OMNIQ (OMQS) 10-Q 15 May 23 2023 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Mar. 31, 2023	Apr. 27, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	000-09047
Entity Registrant Name	OMNIQ Corp.
Entity Central Index Key	0000278165
Entity Tax Identification Number	20-3454263
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1865 West 2100 South
Entity Address, City or Town	Salt Lake City
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84119
City Area Code	(801)
Local Phone Number	242-7272
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	OMQS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,885,802

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 3,230	$ 1,311
Accounts receivable, net	25,649	23,893
Inventory	8,885	8,726
Prepaid expenses	1,632	1,268
Other current assets	729	473
Total current assets	40,125	35,671
Property and equipment, net of accumulated depreciation of $1,030 and $1,030 respectively	1,361	1,086
Goodwill	16,483	16,542
Trade name, net of accumulated amortization of $6,283 and $4,458, respectively	1,670	1,826
Customer relationships, net of accumulated amortization of $11,001 and $10,762, respectively	4,604	4,967
Other intangibles, net of accumulated amortization of $2,216 and $1,541, respectively	621	675
Right of use lease asset	1,986	2,300
Other assets	1,620	1,744
Total Assets	68,470	64,811
Current liabilities
Accounts payable and accrued liabilities	58,216	54,736
Line of credit	5,225	1,971
Accrued payroll and sales tax	2,637	2,633
Notes payable, related parties – current portion	195	293
Notes payable – current portion	10,843	11,572
Lease liability – current portion	890	942
Other current liabilities	1,733	1,394
Total current liabilities	79,739	73,541
Long term liabilities
Accrued interest and accrued liabilities, related party	72	72
Notes payable, less current portion	44	55
Lease liability	1,141	1,404
Other long-term liabilities	314	265
Total liabilities	81,310	75,337
Stockholders’ deficit
Common stock; $0.001 par value; 15,000,000 shares authorized; 7,884,878 and 7,714,780 shares issued and outstanding, respectively.	8	8
Additional paid-in capital	74,458	73,714
Accumulated deficit	(87,975)	(84,460)
Cumulative Translation Adjustment	668	211
Total OmniQ stockholders’ deficit	(12,840)	(10,526)
Total liabilities and deficit	68,470	64,811
Series A Preferred Stock [Member]
Stockholders’ deficit
Preferred stock value
Series B Preferred Stock [Member]
Stockholders’ deficit
Preferred stock value
Series C Preferred Stock [Member]
Stockholders’ deficit
Preferred stock value	$ 1	$ 1

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Property and equipment, accumulated depreciation	$ 1,030	$ 1,030
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	15,000,000	15,000,000
Common stock, shares, issued	7,884,878	7,714,780
Common stock, shares outstanding	7,884,878	7,714,780
Series A Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares designated	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series B Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares designated	1	1
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series C Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares designated	3,000,000	3,000,000
Preferred stock, shares issued	502,000	502,000
Preferred stock, shares outstanding	502,000	502,000
Trade Names [Member]
Other intangibles, accumulated amortization	$ 6,283	$ 4,458
Customer Relationships [Member]
Other intangibles, accumulated amortization	11,001	10,762
Other Intangible Assets [Member]
Other intangibles, accumulated amortization	$ 2,216	$ 1,541

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues
Total Revenues	$ 27,821	$ 26,322
Cost of goods sold
Cost of goods sold	22,099	20,194
Gross profit	5,722	6,128
Operating expenses
Research & Development	423	523
Selling, general and administrative	6,766	6,476
Depreciation	108	93
Amortization	436	445
Total operating expenses	7,733	7,537
Loss from operations	(2,011)	(1,409)
Other income (expenses):
Interest expense	(938)	(812)
Other (expenses) income	(751)	(264)
Total other expenses	(1,689)	(1,076)
Net Loss Before Income Taxes	(3,700)	(2,485)
Provision for Income Taxes
Current	193	(84)
Total Provision for Income Taxes	193	(84)
Net loss	(3,507)	(2,569)
Net income attributable to noncontrolling interest		67
Net Loss attributable to OmniQ Corp	(3,507)	(2,636)
Foreign currency translation adjustment	457	(10)
Comprehensive loss	(3,050)	(2,579)
Reconciliation of net loss to net loss attributable to common shareholders
Less: Dividends attributable to non-common stockholders’ of OmniQ Corp	(8)	(48)
Net income attributable to noncontrolling interest		67
Net loss attributable to common stockholders’ of OmniQ Corp	$ (3,515)	$ (2,684)
Net loss per share - basic attributable to common stockholders’ of OmniQ Corp	$ (0.45)	$ (0.34)
Weighted average number of common shares outstanding - basic	7,749,870	7,511,376

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Preferred Stock [Member] Series C Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]	AOCI Attributable to Parent [Member]	Total
Beginning balance, value at Dec. 31, 2021	$ 1	$ 20	$ 70,606	$ (70,571)	$ 2,396	$ (154)	$ 2,298
Beginning balance, shares at Dec. 31, 2021	544	7,459
Dividend on Class C shares				(48)			(48)
ESPP stock issuance			8				8
ESPP Stock Issuance, shares		2
Stock and warrants issued for services			298				298
Stock and warrant issuance for Acquisition, shares
Stock-based compensation – options, warrants, issuances			460				460
Exercise of stock options and warrants			41				41
Exercise of stock options and warrants, shares		99
Cumulative translation adjustment					(20)	(10)	(30)
Net loss				(2,636)	67		(2,569)
Ending balance, value at Mar. 31, 2022	$ 1	$ 20	71,413	(73,255)	2,443	(164)	458
Ending balance, shares at Mar. 31, 2022	544	7,560
Beginning balance, value at Dec. 31, 2022	$ 1	$ 8	73,714	(84,460)		211	(10,526)
Beginning balance, shares at Dec. 31, 2022	544	7,714
Dividend on Class C shares				(8)			(8)
ESPP stock issuance			10				10
ESPP Stock Issuance, shares		2
Stock and warrants issued for services			45				45
Stock and warrant issuance for Acquisition, shares		10
Stock-based compensation – options, warrants, issuances			516				516
Exercise of stock options and warrants			173				173
Exercise of stock options and warrants, shares		156
Cumulative translation adjustment						457	457
Net loss				(3,507)			(3,507)
Conversion of shares
Conversion of equity, shares	(42)	2
Ending balance, value at Mar. 31, 2023	$ 1	$ 8	$ 74,458	$ (87,975)		$ 668	$ (12,840)
Ending balance, shares at Mar. 31, 2023	502	7,884

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operations
Net loss	$ (3,507)	$ (2,569)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on disposal of PP&E		46
Stock-based compensation	516	460
Stock and warrants issued for services	45
Depreciation and amortization	544	538
Amortization of ROU asset	281	222
Changes in operating assets and liabilities:
Accounts receivable	(2,228)	(2,641)
Prepaid expenses	(384)	506
Inventory	(395)	(678)
Other assets	104	(167)
Accounts payable and accrued liabilities	3,954	3,017
Accrued interest and accrued liabilities, related party	1	5
Accrued payroll and sales taxes payable	91	737
Lease liability	(282)	(220)
Deferred tax assets, net	(37)	(65)
Other liabilities	8	34
Net cash used in operating activities	(1,289)	(775)
Cash flows from investing activities
Purchase of property and equipment	(341)	(41)
Proceeds from sale of other assets		(23)
Net cash used in investing activities	(341)	(64)
Cash flows from financing activities
Proceeds from private placement
Proceeds from ESPP stock issuance	10	8
Proceeds from exercise of options and warrants	173	41
Dividends paid to non-controlling interest		(1,346)
Proceeds (payments) on notes/loans payable	(544)	566
Proceeds from draw on line of credit	3,361	1,699
Net cash provided by financing activities	3,000	968
Net change in cash and cash equivalents	1,370	130
Effect of foreign exchange rates on cash and cash equivalents	549	(292)
Cash and cash equivalents at beginning of period	1,311	7,085
Cash and cash equivalents at end of period	3,230	6,922
Non-cash activities:
Declared dividends payable	8	180
Warrants/stock issued for service		298
Supplemental disclosure of cash flow information:
Cash paid for interest	$ 938	$ 1,105

ORGANIZATION AND SUMMARY OF SIG

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The condensed consolidated financial statements include the accounts of OMNIQ Corp, and its wholly owned subsidiaries, referred to herein as “we,” “us,” “OMNIQ,” or the “Company.” Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”). We describe our significant accounting policies in Note 2 of the notes to consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022. During three-month period ended March 31, 2023, there were no significant changes to those accounting policies. Recent Accounting Pronouncements In August 2020, the Financial Statement Accounting Board (the “FASB”) issued ASU 2020-06 which simplifies the accounting for convertible instruments and its application of the derivatives scope exception for contracts in an entity’s own equity. For contracts in an entity’s own equity, the new guidance eliminates some of the current requirements for equity classification such as the requirement that settlement in unregistered shares is permitted. In addition, the new guidance reduces the number of accounting models that require separating embedded conversion features from convertible instruments, including eliminating the requirement to recognize a beneficial conversion feature if the conversion feature is in the money and does not require bifurcation as a derivative liability. As a result, only conversion features accounted for under the substantial premium model and those that require bifurcation will be accounted for separately. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation and requires enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity. The Company adopted the new standards January 1, 2023. The adoption of this standard may allow the Company, in the future and in certain circumstances, to avoid derivative treatment of warrants and avoid beneficial conversion treatment of certain convertible preferred shares. Adoption of this standard had no effect on the Company’s financial statements. Net Loss Per Common Share Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive. The weighted-average number of common shares outstanding for computing basic EPS for the three-months ended March 31, 2023, and 2022 were 7,749,870 7,511,376 The following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share because such securities have an anti-dilutive impact due to losses reported as of: SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNING PER SHARE March 31, 2023 March 31, 2022 Options to purchase common stock 1,907,583 2,188,750 Warrants to purchase common stock 1,481,734 1,411,734 Potential shares excluded from diluted net loss per share 3,389,317 3,600,484

LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY AND CAPITAL RESOURCES	3 Months Ended
	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
LIQUIDITY AND CAPITAL RESOURCES	NOTE 2 – LIQUIDITY AND CAPITAL RESOURCES The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. The following are the principal conditions or events which potentially raise substantial doubt about the company’s ability to continue as a going concern: ● Balancing the need for operational cash with the need to add additional products ● Timely and cost-effective development of products ● Working capital deficit of $ 39.6 ● Accumulated deficit of $ 88 ● Multiple periods of losses from operations ● Noncompliance with certain debt covenants These facts and others have raised concerns about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, which we have successfully accomplished to date. The following conditions, plans and actions are currently being implemented to address the Company’s conditions: ● Outstanding warrants exist from prior offerings that could be exercised for cash depending upon the performance of our stock. ● The Company’s acquisition of Dangot Computers, Ltd. has improved the balance sheet, profitability, and cash flow and is expected to help the Company as a whole to generate positive cash flows from operations for the foreseeable future. ● The acquisition of Dangot has added capabilities to the Company which have already transformed into significant new orders in the Parking segment. Management expects the collaboration and cross sales to contribute to improved revenues and margins. ● Management is evaluating operating expenses and is developing a plan to reduce expenditures without negatively impacting current operations. Management has already cut staff by about 5% and will continue to do additional overhead cuts. ● Blue Star - The Company’s total accounts payable due to Blue Star as of March 31, 2023 was approximately $ 37 5

CONCENTRATIONS

CONCENTRATIONS	3 Months Ended
	Mar. 31, 2023
Risks and Uncertainties [Abstract]
CONCENTRATIONS	NOTE 3 – CONCENTRATIONS For the three-months ended March 31, 2023, and the year ended December 31, 2022, two customers accounted for 30 Accounts receivable at March 31, 2023 and December 31, 2022 are made up of trade receivables due from customers in the ordinary course of business. No customer accounted for more than 10 For the three months ended March 31, 2023, and the year ended December 31, 2022 two vendors made up 49 48

BUSINESS ACQUISITION

BUSINESS ACQUISITION	3 Months Ended
	Mar. 31, 2023
Business Combination and Asset Acquisition [Abstract]
BUSINESS ACQUISITION	NOTE 4 – BUSINESS ACQUISITION Dangot Computers Ltd 23.0 3,518,000

INVENTORY

INVENTORY	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
INVENTORY	NOTE 5 – INVENTORY Inventory consisted of the following as of: SCHEDULE OF INVENTORY In thousands March 31, 2023 December 31, 2022 Raw materials $ 827 $ 649 Inventory in transit 2,062 2,004 Finished goods (less allowance) 5,996 6,073 Total inventories $ 8,885 $ 8,726

CREDIT FACILITIES AND LINE OF C

CREDIT FACILITIES AND LINE OF CREDIT	3 Months Ended
	Mar. 31, 2023
Debt Disclosure [Abstract]
CREDIT FACILITIES AND LINE OF CREDIT	NOTE 6 – CREDIT FACILITIES AND LINE OF CREDIT We maintain operating lines of credit, factoring and revolving credit facilities with banks and finance companies to provide us with working capital. On March 25, 2022, we entered into a Business Finance Agreement (the “BFA”) with BridgeBank a division of Western Alliance Bank (“BridgeBank”) to establish the sale of accounts receivable credit facility, whereby we may obtain short-term financing by selling and assigning acceptable accounts receivables to BridgeBank. Pursuant to the BFA, the outstanding principal amount of advances made by BridgeBank at any time shall not exceed $ 8.5 15 The annual interest rate with respect to the daily average balance of unpaid advances outstanding under the BFA (computed on a monthly basis) is equal to the “Prime Rate” of Wells Fargo Bank N.A. plus 1.5%, plus a monthly fee equal to 0.15% of the average outstanding balance.

RELATED PARTY NOTES PAYABLE

RELATED PARTY NOTES PAYABLE	3 Months Ended
	Mar. 31, 2023
Related Party Notes Payable
RELATED PARTY NOTES PAYABLE	NOTE 7 – RELATED PARTY NOTES PAYABLE Related party notes payable, consisted of the following as of: SCHEDULE OF NOTES PAYABLE, RELATED PARTIES In thousands March 31, 2023 December 31, 2022 Note payable –Marin $ 120 $ 180 Note payable –Thomet 75 113 Total notes payable 195 293 Less current portion 195 293 Long-term portion $ - $ - Note Payable -Marin In December 2017, we entered into a $ 660 1.89 60 monthly 20 72 thousand. Accrued interest is payable at maturity. Note Payable – Thomet In December 2017, we entered into a $ 750 zero 60 monthly 13

OTHER NOTES PAYABLE

OTHER NOTES PAYABLE	3 Months Ended
	Mar. 31, 2023
Debt Disclosure [Abstract]
OTHER NOTES PAYABLE	NOTE 8 – OTHER NOTES PAYABLE SCHEDULE OF OTHER NOTES PAYABLE (In thousands) March 31, 2023 December 31, 2022 Note payable other 10,887 11,627 Total 10,887 11,627 Less current portion 10,843 11,572 Long term notes payable $ 44 $ 55 Notes Payable Other On July 29, 2021, the Company entered into a long-term loan from Leumi Bank totalling NIS 7 2.16 4.5 8.25 8 4 years On November 28, 2021, the Company entered into another long-term loan from Leumi Bank totalling NIS 3.5 million, which at the time was approximately $ 1.1 million. The note accrues interest at the Israeli Prime Rate plus 4.5 % which currently equals 8.25 8 instalments of principal and interest over 4 years . The note is secured by shares of Dangot Computers, Ltd. On August 11, 2021, the Company purchased vehicles using cash and financing of NIS 500 155 5 years 7.5 292 81 On March 27, 2022, the Company entered into another long-term loan from Leumi Bank totalling NIS 3.5 1.1 4.5 8.25 8 4 years On September 13, 2022, the Company entered into a long-term loan from Hapoalim Bank totalling NIS 3 0.9 6.03 36 3 years During the year ended December 31, 2022, the Company entered into five short term loans totalling NIS 26.8 7.6 6.3 As of March 31, 2023, 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.

OTHER LIABILITIES

OTHER LIABILITIES	3 Months Ended
	Mar. 31, 2023
Other Liabilities Disclosure [Abstract]
OTHER LIABILITIES	NOTE 9 – OTHER LIABILITIES SCHEDULE OF OTHER LIABILITIES (In thousands) March 31, 2023 December 31, 2022 Other vendor payable $ 803 $ 801 Dividend payable 159 153 Others 1,085 705 Total other liabilities 2,047 1,659 Less Current Portion (1,733 ) (1,394 ) Total long term other liabilities $ 314 $ 265

STOCKHOLDERS_ EQUITY

STOCKHOLDERS’ EQUITY	3 Months Ended
	Mar. 31, 2023
Equity [Abstract]
STOCKHOLDERS’ EQUITY	NOTE 10 – STOCKHOLDERS’ EQUITY PREFERRED STOCK Series A As of March 31, 2023, there were 2,000,000 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 250 common shares. Series B As of March 31, 2023, there was 1 no Series C As of March 31, 2023, there were 3,000,000 502,000 0.06 1 159 The Series C Preferred Stock has a liquidation value and conversion price of $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) and automatically converts into Common Stock at $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) in the event that the Company’s common stock has a closing price of $30 per share for 20 consecutive trading days. COMMON STOCK In October 2021, OMNIQ’ Board of Directors adopted an Equity Incentive Plan (the “Plan”), as an incentive to retain in the employ of and attract new employees, directors, officers, consultants, advisors, and employees to the Company. Pursuant to the Plan, 1,118,856 0.001 792,500 For the three months ending March 31, 2023, 210,000 155,508 In December 2015, our Board of Directors approved the OMNIQ. Employee Stock Purchase Plan (the “ESPP”). For the three months ending March 31, 2023, employees purchased 2,340 10 On August 10, 2022, our Board of Directors approved issuing 10,000 45

LITIGATION

LITIGATION	3 Months Ended
	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
LITIGATION	NOTE 11 – LITIGATION The Company was named a defendant in a case involving a former employee who claims he is owed approximately $ 60 The company is not a party to any other pending material legal proceeding in which it is defending against any claims of material significance. To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against the Company. To the knowledge of management, no director, executive officer or affiliate of the Company, any owner of record or beneficially of more than five percent of the Company’s Common Stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 12 – SUBSEQUENT EVENTS

ORGANIZATION AND SUMMARY OF S_2

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements In August 2020, the Financial Statement Accounting Board (the “FASB”) issued ASU 2020-06 which simplifies the accounting for convertible instruments and its application of the derivatives scope exception for contracts in an entity’s own equity. For contracts in an entity’s own equity, the new guidance eliminates some of the current requirements for equity classification such as the requirement that settlement in unregistered shares is permitted. In addition, the new guidance reduces the number of accounting models that require separating embedded conversion features from convertible instruments, including eliminating the requirement to recognize a beneficial conversion feature if the conversion feature is in the money and does not require bifurcation as a derivative liability. As a result, only conversion features accounted for under the substantial premium model and those that require bifurcation will be accounted for separately. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation and requires enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity. The Company adopted the new standards January 1, 2023. The adoption of this standard may allow the Company, in the future and in certain circumstances, to avoid derivative treatment of warrants and avoid beneficial conversion treatment of certain convertible preferred shares. Adoption of this standard had no effect on the Company’s financial statements.
Net Loss Per Common Share	Net Loss Per Common Share Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive. The weighted-average number of common shares outstanding for computing basic EPS for the three-months ended March 31, 2023, and 2022 were 7,749,870 7,511,376 The following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share because such securities have an anti-dilutive impact due to losses reported as of: SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNING PER SHARE March 31, 2023 March 31, 2022 Options to purchase common stock 1,907,583 2,188,750 Warrants to purchase common stock 1,481,734 1,411,734 Potential shares excluded from diluted net loss per share 3,389,317 3,600,484

ORGANIZATION AND SUMMARY OF S_3

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNING PER SHARE	The following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share because such securities have an anti-dilutive impact due to losses reported as of: SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNING PER SHARE March 31, 2023 March 31, 2022 Options to purchase common stock 1,907,583 2,188,750 Warrants to purchase common stock 1,481,734 1,411,734 Potential shares excluded from diluted net loss per share 3,389,317 3,600,484

INVENTORY (Tables)

INVENTORY (Tables)	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
SCHEDULE OF INVENTORY	Inventory consisted of the following as of: SCHEDULE OF INVENTORY In thousands March 31, 2023 December 31, 2022 Raw materials $ 827 $ 649 Inventory in transit 2,062 2,004 Finished goods (less allowance) 5,996 6,073 Total inventories $ 8,885 $ 8,726

RELATED PARTY NOTES PAYABLE (Ta

RELATED PARTY NOTES PAYABLE (Tables)	3 Months Ended
	Mar. 31, 2023
Related Party Notes Payable
SCHEDULE OF NOTES PAYABLE, RELATED PARTIES	Related party notes payable, consisted of the following as of: SCHEDULE OF NOTES PAYABLE, RELATED PARTIES In thousands March 31, 2023 December 31, 2022 Note payable –Marin $ 120 $ 180 Note payable –Thomet 75 113 Total notes payable 195 293 Less current portion 195 293 Long-term portion $ - $ -

OTHER NOTES PAYABLE (Tables)

OTHER NOTES PAYABLE (Tables)	3 Months Ended
	Mar. 31, 2023
Debt Disclosure [Abstract]
SCHEDULE OF OTHER NOTES PAYABLE	SCHEDULE OF OTHER NOTES PAYABLE (In thousands) March 31, 2023 December 31, 2022 Note payable other 10,887 11,627 Total 10,887 11,627 Less current portion 10,843 11,572 Long term notes payable $ 44 $ 55

OTHER LIABILITIES (Tables)

OTHER LIABILITIES (Tables)	3 Months Ended
	Mar. 31, 2023
Other Liabilities Disclosure [Abstract]
SCHEDULE OF OTHER LIABILITIES	SCHEDULE OF OTHER LIABILITIES (In thousands) March 31, 2023 December 31, 2022 Other vendor payable $ 803 $ 801 Dividend payable 159 153 Others 1,085 705 Total other liabilities 2,047 1,659 Less Current Portion (1,733 ) (1,394 ) Total long term other liabilities $ 314 $ 265

SCHEDULE OF ANTI DILUTIVE SECUR

SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNING PER SHARE (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential shares excluded from diluted net loss per share	3,389,317	3,600,484
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential shares excluded from diluted net loss per share	1,907,583	2,188,750
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential shares excluded from diluted net loss per share	1,481,734	1,411,734

ORGANIZATION AND SUMMARY OF S_4

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Weighted-average number of common shares outstanding	7,749,870	7,511,376

LIQUIDITY AND CAPITAL RESOURC_2

LIQUIDITY AND CAPITAL RESOURCES (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Aug. 11, 2021
Working capital deficit	$ 39,600
Accumulated deficit	87,975	$ 84,460
Debt instrument, interest rate, stated percentage			7.50%
Blue Star [Member]
Accounts payable, related parties	$ 37,000
Debt instrument, interest rate, stated percentage	5%

CONCENTRATIONS (Details Narrati

CONCENTRATIONS (Details Narrative) - Customer Concentration Risk [Member]	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Revenue Benchmark [Member] | Two Customers [Member]
Concentration Risk [Line Items]
Concentration risk percentage	30%	30%
Accounts Receivable [Member] | No Customer [Member]
Concentration Risk [Line Items]
Concentration risk percentage	10%	10%
Accounts Payable [Member] | One Vendor [Member]
Concentration Risk [Line Items]
Concentration risk percentage	49%	48%

BUSINESS ACQUISITION (Details N

BUSINESS ACQUISITION (Details Narrative) - Dangot Computers Ltd [Member]	Apr. 02, 2022 USD ($)
Purchase of shares, percent	23%
Stock issued during period, value, purchase of assets	$ 3,518,000

SCHEDULE OF INVENTORY (Details)

SCHEDULE OF INVENTORY (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 827	$ 649
Inventory in transit	2,062	2,004
Finished goods (less allowance)	5,996	6,073
Total inventories	$ 8,885	$ 8,726

CREDIT FACILITIES AND LINE OF_2

CREDIT FACILITIES AND LINE OF CREDIT (Details Narrative) - Business Finance Agreement [Member] - Bridge Bank [Member] $ in Millions	Mar. 25, 2022 USD ($)
Line of Credit Facility [Line Items]
Line of credit facility maximum borrowing capacity	$ 8.5
Percentage of reserve account	15%
Line of credit, interest rate, description	The annual interest rate with respect to the daily average balance of unpaid advances outstanding under the BFA (computed on a monthly basis) is equal to the “Prime Rate” of Wells Fargo Bank N.A. plus 1.5%, plus a monthly fee equal to 0.15% of the average outstanding balance.

SCHEDULE OF NOTES PAYABLE, RELA

SCHEDULE OF NOTES PAYABLE, RELATED PARTIES (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Dec. 31, 2017
Short-Term Debt [Line Items]
Less current portion	$ 10,843	$ 11,572
Long-term portion	44	55
Related Party [Member]
Short-Term Debt [Line Items]
Total notes payable	195	293
Less current portion	195	293
Long-term portion
Note Payable - Marin [Member] | Related Party [Member]
Short-Term Debt [Line Items]
Total notes payable	120	180	$ 660
Note Payable - Thomet [Member] | Related Party [Member]
Short-Term Debt [Line Items]
Total notes payable	$ 75	$ 113	$ 750

RELATED PARTY NOTES PAYABLE (De

RELATED PARTY NOTES PAYABLE (Details Narrative) - USD ($) $ in Thousands	1 Months Ended
	Dec. 31, 2017	Mar. 31, 2023	Dec. 31, 2022	Aug. 11, 2021
Short-Term Debt [Line Items]
Debt instrument, percentage				7.50%
Related Party [Member]
Short-Term Debt [Line Items]
Notes payable related parties		$ 195	$ 293
Note Payable - Marin [Member] | Related Party [Member]
Short-Term Debt [Line Items]
Notes payable related parties	$ 660	120	180
Debt instrument, percentage	1.89%
Debt instrument, frequency of periodic payment	60 monthly
Principal payments	$ 20
Accrued interest		72
Note Payable - Thomet [Member] | Related Party [Member]
Short-Term Debt [Line Items]
Notes payable related parties	$ 750	$ 75	$ 113
Debt instrument, percentage	0%
Debt instrument, frequency of periodic payment	60 monthly
Principal payments	$ 13

SCHEDULE OF OTHER NOTES PAYABLE

SCHEDULE OF OTHER NOTES PAYABLE (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Short-Term Debt [Line Items]
Total	$ 10,887	$ 11,627
Less current portion	10,843	11,572
Long term notes payable	44	55
Notes Payable Other [Member]
Short-Term Debt [Line Items]
Total	$ 10,887	$ 11,627

OTHER NOTES PAYABLE (Details Na

OTHER NOTES PAYABLE (Details Narrative) ₪ in Thousands, $ in Thousands	Sep. 14, 2022	Mar. 27, 2022 USD ($) Integer	Nov. 28, 2021 USD ($) Integer	Aug. 11, 2021 USD ($)	Jul. 29, 2021 USD ($) Integer	Dec. 31, 2022 USD ($)	Dec. 31, 2022 ILS (₪)	Sep. 13, 2022 USD ($) Integer	Sep. 13, 2022 ILS (₪) Integer	Mar. 31, 2022 USD ($)	Mar. 31, 2022 ILS (₪)	Mar. 27, 2022 ILS (₪) Integer	Nov. 28, 2021 ILS (₪) Integer	Aug. 11, 2021 ILS (₪)	Jul. 29, 2021 ILS (₪) Integer
Short-Term Debt [Line Items]
Loans payble				$ 155						$ 81	₪ 292			₪ 500
Debt instrument percentage				7.50%										7.50%
Debt instrument term				5 years
Short term loans						$ 7,600	₪ 26,800
Accrues average interest						6.30%	6.30%
Leumi Bank [Member]
Short-Term Debt [Line Items]
Loans payble		$ 1,100	$ 1,100		$ 2,160							₪ 3,500	₪ 3,500		₪ 7,000
Debt instrument percentage		8.25%	8.25%		8.25%							8.25%	8.25%		8.25%
Number of installements		8	8		8							8	8		8
Debt instrument term		4 years	4 years		4 years
Leumi Bank [Member] | Israeli Prime Rate [Member]
Short-Term Debt [Line Items]
Debt instrument percentage		4.50%	4.50%		4.50%							4.50%	4.50%		4.50%
Hapoalim Bank [Member]
Short-Term Debt [Line Items]
Loans payble								$ 900	₪ 3,000
Debt instrument percentage								6.03%	6.03%
Number of installements								36	36
Debt instrument term	3 years

SCHEDULE OF OTHER LIABILITIES (

SCHEDULE OF OTHER LIABILITIES (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Other Liabilities Disclosure [Abstract]
Other vendor payable	$ 803	$ 801
Dividend payable	159	153
Others	1,085	705
Total other liabilities	2,047	1,659
Less Current Portion	(1,733)	(1,394)
Total long term other liabilities	$ 314	$ 265

STOCKHOLDERS_ EQUITY (Details N

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended	3 Months Ended
	Jan. 03, 2023	Aug. 10, 2022	Feb. 25, 2022	Oct. 31, 2021	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Class of Stock [Line Items]
Common stock, par value					$ 0.001		$ 0.001
Stock issued during period employee stock purchase plans, value					$ 10	$ 8
Number of shares issue service, value					45	$ 298
Board of Directors [Member]
Class of Stock [Line Items]
Number of shares issue		10,000
Board of Directors [Member] | Consulting Agreement [Member] | Options Held [Member]
Class of Stock [Line Items]
Number of shares issue service, value	$ 45
Common Stock [Member]
Class of Stock [Line Items]
Stock options and warrants exercised					$ 210,000
Stock warrant exercised					155,508
Stock issued during period shares employee stock purchase plans					2,000	2,000
Stock issued during period employee stock purchase plans, value
Number of shares issue service, value
Equity Incentive Plan [Member] | Common Stock [Member]
Class of Stock [Line Items]
Shares issued				1,118,856
Common stock, par value				$ 0.001
Stock options granted			792,500
Employee Stock Purchase Plan [Member] | Common Stock [Member]
Class of Stock [Line Items]
Stock issued during period shares employee stock purchase plans					2,340
Stock issued during period employee stock purchase plans, value					$ 10
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized					2,000,000		2,000,000
Preferred stock, voting rights					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 250 common shares.
Preferred stock, shares outstanding					0		0
Preferred stock, shares issued					0		0
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized					1		1
Preferred stock, shares outstanding					0		0
Preferred stock, shares issued					0		0
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized					3,000,000		3,000,000
Preferred stock, shares outstanding					502,000		502,000
Preferred stock, shares issued					502,000		502,000
Dividends payable, amount per share					$ 0.06
Liquidation preference					$ 1
Accrued dividends					$ 159
Preferred stock conversion, description					The Series C Preferred Stock has a liquidation value and conversion price of $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) and automatically converts into Common Stock at $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) in the event that the Company’s common stock has a closing price of $30 per share for 20 consecutive trading days.

LITIGATION (Details Narrative)

LITIGATION (Details Narrative) $ in Thousands	Mar. 31, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Accrued liabilities for commissions, expense and taxes	$ 60