, respectively.

payable are made up of payables due to vendors in the ordinary course of business at December 31, 2019 and 2018.

One vendor made

up 83.0% and 62.7% of our accounts payable in 2019 and 2018, respectively, which represented greater than 10% of accounts payable

at December 31, 2019 and 2018, respectively.

and Consultants

of the date of this filing, we had a total of 61 full time employees and no part time employees.

OMNIQ’s website is located at www.omniq.com .

The Company’s website and the information to be contained on that site, or connected to that site, are not part of or

incorporated by reference into this filing.

of the balance of accounts receivable at December 31, 2019.

payable are made up of amounts due to suppliers in the ordinary course of business at December 31, 2020 and 2019.

One vendor made up 92.4% and 83.0% of our accounts payable in 2020 and 2019, respectively.

OMNIQ’s

website is located at www.omniq.com .

The Company’s website and the information to be contained on that site, or connected

to that site, are not part of or incorporated by reference into this filing.

file electronically with the SEC annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and

amendments to those reports filed or furnished pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding

issuers that file electronically with the SEC.

Copies of these reports, proxy and information statements and other information

may be obtained by electronic request at the following e-mail address:

publicinfo@sec.gov.

We use the Investor section of our

website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation

Accordingly, investors should monitor the Investor section of our website, in addition to following press releases, SEC filings

and public conference calls and webcasts.

section is not required for smaller reporting companies.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business