Salt Lake City, August 14, 2024 — omniQ Corporation (OTCQB: OMQS) (“omniQ” or the “Company”), a leading provider of Artificial Intelligence (AI)-based solutions, today reported revenues of approximately $19.1 million in the second quarter, marking an improvement from the previous quarter.

FINANCIAL HIGHLIGHTS

Key Improvements Compared to 2023

• Gross margin for the three months ended June 30, 2024, substantially increased to 26% compared to 19% in Q2 2023
• Gross margin for the six months ended June 30, 2024, increased to 27% compared to 20% in the same period of 2023.
• Gross profit for the three months ended June 30, 2024, increased by 26% or $1M compared to the second quarter of 2023.
• Gross Profit for the six months ended June 30, 2024, increased by 4% or $332 thousand compared to the same period of 2023.
• SGA expenses decreased by approximately $290 thousand compared to Q2 2024.
•  SGA expenses down by $1.5M for the six months ended June 30, 2024, as compared to the same period of 2023. Total operating expenses during Q2 2024 decreased by $586 thousand compared to Q1 2023.
• Total operating expenses for the six months ended June 30, 2024, are down by over $2M compared to same period of 2023.

Key sequential Improvements from Q1 to Q2 2024:

• Gross margin for the three months ended June 30, 2024, substantially increased to 26% compared to 19% in Q2 2023
• Gross margin for the six months ended June 30, 2024, increased to 27% compared to 20% in the same period of 2023.
• Gross profit for the three months ended June 30, 2024, increased by 26% or $1M compared to the second quarter of 2023.
• Gross Profit for the six months ended June 30, 2024, increased by 4% or $332 thousand compared to the same period of 2023.
• SGA expenses decreased by approximately $290 thousand compared to Q2 2024.
• SGA expenses down by $1.5M for the six months ended June 30, 2024, as compared to the same period of 2023. Total operating expenses during Q2 2024 decreased by $586 thousand compared to Q1 2023.
• Total operating expenses for the six months ended June 30, 2024, are down by over $2M compared to same period of 2023.

SECOND QUARTER 2024 FINANCIAL RESULTS

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.

Total operating expenses for the six months ended June 30, 2024, and 2023 recognized were $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.

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. This can be attributed, in part, to an increase in service and subscription orders which generally have a higher margin vs hardware sales.

Overall, the financial results of Q2 2024 show key improvements in revenue, profitability, and cash flow management.

ADDITIONAL Q2 AND RECENT EVENTS

Technology Development

OMNIQ has been reinvesting in our technology, as well as creating strategic partnerships to create more value for our customers and to stay ahead in the competitive areas in which we operate. We have upgraded our AI engine to be applicable to new use cases for existing and new customers. In this way, we can expand our market share, increase the size of purchase orders, and create ongoing revenue streams where in the past it would have been a one-time purchase.

One notable new use case since the last quarter is restricted area access. Instead of just allowing or disallowing access to a whole campus, we can set specific areas to only allow authorized personnel and to either alert security or create citations for unauthorized vehicles. One simple example of this is a student parking in a staff lot, or someone without a tag parking in a handicap space. These are practical applications that we can add onto existing and future AI deployments for additional customer satisfaction and additional revenue for OMNIQ.

Strategic Expansion in Security Operations: Some notable recent deployments that are taking advantage of the new features are two major medical centers: in Ohio and Texas.

Strong IoT Business: We are still utilizing our IoT business to retain long-lasting customers relationships, as well as bring in new business. In addition, we are able to offer our SaaS product lines to existing IoT customers that would benefit from these products.

Strategic Business Moves:

OMNIQ stock began trading on OTCQB on August 1st. This is an uplisting from OTCPK and underscores the Company’s sustained financial stability and adherence to high standards of corporate governance and disclosure.

The transition to OTCQB is expected to provide current and potential investors with better trading conditions, including improved market depth and reduced spreads. Additionally, it highlights the Company’s ongoing efforts to meet rigorous financial and operational standards.

Investors can find real-time Level 2 quotes and market information for OMNIQ at www.otcmarkets.com under the ticker symbol “OMQS.”

OMNIQ has also entered into an agreement with Ingenico, a  – global leader in payments acceptance solutions. OMNIQ Corp. will leverage its innovative fintech software alongside Ingenico’s state-of-the-art payment solutions. This strategic alliance aims to enhance and streamline payment across various industries, marrying OMNIQ’s AI-driven technology solutions with Ingenico’s global expertise in payment.

SHAREHOLDER UPDATE

Management has been and will continue to enact its plan to regain profitability as quickly as possible. To do this, we have been reducing expenditures wherever it doesn’t reduce the ability to operate effectively. Management has also placed a strategic focus on growing business with prime customers and on the most profitable product lines.

By offering SaaS and revenue share products to existing customers, we are able to increase our revenue without incurring additional material costs of goods. R&D has been dedicated to completing these products and we were proud to launch seeQ last quarter.

We have also continued to leverage our IoT, Fintech, and AI business so that we can provide value for and maintain relationships with our Fortune 100 customers.

“At omniQ, we place the utmost importance on our shareholders’ trust. Our focus is on regaining profitability while ensuring the highest standards of operational excellence. We are dedicated to the success of our business, making every decision with the intention of creating long-term value and maintaining our commitment to those who invest in our vision. Thank you for your continued support.” OMNIQ CEO Shai Lustgarten

About omniQ Corp

OMNIQ Corp. excels in providing state-of-the-art computerized and machine vision image processing technologies, anchored in its proprietary and patented artificial intelligence innovations. The Company’s extensive range of services spans advanced data collection systems, real-time surveillance, and monitoring capabilities catered to various sectors, including supply chain management, homeland security, public safety, as well as traffic and parking management. These innovative solutions are strategically designed to secure and optimize the movement of individuals, assets, and information across essential infrastructures such as airports, warehouses, and national borders.

The Company serves a broad spectrum of clients, including government agencies and esteemed Fortune 500 corporations across several industries—manufacturing, retail, healthcare, distribution, transportation, logistics, food and beverage, and the oil, gas, and chemical sectors. By adopting OMNIQ Corp.’s advanced solutions, these organizations are better equipped to manage the intricacies of their domains, thereby enhancing their operational effectiveness.

OMNIQ Corp. has established a significant footprint in rapidly expanding markets. This includes the Global Safe City sector, predicted to reach $67.1 billion by 2028, the smart parking industry, expected to escalate to $16.4 billion by 2030, and the fast-casual restaurant market, projected to hit $209 billion by 2027. These engagements reflect the Company’s strategic alignment with industries that are witnessing a growing need for cutting-edge AI technology solutions.

Information about forward-looking statements

This press release includes forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, specifically under Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements, which address expected future events, economic performance, and financial outcomes, are not historical facts but predictions based on current expectations and projections.

Such forward-looking statements, identifiable by terms like “anticipate,” “expect,” “may,” “believe,” and similar expressions, should not be seen as guarantees of future results. They are based on the information available at the time of making and reflect management’s current expectations about future events. These statements are subject to various risks and uncertainties that could cause actual results to differ significantly from those projected or implied. Some of these risks include fluctuations in product demand, the introduction of new offerings, maintaining customer and strategic relationships, competitive pressures, market growth, financial liquidity, debt management, and the ability to integrate new acquisitions effectively.

Specific forward-looking statements in this release include expectations regarding financial strategies, revenue growth, and operational improvements. For a detailed discussion of risks and uncertainties that could affect OMNIQ Corp.’s future performance, please refer to our recent filings with the Securities and Exchange Commission at https://www.sec.gov. OMNIQ Corp. does not commit to updating these forward-looking statements unless required by law.

Contact omniQ

IR@OMNIQ.com