What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-14 compared with 2023-05-15 · 71 added, 48 removed, 79 unchanged (60% of the section changed)

37 unchanged sentences

Report on Form 10-K for the year ended December 31, 2022 and Item 1A — “Risk Factors” in this Quarterly Report on Form

10-Q for the quarterly period ended March 31, 2023, as well as other reports and registration statements filed by us with the SEC.

10-Q for the quarterly period ended June 30, 2023, as well as other reports and registration statements filed by us with the SEC.

factors should not be construed as exhaustive and should be read with other cautionary statements in this Quarterly Report on Form 10-Q

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and analysis should be read in conjunction with our unaudited condensed consolidated financial statements contained in this Form 10-Q.

Company’s sales from operations for the three months ended March 31, 2023, were $27.8 million, an increase of approximately $1.5

million, or 5.7%, over the three months ended March 31, 2022.

loss from operations for the three months ended March 31, 2023, was $2 million, an increase of $602 thousand compared with the loss

in the three months ended March 31, 2022, of $1.4 million.

Basic loss per share from continuing operations for the three months ended

March 31, 2023, was ($0.45) versus ($0.34) per share for the same period in 2022.

Comprehensive loss for the three months ended March 31, 2023 and 2022 was $3.1 million and $2.6 million respectively,

the only component to comprehensive loss besides net loss is foreign currency translation.

Company’s sales from operations for the six months ended June 30, 2023, were $48 million, a decrease of approximately $2.3 million,

or 4.5%, over the six months ended June 30, 2022.

loss from operations for the six months ended June 30, 2023, was $4.5 million, an increase of $1.1 million compared with the loss in

the six months ended June 30, 2022, of $3.4 million.

Basic loss per share from continuing operations for the six months ended June 30,

2023, was ($.95) versus ($.79) per share for the same period in 2022.

AND CAPITAL RESOURCES

of March 31, 2023, the Company had cash in the amount of $3.2 million and a working capital deficit of $39.6 million, compared to cash

in the amount of $1.3 million, and a working capital deficit of $38 million as of December 31, 2022.

of June 30, 2023, the Company had cash in the amount of $2 million and a working capital deficit of $40 million, compared to cash in

the amount of $1.3 million, and a working capital deficit of $40 million as of December 31, 2022.

The Company had stockholders’

deficit attributable to OmniQ stockholders of $12.8 million and $10.5 million as of March 31, 2023, and December 31, 2022, respectively.

deficit attributable to OmniQ stockholders of $15.9 million and $10.5 million as of June 30, 2023, and December 31, 2022, respectively.

This increase in our stockholders’ deficit was primarily attributable to net losses.

Company’s accumulated deficit was $88 million and $84.4 million as of March 31, 2023, and December 31, 2022.

Company’s operations used net cash of $1.3 million and $775 thousand in the three months ended March 31, 2023, and 2022, respectively.

The increase in cash used in operations of $514 thousand is due to the increase in revenue.

Company’s cash used in investing activities was $341 thousand for the three months ended March 31, 2023, compared to cash used

in investing activities of $64 thousand for the three months ended March 31, 2022.

Company’s financing activities provided $3 million of cash during the three months ended March 31, 2023, and provided $968 thousand

during the three months ended March 31, 2022.

During the three months ended March 31, 2023, the Company made payments of $544 thousand

on its notes payable, including its Supplier Secured Promissory note and related party notes payable, compared to the net proceeds from

the three months ended March 31, 2022, of $566 thousand on its notes payable, including its Supplier Secured Promissory note and related

party notes payable.

Additionally, the Company borrowed $3.4 million on the Company’s line of credit during the three months ended

March 31, 2023, compared to the three months ended March 31, 2022, when $1.7 million was borrowed on the Company’s line of credit.

Company’s accumulated deficit was $91.8 million and $84.4 million as of June 30, 2023, and December 31, 2022.

Company’s operations used net cash of $767 and cash provided of $1.5 million in the six months ended June 30, 2023, and 2022,

respectively.

The decrease in cash provided by operations of $2,303 thousand is due to the decrease in revenue and paying down

accounts payable.

Company’s cash provided from investing activities was $572 thousand for the six months ended June 30, 2023, compared to cash used

in investing activities of $3.8 million for the six months ended June 30, 2022.

Company’s financing activities provided $683 thousand of cash during the six months ended June 30, 2023, and used $2 million during

the six months ended June 30, 2022.

During the six months ended June 30, 2023, the Company made payments of $673 thousand on its notes

payable, including its related party notes payable, compared to the payments of $2.6 million for the six months ended June 30, 2022.

Additionally, the Company borrowed $1.1 million on the Company’s line of credit during the six months ended June 30, 2023, compared

to the six months ended June 30, 2022, when $1.3 million was paid on the Company’s line of credit.

of Operations

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In addition, we note that the period-to-period comparison may not be indicative of future performance.

Three months ended March 31,

Three months ended June 30,

Cost of Goods sold

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Net Loss per common Share from continuing operations

the three months ended March 31, 2023, and 2022, the Company generated net revenues in the amount of $27.8 million and $26.3 million,

respectively.

The increase between the three-month periods was attributable to the additional sales channels.

the three months ended June 30, 2023 and 2022, the Company generated net revenues in the amount of $20 million and $24 million, respectively.

The decrease between the three-month periods was attributable to the decrease in demand and limitations in the supply chain.

of Goods Sold

the three months ended March 31, 2023, and 2022, the Company recognized a total of $22 million and $20.2 million, respectively, of

the three months ended June 30, 2023 and 2022, the Company recognized a total of $16.6 million and $18.2 million, respectively, of cost

of goods sold.

For the three months ended June 30, 2023 and 2022, cost of goods sold were 81% and 75% of net revenues, respectively.

operating expense for the three months ended June 30, 2023 and 2022 recognized was $6.4 million and $8 million, respectively, representing

a 20% decrease.

The decreases are related to the cost reduction plan put in place by management.

and Development – Research and development expenses for the three months ended June 30, 2023 and 2022 totaled $559 thousand

and $468 thousand, respectively.

general and Administrative – Selling, general and administrative expenses for the three months ended June 30, 2023 and

2022 totaled $5.3 million and $7 million, respectively, representing a 25% decrease.

The decreases are related to the cost reduction

plan put in place by management.

– Depreciation expenses for the three months ended June 30, 2023 and 2022 totaled $96 thousand and $58 thousand, respectively,

representing a 66% increase.

The increase is attributable to the addition of fixed assets.

amortization – Intangible amortization expenses for the three months ended June 30, 2023 and 2022 totaled $422 thousand

and $406 thousand, respectively.

income and expenses

Expense – Interest expense for the three months ended June 30, 2023 totaled $740 thousand, as compared to $878 thousand

for the three months ended June 30, 2022.

The decrease is primarily attributable to a reduction in debt.

Six months ended June 30,

Cost of Goods sold

For the three months ended March 31, 2023, and 2022, cost of goods sold were 79% and 77% of net revenues, respectively.

operating expenses for the three months ended March 31, 2023, and 2022 recognized was $7.7 million and $7.5 million, respectively, representing

a 2.6% increase.

The increase in operating expenses was due primarily to the increase in revenue.

and Development – Research and development expenses for the three months ended March 31, 2023, and 2022 totaled $423 thousand

and $523 thousand, respectively, representing a 19% decrease.

The decreases are primarily attributed to the maturity of the development

of solutions offered for our AI proprietary products.

general and Administrative – Selling, general and administrative expenses for the three months ended March 31, 2023, and

2022 totaled $6.8 million and $6.5 million, respectively, representing a 4.5% increase.

The increase was due primarily to the increase

– Depreciation expenses for the three months ended March 31, 2023, and 2022 totaled $108 thousand and $93 thousand, respectively,

Operating Expenses

Loss from operations

Net Loss per common Share from continuing operations

the six months ended June 30, 2023 and 2022, the Company generated net revenues in the amount of $48.3 million and $50.5 million, respectively.

The decrease between the six-month periods was attributable to the decrease in demand and limitations in the supply chain

of Goods Sold

the six months ended June 30, 2023 and 2022, the Company recognized a total of $38.7 million and $38.4 million, respectively, of cost

of goods sold.

For the six months ended June 30, 2023 and 2022, cost of goods sold were 80% and 76% of net revenues, respectively.

operating expense for the six months ended June 30, 2023 and 2022 recognized was $14.1 million and $15.5 million, respectively, representing

a 9% decrease.

The decreases are related to the cost reduction plan put in place by management.

and Development – Research and development expenses for the six months ended June 30, 2023 and 2022 totaled $982 thousand

and $990 thousand, respectively.

general and Administrative – Selling, general and administrative expenses for the six months ended June 30, 2023 and 2022

totaled $12.1 million and $13.5 million, respectively, representing a 10% decrease.

The decreases are related to the cost reduction plan

put in place by management.

– Depreciation expenses for the six months ended June 30, 2023, and 2022 totaled $204 thousand and $151 thousand, respectively,

representing a 35% increase.

The increase is directly related to the acquisition of additional fixed assets.

amortization – Intangible amortization expenses for the three months ended March 31, 2023, and 2022 totaled $436 thousand

The increase is directly increased by the acquisition of additional fixed assets.

amortization – Intangible amortization expenses for the six months ended June 30, 2023, and 2022 totaled $858 thousand

and $851 thousand, respectively.

The decrease is due to diminishing life of intangibles.

income and expenses

Expense – Interest expense for the three months ended March 31, 2023, totaled $938 thousand, as compared to $812 thousand

for the three months ended March 31, 2022.

The increase is primarily attributable to additional lines of credit.

Expense – Interest expense for the six months ended June 30, 2023 totaled $1.7 million, as compared to $1.7 million for

the six months ended June 30, 2022.

Company’s results of operations have not been affected by inflation and management does not expect inflation to have a material

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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 2. Management’s Discussion and Analysis