BUSINESS ACQUISITIONS

12 Months Ended

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

BUSINESS ACQUISITIONS

NOTE 4 – BUSINESS ACQUISITIONS

Dangot Computers Ltd

On May 3, 2021, the Company and Omniq Technologies Ltd., a wholly owned subsidiary of the Company (“Omniq Technologies”) entered into a share purchase agreement (the “Dangot Share Purchase Agreement”) with Mr. Haim Dangot. Pursuant to the Dangot Share Purchase Agreement, Omniq Technologies agreed to purchase 51%, or 5,100 shares, of the capital stock of Dangot Computers Ltd., an Israel company (“Dangot”), from Dangot’s sole shareholder, Haim Dangot, for consideration equivalent to 23,740,500 NIS (New Israeli Shekel), which is equal to US$7.6 million (the “Closing Consideration”), based on the then current exchange rate at the date of acquisition of NIS to dollars.

The Closing Consideration was paid on July 8, 2021 in the following manner: (a) the Company issued 220,103 shares of its common stock having a share value of $2,084 thousand and (b) cash in the amount of $5,058 thousand and $600 thousand payable to owner.

Haim Dangot also granted Omniq Technologies an irrevocable option to purchase the remaining 4,900 shares, or 49%, of Dangot’s capital stock (the “Dangot Option”) in the 12-month period following the closing date (the “Dangot Option Period”) at a share purchase price of 465,500 NIS, which is equal to US$143 thousand, per each 1% of Dangot’s remaining shares on a fully diluted basis which is the same valuation per share as the purchase price for the 51%. Effective October 1, 2021 the Company exercised a portion of its option and purchased an additional 26% of Dangot bringing its ownership to 77%. The Company paid $4,012,000 to purchase the additional shares.

On April 1, 2022, the Company closed on its acquisition of Dangot and exercised the remaining portion of its option to purchase 23.0% of the capital stock, thereby making Dangot a fully owned subsidiary of the Company. The Company paid $3,518,000 to purchase the additional shares. The Company utilized its working capital and a combination of short and long term loans.

The following table summarizes the consideration given and the purchase price allocation:

Purchase Price Consideration (in thousands)	Total Consideration
Cash payments	$	5,058
Accrued payable to owner		600
Fair value of stock issued (220,103 shares)		2,084
Debt assumed		5,310
Total consideration	$	13,052
Cash	$	666
Accounts receivable		13,470
Inventory		4,616
Other assets		5,392
Property and equipment		638
Goodwill		1,758
Trade name		1,893
Customer relationship		3,139
Other intangible assets		899
Assets acquired	$	32,471
Current liabilities assumed		(12,911	)
Non-controlling interest		(6,508	)
Net assets acquired	$	13,052

The proforma unaudited revenue and earnings as if the acquisition had been included in the consolidated results of the company for the full year ending December 31, 2021 were $92.5 million in revenues and $10.8 million net loss.

Since the acquisition the amounts included in the consolidated statement of comprehensive income from Dangot Computers Ltd. for the year ended December 31, 2021, was $20.6 million in revenue and $566 thousand in net income.