Company: OMQS
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010783
Chunk: 29

Company: OMNIQ Corp.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 29
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2025, the Company owed Bank Leumi approximately USD $5.4 million.

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 9.5% per annum and is payable in 36 monthly installments. The balance
at December 31, 2024 is $251 thousand and at March 31, 2025 was $212 thousand.

As of March 31, 2025, the Company was not in compliance
with certain financial covenants related to the Bank Leumi and Bank Hapoalim debt. The Company’s failure to comply with these financial
covenants could result in an event of default under its debt agreements. Therefore, we reclassified the total balance as current debt
on the balance sheet. The Company is actively pursuing options to address its noncompliance. The lenders have not requested early repayment
of the loan as of the date when these financial statements were available to be issued.

NOTE 9 – OTHER INCOME 

For the three months ended March 31, 2025, the Company
received government relief funds in the amount of approximately NIS 1.7 million or US $609 thousand.

NOTE 10 – STOCKHOLDERS’ EQUITY

PREFERRED STOCK

Series A

As of March 31, 2025, 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 13 common shares.

Series B

As of March 31, 2025, there was 1 preferred share
designated and  no preferred shares outstanding.

Series C

As of March 31, 2025, 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