What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-31 compared with 2024-04-01 · 551 added, 696 removed, 1100 unchanged (53% of the section changed)

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of Science degree in Business Management & Computer Science from the University of Maryland.

Nissenson became a director of the Company in April 2017 and was appointed as our CFO in September 2019 and resigned as CFO November

Nissenson continues to serve as a director on the board.

He is an experienced entrepreneur and financial officer.

Nissenson founded Hotwine, Inc., a California based wine startup company.

Since August 2016 and until October 2019, Mr.

served as the CFO of Hypnocore, Ltd., an Israeli-based startup company that develops mobile applications for sleep monitoring and therapy.

From 2011 to 2015, Mr.

Nissenson was the CFO of GMW, Inc., a high-end wine retailer from Napa, California.

Before that, Mr.

served as the Vice President from 2006 to 2011 and the CFO from 2009 to 2011 at Phoenix International Ventures, Inc., an aerospace defense

Nissenson was also a member of the Municipal Committee for Business from 2004 to 2007 and a member of Municipal Committee

for Street Naming from 2005 to 2007 in the City of Herzliya, Israel.

He was also an armored-platoon commander in the Israeli Defense

Forces (Reserve) Armored Corps with a rank of Captain.

Nissenson graduated from Tel Aviv University in 2005 with a B.A.

in General History and Political Science.

In 2007, he graduated from the Hebrew University with an Executive Master’s degree in

Business Administration specializing in Integrative Management.

Shalem became a director of the Company in April 2017.

He has extensive experience in financial and business management.

has served as the CFO at Saga Monetary Technologies Limited (UK) since January 2018.

Prior to that Mr.

Shalem served as the CFO at Singulariteam

VC from January 2014 till January 2018.

He also worked as the CFO at Mobli Media Inc.

from January 2014 to December 2016.

experience also includes serving as the CFO of TAT Technologies Ltd., a NASDAQ-listed company, from April 2008 to December 2013.

Shalem is a CPA in Israel.

He received his B.A.

in Economy & Accounting from Tel Aviv University in 1999 and an MBA degree from Bar-Ilan

University in 2004.

Elhanani became a director of the Company in August 2021.

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to facilitate company growth.

Elhanani is serving as the CFO of Tarya Ltd.

, a public Fintech company which its shares are traded

in the Tel Aviv Stock Exchange.

Elhanani and has been the CFO and a partner of Singulariteam VC, a venture capital firm, since 2018.

Elhanani has been the CFO of Sirin Labs since 2017.

Sirin Labs is a multinational, high-tech company specializing in secured mobile

Elhanani is serving since 2023 as the CFO of Tarya Ltd.

, a public Fintech company which its shares

are traded in the Tel Aviv Stock Exchange.

Elhanani has been the CFO of Sirin Labs since 2017 till 2021.

Sirin Labs is a multinational,

high-tech company specializing in secured mobile phones.

From 2015 to 2017, Mr.

Elhanani was the CFO of SalesTech, an online internet technology servicing company.

Elhanani has also

served as the CFO of other companies, including:

Elhanani was the CFO of SalesTech, an online internet

technology servicing company.

Elhanani has also served as the CFO of other companies, including:

Micronet Ltd.

InterLogic Ltd.

and Finotec Group Inc.

From 2003 to 2006, Mr.

Elhanani was the corporate controller of On Track Innovations Ltd.

Elhanani was the corporate controller of On Track Innovations

From 1999 to 2003, Mr.

Elhanani was a senior

auditor at Kesselman and Kesselman (PWC Israel).

Elhanani was a lecturer at IVC College in Israel from 2014 to 2018 and at Hebrew

University in Jerusalem from 2001 to 2003.

Elhanani has also served as a board member for various companies, including:

Elhanani was a senior auditor at Kesselman and Kesselman (PWC Israel).

Elhanani was a lecturer at IVC

College in Israel from 2014 to 2018 and at Hebrew University in Jerusalem from 2001 to 2003.

Elhanani has also served as a board

member for various companies, including:

General Robotics (2017-2021);

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and Infinity AR (2017-2019).

Elhanani received a

in Accounting and Economics, and a Master of Business Administration, specializing in finance, from Hebrew University.

Teicher became a director of the Company in December 2022.

Teicher is the former Chief Scientist of the Israel government.

is a leading mathematician specializing in Algebraic Geometry with applications to computer vision, cryptography, cyber security, neuroscience,

neuro-medical devices, and complex societal systems, such as financial markets and health systems.

She earned a PhD in Mathematics from

Tel Aviv University and a postdoctoral fellowship from the Institute for Advanced Study in Princeton.

She has published 140 scientific

papers, wrote 5 books, mentored 80 students (Master, PhD, and postdocs) in Israel and the USA, organized 20 international conferences,

and won prestigious invitations to deliver lectures, numerous awards, and highly competitive research grants (in Israel, Germany, Italy,

the European Union, the USA, and China).

table below provides certain information regarding the diversity of our board of directors as the date of this annual report.

Diversity Matrix

of Principal Executive Offices:

Private Issuer

Prohibited under Home Country Law

Number of Directors

Not Disclose Gender

Gender Identity

Demographic Background

Underrepresented

Individual in Home Country Jurisdiction

Not Disclose Demographic Background

Elhanani received a B.A.

in Accounting and Economics, and a Master of Business Administration, specializing

in finance, from Hebrew University.

Board seeks members from diverse professional backgrounds who combine a solid professional reputation and knowledge of our business and

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such candidates which fulfill the diversity requirement with the requisite professional experience.

Family Relationships

Relationships

are no family relationships among and between the issuer’s directors, officers, persons nominated or chosen by the issuer to become

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

and Principal Position

Name and Principal

Option Awards

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

Option 1 Awards

Incentive Plan Compensation

Yaron Shalem (1)

Guy Elhanani (1)

fair value of the options awarded to Mr.

Shalem, and Mr.

Elhanani in 2022 was determined to be $46 thousand using the Black-Scholes

Option Pricing Model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the

stock options or warrants, and future dividends

PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

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Board currently consists of 2 members:

Shai Lustgarten, Mr.

Neev Nissenson, Mr.

Yaron Shalem, Mr.

Guy Elhanani, and Ms.

Mina Teicher.

Shai Lustgarten and Mr.

Guy Elhanani.

of the key functions of our Board is to provide oversight of our risk management process.

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directly, with support from its three standing committees—the Audit Committee, the Compensation Committee, and the Corporate Governance/Nominating

The information set forth in Item

1C is also incorporated herein by reference.

The information set forth in Item 1C is also incorporated herein by reference.

to Item 407(a)(1)(ii) of Regulation S-K promulgated under the Securities Act, we have adopted the definition of “independent director”

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The Board determined that Mr.

Yaron Shalem,

Guy Elhanani, and Ms.

Mina Teicher qualify as “independent directors” pursuant to such rules.

qualifies as “independent directors” pursuant to such rules.

have three standing committees:

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Audit Committee consists of Mr.

Yaron Shalem, Mr.

Guy Elhanani, and Ms.

Mina Teicher whereby Mr.

Shalem is the Chairperson.

has determined that Mr.

Shalem qualifies as an “audit committee financial expert,” as defined under the rules of the SEC.

Guy Elhanani, whereby Mr.

Elhanani is the Chairperson.

Our Board has determined that Mr.

Elhanani qualifies

as an “audit committee financial expert,” as defined under the rules of the SEC.

primary responsibility of the Audit Committee is to oversee our financial reporting process on behalf of the Board and report the results

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Compensation Committee consists of Mr.

Yaron Shalem, Mr.

Guy Elhanani, and Ms.

Mina Teicher.

Shalem serves as Chairperson.

Guy Elhanani,.

Elhanani serves as Chairperson.

Compensation Committee’s responsibilities include, among others:

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Corporate Governance/Nominating Committee consists of Mr.

Yaron Shalem, Mr.

Guy Elhanani, and Ms.

Mina Teicher.

Shalem serves as

Guy Elhanani .

Elhanani serves as Chairperson.

Corporate Governance/Nominating Committee’s responsibilities include, among others:

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shares of our common stock outstanding.

of Beneficial Owner

Name of Beneficial

of Beneficial Ownership

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

50,000 shares issuable upon the exercise of options.

Also includes 10,000 shares.

10,000 shares of common stock.

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

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

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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.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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Nissensohn is the father of Neev Nissenson,

board member and former CFO.

former board member and former CFO.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

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on its behalf by the undersigned, thereunto duly authorized.

April 1, 2024

March 31, 2025

Shai Lustgarten

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OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PCAOB:

2015 (BARZILY)

BALANCE SHEETS

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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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in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the financial statements).

opinion, the consolidated financial position of the Company present fairly, in all material respects, the consolidated financial position

of the Company as of December 31, 2023, and 2022 and the results of its operations and its cash flows for each of the years in the two-year

period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of

December 31, 2024, and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended

December 31, 2024, 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

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of the Company’s Ability to Continue as a Going Concern

accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.

in Note 3 to the financial statements, the Company has a deficit in stockholders’ equity, and has sustained recurring losses from

accompanying financial statements have been prepared assuming the Company will continue as a going concern.

As discussed in Note 3 to

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.

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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conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

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matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

and Intangible Assets— Refer to Note 8 to the consolidated financial statements

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.

after recording an impairment loss of $14.7 million.

The Company 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

identified potential impairment 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 as of December 31, 2023.

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.

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

as of December 31, 2024.

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

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Haynie & Company

Lake City, Utah

March 31, 2025

have served as the Company’s auditor since 2019.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of OMNIQ CORP.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of

on the Financial Statements

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thousands, except share and per share data)

and cash equivalents

receivable, net

Current assets

Cash and cash

Accounts receivable, net

Prepaid expenses

current assets

and equipment, net of accumulated depreciation of $ 1,166

Goodwill, net of accumulated

impairment of $ 14,868

name, net of accumulated amortization of $ 4,850

and $ 4,458 ,

relationships, net of accumulated amortization of $ 11,814

and $ 10,762 ,

intangibles, net of accumulated amortization of $ 1,669

and $ 1,541 ,

of use lease asset

AND STOCKHOLDERS’ EQUITY

payable and accrued liabilities

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

Right of use lease asset

LIABILITIES AND STOCKHOLDERS’

Current liabilities

Accounts payable and accrued

Line of credit

payroll and sales tax

payable, related parties

payable – current portion

liability – current portion

Accrued payroll and sales

Notes payable – current

Lease liability –

current portion

current liabilities

interest and accrued liabilities, related party

payable, less current portion

Long-term liabilities

Stockholders’

equity (deficit)

A Preferred stock;

shares designated, 0

shares issued and outstanding

B Preferred stock;

share designated, 0

shares issued and outstanding

C Preferred stock;

shares designated, 502,000

shares issued and outstanding, respectively

15,000,000 shares

10,675,802 and

7,714,780 shares

issued and outstanding, respectively

paid-in capital

Accrued interest and accrued

liabilities, related party

Notes payable, less current

Lease liability

long term liabilities

Stockholders’ equity

Series A Preferred stock;

$ 0.001 par value;

2,000,000 shares designated, 0 shares issued and outstanding

Series B Preferred stock;

$ 0.001 par value;

1 share designated, 0 shares issued and outstanding

Series C Preferred stock;

$ 0.001 par value;

3,000,000 shares designated, 502,000 shares issued and outstanding, respectively

Preferred stock value

Common stock;

35,000,000 shares authorized;

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

Additional paid-in capital

Accumulated (deficit)

other comprehensive income

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STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

the Years Ended December 31,

thousands, except share and per share data)

(In thousands, except

share and per share data)

(In thousands, except

share and per share data)

of goods sold

& Development

general and administrative

impairment expense

Operating expenses

from operations

Research & Development

Selling, general and administrative

Goodwill impairment

Total operating expenses

Loss from operations

Other income (expenses):

Interest expense

(expenses) income

other expenses

Total other expenses

Net Loss Before Income Taxes

Provision for Income Taxes

income attributable to noncontrolling interest

Loss attributable to OmniQ Corp

currency translation adjustment

Comprehensive

Reconciliation of net loss

to net loss attributable to common shareholders

Dividends attributable to non-common stockholders’ of OmniQ Corp

loss attributable to common stockholders’ of OmniQ Corp

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

Weighted average number

of common shares outstanding - basic

Total Provision for Income

Foreign currency translation

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

accompanying notes are integral to these consolidated financial statements.

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the Years Ended December 31, 2024 and 2023

Stockholders’

Accumulated Other

Total Stockholders’

Comprehensive

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ESPP Stock Issuance

Stock and Warrant issued for

Stock-based compensation –

options, warrants, issuances

Warrant issuances, net of

issuance costs

Exercise of stock options

Non-controlling interests,

distributions and other

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

Cumulative Translation Adjustment

(loss) income

December 31, 2022

Net (loss) income

Balance, December 31,

$ ( 113,923 )

Dividend on Class C Shares

CodeBlocks Acquisition

ESPP Stock Issuance

Stock-based compensation –

options, warrants, issuances

Stock and Warrant issued for

Exercise of stock options

Stock and warrant issuances,

net of issuance costs

Conversion of equity

Stock-based compensation – options, warrants,

Cumulative Translation Adjustment

(loss) income

December 31, 2023

Net (loss) income

Balance, December 31,

$ ( 123,899 )

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the Years Ended December 31,

flows from operations

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

on disposal of PP&E

interest expense

and warrant issued for services

and amortization

in operating assets and liabilities:

payable and accrued liabilities

interest and accrued liabilities, related party

payroll and sales taxes payable

tax assets, net

cash provided by (used in) operating activities

flows from investing activities

for additional ownership in subsidiary

of property and equipment

(In thousands)

Cash flows from operations

Adjustments to reconcile net loss to net cash

provided by operating activities:

Noncash interest expense

Stock-based compensation

Stock and warrant issued

Depreciation and amortization

Goodwill impairment

Amortization of ROU asset

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

Lease liability

Deferred tax assets, net

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

cash provided by (used in) investing activities

flows from financing activities

from ESPP stock issuance

from exercise of options and warrants

paid to non-controlling interest

proceeds from issuance of common stock

on notes/loans payable

from the issuance of notes/loans payable

on line of credit

cash (used in) provided by financing activities

change in cash and cash equivalents

of foreign exchange rates on cash and cash equivalents

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

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

issued for services

dividends payable

of use asset acquired in exchange for lease liability

disclosure of cash flow information:

paid for interest

paid for income taxes

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:

Cash paid for interest

Cash paid for income taxes

accompanying notes are integral to these consolidated financial statements.

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Computers Ltd.

(January 2024)

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

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OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT

years (in Dangot subsidiary, 10 years)

Definite-lived

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amortizes definite-lived intangible assets on a straight-line basis over their useful lives.

The Company recorded no

impairment loss for definite-lived intangible

assets during the years ended December 31, 2023 and 2022.

The Company recorded no impairment loss

for definite-lived intangible assets during the years ended December 31, 2024 and 2023.

the Company determines that the carrying value of a long-lived asset may not be recoverable based upon the existence of one or more of

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The assets are being amortized on the straight-line method over

useful lives ranging from 3

years with a remaining weighted average lifespan

useful lives ranging from 3 to 11 years with a remaining weighted average lifespan of 7.1 years.

Indefinite-lived

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

Two vendors made

and one vendor made up 48 %

of our purchases during the year ended December 31, 2023 and 2022, respectively.

One vendor made

up 47 % and two vendors made up 38 % of our purchases during the year ended December 31, 2024 and 2023, 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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Company expenses marketing and advertising costs as incurred.

During 2023 and 2022, the Company spent $ 379

thousand and $ 630

thousand, respectively, on marketing, trade show,

and advertising.

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

respectively, on marketing, trade show, and advertising.

Currency Translation

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The aggregate foreign currency transaction loss included in net income

for the years ended December 31, 2023 and 2022 was $ 1

million, respectively.

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

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

EPS for the years ended December 31, 2023 and December 31, 2022 were 8,412,494

and 7,576,434 ,

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.

EPS for the years ended December 31, 2024 and December 31, 2023 were 10,696,435 and 8,412,494 and, 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.

following table sets forth the potentially dilutive securities as of December 31, 2024 and 2023, excluded from the computation of diluted

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OF ANTI DILUTIVE SECURITIES EXCLUDES FROM COMPUTATION OF EARNINGS PER SHARE

Options to purchase

to purchase common stock

shares excluded from diluted net loss per share

Reclassifications

and Comparability

Certain revenue and cost of goods sold amounts in the financial statements

of the prior year have been reclassified to be presented on a net basis rather than a gross to conform to the current year’s presentation

for comparative purposes.

The total amount reclassified from cost of goods sold to revenue, as a reduction, was $1.8 million.

no effect on total assets or net income.

adopted accounting pronouncements

June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (“ASU”) 2016-13,

Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, which changes how entities will

measure credit losses for financial assets and certain other instruments that are not measured at fair value through net income.

new expected credit loss impairment model requires immediate recognition of estimated credit losses expected to occur.

Additional disclosures

are required regarding assumptions, models, and methods for estimating the credit losses.

ASU 2019-10, Financial Instruments-Credit Losses

(Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):

Effective Dates, deferred the effective date for non-public

The standard is effective for non-public companies for fiscal years beginning after December 15, 2022.

We adopted these requirements

as of January 1, 2023 with no material impact on our consolidated financial statements.

August 2020, the Financial Statement Accounting Board (the “FASB”) issued ASU 2020-06 which simplifies the accounting for

convertible instruments and its application of the derivatives scope exception for contracts in an entity’s own equity.

For contracts

in an entity’s own equity, the new guidance eliminates some of the current requirements for equity classification such as the requirement

that settlement in unregistered shares is permitted.

In addition, the new guidance reduces the number of accounting models that require

separating embedded conversion features from convertible instruments, including eliminating the requirement to recognize a beneficial

conversion feature if the conversion feature is in the money and does not require bifurcation as a derivative liability.

only conversion features accounted for under the substantial premium model and those that require bifurcation will be accounted for separately.

The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation and requires

enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity.

The Company adopted the

new standards January 1, 2023.

The adoption of this standard may allow the Company, in the future and in certain circumstances, to avoid

derivative treatment of warrants and avoid beneficial conversion treatment of certain convertible preferred shares.

Adoption of this

standard had no effect on the Company’s financial statements.

Accounting Pronouncements not yet adopted

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

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year-end and interim periods beginning in fiscal 2025, 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.

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.

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

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

Reporting Comprehensive Income-Expense Disaggregation Disclosures

(Subtopic 220-40)” to improve the disclosures about an entity’s expenses.

Upon adoption, we will be required to disclose

in the notes to the financial statements a disaggregation of certain expense categories included within the expense captions on the face

of the income statement.

The standard is effective for our 2027 annual period, and our interim periods beginning in 2028, with early

adoption permitted.

The standard can be applied either prospectively or retrospectively.

We are currently assessing adoption timing and

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

3 – GOING CONCERN

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and cost-effective development of products

capital deficit of $ 45 million

as of December 31, 2023

deficit of $ 113.9

million as of December 31, 2023

capital deficit of $ 54 million as of December 31, 2024

deficit of $ 124 million as of December 31, 2024

years of losses from operations

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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, 2023, was approximately $ 42

Blue 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.

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.

1 unchanged sentence

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.

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

4 – BUSINESS ACQUISITIONS

Computers Ltd

May 3, 2021, the Company and Omniq Technologies Ltd., a wholly owned subsidiary of the Company (“Omniq Technologies”) entered

into a share purchase agreement (the “Dangot Share Purchase Agreement”) with Mr.

Pursuant to the Dangot Share

Purchase Agreement, Omniq Technologies agreed to purchase 51 %,

shares, of the capital stock of Dangot Computers

Ltd., an Israel company (“Dangot”), from Dangot’s sole shareholder, Haim Dangot, for consideration equivalent to 23,740,500

NIS (New Israeli Shekel), which equaled US $ 7.6

million (the “Closing Consideration”),

based on the exchange rate at the date of acquisition.

Closing Consideration was paid on July 8, 2021 in the following manner:

(a) the Company issued 220,103

shares of its common stock having a share value

thousand and (b) cash in the amount of $ 5,058

thousand, and (c) $ 600

thousand payable to owner.

Dangot also granted Omniq Technologies an irrevocable option to purchase the remaining 4,900

shares, or 49 %,

of Dangot’s capital stock (the “Dangot Option”) in the 12-month period following the closing date (the “Dangot

Option Period”) at a share purchase price of 465,500

NIS, which equaled US $ 143

thousand, per each 1 %

of Dangot’s remaining shares on a fully diluted basis which is the same valuation per share as the purchase price for the 51 %.

Effective October 1, 2021 the Company exercised a portion of its option and purchased an additional 26 %

of Dangot bringing its ownership to 77 %.

The Company paid $ 4,012

thousand to purchase the additional shares.

April 1, 2022, the Company closed on its acquisition of Dangot and exercised the remaining portion of its option to purchase 23.0 %

of the capital stock, thereby making Dangot a fully owned subsidiary of the Company.

The Company paid $ 3,518

thousand to purchase the additional shares.

Company utilized its working capital and a combination of short- and long-term loans.

following table summarizes the consideration given and the purchase price allocation:

OF RECOGNIZED FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

Price Consideration (in thousands)

Consideration

Cash payments

Accrued payable to owner

Fair value of stock issued (220,103 shares)

consideration

Accounts receivable

Property and equipment

Customer relationship

intangible assets

Assets acquired

Current liabilities assumed

Non-controlling

assets acquired

January 30, 2024, OMNIQ Corp.

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

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.

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.

based customers.

5 – CONTRACTS WITH CUSTOMERS

balance of deferred revenues is included in other current and long-term liabilities on the balance sheet.

The following table summarizes

changes in deferred revenue as of December 31:

balance of deferred revenues is included in other current liabilities on the balance sheet.

The following table summarizes changes in

deferred revenue as of December 31:

OF DEFERRED REVENUE

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Less amounts recognized during

new deferred revenue

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.

6 – ACCOUNTS RECEIVABLE

1 unchanged sentence

OF ACCOUNTS RECEIVABLE

Trade accounts

accounts receivable

allowance for doubtful accounts

accounts receivable (net)

receivable as of December 31, 2023 and 2022 are made up of trade receivables due from customers in the ordinary course of business.

customer accounted for more than 10 %

of the balance of accounts receivable for either period.

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 .

7 – INVENTORY

3 unchanged sentences

Finished goods

allowance for obsolescence

Less allowance for obsolescence

Total inventories

8 – PROPERTY AND EQUIPMENT

1 unchanged sentence

OF PROPERTY AND EQUIPMENT

Manufacturing

and lab equipment

Manufacturing and lab equipment

Leasehold improvements

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Property and equipment,

expense for the years ended December 31, 2023 and 2022 was approximately $ 464

thousand and $ 324

thousand, respectively.

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

9 – GOODWILL AND INTANGIBLE ASSETS

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Accumulated impairment of goodwill for the years ended

December 31, 2023 and 2022 was $ 14.7

million and $ 0 ,

respectively.

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

million , respectively.

intangible assets are stated at cost, net of accumulated amortization.

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the estimated useful lives ranging from 3

Amortization expense for the years ended

December 31, 2023 and 2022 was $ 1.6

million and $ 1.8

Amortization expense for the years ended December 31,

2024 and 2023 was $ 915 thousand and $ 1.6

million, respectively

assets consisted of the following as of December 31:

OF GOODWILL ASSETS CONSISTED

balance, beginning of year

foreign exchange rates

balance, end of year

SCHEDULE OF GOODWILL ASSETS CONSISTED

Goodwill balance, beginning of

Impairment loss

Addition of Codeblocks

Effective foreign exchange

Goodwill balance, end

assets consisted of the following as of December 31:

OF GOODWILL AND INTANGIBLE ASSETS

SCHEDULE OF GOODWILL AND INTANGIBLE ASSETS

Customer relationships

Other intangibles

Accumulated amortization

Intangibles, net

future amortization expense on the trade names, customer relationships, and other intangibles are as follows:

OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE

ending December 31,

SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE

Years ending December 31,

is not amortized but is evaluated for impairment annually or when indicators of a potential impairment are present.

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consist of customer relationships, contractor and resume databases, trade names, and internal use software and are being amortized over

periods ranging from two

Purchased intangible assets are reviewed

annually to determine if facts and circumstances indicate that the useful life is shorter than originally estimated or that the carrying

amount of assets may not be recoverable.

If such facts and circumstances exist, recoverability is assessed by comparing the projected

undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective

carrying amounts.

Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets.

If the useful

life is shorter than originally estimated, the rate of amortization is accelerated, and the remaining carrying value is amortized over

the new shorter useful life.

impairments were identified or changes to estimated

useful lives have been recorded as of December 31, 2023 and 2022.

periods ranging from two to nine years .

Purchased intangible assets are reviewed annually to determine if facts and circumstances indicate

that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable.

If such facts

and circumstances exist, recoverability is assessed by comparing the projected undiscounted net cash flows associated with the related

asset or group of assets over their remaining lives against their respective carrying amounts.

Impairments, if any, are based on the

excess of the carrying amount over the fair value of those assets.

If the useful life is shorter than originally estimated, the rate

of amortization is accelerated, and the remaining carrying value is amortized over the new shorter useful life.

No impairments were identified

or changes to estimated useful lives have been recorded as of December 31, 2024 and 2023.

10 – CREDIT FACILITIES AND LINE OF CREDIT

3 unchanged sentences

accounts receivables to BridgeBank.

Gross proceeds received during the years ended December 31, 2023 and 2022 were $ 35

million and $ 50

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

million, respectively.

This agreement was terminated

annual interest rate with respect to the daily average balance of unpaid advances outstanding under the BFA (computed on a monthly basis)

was equal to the “Prime Rate” of Wells Fargo Bank N.A.

plus 1.5%, plus a monthly fee equal to 0.15% of the average outstanding

The BFA credit facility was collateralized

with a senior security interest in certain assets of the Company.

The BFA included customary representations and warranties and default

provisions for transactions of this type.

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

party notes payable, consisted of the following as of December 31:

OF NOTES PAYABLE, RELATED PARTIES

Note payable –

payable – Thomet

notes payable, related parties

remaining balances were paid in full during the year ended December 31, 2023.

For the years ended December 31, 2023 and 2022, the Company

recorded interest expense in connection with these notes in the amount of $ 1

thousand and $ 8

thousand, respectively.

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

The Marin Note was payable in 60

monthly principal payments of $ 20

thousand beginning in October 2018.

Accrued interest

payable as of December 31, 2023 and 2022, was $ 73

thousand and $ 72

thousand, respectively.

Accrued interest was

payable at maturity.

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 his company (in 2014).

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.

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

October 2023.

This loan was settled during 2023.

12 – OTHER NOTES PAYABLE

notes payable consists of the following as of December 31,

OF OTHER NOTES PAYABLE

Notes Payable

current portion

Term Notes Payable

SCHEDULE OF OTHER NOTES PAYABLE

Notes Payable - other

Less current portion

Long Term Notes Payable

maturities of notes payable are as follows for the years ending December 31, 2024:

OF FUTURE MATURITIES OF NOTE PAYABLE

SCHEDULE OF FUTURE MATURITIES OF NOTE PAYABLE

Notes Payable

1 unchanged sentence

million, which at the time was approximately $ 2.16

The note accrues interest at the Israeli

Prime Rate plus 4.5 %

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

August 11, 2021, the Company purchased vehicles using cash and financing of NIS 500

thousand, approximately $ 155

thousand, to be paid off in monthly interest

and principal payments over 5 years .

The loan accrues interest at 7.5 %

per annum and is secured by the vehicles.

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 7.5 %

per annum and is payable in 36

instalments of principal and interest over 3

The note is secured by shares of Dangot Computers, Ltd At December 31, 2024, the balance owed is $ 1,815,840 .

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

off in monthly interest and principal payments over 5 years.

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

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

1 unchanged sentence

The note accrues interest at 7.3 %

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

1 unchanged sentence

The note accrues interest at 7.6 %

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

which at December 31, 2024 was 7.89 %.

In March 2024, NIS 7.5

million of the loan was converted into a long-term loan to be repaid in 36

installments, bearing interest at a rate of Prime + 3.25 %,

which at December 31, 2024 was 9.25 %.

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

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 %

The note accrues interest at the Israeli Prime Rate plus 3.5 %

which currently equals 9.5 %

1 unchanged sentence

monthly installments.

The balance at December 31, 2024 is $ 251 thousand.

of December 31, 2024, the Company was not in compliance with certain financial covenants related to the Bank Leumi and Bank Hapoalim

14 unchanged sentences

2023 and 2024, the company has elected to match;

the total expense was $ 109

thousand and $ 122

thousand, respectively.

the total expense was $ 109 thousand and $ 99 thousand, respectively.

of December 31, 2024, we had 5 Operating leases as follows:

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

As of December 31, 2023, the Company had 32

remaining on the lease.

space in Anaheim, CA with monthly payments of $ 4

As of December 31, 2023, the Company had 27

remaining on the lease.

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.

As of December 31, 2024, the Company had 15 months remaining on the lease.

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

1 unchanged sentence

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 784,380 .

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

As of December 31, 2024, the Company had 11

2 unchanged sentences

The lease provides

for monthly payments of NIS 18,814 .

As of December 31, 2023, the Company had 12

months remaining on the lease.

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

The lease expired as of December 31, 2024 .

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 41,200 .

AS of December 31, 2023, the Company had 18

months remaining on the lease.

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

The lease expired as of December 31, 2024.

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:

1 unchanged sentence

ROU asset - January 1, 2023

Effective foreign exchange

Effective foreign exchange rates

ROU asset - December 31, 2023

Effective foreign exchange

asset – December 31, 2023

Effective foreign exchange rates

ROU asset – December 31, 2024

Lease liability – January 1, 2023

Effective foreign exchange

Effect of foreign exchange rates

Lease liability – December 31, 2023

Effective foreign exchange

liability - December 31, 2023

of December 31, 2023, our operating leases had a weighted average remaining lease term of 19.81

months and a weighted average discount rate of

Effective foreign exchange rates

Lease liability - December 31, 2024

of December 31, 2024, our operating leases had a weighted average remaining lease term of 7.81 months and a weighted average discount

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

value of future minimum lease payments

current obligations

term lease obligations

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.

Less interest

Present value of future minimum lease payments

Less current obligations

Long term lease obligations

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).

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.

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.

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

$ 389,000 in unpaid fees and commissions.

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

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

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

14 – STOCKHOLDERS’ EQUITY

of December 31, 2023 and 2022, there were 2,000,000

Series A preferred shares authorized and zero

Series A preferred shares outstanding.

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, 2023 and 2022, there was one

preferred share authorized and zero

preferred shares outstanding.

of December 31, 2023 and 2022, there were 3,000,000

Series C Preferred Shares (“Series C”)

authorized with 502,000

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.

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

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, 2023 and 2022, the accrued dividends

on the Series C Preferred Stock was $ 181

thousand and $ 153

thousand, 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.

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

4 unchanged sentences

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.

On February 25, 2022,

the Company granted 792,500

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

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.

On October 23, 2022 19,000

stock options were granted to employees as part

shares were issued under the Plan in 2023.

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

thousand) shares and 7,025

thousand) shares of commons stock.

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.

1 unchanged sentence

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

per Pre-Funded Warrant.

The Company 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

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.

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.

and Stock Options

valuation assumptions used to determine the fair value of each option and warrant awarded during the year ended December 31, 2023 are

expected stock price volatility 126.44 %,

expected term in years 3.25 ,

and risk-free interest rate 4.73 %.

The estimated fair value of the warrants were $ .55 .

valuation assumptions used to determine the fair value of each option and warrant awarded during the year ended December 31, 2022 are

expected stock price volatility ranged from 104.33 %

expected term in years 3.25 ,

and risk-free interest rate ranged from 1.76 %

expected stock price volatility 126.44 %, expected term in years 3.25 , and risk-free interest rate 4.73 %.

The estimated fair

value of the warrants were $ .55 .

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

warrants were exercised during the years ended December 31, 2023 or 2024.

following table summarizes information about warrants granted during the years ended December 31:

OF WARRANTS ACTIVITY

SCHEDULE OF WARRANTS ACTIVITY

Weighted Average

2 unchanged sentences

Exercise Price

Balance, beginning

Warrants granted

Warrants expired

beginning of year

warrants as of December 31, 2024 are as follows:

OF OUTSTANDING WARRANTS

SCHEDULE OF OUTSTANDING WARRANTS

Exercise Prices

1 unchanged sentence

Residual Life

Span (in years)

Weighted Average

3 unchanged sentences

outstanding have the following expiry date and exercise prices as of the years ended December 31:

OF WARRANTS OUTSTANDING, EXPIRY DATE AND EXERCISE PRICES

Exercise Prices

SCHEDULE OF WARRANTS OUTSTANDING, EXPIRY DATE AND EXERCISE PRICES

October 06, 2024

September 01, 2025

June 04, 2026

December 04, 2027

March 25, 2027

October 11, 2028

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

3 unchanged sentences

The current plan was adopted by the board of directors in December 2021 with a maximum

shares to be issued.

of 1,118,856 shares to be issued.

option exercise price is established by the Board of Directors and may not be lower than the market price of the common shares at the

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exceed ten years from the date of the grant.

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

As of December 31, 2023, 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 $ 369

As of December 31, 2022, the intrinsic

value for vested stock options was $ 477

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

The weighted average period over which

it is expected to be recognized is 2

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.

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

OF STOCK OPTIONS GRANTED

SCHEDULE OF STOCK OPTIONS GRANTED

Stock Options

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Exercise Price

Balance, beginning

Balance, beginning of year

Stock options granted

1 unchanged sentence

Stock options cancelled, forfeited

options exercised

stock options

Stock options exercised

Balance, end of year

Exercisable stock options

options outstanding at the end of the year have the following expiry date and exercise prices as of December 31,

OF STOCK OPTIONS, EXPIRY DATE AND EXERCISE PRICES

SCHEDULE OF STOCK OPTIONS, EXPIRY DATE AND EXERCISE PRICES

April 20, 2025

March 1, 2027

October 31, 2027

December 31, 2028

September 30, 2030

recorded stock compensation expense relating to the vesting of stock options and warrants as follows for the years ended December 31,

OF STOCK COMPENSATION EXPENSE

SCHEDULE OF STOCK COMPENSATION EXPENSE

Stock Compensation

Option vesting

Stock Option vesting

15 – RELATED PARTY TRANSACTIONS

February 2020 we amended the consulting agreement with Mr.

Nissensohn, a principal shareholder of the Company and a family

member of a director and former officer of the Company.

The terms and condition of the contract are as follows:

a monthly fee of $ 30,000 .

Financing Fee:

the Company procures debt financing during the term of this Agreement and without any equity component, then the Consultant, who

shall have coordinated the transaction through which the Company procured the debt financing, shall be entitled to 5% of the gross

funds raised;

however if the Company is required to pay a success fee to another external entity, the Consultant shall be entitled

to only 3% of the gross funds raised.

Consultant’s right to receive such fee shall remain in force for a period of 24 months

immediately following the termination of this Agreement.

Financing Fee:

the Company procures equity financing in an amount equal to or greater than $2,000,000 during the term of this Agreement, then the

Consultant shall be entitled to a success fee of $60,000 upon the Company’s receipt of at least $2,000,000.

right to receive such fee shall remain in force for a period of 24 months immediately following the termination of this Agreement.

If the Company procures equity financing in an amount equal to or greater than $4,000,000 during the term of this Agreement, then

the Consultant shall be entitled to a success fee of $180,000 upon the Company’s receipt of at least $4,000,000.

right to receive such fee shall remain in force for a period of 24 months immediately following the termination of this Agreement.

If the Company procures equity financing in an amount equal to or greater than $6,000,000 during the term of this Agreement, then

the Consultant shall be entitled to a success fee to be determined by the Board of Directors but not less than $250,000 upon the

Company’s receipt of at least $6,000,000.

Consultant’s right to receive such fee shall remain in force for a period of

24 months immediately following the termination of this Agreement.

to National Exchange.

If the Consultant assists in the planning and monitoring of a successful listing or offering of securities

by the Company, or any subsidiary thereof, on the NASDAQ or New York Stock Exchange markets and such a listing or offering shall

be consummated within 24 months as of the date hereof, then the Consultant shall be entitled to a $ 80,000

onetime payment which shall be paid on the

1st day that the OMNIQ shares become traded on such national exchange.

the Company closes any M&A transaction with a third party target during the term of this Agreement, then the Consultant shall

be entitled to a success fee in the amount equal to five percent ( 5 %)

of the total transaction price, in any combination of cash and shares to be determined by OMNIQ, to be paid to the Consultant within

two (2) weeks of the closing of such transaction.

In the event an external entity is entitled to a success fee from the same M&A

transaction, the Consultant’s fee shall be reduced to no less than two and one-half percent ( 2.5 %)

and such amount reduced from Consultant’s fee shall be reallocated to the fee due to such external entity.

the Company closes any M&A transaction in which it is the acquired company, then the Consultant shall be entitled to a success

fee in the amount equal to two percent ( 2 %)

of the total transaction price, in any combination of cash and shares to be determined by the Company, to be paid to the Consultant

within two (2) weeks of the closing of such transaction.

fees described in this Section 2(e) shall also apply to any M&A transaction that closes after the term of this Agreement but

which the Consultant substantially contributed to prior to the termination of this Agreement.

Consultant shall be entitled to a fee equal to five percent ( 5 %)

of the year-to-year growth in the Company’s foreign sales of its products and services during the term of the Agreement.

fee shall be paid within a reasonable time after the end of each fiscal year.

If this Agreement is terminated prior to the end of

a fiscal year, then the Consultant shall be entitled to receive a pro-rated amount of the sales growth realized by the Company that

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.

Nissensohn was terminated in February 11, 2025 with effective May 11, 2025 date.

As of December 31, 2024, the Company

has accrued $ 60,000 towards amounts owed under this contract.

of January 1, 2024, the Company’s subsidiary Dangot Computers, Ltd.

entered into a service agreement with the Company’s CEO,

Shai Lustgarten for his role as director and Chairman of the Board of Directors of Dangot Computers.

The consideration for this is NIS

25,000 per month (approx.

$ 6,800 USD).

The Agreement allows for termination by either party without cause with 90 days written notice.

Haim Dangot, the founder of Dangot Computers, Ltd

and former shareholder of Dangot Computers Ltd., previously was employed with the company on a month to month basis for USD $ 5,000 per

His employment with the Company ended in July 2024.

16 – CONCENTRATION AND GEOGRAPHIC DATA

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

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

of the Company’s revenues.

For the year ended December 31, 2022, one customer accounted for 30 %

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

of the Company’s revenues.

3 unchanged sentences

years ended December 31,

OF REVENUES BY GEOGRAPHIC AREA

SCHEDULE OF REVENUES BY GEOGRAPHIC AREA

United States

Rest of the world

Total revenues

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

8 unchanged sentences

17 – INCOME TAX

the year ended December 31, 2023, the Company has $ 741

thousand of current income tax expense (US State

& Local and Foreign) and $ 221

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.

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

OF DEFERRED TAX ASSETS AND LIABILITIES

Reserves and deferred

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets

Reserves and deferred revenue

163(j) Limitation

Foreign deferred tax assets

operating loss

Net operating loss

Total gross deferred tax assets

2 unchanged sentences

Deferred tax liabilities

deferred tax liabilities

deferred tax assets

Total deferred tax liabilities

Net deferred tax assets

of net deferred tax assets, including a valuation allowance, are as follows as of December 31:

OF DEFERRED TAX ASSETS AND VALUATION ALLOWANCES

Net deferred tax

deferred tax assets

valuation allowance for deferred tax assets as of December 31, 2023 and 2022 was $ 14.9

million and $ 10.9

million, respectively.

In assessing the recovery

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

will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the

periods in which those temporary differences become deductible.

Management considers the scheduled reversals of future deferred tax liabilities,

projected future taxable income, and tax planning strategies in making this assessment.

Management has recorded a 100% valuation allowance,

against its U.S.

net deferred tax assets, since Management believes it is more likely than not that it will not be realized at the date

of this statement.

SCHEDULE OF DEFERRED TAX ASSETS AND VALUATION ALLOWANCES

Net deferred tax assets

Valuation allowance

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.

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

tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income

in the periods in which those temporary differences become deductible.

Management considers the scheduled reversals of future deferred

tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

Management has recorded a 100%

valuation allowance, against its U.S.

net deferred tax assets, since Management believes it is more likely than not that it will not

be realized at the date of this statement.

The Company will continue to monitor the potential utilization of this asset.

Should factors and evidence change to

aid in this assessment, a potential adjustment to the valuation allowance in future periods may occur.

The Company records any penalties

and interest as a component of operating expenses.

Should factors

and evidence change to aid in this assessment, a potential adjustment to the valuation allowance in future periods may occur.

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,:

OF RECONCILIATION OF STATUTORY RATE AND EFFECTIVE TAX RATE

Federal statutory

SCHEDULE OF RECONCILIATION OF STATUTORY RATE AND EFFECTIVE TAX RATE

Federal statutory tax rate

Foreign income taxes

1 unchanged sentence

Return to provision adjustments

Effective tax rate

Company reported no uncertain tax liability as of December 31, 2024 and expects no significant change to the uncertain tax liability

2 unchanged sentences

by the applicable governmental authorities.

of December 31, 2023, the Company had a net operating loss (NOL) carryforward of approximately $ 43.8

A portion of the NOL carryforward begins

to expire in 2028.

of December 31, 2024, the Company had a net operating loss (NOL) carryforward of approximately $ 45.7 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

13 unchanged sentences

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.

19 – SUBSEQUENT EVENTS

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

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:

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.

January 30, 2024, OMNIQ Corp.

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

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

(approximately US $ 1,275,044

based on today’s exchange rate).

The consideration

is payable in seven equal installments with the final payment due on January 11, 2025.

The purchase Agreement closed on February 1, 2024.

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

50 unchanged sentences

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

Code of Ethics

of the Registrant

2 unchanged sentences

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 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.

3 unchanged sentences

Section 1350)

Clawback Policy

XBRL Instance Document

7 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