What changed in this filing

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Item 1. Financial Statements

2023-11-13 compared with 2023-08-14 · 124 added, 78 removed, 348 unchanged (37% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

June 30, 2023

December 31, 2022

(In thousands)

June 30, 2023

December 31, 2022

(In thousands, except share and per share data)

September 30,

(In thousands, except share and per share data)

September 30,

( UNAUDITED )

10 unchanged sentences

Right of use lease asset

LIABILITIES AND STOCKHOLDERS’ DEFICIT

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

8 unchanged sentences

Long term liabilities

Notes payable, related party, less current portion

Accrued interest and accrued liabilities, related party

3 unchanged sentences

Total liabilities

Stockholders’ deficit

Stockholders’ equity (deficit)

Series A Preferred stock;

6 unchanged sentences

shares designated, 502,000

and 544,500 shares issued and outstanding, respectively

shares issued and 544,500 outstanding, respectively

Preferred stock value

6 unchanged sentences

Cumulative Translation Adjustment

Total OmniQ stockholders’ deficit

Total liabilities and deficit

Total OmniQ stockholders’ equity (deficit)

Total liabilities and equity (deficit)

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

1 unchanged sentence

(In thousands, except share and per share data)

For the three months

For the Six months

ending June 30,

ended June 30,

For the three months ending

For the Nine months ended

September 30,

(In thousands, except share and per share data)

26 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

Total Stockholders’

Stockholders’

Preferred Stock

18 unchanged sentences

Balance, June 30, 2022

ESPP Stock Issuance

Exercise of stock options and warrants

Stock-based compensation – options, warrants, issuances

Stock and warrant issued for services

Cumulative Translation Adjustment

Net (loss) income

Balance, September 30, 2022

Balance, December 31, 2022

15 unchanged sentences

Balance, June 30, 2023

Dividend on Class C Shares

ESPP Stock Issuance

Stock and Warrant issued for services

Stock and Warrant issued for services, shares

Stock-based compensation – options, warrants, issuances

Cumulative Translation Adjustment

Net (loss) income

Balance, September 30, 2023

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

CONSOLIDATED STATEMENTS OF CASH FLOW

the six months ended June 30,

For the nine months ended September 30,

(In thousands)

36 unchanged sentences

Declared dividends payable

Right of use asset acquired in exchange for lease liability

Supplemental disclosure of cash flow information:

Cash paid for interest

Cash paid for income taxes

accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements.

20 unchanged sentences

10-K for the year ended December 31, 2022.

During six-month period ended June 30, 2023, there were no significant changes to those accounting

During nine-month period ended September 30, 2023, there were no significant changes to those

accounting policies.

Loss Per Common Share

5 unchanged sentences

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

EPS for the six-months ended June 30, 2023, and 2022 were 7,777,665 and 7,545,190 , respectively.

Diluted net loss per share of common

stock is the same as basic net loss per share of common stock because the effects of potentially dilutive securities are antidilutive.

EPS for the nine-months ended September 30, 2023, and 2022 were 7,788,262 and 7,545,190 , respectively.

Diluted net loss per share of

common stock is the same as basic net loss per share of common stock because the effects of potentially dilutive securities are antidilutive.

following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share because such

1 unchanged sentence

OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNING PER SHARE

June 30, 2023

June 30, 2022

September 30,

Options to purchase common stock

1 unchanged sentence

Potential shares excluded from diluted net loss per share

recognize revenue once the product has been shipped.

For some transactions we collect a deposit on the transaction.

These deposits represent

cash received under noncancelable contracts before the related product or service is transferred to the customer.

We record this as a

customer deposit, which is included in accounts payable and other accrued expenses on our consolidated balance sheet.

Such amounts are

recognized as revenue by the Company upon shipment of the product or performance of the services when the revenue recognition criteria

is met and generally within one year.

balances of customer deposits included in accounts payable and other accrued expenses as of September 30, 2023, and December 31, 2022

were approximately $ 573 thousand and $ 1 million, respectively.

The amount of revenue recognized in the nine-months ended September 30,

2023, that related to the customer deposits as of December 31, 2022 was $1.2 million.

2 – LIQUIDITY AND CAPITAL RESOURCES

4 unchanged sentences

and cost-effective development of products

capital deficit of $ 40 million as of June 30, 2023

deficit of $ 92 million as of June 30, 2023

capital deficit of $ 43 million as of September 30, 2023

deficit of $ 96 million as of September 30, 2023

periods of losses from operations

13 unchanged sentences

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

Management has already cut staff by about 5% and will continue to do additional overhead cuts.

Star - The Company’s total accounts payable due to Blue Star as of June 30, 2023 was approximately $ 37 million.

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

Management believes that Blue Star

will continue supplying the Company with preferable credit terms.

Blue Star has agreed to the annual interest rate of 5 % on invoices

that are past due.

Blue Star - The Company’s total accounts payable due to Blue Star as of September 30, 2023, was approximately

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

Management believes

that Blue Star will continue supplying the Company with preferable credit terms.

Blue Star has agreed to the annual interest rate of 5%

on invoices that are past due.

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.

has enjoyed a good mutual relationship for the past four years.

Management is in the process of finalizing a new line of credit with an additional financial institution.

In October 2023 management finalized an equity raise which resulted in $ 2.5 million in net cash received from investors.

3 – CONCENTRATIONS

the six-months ended June 30, 2023 and the year ended December 31, 2022, two customers accounted for 19 %

and one customer accounted for 30 %,

respectively, of the Company’s consolidated revenues.

receivable at June 30, 2023 and December 31, 2022 are made up of trade receivables due from customers in the ordinary course of business.

No customer accounted for more than 10 % of the outstanding receivables as of June 30, 2023, or December 31, 2022.

the six months ended June 30, 2023 and the year ended December 31, 2022 one vendor made up 42 % and 48 %, respectively, of our purchases.

the nine-months ended September 30, 2023 and the year ended December 31, 2022, no customers accounted for more than 10 % and two customers

accounted for 30 %, respectively, of the Company’s consolidated revenues.

receivable at September 30, 2023 and December 31, 2022 are made up of trade receivables due from customers in the ordinary course of

No customer accounted for more than 10 % of the outstanding receivables as of September 30, 2023, or December 31, 2022.

the nine months ended September 30, 2023 and the year ended December 31, 2022 one vendor made up 29 % and 65 %, respectively, of our purchases.

4 – BUSINESS ACQUISITION

7 unchanged sentences

SCHEDULE OF INVENTORY

September 30, 2023

December 31, 2022

21 unchanged sentences

OF NOTES PAYABLE, RELATED PARTIES

June 30, 2023

December 31, 2022

September 30,

Note payable –Marin

8 unchanged sentences

beginning in October 2018.

Accrued interest payable as of June 30, 2023, was $ 70 thousand.

Accrued interest payable as of September 30, 2023, was $ 73 thousand.

Accrued interest is payable at maturity.

7 unchanged sentences

(In thousands)

June 30, 2023

December 31, 2022

September 30,

Note payable other

25 unchanged sentences

The note accrues average interest at 6.3 % per annum.

of June 30, 2023, the Company was not in compliance with certain financial covenants related to the Bank Leumi and Bank Hapoalim debt.

September 21, 2023, the Company entered into a long-term loan from Tzameret Mimunim totaling 1.5 M NIS.

The note accrues interest at the

Israeli Prime Rate plus 3.5 % which currently equals 9.75 % per annum and is payable in 36 monthly installments.

of September 30, 2023, the Company was not in compliance with certain financial covenants related to the Bank Leumi and Bank Hapoalim

The Company’s failure to comply with these financial covenants could result in an event of default under its debt agreements.

we reclassified the total balance as current debt on the balance sheet.

The Company is actively pursuing options to address its noncompliance.

The lenders have not requested early repayment of the loan as of the date when these financial statements were available to be issued.

Therefore, we reclassified the total balance as current debt on the balance sheet.

The Company is actively pursuing options to address

its noncompliance.

The lenders have not requested early repayment of the loan as of the date when these financial statements were available

to be issued.

9 – OTHER LIABILITIES

1 unchanged sentence

(In thousands)

June 30, 2023

December 31, 2022

September 30,

Other vendor payable

4 unchanged sentences

10 – STOCKHOLDERS’ EQUITY

of June 30, 2023, 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, 2023, there was 1 preferred share designated and no preferred shares outstanding.

of June 30, 2023, there were 3,000,000 Series C Preferred Shares (“Series C”) authorized with 502,000 issued and outstanding.

of September 30, 2023, 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 September 30, 2023, there was 1 preferred share designated and no preferred shares outstanding.

of September 30, 2023, there were 3,000,000 Series C Preferred Shares (“Series C”) authorized with 502,000 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

2 unchanged sentences

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

As of June 30, 2023, the accrued dividends on the

Series C Preferred Stock were $ 166 thousand.

As of September 30, 2023, the accrued dividends on

the Series C Preferred Stock were $ 174 thousand.

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

11 unchanged sentences

No options were

issued in the six months ended June 30, 2023.

the six months ending June 30, 2023, 235,426 in stock options were exercised in exchange for 158,934 shares of OMNIQ common stock.

warrants were exercised.

issued in the nine months ended September 30, 2023.

the nine months ending September 30, 2023, 235,426 in stock options were exercised in exchange for 158,934 shares of OMNIQ common stock.

No warrants were exercised.

December 2015, our Board of Directors approved the OMNIQ.

Employee Stock Purchase Plan (the “ESPP”).

For the six months ending

June 30, 2023, employees purchased 4,234 shares or $ 18 thousand of common stock.

For the nine months

ending September 30, 2023, employees purchased 7,103 shares or $ 25 thousand of common stock.

August 10, 2022, our Board of Directors approved issuing 10,000 shares as part of an employment agreement.

26 unchanged sentences

the State of Israel (TBSI, TBSI LP, TTT and TTL LP shall be referred together as “TT”).

owns 100 % of the shares of TBSI and 99 % of the partnership equity rights in TBSI LP (the remaining 1 % being held by TBSI), and Ateka

owns 100 % of the shares of TTT, and 99 % of the partnership equity rights in TTL LP (the remaining 1 % being held by TTT) (collectively

the “Purchased Equity”).

The Agreement provides that the Purchaser will acquire from the Sellers, the Purchased Equity in

exchange for total consideration of $ 15.25 million (the “Purchase Price”) to be paid as follows:

(i) $ 12,500,000 in cash

and (ii) shares of the Company’s common stock having a value of $ 2.75 million based on market prices at closing.

It is expected

that, as part of the consideration, OmniQ will arrange a loan to TT in the approximate amount of $ 6.1 million that will repay all debts

of TT to the Sellers.

This $ 6.1 million debt repayment is part of the $ 12,500,00 cash portion of the Purchase Price.

The Sellers are

also eligible to earn an additional $ 750,000 of shares of OmniQ common stock if TT’s EBITA is positive in 24 months from closing.

closing of the Agreement is subject to certain closing conditions including but not limited to obtaining approval from the Israeli Competition

(Antitrust) Commission, all necessary union approvals, certain third-party consents, and the compliance with certain cash and working

capital requirements.

Agreement provided for termination after 60 days if not renewed.

On October 4, 2023, as a result of the non-fulfilment of certain conditions,

the Company and the Sellers mutually terminated the Agreement, as a result of the termination, the Company will not make the $ 12,500,000

cash payment and the issuance of shares of common stock having a value of $ 2,750,000 .

Additionally, the Agreement provides for a mutual

release of claims among the parties and their affiliates, in the event of an effective termination.

October 5, 2023, OmniQ Corp.

(the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”)

with ThinkEquity LLC, as representatives (the “Representatives”) of the several underwriters named therein (collectively,

the “Underwriters”), relating to the issuance and sale (the “Offering”) of 2,775,000 shares of the Company’s

common stock, par value $ 0.001 per share, at a price to the public of $ 1.00 per share (the “Underwritten Shares”) and pre-funded

warrants (the “Pre-Funded Warrants”) to purchase 225,000 shares of the Company’s common stock at a price to the public

of $ 0.999 per Pre-Funded Warrant.

Under the terms of the Underwriting Agreement, the Underwriters have agreed to purchase the Underwritten

Shares from the Company at a price of $ 1.00 per share and the Pre-Funded Warrants at a price of $ 0.999 per Pre-Funded Warrant.

also granted the Underwriters an option exercisable for 45 days from the date of the Underwriting Agreement to purchase up to an additional

450,000 shares of common stock solely for the purpose of covering over-allotments (together with the Underwritten Shares, the “Shares”).

All of the Shares and Pre-Funded Warrants in the Offering are being sold by the Company.

The Company also issued warrants to the Representative

(the “Representative’s Warrants”), exercisable to purchase 140,000 shares of common stock, at an exercise price of

$ 1.25 per share.

gross proceeds from the Offering are expected to be approximately $ 3.0 million before deducting underwriting discounts and commissions

and other offering expenses payable by the Company and assuming no exercise of the Underwriters’ option to purchase additional

The Offering closed on October 11, 2023.

We are closely monitoring developments in the war between Israel and Hamas

that began on October 7, 2023 including potential impacts to The Companies business, customers, suppliers, employees, and operations in

Israel, the Middle East and elsewhere.

At this time, impacts to The Company are uncertain and subject to change given the volatile nature

of the situation.

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