Company: OMQS
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023481
Chunk: 11

Company: OMNIQ Corp.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 11
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Purchase Agreement contains customary representations, warranties, and covenants, including pre-closing operating covenants, post-closing
indemnification provisions, and certain limitations on liability. The Transaction and Purchase Agreement were approved by the Company’s
Board of Directors effective June 30, 2025 following completion of a fairness opinion, dated June 27, 2025, from an independent financial
advisor.

In
connection with the closing, the Company and Buyer entered into and delivered various ancillary agreements, including a Bill of Sale,
Assignment and Assumption Agreement, Trademark Assignment Agreement, Promissory Note, Intellectual Property License Agreement, and Transition
Services Agreement. The Company also entered into a consent agreement with its largest vendor Bluestar to consent to the transfer of
the liabilities owed to it from the Company to the Buyer. Due to an entity affiliated with Shai Lustgarten, the Company’s CEO as
a principal member of the Buyer, the transaction is deemed related party.

Pursuant
to his employment contract, the CEO, Shai Lustgarten is entitled to a bonus equal to 4% of a total transaction price and pursuant to
that, the Board of Directors awarded a bonus of $1.72 million to Mr. Lustgarten.

Based
on ASC 850-10, ASC 845-10, ASC 820, and SEC Staff Accounting Bulletin Topics 5.G, 5.T, and 1.B.1, the transaction represents a capital
contribution from the CEO to the Company. While a fairness opinion was obtained, it does not fully satisfy ASC 820 fair value measurement
requirements for full recognition. Accordingly, the $34 million gain is recorded directly to equity as a capital contribution. This conclusion
aligns with both the letter and the spirit of applicable GAAP and SEC guidance.

NOTE
12 – LITIGATION

On
November 3, 2024 a commercial real estate company filed a lawsuit against Dangot Computers, OmniQ Technologies and some of Dangot’s
officers alleging breach of a letter of intent for a lease arrangement. The claims were brought in an Israeli court. The initial claim
against Dangot Computers is NIS 21 million approximately US $5.6 million. The Company believes that it has meritorious defenses to such
action and intends to vigorously defend itself.

In
March 2025, the Company was named a defendant in a case involving a consultant who was terminated and who claims he