OMNIQ Corp. 10-K

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information In 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 i) 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”). All discussions of the Company’s securities, in this Annual Report Form 10k, reflect the consolidation of shares as a result of the Reverse Split. On October 8, 2021 the Company’s common stock became available on The Nasdaq Stock Market LLC under the symbol “OMQS”. Before then, shares of OMNIQ’s common stock were not traded on an established market. OMNIQ’s common stock was traded through broker/dealers and in private transactions, and quotations reported on the OTCQB under the symbol “OMQS”. OTCQB quotations reflected interdealer prices, without mark-up, mark-down or commission and may not represent actual transactions. No dividends have been declared or paid on OMNIQ’s common stock and none are likely to be declared or paid in the near future. Common Stock High Low Fiscal Year Ended December 31, 2020: Fiscal Quarter Ended March 31, 2020 $ 5.76 $ 2.50 Fiscal Quarter Ended June 30, 2020 $ 7.39 $ 3.77 Fiscal Quarter Ended September 30, 2020 $ 7.25 $ 4.25 Fiscal Quarter Ended December 31, 2020 $ 6.86 $ 4.03 Fiscal Year Ended December 31, 2021: Fiscal Quarter Ended March 31, 2021 $ 10.25 $ 4.16 Fiscal Quarter Ended June 30, 2021 $ 12.00 $ 7.01 Fiscal Quarter Ended September 30, 2021 $ 16.00 $ 7.10 Fiscal Quarter Ended December 31, 2021 $ 10.88 $ 6.01 Equity Compensation Plan Information Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (a) (b) (c) Equity compensation plans approved by security holders 2,938,229 $ 5.91 1,483,856 Total 2,963,229 $ 5.91 1,483,856 9 In October 2021, OMNIQ’s Board of Directors adopted an Equity Incentive Plan (the “Plan”), as an incentive to provide long-term incentives and rewards to directors, officers, consultants, advisors and employees of the Company and its subsidiaries in order to assist the Company to attract and retain individuals with experience and/or ability on a basis competitive with industry practices and to associate the interest of these individuals with those of the Company’s shareholders by providing for the issuance of stock-based awards. The total number of shares of Common Stock authorized for issuance under the Plan is 1,118,856 shares. In August 2020, OMNIQ’s Board of Directors adopted an Equity Incentive Plan (the “Plan”), as an incentive to retain in the employ of and attract new employees, directors, officers, consultants, advisors and employees to the Company. Pursuant to the Plan, one million (1,000,000) shares of OMNIQ’s common stock, par value $0.001 (the “Shares”), were set aside and reserved for issuance. The Plan was approved by our stockholders at the September 2020, shareholders’ meeting. For the year ending December 31, 2020, we issued 336,146 shares ($1.6 million) to consultants and advisors for services rendered. No shares were issued in 2021 In September 2020 and pursuant to the 2020 Equity Incentive Plan, we granted options to purchase an aggregate of 745,000 shares of the Company’s common stock to certain of our employees, officers and directors. Included in the total shares granted are options to purchase 230,000 shares of its common stock to Mr. Shai Lustgarten, our Chief Executive Officer, options to purchase 40,000 shares of its common stock to Mr. Neev Nissenson, our Chief Financial Officer, options to purchase 150,000 shares of its common stock to Mr. Carlos J. Nissensohn, a consultant and principal stockholder, and options to purchase 10,000 shares of its common stock to our Directors Andy MacMillan and Yaron Shalem, respectively. The remaining 305,000 granted options are for other employees and consultants. The exercise price of the options granted was $4.40 per share, which was the closing price of the Company’s common stock on September 29, 2020, the day prior to the grant, except for the options granted to Shai Lustgarten and Carlos J. Nissensohn, which have an exercise price of $4.84 per share. The options granted to Shai Lustgarten and Carlos J. Nissensohn have a term of five (5) years and the balance of the options have a term of ten (10) years. On January 23, 2019, the Company received shareholder approval to adopt its 2018 Equity Incentive Plan. Dividends and other Distributions OMNIQ has never declared or paid any cash dividends on its common stock. The Company currently plans to retain future earnings to finance growth and development of its business and does not anticipate paying any cash dividends in the foreseeable future. OMNIQ may incur indebtedness in the future which may prohibit or effectively restrict the payment of dividends, although the Company has no current plans to do so. Any future determination to pay cash dividends will be at the discretion of OMNIQ’s Board of Directors. The Company’s Series C Preferred Stock pays a 6% dividend, but the Company has been unable to make such dividend payments and so those dividends are accrued quarterly. Accrued but unpaid dividends do not bear interest. Pursuant to the settlement agreements made certain shareholders in February 2018, in which over $15 million in debt was extinguished, the shares of Series C Preferred Stock issued in exchange, totaling 1,685,000 shares, will not pay and will not accrue dividends for a 24-month period, or any time prior to March 1, 2020. At the time of acquisition of Dangot Computers Ltd certain dividend payables were owed to non-controlling interests. These liabilities were assumed by OMNIQ and during the year ended December 31, 2021 Dangot Computers Ltd paid $306 thousand to those non-controlling interests. Recent Sales of Unregistered Securities During 2021, the Company issued an aggregate of 2,186 shares of common stock to certain individuals as part of the Company’s Employee Stock Purchase Program valued at approximately $16 thousand. On February 15, 2021, the Company issued 25,000 shares to Orion 4, LLC as part of a consulting agreement. The shares were valued at $188 thousand. On May 4, 2021, the Company issued 95,424 shares as part of a series of conversion agreements with a former noteholder and preferred shareholder. The shares were valued at $859 thousand including conversion penalties. On July 8, 2021, the Company issued 220,103 shares in connection with the acquisition of Dangot Computers. The shares were valued at approximately $2 million. See note 4. On July 8, 2021, the Company entered into a form of Securities Purchase Agreement (the “Securities Purchase Agreement”) with accredited investors. Pursuant to the Securities Purchase Agreement, on July 8, 2021 (the Closing Date”), the Company sold an aggregate gross proceeds of $15 million of units (the “Units”) before deducting placement agent fees, consultant and legal fees and other offering expenses (the “Offering”). The per Unit purchase price was $7.00. Each Unit is comprised of one share of the Company’s common stock, $0.001 par value per share. As a result of the Offering, the Company issued 2,142,857 shares of common Stock (the “Shares”) and warrants (the “Warrants”) to purchase 171,429 shares of Common Stock (the “Warrant Shares”) at an exercise price equal to $7.70 per Warrant Share, which Warrants are exercisable for a period of five years from the issuance date. On October 13, 2021, the Company issued 10,127 shares as part of a series of conversion agreements with a former noteholder and preferred shareholder. The shares were valued at less than $100 thousand including conversion penalties. During 2021, various holders exercised options and warrants resulting in the issuance of 77,677 shares valued at $436 thousand During 2021, various holders exercised in cashless transactions options and warrants resulting in the issuance of 201,429 shares valued at $1,269 thousand ITEM 6. SELECTED FINANCIAL DATA Reserved. 10