What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-13 compared with 2023-08-14 · 70 added, 64 removed, 86 unchanged (61% 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 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

and our other public filings.

For more information about us and the announcements we make from time to time, visit our Internet website

at www.omniq.com.

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

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

10-Q and our other public filings.

For more information about us and the announcements we make from time to time, visit our Internet

website at www.omniq.com.

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

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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 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,

Company’s sales from operations for the nine months ended September 30, 2023, were $66 million, a decrease of approximately $12

million, or 15%, over the nine months ended September 30, 2022.

loss from operations for the nine months ended September 30, 2023, was $7 million, an increase of $1 million compared with the loss in

the nine months ended September 30, 2022, of $6 million.

Basic loss per share from continuing operations for the nine months ended September

30, 2023, was ($1.50) versus ($1.29) per share for the same period in 2022.

AND CAPITAL RESOURCES

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.

of September 30, 2023, the Company had cash in the amount of $408 thousand and a working capital deficit of $43 million, compared to

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

The Company had stockholders’

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

deficit attributable to OmniQ stockholders of $19.2 million and $10.5 million as of September 30, 2023, and December 31, 2022, respectively.

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

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.

Company’s accumulated deficit was $96.2 million and $84.4 million as of September 30, 2023, and December 31, 2022.

Company’s operations used net cash of $2.7 and $2 million in the nine months ended September 30, 2023, and 2022, respectively.

The increase in cash used by operations of $650 thousand is due to the decrease in revenue and paying down accounts payable.

Company’s cash provided from investing activities was $598 thousand for the nine months ended September 30, 2023, compared to cash

used in investing activities of $3.9 million for the nine months ended September 30, 2022.

Company’s financing activities provided $323 thousand of cash during the nine months ended September 30, 2023, and used $2.3

million during the nine months ended September 30, 2022.

During the nine months ended September 30, 2023, the Company made payments

of $1 million on its notes payable, including its related party notes payable, compared to the payments of $3 million for the nine

months ended September 30, 2022.

Additionally, the Company borrowed $796 thousand on the Company’s line of credit during the

nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, when $1.8 million was borrowed on the

Company’s line of credit.

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

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

See note 12 of the financial statements.

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 June 30,

Three months ended

September 30,

Cost of Goods sold

2 unchanged sentences

Net Loss per common Share from continuing operations

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 three months ended September 30, 2023 and 2022, the Company generated net revenues in the amount of $17 million and $27 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 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 three months ended September 30, 2023 and 2022, the Company recognized a total of $13.4 million and $21 million, respectively, of

cost of goods sold.

For the three months ended September 30, 2023 and 2022, cost of goods sold were 77% and 78% of net revenues, respectively.

operating expense for the three months ended September 30, 2023 and 2022 recognized was $6.6 million and $8.6 million, respectively,

representing a 23% decrease.

The decreases are related to the decrease in revenue.

and Development – Research and development expenses for the three months ended September 30, 2023 and 2022 totaled $482

thousand and $445 thousand, respectively.

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

and 2022 totaled $5.6 million and $7.6 million, respectively, representing a 27% decrease.

The decreases are related to decrease in revenue

and the cost reduction plan put in place by management.

– Depreciation expenses for the three months ended September 30, 2023 and 2022 totaled $146 thousand and $91 thousand,

respectively, representing a 60% 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

amortization – Intangible amortization expenses for the three months ended September 30, 2023 and 2022 totaled $418 thousand

and $474 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,

Expense – Interest expense for the three months ended September 30, 2023 totaled $898 thousand, as compared to $880 thousand

for the three months ended September 30, 2022.

The increase is primarily attributable to a additional in debt.

Nine months ended

September 30,

Cost of Goods sold

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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

the nine months ended September 30, 2023 and 2022, the Company generated net revenues in the amount of $66 million and $78 million, respectively.

The decrease between the nine-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

the nine months ended September 30, 2023 and 2022, the Company recognized a total of $52 million and $59 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

For the nine months ended September 30, 2023 and 2022, cost of goods sold were 79% and 77% of net revenues, respectively.

operating expense for the nine months ended September 30, 2023 and 2022 recognized was $21 million and $24 million, respectively, representing

a 14% 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.

and Development – Research and development expenses for the nine months ended September 30, 2023 and 2022 totaled $1.5

million and $1.4 million, respectively.

general and Administrative – Selling, general and administrative expenses for the nine months ended September 30, 2023

and 2022 totaled $18 million and $21 million, respectively, representing a 17% decrease.

The decreases are related to the cost reduction

plan put in place by management.

– Depreciation expenses for the nine months ended September 30, 2023, and 2022 totaled $349 thousand and $241 thousand,

respectively, representing a 45% increase.

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.

amortization – Intangible amortization expenses for the nine months ended September 30, 2023, and 2022 totaled $1.3 million

and $1.3 million, respectively.

income and expenses

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.

Expense – Interest expense for the nine months ended September 30, 2023 totaled $2.6 million, as compared to $2.6 million

for the nine months ended September 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