UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from________ to__________

Commission File Number: 001-40768

OMNIQ Corp.

(Exact name of registrant as specified in its charter)

Delaware

20-3454263

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

696 West Confluence Ave.

Murray UT 84123

(Address of principal executive offices) (Zip Code)

(801) 733-2222

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Ticker symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value		OMQS		OTCMKTS

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 11,602,930 shares of common stock, $0.001 par value, as of November 4, 2025.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION	F-1
ITEM 1. FINANCIAL STATEMENTS	F-1
CONDENSED CONSOLIDATED BALANCE SHEETS AT SEPTEMBER 30, 2025 AND DECEMBER 31, 2024 (UNAUDITED)	F-1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED)	F-2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED)	F-3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED)	F-4
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	F-5
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	7
ITEM 4. CONTROLS AND PROCEDURES	7
PART II - OTHER INFORMATION	8
ITEM 1. LEGAL PROCEEDINGS.	8
ITEM 1A. RISK FACTORS.	8
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	8
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.	8
ITEM 4. MINE SAFETY DISCLOSURES.	8
ITEM 5. OTHER INFORMATION.	8
ITEM 6. EXHIBITS.	9
SIGNATURES	10

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OMNIQ CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS


(In thousands, except share and per share data)	As of
	September 30, 2025			December 31, 2024
	(UNAUDITED)
ASSETS
Current assets
Cash and cash equivalents	$	679		$	2,349
Accounts receivable, net		10,579			20,945
Inventory		3,492			7,405
Prepaid expenses		696			1,085
Other current assets		38			96
Total current assets		15,484			31,880

Property and equipment, net of accumulated depreciation		668			721
Goodwill		1,891			2,918
Trade name, net of accumulated amortization		1,159			1,187
Customer relationships, net of accumulated amortization		2,842			3,115
Other intangibles, net of accumulated amortization		354			410
Right of use lease asset		371			1,076
Other assets		2,251			2,282
Total Assets	$	25,020		$	43,589

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	12,432		$	66,097
Line of credit		2,019			535
Accrued payroll and sales tax		3,020			2,903
Notes payable – current portion		5,667			8,512
Lease liability – current portion		218			701
Related party advances		1,995			-
Other current liabilities		1,400			7,575
Total current liabilities		26,751			86,323

Long-term liabilities
Accrued interest and accrued liabilities, related party		-			73
Notes payable, less current portion		543			234
Related party notes payable		9,987			-
Notes payable		9,987			-
Lease liability		91			353
Other long term liabilities		728			494
Total liabilities		38,100			87,477

Stockholders’ equity (deficit)
Series A Preferred stock; $0.001 par value; 2,000,000 shares designated, 0 shares issued and outstanding		-			-
Series B Preferred stock; $0.001 par value; 1 share designated, 0 shares issued and outstanding		-			-
Series C Preferred stock; $0.001 par value; 3,000,000 shares designated, 502,000 shares issued and outstanding, respectively		1			1
Preferred stock, value		1			1
Common stock; $0.001 par value; 35,000,000 shares authorized; 11,602,930 and 10,712,930 shares issued and outstanding, respectively.		12			11
Additional paid-in capital		112,328			78,713
Accumulated (deficit)		(124,698	)		(123,899	)
Accumulated other comprehensive income		(723	)		1,286
Total OmniQ stockholders’ equity (deficit)		(13,080	)		(43,888	)

Total liabilities and equity (deficit)	$	25,020		$	43,589

The accompanying unaudited notes should be read in conjunction with these unaudited condensed consolidated financial statements.

F-1

OMNIQ CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)


	For the Three months ended						For the Nine months ended
	September 30,						September 30,
(In thousands, except share and per share data)	2025			2024			2025			2024
Revenues	$	8,826		$	9,454		$	24,213		$	27,040

Cost of goods sold		5,867			7,362			17,089			20,820

Gross profit		2,959			2,092			7,124			6,220

Operating expenses
Research & Development		436			492			1,405			1,348
Selling, general and administrative		2,852			2,074			6,221			6,957
Depreciation		17			85			53			284
Amortization		245			228			713			686
Total operating expenses		3,550			2,879			8,392			9,275
Loss from operations		(591	)		(787	)		(1,268	)		(3,055	)

Other income (expenses):
Interest expense		(248	)		(282	)		(651	)		(820	)
Other (expenses) income		212			219			2,691			(1,142	)
Gain on debt settlement		-			-			325			-
Total other expenses		(36	)		(63	)		2,365			(1,962	)
Net Loss Before Income Taxes		(627	)		(850	)		1,097			(5,017	)
Provision for Income Taxes
Current		(120	)		46			(156	)		94
Total Provision for Income Taxes		(120	)		46			(156	)		94
Income (loss) from continuing operations		(747	)		(804	)		941			(4,923	)

Loss from discontinued operations (net of tax)		-			(795	)		(1,725	)		(1,819	)

Net Income (Loss)	$	(747	)	$	(1,599	)	$	(784	)	$	(6,742	)

Net Income (Loss)	$	(747	)	$	(1,599	)	$	(784	)	$	(6,742	)
Foreign currency translation adjustment		171			(277	)		(2,009	)		1,133
Comprehensive loss		(576	)		(1,876	)	$	(2,793	)	$	(5,609	)
Reconciliation of net loss to net loss attributable to common shareholders
Net Income (Loss)		(747	)		(1,599	)	$	(784	)	$	(6,742	)
Less: Dividends attributable to non-common stockholders’ of OmniQ Corp		(8	)		(7	)		(15	)		(22	)
Net loss attributable to common stockholders’ of OmniQ Corp		(755	)		(1,606	)	$	(799	)	$	(6,764	)
Net income (loss) per share - basic attributable to common stockholders’ of OmniQ Corp	$	(0.06	)	$	(0.15	)	$	(0.07	)	$	(0.63	)
Weighted average number of common shares outstanding – basic and diluted		11,505,104			10,697,247			10,984,254			10,696,435

The accompanying unaudited notes should be read in conjunction with these unaudited condensed consolidated financial statements.

F-2

OMNIQ CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(UNAUDITED)


	Series C									Additional						Accumulated Other			Total Stockholders’
	Preferred Stock				Common Stock					Paid-in			Accumulated			Comprehensive			Equity
(In thousands)	Shares		Amount		Shares			Amount		Capital			Deficit			Income (Loss)			(Deficit)

Balance, December 31, 2023		502	$	1		10,675		$	11	$	78,340		$	(113,923	)	$	551		$	(35,020	)

Dividend on Class C Shares		-		-		-			-		-			(7	)		-			(7	)
ESPP Stock Issuance		-		-		15			-		6			-			-			6
Stock and Warrant issued for services		-		-		-			-		293			-			-			293
Acquisition of Codeblocks		-		-		-			-		-			56			-			56
Cumulative Translation Adjustment		-		-		-			-		-			-			241			241
Net (loss) income		-		-		-			-		-			(2,098	)		-			(2,098	)
Balance, March 31, 2024		502	$	1		10,690			11		78,639			(115,972	)		792		$	(36,529	)

Dividend on Class C Shares		-		-		-			-		-			(8	)		-			(8	)
ESPP Stock Issuance		-		-		2			-		2			-			-			2
Stock and Warrant issued for services		-		-		-			-		53			-			-			53
Cumulative Translation Adjustment		-		-		-			-		-			-			1,169			1,169
Net (loss) income		-		-		-			-		-			(3,045	)		-			(3,045	)
Balance, June 30, 2024		502	$	1		10,692			11		78,694			(119,025	)		1,961		$	(38,358	)

Dividend on Class C Shares		-		-		-			-		-			(7	)		-			(7	)
ESPP Stock Issuance		-		-		20			-		4			-			-			4
Stock and Warrant issued for services		-		-		-			-		10			-			-			10
Cumulative Translation Adjustment		-		-		-			-		-			-			(277	)		(277	)
Net (loss) income		-		-		-			-		-			(1,599	)		-			(1,599	)
Balance, September 30, 2024		502	$	1		10,712			11		78,708			(120,631	)		1,684		$	(40,227	)

Balance, December 31, 2024		502	$	1		10,712		$	11	$	78,713		$	(123,899	)	$	1,286		$	(43,888	)

Dividend on Class C Shares		-		-		-			-		-			(7	)		-			(7	)
Stock-based compensation – options, warrants, issuances		-		-		-			-		2			-			-			2
Cumulative Translation Adjustment		-		-		-			-		-						491			491
Net (loss) income		-		-		-			-		-			(2,089	)		-			(2,089	)
Balance, March 31, 2025		502	$	1		10,712		$	11	$	78,715		$	(125,995	)	$	1,777		$	(45,491	)

Dividend on Class C Shares		-		-		-			-		-			(7	)		-			(7	)
Sale of assets from division											34,734			-						34,734
Stock-based compensation – options, warrants, issuances		-		-		-			-		64			-			-			64
Cumulative Translation Adjustment		-		-		-			-		-			4			(2,329	)		(2,325	)
Net (loss) income		-		-		-			-		-			2,051			-			2,051
Balance, June 30, 2025		502	$	1		10,712		$	11	$	113,513		$	(123,947	)	$	(552	)	$	(10,974	)
Balance		502	$	1		10,712		$	11	$	113,513		$	(123,947	)	$	(552	)	$	(10,974	)

Dividend on Class C Shares		-		-		-			-		-			(8	)		-			(8	)
Shares returned and canceled		-		-		(10	)		-		1			-			-			1
Adjustment of goodwill portion of divestiture		-		-		-			-		(1,249	)		-			-			(1,249	)
Conversion of debt to equity						900			1		61			-			-			62
Stock-based compensation – options, warrants, issuances		-		-		-			-		2			-			-			2
Cumulative Translation Adjustment		-		-		-			-		-			4			(171	)		(167	)
Net (loss) income		-		-		-			-		-			(747	)		-			(747	)
Balance, September 30, 2025		502	$	1		11,602		$	12	$	112,328		$	(124,698	)	$	(723	)	$	(13,080	)
Balance		502	$	1		11,602		$	12	$	112,328		$	(124,698	)	$	(723	)	$	(13,080	)

The accompanying unaudited notes should be read in conjunction with these condensed unaudited consolidated financial statements.

F-3

OMNIQ CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(UNAUDITED)

For the nine months ended September 30,


(In thousands)	2025			2024
Cash flows from operations
Net loss	$	(784	)	$	(6,742	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation		66			356
Stock and warrant issued for services		-			-
Depreciation and amortization		861			984
Amortization of ROU asset		282			545
Changes in operating assets and liabilities:
Accounts receivable		6,655			865
Prepaid expenses		220			(70	)
Inventory		3,338			280
Other assets		102			850
Accounts payable and accrued liabilities		(783	)		4,099
Accrued interest and accrued liabilities, related party		(86	)		-
Accrued payroll and sales taxes payable		81			889
Lease liability		(317	)		(607	)
Deferred tax assets, net		132			(932	)
Other liabilities		(4,335	)		(287	)
Net cash provided by (used in) operating activities		5,432			230

Cash flows from investing activities
Purchase of property and equipment		(79	)		(107	)
Cash paid for divestiture		(2,388	)		-
Purchase of intangible assets		-			-
Proceeds from sale of property and equipment		-			20
Net cash provided by (used in) investing activities		(2,467	)		(87	)

Cash flows from financing activities
Proceeds from ESPP stock issuance		-			12
Payments on notes/loans payable		(3,366	)		(2,700	)
Proceeds from draw on line of credit		1,353			329
Net cash (used in) provided by financing activities		(2,013	)		(2,359	)

Net change in cash and cash equivalents		952			(2,216	)

Effect of foreign exchange rates on cash and cash equivalents		(2,622	)		1,772

Cash and cash equivalents at beginning of period		2,349			1,678

Cash and cash equivalents at end of period	$	679		$	1,234

Non-cash activities:
Stock issued for services	$	-		$	22
Declared dividends payable	$	15		$	1,284
Cancelation of lease	$	471		$	-

Supplemental disclosure of cash flow information:				$
Cash paid for interest	$	1,689		$	2,642
Cash paid for income taxes	$	-		$	-

The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements.

F-4

OMNIQ CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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, 2024 (the “2024 Form 10-K”). Interim disclosures generally do not repeat those in the annual statements.

We describe our significant accounting policies in Note 2 of the notes to consolidated financial statements in the 2024 Form 10-K. During the nine-month period ended September 30, 2025, there were no significant changes to those accounting policies.

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 nine-months ended September 30, 2025, and 2024 were 10,984,254 and 10,696,435, respectively. Diluted net loss per share of common stock is the same as basic net loss per share of common stock because the effects of potentially dilutive securities are antidilutive.

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:

	September 30, 2025		September 30, 2024
Options to purchase common stock		2,126,833		1,294,833
Warrants to purchase common stock		875,901		1,606,734
Potential shares excluded from diluted net loss per share		3,002,734		2,901,567

F-5

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 $11.8 million as of September 30, 2025
	●	Accumulated deficit of $124.7 million as of September 30, 2025
	●	Multiple years of losses from operations

Management Evaluation

Management considers the conditions outlined above as the most significant factors in raising substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued.

Management’s Plans to Mitigate and Alleviate Conditions or Events

	●	Management is continuing to evaluate operating expenses and is developing a plan to reduce expenditures without negatively impacting current operations.
	●	Management has placed a strategic focus on increasing sales with prime customers.
	●	Sales efforts are focused on the most profitable product lines.

NOTE 3 – CONCENTRATIONS

For the nine-months ended September 30, 2025 and the year ended December 31, 2024, one customer accounted for 3.5% and one customer accounted for 3%, respectively, of the Company’s consolidated revenues.

Accounts receivable at September 30, 2025 and December 31, 2024 are made up of trade receivables due from customers in the ordinary course of business. One customer accounted for 6.5% of the outstanding receivables as of September 30, 2024, and no customers accounted for more than 10% as of December 31, 2024.

For the nine months ended September 30, 2025 one vendor made up 13.9% of our purchases, and for the year ended December 31, 2024 one vendor made up 15%, of our purchases.

The concentrations are based on the continuing operations and do not include operations from subsidiaries sold.

F-6

NOTE 4 – BUSINESS ACQUISITION

CodeBlocks LTD

On January 30, 2024, OMNIQ’s wholly owned subsidiary, Dangot Computers Ltd. (“Dangot”), entered into a Share Purchase Agreement (the “Purchase Agreement”) with CodeBlocks Ltd. (CodeBlocks”) and CodeBlocks’ owners, Alina Lifshits and Erez Attia pursuant to which Dangot, acquired all of the capital stock of CodeBlocks in exchange for NIS 4,666,664 (approximately US $ 1,275,044). The purchase Agreement closed on February 1, 2024. As noted in Note 12, this entity was sold on June 30, 2025.

NOTE 5 – INVENTORY

Inventory consisted of the following as of:

In thousands	September 30, 2025			December 31, 2024

Raw materials	$	215		$	287
Inventory in transit		46			4,076
Finished goods		4,172			49
Less allowance for obsolescence		(941	)		(1,204	)
Total inventories (continuing operations)		3,492			3,208
Inventories related to discontinued operations		-			4,197
Total inventories	$	3,492		$	7,405

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 January 18, 2024, the Company’s wholly owned subsidiary, Quest Marketing, Inc. (“Quest”) entered into a Purchase and Sale Agreement with Prestige Capital Finance, LLC (“Prestige”), in which Quest has sold, transferred and assigned all of its rights, title, and interest to specific accounts receivable owed to Quest. The maximum outstanding balance of Quest to Prestige shall be $7.5 million. The discount fee starts at 1.5% and increases based on the age of the outstanding receivables. This agreement was concluded concurrent with the sale of the assets of the Quest division at June 30, 2025.

F-7

NOTE 7 – OTHER NOTES PAYABLE

SCHEDULE OF OTHER NOTES PAYABLE

(In thousands)	September 30, 2025			December 31, 2024
Note payable other		6,461			8,746
Related party note payable		10,000			-
Total		16,461			8,746
Less current portion		(6,461	)		(8,512	)
Long-term notes payable	$	10,000		$	234

Notes Payable Other

On July 29, 2021, the Company entered into a long-term loan from Leumi Bank totaling NIS 7 million, which at the time was approximately $2.16 million. The note accrues interest at the Israeli Prime Rate plus 4.5% which currently equals 8.25% per annum and is payable in 8 instalments of principal and interest over 4 years. The note is secured by shares of Dangot Computers, Ltd At December 31, 2024, the balance owed is $1,815,840 and at September 30, 2025, the balance owed is $1.8 million NIS (approx. $500,000USD).

On August 11, 2021, the Company purchased vehicles using cash and financing of NIS 500 thousand, approximately $155 thousand, to be paid off in monthly interest and principal payments over 5 years. The loan accrues interest at 7.5% per annum and is secured by the vehicles. This was completed in January 2025.

On September 13, 2022, the Company entered into a long-term loan from Hapoalim Bank totaling NIS 3 million, approximately US $0.9 million. The note accrues interest at 7.28% per annum (Israeli Prime Rate plus 1.28%) and is payable in 36 installments of principal and interest over 3 years. The balance at September 30, 2025 was approximately $0.14 million.

During the year ended December 31, 2023, the Company entered into a short-term loan Hapoalim Bank totaling NIS 5.5 million, approximately US $1.5 million. The note accrues interest at 7.3% per annum. The loan is renewed every month at Israeli Prime Rate plus + 1.3%, which at December 31, 2024 was 7.3%. In February 2024, NIS 1.5 million of the loan was converted into a short-term loan to be repaid in 12 installments, bearing interest at Prime + 1.5%. In July 2024, an additional 1.5 million was converted into a long-term loan to be repaid in 18 installments, bearing interest at a rate of Prime + 1.5%. At December 31, 2024, the Company owed Hapoalim Bank USD $1.39 million. At September 30, 2025, the balance was approximately $1.5 million.

During the year ended December 31, 2023, the Company entered into a short-term loan from Bank Leumi totaling NIS 21.5 million, approximately US $5.9 million. The note accrues interest at 7.6% per annum. The loan is renewed every month at Israeli Prime Rate plus 1.89, which at December 31, 2024 was 7.89%. In March 2024, NIS 7.5 million of the loan was converted into a long-term loan to be repaid in 36 installments, bearing interest at a rate of Prime + 3.25%, which at December 31, 2024 was 9.25%. At December 31, 2024, the Company owed Bank Leumi USD $5.4 million. At September 30, 2025, the Company owed Bank Leumi approximately USD $5 million.

On September 21, 2023, the Company entered into a long-term loan from Tzameret Mimunim totaling 1.5M NIS, approximately US $393 thousand. The note accrues interest at the Israeli Prime Rate plus 3.5% which currently equals 9.5% per annum and is payable in 36 monthly installments. The balance at December 31, 2024 is $251 thousand and at September 30, 2025 was $200 thousand.

As of September 30, 2025, 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.

As part of the sale of the Quest division and it’s assets, and as discussed in Note 11, the Company entered into a Promissory Note which bears interest at 5% per annum, is amortized over a 10ten-year period, and provides for a balloon payment after the third year. In addition, the Company is entitled to a contingent payment of up to $10.0 million in the event that, within 18 months following the closing, Buyer either (i) consummates a sale of all or substantially all of its assets or equity for consideration in excess of $100.0 million or (ii) completes an initial public offering at a valuation exceeding $100.0 million. Due to the related party nature of the CEO of omniQ relationship with the Note Holder, this note is deemed related party. In addition to this, the Company entered into a Transition Services Agreement whereby the employees doing work for the Company would charge back at a portion of the actual payroll cost, for the time working on the Company. This has been recorded as a short-term related party payable as of September 30, 2025.

F-8

NOTE 8 – OTHER INCOME

For the nine months ended September 30, 2024, the Company received government relief funds in the amount of approximately NIS 1.8 million or US $482 thousand.

NOTE 9 – STOCKHOLDERS’ EQUITY

PREFERRED STOCK

Series A

As of September 30, 2025, there were 2,000,000 Series A preferred shares designated and no Series A preferred shares outstanding. 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 September 30, 2025, there was 1 preferred share designated and no preferred shares outstanding.

Series C

As of September 30, 2025, there were 3,000,000 Series C Preferred Shares (“Series C”) authorized with 502,000 issued and outstanding. The Series C shares have preferential rights above common shares and the Series B Preferred Shares and is entitled to receive a quarterly dividend at a rate of $0.06 per share per annum and have a liquidation preference of $1 per share. Series C shares outstanding are convertible into common stock at the rate of 20 preferred shares to one share of common stock. As of September 30, 2025, the accrued dividends on the Series C Preferred Stock was $219 thousand.

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 shares of the Company’s common stock, par value $0.001 (the “Shares”), were set aside and reserved for issuance. The Plan was approved by our stockholders at the December 2021, shareholders’ meeting. No options were issued in the nine months ended September 30, 2025, except those mentioned below.

In December 2015, our Board of Directors approved the OMNIQ. Employee Stock Purchase Plan (the “ESPP”). For the nine months ending September 30, 2024, employees purchased 37,128 shares or $12 thousand of common stock.

April 8, 2024, Stockholders approved the amendment of the Company’s Certificate of Incorporation to increase the amount of authorized common stock to 35,000,000 shares.

During June of 2025, the Company issued stock options or warrants to 47 employees and consultants for the purchase of an aggregate 1,035,000 shares of stock at between $0.06 and $0.07 per share. The Company’s CEO was issued options for 50,000 shares at $0.07 and warrants were issued to a company he is affiliated with for 100,000 shares at exercise price of $0.07 per share, which was above the market price at the time of issuance. The options have a 5 year expiration period and vested immediately. The Black Scholes calculation used approximately 109.7% volatility for the stock and approximately $63,000 was booked as a compensation expense related to these options and warrants.

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 settle $31,500 owed to him.

NOTE 10 – BUSINESS SEGMENT

The Company operates in a single reportable segment, referred to as providing solutions including software, communications, and automated management service. The business is managed by the chief executive officer who is the Chief Operating Decision Maker (CODM). The CODM evaluates segment performance based on operating income (loss) for purposes of allocating resources and evaluating financial performance. The accounting policies of our single reportable segment are the same as those for the Company as a whole.

F-9

NOTE 11 – DISCONTINUED OPERATIONS

As discussed in the prior Form 10Q and the relevant Form 8-K, on July 11, 2025, OmniQ Corp., a Delaware corporation (the “Company”), together with its subsidiaries, Quest Marketing, Inc., HTS Image Processing, Inc., OmniQ Vision Inc., HTS Image Ltd., OmniQ Technologies Ltd., and Dangot Computers, Ltd. (collectively, the “Sellers”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Summit Junction Holdings LLC, a Delaware limited liability company (the “Buyer”).

Pursuant to the Purchase Agreement, the Sellers agreed to sell, and Buyer agreed to purchase, substantially all of the assets and assume certain liabilities mainly associated with the Company’s legacy business line, including its integrated hardware, software, and automation solutions business, (the “Transferred Business”). The Transaction was consummated on July 11, 2025. Although the Purchase Agreement is dated as of June 30, 2025, the parties executed the agreement and consummated the Transaction on July 11, 2025.

The aggregate consideration for the Transaction is approximately $45.0 million, consisting of the assumption by Buyer of up to $55.0 million in specified liabilities of the Transferred Business and the issuance by the Company of a Promissory Note in the principal amount of $10.0 million in favor of the Buyer. The Promissory Note bears interest at 5% per annum, is amortized over a ten-year period, and provides for a balloon payment after the third year. In addition, the Company is entitled to a contingent payment of up to $10.0 million in the event that, within 18 months following the closing, Buyer either (i) consummates a sale of all or substantially all of its assets or equity for consideration in excess of $100.0 million or (ii) completes an initial public offering at a valuation exceeding $100.0 million.

The sale resulted in a net gain on disposal of approximately $34.7m, which reflects the difference between the carrying amount of the net assets disposed of and the consideration transferred/assumed, including the promissory note and transaction costs. However, due to the related-party nature of the transaction, management determined record the gain to Additional Paid-in Capital.

The net gain (APIC) was calculated as follows (in thousands):

	Change in Value
Cash and cash equivalents	$	(2,388	)
Accounts receivable, net		(4,730	)
Inventory, net		(282	)
Other current assets		(996	)
Property and equipment, net of accumulated depreciation		(48	)
Accounts payable and accrued liabilities		55,000
Other current liabilities		(1,822	)
Related party notes payable		(10,000	)
Additional paid-in capital	$	(34,734	)

Details of net loss from discontinued operations, net of taxes, are as follows (in thousands):

SCHEDULE OF DISCONTINUED OPERATIONS

Nine months ended	September 30, 2025		September 30, 2024

Revenues	$	24,599	$	28,882
Cost of goods sold		19,115		21,211
Selling, general and administrative		7,281		7,987
Research & Development		40		(220	)
Depreciation		14		14
Amortization		-		-
Interest expense		1,050		1,819
Other (expenses) income		1,176		110
Current tax		-		-
Net Loss from Discontinued Ops (Net of Tax)	$	1,725	$	1,819

Three months ended	September 30, 2025		September 30, 2024

Revenues	$	-		9,095
Cost of goods sold		-		7,236
Selling, general and administrative		-		2,280
Research & Development		-		(230	)
Depreciation		-		5
Amortization		-		-
Interest expense		-		647
Other (expenses) income		-		47
Current tax		-		-
Net Loss from Discontinued Ops (Net of Tax)	$	-	$	795

F-10

Because the transaction was effective June 30,2025, no assets or liabilities disposed in the sale were included on the balance sheet as of September 30, 2025. The balances of the disposed assets and liabilities as of December 31, 2024 were as follows:

Assets
Current Assets
Accounts receivable, net	$	10,608
Inventory, net		4,197
Prepaid expenses		482
Other current assets		61
Total current assets		15,348

Property and equipment, net of accumulated depreciation		8
Right of use lease asset		471
Total Assets	$	15,827

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	56,863
Accrued payroll and sales tax		1,490
Lease liability – current portion		103
Other current liabilities		206
Total Current Liabilities		58,662
Deferred revenue		5,891
Lease liability		178
Total liabilities	$	64,731

Cash flows related to the discontinued business have not been segregated and are included in the condensed consolidated statements of cash flows. The following table provides supplemental cash-flow information for the discontinued operations (in thousands):

	Nine months ended September 30, 2025			Nine months ended September 30, 2024
Depreciation and amortization		2,304			14
Capital expenditures		(771	)		128
Other significant non-cash items
Cancelation of lease		471			-

The assets sold include, among other things, accounts receivable, inventory, tangible personal property, intellectual property, contract rights, books and records, and other assets used or held for use in connection with the Transferred Business. Certain assets were excluded from the Transaction, including the Company’s cash and cash equivalents and all assets not related to the Transferred Business. Buyer assumed only those liabilities specified in the Purchase Agreement, and the Company retained all other liabilities, including those unrelated to the Transferred Business or expressly excluded.

The Purchase Agreement contains customary representations, warranties, and covenants, including pre-closing operating covenants, post-closing indemnification provisions, and certain limitations on liability. The Transaction and Purchase Agreement were approved by the Company’s Board of Directors effective June 30, 2025 following completion of 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.

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 12 – LITIGATION

On November 3, 2024 a commercial real estate company filed a lawsuit against Dangot Computers, OmniQ Technologies and some of Dangot’s officers alleging breach of a letter of intent for a lease arrangement. The claims were brought in an Israeli court. The initial claim against Dangot Computers is NIS 21 million approximately US $5.6 million. The Company believes that it has meritorious defenses to such action and intends to vigorously defend itself.

In March 2025, the Company was named a defendant in a case involving a consultant who was terminated and who claims he is owed approximately $389 thousand in unpaid fees and commissions. The Company believes it has multiple defense and cross claims against the former consultant and is evaluating its response to the lawsuit, but plans to vigorously defend the suit.

On June 30, 2025, the Company’s subsidiary Dangot Computers reached at settlement with one of its vendors in Israel related to past due rebates and price protection payments entitled under prior agreements. The vendor agreed to pay Dangot Computers, approximately USD$1.2 million over a 12 month period, based on certain milestones related to additional purchases. These payments are being treated as reduction in Cost of Goods sold upon receipt from the Vendor.

NOTE 13 – SUBSEQUENT EVENTS

On November 10, 2025, with effective date of November 1, 2025, the Board of Directors agreed to extend the employment contract of Shai Lustgarten, which previously was set to expire in 2027, is now set to expire November 1, 2029. In addition, Mr. Lustgarten’s base salary was revised to increase 5% per year for cost of living increases. In the revised employment agreement the Executive is eligible for performance-based bonuses tied to market capitalization, including a $100,000 bonus when the Company’s market capitalization exceeds $10 million for 30 consecutive trading days and additional one-time bonuses equal to 1% of market capitalization for each subsequent $10 million increase maintained for 30 consecutive trading days, payable in cash or stock at the Executive’s option. The full employment agreement is attached as an Exhibit to this Form 10Q.

F-12

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 the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by, or that include the words “may”, “could”, “would”, “should”, “believe”, “expect”, “anticipate”, “plan”, “estimate”, “target”, “project”, “intend”, “foresee” and similar expressions. These statements include, among others, statements regarding our expected business outlook, anticipated financial and operating results, our business strategy and means to implement the strategy, our objectives, the amount and timing of capital expenditures, the likelihood of our success in expanding our business, financing plans, budgets, working capital needs, and sources of liquidity. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.

Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our products, the expansion of product offerings geographically or through new marketing applications, the timing and cost of planned capital expenditures, competitive conditions, and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. In addition, even if our actual results are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results may not be indicative of results or developments in subsequent periods. Many of these factors are beyond our ability to control or predict. Such factors include, but are not limited to, the following:

	●	Our ability to raise capital when needed and on acceptable terms and conditions;

	●	Our ability to manage credit and debt structures from vendors, debt holders, and secured lenders.

	●	Our ability to manage the growth of our business through internal growth and acquisitions;

	●	Competitive pressures;

	●	Our ability to attract and retain management, and to integrate and maintain technical information and management information systems.

	●	Compliance with laws and regulations, including those relating to environmental matters, corporate governance matters and tax matters, as well as any future changes to such laws and regulations; and

For a more detailed discussion of some of the foregoing risks and uncertainties, see Item 1A — “Risk Factors” in our 2024 Form 10-K and Item 1A — “Risk Factors” in this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025, 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.

Introduction

We use patented and proprietary artificial intelligence (AI) technology to deliver machine vision image processing solutions including data collection, real-time surveillance and monitoring for supply chain management, homeland security, public safety, traffic & parking management, and access control applications.

The technology and services we provide help our clients move people, assets, and data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments.

Our principal solutions include hardware, software, communications, and automated management services, technical service and support. Our highly tenured team of professionals has the knowledge and expertise to simplify the integration process for our customers. We deliver practical problem-solving solutions backed by numerous customer references.

Our customers include government agencies, healthcare, universities, airports, municipalities and more. We currently engage with several billion-dollar markets with double-digit growth, including the Global Safe City market and the Ticketless Safe Parking market.

The following is a discussion of our financial condition, results of operations, financial resources, and working capital. This discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements contained in this Form 10-Q.

OVERVIEW

Pursuant to the asset sale described in the Notes to the Financial Statements, the assets of one division was sold during the second quarter of 2025. Accordingly, the financial statements have reclassified the related revenues and expenses from both prior periods and the current period into a single line item for “Discontinued Operations” on the face of the financial statements, with further detail provided in the accompanying Notes.

The Company’s sales from operations for the nine months ended September 30, 2025, were $24 million, a decrease of approximately $2.8 million, or 10%, over the nine months ended September 30, 2024.

The loss from operations for the nine months ended September 30, 2025, was $1.3 million, a decrease of $1.8 million compared with the loss in the nine months ended September 30, 2024, of $3.1 million. Basic loss per share from continuing operations for the nine months ended September 30, 2025, was $0.09 versus loss of ($0.46) per share for the same period in 2024.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2025, the Company had cash in the amount of $679 thousand and a working capital deficit of $11.8 million, compared to cash in the amount of $2.3 million, and a working capital deficit of $54 million as of December 31, 2024. The Company had stockholders’ deficit attributable to OmniQ stockholders of $13 million and $43.9 million as of September 30, 2025, and December 31, 2024, respectively. This decrease in our stockholders’ deficit was primarily attributable to the sale of one of the divisions at June 30, 2025.

The Company’s accumulated deficit was $124.7 million and $123.9 million as of September 30, 2025, and December 31, 2024.

The Company’s operations provided net cash of $5.4 million and provided $230 thousand in the nine months ended September 30, 2025, and 2024, respectively. The increase in cash used by operations of $5.2 million is due to an increase in accounts receivables being received as well as reliance on accounts payable being accrued.

The Company’s cash used in investing activities was $2.5 million for the nine months ended September 30, 2025, compared to cash used by investing activities of $87 thousand for the nine months ended September 30, 2024.

The Company’s financing activities used $2 million of cash during the nine months ended September 30, 2025, and used $2.4 million during the nine months ended September 30, 2024. During the nine months ended September 30, 2025, the Company made payments of $3.4 million on its notes payable, compared to the payments of $2.7 million for the nine months ended September 30, 2024.

Results of Operations

The following tables set forth certain selected unaudited condensed consolidated statement of operations data for the periods indicated in dollars. In addition, we note that the period-to-period comparison may not be indicative of future performance.

	Three months ended September 30,						Variation
In thousands	2025			2024			$			%
Revenue	$	8,826		$	9,454		$	(628	)		(6.64	)%
Cost of Goods sold	$	5,867		$	7,362		$	(1,495	)		(20.31	)%
Gross Profit	$	2,959		$	2,092		$	867			41.44	%
Operating Expenses	$	3,550		$	2,879		$	671			23.31	%
Loss from operations	$	(591	)	$	(787	)	$	196			(24.90	)%
Net loss	$	(747	)	$	(1,600	)	$	853			(53.31	)%
Net Loss per common Share from continuing operations	$	(0.06	)	$	(0.08	)	$	0.02			(26.60	)%

Revenues

For the three months ended September 30, 2025 and 2024, the Company generated net revenues in the amount of $8.8 million and $9.5 million, respectively. The decrease between the three-month periods was attributable to the focusing on more profitable revenue and timing on some orders.

Cost of Goods Sold

For the three months ended September 30, 2025 and 2024, the Company recognized a total of $5.9 million and $7.43 million, respectively, of cost of goods sold. For the three months ended September 30, 2025 and 2024, cost of goods sold were 66% and 78% of net revenues, respectively.

Operating expenses

Total operating expenses for the three months ended September 30, 2025 and 2024 recognized was $3.6 million and $2.9 million, respectively, representing a 23% increase. The increase is related to the additional commissions incurred on the sale of the division.

Research and Development – Research and development expenses for the three months ended September 30, 2025 and 2024 totaled $436 thousand and $492 thousand, respectively.

Selling, general and Administrative – Selling, general and administrative expenses for the three months ended September 30, 2025 and 2024 totaled $2.9 million and $2.1 million, respectively, representing a 41% increase. The increases are related to increases in salaries for key people in 2025 relative to 2024.

Depreciation – Depreciation expenses for the three months ended September 30, 2025 and 2024 totaled $17 thousand and $85 thousand, respectively, representing an 80% decrease.

Intangible amortization – Intangible amortization expenses for the three months ended September 30, 2025 and 2024 totaled $245 thousand and $228 thousand, respectively.

Other income and expenses

Interest Expense – Interest expense for the three months ended September 30, 2025 totaled $248 thousand, as compared to $250 thousand for the three months ended September 30, 2024.

	For the nine months ended September 30,						Variation
In thousands	2025			2024			$			%
Revenue	$	24,213		$	27,040		$	(2,827	)		(10.45	)%
Cost of Goods sold		17,089			20,820			(3,731	)		(17.92	)%
Gross Profit		7,124			6,220			904			14.53	%
Operating Expenses		8,392			9,275			(883	)		(9.52	)%
Loss from operations		(1,268	)		(3,055	)		1,787			(58.49	)%
Net loss		(784	)		(6,743	)		5,959			(88.37	)%
Net Loss per common Share from continuing operations	$	0.09		$	(0.46	)	$	0.55			(118.61	)%

Revenues

For the nine months ended September 30, 2025 and 2024, the Company generated net revenues in the amount of $24.2 million and $27.0 million, respectively. The decrease between the nine-month periods was attributable to the decrease in demand.

Cost of Goods Sold

For the nine months ended September 30, 2025 and 2024, the Company recognized a total of $17.1 million and $20.8 million, respectively, of cost of goods sold. For the nine months ended September 30, 2025 and 2024, cost of goods sold were 71% and 77% of net revenues, respectively.

Operating expenses

Total operating expenses for the nine months ended September 30, 2025 and 2024 recognized was $8.4 million and $9.3 million, respectively, representing a 9.5% decrease. The decreases are related to the cost reduction plan put in place by management.

Research and Development – Research and development expenses for the nine months ended September 30, 2025 and 2024 totaled $1.4 million and $1.3 million, respectively.

Selling, general and Administrative – Selling, general and administrative expenses for the nine months ended September 30, 2025 and 2024 totaled $6.2 million and $6.9 million, respectively, representing a 10.5% decrease. The decreases are related to the cost reduction plan put in place by management.

Depreciation – Depreciation expenses for the nine months ended September 30, 2025, and 2024 totaled $53 thousand and $284 thousand, respectively.

Intangible amortization – Intangible amortization expenses for the nine months ended September 30, 2025, and 2024 totaled $713 thousand and $686 million, respectively.

Other income and expenses

Interest Expense – Interest expense for the nine months ended September 30, 2025 totaled $651 thousand, as compared to $820 thousand million for the nine months ended September 30, 2024.

Inflation

The Company’s results of operations have not been materially affected by inflation and management does not expect inflation to have a material impact on its operations in the future.

Off- Balance Sheet Arrangements

The Company currently does not have any off-balance sheet arrangements.

Cybersecurity

Risk Management and Strategy

We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data.

Managing Material Risks & Integrated Overall Risk Management

We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. This integration ensures that cybersecurity considerations are an integral part of our decision-making processes at every level. Our management team continuously evaluates and addresses cybersecurity risks in alignment with our business objectives and operational needs.

Oversee Third-party Risk

Because we are aware of the risks associated with third-party service providers, we have implemented stringent processes to oversee and manage these risks. We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes annual assessments of the SOC reports of our providers and implementing complementary controls. This approach is designed to mitigate risks related to data breaches or other security incidents originating from third-parties.

Risks from Cybersecurity Threats

We have not encountered cybersecurity challenges that have materially impaired our operations or financial standing.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15(b) and 15d-15(b) under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2025. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, due to the previously reported material weakness in internal control over financial reporting described below, our disclosure controls and procedures were not effective as of September 30, 2025. Although we have determined that the existing controls and procedures are not effective, the deficiencies identified have not been deemed material to our reporting disclosures.

Material Weakness in Internal Control over Financial Reporting

In connection with the audit of our financial statements for the year ended December 31, 2024, we identified a material weakness in our internal control over financial reporting. Specifically, we identified a material weakness in our controls related to segregation of duties and other immaterial weaknesses in several areas of data management and documentation.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On June 30, 2025, the Company’s subsidiary Dangot Computers reached a settlement with one of its vendors in Israel related to past due rebates and price protection payments entitled under prior agreements. The vendor agreed to pay Dangot Computers, approximately USD$1.2 million over a 12 month period, based on certain milestones related to additional purchases. These payments are being treated as reduction in Cost of Goods sold upon receipt from the Vendor.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission this Form 10-Q, including exhibits. You may read and copy all or any portion of the registration statement or any reports, statements, or other information in the files at SEC’s Public Reference Room located at 100 F Street, NE., Washington, DC 20549, on official business days during the hours of 10 a.m. to 3 p.m.

You can request copies of these documents upon payment of a duplicating fee by writing to the Commission. You may call the Commission at 1-800-SEC-0330 for further information on the operation of its public reference room. Our filings, including the registration statement, will also be available to you on the website maintained by the Commission at http://www.sec.gov.

We intend to furnish our stockholders with annual reports which will be filed electronically with the SEC containing the consolidated financial statements audited by our independent auditors, and to make available to our stockholder’s quarterly reports for the first three quarters of each year containing unaudited interim consolidated financial statements.

Our website is located at http://www.omniq.com. The Company’s website and the information contained on that site, or connected to that site, is not part of or incorporated by reference into this filing.

ITEM 6. EXHIBITS

EXHIBIT INDEX

10.1		Employment Agreement by and Between the Company and Shai Lustgarten effective November 1, 2025

31.1		Certification of our Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of our Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of our Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)

101.INS		Inline XBRL Instance Document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: November 14, 2025

OMNIQ CORP.

By:	/s/ Shai Lustgarten
	Shai Lustgarten
	Chief Executive Officer, Interim Chief Financial Officer and Chairman of the Board

SEC Form 10-Q filed by OMNIQ Corp.