OMQS OMNIQ Corporation (QB)

 

 

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, 2024

 

☐ 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		OTCMKTS

 

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: 10,692,891 shares of common stock, $0.001 par value, as of July 26, 2024.

 

 

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION	F-1
ITEM 1. FINANCIAL STATEMENTS	F-1
CONDENSED CONSOLIDATED BALANCE SHEETS AT JUNE 30, 2024 AND DECEMBER 31, 2023	F-1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023	F-2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND DECEMBER 31, 2023	F-3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023	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	8
ITEM 1. LEGAL PROCEEDINGS.	8
ITEM 1A. RISK FACTORS.	8
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	8
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

 

		As of
(In thousands, except share and per share data)		June 30, 2024				December 31, 2023
		(UNAUDITED)
ASSETS
Current assets
Cash and cash equivalents		$	1,373			$	1,678
Accounts receivable, net			21,934				18,654
Inventory			5,787				6,028
Prepaid expenses			1,240				969
Other current assets			42				25
Total current assets			30,376				27,354
Property and equipment, net of accumulated depreciation of $1,769 and $1,030 respectively			898				1,066
Goodwill			2,831				1,788
Trade name, net of accumulated amortization of $4,922 and $4,564, respectively			1,241				1,377
Customer relationships, net of accumulated amortization of $12,072 and $11,001, respectively			3,361				3,777
Other intangibles, net of accumulated amortization of $1,673 and $2,216, respectively			451				504
Right of use lease asset			1,414				1,862
Other assets			2,043				1,758
Total Assets		$	42,615			$	39,486
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities		$	59,499			$	56,741
Line of credit			3,401				240
Accrued payroll and sales tax			3,084				1,537
Notes payable – current portion			8,882				10,196
Lease liability – current portion			715				885
Other current liabilities			3,002				3,106
Total current liabilities			78,583				72,705
Long-term liabilities
Accrued interest and accrued liabilities, related party			73				73
Notes payable, less current portion			1,065				265
Lease liability			727				1,011
Other long-term liabilities			525				452
Total liabilities			80,973				74,506
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 shares issued and outstanding, respectively			1				1
Preferred stock			1				1
Common stock; $0.001 par value; 35,000,000 shares authorized; 10,692,891 and 10,675,802 shares issued and outstanding, respectively.			11				11
Additional paid-in capital			78,694				78,340
Accumulated deficit			(119,025	)			(113,923	)
Accumulated other comprehensive income			1,961				551
Total OmniQ stockholders’ deficit			(38,358	)			(35,020	)
Total liabilities and deficit		$	42,615			$	39,486

 

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

 

 

OMNIQ CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

 

		For the three months								For the six months ended
		ending June 30,								June 30,
(In thousands, except share and per share data)		2024				2023				2024				2023
Revenues		$	19,057			$	20,270			$	37,374			$	47,867
Cost of goods sold			14,174				16,384				27,433				38,258
Gross profit			4,883				3,886				9,941				9,609
Operating expenses
Research & Development			462				559				867				982
Selling, general and administrative			5,025				5,315				10,590				12,082
Depreciation			92				96				208				204
Amortization			227				422				458				858
Total operating expenses			5,806				6,392				12,123				14,126
Loss from operations			(923	)			(2,506	)			(2,182	)			(4,517	)
Other income (expenses):
Interest expense			(794	)			(740	)			(1,710	)			(1,678	)
Other (expenses) income			(1,328	)			(721	)			(1,299	)			(1,472	)
Total other expenses			(2,122	)			(1,461	)			(3,009	)			(3,150	)
Net Loss Before Income Taxes			(3,045	)			(3,967	)			(5,191	)			(7,667	)
Provision for Income Taxes
Current			-				101				48				294
Total Provision for Income Taxes			-				101				48				294
Net Loss		$	(3,045	)		$	(3,866	)		$	(5,143	)		$	(7,373	)
Net Loss		$	(3,045	)		$	(3,866	)		$	(5,143	)		$	(7,373	)
Foreign currency translation adjustment			1,169				260				1,410				717
Comprehensive loss		$	(1,876	)		$	(3,606	)		$	(3,733	)		$	(6,656	)
Reconciliation of net loss to net loss attributable to common shareholders
Net loss		$	(3,045	)		$	(3,866	)		$	(5,143	)		$	(7,373	)
Less: Dividends attributable to non-common stockholders’ of OmniQ Corp			(8	)			(8	)			(15	)			(16	)
Net loss attributable to common stockholders’ of OmniQ Corp		$	(3,053	)		$	(3,874	)		$	(5,158	)		$	(7,389	)
Net (loss) per share - basic attributable to common stockholders’ of OmniQ Corp		$	($0.28	)		$	(0.49	)		$	($0.48	)		$	($0.95	)
Weighted average number of common shares outstanding - basic			10,692,596				7,887,283				10,690,286				7,777,665

 

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								Accumulated Other				Total Stockholders’
		Preferred Stock								Common Stock								Paid-in				Accumulated				Comprehensive				Equity
(In thousands)		Shares				Amount				Shares				Amount				Capital				Deficit				Income (Loss)				(Deficit)
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	)
Dividend on Class C Shares			-				-				-				-				-				(8	)			-				(8	)
ESPP Stock Issuance			-				-				4				-				8				-				-				8
Stock and Warrant issued for services			-				-				-				-				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, December 31, 2023			502			$	1				10,675			$	11			$	78,340			$	(113,923	)		$	551			$	(35,020	)
Dividend on Class C Shares			-				-				-				-				-				(7	)			-				(7	)
ESPP Stock Issuance			-				-				15				-				6				-				-				6
Stock-based compensation – options, warrants, issuances			-				-				-				-				293				-				-				293
Acquisition of Codeblocks			-				-				-				-				-				56								56
Cumulative Translation Adjustment			-				-				-				-				-				-				241				241
Net (loss) income			-				-				-				-				-				(2,098	)			-				(2,098	)
Balance, March 31, 2024			502			$	1				10,690			$	11			$	78,639			$	(115,972	)		$	792			$	(36,529	)
Balance			502			$	1				10,690			$	11			$	78,639			$	(115,972	)		$	792			$	(36,529	)
Dividend on Class C Shares			-				-				-				-				-				(8	)			-				(8	)
ESPP Stock Issuance			-				-				2				-				2				-				-				2
Stock-based compensation – options, warrants, issuances			-				-				-				-				53				-				-				53
Cumulative Translation Adjustment			-				-				-				-				-				-				1,169				1,169
Net (loss) income			-				-				-				-				-				(3,045	)			-				(3,045	)
Balance, June 30, 2024			502			$	1				10,692			$	11			$	78,694			$	(119,025	)		$	1,961			$	(38,358	)
Balance			502			$	1				10,692			$	11			$	78,694			$	(119,025	)		$	1,961			$	(38,358	)

 

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)		2024				2023
Cash flows from operations
Net loss		$	(5,143	)		$	(7,373	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation			346				1,032
Stock and warrant issued for services			-				45
Depreciation and amortization			666				1,062
Amortization of ROU asset			413				443
Changes in operating assets and liabilities:
Accounts receivable			(3,699	)			4,835
Prepaid expenses			(260	)			(27	)
Inventory			92				1,693
Other assets			812				406
Accounts payable and accrued liabilities			3,028				(1,422	)
Accrued payroll and sales taxes payable			1,643				(973	)
Lease liability			(419	)			(450	)
Deferred tax assets, net			(1,103	)			21
Other liabilities			(47	)			(59	)
Net cash used in operating activities			(3,671	)			(767	)
Cash flows from investing activities
Proceeds/purchase of property and equipment			(81	)			409
Proceeds/loss from sale of other assets			(22	)			163
Net cash provided by (used in) investing activities			(103	)			572
Cash flows from financing activities
Proceeds from ESPP stock issuance			8				18
Proceeds from exercise of options and warrants			-				191
Payments on notes/loans payable			(1,814	)			(673	)
Proceeds from draw on line of credit			3,175				1,147
Net cash provided by financing activities			1,369				683
Net change in cash and cash equivalents			(2,405	)			488
Effect of foreign exchange rates on cash and cash equivalents			2,100				199
Cash and cash equivalents at beginning of period			1,678				1,311
Cash and cash equivalents at end of period		$	1,373			$	1,998
Non-cash activities:
Declared dividends payable		$	15			$	16
Net assets acquired in business combination		$	1,284			$	-
Supplemental disclosure of cash flow information:
Cash paid for interest		$	1,709			$	1,678

 

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. 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, 2023 (the “2023 Form 10-K”). Interim disclosures generally do not repeat those in the annual statements.

 

We describe our significant accounting policies in Note 2 of the notes to consolidated financial statements in the 2023 Form 10-K. During the six-month period ended June 30, 2024, 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, 2024, and 2023 were 10,690,286 and 7,777,665, 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, 2024				June 30, 2023
Options to purchase common stock			1,297,333				1,756,157
Warrants to purchase common stock			1,606,734				1,431,734
Potential shares excluded from diluted net loss per share			2,904,067				3,187,891

 

F-5

 

Reclassifications and Comparability

 

Certain revenue and cost of goods sold amounts in the financial statements of the prior period have been reclassified to be presented on a net basis rather than a gross to conform to the current period’s presentation for comparative purposes. The total amount reclassified from cost of goods sold to revenue, as a reduction, was $401 thousand. This had no effect on total assets or net income.

 

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 $48 million as of June 30, 2024
	●	Accumulated deficit of $119 million as of June 30, 2024
	●	Multiple years of losses from operations

 

Management Evaluation

 

Management considers the conditions outlined above as the most significant factors in raising substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued.

 

Management’s Plans to Mitigate and Alleviate Conditions or Events

 

	●	Management is evaluating operating expenses and is developing a plan to reduce expenditures without negatively impacting current operations.
	●	Management has placed a strategic focus on increasing sales with prime customers.
	●	Sales efforts are focused on the most profitable product lines.
	●	Blue Star - The Company’s total accounts payable due to Blue Star as of June 30, 2024, was approximately $46 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 five years.
	●	Management finalized a new line of credit with an additional financial institution.
	●	In October 2023 management finalized an equity raise which resulted in $2.5 million in net cash received from investors.

 

NOTE 3 – CONCENTRATIONS

 

For the six-months ended June 30, 2024 and the year ended December 31, 2023, one customer accounted for 24% and one customer accounted for 30%, respectively, of the Company’s consolidated revenues.

 

Accounts receivable at June 30, 2024 and December 31, 2023 are made up of trade receivables due from customers in the ordinary course of business. One customer accounted for more than 22% of the outstanding receivables as of June 30, 2024, and no customers accounted for more than 10% as of December 31, 2023.

 

For the six months ended June 30, 2024 and the year ended December 31, 2023 two vendors made up 49%, respectively, of our purchases.

 

F-6

 

NOTE 4 – BUSINESS ACQUISITION

 

CodeBlocks LTD

 

On January 30, 2024, OMNIQ’s wholly owned subsidiary, Dangot Computers Ltd. (“Dangot”), entered into a Share Purchase Agreement (the “Purchase Agreement”) with CodeBlocks Ltd. (CodeBlocks”) and CodeBlocks’ owners, Alina Lifshits and Erez Attia pursuant to which Dangot, acquired all of the capital stock of CodeBlocks in exchange for NIS 4,666,664 (approximately US $ 1,275,044). The consideration is payable in seven equal installments with the final payment due on January 11, 2025. The note has no explicit interest rate so the Company used an implicit interest rate of 8%; therefore the present value for the acquisition was NIS 4,356,720, approximately $1,190,360. The purchase Agreement closed on February 1, 2024.

 

Neway Distribution LTD

 

On February 15, 2024, Dangot divested its 50% equity interest in Neway Distribution LTD for consideration of approximately NIS 1 million—which was the carrying amount of the equity investment on Dangot’s balance sheet as of the date of the sale.

 

NOTE 5 – INVENTORY

 

Inventory consisted of the following as of:

 SCHEDULE OF INVENTORY

In thousands		June 30, 2024				December 31, 2023
Raw materials		$	322			$	457
Inventory in transit			1,011				737
Finished goods (less allowance)			4,454				4,834
Total inventories		$	5,787			$	6,028

 

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. This agreement was terminated in November 2023.

 

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.

 

On January 18, 2024, the Company’s wholly owned subsidiary, Quest Marketing, Inc. (“Quest”) entered into a Purchase and Sale Agreement with Prestige Capital Finance, LLC (“Prestige”), in which Quest has sold, transferred and assigned all of its rights, title, and interest to specific accounts receivable owed to Quest. The maximum outstanding balance of Quest to Prestige shall be $7.5 million. The discount fee starts at 1.5% and increases based on the age of the outstanding receivables. The balance as of June 30, 2024, was $2.8 million.

 

F-7

 

NOTE 7 – OTHER NOTES PAYABLE

 SCHEDULE OF OTHER NOTES PAYABLE

(In thousands)		June 30, 2024				December 31, 2023
Note payable other			9,171				10,461
Acquisition payable			776				-
Total			9,947				10,461
Less current portion			(8,882	)			(10,196	)
Long-term notes payable		$	1,065			$	265

 

Notes Payable Other

 

On July 29, 2021, the Company entered into a long-term loan from Leumi Bank totaling NIS 7 million, which at the time was approximately $2.16 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 September 13, 2022, the Company entered into a long-term loan from Hapoalim Bank totaling NIS 3 million, approximately US $0.9 million. The note accrues interest at 7.5% per annum and is payable in 36 instalments of principal and interest over 3 years.

 

During the year ended December 31, 2023, the Company entered into a short-term loan Hapoalim Bank totaling NIS 5.5 million, approximately US $1.5 million. The note accrues interest at 7.3% per annum.

 

During the year ended December 31, 2023, the Company entered into a short-term loan from Bank Leumi totaling NIS 21.5 million, approximately US $5.9 million. The note accrues interest at 7.6% per annum.

 

On September 21, 2023, the Company entered into a long-term loan from Tzameret Mimunim totaling 1.5M NIS, approximately US $393 thousand. The note accrues interest at the Israeli Prime Rate plus 3.5% which currently equals 9.75% per annum and is payable in 36 monthly installments.

 

NOTE 8 – OTHER LIABILITIES

 SCHEDULE OF OTHER LIABILITIES

(In thousands)		June 30, 2024				December 31, 2023
Other vendor payable		$	808			$	803
Dividend payable			196				182
Others			2,523				2,573
Total other liabilities			3,527				3,558
Less Current Portion			(3,002	)			(3,106	)
Total long-term other liabilities		$	525			$	452

 

The balance of deferred revenues is included in other current and long-term liabilities on the balance sheet. The following table summarizes changes in deferred revenue as of:

 SCHEDULE OF DEFERRED REVENUE

		June 30, 2024				December 31, 2023
Beginning balance		$	2,275			$	1,393
Less amounts recognized during the year			(2,124	)			(945	)
Add new deferred revenue			2,042				1,827
Ending Balance		$	2,193			$	2,275

 

F-8

 

NOTE 9 – OTHER INCOME

 

For the six months ended June 30, 2024, the Company received government relief funds in the amount of approximately NIS 1.7 million or US $470 thousand.

 

NOTE 10 – STOCKHOLDERS’ EQUITY

 

PREFERRED STOCK

 

Series A

 

As of June 30, 2024, 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, 2024, there was 1 preferred share designated and no preferred shares outstanding.

 

Series C

 

As of June 30, 2024, 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, 2024, the accrued dividends on the Series C Preferred Stock was $196 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. No options were issued in the six months ended June 30, 2024 or 2023.

 

In December 2015, our Board of Directors approved the OMNIQ. Employee Stock Purchase Plan (the “ESPP”). For the three months ending June 30, 2024, employees purchased 2,608 shares or $2 thousand of common stock.

 

April 8, 2024, Stockholders approved the amendment of the Company’s Certificate of Incorporation to increase the amount of authorized common stock to 35,000,000 shares.

 

NOTE 11 – LITIGATION

 

The company is not a party to any pending 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

 

There are no subsequent events.

 

 

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. Many of these factors are beyond our ability to control or predict. Such factors include, but are not limited to, the following:

 

	●	Our ability to raise capital when needed and on acceptable terms and conditions;
	●	Our ability to manage credit and debt structures from vendors, debt holders, and secured lenders.
	●	Our ability to manage the growth of our business through internal growth and acquisitions;
	●	Competitive pressures;
	●	Our ability to attract and retain management, and to integrate and maintain technical information and management information systems.
	●	Compliance with laws and regulations, including those relating to environmental matters, corporate governance matters and tax matters, as well as any future changes to such laws and regulations; and

 

For a more detailed discussion of some of the foregoing risks and uncertainties, see Item 1A — “Risk Factors” in our 2023 Form 10-K and Item 1A — “Risk Factors” in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024, 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 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 help our clients move people, assets, and data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments.

 

Our principal solutions include hardware, software, communications, and automated management services. We are an established distributor of barcode labels, tags, and ribbons, as well as RFID labels and tags. We provide printing solutions, credit card terminals, automatic kiosks and point-of-care units. We also offer technical service and support. 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, and transportation and logistics. Since 2014, our annual consolidated revenues have grown to more than $80 million with clients in more than 40 countries. We currently engage with several billion-dollar markets with double-digit growth, including the Global Safe City market and the Ticketless Safe Parking market.

 

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, 2024, were $37 million, a decrease of approximately $11 million, or 22.8%, over the six months ended June 30, 2023.

 

The loss from operations for the six months ended June 30, 2024, was $2.2 million, a decrease of $2 million compared with the loss in the six months ended June 30, 2023, of $4.5 million. Basic loss per share from continuing operations for the six months ended June 30, 2024, was ($.48) versus ($.95) per share for the same period in 2023.

 

DISCLOSURE OF THE CHANGES IN TRADING VENUE

 

On May 3, 2024, The Nasdaq Stock Market LLC (“Nasdaq”) notified OMNIQ Corp. (the “Company”) that the Nasdaq Hearings Panel (the “Panel”) has determined to delist the Company’s common stock and that trading of the Company’s securities will be suspended at the open of trading on May 7, 2024. As previously reported, on August 9, 2023, Nasdaq Listing Qualifications Staff (the “Staff”) notified the Company that it no longer complied with the minimum $35 million market value of listed securities (“MVLS”) required for continued listing as set forth in Listing Rule 5550(b)(2). In accordance with Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until February 5, 2024, to regain compliance. On February 8, 2024, Staff notified the Company that it had determined to delist the Company as it did not comply with the MVLS requirement for listing on the Exchange. On February 15, 2024, the Company requested a hearing, which was held on April 11, 2024.

 

On May 7, 2024, OMNIQ Corp. stock transitioned from NASDAQ to the OTC Markets, and OMNIQ’s stock continues to trade on the OTCQB under the ticker symbol “OMQS”, ensuring uninterrupted market activity for its shareholders.

 

LIQUIDITY AND CAPITAL RESOURCES

 

As of June 30, 2024, the Company had cash in the amount of $1.4 million and a working capital deficit of $48 million, compared to cash in the amount of $1.7 million, and a working capital deficit of $45 million as of December 31, 2023. The Company had stockholders’ deficit attributable to OmniQ stockholders of $38 million and $35 million as of June 30, 2024, and December 31, 2023, respectively. This increase in our stockholders’ deficit was primarily attributable to net losses.

 

The Company’s accumulated deficit was $119 million and $114 million as of June 30, 2024, and December 31, 2023.

 

The Company’s operations used net cash of $3.7 million and 767 thousand in the six months ended June 30, 2024, and 2023, respectively. The decrease in cash used by operations of $2.9 million is due to an increase in accounts receivable.

 

The Company’s cash used in investing activities was $103 thousand for the six months ended June 30, 2024, compared to cash provided by investing activities of $572 thousand for the six months ended June 30, 2023.

 

The Company’s financing activities provided $1.4 million of cash during the six months ended June 30, 2024, and $683 thousand during the six months ended June 30, 2023. During the six months ended June 30, 2024, the Company made payments of $1.8 million on its notes payable, compared to the payments of $673 thousand for the six months ended June 30, 2023. Additionally, the Company borrowed $3.2 million on the Company’s line of credit during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, when $1.1 million was borrowed 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		2024				2023				$				%
Revenue		$	19,057			$	20,270			$	(1,213	)			(5.98	%)
Cost of Goods sold			14,174				16,384				(2,210	)			(13.49	%)
Gross Profit			4,883				3,886				997				25.66	%
Operating Expenses			5,806				6,392				(586	)			(9.17	%)
Loss from operations			(923	)			(2,506	)			1,583				(63.17	%)
Net loss			(3,045	)			(3,866	)			821				(21.24	%)
Net Loss per common Share from continuing operations		$	(0.28	)		$	(0.49	)		$	0.21				(42.86	%)

 

Revenues

 

For the three months ended June 30, 2024 and 2023, the Company generated net revenues in the amount of $19 million and $20 million, respectively. The decrease between the three-month periods was attributable to the decrease in demand.

 

Cost of Goods Sold

 

For the three months ended June 30, 2024 and 2023, the Company recognized a total of $14.1 million and $16.4 million, respectively, of cost of goods sold. For the three months ended June 30, 2024 and 2023, cost of goods sold were 74% and 81% of net revenues, respectively.

 

Operating expenses

 

Total operating expenses for the three months ended June 30, 2024 and 2023 recognized was $5.8 million and $6.4 million, respectively, representing an 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 three months ended June 30, 2024 and 2023 totaled $462 thousand and $559 thousand, respectively.

 

Selling, general and Administrative – Selling, general and administrative expenses for the three months ended June 30, 2024 and 2023 totaled $5 million and $5.3 million, respectively, representing a 5% 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, 2024 and 2023 totaled $92 thousand and $96 thousand, respectively, representing a 4% decrease.

 

Intangible amortization – Intangible amortization expenses for the three months ended June 30, 2024 and 2023 totaled $227 thousand and $422 thousand, respectively.

 

Other income and expenses

 

Interest Expense – Interest expense for the three months ended June 30, 2024 totaled $794 thousand, as compared to $740 thousand for the three months ended June 30, 2023.

 

		For the six months ended June 30,								Variation
In thousands		2024				2023				$				%
Revenue		$	37,374			$	47,867			$	(10,493	)			(21.92	%)
Cost of Goods sold			27,433				38,258				(10,825	)			(28.29	%)
Gross Profit			9,941				9,609				332				3.46	%
Operating Expenses			12,123				14,126				(2,003	)			(14.18	%)
Loss from operations			(2,182	)			(4,517	)			2,335				(51.69	%)
Net loss			(5,143	)			(7,373	)			2,230				(30.24	%)
Net Loss per common Share from continuing operations		$	(0.48	)		$	(0.95	)		$	0.47				(49.47	%)

 

 

Revenues

 

For the six months ended June 30, 2024 and 2023, the Company generated net revenues in the amount of $37 million and $48 million, respectively. The decrease between the six-month periods was attributable to the decrease in demand.

 

Cost of Goods Sold

 

For the six months ended June 30, 2024 and 2023, the Company recognized a total of $27.4 million and $38.3 million, respectively, of cost of goods sold. For the six months ended June 30, 2024 and 2023, cost of goods sold were 73% and 80% of net revenues, respectively.

 

Operating expenses

 

Total operating expenses for the six months ended June 30, 2024 and 2023 recognized was $12.1 million and $14.1 million, respectively, representing a 14% 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, 2024 and 2023 totaled $867 thousand and $982 thousand, respectively.

 

Selling, general and Administrative – Selling, general and administrative expenses for the six months ended June 30, 2024 and 2023 totaled $10.6 million and $12.1 million, respectively, representing a 12% 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, 2024, and 2023 totaled $208 thousand and $204 thousand, respectively.

 

Intangible amortization – Intangible amortization expenses for the six months ended June 30, 2024, and 2023 totaled $458 thousand and $858 thousand, respectively.

 

Other income and expenses

 

Interest Expense – Interest expense for the six months ended June 30, 2024 totaled $1.7 million, as compared to $1.7 million for the six months ended June 30, 2023.

 

Inflation

 

The Company’s results of operations have not been materially 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. 

 

Cybersecurity

 

Risk Management and Strategy

 

We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data.

 

Managing Material Risks & Integrated Overall Risk Management

 

We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. This integration ensures that cybersecurity considerations are an integral part of our decision-making processes at every level. Our management team continuously evaluates and addresses cybersecurity risks in alignment with our business objectives and operational needs.

 

Oversee Third-party Risk

 

Because we are aware of the risks associated with third-party service providers, we have implemented stringent processes to oversee and manage these risks. We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes annual assessments of the SOC reports of our providers and implementing complementary controls. This approach is designed to mitigate risks related to data breaches or other security incidents originating from third-parties.

 

Risks from Cybersecurity Threats

 

We have not encountered cybersecurity challenges that have materially impaired our operations or financial standing. 

 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not Applicable

 

ITEM 4. CONTROLS AND PROCEDURES

 

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 

(a) Evaluation of Disclosure and Control Procedures

 

We maintain “disclosure controls and procedures”, as such terms are defined under Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Principal Accounting Officer, as appropriate, to allow timely decisions regarding required disclosures. The Company acknowledges that any controls and procedures can provide only reasonable assurances of achieving the desired control objectives.

 

We have carried out an evaluation as required by Rule 13a-15(d) under the supervision of and with the participation of our management, including our Chief Executive Officer and Principal Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2024. Based upon their evaluation, the Chief Executive Officer and Principal Accounting Officer concluded that, as of June 30, 2024, the Company’s disclosure controls and procedures were not effective. Although we have determined that the existing controls and procedures are not effective, the deficiencies identified have not been deemed material to our reporting disclosures.

 

(b) Management’s Report on Internal Controls over Financial Reporting

 

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and Principal Accounting Officer, and affected by our Board, management and other personnel, 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.

 

Internal control over financial reporting cannot provide absolute assurance of achieving their objectives. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgement and breakdowns resulting from human failures. Due to their inherent limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. It is possible to design safeguards to reduce, but not eliminate, this risk. Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.

 

Management has used the framework set forth in the report entitled Internal Control—Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), known as COSO, to evaluate the effectiveness of our internal control over financial reporting.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Based on such an evaluation, our CEO concluded that, as of June 30, 2024, our internal controls over financial reporting were not effective.

 

As a result of our evaluation, we identified a material weakness in our controls related to segregation of duties and other immaterial weaknesses in several areas of data management and documentation.

 

Our management is composed of a small number of professionals resulting in a situation where limitations on segregation of duties exist. Accordingly, and as a result of the material weakness identified above, we have concluded that the control deficiencies result in a reasonable possibility that a material misstatement of the annual or interim financial statements may not be prevented on a timely basis by the Company’s internal controls. We continue to employ and refine a structure in which critical accounting policies, issues and estimates are identified, and together with other complex areas, are subject to multiple reviews by executives. In addition, we evaluate and assess our internal controls and procedures regarding our financial reporting, utilizing standards incorporating applicable portions of the Public Company Accounting Oversight Board’s 2009 Guidance for Smaller Public Companies in Auditing Internal Controls Over Financial Reporting as necessary on an on-going basis.

 

While the material weakness set forth above was the result of the scale of the Company’s operations and is intrinsic to its small size, the Company believes the risk of material misstatements relative to financial reporting are minimal.

 

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by its registered public accounting firm pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which permits the Company to provide only management’s report in this annual report.

 

(c) Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

ITEM 1A. RISK FACTORS

 

Not applicable.

 

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

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

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 the consolidated financial statements audited by our independent auditors, and to make available to our stockholder’s 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 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, 2024

 

OMNIQ CORP.
By:	/s/ Shai Lustgarten
	Shai Lustgarten
	Chief Executive Officer, Interim Chief Financial Officer and Chairman of the Board

 

 

 

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, 2024 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, 2024	/s/ Shai Lustgarten
	Shai Lustgarten,
	Chief Executive Officer, Interim Chief Financial Officer and Chairman of the Board

 

 

 

 

 

EXHIBIT 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

I, Margo Goodrich, certify that:

 

1.	I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2024 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, 2024	/s/ Margo Goodrich
	Margo Goodrich
	Principal 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 Margo Goodrich, 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, 2024 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, 2024

 

	/s/ Shai Lustgarten
	Shai Lustgarten,
	Chief Executive Officer, Interim Chief Financial Officer and Chairman of the Board
	/s/ Margo Goodrich
	Margo Goodrich
	Principal Financial Officer

 

 

 

v3.24.2.u1

Cover - $ / shares	6 Months Ended
	Jun. 30, 2024	Jul. 26, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024
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
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		10,692,891
Entity Listing, Par Value Per Share	$ 0.001

v3.24.2.u1

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 1,373	$ 1,678
Accounts receivable, net	21,934	18,654
Inventory	5,787	6,028
Prepaid expenses	1,240	969
Other current assets	42	25
Total current assets	30,376	27,354
Property and equipment, net of accumulated depreciation of $1,769 and $1,030 respectively	898	1,066
Goodwill	2,831	1,788
Trade name, net of accumulated amortization of $4,922 and $4,564, respectively	1,241	1,377
Customer relationships, net of accumulated amortization of $12,072 and $11,001, respectively	3,361	3,777
Other intangibles, net of accumulated amortization of $1,673 and $2,216, respectively	451	504
Right of use lease asset	1,414	1,862
Other assets	2,043	1,758
Total Assets	42,615	39,486
Current liabilities
Accounts payable and accrued liabilities	59,499	56,741
Line of credit	3,401	240
Accrued payroll and sales tax	3,084	1,537
Notes payable – current portion	8,882	10,196
Lease liability – current portion	715	885
Other current liabilities	3,002	3,106
Total current liabilities	78,583	72,705
Long-term liabilities
Accrued interest and accrued liabilities, related party	73	73
Notes payable, less current portion	1,065	265
Lease liability	727	1,011
Other long-term liabilities	525	452
Total liabilities	80,973	74,506
Stockholders’ deficit
Common stock; $0.001 par value; 35,000,000 shares authorized; 10,692,891 and 10,675,802 shares issued and outstanding, respectively.	11	11
Additional paid-in capital	78,694	78,340
Accumulated deficit	(119,025)	(113,923)
Accumulated other comprehensive income	1,961	551
Total OmniQ stockholders’ deficit	(38,358)	(35,020)
Total liabilities and deficit	42,615	39,486
Series A Preferred Stock [Member]
Stockholders’ deficit
Preferred stock
Series B Preferred Stock [Member]
Stockholders’ deficit
Preferred stock
Series C Preferred Stock [Member]
Stockholders’ deficit
Preferred stock	$ 1	$ 1

v3.24.2.u1

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Property and equipment, accumulated depreciation	$ 1,769	$ 1,030
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	35,000,000	35,000,000
Common stock, shares, issued	10,692,891	10,675,802
Common stock, shares outstanding	10,692,891	10,675,802
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	502,000
Preferred stock, shares outstanding	502,000	502,000
Trade Names [Member]
Other intangibles, accumulated amortization	$ 4,922	$ 4,564
Customer Relationships [Member]
Other intangibles, accumulated amortization	12,072	11,001
Other Intangible Assets [Member]
Other intangibles, accumulated amortization	$ 1,673	$ 2,216

v3.24.2.u1

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
Revenues	$ 19,057	$ 20,270	$ 37,374	$ 47,867
Cost of goods sold	14,174	16,384	27,433	38,258
Gross profit	4,883	3,886	9,941	9,609
Operating expenses
Research & Development	462	559	867	982
Selling, general and administrative	5,025	5,315	10,590	12,082
Depreciation	92	96	208	204
Amortization	227	422	458	858
Total operating expenses	5,806	6,392	12,123	14,126
Loss from operations	(923)	(2,506)	(2,182)	(4,517)
Other income (expenses):
Interest expense	(794)	(740)	(1,710)	(1,678)
Other (expenses) income	(1,328)	(721)	(1,299)	(1,472)
Total other expenses	(2,122)	(1,461)	(3,009)	(3,150)
Net Loss Before Income Taxes	(3,045)	(3,967)	(5,191)	(7,667)
Provision for Income Taxes
Current		101	48	294
Total Provision for Income Taxes		101	48	294
Net Loss	(3,045)	(3,866)	(5,143)	(7,373)
Foreign currency translation adjustment	1,169	260	1,410	717
Comprehensive loss	(1,876)	(3,606)	(3,733)	(6,656)
Reconciliation of net loss to net loss attributable to common shareholders
Net loss	(3,045)	(3,866)	(5,143)	(7,373)
Less: Dividends attributable to non-common stockholders’ of OmniQ Corp	(8)	(8)	(15)	(16)
Net loss attributable to common stockholders’ of OmniQ Corp	$ (3,053)	$ (3,874)	$ (5,158)	$ (7,389)
Net (loss) per share - basic attributable to common stockholders’ of OmniQ Corp	$ (0.28)	$ (0.49)	$ (0.48)	$ (0.95)
Weighted average number of common shares outstanding - basic	10,692,596	7,887,283	10,690,286	7,777,665

v3.24.2.u1

Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Preferred Stock [Member] Series C Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
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 and Warrant issued for services, shares		10
Stock-based compensation – options, warrants, issuances			516			516
Exercise of stock options and warrants			173			173
Exercise of stock options and warrants, shares		156
Conversion of shares
Conversion of shares, shares	(42)	2
Cumulative Translation Adjustment					457	457
Net (loss) income				(3,507)		(3,507)
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		4
Stock and Warrant issued for services			18			18
Stock and Warrant issued for services, shares
Stock-based compensation – options, warrants, issuances			516			516
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
Balance at Dec. 31, 2023	$ 1	$ 11	78,340	(113,923)	551	(35,020)
Balance, shares at Dec. 31, 2023	502	10,675
Dividend on Class C Shares				(7)		(7)
ESPP Stock Issuance			6			6
ESPP Stock Issuance, shares		15
Stock-based compensation – options, warrants, issuances			293			293
Cumulative Translation Adjustment					241	241
Net (loss) income				(2,098)		(2,098)
Acquisition of Codeblocks				56		56
Balance at Mar. 31, 2024	$ 1	$ 11	78,639	(115,972)	792	(36,529)
Balance, shares at Mar. 31, 2024	502	10,690
Balance at Dec. 31, 2023	$ 1	$ 11	78,340	(113,923)	551	(35,020)
Balance, shares at Dec. 31, 2023	502	10,675
Net (loss) income						(5,143)
Balance at Jun. 30, 2024	$ 1	$ 11	78,694	(119,025)	1,961	(38,358)
Balance, shares at Jun. 30, 2024	502	10,692
Balance at Mar. 31, 2024	$ 1	$ 11	78,639	(115,972)	792	(36,529)
Balance, shares at Mar. 31, 2024	502	10,690
Dividend on Class C Shares				(8)		(8)
ESPP Stock Issuance			2			2
ESPP Stock Issuance, shares		2
Stock-based compensation – options, warrants, issuances			53			53
Cumulative Translation Adjustment					1,169	1,169
Net (loss) income				(3,045)		(3,045)
Balance at Jun. 30, 2024	$ 1	$ 11	$ 78,694	$ (119,025)	$ 1,961	$ (38,358)
Balance, shares at Jun. 30, 2024	502	10,692

v3.24.2.u1

Condensed Consolidated Statements of Cash Flow (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operations
Net loss	$ (5,143)	$ (7,373)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation	346	1,032
Stock and warrant issued for services		45
Depreciation and amortization	666	1,062
Amortization of ROU asset	413	443
Changes in operating assets and liabilities:
Accounts receivable	(3,699)	4,835
Prepaid expenses	(260)	(27)
Inventory	92	1,693
Other assets	812	406
Accounts payable and accrued liabilities	3,028	(1,422)
Accrued payroll and sales taxes payable	1,643	(973)
Lease liability	(419)	(450)
Deferred tax assets, net	(1,103)	21
Other liabilities	(47)	(59)
Net cash used in operating activities	(3,671)	(767)
Cash flows from investing activities
Proceeds/purchase of property and equipment	(81)	409
Proceeds/loss from sale of other assets	(22)	163
Net cash provided by (used in) investing activities	(103)	572
Cash flows from financing activities
Proceeds from ESPP stock issuance	8	18
Proceeds from exercise of options and warrants		191
Payments on notes/loans payable	(1,814)	(673)
Proceeds from draw on line of credit	3,175	1,147
Net cash provided by financing activities	1,369	683
Net change in cash and cash equivalents	(2,405)	488
Effect of foreign exchange rates on cash and cash equivalents	2,100	199
Cash and cash equivalents at beginning of period	1,678	1,311
Cash and cash equivalents at end of period	1,373	1,998
Non-cash activities:
Declared dividends payable	15	16
Net assets acquired in business combination	1,284
Supplemental disclosure of cash flow information:
Cash paid for interest	$ 1,709	$ 1,678

v3.24.2.u1

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2024
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. 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, 2023 (the “2023 Form 10-K”). Interim disclosures generally do not repeat those in the annual statements.   We describe our significant accounting policies in Note 2 of the notes to consolidated financial statements in the 2023 Form 10-K. During the six-month period ended June 30, 2024, 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, 2024, and 2023 were 10,690,286 and 7,777,665, 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, 2024     June 30, 2023   Options to purchase common stock     1,297,333       1,756,157   Warrants to purchase common stock     1,606,734       1,431,734   Potential shares excluded from diluted net loss per share     2,904,067       3,187,891       Reclassifications and Comparability   Certain revenue and cost of goods sold amounts in the financial statements of the prior period have been reclassified to be presented on a net basis rather than a gross to conform to the current period’s presentation for comparative purposes. The total amount reclassified from cost of goods sold to revenue, as a reduction, was $401 thousand. This had no effect on total assets or net income.

v3.24.2.u1

LIQUIDITY AND CAPITAL RESOURCES	6 Months Ended
	Jun. 30, 2024
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 $48 million as of June 30, 2024   ● Accumulated deficit of $119 million as of June 30, 2024   ● Multiple years of losses from operations   Management Evaluation   Management considers the conditions outlined above as the most significant factors in raising substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued.   Management’s Plans to Mitigate and Alleviate Conditions or Events     ● Management is evaluating operating expenses and is developing a plan to reduce expenditures without negatively impacting current operations.   ● Management has placed a strategic focus on increasing sales with prime customers.   ● Sales efforts are focused on the most profitable product lines.   ● Blue Star - The Company’s total accounts payable due to Blue Star as of June 30, 2024, was approximately $46 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 five years.   ● Management finalized a new line of credit with an additional financial institution.   ● In October 2023 management finalized an equity raise which resulted in $2.5 million in net cash received from investors.

v3.24.2.u1

CONCENTRATIONS	6 Months Ended
	Jun. 30, 2024
Risks and Uncertainties [Abstract]
CONCENTRATIONS	NOTE 3 – CONCENTRATIONS   For the six-months ended June 30, 2024 and the year ended December 31, 2023, one customer accounted for 24% and one customer accounted for 30%, respectively, of the Company’s consolidated revenues.   Accounts receivable at June 30, 2024 and December 31, 2023 are made up of trade receivables due from customers in the ordinary course of business. One customer accounted for more than 22% of the outstanding receivables as of June 30, 2024, and no customers accounted for more than 10% as of December 31, 2023.   For the six months ended June 30, 2024 and the year ended December 31, 2023 two vendors made up 49%, respectively, of our purchases.

v3.24.2.u1

BUSINESS ACQUISITION	6 Months Ended
	Jun. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]
BUSINESS ACQUISITION	NOTE 4 – BUSINESS ACQUISITION   CodeBlocks LTD   On January 30, 2024, OMNIQ’s wholly owned subsidiary, Dangot Computers Ltd. (“Dangot”), entered into a Share Purchase Agreement (the “Purchase Agreement”) with CodeBlocks Ltd. (CodeBlocks”) and CodeBlocks’ owners, Alina Lifshits and Erez Attia pursuant to which Dangot, acquired all of the capital stock of CodeBlocks in exchange for NIS 4,666,664 (approximately US $ 1,275,044). The consideration is payable in seven equal installments with the final payment due on January 11, 2025. The note has no explicit interest rate so the Company used an implicit interest rate of 8%; therefore the present value for the acquisition was NIS 4,356,720, approximately $1,190,360. The purchase Agreement closed on February 1, 2024.   Neway Distribution LTD   On February 15, 2024, Dangot divested its 50% equity interest in Neway Distribution LTD for consideration of approximately NIS 1 million—which was the carrying amount of the equity investment on Dangot’s balance sheet as of the date of the sale.

v3.24.2.u1

INVENTORY	6 Months Ended
	Jun. 30, 2024
Inventory Disclosure [Abstract]
INVENTORY	NOTE 5 – INVENTORY   Inventory consisted of the following as of:  SCHEDULE OF INVENTORY In thousands   June 30, 2024     December 31, 2023                 Raw materials   $ 322     $ 457   Inventory in transit     1,011       737   Finished goods (less allowance)     4,454       4,834   Total inventories   $ 5,787     $ 6,028

v3.24.2.u1

CREDIT FACILITIES AND LINE OF CREDIT	6 Months Ended
	Jun. 30, 2024
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. This agreement was terminated in November 2023.   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.   On January 18, 2024, the Company’s wholly owned subsidiary, Quest Marketing, Inc. (“Quest”) entered into a Purchase and Sale Agreement with Prestige Capital Finance, LLC (“Prestige”), in which Quest has sold, transferred and assigned all of its rights, title, and interest to specific accounts receivable owed to Quest. The maximum outstanding balance of Quest to Prestige shall be $7.5 million. The discount fee starts at 1.5% and increases based on the age of the outstanding receivables. The balance as of June 30, 2024, was $2.8 million.

v3.24.2.u1

OTHER NOTES PAYABLE	6 Months Ended
	Jun. 30, 2024
Debt Disclosure [Abstract]
OTHER NOTES PAYABLE	NOTE 7 – OTHER NOTES PAYABLE  SCHEDULE OF OTHER NOTES PAYABLE (In thousands)   June 30, 2024     December 31, 2023   Note payable other     9,171       10,461   Acquisition payable     776       -   Total     9,947       10,461   Less current portion     (8,882 )     (10,196 ) Long-term notes payable   $ 1,065     $ 265     Notes Payable Other   On July 29, 2021, the Company entered into a long-term loan from Leumi Bank totaling NIS 7 million, which at the time was approximately $2.16 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 September 13, 2022, the Company entered into a long-term loan from Hapoalim Bank totaling NIS 3 million, approximately US $0.9 million. The note accrues interest at 7.5% per annum and is payable in 36 instalments of principal and interest over 3 years.   During the year ended December 31, 2023, the Company entered into a short-term loan Hapoalim Bank totaling NIS 5.5 million, approximately US $1.5 million. The note accrues interest at 7.3% per annum.   During the year ended December 31, 2023, the Company entered into a short-term loan from Bank Leumi totaling NIS 21.5 million, approximately US $5.9 million. The note accrues interest at 7.6% per annum.   On September 21, 2023, the Company entered into a long-term loan from Tzameret Mimunim totaling 1.5M NIS, approximately US $393 thousand. The note accrues interest at the Israeli Prime Rate plus 3.5% which currently equals 9.75% per annum and is payable in 36 monthly installments.

v3.24.2.u1

OTHER LIABILITIES	6 Months Ended
	Jun. 30, 2024
Other Liabilities Disclosure [Abstract]
OTHER LIABILITIES	NOTE 8 – OTHER LIABILITIES  SCHEDULE OF OTHER LIABILITIES (In thousands)   June 30, 2024     December 31, 2023   Other vendor payable   $ 808     $ 803   Dividend payable     196       182   Others     2,523       2,573   Total other liabilities     3,527       3,558   Less Current Portion     (3,002 )     (3,106 ) Total long-term other liabilities   $ 525     $ 452     The balance of deferred revenues is included in other current and long-term liabilities on the balance sheet. The following table summarizes changes in deferred revenue as of:  SCHEDULE OF DEFERRED REVENUE     June 30, 2024     December 31, 2023   Beginning balance   $ 2,275     $ 1,393   Less amounts recognized during the year     (2,124 )     (945 ) Add new deferred revenue     2,042       1,827   Ending Balance   $ 2,193     $ 2,275

v3.24.2.u1

OTHER INCOME	6 Months Ended
	Jun. 30, 2024
Other Income and Expenses [Abstract]
OTHER INCOME	NOTE 9 – OTHER INCOME   For the six months ended June 30, 2024, the Company received government relief funds in the amount of approximately NIS 1.7 million or US $470 thousand.

v3.24.2.u1

STOCKHOLDERS’ EQUITY	6 Months Ended
	Jun. 30, 2024
Equity [Abstract]
STOCKHOLDERS’ EQUITY	NOTE 10 – STOCKHOLDERS’ EQUITY   PREFERRED STOCK   Series A   As of June 30, 2024, 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, 2024, there was 1 preferred share designated and no preferred shares outstanding.   Series C   As of June 30, 2024, 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, 2024, the accrued dividends on the Series C Preferred Stock was $196 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. No options were issued in the six months ended June 30, 2024 or 2023.   In December 2015, our Board of Directors approved the OMNIQ. Employee Stock Purchase Plan (the “ESPP”). For the three months ending June 30, 2024, employees purchased 2,608 shares or $2 thousand of common stock.   April 8, 2024, Stockholders approved the amendment of the Company’s Certificate of Incorporation to increase the amount of authorized common stock to 35,000,000 shares.

v3.24.2.u1

LITIGATION	6 Months Ended
	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
LITIGATION	NOTE 11 – LITIGATION   The company is not a party to any pending 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.

v3.24.2.u1

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 12 – SUBSEQUENT EVENTS   There are no subsequent events.

v3.24.2.u1

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2024
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, 2024, and 2023 were 10,690,286 and 7,777,665, 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, 2024     June 30, 2023   Options to purchase common stock     1,297,333       1,756,157   Warrants to purchase common stock     1,606,734       1,431,734   Potential shares excluded from diluted net loss per share     2,904,067       3,187,891
Reclassifications and Comparability	Reclassifications and Comparability   Certain revenue and cost of goods sold amounts in the financial statements of the prior period have been reclassified to be presented on a net basis rather than a gross to conform to the current period’s presentation for comparative purposes. The total amount reclassified from cost of goods sold to revenue, as a reduction, was $401 thousand. This had no effect on total assets or net income.

v3.24.2.u1

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Jun. 30, 2024
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, 2024     June 30, 2023   Options to purchase common stock     1,297,333       1,756,157   Warrants to purchase common stock     1,606,734       1,431,734   Potential shares excluded from diluted net loss per share     2,904,067       3,187,891

v3.24.2.u1

INVENTORY (Tables)	6 Months Ended
	Jun. 30, 2024
Inventory Disclosure [Abstract]
SCHEDULE OF INVENTORY	Inventory consisted of the following as of:  SCHEDULE OF INVENTORY In thousands   June 30, 2024     December 31, 2023                 Raw materials   $ 322     $ 457   Inventory in transit     1,011       737   Finished goods (less allowance)     4,454       4,834   Total inventories   $ 5,787     $ 6,028

v3.24.2.u1

OTHER NOTES PAYABLE (Tables)	6 Months Ended
	Jun. 30, 2024
Debt Disclosure [Abstract]
SCHEDULE OF OTHER NOTES PAYABLE	SCHEDULE OF OTHER NOTES PAYABLE (In thousands)   June 30, 2024     December 31, 2023   Note payable other     9,171       10,461   Acquisition payable     776       -   Total     9,947       10,461   Less current portion     (8,882 )     (10,196 ) Long-term notes payable   $ 1,065     $ 265

v3.24.2.u1

OTHER LIABILITIES (Tables)	6 Months Ended
	Jun. 30, 2024
Other Liabilities Disclosure [Abstract]
SCHEDULE OF OTHER LIABILITIES	SCHEDULE OF OTHER LIABILITIES (In thousands)   June 30, 2024     December 31, 2023   Other vendor payable   $ 808     $ 803   Dividend payable     196       182   Others     2,523       2,573   Total other liabilities     3,527       3,558   Less Current Portion     (3,002 )     (3,106 ) Total long-term other liabilities   $ 525     $ 452
SCHEDULE OF DEFERRED REVENUE	The balance of deferred revenues is included in other current and long-term liabilities on the balance sheet. The following table summarizes changes in deferred revenue as of:  SCHEDULE OF DEFERRED REVENUE     June 30, 2024     December 31, 2023   Beginning balance   $ 2,275     $ 1,393   Less amounts recognized during the year     (2,124 )     (945 ) Add new deferred revenue     2,042       1,827   Ending Balance   $ 2,193     $ 2,275

v3.24.2.u1

SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNING PER SHARE (Details) - shares shares in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential shares excluded from diluted net loss per share	2,904,067	3,187,891
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	1,297,333	1,756,157
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential shares excluded from diluted net loss per share	1,606,734	1,431,734

v3.24.2.u1

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Weighted-average number of common shares outstanding	10,690,286	7,777,665
Revision of Prior Period, Reclassification, Adjustment [Member]
Revenues	$ 401	$ 401

v3.24.2.u1

LIQUIDITY AND CAPITAL RESOURCES (Details Narrative) - USD ($) $ in Thousands	1 Months Ended
	Oct. 31, 2023	Jun. 30, 2024	Dec. 31, 2023	Aug. 11, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Working capital deficit		$ 48,000
Accumulated deficit		119,025	$ 113,923
Total accounts payable		$ 46,000
Annual interest rate		5.00%		7.50%
Proceeds from equity	$ 2,500

v3.24.2.u1

CONCENTRATIONS (Details Narrative) - Customer Concentration Risk [Member]	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Revenue Benchmark [Member] | One Customers [Member]
Concentration Risk [Line Items]
Concentration risk percentage	24.00%	30.00%
Accounts Receivable [Member] | One Customers [Member]
Concentration Risk [Line Items]
Concentration risk percentage	22.00%
Accounts Receivable [Member] | No Customer [Member]
Concentration Risk [Line Items]
Concentration risk percentage		10.00%
Accounts Payable [Member] | Two Vendors [Member]
Concentration Risk [Line Items]
Concentration risk percentage	49.00%	49.00%

v3.24.2.u1

BUSINESS ACQUISITION (Details Narrative) - Dangot Share Purchase Agreement [Member]	Feb. 15, 2024 ILS (₪)	Jan. 30, 2024 USD ($)	Jan. 30, 2024 ILS (₪)	Jan. 30, 2024 ILS (₪)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Transaction costs		$ 1,275,044		₪ 4,666,664
Implicit interest rate		8.00%		8.00%
Present value for the acquisition		$ 1,190,360	₪ 4,356,720
Neway Distribution Ltd [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Equity interest percentage	50.00%
Consideration from sale	₪ 1,000,000

v3.24.2.u1

SCHEDULE OF INVENTORY (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 322	$ 457
Inventory in transit	1,011	737
Finished goods (less allowance)	4,454	4,834
Total inventories	$ 5,787	$ 6,028

v3.24.2.u1

SCHEDULE OF OTHER NOTES PAYABLE (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Short-Term Debt [Line Items]
Total	$ 9,947	$ 10,461
Less current portion	(8,882)	(10,196)
Long-term notes payable	1,065	265
Note Payable Other [Member]
Short-Term Debt [Line Items]
Total	9,171	10,461
Acquisition Payable [Member]
Short-Term Debt [Line Items]
Total	$ 776

v3.24.2.u1

CREDIT FACILITIES AND LINE OF CREDIT (Details Narrative) - USD ($) $ in Millions	Mar. 25, 2022	Jun. 30, 2024	Jan. 18, 2024
Business Finance Agreement [Member] | Bridge Bank [Member]
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. 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.
Purchase and Sale Agreement [Member]
Line of Credit Facility [Line Items]
Outstanding balance		$ 2.8	$ 7.5
Discount fee percentage			1.50%

v3.24.2.u1

OTHER NOTES PAYABLE (Details Narrative) ₪ in Thousands, $ in Thousands	Sep. 21, 2023 USD ($) Integer	Sep. 13, 2022 USD ($) Integer	Aug. 11, 2021 USD ($)	Jul. 29, 2021 USD ($) Integer	Jun. 30, 2024	Dec. 31, 2023 USD ($)	Dec. 31, 2023 ILS (₪)	Sep. 21, 2023 ILS (₪) Integer	Sep. 13, 2022 ILS (₪) Integer	Aug. 11, 2021 ILS (₪)	Jul. 29, 2021 ILS (₪) Integer
Line of Credit Facility [Line Items]
Loans payable			$ 155							₪ 500
Debt instrument, interest rate, stated percentage			7.50%		5.00%					7.50%
Debt instrument, term			5 years
Leumi Bank [Member]
Line of Credit Facility [Line Items]
Loans payable				$ 2,160							₪ 7,000
Debt instrument, interest rate, stated percentage				8.25%		7.60%	7.60%				8.25%
Number of installments				8							8
Debt instrument, term				4 years
Short-term debt						$ 5,900	₪ 21,500
Leumi Bank [Member] | Israel, New Shekels
Line of Credit Facility [Line Items]
Debt instrument, interest rate, stated percentage				4.50%							4.50%
Hapoalim Bank [Member]
Line of Credit Facility [Line Items]
Debt instrument, interest rate, stated percentage		7.50%				7.30%	7.30%		7.50%
Number of installments		36							36
Debt instrument, term		3 years
Long-term debt		$ 900							₪ 3,000
Short-term debt						$ 1,500	₪ 5,500
Tzameret [Member]
Line of Credit Facility [Line Items]
Debt instrument, interest rate, stated percentage	3.50%							3.50%
Number of installments	36							36
Long-term debt	$ 393							₪ 1,500
Debt instrument, interest rate, increase (decrease)	9.75%

v3.24.2.u1

SCHEDULE OF OTHER LIABILITIES (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Other Liabilities Disclosure [Abstract]
Other vendor payable	$ 808	$ 803
Dividend payable	196	182
Others	2,523	2,573
Total other liabilities	3,527	3,558
Less Current Portion	(3,002)	(3,106)
Total long-term other liabilities	$ 525	$ 452

v3.24.2.u1

SCHEDULE OF DEFERRED REVENUE (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Other Liabilities Disclosure [Abstract]
Beginning balance	$ 2,275	$ 1,393
Less amounts recognized during the year	(2,124)	(945)
Add new deferred revenue	2,042	1,827
Ending Balance	$ 2,193	$ 2,275

v3.24.2.u1

OTHER INCOME (Details Narrative) - 6 months ended Jun. 30, 2024 $ in Thousands, ₪ in Millions	USD ($)	ILS (₪)
Other Income and Expenses [Abstract]
Government relief funds	$ 470	₪ 1.7

v3.24.2.u1

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended				6 Months Ended
	Oct. 31, 2021	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023	Apr. 08, 2024	Dec. 31, 2023
Class of Stock [Line Items]
Common stock, par or stated value per share		$ 0.001				$ 0.001			$ 0.001
Stock issued during period, value, employee stock purchase plans		$ 2	$ 6	$ 8	$ 10
Common stock, shares authorized		35,000,000				35,000,000		35,000,000	35,000,000
Common Stock [Member]
Class of Stock [Line Items]
Stock issued during period, shares, employee stock purchase plans		2,000	15,000	4,000	2,000
Stock issued during period, value, employee stock purchase plans
Equity Incentive Plan [Member] | Common Stock [Member]
Class of Stock [Line Items]
Stock issued during period, shares, new issues	1,118,856
Common stock, par or stated value per share	$ 0.001
Options issued						0	0
Employee Stock Purchase Plan [Member] | Common Stock [Member]
Class of Stock [Line Items]
Stock issued during period, shares, employee stock purchase plans		2,608
Stock issued during period, value, employee stock purchase plans		$ 2
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares designated		2,000,000				2,000,000			2,000,000
Preferred stock, shares outstanding		0				0			0
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 issued		0				0			0
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares designated		1				1			1
Preferred stock, shares outstanding		0				0			0
Preferred stock, shares issued		0				0			0
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares designated		3,000,000				3,000,000			3,000,000
Preferred stock, shares outstanding		502,000				502,000			502,000
Preferred stock, voting rights						Series C shares outstanding are convertible into common stock at the rate of 20 preferred shares to one share of common stock
Preferred stock, shares issued		502,000				502,000			502,000
Dividends payable, amount per share		$ 0.06				$ 0.06
Preferred stock, liquidation preference per share		$ 1				$ 1
Dividends						$ 196
Preferred stock, conversion basis						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.

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