What changed in this filing

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Item 1. Financial Statements

2022-08-15 compared with 2022-05-16 · 184 added, 182 removed, 267 unchanged (58% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

( UNAUDITED )

(In thousands, except share and per share data)

March 31, 2022

June 30, 2022

December 31, 2021

( UNAUDITED )

Current assets

4 unchanged sentences

Total current assets

Property and equipment, net of accumulated depreciation of $ 1,483

Trade name, net of accumulated amortization of $ 4,011

and $ 3,863 ,

Customer relationships, net of accumulated amortization of $ 9,936

and $ 9,660 ,

Other intangibles, net of accumulated amortization of $ 1,485

and $ 1,457 ,

Property and equipment, net of accumulated depreciation of $ 1,423 and $ 2,203 respectively

Trade name, net of accumulated amortization of $ 4,160 and $ 3,863 , respectively

Customer relationships, net of accumulated amortization of $ 10,211 and $ 9,660 , respectively

Other intangibles, net of accumulated amortization of $ 1,454 and $ 1,457 , respectively

Right of use lease asset

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities

16 unchanged sentences

Series A Preferred stock;

shares designated, 0

shares issued and outstanding

$ 0.001 par value;

2,000,000 shares designated, 0 shares issued and outstanding

Series B Preferred stock;

2 unchanged sentences

Series C Preferred stock;

shares designated, 544,500

shares issued and outstanding, respectively

$ 0.001 par value;

3,000,000 shares designated, 544,500 shares issued and outstanding, respectively

Common stock;

15,000,000 shares

7,560,001 and 7,459,534

shares issued and outstanding, respectively.

$ 0.001 par value;

15,000,000 shares authorized;

7,579,795 and 7,459,534 shares issued and outstanding, respectively.

Additional paid-in capital

3 unchanged sentences

Non-controlling interest

TOTAL STOCKHOLDERS’ EQUITY

Total liabilities and stockholders’ equity

TOTAL EQUITY (DEFICIT)

Total liabilities and equity (deficit)

accompanying unaudited notes should be read on conjunction with these unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

For the three months

ending March 31,

For the six months

ending June 30,

(In thousands, except share and per share data)

1 unchanged sentence

Cost of goods sold

Operating expenses

15 unchanged sentences

Reconciliation of net loss to net loss attributable to common shareholders

Preferred stock – Series C dividend

Net loss less series C dividend

Net income after series C dividend attributable to noncontrolling interest

Net loss after series C dividend attributable to common stockholders’ of OmniQ Corp

Dividends attributable to non-common stockholders’ of OmniQ Corp

Net loss attributable to common stockholders

Net (loss) per share - basic attributable to common stockholders’ of OmniQ Corp

2 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

Stockholders’

Total Stockholders’

Preferred Stock

Comprehensive

(In thousands)

December 31, 2020

on Class C Shares

Stock Issuance

compensation – options, warrants, issuances

and Warrant issued for services

of stock options and warrants

Translation Adjustment

(loss) income

March 31, 2021

December 31, 2021

on Class C Shares

Stock Issuance

Warrant issued for services

compensation – options, warrants, issuances

of stock options and warrants

Translation Adjustment

(loss) income

March 31, 2022

Income (Loss)

Balance, December 31, 2020

Dividend on Class C Shares

ESPP Stock Issuance

Stock-based compensation – options, warrants, issuances

Stock and Warrant issued for services

Exercise of stock options and warrants

Conversion of Equity

Conversion of Equity, shares

Conversion of Debt

Conversion of Debt, shares

Cumulative Translation Adjustment

Net (loss) income

Balance, March 31, 2021

Dividend on Class C Shares

ESPP Stock Issuance

Stock-based compensation – options, warrants, issuances

Exercise of stock options and warrants

Cumulative Translation Adjustment

Conversion of Equity

Conversion of Debt

Net (loss) income

Balance, June 30, 2021

Balance, December 31, 2021

Dividend on Class C Shares

ESPP Stock Issuance

Stock and Warrant issued for services

Stock-based compensation – options, warrants, issuances

Exercise of stock options and warrants

Cumulative Translation Adjustment

Net (loss) income

Balance, March 31, 2022

ESPP Stock Issuance

Noncontrolling interests - distributions and other

Exercise of stock options and warrants

Stock-based compensation – options, warrants, issuances

Cumulative Translation Adjustment

Net (loss) income

Balance, June 30, 2022

accompanying unaudited notes should be read in conjunction with these condensed unaudited consolidated financial

CONSOLIDATED STATEMENTS OF CASH FLOW

the six months ended June 30,

(In thousands)

1 unchanged sentence

Adjustments to reconcile net loss to net cash provided by operating activities:

Loss on disposal of property and equipment

Loss on disposal of PP&E

Stock-based compensation

4 unchanged sentences

Prepaid expenses

Contract Asset

Accounts payable and accrued liabilities

4 unchanged sentences

Other liabilities

Net cash provided by (used in) operating activities

Net cash provided by operating activities

Cash flows from investing activities

Payment for additional ownership in subsidiary

Purchase of property and equipment

6 unchanged sentences

Payments on notes/loans payable

Net proceeds from draw on line of credit

Net cash provided by (used in) financing activities

Proceeds from the issuance of notes/loans payable

Change in line of credit

Net cash used in financing activities

Net change in cash and cash equivalents

3 unchanged sentences

Non-cash activities:

Warrants/stock issued for services

Declared dividends payable

Purchase of PP&E with financing

Warrants/stock issued for service

Supplemental disclosure of cash flow information:

23 unchanged sentences

10-K for the year ended December 31, 2021.

During three-month period ended March 31, 2022, there were no significant changes to those

accounting policies.

During six-month period ended June 30, 2022, there were no significant changes to those accounting

Loss Per Common Share

5 unchanged sentences

The weighted-average number of common shares outstanding for computing basic

EPS for the three-months ended March 31, 2022 and 2021 were 7,511,376 and 4,700,737 , respectively.

EPS for the six-months ended June 30, 2022, and 2021 were 7,545,190 and 4,816,718 , respectively.

Diluted net loss per share of common

2 unchanged sentences

securities have an anti-dilutive impact due to losses reported as of:

SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNINGS PER SHARE

March 31, 2022

SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION

OF EARNINGS PER SHARE

June 30, 2022

June 30, 2021

Options to purchase common stock

8 unchanged sentences

and cost-effective development of products

capital deficit of $ 25 million

as of March 31, 2022

deficit of $ 73

million as of March 31, 2022

capital deficit of $ 31 million as of June 30, 2022

deficit of $ 76 million as of June 30, 2022

years of losses from operations

12 unchanged sentences

Company received financing for the acquisition of the last 23% of shares of Dangot on March 30, 2022.

Company also expects that Dangot’s cashflow will be able to service the debts associated with its acquisition without the need

for cash from the rest of the group.

acquisition of Dangot has added capabilities to the Company which have already transformed into significant new orders (so far approx.

$ 1.3 M) in the Parking segment.

The Company also expects that

Dangot’s cashflow will be able to service the debts associated with its acquisition without the need for cash from the rest

of the group.

acquisition of Dangot has added capabilities to the Company which have already transformed into significant new orders in the Parking

Management expects the collaboration and cross sales to contribute to improved revenues and margins.

is evaluating operating expenses and is developing a plan to reduce expenditures without negatively impacting current operations.

25, 2022 management finalized an $ 8.5 M

line of credit from Western Alliance Bank.

This line of credit replaced the high interest Action Capital line of Credit ($ 6 M)

and settle the ScanSource debt $ 2.5 M.

Overall the effective interest

rate of the new line of credit is approx.

25, 2022 management finalized an $ 8.5 M line of credit from Western Alliance Bank.

This line of credit replaced the high interest

Action Capital line of Credit ($ 6 M) and settle the ScanSource debt $ 2.5 M.

Overall the effective interest rate of the new line of

credit is approx.

7% compared to 12% with Action and 10% with ScanSource.

of March 31, 2022, the Company had approximately $ 7

million, in cash, which is sufficient cash to

last 15 months at the current burn rate.

of June 30, 2022, the Company had approximately $ 3 million, in cash.

results - For over ten years, the Company’s audit opinion has contained an explanatory paragraph describing an uncertainty

2 unchanged sentences

operations, in and of itself, demonstrates an ability to continue for a period of 12 months, post-issuance of each report.

Star - The Company’s total accounts payable due to Blue Star as of March 31, 2022 was approximately $ 33 M.

Blue Star is an unsecured creditor, financing a substantial amount the Company’s supply chain demand.

Blue Star continues selling

to the Company with preferable credit terms.

Blue Star has agreed to reduce the annual interest rate on invoices that are past due

We anticipate, consistent with prior periods, Blue Star will continue to extend us such preferable payments terms in the foreseeable

As an unsecured creditor of the Company, Blue Star has no incentive to force a liquidation.

The Company has enjoyed a good

mutual relationship for the past four years.

Star - The Company’s total accounts payable due to Blue Star as of June 30, 2022 was approximately $ 35 M.

Blue Star is an unsecured

creditor, financing a substantial amount the Company’s supply chain demand.

Blue Star continues selling to the Company with

preferable credit terms.

Blue Star has agreed to reduce the annual interest rate on invoices that are past due to just 5 %.

We anticipate,

consistent with prior periods, Blue Star will continue to extend us such preferable payments terms in the foreseeable future.

an unsecured creditor of the Company, Blue Star has no incentive to force a liquidation.

The Company has enjoyed a good mutual relationship

for the past four years.

believes that the aggregate impact of these plans is to mitigate the conditions raising substantial doubt about the Company’s ability

1 unchanged sentence

3 – CONCENTRATIONS

the three-months ended March 31, 2022 and the year ended December 31, 2021, two customers accounted for 15.2 %

and two customer accounted for 23 % ,

the six-months ended June 30, 2022 and the year ended December 31, 2021, two customers accounted for 17 % and two customer accounted for

23 %, respectively, of the Company’s consolidated revenues.

receivable at March 31, 2022 and December 31, 2021 are made up of trade receivables due from customers in the ordinary course of business.

Four customers made up 22 % of the accounts receivable balance at March 31, 2022 and one customer represented 17 % of the balance of accounts

receivable at June 30, 2022 and December 31, 2021 are made up of trade receivables due from customers in the ordinary course of business.

One customers made up 16 % of the accounts receivable balance at June 30, 2022 and one customer represented 17 % of the balance of accounts

receivable at December 31, 2021.

the three months ended March 31, 2022 and the year ended December 31, 2021 one vendor made up 71 % and 65 %, respectively, of our purchases.

the six months ended June 30, 2022 and the year ended December 31, 2021 one vendor made up 69 % and 65 %, respectively, of our purchases.

4 – BUSINESS ACQUISITION

Dangot Computers Ltd

On May 3, 2021, the Company and Omniq

Technologies Ltd., a wholly owned subsidiary of the Company (“Omniq Technologies”) entered into a share purchase

agreement (the “Dangot Share Purchase Agreement”) with Mr.

The Closing Consideration was paid on July 8,

2021 in the following manner:

(a) the Company issued 220,103 shares

of its common stock having a share value of $ 2,084 thousand

and (b) cash in the amount of $ 5,058 thousand

and $ 600 thousand

payable to owner.

Effective October 1, 2021 the Company exercised

a portion of its option and purchased an additional 26 %

Computers Ltd

May 3, 2021, the Company and Omniq Technologies Ltd., a wholly owned subsidiary of the Company (“Omniq Technologies”) entered

into a share purchase agreement (the “Dangot Share Purchase Agreement”) with Mr.

The Closing Consideration was

paid on July 8, 2021 in the following manner:

(a) the Company issued 220,103 shares of its common stock having a share value of $ 2,084

thousand and (b) cash in the amount of $ 5,058 thousand and $ 600 thousand payable to owner.

October 1, 2021, the Company exercised a portion of its option and purchased an additional 26 %

of Dangot bringing its ownership to 77 %.

1 unchanged sentence

to purchase the additional shares.

OmniQ Technologies has the right to complete the purchase of the remaining 23 %

of the Dangot shares on a fully diluted basis in a single exercise until the lapse of the Dangot Option Period.

Refer to Note 4 in 2021 Form 10-K for more details.

April 1, 2022, the Company closed on its acquisition of Dangot and exercised the remaining portion of its option to purchase 23.0 % of

the capital stock, thereby making Dangot a fully owned subsidiary of the Company.

The Company paid $ 3,518,000 to purchase the additional

The Company utilized its working capital and a combination of short and long term loans.

following proforma unaudited revenue and earnings as if the acquisition had been included in the consolidated results of the company

for the three months ended March 31, 2021.

OF ACQUISITIONS UNAUDITED REVENUE

thousands/unaudited)

Individual pro forma results for each acquisition

are not disclosed, as individually these acquisitions would not have a material impact on the Company’s financial statements.

Since the acquisition the amounts included in

the consolidated statement of comprehensive income from Dangot Computers Ltd.

for the three months ended March 31, 2022, was $ 11.5

million in revenue and $ 293

thousand in net income.

for the six months ended June 30, 2021.

SCHEDULE OF ACQUISITIONS UNAUDITED REVENUE

(in thousands/unaudited)

Net income (loss)

pro forma results for each acquisition are not disclosed, as individually these acquisitions would not have a material impact on the

Company’s financial statements.

the acquisition the amounts included in the consolidated statement of comprehensive income from Dangot Computers Ltd.

for the six months

ended June 30, 2022, was $ 21.7 million in revenue and $ 25 thousand in net loss.

5 – CREDIT FACILITIES AND LINE OF CREDIT

maintain operating lines of credit, factoring and revolving credit facilities with banks and finance companies to provide us working

March 25, 2022 we entered into a Business Finance Agreement (the “BFA”) with BridgeBank a division of Western Alliance

Bank (“BridgeBank”) to establish the sale of accounts receivable credit facility, whereby we may obtain short-term

financing by selling and assigning acceptable accounts receivables to BridgeBank.

Pursuant to the BFA, the outstanding principal

amount of advances made by BridgeBank at any time shall not exceed $ 8.5 million.

BridgeBank reserves and withholds to 15 %

of the face amount of each account purchased in a reserve account.

During the three months ended March 31, 2022 we borrowed a

total of $ 7.9

million on the line and incurred $ 645 thousand in origination fees.

As a result of entering into the BFA we have paid off and

terminated the Factoring and Security Agreement with Action Capital.

March 25, 2022 we entered into a Business Finance Agreement (the “BFA”) with BridgeBank a division of Western Alliance Bank

(“BridgeBank”) to establish the sale of accounts receivable credit facility, whereby we may obtain short-term financing by

selling and assigning acceptable accounts receivables to BridgeBank.

Pursuant to the BFA, the outstanding principal amount of advances

made by BridgeBank at any time shall not exceed $ 8.5 million.

BridgeBank reserves and withholds to 15 % of the face amount of each account

purchased in a reserve account.

During the six months ended June 30, 2022 we had a net borrowing of an additional $ 1.3 million on the

line and incurred $ 645 thousand in origination fees.

As a result of entering into the BFA we have paid off and terminated the Factoring

and Security Agreement with Action Capital.

See notes 11 and 19 the 2021 Form 10-K.

8 unchanged sentences

SCHEDULE OF NOTES PAYABLE, RELATED PARTIES

March 31, 2022

June 30, 2022

December 31, 2021

9 unchanged sentences

beginning in October 2018.

Accrued interest payable as of March 31, 2022, was $ 68 thousand.

Accrued interest payable as of June 30, 2022, was $ 70 thousand.

Accrued interest is payable at maturity.

4 unchanged sentences

thousand beginning in October 2018.

maturities of related party notes payable as of March 31, 2022, are as follows:

maturities of related party notes payable as of June 30, 2022, are as follows:

SCHEDULE OF FUTURE MATURITIES OF NOTES PAYABLE, RELATED PARTIES

7 – OTHER NOTES PAYABLE

7 – NOTES PAYABLE

SCHEDULE OF OTHER NOTES PAYABLE

(In thousands)

March 31, 2022

June 30, 2022

December 31, 2021

9 unchanged sentences

with any remaining principal and accrued interest due and payable on December 31, 2016.

July 20, 2021, the Company entered into the Eighth Amendment to the Secured Promissory Note

(the “Eighth Amendment”) extending the maturity date to August 15, 2022 and reducing

the interest rate from 18 % to 10 %.

The Eighth Amendment also provides that the Company will

continue to make monthly installments of principal and accrued interest at a minimum of $ 300

thousand each month.

As has been the case with each previous amendment, the Company is in

continual negotiations with the holder of the Secured Promissory Note to extend the maturity

date and establish a new schedule of payments.

July 20, 2021, the Company entered into the Eighth Amendment to the Secured Promissory Note (the “Eighth Amendment”)

extending the maturity date to August 15, 2022 and reducing the interest rate from 18 % to 10 %.

The Eighth Amendment also provides

that the Company will continue to make monthly installments of principal and accrued interest at a minimum of $ 300 thousand each

As has been the case with each previous amendment, the Company is in continual negotiations with the holder of the Secured

Promissory Note to extend the maturity date and establish a new schedule of payments.

March 25, 2022 the Company has paid off the entire remaining balance owed to the supplier.

Payable other

July 29, 2021 the Company entered into a long-term loan from Leumi Bank totaling NIS 7

million, which at the time was approximately

The note accrues interest at 4.7 %

per annum and is payable in 8

of principal and interest over 4

The note is secured by shares of Dangot

Computers, Ltd.

July 29, 2021 the Company entered into a long-term loan from Leumi Bank totaling NIS 7 million, which at the time was approximately $ 2.16

The note accrues interest at 4.7 % per annum and is payable in 8 installments of principal and interest over 4 years.

is secured by shares of Dangot Computers, Ltd.

November 28, 2021 the Company entered into another long-term loan from Leumi Bank totaling NIS 3.5

2 unchanged sentences

per annum and is payable in 8

of principal and interest over 4

The note is secured by shares of Dangot

Computers, Ltd.

the year ended December 31, 2021, the Company entered into five lines of credit totaling NIS 17.5 million, as of December 31, 2021 the

installments of principal and interest over 4

The note is secured by shares of Dangot Computers, Ltd.

the year ended December 31, 2021, the Company entered into five lines of credit totaling NIS 17.5 million, as of June 30, 2022 the

outstanding balance was NIS 13.6 million, approximately $ 4.4 million.

August 11, 2021, the Company purchased vehicles using cash and financing of NIS 500

thousand, approximately $ 155

thousand, to be paid off in monthly interest

and principal payments over 5 years.

The loan accrues interest at 7.5 %

per annum and is secured by the vehicles.

As of March 31, 2022, the remaining balance was NIS 436

thousand, which was approximately $ 137

March 27, 2022 the Company entered into another long-term loan from Leumi Bank totaling NIS 3.5

million, which at the time was approximately

The note accrues interest at 4.7 %

per annum and is payable in 8

of principal and interest over 4

The note is secured by shares of Dangot

Computers, Ltd.

August 11, 2021, the Company purchased vehicles using cash and financing of NIS 500 thousand, approximately $ 155 thousand, to be paid

off in monthly interest and principal payments over 5 years.

The loan accrues interest at 7.5 % per annum and is secured by the vehicles.

As of June 30, 2022, the remaining balance was NIS 342 thousand, which was approximately $ 98 thousand.

March 27, 2022 the Company entered into another long-term loan from Leumi Bank totaling NIS 3.5 million, which at the time was approximately

$ 1.1 million.

The note accrues interest at 4.7 % per annum and is payable in 8 installments of principal and interest over 4 years.

note is secured by shares of Dangot Computers, Ltd.

8 – OTHER LIABILITIES

1 unchanged sentence

(In thousands)

March 31, 2022

June 30, 2022

December 31, 2021

5 unchanged sentences

9 – STOCKHOLDERS’ EQUITY

of March 31, 2022, there were 2,000,000 Series A preferred shares designated and no Series A preferred shares outstanding.

of directors of the Company (the “Board”) had previously set the voting rights for the Series A preferred stock at 1 share

of preferred to 250 common shares .

of March 31, 2022, there was 1 preferred share designated and no preferred shares outstanding.

of March 31, 2022, there were 3,000,000 Series C Preferred Shares (“Series C”) authorized with 544,500 issued and outstanding.

The Series C shares have preferential rights above common shares and the Series B Preferred Shares and is entitled to receive a quarterly

of June 30, 2022, there were 2,000,000 Series A preferred shares designated and no Series A preferred shares outstanding.

directors of the Company (the “Board”) had previously set the voting rights for the Series A preferred stock at 1 share of

preferred to 250 common shares .

of June 30, 2022, there was 1 preferred share designated and no preferred shares outstanding.

of June 30, there were 3,000,000 Series C Preferred Shares (“Series C”) authorized with 544,500 issued and outstanding.

Series C shares have preferential rights above common shares and the Series B Preferred Shares and is entitled to receive a quarterly

dividend at a rate of $ 0.06 per share per annum and have a liquidation preference of $ 1 per share.

1 unchanged sentence

into common stock at the rate of 20 preferred shares to one share of common stock.

As of March 31, 2022, the accrued dividends on the

As of June 30, 2022, the accrued dividends on the

Series C Preferred Stock was $ 137 thousand.

12 unchanged sentences

Equity Incentive Plan.

the three months ending March 31, 2022, 163,050 in stock options and stock warrants were exercised in exchange for 98,805 shares of OMNIQ

common stock.

the six months ending June 30, 2022, $ 128 thousand in stock options and stock warrants were exercised in exchange for 116,805 shares

of OMNIQ common stock.

December 2015, our Board of Directors approved the OMNIQ.

Employee Stock Purchase Plan (the “ESPP”).

For the three months

ending March 31, 2022 employees purchased 1,662

thousand of common stock.

For the six months ending

June 30, 2022 employees purchased 3,456 shares or $ 18 thousand of common stock.

On June 15, 2022 our Board of Directors approved issuing 20,000 shares

as part of a consulting agreement.

The shares were valued at $109 thousand.

10 – LITIGATION

9 unchanged sentences

11 – SUBSEQUENT EVENTS

April 1, 2022, the Company closed on its acquisition of Dangot and exercised the remaining portion of its option to purchase 23.0 % of

the capital stock, thereby making Dangot a fully owned subsidiary of the Company.

The Company paid $ 3,518,000 to purchase the additional

The Company utilized its working capital and a combination of short and long term loans.

August 8, 2022, the Company approved certain grants under the Company’s 2021 Equity Incentive Plan.

The Compensation Committee

approved a grant of 10,000 shares of Common Stock and warrants to purchase 40,000 shares of Common Stock at the market closing price

on the day before the grant, vesting equally over eight quarters to Campbeltown Consulting Ltd., a related party and principal stockholder.

Company also approved the grant of 40,000 shares of Common Stock to the Company’s CEO Shai Lustgarten, and 20,000 shares to its

CFO, Neev Nissenson.

These shares were issued to replace the grant of certain Restricted Stock Units issued in February 2022 which were

These grants were initially considered and approved by the Company’s Compensation Committee.

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-Q

Item 1. Financial Statements