OMQS 10-K & 10-Q changes, risk factors and insider trading

Net loss attributable to common stockholders’ of OMNIQ Corp was $10$169 millionthousand in 2024,2025, a decrease of $19.5$9.9 million from the 20232024 loss of $29.5$10 million. Basic loss per share attributable to common stockholders was $0.94$0.01 for the year 20242025 compared to $3.50$0.94 loss per share for the year 2023.2024.

Revenue for the years ended December 31, 20242025 and 20232024 were generated from the the sales of hardware,AI service contracts, software, labels and ribbons, and related services provided by the Company to its customers. For the years ended December 31, 20242025 and 2023,2024, the Company recognized $73.6$33 million and $81.2$34.9 million in net revenues, respectively. This represents a decrease of 9%. 5.5%. The decrease was due to two main factors: (1) The decrease in deliverables, and (2) a delay in the timing of a significant customer project.

For the years ended December 31, 20242025 and 2023,2024, operating expenses were $22.3 $12.9 million and $41.9$12.3 million, respectively. This represents an a decreaseincrease of $19.6$696 million,thousand, or 47%,6%, which is due to impairment expense of $14.7 millionincrease in 2023.our selling general and administrative expenses in 2025. The following explains in detail the change in operating expenses.

Research & Development – Research and development for the years ended December 31, 20242025 and 20232024 totaled $1.5 $2 million and $2.2 $1.9 million, respectively. This represents an decreaseincrease of $657$164 thousand or 31%,9%, which is due to reductionincrease in costs for developing software.

Selling, General and Administrative – Selling, General and Administrative expenses were $19.5$9.8 million for the year ended December December 31, 2024,2025, compared to $23$9.1 million for the year ended December 31, 2023,2024, representing aan decreaseincrease of $3.5$685 million,thousand, or 15%.7%. The change was due to management’sincreased effortsfocus toon cutsales costs.efforts.

Depreciation – Depreciation for the year ended December 31, 20242025 was $364$80 thousand compared to $464 $347 thousand for the year ended December 31, 2023.2024. This represents a decrease of $100$267 thousand, or 22%,77%, attributable to a reduction in fixed assets.

Intangible Amortization – Intangible amortization expense for the year ended December 31, 20242025 was $915$965 thousand, compared to $1.6 million$915 thousand for the year ended December 31, 2023.2024.

For the year ended December 31, 2024,2025, the Company has $12$495 thousand of current income tax expense (US State & Local and Foreign) and $882 thousand deferred income tax benefit..

For the year ended December 31, 2023,2024, the Company has $741$698 thousand of current income tax provisionbenefit (US State & Local and Foreign) and $221 thousand deferred income tax expense..

The Company realized a net loss of $137 thousand for the year ended December 31, 2025, compared to a net loss of $10 million for the year ended December 31, 2024, compared to a net loss of $29.4 million for the year ended December 31, 2023.2024. The decreased loss in 20242025 is due primarily to drastic improvements by management to increase gross margins impairmentwhile of goodwill from prior year not in 2024 andat the decreasesame intime revenue.trimming overhead.

As of December 31, 2024,2025, the Company had cash in the amount of $2.3$679 million thousand and a working capital deficit of $54$13.2 million, compared to cash in the amount of $1.7$2.3 million, and a working capital deficit of $45$54 million as of December 31, 2023.2024. The Company had stockholders’ deficit attributable to OmniQOMNIQ stockholders of $43.9$12.7 million and $35$43.9 million as of December 31, 20242025 and 2023,2024, respectively. This increase reduction in our stockholders’ deficit was primarily attributabledue to netthe losses.sale of the Quest division in June 2025.

The Company’s operations provided net cash of $2.4$7.5 million and $170$2.4 thousandmillion for the years ended December 31, 20242025 and 2023,2024, respectively. The increase of cash from operations of $2.2$5.1 million is primarily a result of increase in payablesreceivables and other liabilities.

The Company’s cash used in investing activities was $32$3 thousand for the year ended December 31, 2024 compared to cash used by investing activities of $331thousandmillion for the year ended December 31, 2023.2025 compared to cash used by investing activities of $32 thousand for the year ended December 31, 2024.

The Company’s financing activities used $2.87$1.7 million of cash during the year ended December 31, 2025, and used $2.9 million during the year ended December 31, 2024, and used $50 thousand during the year ended December 31, 2023.2024. During the year ended December 31, 20243,2025, the Company made payments of $3.4 million on its notes payable, compared to the year ended December 31, 2024, when the Company made payments of $3.2 million on its notes payable, compared to the year ended December 31, 2023, when the Company made payments of $1.4 million on its notes payable, including its Supplier Secured Promissory note and related party notes payable. Additionally, the Company received $292$685 thousand in the year ended December 31, 20242025 on its line of credit and had paid$292 $1.6 millionthousand on the Company’s line of credit during the year ended December 31, 2023.2024. The Company raised nonet fundsproceeds of $941 thousand in the year ended December 31, 2024 2025 and raisedno net proceeds of $2.4 millionfunds for the year ended December 31, 2024.

We are closely monitoring developments in the war betweenin Israel and Hamas that began on October 7, 2023 including potential impacts to The Companiesthe Company’s business, customers, suppliers, employees, and operations in Israel, the Middle East and elsewhere. At this time, impacts to Thethe Company are expected to be minimal but is subject to change given the volatile nature of the situation.

For a more detailed discussion of some of the foregoing risks and uncertainties, see Item 1A — “Risk Factors” in our 2025 Form 10-K and Item 1A — “Risk Factors” in this Quarterly Report on Form 10-Q for the quarterly period ended MarchJune 31,30, 2026, as well as other reports and registration statements filed by us with the SEC. These factors should not be construed as exhaustive and should be read with other cautionary statements in this Quarterly Report on Form 10-Q and our other public filings. For more information about us and the announcements we make from time to time, visit our website at www.omniq.com.

The Company’s sales from operations for the threesix months ended MarchJune 31,30, 2026, were $7.7$15 million, a decrease of approximately $299$727 thousand thousand or 4%, over the threesix months ended MarchJune 31,30, 2025.

The loss from operations for the threesix months ended MarchJune 31,30, 2026, was $1.26$3.5 million, an increase of $841$2.4 thousandmillion compared with the loss in the threesix months ended MarchJune 31,30, 2025, of $425$678 thousand. Basic loss per share from continuing operations for the threesix months ended MarchJune 30, 31, 2026, was ($0.13$0.16) versus ($0.19$0.00) per share for the same period in 2025. Comprehensive loss for the three months ended March 31, 2026 and 2025 was $1.7 million and $1.6 million respectively, the only component to comprehensive loss besides net loss is foreign currency translation.

As of MarchJune 31,30, 2026, the Company had cash in the amount of $787$1.1 thousandmillion and a working capital deficit of $14.6$15.2 million, compared to cash in the amount of $679 thousand, and a working capital deficit of $13.2 million as of December 31, 2025. The Company had stockholders’ deficit attributable to OmniQ stockholders of $14.1$14.9 million and $12.7 million as of MarchJune 31,30, 2026, and December 31, 2025, respectively. This increase in our stockholders’ deficit was primarily attributable to net losses.

The Company’s accumulated deficit was $125.7$126.4 million and $124 million as of MarchJune 31,30, 2026, and December 31, 2025.

The Company’s operations provided (used) net cash of $70$877 thousand and provided $1 $6.1 million in the threesix months ended MarchJune 31, 30, 2026, and 2025, respectively. The decrease in cash provided in operations of $1$5.2 million is due to the decrease in revenue.

The Company’s cash usedprovided in investing activities was $26$870 thousand for the threesix months ended MarchJune 31,30, 2026, compared to cash used in in investing activities of $31$2.5 thousandmillion for the threesix months ended MarchJune 31,30, 2025.

The Company’s financing activities used $0.68$2.3 million of cash during the threesix months ended MarchJune 31,30, 2026, and used $1.2$1.7 million during the threesix months ended MarchJune 31,30, 2025.

Results of Operations – for the 6 months ended

For the threesix months ended MarchJune 31,30, 2026, and 2025, the Company generated net revenues in the amount of $7.7$15 million and $7.9$15.8 million, respectively. The decrease between the three-monthsix-month periods was attributable to timing of projects by customers. In addition, the strengthening of the Israeli Shekel during the quarter resulted in the decrease in sales to be less in the USD presentation currency.

For the threesix months ended MarchJune 31,30, 2026, and 2025, the Company recognized a total of $5.4$11.3 million and $5.8$11.6 million, respectively, of cost of goods sold. For the threesix months ended MarchJune 31,30, 2026, and 2025, cost of goods sold were 70%75% and 73%74% of net revenues, respectively.

Total operating expenses for the threesix months ended MarchJune 31,30, 2026, and 2025 recognized was $3.5$7.3 million and $2.6$4.8 million, respectively, representing a 35%50% increase. The increase in operating expenses was due primarily to increase costs in selling and general administrative expenses, specifically salaries.

Research and Development – Research and development expenses for the threesix months ended MarchJune 31,30, 2026, and 2025 totaled $478$1.1 thousandmillion and $485$969 thousand, respectively.

Selling, general and Administrative – Selling, general and administrative expenses for the threesix months ended MarchJune 31,30, 2026, and 2025 2025 totaled $2.7$5.6 million and $1.9$3.4 million, respectively, representing a 48%66% increase. The increase was due primarily to increased costs for selling and general administrative expenses.

Depreciation – Depreciation expenses for the threesix months ended MarchJune 31,30, 2026, and 2025 totaled $16$31 thousand and $26$36 thousand, respectively, representing a 38%14% decrease. The decrease is directly related to the reduction in fixed assets.

Intangible amortization – Intangible amortization expenses for the threesix months ended MarchJune 31,30, 2026, and 2025 totaled $256$513 thousand and $232$468 thousand, respectively. The increase is due to life of intangibles and what is remaining to be amortized.

Interest Expense – Interest expense for the threesix months ended MarchJune 31,30, 2026, totaled $306$605 thousand, as compared to $260$403 thousand for the threesix months ended MarchJune 31,30, 2025. The increase is primarily attributable to the line of credit.