Company: OMQS
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001641172-25-024877
Chunk: 71

Company: OMNIQ Corp.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 71
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receivable, inventory, tangible personal property, intellectual property, contract rights, books and records, and other assets used or
held for use in connection with the Transferred Business. Certain assets were excluded from the Transaction, including the Company’s
cash and cash equivalents and all assets not related to the Transferred Business. Buyer assumed only those liabilities specified in the
Purchase Agreement, and the Company retained all other liabilities, including those unrelated to the Transferred Business or expressly
excluded.

The 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. The bonus has been accrued but as of this filing nothing has been paid on the bonus.

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
14 – SUBSEQUENT EVENTS

In
July 2025