Financial Analysis

NOTE 4 BUSINESS ACQUISITIONS On January 30, 2024, OMNIQ Corp. (the Company), its wholly owned subsidiary, Dangot Computers Ltd. (Dangot), CodeBlocks Ltd. (CodeBlocks). and CodeBlocks owners, Alina Lifshits and Erez Attia entered into a Share Purchase Agreement (the Purchase Agreement) pursuant to which Dangot, acquired all of the capital stock of CodeBlocks in exchange for NIS 4,666,664 (approximately US $ 1,275,044 based on the then exchange rate). The purchase Agreement closed on January 26, 2024. Approximately 89 % of the purchase price was allocated to Goodwill on the books of Dangot Computers Ltd. The balance was allocated between Accounts receivable and prepaid expenses and misc other assets. As part of the purchase, the Company was able to replace historical license fees as well as utilize the software solution to its U.S. based customers. …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 13 COMMITMENTS AND CONTINGENCIES Profit Sharing Plan We maintain a contributory profit-sharing plan covering substantially all full-time employees within the requirements of the Employee Retirement Income Security Act of 1974 (ERISA). In 2016, the Safe Harbor element was removed from the plan, so the employer may make a discretionary matching contribution equal to a uniform percentage or dollar amount of participants elective deferrals for each Plan Year. The plan also includes a 401(k)-savings plan feature that allows substantially all employees to make voluntary contributions and provides for discretionary matching contributions determined annually by the Board of Directors. For the years ending December 31, 2025 and 2024, the company has elected to match; the total expense was $ 127 thousand and $ 99 thousand, respectively. Operating Leases As of December 31, 2025, we had 5 Operating leases as follows: Office space in Salt Lake City UT with monthly payments of $ 15 thousand. As of December 31, 2025, the Company had 78 months remaining on the lease. Office space in Anaheim, CA with monthly payments of $ 4 thousand. As of December 31, 2025, the Company had 12 months remaining on the lease. Dangots corporate offices are currently located at Yad Harutzim 14 Tel-Aviv, Israel. The main corporate office, Yad Harutzim 14, serves as the companys main building on the 2nd and 3rd floors, used by the management and most of the sales staff, technicians, etc. The corporate office a …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 12 OTHER NOTES PAYABLE Other notes payable consists of the following as of December 31, SCHEDULE OF OTHER NOTES PAYABLE In thousands 2025 2024 Notes Payable - other $ 6,016 $ 8,746 Less current portion (5,486 ) (8,512 ) Long Term Notes Payable $ 530 $ 234 In thousands 2025 2024 Related Party Notes Payable - other $ 9,609 $ - Less current portion of related party note payable (919 ) - Long Term Notes Payable related party $ 8,690 $ - Future maturities of notes payable are as follows for the years ending December 31, 2025: SCHEDULE OF FUTURE MATURITIES OF NOTE PAYABLE In thousands 2026 $ 6570 2027 1,147 2028 7,839 2029 69 2030 - Total $ 15,625 Other Notes Payable 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 10 % 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 December 31, 2025, the balance owed is $ 437,500 NIS (approx. $ 136,059 USD). 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 …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 9 GOODWILL AND INTANGIBLE ASSETS Identifiable intangible assets are stated at cost, net of accumulated amortization. The assets are being amortized on the straight-line method over the estimated useful lives ranging from 3 to 11 years. Amortization expense for the years ended December 31, 2025 and 2024 was $ 965 thousand and $ 915 thousand, respectively Goodwill assets consisted of the following as of December 31: SCHEDULE OF GOODWILL ASSETS CONSISTED In thousands 2025 2024 Goodwill balance, beginning of year $ 2,918 $ 1,788 Addition of Codeblocks - 1,204 Effective foreign exchange rates 418 (74 ) Goodwill balance, end of year $ 3,336 $ 2,918 Intangible assets consisted of the following as of December 31: SCHEDULE OF GOODWILL AND INTANGIBLE ASSETS In thousands 2025 2024 Trade names 6,488 6,217 Customer relationships 16,231 15,567 Other intangibles 2,373 2,165 Accumulated amortization (20,846 ) (19,237 ) Intangibles, net $ 4,246 $ 4,712 The future amortization expense on the trade names, customer relationships, and other intangibles are as follows: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE In thousands Years ending December 31, 2026 $ 776 2027 776 2028 659 2029 659 2030 659 Thereafter 717 Total $ 4,246 Goodwill is not amortized but is evaluated for impairment annually or when indicators of a potential impairment are present. The impairment testing of goodwill is performed separately from our impairment testing of intangibles. The annual evalu …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 20 INCOME TAX For the year ended December 31, 2025, the Company has $ 495 thousand of current income tax expense (US State & Local and Foreign) and no deferred income tax benefit. Taxes based on income were as follows: SCHEDULE OF TAX BASED ON INCOME In thousands Current 2025 2024 U.S. Federal Tax $ - $ - State Taxes - 12 Foreign Taxes 495 - 495 12 Deferred: U.S. Federal Tax - - State Taxes - - Foreign Taxes - (710 ) Provision for (benefit) Income Taxes $ 495 $ (698 ) The tax effect of temporary differences that give rise to deferred tax assets and deferred tax liabilities are as follows as of December 31, SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES In thousands Deferred tax assets 2025 2024 Reserves and deferred revenue $ 923 $ 1,395 163(j) Limitation 616 3,752 Foreign deferred tax assets 1,508 1,238 Net operating loss 4,081 11,174 Total gross deferred tax assets 7,128 17,559 Less: Valuation Allowance (5,583 ) (16,316 ) Net deferred tax assets 1,545 1,243 Deferred tax liabilities Depreciation (37 ) (4 ) Total deferred tax liabilities (37 ) (4 ) Net deferred tax assets $ 1,508 $ 1,239 Components of net deferred tax assets, including a valuation allowance, are as follows as of December 31: SCHEDULE OF DEFERRED TAX ASSETS AND VALUATION ALLOWANCES 2025 2024 Net deferred tax assets $ 7,091 $ 17,555 Valuation allowance (5,583 ) (16,316 ) Total deferred tax assets $ 1,508 $ 1,239 The valuation allowance for deferred tax assets as of December 31, 2025 and 2024 was $ 5.6 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 16 LITIGATION The Company was named a defendant in a case involving a former employee who claims he is owed approximately $ 60 thousand in unpaid commissions. This case was settled in February 2024. On November 3, 2024 a commercial real estate company filed a lawsuit against Dangot Computers, OMNIQ Technologies and some of Dangots 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. At this early stage, it is not possible to fully assess the chances of a lawsuit. The judge has referred the matter to mediation and the company believes that its exposure is significantly lower than the original claim. The Company has recorded a low level accrual representing the amount it currently estimates will be required for payment. 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 $ 389,000 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 Companys subsidiary Dangot Computers reached at settlement with one of its vendors in Israel related to past due re …

LegalMattersAndContingenciesTextBlock · excerpt; the full note is in the filing

Recently adopted accounting pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires an annual tabular effective tax rate reconciliation disclosure including information for specified categories and jurisdiction levels, as well as, disclosure of income taxes paid, net of refunds received, disaggregated by federal, state/local, and significant foreign jurisdiction. This ASU is effective for the Companys fiscal December 31, 2025 year-end. …

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NOTE 18 RELATED PARTY TRANSACTIONS In February 2020 we amended the consulting agreement with Mr. Carlos J. Nissensohn a/k/a Haim Nissensohn, a principal shareholder of the Company and a family member of a former director and former officer of the Company. This Agreement with Mr. Nissensohn was terminated in February 11, 2025 with effective May 11, 2025 date. As of December 31, 2025, the Company has accrued $ 60,000 towards amounts owed under this contract. As of January 1, 2024, the Companys subsidiary Dangot Computers, Ltd. entered into a service agreement with the Companys CEO, Shai Lustgarten for his role as director and Chairman of the Board of Directors of Dangot Computers. The consideration for this is NIS 25,000 per month (approx. $ 6,800 USD). The Agreement allows for termination by either party without cause with 90 days written notice. Haim Dangot, the founder of Dangot Computers, Ltd and former shareholder of Dangot Computers Ltd., previously was employed with the company on a month to month basis for USD $ 5,000 per month. He has been working with the Company throughout 2025. There is an interim arrangement under which he is being paid USD 5,000 per month. As discussed in Note 11 and 12, the CEO of the Company is a controlling owner of the enti ty which purchased the Quest Solution division in June 30, 2025. He is also an owner in the office building which the Company leases space from for its Headquarters in Murray, Utah. …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 5 CONTRACTS WITH CUSTOMERS The balance of deferred revenues is included in other current liabilities on the balance sheet. The following table summarizes changes in deferred revenue as of December 31: SCHEDULE OF DEFERRED REVENUE 2025 2024 Beginning balance $ 6,174 $ 2,275 Less amounts recognized during the year (6,174 ) (1,012 ) Add new deferred revenue 970 4,911 Ending Balance $ 970 $ 6,174 The short term deferred revenue at December 31, 2025 was $ 886 thousand and the long term deferred revenue was $ 84 thousand. The Company had deposits from customers of $ 94 thousand at December 31, 2025. …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

NOTE 14 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. …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation Our consolidated financial statements include the financial position and results of operations of OMNIQ Corp. and its wholly owned subsidiaries: HTS Image Processing, Inc., OmniQ Vision Inc., HTS Image Ltd., OmniQ Technologies Ltd., and Dangot Computers Ltd. All significant intercompany accounts and transactions have been eliminated in these consolidated financial statements. Business combinations are included in the consolidated financial statements from their respective dates of acquisition. Use of Estimates We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, which requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. These assumptions and estimates could have a material effect on our consolidated financial statements. Actual results may differ materially from those estimates. We review our estimates on an ongoing basis based on information currently available, and changes in facts and circumstances may cause us to revise these estimates. Cash Cash consists of petty cash, checking, savings, and money market accounts. The Company maintains its cash in ban …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

NOTE 17 STOCKHOLDERS EQUITY PREFERRED STOCK Series A As of December 31, 2025 and 2024, there were 2,000,000 Series A preferred shares authorized and zero Series A preferred shares outstanding. The board of directors had previously set the voting rights for the preferred stock at 1 share of preferred to 13 common shares. Series B As of December 31, 2025 and 2024, there was one preferred share authorized and zero preferred shares outstanding. Series C As of December 31, 2025 and 2024, there were 3,000,000 Series C Preferred Shares (Series C) authorized with 502,000 and 502,000 issued and outstanding, respectively. The Series C shares have preferential rights above common shares and the Series B Preferred Shares, are 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 December 31, 2025 and 2024, the accrued dividends on the Series C Preferred Stock was $ 226 thousand and $ 211 thousand, respectively. 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 Companys common stock has …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 22 SUBSEQUENT EVENTS Subsequent Event Planned Divestiture of CodeBlocks In connection with a transaction executed on June 30, 2025, the Company agreed to divest its CodeBlocks business, which is currently included within goodwill. As of December 31, 2025, the definitive agreements related to the divestiture of CodeBlocks had not been finalized or executed and remained subject to completion of final terms and approvals. Accordingly, the Company concluded that the criteria for classification as held for sale were not met as of year-end. Subsequent to December 31, 2025, the Company has continued to finalize the terms of the transaction, and the definitive agreements are expected to be executed in the near term. The completion of the divestiture remains subject to final execution and customary conditions. As of April 15, 2026, there are no other material subsequent events that have occurred. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing