What changed in this filing

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Item 1. Financial Statements

2026-08-18 compared with 2026-05-20 · 221 added, 203 removed, 301 unchanged (58% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

March 31, 2026

December 31, 2025

(In thousands, except share and per share data)

March 31, 2026

December 31, 2025

thousands, except share and per share data)

( UNAUDITED )

Current assets

Cash and cash equivalents

Cash and cash

Accounts receivable, net

Inventory, net

Prepaid expenses

Other current assets

Total current assets

Property and equipment, net of accumulated depreciation $ 1,408 and $ 1,413 , respectively

Trade name, net of accumulated amortization of $ 5,371 and _$ 5,334 , respectively

Customer relationships, net of accumulated amortization of $ 13,587 and $ 13,474 , respectively

Other intangibles, net of accumulated amortization of $ 2,032 and $ 2,038 , respectively

current assets

Property and equipment,

net of accumulated depreciation of $ 1,441 and $ 1,413 respectively

Trade name, net of accumulated

amortization of $ 5,442 and $ 5,334 , respectively

Customer relationships,

net of accumulated amortization of $ 13,763 and $ 13,474 , respectively

Other intangibles, net

of accumulated amortization of $ 2,056 and $ 2,038 , respectively

Right of use lease asset

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

LIABILITIES AND STOCKHOLDERS’

Current liabilities

Accounts payable and accrued liabilities

Accounts payable and accrued

Line of credit

Accrued payroll and sales tax

Accrued payroll and sales

Related party advances

Note payable – related party, short term

Notes payable – current portion

Notes payable – related

Notes payable – current

Notes payable

Lease liability – current portion

Lease liability –

current portion

Other current liabilities

Total current liabilities

current liabilities

Long-term liabilities

Notes payable, less current

Related party notes payable

Notes payable, less current portion

Notes payable

2 unchanged sentences

Total liabilities

Commitments and Contingencies (See Note 8)

Stockholders’ equity (deficit)

Stockholders’ equity

Series A Preferred stock;

9 unchanged sentences

Common stock;

$ 0.001 par value;

35,000,000 shares authorized;

2 unchanged sentences

Accumulated (deficit)

Accumulated other comprehensive (loss)

Total OmniQ stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

Accumulated other comprehensive

OmniQ stockholders’ equity (deficit)

Total liabilities and equity

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

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

For the Three months ended

(In thousands, except share and per share data)

Cost of goods sold

thousands, except share and per share data)

For the three

thousands, except share and per share data)

of goods sold

& Development

general and administrative

operating expenses

Research & Development

Selling, general and administrative

Total operating expenses

Loss from operations

from operations

Other income (expenses):

Interest expense

Other (expenses) income

Total other expenses

Net Loss Before Income Taxes

Current Provision for Income Taxes

Total Provision for Income Taxes

Net Income (Loss) before discontinued operations

Loss from Discontinued Operations, net

Foreign currency translation adjustment

Comprehensive loss

Reconciliation of net loss to net loss attributable to common shareholders

(expenses) income

(Loss) on debt settlement

other (income) expenses

Net Income (Loss) Before Income Taxes

Provision for Income Taxes

(loss) from continuing operations

from discontinued operations (net of tax)

Income (Loss)

Net Income (Loss)

currency translation adjustment

Comprehensive

income (loss )

Reconciliation of net income (loss)

to net income (loss) attributable to common shareholders

Net Income (Loss)

Dividends attributable to non-common stockholders’ of OmniQ Corp

Net loss attributable to common stockholders’ of OmniQ Corp

Net (loss) per share - basic attributable to common stockholders’ of OmniQ Corp

Net (loss) per share - diluted attributable to common stockholders’

of OmniQ Corp

Weighted average number of common shares outstanding – basic and diluted

income (loss) attributable to common stockholders’ of OmniQ Corp

income (loss) per share - basic attributable to common stockholders’ of OmniQ Corp

income (loss) per share - diluted

from discontinued operations (net of tax)

loss per share from discontinued operations

average number of common shares outstanding - basic

Weighted average number of common shares outstanding – dilutive

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

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

the Three Months ended March 31, 2025 and 2026

(In thousands)

Income (Loss)

Accumulated Other

Total Stockholders’

Preferred Stock

the Three and Six Months ended June 30, 2025 and 2026

Stockholders’

Comprehensive

(In thousands)

Income (Loss)

Balance, December 31, 2024

December 31, 2024

$ ( 123,899 )

Dividend on Class C Shares

Stock-based compensation – options, warrants, issuances

Cumulative Translation Adjustment

Net (loss) income

Balance, March 31, 2025

on Class C Shares

compensation – options, warrants, issuances

Translation Adjustment

(loss) income

March 31, 2025

$ ( 125,995 )

Balance, December 31, 2025

on Class C Shares

of assets from division

compensation – options, warrants, issuances

Translation Adjustment

(loss) income

June 30, 2025

December 31, 2025

$ ( 124,050 )

on Class C Shares

of stock option

Translation Adjustment

(loss) income

March 31, 2026

$ ( 125,961 )

Dividend on Class C Shares

Exercise of stock option

Stock Based Compensation

Cumulative Translation Adjustment

Net (loss) income

Balance, March 31, 2026

$ ( 125,961 )

on Class C Shares

Translation Adjustment

(loss) income

June 30, 2026

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

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

the Three Months Ended March 31,

the Six Months Ended June 30,

(In thousands)

Cash flows from operations

Loss from discontinued operations

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash

provided by (used in) operating activities:

Stock-based compensation

6 unchanged sentences

Accounts payable and accrued liabilities

Accrued interest and accrued liabilities, related party

Accrued interest and accrued liabilities

Accrued payroll and sales taxes payable

2 unchanged sentences

Other liabilities

Net cash provided by (used in) operating activities - continuing

Net cash provided by (used in) operating activities - discontinuing

Net cash provided by (used

in) operating activities - continuing

Net cash provided by (used in) operating activities

1 unchanged sentence

Purchase of property and equipment

Net cash (used in) investing activities – continuing operations

Net cash (used in) investing activities – discontinuing operations

Net cash (used in) investing activities

Cash paid for divestiture

Net cash (used in) investing

activities – continuing operations

Net cash (used in) investing

Cash flows from financing activities

1 unchanged sentence

Payments on notes/loans payable

Proceeds from draw on line of credit

Net cash (used in) provided by financing activities – continuing operations

Net cash (used in) provided by financing activities – discontinuing

Net cash (used in) provided by financing activities

Proceeds from draw on

line of credit

Net cash (used in) provided

by financing activities – continuing operations

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

Cash and cash equivalents at beginning of period

Cash 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

Right of use asset acquired in exchange for lease liability

Supplemental disclosure of cash flow information:

Right of use asset acquired in exchange for

lease liability

Cancelation of lease

Supplemental disclosure

of cash flow information:

Cash paid for interest

17 unchanged sentences

describe our significant accounting policies in Note 2 of the notes to consolidated financial statements in the 2025 Form 10-K.

the three-month period ended March 31, 2026, there were no significant changes to those accounting policies other than below.

the six-month period ended June 30, 2026, there were no significant changes to those accounting policies other than below.

Accounting Pronouncements not yet adopted

18 unchanged sentences

December 15, 2027, including interim periods within those annual periods, with early adoption permitted.

Loss Per Common Share

loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”.

Basic net loss per common share (“EPS”)

is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period.

Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential

common shares were issued, unless doing so is anti-dilutive.

The weighted-average number of common shares outstanding for computing basic

EPS for the three-months ended March 31, 2026, and 2025 were 15,140,705 and 10,712,930 , respectively.

Diluted net loss per share of common

stock is the same as basic net loss per share of common stock because the effects of potentially dilutive securities are antidilutive.

Income (Loss) Per Common Share

income (loss) per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”.

Basic net loss per common share

(“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares

outstanding for the period.

Diluted earnings per share is computed by dividing net income by the weighted average shares

outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive.

The weighted-average

number of common shares outstanding for computing basic EPS for the six-months ended June 30, 2026, and 2025 were 15,140,705

and 10,712,930 ,

respectively.

For the three months ended June 30, 2026 and 2025 the shares were 15,140,705 and 13,616,997 .

Diluted net loss per share of common stock is the same as basic net loss per share of common stock because the effects

of potentially dilutive securities are antidilutive.

following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share because such

1 unchanged sentence

SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNINGS PER SHARE

March 31, 2026

March 31, 2025

June 30, 2025

Options to purchase common stock

Warrants to purchase common stock

Potential shares excluded from diluted net loss per share

Warrants to purchase common

Potential shares excluded

from diluted net loss per share

the three months ended June 30, 2025, the weighted average number of shares included the options and warrants to purchase common stock.

2 – GOING CONCERN

4 unchanged sentences

and cost-effective development of products

capital deficit of $ 14.6 million as of March 31, 2026

deficit of $ 125.7 million as of March 31, 2026

capital deficit of $ 15.2 million as of June 30, 2026

deficit of $ 126.4 million as of June 30, 2026

years of losses from operations

5 unchanged sentences

efforts are focused on the most profitable product lines.

Company has implemented an aggressive debt settlement plan with its vendors and debt holders to clean up the Balance Sheet presentation

and during 2025, the Company was able to settle many debts for a discount.

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

to clean up the Balance Sheet presentation and during 2025, the Company 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.

1 unchanged sentence

3 – CONCENTRATIONS

the three-months ended March 31, 2026, and the year ended December 31, 2025, no customer accounted for more than 10 % of the Company’s

the six-months ended June 30, 2026, and the year ended December 31, 2025, no customer accounted for more than 10 % of the Company’s

consolidated revenues from continuing operations.

receivable at March 31, 2026 and December 31, 2025 are made up of trade receivables due from customers in the ordinary course of business.

No customer accounted for more than 10 % of the outstanding receivables as of March 31, 2026, and 11.2 % as of December 31, 2025.

the three months ended March 31, 2026, and the year ended December 31, 2025 one vendor made up 45% and 45 %, respectively, of our purchases.

receivable at June 30, 2026 and December 31, 2025 are made up of trade receivables due from customers in the ordinary course of business.

No customer accounted for more than 10 % of the outstanding receivables as of June 30, 2026, and 11.2 % as of December 31, 2025.

the six months ended June 30, 2026, and the year ended December 31, 2025 one vendor made up 45 % and 45 %, respectively, of our purchases.

4 – INVENTORY

1 unchanged sentence

SCHEDULE OF INVENTORY

March 31, 2026

December 31, 2025

June 30, 2026

Raw materials

7 unchanged sentences

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

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 and at March 31, 2026 was $ 5,624,040 .

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

The balance as of December 31, 2025 was

$ 3.8 million and at June 30, 2026 was $ 7.3 million.

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

2 unchanged sentences

The balance at December

31, 2025 was $ 9.6 million and at March 31, 2026 was $ 9.4 million.

31, 2025 was $ 9.6 million and at June 30, 2026 was $ 9.2 million.

OF RELATED PARTY NOTES PAYABLE

June 30, 2026

Related Party Notes Payable - other

Less current portion of

related party note payable

Long Term Notes Payable

– related party

6 – OTHER NOTES PAYABLE

SCHEDULE OF OTHER NOTES PAYABLE

(In thousands)

March 31, 2026

December 31, 2025

Note payable other

1 unchanged sentence

Long-term notes payable

March 31, 2026

December 31, 2025

Related Party Notes Payable - other

Less current portion of related party note payable

Long Term Notes Payable – related party

Payable Other

1 unchanged sentence

million, which at the time was approximately $ 2.16

The note accrues interest at the Israeli Prime Rate

The note accrues interest at the Israeli Prime Rate plus 4.5 %

which currently equals 8.25 %

1 unchanged sentence

instalments of principal and interest over 4

The note is secured by shares of Dangot Computers, Ltd

At December 31, 2025, the balance owed is $ 437,500

USD and at March 31, 2026, the balance owed is $ 385,000

The note is secured by shares of Dangot Computers, Ltd At December 31, 2025, the balance owed is $ 437,500

USD and at June 30, 2026, the balance owed is approximately $ 332,500

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

6 unchanged sentences

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

March 31, 2026 was 7.3 % and at December 31, 2025 was 7.05 %.

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

June 30, 2026 was 7.05 % and at December 31, 2025 was 7.05 %.

February 2024, NIS $ 1.5 million of the loan was converted into a short-term loan to be repaid in 12 instalments, 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

July 2024, an additional $ 1.5 million was converted into a long-term loan to be repaid in 18 instalments, 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 and at March 31, 2026 was $ 0.6 million.

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

of Prime + 2.2 %, the balance at December 31, 2025 was still $ 0.8 million and at June 30, 2026 was $ 0.4 million.

December 31, 2025, the Company owed Hapoalim Bank USD $ 1.39 million.

At March 31, 2026, 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

The note accrues interest at 7.6 %

The loan is renewed every month at Israeli Prime Rate plus 1.89 %,

which at December 31, 2025 was 7.64 %

and at March 31, 2026 was 7.64 %.

At June 30, 2026, the balance was approximately $ 0.81 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, 2025 was 7.64 % and at June 30, 2026 was 7.39 %.

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, 2025 was 9.0 % which at March 31, 2026 was 9.0 %.

of Prime + 3.25 %, which at December 31, 2025 was 9.0 % which at June 30, 2026 was 8.75 %.

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

1 unchanged sentence

December 31, 2025, the Company owed Bank Leumi USD $ 4.138 million.

At March 31, 2026, the Company owed Bank Leumi approximately USD $ 4

At June 30, 2026, the Company owed Bank Leumi approximately USD $ 3.85

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 % per annum and is payable in 36 monthly installments.

The balance at December 31, 2025 is $ 130 thousand and at March 31, 2026 was $ 100 thousand.

of March 31, 2026, the Company was not in compliance with certain financial covenants related to the Bank Leumi and Bank Hapoalim

The balance at December 31, 2025 is $ 130 thousand and at June 30, 2026 was $ 70 thousand.

of June 30, 2026, the Company was not in compliance with certain financial covenants related to the Bank Leumi and Bank Hapoalim debt.

The Company’s failure to comply with these financial covenants could result in an event of default under its debt agreements.

Therefore, we reclassified the total balance as current debt on the balance sheet.

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.

part of the sale of the Quest division and its assets, 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 March 31, 2026 was $ 9.4

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

we reclassified the total balance as current debt on the balance sheet.

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.

part of the sale of the Quest division and its assets, 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 June 30, 2026 was $ 9.2

Due to the related party nature of the CEO of OMNIQ relationship with the Note Holder, this note is deemed related

7 – STOCKHOLDERS’ EQUITY

of March 31, 2026, there were 2,000,000 Series A preferred shares designated and no Series A preferred shares outstanding.

of directors of the Company (the “Board”) had previously set the voting rights for the Series A preferred stock at 1 share

of preferred to 13 common shares.

of March 31, 2026, there was 1 preferred share designated and no preferred shares outstanding.

of March 31, 2026, there were 3,000,000 Series C Preferred Shares (“Series C”) authorized with 502,000 issued and outstanding.

The Series C shares have preferential rights above common shares and the Series B Preferred Shares and is entitled to receive a quarterly

dividend at a rate of $ 0.06 per share per annum and have a liquidation preference of $ 1 per share.

Series C shares outstanding are convertible

into common stock at the rate of 20 preferred shares to one share of common stock.

As of March 31, 2026, the accrued dividends on the

Series C Preferred Stock was $ 233 thousand.

of June 30, 2026 and December 31, 2025, there were 2,000,000

Series A preferred shares designated and no

Series A preferred shares outstanding.

board of directors of the Company (the “Board”) had previously set the voting rights for the Series A preferred stock at

1 share of preferred to 13 common shares.

of June 30, 2026 and December 31, 2025, there was 1

preferred share designated and no

preferred shares outstanding.

of June 30, 2026 and December 31, 2025, there were 3,000,000

Series C Preferred Shares (“Series C”) authorized with 502,000

issued and outstanding.

The Series C shares have preferential rights above common shares and the Series B Preferred Shares and is

entitled to receive a quarterly dividend at a rate of $ 0.06

per share per annum and have a liquidation preference of $ 1

C shares outstanding are convertible into common stock at the rate of 20 preferred shares to one share of common stock.

June 30, 2026, the accrued dividends on the Series C Preferred Stock was $ 241

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.

During the quarter ended March 31, 2026, the Company issued 50,000 shares upon exercise and receipt of funds for stock options.

the six months ended June 30, 2026, the Company issued 50,000 shares upon exercise and receipt of funds for stock options.

received were $ 3,000 .

5 unchanged sentences

against Dangot Computers is NIS 21 million approximately US $ 5.6 million.

The Company believes that it has meritorious defenses to such

action and intends to vigorously defend itself.

At this early stage, it is not possible to fully assess the chances of a lawsuit.

The judge has referred the matter to mediation and the company believes that its exposure is significantly lower than the original claim.

The Company has recorded a low level accrual representing the amount it currently estimates will be required for payment.

As of July 2026, this case has been settled for approx.

525,000 , to be paid over a 4 year period.

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

$ 389,000 in unpaid fees and commissions.

The Company believes it has multiple defense and cross claims against the former consultant

The Company believes it has multiple defenses and cross claims against the former consultant

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

17 unchanged sentences

our single reportable segment are the same as those for the Company as a whole.

NOTE 10 – DISCONTINUED OPERATIONS

10 – DISCONTINUED OPERATIONS

discussed in the Form 10K filed April 15, 2026, and the relevant Form 8-K, on July 11, 2025, OMNIQ Corp., a Delaware corporation (the

34 unchanged sentences

a principal member of the Buyer, the transaction is deemed related party.

Pursuant to his employment contract, the CEO, Shai Lustgarten

is entitled to a bonus equal to 4 % of a total transaction price and pursuant to that, the Board of Directors awarded a bonus of $ 1.72

million to Mr.

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

14 unchanged sentences

Reduction of other current assets

Reduction in property and equipment, net of accumulated depreciation

Reduction in accounts payable and accrued liabilities

Reduction in property and equipment, net

of accumulated depreciation

Reduction in accounts payable and accrued

Increase in other current liabilities

3 unchanged sentences

Additional paid-in capital reduction

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

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

SCHEDULE OF DISCONTINUED OPERATIONS

For the six months ended

Cost of goods sold

Selling, general and administrative

Research & Development

Interest expense

Other expenses (income)

Net Income (Loss) from Discontinued Ops

For the three months ended

March 31, 2026

March 31, 2025

Cost of goods sold

3 unchanged sentences

Other expenses (income)

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

Net Income (Loss) from Discontinued Ops

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

6 unchanged sentences

Total current assets

Property and equipment, net of accumulated depreciation

Property and equipment, net of accumulated

Right of use lease asset

12 unchanged sentences

SCHEDULE OF SUPPLEMENTAL CASH-FLOW INFORMATION FOR DISCONTINUED OPERATIONS

Three months ended

March 31, 2026

Three months ended

March 31, 2025

June 30, 2026

June 30, 2025

Depreciation and amortization

3 unchanged sentences

11 – SUBSEQUENT EVENTS

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.

As discussed in Note 6.

the Dangot Computers subsidiary has a bank loan

which as discussed is in negotiations with receiving an extension on the bank covenants.

of May 20, 2026, there are no other material subsequent events that have occurred.

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.

In July 2026, the case was settled for approx.

USD$ 525,000 ,

to be paid over a 4 year period.

of August 14, 2026, there are no other material subsequent events that have occurred.

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-Q

Item 1. Financial Statements