What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-04-15 compared with 2025-03-31 · 740 added, 584 removed, 1067 unchanged (55% of the section changed)

51 unchanged sentences

the material weakness set forth above was the result of the scale of the Company’s operations and is intrinsic to its small size,

the Company believes the risk of material misstatements relative to financial reporting are minimal.

the Company believes the risk of material misstatements relative to financial reporting are mitigated through management review.

annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial

83 unchanged sentences

serving as our principal executive officers (whom we refer to collectively as our “named executive officers”);

Name and Principal

Name and Principal Position

Option Awards

1 unchanged sentence

Chief Executive Officer and Interim CFO

Neev Nissenson

Chief Financial Officer (1)

November 17, 2023, Neev Nissenson resigned from his position as CFO.

bonuses granted in the future will relate to meeting certain performance criteria that are directly related to areas within the named

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Lustgarten shall continue to serve as the Company’s CEO.

The Lustgarten Agreement has a four-year term and

automatically renews for additional one-year periods unless either-party elects to terminate the Lustgarten Agreement.

Pursuant to the

Lustgarten Agreement, the Company shall pay Mr.

Pursuant to the Lustgarten Agreement, the Company

shall pay Mr.

Lustgarten an annual base salary of $560,000.

Lustgarten shall also be eligible to

receive i) equity awards pursuant to the Company’s Equity Incentive Plans and ii) certain milestone bonuses as set forth in the

Lustgarten Agreement.

In the event Mr.

Lustgarten shall also be eligible to receive i) equity awards pursuant

to the Company’s Equity Incentive Plans and ii) certain milestone bonuses as set forth in the Lustgarten Agreement.

Lustgarten’s employment is terminated by Mr.

Lustgarten for good reason, or terminated by

the Company without cause, Mr.

Lustgarten shall be entitled to the greater of (i) the unpaid base salary or (ii) one year’s base

Lustgarten for good reason, or terminated by the Company without cause, Mr.

shall be entitled to the greater of (i) the unpaid base salary or (ii) one year’s base salary.

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.

In alignment with the terms of his employment contract, Mr.

Lustgarten earned a bonus of $1.7 million on the sale

of the Quest Solution business at June 30, 2025.

This amount has been accrued on the books of the company, but has not been paid as of

December 31, 2025 or as of the date of this filing.

the sole discretion of our Board, all officers are entitled to merit-based cash and equity bonuses.

Incentive Plan Compensation

Fees Earned or Paid in

Non-Equity Incentive

Plan Compensation

Yaron Shalem (1)

Mina Teicher (1)

1 – Resigned from the Board on January 31, 2025.

PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

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shares of our common stock outstanding.

Name of Beneficial

of Beneficial Ownership

Shai Lustgarten

(Chairman and CEO) 1

Neev Nissenson 2

Name of Beneficial Owner

Amount of Beneficial

Percentage of

Shai Lustgarten (Chairman and CEO & Interim CFO) 1

Yaron Shalem 2

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Mina Teicher 5

All Executive Officers and

Directors as a group (5 individuals)

All Executive Officers and Directors as a group (4 individuals)

Carlos Nissensohn 3

420,000 shares issuable upon the exercise of options.

Also includes (i) 1,056,822 shares and (ii) 33,333 shares issuable upon the

exercise of warrants held by Walefar Investments Ltd., which is beneficially owned by Mr.

10,000 shares of common stock.

Neev Nissenson resigned from the Board of Directors on March 27, 2024.

Also includes (i) 1,056,822 shares and shares issuable upon the exercise of

warrants held by beneficially owned by Mr.

20,000 shares issuable upon exercise of options.

Also includes 29,464 shares.

Yaron Shalem resigned from

the Board of Directors on January 31, 2025.

739,308 shares held by Campbeltown Consulting Ltd., which is beneficially owned by Mr.

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60,000 shares issuable upon exercise of options.

Also includes 29,464 shares.

Yaron Shalem resigned from the Board of

Directors on January 31, 2025.

10,000 shares issuable upon exercise of options.

Mina Teicher resigned from the Board of Directors on January 31, 2025.

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The following documents are filed under pages F-1 through F-29 and are included as part of this Form 10-K:

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (HAYNIE)

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (BARZILY)

BALANCE SHEETS

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

STATEMENTS OF EQUITY (DEFICIT)

STATEMENTS OF CASH FLOWS

TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (HAYNIE)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (BARZILY)

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Financial statement schedules are omitted as they are not applicable.

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on its behalf by the undersigned, thereunto duly authorized.

March 31, 2025

April 15, 2026

Shai Lustgarten

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of the Board, Chief Executive Officer and Interim Chief Financial Officer

April 15, 2026

TO CONSOLIDATED FINANCIAL STATEMENTS

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PCAOB:

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PCAOB:

2015 (BARZILY)

BALANCE SHEETS

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

STATEMENTS OF CASH FLOWS

TO CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and

Stockholders of OMNIQ Corp.

the Board of Directors and Stockholders of OMNIQ CORP.

on the Financial Statements

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December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

did not audit portions of the December 31, 2024, and 2023, consolidated financial statements for Dangot Computers, Ltd., a wholly owned

The portions not audited by us include assets of $17.4 million and $20.2 million as of December 31, 2024, and 2023, respectively,

and total revenues of $30.5 million and $44.8 million for the years ended December 31, 2024, and 2023, respectively.

Those portions of

the December 31, 2024, and 2023, consolidated financial statements were audited by other auditors whose report has been furnished to

us, and our opinion, insofar as they relate to the amounts included for Dangot Computers, Ltd.

is based solely on the reports of the

other auditors.

did not audit portions of December 31, 2025, and 2024, consolidated financial statements for Dangot Computers, Ltd., a wholly owned subsidiary.

The portions not audited by us include assets of $13.1 million and $17.4 million as of December 31, 2025, and 2024, respectively, and

total revenues of $29.9 million and $30.5 million for the years ended December 31, 2025, and 2024, respectively.

Those portions of December

31, 2025, and 2024, consolidated financial statements were audited by other auditors whose report has been furnished to us, and our opinion,

insofar as they relate to the amounts included for Dangot Computers, Ltd.

is based solely on the reports of the other auditors.

Consideration

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the financial statements, the Company has a deficit in stockholders’ equity and has sustained recurring losses from operations.

This raises substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans with regard

to these matters are also described in Note 3.

The financial statements do not include any adjustments that might result from the outcome

of this uncertainty.

These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable

period of time.

Management’s plans with regard to these matters are also described in Note 3.

The financial statements do not include

any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

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and Intangible Assets— Refer to Note 9 to the financial statements

described in Note 9 to the financial statements, the Company has $4.7million of intangible assets and $2.9 million of goodwill.

evaluates its goodwill and intangible assets at least annually or more frequently when events or changes in circumstances indicate the

carrying value may not be recoverable.

In consideration of impairment, the Company employed a third-party specialist to prepare a valuation

based on management’s estimates and market information.

identified valuation of these assets as a critical audit matter because of the significant estimates and assumptions made by management

to estimate fair value, including the impact of forecasted growth, and the difference between the fair values and the carrying values

described in Note 9, the Company has $4.2 million of intangible assets and $3.3 million of goodwill.

Management performs impairment evaluations

at least annually and engaged a third-party specialist to assist in valuing these assets using management’s projected cash flows

and market inputs.

identified the valuation of goodwill and intangible assets as a critical audit matter because the impairment analyses involved significant

judgment in developing projected cash flows and key assumptions, including revenue growth, profitability, working capital and capital

expenditure assumptions, and terminal value inputs, and because the resulting fair values were compared to the related carrying amounts

as of December 31, 2025.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve

our fair value specialist, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions

related to certain assumptions within the projected cash flows.

the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated

financial statements.

We followed professional standards relating to the use of specialists employed by management.

These procedures

included, among others, evaluating the expertise and independence of third-party specialists, gaining an understanding of management’s

process for developing the fair value estimate, and assessing the inputs and key assumptions used to develop the models.

We used professionals

inside our firm with specialized skills and knowledge to assess the methodology.

Haynie & Company

audit procedures included evaluating the competence and objectivity of the Company’s specialist;

reconciling the projections used

in the valuation analyses to management’s forecasts;

independently recalculating elements of the undiscounted cash flow analyses;

evaluating the reasonableness of significant assumptions and terminal value inputs;

and involving our valuation specialist to assess

the valuation methodology and key assumptions.

Operations – Refer to Note 15 to the financial statements

described in Note 15, the Company entered into an Asset Purchase Agreement to sell substantially all of the assets and certain liabilities

associated with its legacy Quest business line on June 30, 2025, for aggregate non-cash consideration primarily consisting of debt assumed

by the buyer.

identified the accounting and presentation for the disposal transaction as a critical audit matter because significant auditor judgment

was required to evaluate whether the transaction was a sale to a third party or a transfer under common control and to assess the resulting

financial statement presentation and disclosures.

Judgment was also required to evaluate the identification and carrying values of the

assets and liabilities derecognized and the appropriate cutoff of revenues and expenses associated with the disposed operations.

audit procedures included evaluating management’s conclusions regarding the nature of the transaction and the absence of common

examining the terms of the sale agreement and related-party disclosures;

testing the identification and carrying values of the

assets and liabilities included in the disposal group;

recalculated the gain or loss recognized, as applicable;

performing procedures

to evaluate whether revenues and expenses were recorded in the appropriate period relative to the sale date;

and evaluating whether the

presentation of the gain, discontinued operations results, and related disclosures were consistent with applicable U.S.

requirements.

Lake City, Utah

March 31, 2025

have served as the Company’s auditor since 2019.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of

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BALANCE SHEETS

of December 31,

thousands, except share and per share data)

(In thousands, except share and per share data)

December 31, 2025

December 31, 2024

Current assets

Cash and cash

Cash and cash equivalents

Accounts receivable, net

Prepaid expenses

current assets

Property and equipment,

net of accumulated depreciation, net

Trade name, net of accumulated

amortization, net

Customer relationships,

net of accumulated amortization, net

Other intangibles, net

of accumulated amortization, net

Other current assets

Total current assets

Property and equipment, net of accumulated depreciation

Trade name, net of accumulated amortization

Customer relationships, net of accumulated amortization

Other intangibles, net of accumulated amortization

Right of use lease asset

LIABILITIES AND STOCKHOLDERS’

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable and accrued

Accounts payable and accrued liabilities

Line of credit

Accrued payroll and sales

Notes payable – current

Lease liability –

current portion

current liabilities

Accrued payroll and sales tax

Related party advances

Note payable – related party, short term

Notes payable – current portion

Notes payable

Lease liability – current portion

Other current liabilities

Total current liabilities

Long-term liabilities

Accrued interest and accrued

liabilities, related party

Notes payable, less current

Accrued interest and accrued liabilities, related party

Related party notes payable

Notes payable, less current portion

Notes payable

Lease liability

long term liabilities

Stockholders’ equity

Other long term liabilities

Total liabilities

Commitments and Contingencies (See Note 13)

Stockholders’ equity (deficit)

Series A Preferred stock;

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35,000,000 shares authorized;

10,712,930 and 10,675,802 shares issued and outstanding, respectively.

15,102,930 and 10,712,930 shares issued

and outstanding, respectively.

Additional paid-in capital

Accumulated (deficit)

other comprehensive income

OmniQ stockholders’ equity (deficit)

liabilities and equity (deficit)

Accumulated other comprehensive (loss)

Total OMNIQ stockholders’ equity (deficit)

Total liabilities and equity (deficit)

accompanying notes are integral to these consolidated financial statements.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except

share and per share data)

(In thousands, except

share and per share data)

of goods sold

For the year ended

(In thousands, except share and per share data)

Cost of goods sold

Operating expenses

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Interest expense

(expenses) income

Total other expenses

Net Loss Before Income Taxes

Other (expenses) income

Total other (expenses) income

Net (Loss) Income Before Income Taxes

Provision for Income Taxes

Total Provision for Income

Foreign currency translation

Total (Provision) Benefit for Income Taxes

Net Income (Loss) before discontinued Operations

Income (Loss) from Discontinued Operations, net of taxes

Foreign currency translation adjustment

Comprehensive loss

Reconciliation of net loss to net loss attributable

to common shareholders

Dividends attributable

to non-common stockholders’ of OmniQ Corp

Net loss attributable

to common stockholders’ of OmniQ Corp

Net (loss) per share

– basic & diluted attributable to common stockholders’ of OmniQ Corp

Weighted average number of common shares

outstanding – basic & diluted

Reconciliation of net loss to net loss attributable to common shareholders:

Dividends attributable to non-common stockholders’ of OMNIQ Corp

Net loss attributable to common stockholders’ of OMNIQ Corp

Net (loss) per share - basic & diluted attributable to

common stockholders’ of OMNIQ Corp

Net (loss) per share for continuing operations

Net income (loss) per share for discontinued operations

Weighted average number of common shares outstanding – basic & diluted

accompanying notes are integral to these consolidated financial statements.

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Total Stockholders’

Preferred Stock

Comprehensive

December 31, 2022

(In thousands)

Income (Loss)

Balance, December 31, 2023

$ ( 113,923 )

Dividend on Class C Shares

CodeBlocks Acquisition

ESPP Stock Issuance

Stock and Warrant issued for services

Stock and warrant issuances, net of issuance

Stock-based compensation – options, warrants,

Exercise of stock options and warrants

Conversion of shares

Stock-based compensation – options, warrants, issuances

Cumulative Translation Adjustment

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Dividend on Class C Shares

CodeBlocks Acquisition

Shares returned and canceled

ESPP Stock Issuance

Stock-based compensation – options, warrants,

Stock-based compensation – options, warrants, issuances

Sale of assets from division, net of tax

Conversion of debt to equity

Sale of prefunded warrants

Sale of stock

Cumulative Translation Adjustment

Net (loss) income

Net loss before discontinued operations

Balance, December 31, 2025

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Cash flows from operations

Adjustments to reconcile net loss to net cash

provided by operating activities:

Noncash interest expense

Adjustments to reconcile net loss to net cash provided by operating activities:

Stock-based compensation

Stock and warrant issued

Depreciation and amortization

Goodwill impairment

Amortization of ROU asset

Changes in operating assets

and liabilities:

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses

Accounts payable and accrued

Accrued interest and accrued

liabilities, related party

Accrued payroll and sales

taxes payable

Accounts payable and accrued liabilities

Accrued interest and accrued liabilities, related party

Accrued payroll and sales taxes payable

Lease liability

Deferred tax assets, net

Net cash provided by (used

in) operating activities

Other liabilities

Net cash provided by (used in) operating activities

Cash flows from investing activities

Cash paid for investments

Purchase of property and

Proceeds/loss

from sale of other assets

Net cash provided by (used

in) investing activities

Purchase of property and equipment

Payment for acquisition

Cash paid for divestiture

Proceeds from sale of property and equipment

Net cash provided by (used in) investing activities

Cash flows from financing activities

Proceeds from ESPP stock

Proceeds from exercise

of options and warrants

Net proceeds from issuance

of common stock

Payments on notes/loans

Proceeds from the issuance

of notes/loans payable

from draw on line of credit

Net cash (used in) provided

by financing activities

Proceeds from ESPP stock issuance

Net proceeds from issuance of common stock

Payments on notes/loans payable

Proceeds from draw on line of credit

Net cash (used in) provided by financing activities

Net change in cash and cash equivalents

Effect of foreign exchange rates on cash and

cash equivalents

and cash equivalents at beginning of period

and cash equivalents at end of period

Effect of foreign exchange rates on cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Non-cash activities:

Declared dividends payable

Net assets acquired in

business combination

Right of use asset acquired

in exchange for lease liability

Supplemental disclosure

of cash flow information:

Debt conversion

Right of use asset acquired in exchange for lease liability

New lease entered

Supplemental disclosure of cash flow information:

Cash paid for interest

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Since its incorporation, the Company has been involved in various lines of business.

2008 to 2013, we were in the business of developing oil and gas reserves.

In January 2014, we determined it was in the best interest

of our stockholders to focus on operating companies with a track record of positive cash flows and larger existing revenue bases.

strategy developed into leveraging management’s relationships in the business world for investments for us.

2014, we have made the following acquisitions resulting in us becoming a leading provider of computerized and machine-vision image-processing

Solutions, Inc.

From 2008 to 2013, we were in the business of developing

oil and gas reserves.

In January 2014, we determined it was in the best interest of our stockholders to focus on operating companies with

a track record of positive cash flows and larger existing revenue bases.

Our strategy developed into leveraging management’s relationships

in the business world for investments for us.

Since 2014, we have made the following acquisitions

resulting in us becoming a leading provider of computerized and machine-vision image-processing solutions:

Quest Solution, Inc.

(January 2014)

Code Specialties, Inc.

Bar Code Specialties, Inc.

(November 2014)

Image Processing, Inc.

HTS Image Processing, Inc.

(October 2018)

Consulting LLC.

EyepaxIT Consulting LLC.

(February 2020)

Computers Ltd.

(January 2024)

use patented and proprietary artificial intelligence (AI) technology to deliver data collection, real-time surveillance and monitoring

Dangot Computers Ltd.

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.

technology and services we provide helps our clients move people, assets, and data safely and securely through airports, warehouses,

schools, national borders, and many other applications and environments.

principal solutions include hardware, software, communications, and automated management services.

We are an established distributor

of barcode labels, tags, and ribbons, as well as RFID labels and tags.

We provide printing solutions, credit card terminals, automatic

kiosks and point-of-care units.

We also offer technical service and support.

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, and our team delivers proven problem-solving solutions backed by

numerous customer references.

We offer comprehensive packaged and configurable software, and we are a leading provider of best-in-class

mobile and wireless equipment.

customers include government agencies and leading Fortune 500 companies from diverse sectors, including healthcare, food and beverage,

manufacturing, retail, distribution, and transportation and logistics.

Since 2014, our annual consolidated revenues have grown to more

than $ 73 million with clients in more than 40 countries.

We currently engage with several billion-dollar markets with double-digit growth,

including the Global Safe City market and the Ticketless Safe Parking market.

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.

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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and its wholly owned subsidiaries:

Quest Marketing, Inc., HTS Image Processing, Inc., OmniQ Vision Inc., HTS Image Ltd., OmniQ Technologies Ltd., and Dangot Computers Ltd.

HTS Image Processing, Inc., OmniQ Vision Inc., HTS Image Ltd., OmniQ Technologies Ltd., and Dangot Computers Ltd.

significant intercompany accounts and transactions have been eliminated in these consolidated financial statements.

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tax effect from any tax-deductible goodwill.

payable are made up of payables due to vendors in the ordinary course of business as of December 31, 2024 and 2023.

One vendor made

up 47 % and two vendors made up 38 % of our purchases during the year ended December 31, 2024 and 2023, respectively.

Accounts payable are made

up of payables due to vendors in the ordinary course of business as of December 31, 2025 and 2024.

Accounts payable are made up of payables due to vendors in the ordinary course of business as of December 31, 2025 and 2024.

made up 25% and one vendor made up 12% of our payables for the year ended December 31, 2025 and 2024, respectively.

determine whether an arrangement is a lease at the inception of the arrangement based on the terms and conditions in the contract.

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on the amortization of the fair value at the date of grant on a straight-line basis primarily over the vesting period of the options.

Company expenses marketing and advertising costs as incurred.

During 2024 and 2023, the Company spent $ 216 thousand and $ 379 thousand,

respectively, on marketing, trade show, and advertising.

The Company expenses marketing

and advertising costs as incurred.

During 2025 and 2024, the Company spent $ 125 thousand and $ 216 thousand, respectively, on marketing,

trade show, and advertising.

Currency Translation

consolidated financial statements are presented in U.S.

Our consolidated

financial statements are presented in U.S.

The functional currency for the Company is U.S.

in currencies other than the functional currency are recorded using the appropriate exchange rate at the time of the transaction.

Transactions in

currencies other than the functional currency are recorded using the appropriate exchange rate at the time of the transaction.

our continuing operations are conducted in U.S.

dollars except for subsidiaries located in Israel.

The records of the Israeli operations

were maintained in the local currency and translated to the reporting currency as follows:

assets and liabilities are translated using

the balance sheet period-end date exchange rate.

Expenses and income are translated using the weighted average exchange rates for the

reporting period.

Foreign translation gains and losses are reported on the consolidated statement of operations and comprehensive loss

and were included in the amount of loss from comprehensive income.

The aggregate foreign currency transaction loss included in net income

for the years ended December 31, 2024 and 2023 was $ 735 thousand and $ 340 thousand, respectively.

The records of the Israeli

operations were maintained in the local currency and translated to the reporting currency as follows:

assets and liabilities are

translated using the balance sheet period-end date exchange rate.

Expenses and income are translated using the weighted average

exchange rates for the reporting period.

Foreign translation gains and losses are reported on the consolidated statement of

operations and comprehensive loss and were included in the amount of gain or loss from comprehensive income.

The aggregate foreign

currency transaction income and loss included in net income for the years ended December 31, 2025 was $ 3.5 million of income and in

2024 was loss of $ 735

account for our income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets

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OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNINGS PER SHARE

to purchase common stock

shares excluded from diluted net loss per share

Options to purchase common stock

Warrants to purchase common stock

Potential shares excluded from diluted net loss per share

adopted accounting pronouncements

November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires retrospective disclosure of significant

segment expenses and other segment items on an annual and interim basis.

Additionally, it requires disclosure of the title and position

of the Chief Operating Decision Maker (“CODM”).

This ASU will be effective for the Company’s fiscal December 31, 2024

year-end and interim periods beginning in fiscal 2025, with early adoption permitted.

Our CODM is Shai Lustgarten, our CEO.

18 – Operating Segments for required disclosures.

Accounting Pronouncements not yet adopted

December 2023, the FASB issued ASU No.

In December 2023, the FASB issued ASU No.

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 will be effective for the Company’s fiscal December 31, 2025 year-end, with early adoption permitted.

We are assessing

the impact of this guidance on our disclosures;

it will not have an impact on our results of operations, cash flows, or financial condition.

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 Company’s fiscal December

31, 2025 year-end.

Accounting Pronouncements not yet adopted

November 2024, the FASB issued ASU 2025-03 “Income Statement:

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the effect that the updated standard will have on our financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill

and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software .

changes when capitalization of internal-use software costs begins and updates the related guidance for modern software development methods.

The Company is evaluating the impact of this guidance on the timing of capitalization, amortization, and related disclosures.

is effective for annual periods beginning after December 15, 2027, including interim periods within those annual periods, with early adoption

3 – GOING CONCERN

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efforts are focused on the most profitable product lines.

Star - The Company’s total accounts payable due to Blue Star as of December 31, 2024, was approximately $ 53.6 million.

Star is an unsecured creditor, financing a substantial amount the Company’s supply chain demand.

Management believes that Blue

Star will continue supplying the Company with preferable credit terms.

Blue Star has agreed to the annual interest rate of 5 % on

invoices that are past due.

As an unsecured creditor of the Company, Blue Star has no incentive to force a liquidation.

has enjoyed a good mutual relationship for the past five years.

finalized a new line of credit with an additional financial institution.

October 2023 management finalized an equity raise which resulted in $ 2.5 million in net cash received from investors.

Company has implemented an aggressive debt settlement plan with its vendors and debt holders

to clean up the Balance Sheet presentation and during the year was able to settle many debts

for a discount.

term liabilities for the Company decreased from $ 86.3 million to roughly $ 27.7 million, showing the efforts of management are working.

December 2025, management finalized an equity raise which resulted in approximately $ 941,000

net cash received from investors.

4 – BUSINESS ACQUISITIONS

January 30, 2024, OMNIQ Corp.

On January 30, 2024, OMNIQ

(the “Company’), its wholly owned subsidiary, Dangot Computers Ltd.

CodeBlocks Ltd.

(“Dangot”), CodeBlocks Ltd.

(CodeBlocks”).

and CodeBlock’s 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 today’s exchange rate).

The consideration is payable in eight equal installments

with the final payment due on November 1, 2025.

and CodeBlock’s 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 it’s U.S.

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

based customers.

5 unchanged sentences

Beginning balance

Less amounts recognized during

Less amounts recognized during the year

Add new deferred revenue

Ending Balance

The short term deferred revenue at December 31, 2024 was $ 5.8 million and

the long term deferred revenue was $ 125 thousand.

The Company had deposits from customers of $ 266 thousand at December 31, 2024.

The short term deferred

revenue at December 31, 2025 was $ 886

thousand and the long term deferred revenue was $ 84

The Company had deposits

from customers of $ 94 thousand at December 31, 2025.

6 – ACCOUNTS RECEIVABLE

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OF ACCOUNTS RECEIVABLE

accounts receivable

allowance for doubtful accounts

accounts receivable (net)

receivables are made up of trade receivables due from customers in the ordinary course of business.

As of December 31, 2024, 1 customer

accounted for 26 % of the outstanding receivables and as of December 31, 2023, no customer accounted for more than 10 % of the outstanding

receivables, and as of .

Trade accounts receivable

Less allowance for doubtful accounts

Total accounts receivable (net)

Accounts receivables are made up of trade receivables due from customers in the ordinary course of business.

December 31, 2025 and 2024, no customer accounting for more than 10% of the outstanding receivables from continuing operations.

7 – INVENTORY

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Property and equipment,

expense for the years ended December 31, 2024 and 2023 was approximately $ 364 thousand and $ 464 thousand, respectively.

Depreciation expense for

the years ended December 31, 2025 and 2024 was approximately $ 80 thousand and $ 347 thousand, respectively.

9 – GOODWILL AND INTANGIBLE ASSETS

of Goodwill – During the year ended December 31, 2023 the Company experienced significant decline in our stock price and sustained

losses from operations.

Therefore, we completed a quantitative goodwill impairment analysis as of December 31, 2023.

The results of the

analysis during the fourth quarter indicated an impairment loss for goodwill related to acquisitions prior to 2021, and we recorded a

non-cash impairment of $ 14.7

Accumulated impairment of goodwill for the years ended

December 31, 2024 and 2023 was $ 0 and $ 14.7

million , respectively.

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

Amortization expense for the years ended December 31,

2024 and 2023 was $ 915 thousand and $ 1.6

million, respectively

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

assets consisted of the following as of December 31:

SCHEDULE OF GOODWILL ASSETS CONSISTED

Goodwill balance, beginning of

Impairment loss

Goodwill balance, beginning of year

Addition of Codeblocks

Effective foreign exchange

Goodwill balance, end

Effective foreign exchange rates

Goodwill balance, end of year

assets consisted of the following as of December 31:

31 unchanged sentences

maintain operating lines of credit, factoring, and revolving credit facilities with banks and finance companies to provide working capital.

March 25, 2022 we entered into a Business Finance Agreement (the “BFA”) with BridgeBank a division of Western Alliance Bank

(“BridgeBank”) to establish a credit facility, whereby we could obtain short-term financing by selling and assigning acceptable

accounts receivables to BridgeBank.

Gross proceeds received during the years ended December 31, 2024 and 2023 were $ 0 million and $ 35

million, respectively.

This agreement was terminated in 2023.

January 18, 2024, the Company’s wholly owned subsidiary, Quest Marketing, Inc.

(“Quest”) entered into a Purchase and

Sale Agreement (the “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.

outstanding balance of Quest to Prestige shall be $ 7.5 million.

addition, Prestige’s purchase from Quest shall be at a discount.

The discount shall be based on the number of days an account is

The discount fee shall be as follows:

If paid within 30 days a discount fee of 1.50% plus an additional .50% for each 10-day

period thereafter up to a maximum of 90 days.

11 – RELATED PARTY NOTES PAYABLE

Payable – Marin

December 2017, we entered into a $ 660 thousand, 1.89 % annual interest rate note payable (the “Marin Note”) with two individuals

from whom we previously acquired their company (in 2014).

The Marin Note was payable in 60 monthly principal payments of $ 20 thousand

beginning in October 2018.

Accrued interest payable as of December 31, 2024 and 2023, was $ 73 thousand and $ 73 , respectively.

interest was payable at maturity.

This loan was settled in 2023.

Payable – Thomet

December 2017, we entered into a $ 750 thousand, zero percent annual interest rate note payable (the “Thomet Note”) with an

individual from whom we previously acquired a company from which he was one of the owners (in 2014).

The Thomet Note was payable in 60

monthly principal payments of $ 13 thousand beginning in October 2018 through

October 2023.

This loan was settled during 2023.

On January 18, 2024, the Company’s wholly owned

subsidiary, Quest Marketing, Inc.

(“Quest”) entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”)

with Prestige Capital Finance, LLC (“Prestige”), in which Quest had sold, transferred and assigned all of its rights, title

and interest to specific accounts receivable owed to Quest.

This agreement was concluded concurrent with the sale of the assets of the

Quest division at June 30, 2025.

11 – RELATED PARTY ADVANCES

Concurrent with the sale

of the Quest Solution division, the company entered into a Transition Services Agreement whereas the costs for some employees would be

split during the transition.

Connected to that was advances to OMNIQ from the Buyer to facilitate the transition.

This entity is majority

controlled by the Company’s CEO and thus treated as related party advances.

The balance as of December 31, 2025 was $ 3,767,032 .

This is non interest bearing with no predefined or agreed upon repayment term.

In addition and concurrent with the sale of the Quest Solution division, the Company entered into a Promissory Note which bears interest

at 5 % per annum, is amortized over a ten-year period, and provides for a balloon payment after the third year.

The balance at December

31, 2025 was $ 9.6 million.

12 – OTHER NOTES PAYABLE

4 unchanged sentences

Long Term Notes Payable

Related Party Notes Payable - other

Less current portion of related party note payable

Long Term Notes Payable – related party

maturities of notes payable are as follows for the years ending December 31, 2025:

8 unchanged sentences

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

$ 136,059 USD).

August 11, 2021, the Company purchased vehicles using cash and financing of NIS 500 thousand, approximately $ 155 thousand, to be paid

1 unchanged sentence

The loan accrues interest at 7.5 % per annum and is secured by the vehicles.

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 instalments of principal and interest

over 3 years.

the year ended December 31, 2023, the Company entered into a short-term loan Hapoalim Bank totaling NIS 5.5

This was completed in January 2025.

September 13, 2022, the Company entered into a long-term loan from Hapoalim Bank totaling NIS 3

million, approximately US $ 0.9

The note accrues interest at 7.28 %

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 20

installments, bearing interest at a rate of Prime + 1.5 %.

At December 31, 2024, the Company owed Hapoalim Bank USD $ 1.39 million.

the year ended December 31, 2023, the Company entered into a short-term loan from Bank Leumi totaling NIS 21.5

per annum (Israeli Prime Rate plus 1.28 %)

and is payable in 36

installments of principal and interest over 3

The balance at December 31, 2025 was approximately $ 0 .

This note ended in September 2025.

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

1 unchanged sentence

The loan is renewed every month at Israeli Prime Rate plus + 1.3 %,

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.

September 21, 2023, the Company entered into a long-term loan from Tzameret Mimunim totaling 1.5 M

NIS, approximately US $ 393

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.

which at December 31, 2025 was 7.05 % and 2024 was 7.3 %.

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 %.

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 %.

December 2025, an additional 0.8 million was converted into a long-term loan to be repaid in 12 installments, bearing interest at a rate

of Prime + 2.2 %, the balance at December 31, 2025 was still $ 0.8 million.

December 31, 2024, the Company owed Hapoalim Bank USD $ 1.39 million.

At December 31, 2025, the balance was approximately $ 1.12 million.

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 % at December 31, 2025 was 7.64 %.

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 % which at December 31, 2025 was 9 %.

June 2025 the Company decreased the balance of the revolving loan by further NIS 4 million.

short-term loan (renewed every month) at 2025 is NIS 10 million, approximately US $ 3.138 million.

December 31, 2024, the Company owed Bank Leumi USD $ 5.4 million.

At December 31, 2025, the Company owed Bank Leumi approximately USD

$ 4.138 million.

September 21, 2023, the Company entered into a long-term loan from Tzameret Mimunim totaling 1.5 M NIS, approximately US $ 393 thousand.

The note accrues interest at the Israeli Prime Rate plus 3.5 % which currently equals 9.25 % per annum and is payable in 36 monthly installments.

The balance at December 31, 2024 is $ 251 thousand and at December 31, 2025 was $ 130 thousand.

of December 31, 2025, the Company was not in compliance with certain financial covenants related to the Bank Leumi and Bank Hapoalim

1 unchanged sentence

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.

On December 29, 2025, a new covenants agreement was signed with Bank Hapoalim, pursuant to which the Company is required

to comply with the financial covenants set forth in the new agreement, commencing with the 2026 financial statements.

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 10 ten-year period, and provides

for a balloon payment after the third year.

The balance at December 31, 2025 was $ 9.6 million.

Due to the related party nature of the

CEO of OMNIQ relationship with the Note Holder, this note is deemed related party.

13 – COMMITMENTS AND CONTINGENCIES

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

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,

2023 and 2024, the company has elected to match;

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.

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.

of December 31, 2025, we had 5 Operating leases as follows:

space in Salt Lake City UT with monthly payments of $ 24 thousand.

As of December 31, 2024, the Company had 20 months remaining on

space in Anaheim, CA with monthly payments of $ 4 thousand.

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.

corporate offices are currently located at Yad Harutzim 14 Tel-Aviv, Israel.

The main corporate office, Yad Harutzim 14, serves as

the company’s main building on the 2nd and 3rd floors, used by the management and most of the sales staff, technicians, etc.

The corporate office annual lease expense is NIS 720,000 (approximately USD$ 197,712 ).

As of December 31, 2024, the Company had 11

months remaining on the lease.

lease office space (Gamdan- 1st floor) for our finance and service department at Yad Harutzim 14 Tel-Aviv, Israel.

The lease provides

for monthly payments of NIS 18,840 (approximately USD$ 5,173 ).

Office space in Anaheim, CA with monthly payments of $ 4 thousand.

of December 31, 2025, the Company had 12 months remaining on the lease.

Dangot’s corporate offices are currently located at Yad Harutzim

14 Tel-Aviv, Israel.

The main corporate office, Yad Harutzim 14, serves as the company’s main building on the 2nd and 3rd

floors, used by the management and most of the sales staff, technicians, etc.

The corporate office annual lease expense is NIS 720,000

(approximately USD$ 197,712 ).

As of December 31, 2025, the Company’s lease has expired and is operating on a month to month basis.

These offices are owned by Haim Dangot (a former shareholder).

We lease office space (Gamdan- 1st floor) for our finance and service

department at Yad Harutzim 14 Tel-Aviv, Israel.

The lease provides for monthly payments of NIS 18,840 (approximately USD$ 5,173 ).

The lease expired as of December 31, 2025 .

Subsequent to year end, the

Company extended the lease with a termination date of December 31, 2025.

lease office and warehouse space for our products and technical support staff at Rival Street, Tel-Aviv, Israel.

The lease provides

for monthly payments of NIS 58,000 (approximately USD$ 15,927 ).

As of December 31, 2025, the Company’s lease has expired and is operating on a month

to month basis.

We lease office and warehouse space for our products and technical

support staff at Rival Street, Tel-Aviv, Israel.

The lease provides for monthly payments of NIS 58,000 (approximately USD$ 15,927 ).

The lease expired as of December 31, 2025.

Subsequent to year end, the

Company extended the lease with a termination date of December 31, 2025.

information related to our operating leases is as follows:

As of December 31, 2025, the Company’s lease has expired and is operating on a month

to month basis.

OF OTHER INFORMATION RELATED TO OPERATING LEASE

ROU asset - January 1, 2024

Effective foreign exchange rates

Effect of foreign exchange rates

ROU asset - December 31, 2024

Effective foreign exchange rates

Effect of foreign exchange rates

ROU asset – December 31, 2025

2 unchanged sentences

Lease liability – December 31, 2024

Effective foreign exchange rates

Effect of foreign exchange rates

Lease liability - December 31, 2025

of December 31, 2025, our operating leases had a weighted average remaining lease term of 77.78 months and a weighted average discount

rate of 6.38 %.

table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years

1 unchanged sentence

OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES

Minimum lease

Less interest

3 unchanged sentences

in Dangot Computers.

As security for credit received from an unrelated entity, a floating charge without limitation was imposed on securities and other negotiable

instruments, including the rights thereto, in addition a general floating charge on the company’s assets and property, share capital,

goodwill, insurance rights, and promissory notes to which the company has or will have rights.

As security for credit received from a banking corporation, a first-ranking fixed charge without limitation was imposed on the unpaid

share capital, goodwill, and promissory notes that the company has delivered or will deliver to the bank as security, for collection,

or for safekeeping.

As security for credit received from the credit company, the company signed a promissory note as discussed in Note 12 – Notes Payable.

As of the balance sheet date, there are contingent liabilities for bank guarantees provided to customers as performance guarantees, amounting

to approximately NIS 1.9 million (approximately USD $ 475 thousand).

As of the balance sheet date, there are liabilities for payments under documentary credit amounting to approximately NIS 328 thousand

(approximately USD $ 82 thousand).

As security for credit received from

a banking corporation, a floating charge without limitation was imposed on securities and other negotiable instruments, including the

rights thereto, In addition a general floating charge on the company’s assets and property, share capital, goodwill, insurance rights,

and promissory notes to which the company has or will have rights.

As security for credit received

from a banking corporation, a first-ranking fixed charge without limitation was imposed on the unpaid share capital, goodwill, and promissory

notes that the company has delivered or will deliver to the bank as security, for collection, or for safekeeping.

As security for credit received

from the credit company, the company signed a promissory note.

As of the balance sheet date, there

are contingent liabilities for bank guarantees provided to customers as performance guarantees, amounting to approximately NIS 1.64 million.

As of the balance sheet date, there

are liabilities for payments under documentary credit amounting to approximately NIS 993 thousand.

14 – BUSINESS SEGMENT

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).

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.

15 – DISCONTINUED OPERATIONS

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”).

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.

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.

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.

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

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.

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.

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.

sale resulted in a net gain on disposal of approximately $ 33.8

million, net of tax, 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 to record the gain to Additional Paid-in Capital.

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

SCHEDULE OF NET GAIN ON ADDITIONAL PAID IN CAPITAL

Reduction of cash and cash equivalents

Reduction of accounts receivable, net

Reduction of inventory, net

Reduction of other current assets

Reduction in property and equipment, net of accumulated depreciation

Reduction in accounts payable and accrued liabilities

Increase in other current liabilities

Increase in related party notes payable

Increase in additional paid-in capital

Income Taxes Payable on transaction

Additional paid-in capital reduction

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

SCHEDULE OF DISCONTINUED OPERATIONS

For the years ended

December 31, 2025

December 31, 2024

Cost of goods sold

Selling, general and administrative

Research & Development

Interest expense

Other expenses (income)

Net Income (Loss) from Discontinued Ops (Net of Tax)

the transaction was effective June 30, 2025, no assets or liabilities disposed in the sale were included on the balance sheet as of

December 31, 2025.

The balances of the disposed assets and liabilities as of December 31, 2024 were as follows:

Current Assets

Accounts receivable, net

Inventory, net

Prepaid expenses

Other current assets

Total current assets

Property and equipment, net of accumulated depreciation

Right of use lease asset

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable and accrued liabilities

Accrued payroll and sales tax

Lease liability – current portion

Other current liabilities

Total Current Liabilities

Deferred revenue

Lease liability

Total liabilities

flows related to the discontinued business have not been segregated and are included in the condensed consolidated statements of cash

The following table provides supplemental cash-flow information for the discontinued operations (in thousands):

SCHEDULE OF SUPPLEMENTAL CASH-FLOW INFORMATION FOR DISCONTINUED OPERATIONS

December 31, 2025

December 31, 2024

Depreciation and amortization

Capital expenditures

Other significant non-cash items

Cancelation of lease

16 – LITIGATION

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.

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.

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;

however, at this stage it is too early to assess the chances of the lawsuit

with certainty.

The initial claim against Dangot Computers is NIS 21

million approximately US $ 5.6

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

March 2025, the Company was named a defendant in a case involving a consultant who was terminated and who claims he is owed approximately

2 unchanged sentences

and is evaluating its response to the lawsuit, but plans to vigorously defend the suit.

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

million, 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.

of December 31, 2025, the full amount has been received from the vendor.

During 2025, several companies filed third-party and fourth-party claims against our subsidiary, Dangot Computers alleging patent infringement.

In the opinion of Dangot’s legal counsel, at this preliminary stage it is not yet possible to assess the likelihood of the

therefore, no provision has been recorded in the Company’s financial statements in connection with this matter.

Company is not a party to any other pending material legal proceeding in which it is defending against any claims of material significance.

4 unchanged sentences

17 – STOCKHOLDERS’ EQUITY

of December 31, 2024 and 2023, 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.

of December 31, 2024 and 2023, there was one preferred share authorized and zero preferred shares outstanding.

of December 31, 2024 and 2023, 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.

December 31, 2024 and 2023, the accrued dividends on the Series C Preferred Stock was $ 211 thousand and $ 181 thousand, respectively.

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.

As of December 31, 2025 and 2024, there was one preferred

share authorized and zero preferred shares outstanding.

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.

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

2 unchanged sentences

for 20 consecutive trading days.

October 2021, OMNIQ’s Board of Directors adopted an Equity Incentive Plan (the “Plan”), as an incentive to retain 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.

was approved by our stockholders at the December 2021, shareholders’ meeting.

On February 25, 2022, the Company granted 792,500

stock options.

These options were granted to employees as part of the Plan.

On October 23, 2022 19,000 stock options were granted to

employees as part of the Plan.

No shares were issued under the Plan in 2023.

December 2015, our Board of Directors approved the OMNIQ’s Employee Stock Purchase Plan (the “ESPP”).

For the years

ending December 31, 2023 and 2022, employees purchased 14,838 ($ 31 thousand) shares and 7,025 ($ 37 thousand) shares of commons stock.

October 5, 2023, OmniQ Corp.

(the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”)

with ThinkEquity LLC, as representatives (the “Representatives”) of the several underwriters named therein (collectively,

the “Underwriters”), relating to the issuance and sale (the “Offering”) of 2,775,000 shares of the Company’s

common stock, par value $ 0.001 per share, at a price to the public of $ 1.00 per share (the “Underwritten Shares”) and pre-funded

warrants (the “Pre-Funded Warrants”) to purchase 225,000 shares of the Company’s common stock at a price to the public

of $ 0.999 per Pre-Funded Warrant.

Under the terms of the Underwriting Agreement, the Underwriters have agreed to purchase the Underwritten

Shares from the Company at a price of $ 1.00 per share and the Pre-Funded Warrants at a price of $ 0.999 per Pre-Funded Warrant.

also granted the Underwriters an option exercisable for 45 days from the date of the Underwriting Agreement to purchase up to an additional

450,000 shares of common stock solely for the purpose of covering over-allotments (together with the Underwritten Shares, the “Shares”).

All of the Shares and Pre-Funded Warrants in the Offering are being sold by the Company.

The Company also issued warrants to the Representative

(the “Representative’s Warrants”), exercisable to purchase 140,000 shares of common stock, at an exercise price of

$ 1.25 per share.

gross proceeds from the Offering were approximately $ 3.0 million before deducting underwriting discounts and commissions and other offering

expenses payable by the Company and assuming no exercise of the Underwriters’ option to purchase additional shares.

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 year ended December 31, 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.

This plan was cancelled in 2024.

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

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.

In December 2025, the Company sold approximately $ 600,000

of prefunded warrants $ 0.10 per share and $ 337,500 of common stock at $ 0.10 per share (for a total of 3,375,000 common shares), along

with settling debts of $ 12,500 in the same offering.

The Company’s CEO participated in this capital raise for the purchase of 1.5

million shares purchased.

and Stock Options

3 unchanged sentences

value of the warrants were $ .55 .

were no options or warrants awarded during the year ended December 31, 2024.

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

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.

warrants were exercised during the years ended December 31, 2025 or 2024.

5 unchanged sentences

Exercise Price

beginning of year

Balance, beginning of year

Warrants granted

Warrants expired

Warrants(prefunded) sold

Warrants exercised

Balance, end of year

Exercisable warrants

warrants as of December 31, 2025 are as follows:

1 unchanged sentence

Exercise Prices

Weighted Average

Residual Life

Span (in years)

Weighted Average

Exercise Price

Weighted Average

Exercise Price

1 unchanged sentence

SCHEDULE OF WARRANTS OUTSTANDING, EXPIRY DATE AND EXERCISE PRICES

October 06, 2024

Exercise Prices

September 01, 2025

3 unchanged sentences

October 11, 2028

June 17, 2030

December 8, 2035

have a stock option plan whereby the Board of Directors may grant directors, officers, employees, or consultants of the Company options

10 unchanged sentences

31, 2025, the difference between the fair value of the Common Stock issued and the respective exercise price was $ 63 thousand.

of December 31, 2025, the intrinsic value for vested stock options was $ 0 .

For options exercised during the year ended December

31, 2024, the difference between the fair value of the Common Stock issued and the respective exercise price was $ 622 thousand.

December 31, 2024, the intrinsic value for vested stock options was $ 0 .

options exercised during the year ended December 31, 2023, the difference between the fair value of the Common Stock issued and the respective

exercise price was $ 373 thousand.

As of December 31, 2023, the intrinsic value for vested stock options was $ 0 .

As of December 31, 2024, the total compensation cost related to nonvested

awards not yet recognized as $ 142 thousand.

of December 31, 2023 the total compensation cost related to nonvested awards not yet recognized was $ 355 thousand.

The weighted average

period over which it is expected to be recognized is 2 months.

As of December 31, 2025, the total compensation

cost related to nonvested awards not yet recognized as $ 0

as all the options and warrants have vested.

As of December 31, 2024 the total compensation cost related to nonvested awards not yet

recognized was $ 142

Options - The following table summarizes information about stock options granted during the years ended December 31,

15 unchanged sentences

SCHEDULE OF STOCK OPTIONS, EXPIRY DATE AND EXERCISE PRICES

Exercise Prices

April 20, 2025

3 unchanged sentences

December 31, 2028

June 17, 2030

September 30, 2030

6 unchanged sentences

February 2020 we amended the consulting agreement with Mr.

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.

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.

Agreement with Mr.

9 unchanged sentences

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

His employment with the Company ended in July 2024.

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

He has been working with the Company throughout

There is an interim arrangement under which he is being paid USD 5,000

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.

19 – CONCENTRATION AND GEOGRAPHIC DATA

the year ended December 31, 2024, one customer accounted for 23.7 %

of the Company’s revenues.

For the year ended December 31, 2023, no customer accounted for more than 10 %

of the Company’s revenues.

the year ended December 31, 2025, no customer accounted for more than 10% of the Company’s revenues.

For the year ended December 31, 2024,

no customer accounted for more than 10% of the Company’s revenues.

about Geographic Areas

6 unchanged sentences

Total revenues

The geographic revenues do not account for the business operations

sold in June 2025.

Company’s operations are subject to various political, economic, and other risks and uncertainties inherent in the countries in

3 unchanged sentences

restrictions, political conditions, and governmental regulations.

are closely monitoring developments in the war between Israel and Hamas that began on October 7, 2023 including potential impacts to

The Companies business, customers, suppliers, employees, and operations in Israel, the Middle East and elsewhere.

are closely monitoring developments in the war in Israel including potential impacts to

the Company’s business, customers, suppliers, employees, and operations in Israel, the Middle East and elsewhere.

At this time, impacts

1 unchanged sentence

20 – INCOME TAX

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

thousand deferred income tax benefit.

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.

based on income were as follows:

SCHEDULE OF TAX BASED ON INCOME

Foreign Taxes

Provision for (benefit) Income Taxes

tax effect of temporary differences that give rise to deferred tax assets and deferred tax liabilities are as follows as of December

16 unchanged sentences

Total deferred tax assets

valuation allowance for deferred tax assets as of December 31, 2024 and 2023 was $ 16.3 million and $ 14.9 million, respectively.

valuation allowance for deferred tax assets as of December 31, 2025 and 2024 was $ 5.6

million and $ 16.3 million, respectively.

the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred

12 unchanged sentences

records any penalties and interest as a component of operating expenses.

reconciliation between statutory rate and effective rate is as follows as of December 31,:

SCHEDULE OF RECONCILIATION OF STATUTORY RATE AND EFFECTIVE TAX RATE

principal items accounting for the difference between taxes computed at the U.S.

federal statutory rate and taxes recorded were as

follows (in thousands) after the adoption of ASU 2023-09:

SCHEDULE OF RECONCILIATION OF STATUTORY FEDERAL INCOME TAX RATE

December 31, 2025

US Federal Statutory Tax Rate

State and Local Income Taxes, Net of Federal Income Tax Effect

Foreign Tax Effects

Effect of Changes in Tax Laws or Rates Enacted in the Current Period

Effect of Cross-Border Tax Laws

Change in Valuation Allowance

Nontaxable or Nondeductible Items

Changes in Unrecognized Tax Benefits

Other Adjustments

Income Tax Expense / Effective Tax Rate

principal items accounting for the difference between taxes computed at the U.S.

federal statutory rate and taxes recorded were as follows

(in thousands) for the year prior to the adoption of ASU 2023-09:

December 31, 2024

Federal statutory tax rate

2 unchanged sentences

Return to provision adjustments

Effective tax rate

Income tax benefit / Effective tax rate

2025 provision for income taxes included i) $495 thousand foreign tax expense;

and ii) $174 thousand of tax benefit from changes in valuation

Income/(loss)

before taxes from continuing operations were as follows:

SCHEDULE OF DISAGGREGATION OF INCOME (LOSS) BEFORE TAXES FROM CONTINUING OPERATIONS

Income before taxes

amount of income taxes paid (net of refunds received) were as follows (in thousands):

OF INCOME TAXES PAID (NET OF REFUNDS RECEIVED)

State and Local

Total Income Taxes Paid (Net of Refunds Received)

Company reported no uncertain tax liability as of December 31, 2025 and expects no significant change to the uncertain tax liability

3 unchanged sentences

of December 31, 2025, the Company had a net operating loss (NOL) carryforward of approximately $ 14.5 million.

A portion of the NOL carryforward

begins to expire in 2028.

Under Section 382 of the Internal Revenue Code of 1986, as amended (“IRC Section 382”), a corporation

that undergoes an “ownership change” is subject to limitations on its use of pre-change NOL carryforwards to offset future

taxable income.

Within the meaning of IRC Section 382, an “ownership change” occurs when the aggregate stock ownership of

certain stockholders (generally 5% shareholders, applying certain look-through rules and aggregation rules which combine unrelated shareholders

that do not individually own 5% or more of the corporation’s stock into one or more “public groups” that may be treated

as 5-percent shareholder) increases by more than 50 percentage points over such stockholders’ lowest percentage ownership during

the testing period (generally three years).

In general, the annual use limitation equals the aggregate value of common stock at the time

of the ownership change multiplied by a specified tax-exempt interest rate.

The Company has not completed a study as to whether there

is a 382 limitation on its NOLs that will limit or possibly eliminate the use of its NOLs in the future.

Company’s Management has

recorded a 100% valuation allowance on the entire NOL as it believes that it is more likely than not that the deferred tax asset associated

with the NOLs will not be realized regardless of whether or not an “ownership change” has occurred.

NOTE 18 – BUSINESS SEGMENT

The Company operates in a single reportable segment,

referred to as providing solutions including hardware, software, communications, and automated management service as an established distributor

of barcode labels, tags, and ribbons, as well as RFID labels and tags.

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.

Under Section 382 of the

Internal Revenue Code of 1986, as amended (“IRC Section 382”), a corporation that undergoes an “ownership change”

is subject to limitations on its use of pre-change NOL carryforwards to offset future taxable income.

Within the meaning of IRC Section

382, an “ownership change” occurs when the aggregate stock ownership of certain stockholders (generally 5% shareholders,

applying certain look-through rules and aggregation rules which combine unrelated shareholders that do not individually own 5% or more

of the corporation’s stock into one or more “public groups” that may be treated as 5-percent shareholder) increases

by more than 50 percentage points over such stockholders’ lowest percentage ownership during the testing period (generally three

In general, the annual use limitation equals the aggregate value of common stock at the time of the ownership change multiplied

by a specified tax-exempt interest rate.

The Company has not completed a study as to whether there is a 382 limitation on its NOLs that

will limit or possibly eliminate the use of its NOLs in the future.

Company’s Management has recorded a 100% valuation allowance

on the entire NOL as it believes that it is more likely than not that the deferred tax asset associated with the NOLs will not be realized

regardless of whether or not an “ownership change” has occurred.

21 – BUSINESS SEGMENT

Company operates in a single reportable segment, referred to as providing solutions including hardware, software, communications, and

automated management service as an established distributor of barcode labels, tags, and ribbons, as well as RFID labels and tags.

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.

22 – SUBSEQUENT EVENTS

March 2025, the Company was named a defendant in a case involving a consultant, who is a related party, 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.

of Certificate of Amendment to the Certificate of Incorporation, as amended, dated November 18, 2019 incorporated by reference to

Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 18, 2019.

to Certificate of Designation of Series C Preferred Stock on June 17, 2016, incorporated by reference to Exhibit 3.1 to the Company’s

Current Report on Form 8-K, filed with the SEC on June 21, 2016.

of Certificate of Amendment to the Certificate of Incorporation, as amended, of OMNIQ Corp., dated September 30, 2020, incorporated

by reference to the Company’s Current Report on Form 8-K, filed with the SEC on October 2, 2020.

$12,492,136.51

Secured Promissory Note, from Quest Solution, Inc., Bar Code Specialties, Inc., Quest Marketing, Inc., Quest Solution Canada Inc.,

Quest Exchange Ltd.

and their subsidiaries and/or affiliates, jointly and severally, to ScanSource, Inc., incorporated by reference

to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on July 22, 2016.

of Securities

CAD Secured Promissory Note, from Quest Solution, Inc., Bar Code Specialties, Inc., Quest Marketing, Inc., Quest Solution Canada

Inc., Quest Exchange Ltd.

and their subsidiaries and/or affiliates, jointly and severally, to ScanSource, Inc., incorporated by reference

to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed with the SEC on July 22, 2016.

of Warrant, incorporated by referenced to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April

of Placement Agent Warrant, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed with

the SEC on April 9, 2019.

Agreement by and between the Company and Shai Lustgarten dated February 17, 2017, incorporated by reference to Exhibit 10.1 to the

Company’s Current Report on Form 8-K, filed with the SEC on April 6, 2017.

Agreement by and between the Company and Shai Lustgarten dated February 17, 2017, incorporated by reference to Exhibit 10.1 to the

Company’s Current Report on Form 8-K, filed with the SEC on April 6, 2017.

Agreement by and between the Company and Carlos J Nissensohn dated August 2, 2017 incorporated by reference to Exhibit 10.1 to the

Company’s Current Report on Form 8-K, filed with the SEC on August 4, 2017.

Agreement by and between the Company and YES-IF dated September 8, 2017, incorporated by reference to Exhibit 10.1 to the Company’s

Current Report on Form 8-K filed with the SEC on September 8, 2017.

Agreement by and between the Company and Benjamin Kemper dated October 2, 2017, incorporated by reference to Exhibit 10.3 to the

Company’s Current Report on Form 8-K filed with the SEC on October 5, 2017.

Agreement by and between the Company and David Marin dated February 28, 2018.

2018 Equity Incentive Plan incorporated by reference

to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed with the SEC on March 12, 2018.

Nissenson Employment Agreement, incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed

with the SEC on September 9, 2019.

Purchase Agreement, dated February 28, 2020, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form

8-K filed with the SEC on March 4, 2020.

Lustgarten Employment Agreement, dated as of February 27, 2020, incorporated by reference to Exhibit 10.2 to the Company’s

Current Report on Form 8-K filed with the SEC on March 4, 2020.

Agreement, dated as of February 27, 2020, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form

8-K filed with the SEC on March 4, 2020.

Purchase Agreement dated February 28, 2020, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form

8-K filed with the SEC on March 4, 2020.

Agreement with Shai Lustgarten on September, 2019, incorporated by reference to Exhibit 10.1 to the Company’s Current Report

on Form 8-K filed with the SEC on September 9, 2019.

Agreement with Carlos J.

Nissensohn on September, 2019, incorporated by reference to Exhibit 10.2 to the Company’s Current

Report on Form 8-K filed with the SEC on September 9, 2019.

Event – Planned Divestiture of CodeBlocks

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.

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.

of April 15, 2026, there are no other material subsequent events that have occurred.

Form of Certificate of Amendment to the Certificate of Incorporation, as amended, dated November 18, 2019 incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 18, 2019.

Amendment to Certificate of Designation of Series C Preferred Stock on June 17, 2016, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 21, 2016.

Form of Certificate of Amendment to the Certificate of Incorporation, as amended, of OMNIQ Corp., dated September 30, 2020, incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on October 2, 2020.

$12,492,136.51 Secured Promissory Note, from Quest Solution, Inc., Bar Code Specialties, Inc., Quest Marketing, Inc., Quest Solution Canada Inc., Quest Exchange Ltd.

and their subsidiaries and/or affiliates, jointly and severally, to ScanSource, Inc., incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on July 22, 2016.

Description of Securities

$483,173.60 CAD Secured Promissory Note, from Quest Solution, Inc., Bar Code Specialties, Inc., Quest Marketing, Inc., Quest Solution Canada Inc., Quest Exchange Ltd.

and their subsidiaries and/or affiliates, jointly and severally, to ScanSource, Inc., incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed with the SEC on July 22, 2016.

Form of Warrant, incorporated by referenced to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 9, 2019.

Form of Placement Agent Warrant, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed with the SEC on April 9, 2019.

Employment Agreement by and between the Company and Shai Lustgarten dated February 17, 2017, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 6, 2017.

Modification Agreement by and between the Company and Shai Lustgarten dated February 17, 2017, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on April 6, 2017.

Consulting Agreement by and between the Company and Carlos J Nissensohn dated August 2, 2017 incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 4, 2017.

Consulting Agreement by and between the Company and YES-IF dated September 8, 2017, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 8, 2017.

Employment Agreement by and between the Company and Benjamin Kemper dated October 2, 2017, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 5, 2017.

Employment Agreement by and between the Company and David Marin dated February 28, 2018.

2018 Equity Incentive Plan incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed with the SEC on March 12, 2018.

Neev Nissenson Employment Agreement, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on September 9, 2019.

Asset Purchase Agreement, dated February 28, 2020, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 4, 2020.

Shai Lustgarten Employment Agreement, dated as of February 27, 2020, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on March 4, 2020.

Consulting Agreement, dated as of February 27, 2020, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on March 4, 2020.

Asset Purchase Agreement dated February 28, 2020, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 4, 2020.

Employment Agreement with Shai Lustgarten on September, 2019, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 9, 2019.

Consulting Agreement with Carlos J.

Nissensohn on September, 2019, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 9, 2019.

2023 Equity Incentive Plan, incorporated by reference to Appendix B to the Company’s Definitive Proxy Statement on Schedule 14A

Purchase Agreement dated January 18, 2024, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form

8-K filed with the SEC on January 24, 2024

Purchase Agreement dated January 30, 2024, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form

8-K filed with the SEC on February 5, 2024

Code of Ethics

of the Registrant

of Independent Registered Public Accounting Firm

Certification

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

Certification

of our Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification

of our Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.

Asset Purchase Agreement dated January 18, 2024, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 24, 2024

Share Purchase Agreement dated January 30, 2024, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 5, 2024

Subsidiaries of the Registrant

Consent of Independent Registered Public Accounting Firm

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

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

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

Section 1350)

Certification

of our Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.

Certification of our Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.

Section 1350)

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures