OMQS OMNIQ Corporation

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: June 30, 2023

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from________ to__________

 

Commission File Number: 000-09047

 

OMNIQ Corp.

(Exact name of registrant as specified in its charter)

 

Delaware		20-3454263
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

1865 West 2100 South

Salt Lake City, UT 84119

(Address of principal executive offices) (Zip Code)

 

(801) 244-9577

(Registrant’s telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Ticker symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value		OMQS		The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)
Emerging growth company	☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 7,890,837 shares of common stock, $0.001 par value, as of July 27, 2023.

 

 

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION	F-1
ITEM 1. FINANCIAL STATEMENTS	F-1
CONDENSED CONSOLIDATED BALANCE SHEETS AT JUNE 30, 2023 AND DECEMBER 31, 2022	F-1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022	F-2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND DECEMBER 31, 2022	F-3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022	F-4
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	F-5
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	7
ITEM 4. CONTROLS AND PROCEDURES	7
PART II - OTHER INFORMATION	7
ITEM 1. LEGAL PROCEEDINGS.	7
ITEM 1A. RISK FACTORS.	7
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	7
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.	8
ITEM 4. MINE SAFETY DISCLOSURES.	8
ITEM 5. OTHER INFORMATION.	8
ITEM 6. EXHIBITS.	9
SIGNATURES	10

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

OMNIQ CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		June 30, 2023				December 31, 2022
(In thousands)		As of
		June 30, 2023				December 31, 2022
		(UNAUDITED)
ASSETS
Current assets
Cash and cash equivalents		$	1,998			$	1,311
Accounts receivable, net			18,283				23,893
Inventory			6,685				8,726
Prepaid expenses			1,261				1,268
Other current assets			371				473
Total current assets			28,598				35,671
Property and equipment, net of accumulated depreciation of $1,069 and $1,030 respectively			1,373				1,086
Goodwill			16,432				16,542
Trade name, net of accumulated amortization of $4,669 and $4,458, respectively			1,522				1,826
Customer relationships, net of accumulated amortization of $11,241 and $10,762, respectively			4,261				4,967
Other intangibles, net of accumulated amortization of $1,569 and $1,541, respectively			577				675
Right of use lease asset			1,800				2,300
Other assets			1,202				1,744
Total Assets		$	55,765			$	64,811
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued liabilities		$	52,859			$	54,736
Line of credit			2,990				1,971
Accrued payroll and sales tax			1,699				2,633
Notes payable, related parties – current portion			97				293
Notes payable – current portion			8,941				11,572
Lease liability – current portion			829				942
Other current liabilities			1,431				1,394
Total current liabilities			68,846				73,541
Long term liabilities
Accrued interest and accrued liabilities, related party			73				72
Notes payable, less current portion			1,570				55
Lease liability			1,010				1,404
Other long term liabilities			178				265
Total liabilities			71,677				75,337
Stockholders’ deficit
Series A Preferred stock; $0.001 par value; 2,000,000 shares designated, 0 shares issued and outstanding			-				-
Series B Preferred stock; $0.001 par value; 1 share designated, 0 shares issued and outstanding			-				-
Series C Preferred stock; $0.001 par value; 3,000,000 shares designated, 502,000 and 544,500 shares issued and outstanding, respectively			1				1
Preferred stock value			1				1
Common stock; $0.001 par value; 15,000,000 shares authorized; 7,890,198 and 7,714,780 shares issued and outstanding, respectively.			8				8
Additional paid-in capital			75,000				73,714
Accumulated deficit			(91,849	)			(84,460	)
Cumulative Translation Adjustment			928				211
Total OmniQ stockholders’ deficit			(15,912	)			(10,526	)
Total liabilities and deficit		$	55,765			$	64,811

 

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

 

 

OMNIQ CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

 

(In thousands, except share and per share data)		2023				2022				2023				2022
		For the three months								For the Six months
		ending June 30,								ended June 30,
(In thousands, except share and per share data)		2023				2022				2023				2022
Revenues
Total Revenues		$	20,446			$	24,209			$	48,268			$	50,531
Cost of goods sold
Cost of goods sold			16,560				18,222				38,659				38,417
Gross profit			3,886				5,987				9,609				12,114
Operating expenses
Research & Development			559				468				982				990
Selling, general and administrative			5,315				7,072				12,082				13,547
Depreciation			96				58				204				151
Amortization			422				406				858				851
Total operating expenses			6,392				8,004				14,126				15,539
Loss from operations			(2,506	)			(2,017	)			(4,517	)			(3,425	)
Other income (expenses):
Interest expense			(740	)			(878	)			(1,678	)			(1,689	)
Other (expenses) income			(721	)			(389	)			(1,472	)			(653	)
Total other expenses			(1,461	)			(1,267	)			(3,150	)			(2,342	)
Net Loss Before Income Taxes			(3,967	)			(3,284	)			(7,667	)			(5,767	)
Provision for Income Taxes
Current			101				98				294				14
Total Provision for Income Taxes			101				98				294				14
Net Loss		$	(3,866	)		$	(3,186	)		$	(7,373	)		$	(5,753	)
Net income attributable to noncontrolling interest			-				-				-				67
Net Loss attributable to OmniQ Corp		$	(3,866	)		$	(3,186	)		$	(7,373	)		$	(5,820	)
Net Loss		$	(3,866	)		$	(3,186	)		$	(7,373	)		$	(5,753	)
Foreign currency translation adjustment			260				241				717				77
Comprehensive loss		$	(3,606	)		$	(2,945	)		$	(6,656	)		$	(5,676	)
Reconciliation of net loss to net loss attributable to common shareholders
Net loss		$	(3,866	)		$	(3,186	)		$	(7,373	)		$	(5,753	)
Less: Dividends attributable to non-common stockholders’ of OmniQ Corp			(8	)			(141	)			(16	)			(189	)
Net income attributable to noncontrolling interest			-				-				-				67
Net loss attributable to common stockholders’ of OmniQ Corp		$	(3,874	)		$	(3,327	)		$	(7,389	)		$	(6,009	)
Net (loss) per share - basic attributable to common stockerholders’ of OmniQ Corp		$	(0.49	)		$	(0.44	)		$	(0.95	)		$	(0.79	)
Weighted average number of common shares outstanding - basic			7,887,283				7,579,795				7,777,665				7,545,190

 

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

 

 

OMNIQ CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(UNAUDITED)

 

		Series C																Additional								Non				Other				Total Stockholders’
		Preferred Stock								Common Stock								Paid-in				Accumulated				Controlling				Comprehensive				Equity
(In thousands)		Shares				Amount				Shares				Amount				Capital				Deficit				Interest				Income (Loss)				(Deficit)
Balance, December 31, 2021			544				1				7,459				20				70,606				(70,571	)			2,396				(154	)			2,298
Dividend on Class C Shares			-				-				-				-				-				(48	)			-				-				(48	)
ESPP Stock Issuance			-				-				2				-				8				-				-				-				8
Stock and Warrant issued for services			-				-				-				-				298				-				-				-				298
Stock-based compensation – options, warrants, issuances			-				-				-				-				460				-				-				-				460
Exercise of stock options and warrants			-				-				99				-				41				-				-				-				41
Cumulative Translation Adjustment			-				-				-				-				-				-				(20	)			(10	)			(30	)
Net (loss) income			-				-				-				-				-				(2,636	)			67				-				(2,569	)
Balance, March 31, 2022			544			$	1				7,560			$	20			$	71,413			$	(73,255	)		$	2,443			$	(164	)		$	458
Dividends			-								-				-				-				(141	)			-				-				(141	)
ESPP Stock Issuance			-				-				1				-				10				-				-				-				10
Noncontrolling interests - distributions and other			-				-				-				-				(668	)			-				(2,443	)			-				(3,111	)
Exercise of stock options and warrants			-				-				18				-				87				-				-				-				87
Stock-based compensation – options, warrants, issuances			-				-				-				-				743				-				-				-				743
Cumulative Translation Adjustment			-				-				-				-				-				-								241				241
Net (loss) income			-				-				-				-				-				(3,186	)			-				-				(3,186	)
Balance, June 30, 2022			544			$	1				7,579			$	20			$	71,585			$	(76,582	)		$	-			$	77			$	(4,899	)
Balance, December 31, 2022			544			$	1				7,714			$	8			$	73,714			$	(84,460	)			-			$	211			$	(10,526	)
Dividend on Class C Shares			-				-				-				-				-				(8	)			-				-				(8	)
ESPP Stock Issuance			-				-				2				-				10				-				-				-				10
Stock and Warrant issued for services			-				-				10				-				45				-				-				-				45
Stock-based compensation – options, warrants, issuances			-				-				-				-				516				-				-				-				516
Exercise of stock options and warrants			-				-				156				-				173				-				-				-				173
Conversion of shares			(42	)			-				2				-				-				-				-				-				-
Cumulative Translation Adjustment			-				-				-				-				-				-				-				457				457
Net (loss) income			-				-				-				-				-				(3,507	)			-				-				(3,507	)
Balance, March 31, 2023			502			$	1			$	7,884			$	8			$	74,458			$	(87,975	)			-			$	668			$	(12,840	)
Balance			502			$	1			$	7,884			$	8			$	74,458			$	(87,975	)			-			$	668			$	(12,840	)
Dividend on Class C Shares			-				-				-				-				-				(8	)			-				-				(8	)
ESPP Stock Issuance			-				-				2				-				8				-				-				-				8
Exercise of stock options and warrants			-				-				4				-				18				-				-				-				18
Stock-based compensation – options, warrants, issuances			-				-				-				-				516				-				-				-				516
Cumulative Translation Adjustment			-				-				-				-				-				-				-				260				260
Net (loss) income			-				-				-				-				-				(3,866	)			-				-				(3,866	)
Balance, June 30, 2023			502			$	1				7,890			$	8			$	75,000			$	(91,849	)			-			$	928			$	(15,912	)
Balance			502			$	1				7,890			$	8			$	75,000			$	(91,849	)			-			$	928			$	(15,912	)

 

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

 

 

OMNIQ CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

For the six months ended June 30,

(UNAUDITED)

 

(In thousands)		2023				2022
Cash flows from operations
Net loss		$	(7,373	)		$	(5,753	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss on disposal of PP&E			-				46
Stock-based compensation			1,032				1,203
Stock and warrant issued for services			45				-
Depreciation and amortization			1,062				1,002
Amortization of ROU asset			443				445
Changes in operating assets and liabilities:
Accounts receivable			4,835				262
Prepaid expenses			(27	)			(99	)
Inventory			1,693				(2,636	)
Other assets			406				87
Accounts payable and accrued liabilities			(1,422	)			7,293
Accrued interest and accrued liabilities, related party			1				6
Accrued payroll and sales taxes payable			(973	)			578
Lease liability			(450	)			(442	)
Deferred tax assets, net			21				(105	)
Other liabilities			(60	)			(350	)
Net cash provided by (used in) operating activities			(767	)			1,537
Cash flows from investing activities
Payment for additional ownership in subsidiary			-				(3,518	)
Purchase of property and equipment			409				(80	)
Proceeds from sale of other assets			163				(171	)
Net cash provided by (used in) investing activities			572				(3,769	)
Cash flows from financing activities
Proceeds from ESPP stock issuance			18				18
Proceeds from exercise of options and warrants			191				128
Dividends paid to non-controlling interest			-				(1,448	)
Payments on notes/loans payable			(673	)			(2,591	)
Proceeds from the issuance of notes/loans payable			-				3,183
Proceeds from draw on line of credit			1,147				(1,290	)
Net cash (used in) provided by financing activities			683				(2,000	)
Net change in cash and cash equivalents			488				(4,232	)
Effect of foreign exchange rates on cash and cash equivalents			199				64
			-
Cash and cash equivalents at beginning of period			1,311				7,085
Cash and cash equivalents at end of period		$	1,998			$	2,917
Non-cash activities:
Stock issued for services		$	-			$	298
Declared dividends payable		$	16			$	16
Supplemental disclosure of cash flow information:
Cash paid for interest		$	1,678			$	1,689

 

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

 

 

OMNIQ CORP.

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The condensed consolidated financial statements include the accounts of OMNIQ Corp, and its wholly owned subsidiaries, referred to herein as “we,” “us,” “OMNIQ,” or the “Company”. Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. Certain prior period amounts in the condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current period’s presentation. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”).

 

We describe our significant accounting policies in Note 2 of the notes to consolidated financial statements in our Annual Report on Form 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 policies.

 

Net Loss Per Common Share

 

Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive. 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.

 

The following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share because such securities have an anti-dilutive impact due to losses reported as of:

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

		June 30, 2023				June 30, 2022
Options to purchase common stock			1,756,157				2,193,750
Warrants to purchase common stock			1,431,734				1,441,734
Potential shares excluded from diluted net loss per share			3,187,891				3,635,484

 

F-5

 

 

NOTE 2 – LIQUIDITY AND CAPITAL RESOURCES

 

The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. The following are the principal conditions or events which potentially raise substantial doubt about the company’s ability to continue as a going concern:

 

●	Balancing the need for operational cash with the need to add additional products
●	Timely and cost-effective development of products
●	Working capital deficit of $40 million as of June 30, 2023
●	Accumulated deficit of $92 million as of June 30, 2023
●	Multiple periods of losses from operations
●	Noncompliance with certain debt covenants

 

These facts and others have raised concerns about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, which we have successfully accomplished to date.

 

The following conditions, plans and actions are currently being implemented to address the Company’s conditions:

 

●	Outstanding warrants exist from prior offerings that could be exercised for cash depending upon the performance of our stock.
●	The Company’s acquisition of Dangot Computers, Ltd. has improved the balance sheet, profitability, and cash flow and is expected to help the Company as a whole to generate positive cash flows from operations for the foreseeable future.
●	The acquisition of Dangot has added capabilities to the Company which have already transformed into significant new orders in the Parking segment. Management expects the collaboration and cross sales to contribute to improved revenues and margins.
●	Management 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.
●	Blue Star - The Company’s total accounts payable due to Blue Star as of June 30, 2023 was approximately $37 million. 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.

 

NOTE 3 – CONCENTRATIONS

 

For 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.

 

Accounts 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.

 

For 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.

 

F-6

 

 

NOTE 4 – BUSINESS ACQUISITION

 

Dangot Computers Ltd

 

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

 

NOTE 5 – INVENTORY

 

Inventory consisted of the following as of:

SCHEDULE OF INVENTORY 

In thousands		June 30, 2023				December 31, 2022
Raw materials		$	622			$	649
Inventory in transit			616				2,004
Finished goods (less allowance)			5,447				6,073
Total inventories		$	6,685			$	8,726

 

NOTE 6 – CREDIT FACILITIES AND LINE OF CREDIT

 

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

 

On 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.

 

The annual interest rate with respect to the daily average balance of unpaid advances outstanding under the BFA (computed on a monthly basis) is equal to the “Prime Rate” of Wells Fargo Bank N.A. plus 1.5%, plus a monthly fee equal to 0.15% of the average outstanding balance. The BFA credit facility is collateralized with a senior security interest in certain assets of the Company. The BFA includes customary representations and warranties and default provisions for transactions of this type.

 

NOTE 7 – RELATED PARTY NOTES PAYABLE

 

Related party notes payable, consisted of the following as of:

 SCHEDULE OF NOTES PAYABLE, RELATED PARTIES

		June 30, 2023				December 31, 2022
In thousands
Note payable –Marin		$	60			$	180
Note payable –Thomet			37				113
Total notes payable			97				293
Less current portion			(97	)			(293	)
Long-term portion		$	-			$	-

 

Note Payable -Marin

 

In December 2017, we entered into a $660 thousand, 1.89% annual interest rate note payable (the “Marin Note”) with two individuals from whom we previously acquired their company (in 2014). The Marin Note is payable in 60 monthly principal payments of $20 thousand beginning in October 2018. Accrued interest payable as of June 30, 2023, was $70 thousand. Accrued interest is payable at maturity.

 

Note Payable – Thomet

 

In December 2017, we entered into a $750 thousand, zero percent annual interest rate note payable (the “Thomet Note”) with an individual from whom we previously acquired his company (in 2014). The Thomet Note is payable in 60 monthly principal payments of $13 thousand beginning in October 2018.

 

F-7

 

 

NOTE 8 – NOTES PAYABLE

SCHEDULE OF NOTES PAYABLE 

(In thousands)		June 30, 2023				December 31, 2022
Note payable other			10,511				11,627
Total			10,511				11,627
Less current portion			8,941				11,572
Long term notes payable		$	1,570			$	55

 

Notes Payable Other

 

On July 29, 2021, the Company entered into a long-term loan from Leumi Bank totalling NIS 7 million, which at the time was approximately $2.16 million. The note accrues interest at the Israeli Prime Rate plus 4.5% which currently equals 8.25% per annum and is payable in 8 instalments of principal and interest over 4 years. The note is secured by shares of Dangot Computers, Ltd.

 

On November 28, 2021, the Company entered into another long-term loan from Leumi Bank totalling NIS 3.5 million, which at the time was approximately $1.1 million. The note accrues interest at the Israeli Prime Rate plus 4.5% which currently equals 8.25% per annum and is payable in 8 instalments of principal and interest over 4 years. The note is secured by shares of Dangot Computers, Ltd.

 

On 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.

 

On March 27, 2022, the Company entered into another long-term loan from Leumi Bank totalling NIS 3.5 million, which at the time was approximately $1.1 million. The note accrues interest at the Israeli Prime Rate plus 4.5% which currently equals 8.25% per annum and is payable in 8 instalments of principal and interest over 4 years. The note is secured by shares of Dangot Computers, Ltd.

 

On September 13, 2022, the Company entered into a long-term loan from Hapoalim Bank totalling NIS 3 million, which at the time was approximately $0.9 million. The note accrues interest at 6.03% per annum and is payable in 36 instalments of principal and interest over 3 years.

 

During the year ended December 31, 2022, the Company entered into five short term loans totalling NIS 26.8 million, approximately $7.6 million. The note accrues average interest at 6.3% per annum.

 

As of June 30, 2023, the Company was not in compliance with certain financial covenants related to the Bank Leumi and Bank Hapoalim debt. The Company’s failure to comply with these financial covenants could result in an event of default under its debt agreements. 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.

 

NOTE 9 – OTHER LIABILITIES

SCHEDULE OF OTHER LIABILITIES 

(In thousands)		June 30, 2023				December 31, 2022
Other vendor payable		$	803			$	801
Dividend payable			166				153
Others			640				705
Total other liabilities			1,609				1,659
Less Current Portion			(1,431	)			(1,394	)
Total long term other liabilities		$	178			$	265

 

F-8

 

 

NOTE 10 – STOCKHOLDERS’ EQUITY

 

PREFERRED STOCK

 

Series A

 

As of June 30, 2023, there were 2,000,000 Series A preferred shares designated and no Series A preferred shares outstanding. The board 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.

 

Series B

 

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

 

Series C

 

As of June 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 dividend at a rate of $0.06 per share per annum and have a liquidation preference of $1 per share. Series C shares outstanding are convertible 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.

 

The 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 convert to one share of common stock) and automatically converts into Common Stock at $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) in the event that the Company’s common stock has a closing price of $30 per share for 20 consecutive trading days.

 

COMMON STOCK

 

In October 2021, OMNIQ’ 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, 1,118,856 shares of the Company’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 December 2021, shareholders’ meeting. On February 25, 2022, the Company granted 792,500 stock options. These options were granted to employees as part of the Company’s Equity Incentive Plan. No options were issued in the six months ended June 30, 2023.

 

For the six months ending June 30, 2023, 235,426 in stock options were exercised in exchange for 158,934 shares of OMNIQ common stock. No warrants were exercised.

 

In 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.

 

On August 10, 2022, our Board of Directors approved issuing 10,000 shares as part of an employment agreement. Shares were issued January 3, 2023, and valued at $45 thousand.

 

F-9

 

 

NOTE 11 – LITIGATION

 

The Company was named a defendant in a case involving a former employee who claims he is owed approximately $60 thousand in unpaid commissions. The Company’s intends to defend the case. This case was filed in the Superior Court of the State of California, County of San Diego on October 21, 2020.

 

The company is not a party to any other pending material legal proceeding in which it is defending against any claims of material significance. To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against the Company. To the knowledge of management, no director, executive officer or affiliate of the Company, any owner of record or beneficially of more than five percent of the Company’s Common Stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding.

 

NOTE 12 – SUBSEQUENT EVENTS

 

On July 6, 2023, OmniQ Corp. (the “Company”) entered into a Share and Rights Purchase Agreement (the Agreement”) with Afcon Holdings Ltd., (“Afcon”), a company organized under the laws of the State of Israel, and Ateka Ltd. (“Ateka”), a company organized under the laws of the State of Israel (Afcon and Ateka, jointly and severally, shall be referred to together as the “Sellers”) (OminQ and its newly formed wholly owned subsidiary which shall be alternatively referred to together as the “Company” or the “Purchaser”), and Tadiran Telecom Communication Services in Israel Ltd. (“TBSI”), a company organized under the laws of the State of Israel, Tadiran Telecom Communication Services in Israel L.P. (“TBSI LP”), a limited partnership organized under the laws of the State of Israel, Tadiran Telecom Technologies (2011) Ltd. (“TTT”), a company organized under the laws of the State of Israel, Tadiran Telecom (TTL) L.P. (“TTL LP”) a limited partnership organized under the laws of the State of Israel (TBSI, TBSI LP, TTT and TTL LP shall be referred together as “TT”).

 

Afcon 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.

 

The 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.

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may”, “could”, “would”, “should”, “believe”, “expect”, “anticipate”, “plan”, “estimate”, “target”, “project”, “intend”, “foresee” and similar expressions. These statements include, among others, statements regarding our expected business outlook, anticipated financial and operating results, our business strategy and means to implement the strategy, our objectives, the amount and timing of capital expenditures, the likelihood of our success in expanding our business, financing plans, budgets, working capital needs and sources of liquidity. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.

 

Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our products, the expansion of product offerings geographically or through new marketing applications, the timing and cost of planned capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. In addition, even if our actual results are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results may not be indicative of results or developments in subsequent periods.

 

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission (“SEC”), we are under no obligation to publicly update or revise any forward-looking statements after we file this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise. Investors, potential investors and other readers are urged to consider the above-mentioned factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results or performance.

 

For a more detailed discussion of some of the foregoing risks and uncertainties, see Item 1A — “Risk Factors” in our Annual 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. 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.

 

Introduction

 

We use patented and proprietary artificial intelligence (AI) technology to deliver data collection, real time surveillance and monitoring for supply chain management, homeland security, public safety, traffic & parking management and access control applications. The technology and services we provide helps our clients move people, assets and data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments.

 

We offer end-to-end solutions that include hardware, software, communications, and full lifecycle management services. We are an established manufacturer and distributor of barcode labels, tags, and ribbons, as well as RFID labels and tags. Our highly tenured team of professionals has the knowledge and expertise to simplify the integration process for our customers, and our team delivers proven problem-solving solutions backed by numerous customer references. We offer comprehensive packaged and configurable software, and we are a leading provider of best-in-class mobile and wireless equipment.

 

 

Our customers include government agencies and leading Fortune 500 companies from diverse sectors, including healthcare, food and beverage, manufacturing, retail, distribution, transportation and logistics, and oil, gas, and chemicals.

 

The following is a discussion of our financial condition, results of operations, financial resources, and working capital. This discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements contained in this Form 10-Q.

 

OVERVIEW

 

The 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.

 

The 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.

 

LIQUIDITY AND CAPITAL RESOURCES

 

As 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 $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.

 

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

 

The 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.

 

The 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.

 

The 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.

 

 

Results of Operations

 

The following tables set forth certain selected unaudited condensed consolidated statement of operations data for the periods indicated in dollars. In addition, we note that the period-to-period comparison may not be indicative of future performance.

 

		Three months ended June 30,								Variation
In thousands		2023				2022				$				%
Revenue		$	20,446			$	24,209			$	(3,763	)			(15.54	)%
Cost of Goods sold			16,560				18,222				(1,662	)			(9.12	)%
Gross Profit			3,886				5,987				(2,101	)			(35.09	)%
Operating Expenses			6,392				8,004				(1,612	)			(20.14	)%
Loss from operations			(2,506	)			(2,017	)			(489	)			24.24	%
Net loss		$	(3,866	)		$	(3,186	)		$	(680	)			21.34	%
Net Loss per common Share from continuing operations		$	(0.49	)		$	(0.44	)		$	(0.05	)			11.36	%

 

Revenues

 

For 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.

 

Cost of Goods Sold

 

For 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 expenses

 

Total 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.

 

Research and Development – Research and development expenses for the three months ended June 30, 2023 and 2022 totaled $559 thousand and $468 thousand, respectively.

 

Selling, 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 – 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.

 

Intangible amortization – Intangible amortization expenses for the three months ended June 30, 2023 and 2022 totaled $422 thousand and $406 thousand, respectively.

 

 

Other income and expenses

 

Interest 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,								Variation
In thousands		2023				2022				$				%
Revenue		$	48,268			$	50,531			$	(2,263	)			(4.48	)%
Cost of Goods sold			38,659				38,417				242				0.63	%
Gross Profit			9,609				12,114				(2,505	)			(20.68	)%
Operating Expenses			14,126				15,539				(1,413	)			(9.09	)%
Loss from operations			(4,517	)			(3,425	)			(1,092	)			31.90	%
Net loss		$	(7,373	)		$	(5,753	)		$	(1,620	)			28.16	%
Net Loss per common Share from continuing operations		$	(0.95	)		$	(0.79	)		$	(0.16	)			20.00	%

 

Revenues

 

For 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

 

Cost of Goods Sold

 

For 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 expenses

 

Total 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.

 

Research and Development – Research and development expenses for the six months ended June 30, 2023 and 2022 totaled $982 thousand and $990 thousand, respectively.

 

Selling, 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 – 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 increased by the acquisition of additional fixed assets.

 

Intangible amortization – Intangible amortization expenses for the six months ended June 30, 2023, and 2022 totaled $858 thousand and $851 thousand, respectively.

 

Other income and expenses

 

Interest 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.

 

 

Inflation

 

The Company’s results of operations have not been affected by inflation and management does not expect inflation to have a material impact on its operations in the future.

 

Off- Balance Sheet Arrangements

 

The Company currently does not have any off-balance sheet arrangements.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not Applicable

 

ITEM 4. CONTROLS AND PROCEDURES

 

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 

The Company’s management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as that term is defined in Rule 13a-15(e)) as of June 30, 2023, the end of the period covered by this Quarterly Report on Form 10-Q.

 

Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer (Principal Financial and Accounting Officer) concluded that, as of June 30, 2023, our disclosure controls and procedures were ineffective as of the end of the period covered to ensure that information required to be disclosed in our reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to the Company’s management, including its principal executive officer and its principal financial officer, as appropriate to allow timely decisions regarding required disclosure. This was due to the following material weaknesses which are indicative of many small companies with limited staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of accounting principles generally accepted in the United States of America and Securities and Exchange Commission guidelines. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Principal Executive Officer, and our Principal Financial and Accounting Officer, to allow timely decisions regarding required disclosure.

 

During 2022, we identified material weaknesses in our internal control over financial reporting, which were disclosed in our annual report on Form 10-K filed with the SEC on March 31, 2023.

 

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

 

We have been implementing additional internal control procedures in order to address the material weaknesses identified in our annual report on Form 10-K filed with the SEC on March 31, 2023.

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

The Company was named a defendant in a case involving a former employee who claims he is owed approximately $60 thousand in unpaid commissions. The Company intends to defend the case. This case was filed in the Superior Court of the State of California, County of San Diego on October 21, 2020.

 

ITEM 1A. RISK FACTORS

 

Not applicable.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

None.

 

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

Not applicable.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION.

 

On August 8, 2023, Andrew MacMillan, a director of the Company passed away unexpectedly. The Company has named Independent Director, Guy Elhani to replace Mr. MacMillan as a member of the Audit Committee and Compensation Committee.

 

On August 9, 2023, the Company received a deficiency letter from the Nasdaq Stock Market advising them that based on the Company’s Market Value of Listed Securities (“MLVS”) for the last 32 consecutive business days, the Company no longer meets the $35 million standard. The Company has 180 calendar days to regain compliance. If at anytime during this 180 day compliance period, the Company’s MLVS closes at $35 million or more for a minimum of ten consecutive business days, Nasdaq will provide you written notice of compliance and the matter will be closed. In the event that the Company does not regain compliance with the Rule prior to the expiration of the compliance period, it will receive written notification that its securities are subject to delisting. At such time, the Company may appeal the delisting determination to a Nasdaq Hearings Panel. The Company intends to put together a plan to achieve compliance.

 

WHERE YOU CAN FIND ADDITIONAL INFORMATION

 

We have filed with the Securities and Exchange Commission this Form 10-Q, including exhibits. You may read and copy all or any portion of the registration statement or any reports, statements or other information in the files at SEC’s Public Reference Room located at 100 F Street, NE., Washington, DC 20549, on official business days during the hours of 10 a.m. to 3 p.m.

 

You can request copies of these documents upon payment of a duplicating fee by writing to the Commission. You may call the Commission at 1-800-SEC-0330 for further information on the operation of its public reference room. Our filings, including the registration statement, will also be available to you on the website maintained by the Commission at http://www.sec.gov.

 

We intend to furnish our stockholders with annual reports which will be filed electronically with the SEC containing consolidated financial statements audited by our independent auditors, and to make available to our stockholders quarterly reports for the first three quarters of each year containing unaudited interim consolidated financial statements.

 

Our website is located at http://www.omniq.com. The Company’s website and the information to be contained on that site, or connected to that site, is not part of or incorporated by reference into this filing.

 

 

ITEM 6. EXHIBITS

 

EXHIBIT INDEX

 

31.1		Certification of our Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of our Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of our Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
10.1		Share and Rights Purchase Agreement dated July 6, 2023 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on July 10, 2023).
101.INS		Inline XBRL Instance Document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: August 14, 2023

 

OMNIQ CORP.
By:	/s/ Shai Lustgarten
	Shai Lustgarten
	President and Chief Executive Officer

 

 

 

EXHIBIT 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a) UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

I, Shai Lustgarten, certify that:

 

1.	I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2023 of OMNIQ Corp.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 14, 2023	/s/ Shai Lustgarten
	Shai Lustgarten,
	Chief Executive Officer

 

 

EXHIBIT 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

I, Neev Nissenson, certify that:

 

1.	I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2023 of OMNIQ Corp.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 14, 2023	/s/ Neev Nissenson
	Neev Nissenson
	Chief Financial Officer

 

 

EXHIBIT 32.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(b) UNDER

THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 1350 OF

CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE

 

Each of the undersigned, Shai Lustgarten and Neev Nissenson, certifies pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code, that (1) this quarterly report on Form 10-Q for the quarter ended June 30, 2023 of OMNIQ Corp. (the “Company”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, and (2) the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: August 14, 2023

 

	/s/ Shai Lustgarten
	Shai Lustgarten,
	Chief Executive Officer
	/s/ Neev Nissenson
	Neev Nissenson
	Chief Financial Officer

 

v3.23.2

Cover - shares	6 Months Ended
	Jun. 30, 2023	Jul. 27, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	000-09047
Entity Registrant Name	OMNIQ Corp.
Entity Central Index Key	0000278165
Entity Tax Identification Number	20-3454263
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1865 West 2100 South
Entity Address, City or Town	Salt Lake City
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84119
City Area Code	(801)
Local Phone Number	244-9577
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	OMQS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,890,837

v3.23.2

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 1,998	$ 1,311
Accounts receivable, net	18,283	23,893
Inventory	6,685	8,726
Prepaid expenses	1,261	1,268
Other current assets	371	473
Total current assets	28,598	35,671
Property and equipment, net of accumulated depreciation of $1,069 and $1,030 respectively	1,373	1,086
Goodwill	16,432	16,542
Trade name, net of accumulated amortization of $4,669 and $4,458, respectively	1,522	1,826
Customer relationships, net of accumulated amortization of $11,241 and $10,762, respectively	4,261	4,967
Other intangibles, net of accumulated amortization of $1,569 and $1,541, respectively	577	675
Right of use lease asset	1,800	2,300
Other assets	1,202	1,744
Total Assets	55,765	64,811
Current liabilities
Accounts payable and accrued liabilities	52,859	54,736
Line of credit	2,990	1,971
Accrued payroll and sales tax	1,699	2,633
Lease liability – current portion	829	942
Other current liabilities	1,431	1,394
Total current liabilities	68,846	73,541
Long term liabilities
Accrued interest and accrued liabilities, related party	73	72
Notes payable, less current portion	1,570	55
Lease liability	1,010	1,404
Other long term liabilities	178	265
Total liabilities	71,677	75,337
Stockholders’ deficit
Common stock; $0.001 par value; 15,000,000 shares authorized; 7,890,198 and 7,714,780 shares issued and outstanding, respectively.	8	8
Additional paid-in capital	75,000	73,714
Accumulated deficit	(91,849)	(84,460)
Cumulative Translation Adjustment	928	211
Total OmniQ stockholders’ deficit	(15,912)	(10,526)
Total liabilities and deficit	55,765	64,811
Series A Preferred Stock [Member]
Stockholders’ deficit
Preferred stock value
Series B Preferred Stock [Member]
Stockholders’ deficit
Preferred stock value
Series C Preferred Stock [Member]
Stockholders’ deficit
Preferred stock value	1	1
Related Party [Member]
Current liabilities
Notes payable – current portion	97	293
Long term liabilities
Notes payable, less current portion
Nonrelated Party [Member]
Current liabilities
Notes payable – current portion	$ 8,941	$ 11,572

v3.23.2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Property and equipment, accumulated depreciation	$ 1,069	$ 1,030
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	15,000,000	15,000,000
Common stock, shares, issued	7,890,198	7,714,780
Common stock, shares outstanding	7,890,198	7,714,780
Series A Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares designated	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series B Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares designated	1	1
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series C Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares designated	3,000,000	3,000,000
Preferred stock, shares issued	502,000	544,500
Preferred stock, shares outstanding	502,000	544,500
Trade Names [Member]
Other intangibles, accumulated amortization	$ 4,669	$ 4,458
Customer Relationships [Member]
Other intangibles, accumulated amortization	11,241	10,762
Other Intangible Assets [Member]
Other intangibles, accumulated amortization	$ 1,569	$ 1,541

v3.23.2

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues
Total Revenues	$ 20,446	$ 24,209	$ 48,268	$ 50,531
Cost of goods sold
Cost of goods sold	16,560	18,222	38,659	38,417
Gross profit	3,886	5,987	9,609	12,114
Operating expenses
Research & Development	559	468	982	990
Selling, general and administrative	5,315	7,072	12,082	13,547
Depreciation	96	58	204	151
Amortization	422	406	858	851
Total operating expenses	6,392	8,004	14,126	15,539
Loss from operations	(2,506)	(2,017)	(4,517)	(3,425)
Other income (expenses):
Interest expense	(740)	(878)	(1,678)	(1,689)
Other (expenses) income	(721)	(389)	(1,472)	(653)
Total other expenses	(1,461)	(1,267)	(3,150)	(2,342)
Net Loss Before Income Taxes	(3,967)	(3,284)	(7,667)	(5,767)
Provision for Income Taxes
Current	101	98	294	14
Total Provision for Income Taxes	101	98	294	14
Net loss	(3,866)	(3,186)	(7,373)	(5,753)
Net income attributable to noncontrolling interest				67
Net Loss attributable to OmniQ Corp	(3,866)	(3,186)	(7,373)	(5,820)
Foreign currency translation adjustment	260	241	717	77
Comprehensive loss	(3,606)	(2,945)	(6,656)	(5,676)
Reconciliation of net loss to net loss attributable to common shareholders
Less: Dividends attributable to non-common stockholders’ of OmniQ Corp	(8)	(141)	(16)	(189)
Net income attributable to noncontrolling interest				67
Net loss attributable to common stockholders’ of OmniQ Corp	$ (3,874)	$ (3,327)	$ (7,389)	$ (6,009)
Net (loss) per share - basic attributable to common stockerholders’ of OmniQ Corp	$ (0.49)	$ (0.44)	$ (0.95)	$ (0.79)
Weighted average number of common shares outstanding - basic	7,887,283	7,579,795	7,777,665	7,545,190

v3.23.2

Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands	Preferred Stock [Member] Series C Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]	AOCI Attributable to Parent [Member]	Total
Balance at Dec. 31, 2021	$ 1	$ 20	$ 70,606	$ (70,571)	$ 2,396	$ (154)	$ 2,298
Balance, shares at Dec. 31, 2021	544	7,459
Dividend on Class C Shares				(48)			(48)
ESPP Stock Issuance			8				8
ESPP Stock Issuance, shares		2
Stock and Warrant issued for services			298				298
Stock-based compensation – options, warrants, issuances			460				460
Exercise of stock options and warrants			41				41
Exercise of stock options and warrants, shares		99
Cumulative Translation Adjustment					(20)	(10)	(30)
Net (loss) income				(2,636)	67		(2,569)
Balance at Mar. 31, 2022	$ 1	$ 20	71,413	(73,255)	2,443	(164)	458
Balance, shares at Mar. 31, 2022	544	7,560
Balance at Dec. 31, 2021	$ 1	$ 20	70,606	(70,571)	2,396	(154)	2,298
Balance, shares at Dec. 31, 2021	544	7,459
Net (loss) income							(5,753)
Balance at Jun. 30, 2022	$ 1	$ 20	71,585	(76,582)		77	(4,899)
Balance, shares at Jun. 30, 2022	544	7,579
Balance at Mar. 31, 2022	$ 1	$ 20	71,413	(73,255)	2,443	(164)	458
Balance, shares at Mar. 31, 2022	544	7,560
Dividend on Class C Shares				(141)			(141)
ESPP Stock Issuance			10				10
ESPP Stock Issuance, shares		1
Stock-based compensation – options, warrants, issuances			743				743
Exercise of stock options and warrants			87				87
Exercise of stock options and warrants, shares		18
Cumulative Translation Adjustment						241	241
Net (loss) income				(3,186)			(3,186)
Noncontrolling interests - distributions and other			(668)		(2,443)		(3,111)
Balance at Jun. 30, 2022	$ 1	$ 20	71,585	(76,582)		77	(4,899)
Balance, shares at Jun. 30, 2022	544	7,579
Balance at Dec. 31, 2022	$ 1	$ 8	73,714	(84,460)		211	(10,526)
Balance, shares at Dec. 31, 2022	544	7,714
Dividend on Class C Shares				(8)			(8)
ESPP Stock Issuance			10				10
ESPP Stock Issuance, shares		2
Stock and Warrant issued for services			45				45
Stock-based compensation – options, warrants, issuances			516				516
Exercise of stock options and warrants			173				173
Exercise of stock options and warrants, shares		156
Cumulative Translation Adjustment						457	457
Net (loss) income				(3,507)			(3,507)
Stock and warrant issuance for Acquisition, shares		10
Conversion of shares
Conversion of equity, shares	(42,000)	2
Balance at Mar. 31, 2023	$ 1	$ 8	74,458	(87,975)		668	(12,840)
Balance, shares at Mar. 31, 2023	502	7,884
Balance at Dec. 31, 2022	$ 1	$ 8	73,714	(84,460)		211	(10,526)
Balance, shares at Dec. 31, 2022	544	7,714
Net (loss) income							(7,373)
Balance at Jun. 30, 2023	$ 1	$ 8	75,000	(91,849)		928	(15,912)
Balance, shares at Jun. 30, 2023	502	7,890
Balance at Mar. 31, 2023	$ 1	$ 8	74,458	(87,975)		668	(12,840)
Balance, shares at Mar. 31, 2023	502	7,884
Dividend on Class C Shares				(8)			(8)
ESPP Stock Issuance			8				8
ESPP Stock Issuance, shares		2
Stock-based compensation – options, warrants, issuances			516				516
Exercise of stock options and warrants			18				18
Exercise of stock options and warrants, shares		4
Cumulative Translation Adjustment						260	260
Net (loss) income				(3,866)			(3,866)
Balance at Jun. 30, 2023	$ 1	$ 8	$ 75,000	$ (91,849)		$ 928	$ (15,912)
Balance, shares at Jun. 30, 2023	502	7,890

v3.23.2

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operations
Net loss	$ (7,373)	$ (5,753)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss on disposal of PP&E		46
Stock-based compensation	1,032	1,203
Stock and warrant issued for services	45
Depreciation and amortization	1,062	1,002
Amortization of ROU asset	443	445
Changes in operating assets and liabilities:
Accounts receivable	4,835	262
Prepaid expenses	(27)	(99)
Inventory	1,693	(2,636)
Other assets	406	87
Accounts payable and accrued liabilities	(1,422)	7,293
Accrued interest and accrued liabilities, related party	1	6
Accrued payroll and sales taxes payable	(973)	578
Lease liability	(450)	(442)
Deferred tax assets, net	21	(105)
Other liabilities	(60)	(350)
Net cash provided by (used in) operating activities	(767)	1,537
Cash flows from investing activities
Payment for additional ownership in subsidiary		(3,518)
Purchase of property and equipment	409	(80)
Proceeds from sale of other assets	163	(171)
Net cash provided by (used in) investing activities	572	(3,769)
Cash flows from financing activities
Proceeds from ESPP stock issuance	18	18
Proceeds from exercise of options and warrants	191	128
Dividends paid to non-controlling interest		(1,448)
Payments on notes/loans payable	(673)	(2,591)
Proceeds from the issuance of notes/loans payable		3,183
Proceeds from draw on line of credit	1,147	(1,290)
Net cash (used in) provided by financing activities	683	(2,000)
Net change in cash and cash equivalents	488	(4,232)
Effect of foreign exchange rates on cash and cash equivalents	199	64
Cash and cash equivalents at beginning of period	1,311	7,085
Cash and cash equivalents at end of period	1,998	2,917
Non-cash activities:
Stock issued for services		298
Declared dividends payable	16	16
Supplemental disclosure of cash flow information:
Cash paid for interest	$ 1,678	$ 1,689

v3.23.2

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   The condensed consolidated financial statements include the accounts of OMNIQ Corp, and its wholly owned subsidiaries, referred to herein as “we,” “us,” “OMNIQ,” or the “Company”. Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. Certain prior period amounts in the condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current period’s presentation. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”).   We describe our significant accounting policies in Note 2 of the notes to consolidated financial statements in our Annual Report on Form 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 policies.   Net Loss Per Common Share   Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive. 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.   The following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share because such securities have an anti-dilutive impact due to losses reported as of:  SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNING PER SHARE     June 30, 2023     June 30, 2022   Options to purchase common stock     1,756,157       2,193,750   Warrants to purchase common stock     1,431,734       1,441,734   Potential shares excluded from diluted net loss per share     3,187,891       3,635,484

v3.23.2

LIQUIDITY AND CAPITAL RESOURCES	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
LIQUIDITY AND CAPITAL RESOURCES	NOTE 2 – LIQUIDITY AND CAPITAL RESOURCES   The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. The following are the principal conditions or events which potentially raise substantial doubt about the company’s ability to continue as a going concern:   ● Balancing the need for operational cash with the need to add additional products ● Timely and cost-effective development of products ● Working capital deficit of $40 million as of June 30, 2023 ● Accumulated deficit of $92 million as of June 30, 2023 ● Multiple periods of losses from operations ● Noncompliance with certain debt covenants   These facts and others have raised concerns about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, which we have successfully accomplished to date.   The following conditions, plans and actions are currently being implemented to address the Company’s conditions:   ● Outstanding warrants exist from prior offerings that could be exercised for cash depending upon the performance of our stock. ● The Company’s acquisition of Dangot Computers, Ltd. has improved the balance sheet, profitability, and cash flow and is expected to help the Company as a whole to generate positive cash flows from operations for the foreseeable future. ● The acquisition of Dangot has added capabilities to the Company which have already transformed into significant new orders in the Parking segment. Management expects the collaboration and cross sales to contribute to improved revenues and margins. ● Management 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. ● Blue Star - The Company’s total accounts payable due to Blue Star as of June 30, 2023 was approximately $37 million. 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.

v3.23.2

CONCENTRATIONS	6 Months Ended
	Jun. 30, 2023
Risks and Uncertainties [Abstract]
CONCENTRATIONS	NOTE 3 – CONCENTRATIONS   For 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.   Accounts 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.   For 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.

v3.23.2

BUSINESS ACQUISITION	6 Months Ended
	Jun. 30, 2023
Business Combination and Asset Acquisition [Abstract]
BUSINESS ACQUISITION	NOTE 4 – BUSINESS ACQUISITION   Dangot Computers Ltd   On 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 shares. The Company utilized its working capital and a combination of short- and long-term loans.

v3.23.2

INVENTORY	6 Months Ended
	Jun. 30, 2023
Inventory Disclosure [Abstract]
INVENTORY	NOTE 5 – INVENTORY   Inventory consisted of the following as of: SCHEDULE OF INVENTORY  In thousands   June 30, 2023     December 31, 2022                 Raw materials   $ 622     $ 649   Inventory in transit     616       2,004   Finished goods (less allowance)     5,447       6,073   Total inventories   $ 6,685     $ 8,726

v3.23.2

CREDIT FACILITIES AND LINE OF CREDIT	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
CREDIT FACILITIES AND LINE OF CREDIT	NOTE 6 – CREDIT FACILITIES AND LINE OF CREDIT   We maintain operating lines of credit, factoring and revolving credit facilities with banks and finance companies to provide us with working capital.   On 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.   The annual interest rate with respect to the daily average balance of unpaid advances outstanding under the BFA (computed on a monthly basis) is equal to the “Prime Rate” of Wells Fargo Bank N.A. plus 1.5%, plus a monthly fee equal to 0.15% of the average outstanding balance. The BFA credit facility is collateralized with a senior security interest in certain assets of the Company. The BFA includes customary representations and warranties and default provisions for transactions of this type.

v3.23.2

RELATED PARTY NOTES PAYABLE	6 Months Ended
	Jun. 30, 2023
Related Party Notes Payable
RELATED PARTY NOTES PAYABLE	NOTE 7 – RELATED PARTY NOTES PAYABLE   Related party notes payable, consisted of the following as of:  SCHEDULE OF NOTES PAYABLE, RELATED PARTIES     June 30, 2023     December 31, 2022   In thousands                 Note payable –Marin   $ 60     $ 180   Note payable –Thomet     37       113   Total notes payable     97       293   Less current portion     (97 )     (293 ) Long-term portion   $ -     $ -     Note Payable -Marin   In December 2017, we entered into a $660 thousand, 1.89% annual interest rate note payable (the “Marin Note”) with two individuals from whom we previously acquired their company (in 2014). The Marin Note is payable in 60 monthly principal payments of $20 thousand beginning in October 2018. Accrued interest payable as of June 30, 2023, was $70 thousand. Accrued interest is payable at maturity.   Note Payable – Thomet   In December 2017, we entered into a $750 thousand, zero percent annual interest rate note payable (the “Thomet Note”) with an individual from whom we previously acquired his company (in 2014). The Thomet Note is payable in 60 monthly principal payments of $13 thousand beginning in October 2018.

v3.23.2

NOTES PAYABLE	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
NOTES PAYABLE	NOTE 8 – NOTES PAYABLE SCHEDULE OF NOTES PAYABLE  (In thousands)   June 30, 2023     December 31, 2022   Note payable other     10,511       11,627   Total     10,511       11,627   Less current portion     8,941       11,572   Long term notes payable   $ 1,570     $ 55     Notes Payable Other   On July 29, 2021, the Company entered into a long-term loan from Leumi Bank totalling NIS 7 million, which at the time was approximately $2.16 million. The note accrues interest at the Israeli Prime Rate plus 4.5% which currently equals 8.25% per annum and is payable in 8 instalments of principal and interest over 4 years. The note is secured by shares of Dangot Computers, Ltd.   On November 28, 2021, the Company entered into another long-term loan from Leumi Bank totalling NIS 3.5 million, which at the time was approximately $1.1 million. The note accrues interest at the Israeli Prime Rate plus 4.5% which currently equals 8.25% per annum and is payable in 8 instalments of principal and interest over 4 years. The note is secured by shares of Dangot Computers, Ltd.   On 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.   On March 27, 2022, the Company entered into another long-term loan from Leumi Bank totalling NIS 3.5 million, which at the time was approximately $1.1 million. The note accrues interest at the Israeli Prime Rate plus 4.5% which currently equals 8.25% per annum and is payable in 8 instalments of principal and interest over 4 years. The note is secured by shares of Dangot Computers, Ltd.   On September 13, 2022, the Company entered into a long-term loan from Hapoalim Bank totalling NIS 3 million, which at the time was approximately $0.9 million. The note accrues interest at 6.03% per annum and is payable in 36 instalments of principal and interest over 3 years.   During the year ended December 31, 2022, the Company entered into five short term loans totalling NIS 26.8 million, approximately $7.6 million. The note accrues average interest at 6.3% per annum.   As of June 30, 2023, the Company was not in compliance with certain financial covenants related to the Bank Leumi and Bank Hapoalim debt. The Company’s failure to comply with these financial covenants could result in an event of default under its debt agreements. 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.

v3.23.2

OTHER LIABILITIES	6 Months Ended
	Jun. 30, 2023
Other Liabilities Disclosure [Abstract]
OTHER LIABILITIES	NOTE 9 – OTHER LIABILITIES SCHEDULE OF OTHER LIABILITIES  (In thousands)   June 30, 2023     December 31, 2022   Other vendor payable   $ 803     $ 801   Dividend payable     166       153   Others     640       705   Total other liabilities     1,609       1,659   Less Current Portion     (1,431 )     (1,394 ) Total long term other liabilities   $ 178     $ 265

v3.23.2

STOCKHOLDERS’ EQUITY	6 Months Ended
	Jun. 30, 2023
Equity [Abstract]
STOCKHOLDERS’ EQUITY	NOTE 10 – STOCKHOLDERS’ EQUITY   PREFERRED STOCK   Series A   As of June 30, 2023, there were 2,000,000 Series A preferred shares designated and no Series A preferred shares outstanding. The board 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.   Series B   As of June 30, 2023, there was 1 preferred share designated and no preferred shares outstanding.   Series C   As of June 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 dividend at a rate of $0.06 per share per annum and have a liquidation preference of $1 per share. Series C shares outstanding are convertible 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.   The 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 convert to one share of common stock) and automatically converts into Common Stock at $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) in the event that the Company’s common stock has a closing price of $30 per share for 20 consecutive trading days.   COMMON STOCK   In October 2021, OMNIQ’ 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, 1,118,856 shares of the Company’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 December 2021, shareholders’ meeting. On February 25, 2022, the Company granted 792,500 stock options. These options were granted to employees as part of the Company’s Equity Incentive Plan. No options were issued in the six months ended June 30, 2023.   For the six months ending June 30, 2023, 235,426 in stock options were exercised in exchange for 158,934 shares of OMNIQ common stock. No warrants were exercised.   In 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.   On August 10, 2022, our Board of Directors approved issuing 10,000 shares as part of an employment agreement. Shares were issued January 3, 2023, and valued at $45 thousand.

v3.23.2

LITIGATION	6 Months Ended
	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
LITIGATION	NOTE 11 – LITIGATION   The Company was named a defendant in a case involving a former employee who claims he is owed approximately $60 thousand in unpaid commissions. The Company’s intends to defend the case. This case was filed in the Superior Court of the State of California, County of San Diego on October 21, 2020.   The company is not a party to any other pending material legal proceeding in which it is defending against any claims of material significance. To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against the Company. To the knowledge of management, no director, executive officer or affiliate of the Company, any owner of record or beneficially of more than five percent of the Company’s Common Stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding.

v3.23.2

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 12 – SUBSEQUENT EVENTS   On July 6, 2023, OmniQ Corp. (the “Company”) entered into a Share and Rights Purchase Agreement (the Agreement”) with Afcon Holdings Ltd., (“Afcon”), a company organized under the laws of the State of Israel, and Ateka Ltd. (“Ateka”), a company organized under the laws of the State of Israel (Afcon and Ateka, jointly and severally, shall be referred to together as the “Sellers”) (OminQ and its newly formed wholly owned subsidiary which shall be alternatively referred to together as the “Company” or the “Purchaser”), and Tadiran Telecom Communication Services in Israel Ltd. (“TBSI”), a company organized under the laws of the State of Israel, Tadiran Telecom Communication Services in Israel L.P. (“TBSI LP”), a limited partnership organized under the laws of the State of Israel, Tadiran Telecom Technologies (2011) Ltd. (“TTT”), a company organized under the laws of the State of Israel, Tadiran Telecom (TTL) L.P. (“TTL LP”) a limited partnership organized under the laws of the State of Israel (TBSI, TBSI LP, TTT and TTL LP shall be referred together as “TT”).   Afcon 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.   The 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.

v3.23.2

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net Loss Per Common Share	Net Loss Per Common Share   Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive. 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.   The following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share because such securities have an anti-dilutive impact due to losses reported as of:  SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNING PER SHARE     June 30, 2023     June 30, 2022   Options to purchase common stock     1,756,157       2,193,750   Warrants to purchase common stock     1,431,734       1,441,734   Potential shares excluded from diluted net loss per share     3,187,891       3,635,484

v3.23.2

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNING PER SHARE	The following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share because such securities have an anti-dilutive impact due to losses reported as of:  SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNING PER SHARE     June 30, 2023     June 30, 2022   Options to purchase common stock     1,756,157       2,193,750   Warrants to purchase common stock     1,431,734       1,441,734   Potential shares excluded from diluted net loss per share     3,187,891       3,635,484

v3.23.2

INVENTORY (Tables)	6 Months Ended
	Jun. 30, 2023
Inventory Disclosure [Abstract]
SCHEDULE OF INVENTORY	Inventory consisted of the following as of: SCHEDULE OF INVENTORY  In thousands   June 30, 2023     December 31, 2022                 Raw materials   $ 622     $ 649   Inventory in transit     616       2,004   Finished goods (less allowance)     5,447       6,073   Total inventories   $ 6,685     $ 8,726

v3.23.2

RELATED PARTY NOTES PAYABLE (Tables)	6 Months Ended
	Jun. 30, 2023
Related Party Notes Payable
SCHEDULE OF NOTES PAYABLE, RELATED PARTIES	Related party notes payable, consisted of the following as of:  SCHEDULE OF NOTES PAYABLE, RELATED PARTIES     June 30, 2023     December 31, 2022   In thousands                 Note payable –Marin   $ 60     $ 180   Note payable –Thomet     37       113   Total notes payable     97       293   Less current portion     (97 )     (293 ) Long-term portion   $ -     $ -

v3.23.2

NOTES PAYABLE (Tables)	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
SCHEDULE OF NOTES PAYABLE	SCHEDULE OF NOTES PAYABLE  (In thousands)   June 30, 2023     December 31, 2022   Note payable other     10,511       11,627   Total     10,511       11,627   Less current portion     8,941       11,572   Long term notes payable   $ 1,570     $ 55

v3.23.2

OTHER LIABILITIES (Tables)	6 Months Ended
	Jun. 30, 2023
Other Liabilities Disclosure [Abstract]
SCHEDULE OF OTHER LIABILITIES	SCHEDULE OF OTHER LIABILITIES  (In thousands)   June 30, 2023     December 31, 2022   Other vendor payable   $ 803     $ 801   Dividend payable     166       153   Others     640       705   Total other liabilities     1,609       1,659   Less Current Portion     (1,431 )     (1,394 ) Total long term other liabilities   $ 178     $ 265

v3.23.2

SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNING PER SHARE (Details) - shares shares in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential shares excluded from diluted net loss per share	3,187,891	3,635,484
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential shares excluded from diluted net loss per share	1,756,157	2,193,750
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential shares excluded from diluted net loss per share	1,431,734	1,441,734

v3.23.2

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - shares	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Weighted-average number of common shares outstanding	7,777,665	7,545,190

v3.23.2

LIQUIDITY AND CAPITAL RESOURCES (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Aug. 11, 2021
Working capital deficit	$ 40,000
Accumulated deficit	91,849	$ 84,460
Debt instrument, interest rate, stated percentage			7.50%
Blue Star [Member]
Accounts payable, related parties	$ 37,000
Debt instrument, interest rate, stated percentage	5.00%

v3.23.2

CONCENTRATIONS (Details Narrative) - Customer Concentration Risk [Member]	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Revenue Benchmark [Member] | One Customers [Member]
Concentration Risk [Line Items]
Concentration risk percentage	19.00%	30.00%
Accounts Receivable [Member] | No Customer [Member]
Concentration Risk [Line Items]
Concentration risk percentage	10.00%	10.00%
Accounts Payable [Member] | One Vendor [Member]
Concentration Risk [Line Items]
Concentration risk percentage	42.00%	48.00%

v3.23.2

BUSINESS ACQUISITION (Details Narrative) - Dangot Computers Ltd [Member]	Apr. 02, 2022 USD ($)
Purchase of shares, percent	23.00%
Stock issued during period, value, purchase of assets	$ 3,518,000

v3.23.2

SCHEDULE OF INVENTORY (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 622	$ 649
Inventory in transit	616	2,004
Finished goods (less allowance)	5,447	6,073
Total inventories	$ 6,685	$ 8,726

v3.23.2

CREDIT FACILITIES AND LINE OF CREDIT (Details Narrative) - Business Finance Agreement [Member] - Bridge Bank [Member] $ in Millions	Mar. 25, 2022 USD ($)
Line of Credit Facility [Line Items]
Line of credit facility maximum borrowing capacity	$ 8.5
Percentage of reserve account	15.00%
Line of credit, interest rate, description	The annual interest rate with respect to the daily average balance of unpaid advances outstanding under the BFA (computed on a monthly basis) is equal to the “Prime Rate” of Wells Fargo Bank N.A. plus 1.5%, plus a monthly fee equal to 0.15% of the average outstanding balance.

v3.23.2

SCHEDULE OF NOTES PAYABLE, RELATED PARTIES (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Dec. 31, 2017
Short-Term Debt [Line Items]
Long-term portion	$ 1,570	$ 55
Related Party [Member]
Short-Term Debt [Line Items]
Total notes payable	97	293
Less current portion	(97)	(293)
Long-term portion
Note Payable - Marin [Member] | Related Party [Member]
Short-Term Debt [Line Items]
Total notes payable	60	180	$ 660
Note Payable - Thomet [Member] | Related Party [Member]
Short-Term Debt [Line Items]
Total notes payable	$ 37	$ 113	$ 750

v3.23.2

RELATED PARTY NOTES PAYABLE (Details Narrative) - USD ($) $ in Thousands	1 Months Ended
	Dec. 31, 2017	Jun. 30, 2023	Dec. 31, 2022	Aug. 11, 2021
Short-Term Debt [Line Items]
Debt instrument, percentage				7.50%
Related Party [Member]
Short-Term Debt [Line Items]
Notes payable related parties		$ 97	$ 293
Note Payable - Marin [Member] | Related Party [Member]
Short-Term Debt [Line Items]
Notes payable related parties	$ 660	60	180
Debt instrument, percentage	1.89%
Debt instrument, frequency of periodic payment	60 monthly
Principal payments	$ 20
Accrued interest		70
Note Payable - Thomet [Member] | Related Party [Member]
Short-Term Debt [Line Items]
Notes payable related parties	$ 750	$ 37	$ 113
Debt instrument, percentage	0.00%
Debt instrument, frequency of periodic payment	60 monthly
Principal payments	$ 13

v3.23.2

SCHEDULE OF NOTES PAYABLE (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Short-Term Debt [Line Items]
Total	$ 10,511	$ 11,627
Less current portion	8,941	11,572
Long term notes payable	1,570	55
Notes Payable Other [Member]
Short-Term Debt [Line Items]
Total	$ 10,511	$ 11,627

v3.23.2

NOTES PAYABLE (Details Narrative) ₪ in Thousands, $ in Thousands	Sep. 14, 2022	Mar. 27, 2022 USD ($) Integer	Nov. 28, 2021 USD ($) Integer	Aug. 11, 2021 USD ($)	Jul. 29, 2021 USD ($) Integer	Dec. 31, 2022 USD ($)	Dec. 31, 2022 ILS (₪)	Sep. 13, 2022 USD ($) Integer	Sep. 13, 2022 ILS (₪) Integer	Mar. 27, 2022 ILS (₪) Integer	Nov. 28, 2021 ILS (₪) Integer	Aug. 11, 2021 ILS (₪)	Jul. 29, 2021 ILS (₪) Integer
Short-Term Debt [Line Items]
Loans payble				$ 155								₪ 500
Debt instrument percentage				7.50%								7.50%
Debt instrument term				5 years
Short term loans						$ 7,600	₪ 26,800
Accrues average interest						6.30%	6.30%
Leumi Bank [Member]
Short-Term Debt [Line Items]
Loans payble		$ 1,100	$ 1,100		$ 2,160					₪ 3,500	₪ 3,500		₪ 7,000
Debt instrument percentage		8.25%	8.25%		8.25%					8.25%	8.25%		8.25%
Number of installements		8	8		8					8	8		8
Debt instrument term		4 years	4 years		4 years
Leumi Bank [Member] | Israeli Prime Rate [Member]
Short-Term Debt [Line Items]
Debt instrument percentage		4.50%	4.50%		4.50%					4.50%	4.50%		4.50%
Hapoalim Bank [Member]
Short-Term Debt [Line Items]
Loans payble								$ 900	₪ 3,000
Debt instrument percentage								6.03%	6.03%
Number of installements								36	36
Debt instrument term	3 years

v3.23.2

SCHEDULE OF OTHER LIABILITIES (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Other Liabilities Disclosure [Abstract]
Other vendor payable	$ 803	$ 801
Dividend payable	166	153
Others	640	705
Total other liabilities	1,609	1,659
Less Current Portion	(1,431)	(1,394)
Total long term other liabilities	$ 178	$ 265

v3.23.2

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended	3 Months Ended				6 Months Ended
	Jan. 03, 2023	Aug. 10, 2022	Feb. 25, 2022	Oct. 31, 2021	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Dec. 31, 2022
Class of Stock [Line Items]
Common stock, par value					$ 0.001				$ 0.001	$ 0.001
Stock issued during period employee stock purchase plans, value					$ 8	$ 10	$ 10	$ 8
Number of shares issue service, value						$ 45		$ 298
Board of Directors [Member]
Class of Stock [Line Items]
Number of shares issue		10,000
Options Held [Member] | Board of Directors [Member] | Consulting Agreement [Member]
Class of Stock [Line Items]
Number of shares issue service, value	$ 45
Common Stock [Member]
Class of Stock [Line Items]
Stock options and warrants exercised									235,426
Stock warrant exercised									158,934
Stock issued during period shares employee stock purchase plans					2	2	1	2
Stock issued during period employee stock purchase plans, value
Number of shares issue service, value
Equity Incentive Plan [Member] | Common Stock [Member]
Class of Stock [Line Items]
Shares issued				1,118,856
Common stock, par value				$ 0.001
Stock options granted			792,500
Equity Incentive Plan [Member] | Common Stock [Member] | Options Held [Member]
Class of Stock [Line Items]
Stock options granted									0
Employee Stock Purchase Plan [Member] | Common Stock [Member]
Class of Stock [Line Items]
Stock issued during period shares employee stock purchase plans									4,234
Stock issued during period employee stock purchase plans, value									$ 18
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized					2,000,000				2,000,000	2,000,000
Preferred stock, voting rights									The board 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.
Preferred stock, shares outstanding					0				0	0
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized					1				1	1
Preferred stock, shares outstanding					0				0	0
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized					3,000,000				3,000,000	3,000,000
Preferred stock, shares outstanding					502,000				502,000	544,500
Dividends payable, amount per share					$ 0.06				$ 0.06
Liquidation preference					$ 1				$ 1
Accrued dividends									$ 166
Preferred stock conversion, description									The 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 convert to one share of common stock) and automatically converts into Common Stock at $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) in the event that the Company’s common stock has a closing price of $30 per share for 20 consecutive trading days.

v3.23.2

LITIGATION (Details Narrative) $ in Thousands	Jun. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Accrued liabilities for commissions, expense and taxes	$ 60

v3.23.2

SUBSEQUENT EVENTS (Details Narrative) - USD ($)	Jul. 06, 2023	Jun. 30, 2023	Dec. 31, 2022
Subsequent Event [Line Items]
Common stock value		$ 8,000	$ 8,000
Share And Rights Purchase Agreement [Member] | Subsequent Event [Member] | Tadiran Telecom [Member]
Subsequent Event [Line Items]
Purchase price	$ 15,250,000
Cash	12,500,000
Market price	2,750,000
Repayments of long term debt	6,100,000
Purchase price of cash portion	12,500.00
Common stock value	$ 750,000
Share And Rights Purchase Agreement [Member] | Subsequent Event [Member] | Afcon Holdings Limited [Member]
Subsequent Event [Line Items]
Partnership equity rights percentage	99.00%
Remaining held percentage	1.00%
Share And Rights Purchase Agreement [Member] | Subsequent Event [Member] | Ateka Limited [Member]
Subsequent Event [Line Items]
Partnership equity rights percentage	99.00%
Remaining held percentage	1.00%
Afcon Holdings Limited [Member] | Share And Rights Purchase Agreement [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Ownership percentage	100.00%
Ateka Limited [Member] | Share And Rights Purchase Agreement [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Ownership percentage	100.00%

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