Company: OMQS
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001641172-25-024877
Chunk: 49

Company: OMNIQ Corp.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 49
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 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, the Company settled approximately $62,500 of debt owed on the books for 900,000 shares. As noted in the Company’s 8-K
filing, 450,000 of those shares were issued to the Company CEO, Shai Lustgarten to settled $31,500 owed to him.

In
July 2025, the Company relocated its corporate headquarters to a new address. The new office / warehouse lease is at $15,000 per month
in rent for 7 years.

F-11

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