OMNIQ Corp.
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
OMQS$0.130.0%Stored close · as of Jun 29, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-04-01.
0001493152-24-012457
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001641172-25-001813
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 68 previous paragraphs and 67 current paragraphs.
46 unchanged; 20 reworded; 1 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (1)
Current report
In 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.
Removed paragraphs (2)
Previous report
In 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. The 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 companies. 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.
Previous report
In 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. As a result, 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.
Reworded paragraphs (20)
Previous wording
The Company’s consolidated revenue for the year ended December 31, 2023 were $81.2 million, representing a decrease of $19.6 million from the year ended December 31, 2022 of $100.8 million. Revenues in 2023 and 2022 are presented in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“Topic 606”).
Current wording
The Company’s consolidated revenue for the year ended December 31, 2024 were $73.6 million, representing a decrease of $7.6 million from the year ended December 31, 2023 of $81.2 million. Revenues in 2024 and 2023 are presented in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“Topic 606”).
Previous wording
Net loss attributable to common stockholders’ of OMNIQ Corp was $29.5 million in 2023, an increase of $15.7 million from the 2022 loss of $13.8 million. Basic loss per share attributable to common stockholders was $3.50 for the year 2023 compared to $1.82 per share for the year 2022.
Current wording
Net loss attributable to common stockholders’ of OMNIQ Corp was $10 million in 2024, a decrease of $19.5 million from the 2023 loss of $29.5 million. Basic loss per share attributable to common stockholders was $0.94 for the year 2024 compared to $3.50 loss per share for the year 2023.
Previous wording
The following are the principal conditions or events which potentially raise substantial doubt about the company’s ability to continue as a going concern:
Current wording
The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. The following are the principal conditions or events which potentially raise substantial doubt about the company’s ability to continue as a going concern:
Previous wording
Revenue for the years ended December 31, 2023 and 2022 were generated from the sales of hardware, service contracts, software, labels and ribbons, and related services provided by the Company to its customers. For the years ended December 31, 2023 and 2022, the Company recognized $81.2 million and $100.8 million in net revenues, respectively. This represents a decrease of 19%. The decrease was due to two main factors: (1) The decrease in deliverables due to the war in Israel, and (2) a delay in the timing of a significant software project.
Current wording
Revenue for the years ended December 31, 2024 and 2023 were generated from the sales of hardware, service contracts, software, labels and ribbons, and related services provided by the Company to its customers. For the years ended December 31, 2024 and 2023, the Company recognized $73.6 million and $81.2 million in net revenues, respectively. This represents a decrease of 9%. The decrease was due to two main factors: (1) The decrease in deliverables, and (2) a delay in the timing of a significant customer project.
Previous wording
For the years ended December 31, 2023 and 2022, the Company recognized a total of $65 million and $78.7 million, respectively, of cost of goods sold. Cost of goods sold was 81% of revenues for 2023 and 78% of revenue for 2022. Our gross margin percentage has remained relatively stable in an industry that is experiencing gross-margin pressure.
Current wording
For the years ended December 31, 2024 and 2023, the Company recognized a total of $58 million and $65 million, respectively, of cost of goods sold. Cost of goods sold was 79% of revenues for 2024 and 81% of revenue for 2023. Our gross margin percentage has remained relatively stable in an industry that is experiencing gross-margin pressure.
Previous wording
For the years ended December 31, 2023 and 2022, operating expenses were $41.9 million and $31.7 million, respectively. This represents an increase of $10.2 million, or 32%, which is due to impairment expense of $14.7 million. The following explains in detail the change in operating expenses.
Current wording
For the years ended December 31, 2024 and 2023, operating expenses were $22.3 million and $41.9 million, respectively. This represents a decrease of $19.6 million, or 47%, which is due to impairment expense of $14.7 million in 2023. The following explains in detail the change in operating expenses.
Previous wording
Research & Development – Research and development for the years ended December 31, 2023 and 2022 totaled $2.2 million and $1.8 million, respectively. This represents an increase of $328 thousand or 18%, which is due to investment in developing additional software.
Current wording
Research & Development – Research and development for the years ended December 31, 2024 and 2023 totaled $1.5 million and $2.2 million, respectively. This represents an decrease of $657 thousand or 31%, which is due to reduction in costs for developing software.
Previous wording
Selling, General and Administrative – Selling, General and Administrative expenses were $23 million for the year ended December 31, 2023, compared to $27.7 million for the year ended December 31, 2022, representing a decrease of $4.7 million, or 17%. The change was due to a decrease in commissions as a result of lower sales and management’s efforts to cut costs.
Current wording
Selling, General and Administrative – Selling, General and Administrative expenses were $19.5 million for the year ended December 31, 2024, compared to $23 million for the year ended December 31, 2023, representing a decrease of $3.5 million, or 15%. The change was due to management’s efforts to cut costs.
Previous wording
Depreciation– Depreciation for the year ended December 31, 2023 was $464 thousand compared to $324 thousand for the year ended December 31, 2022. This represents an increase of $140 thousand, or 43%, attributable to growth in fixed assets.
Current wording
Depreciation– Depreciation for the year ended December 31, 2024 was $364 thousand compared to $464 thousand for the year ended December 31, 2023. This represents a decrease of $100 thousand, or 22%, attributable to reduction in fixed assets.
Previous wording
Intangible Amortization – Intangible amortization expense for the year ended December 31, 2023 was $1.6 million, compared to $1.8 million for the year ended December 31, 2022.
Current wording
Intangible Amortization – Intangible amortization expense for the year ended December 31, 2024 was $915 thousand, compared to $1.6 million for the year ended December 31, 2023.
Previous wording
Impairment of Goodwill– During the year ended December 31, 2023 the Company experienced significant decline in our stock price and sustained losses from operations. Therefore, we completed a quantitative goodwill impairment analysis as of December 31, 2023. The results of the analysis indicated an impairment loss for goodwill related to acquisitions prior to 2021, and we recorded a non-cash impairment of $14.7 million.
Current wording
Impairment of Goodwill– During the year ended December 31, 2024, the Company performed and quantitative goodwill impairment analysis and it was determined no impairment was needed during the year. During the year ended December 31, 2023 the Company experienced significant decline in our stock price and sustained losses from operations. Therefore, we completed a quantitative goodwill impairment analysis as of December 31, 2023. The results of the analysis indicated an impairment loss for goodwill related to acquisitions prior to 2021, and we recorded a non-cash impairment of $14.7 million.
Previous wording
The Company incurred $3.3 million in interest expense for the year ended December 31, 2023, compared to $3.5 million for the year ended December 31, 2022. The interest expense is comprised of interest incurred on promissory notes payable, the company’s line of credit, and vendor payables.
Current wording
The Company incurred $3.5 million in interest expense for the year ended December 31, 2024, compared to $3.3 million for the year ended December 31, 2023. The interest expense is comprised of interest incurred on promissory notes payable, the company’s line of credit, and vendor payables.
Previous wording
For the year ended December 31, 2022, the Company has $35 thousand of current income tax provision (US State & Local and Foreign) and $30 thousand deferred income tax expense.
Current wording
For 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.
Previous wording
The Company realized a net loss of $29.4 million for the year ended December 31, 2023, compared to a net loss of $13.6 million for the year ended December 31, 2022. The increased loss in 2023 is due primarily to impairment of goodwill and the decrease in revenue.
Current wording
The Company realized a net loss of $10 million for the year ended December 31, 2024, compared to a net loss of $29.4 million for the year ended December 31, 2023. The decreased loss in 2024 is due primarily to impairment of goodwill from prior year not in 2024 and the decrease in revenue.
Previous wording
As of December 31, 2023, the Company had cash in the amount of $1.7 million and a working capital deficit of $45 million, compared to cash in the amount of $1.3 million, and a working capital deficit of $38 million as of December 31, 2022. The Company had stockholders’ deficit attributable to OmniQ stockholders of $35 million and $10.5 million as of December 31, 2023 and 2022, respectively. This increase in our stockholders’ deficit was primarily attributable to net losses.
Current wording
As of December 31, 2024, the Company had cash in the amount of $2.3 million and a working capital deficit of $54 million, compared to cash in the amount of $1.7 million, and a working capital deficit of $45 million as of December 31, 2023. The Company had stockholders’ deficit attributable to OmniQ stockholders of $43.9 million and $35 million as of December 31, 2024 and 2023, respectively. This increase in our stockholders’ deficit was primarily attributable to net losses.
Previous wording
The Company’s accumulated deficit was $113.9 million and $84.4 million as of December 31, 2023 and 2022, respectively.
Current wording
The Company’s accumulated deficit was $123.9 million and $113.9 million as of December 31, 2024 and 2023, respectively.
Previous wording
The Company’s operations provided net cash of $170 thousand and $1.2 million for the years ended December 31, 2023 and 2022, respectively. The decrease of cash from operations of $1 million is primarily a result of reduction in sales.
Current wording
The Company’s operations provided net cash of $2.4 million and $170 thousand for the years ended December 31, 2024 and 2023, respectively. The increase of cash from operations of $2.2 million is primarily a result of increase in payables and other liabilities.
Previous wording
The Company’s cash used in investing activities was $331 thousand for the year ended December 31, 2023 compared to cash used by investing activities of $4.2 million for the year ended December 31, 2022.
Current wording
The Company’s cash used in investing activities was $32 thousand for the year ended December 31, 2024 compared to cash used by investing activities of $331thousand for the year ended December 31, 2023.
Previous wording
The Company’s financing activities used $50 thousand of cash during the year ended December 31, 2023, and used $3 million during the year ended December 31, 2022. During the year ended December 31, 2023, the Company made payments of $1.4 million on its notes payable, compared to the year ended December 31, 2022, when the Company made payments of $2.5 million on its notes payable, including its Supplier Secured Promissory note and related party notes payable. Additionally, the Company paid $1.6 million on the Company’s line of credit during the year ended December 31, 2023, compared to the year ended December 31, 2022, when the Company paid $4 million on the line of credit. The Company raised net proceeds of $2.4 million for the year ended December 31, 2023 and no funds were raised for the year ended December 31, 2022.
Current wording
The Company’s financing activities used $2.87 million of cash during the year ended December 31, 2024, and used $50 thousand during the year ended December 31, 2023. During the year ended December 31, 20243, the Company made payments of $3.2 million on its notes payable, compared to the year ended December 31, 2023, when the Company made payments of $1.4 million on its notes payable, including its Supplier Secured Promissory note and related party notes payable. Additionally, the Company received $292 thousand in the year ended December 31, 2024 on its line of credit and had paid $1.6 million on the Company’s line of credit during the year ended December 31, 2023. The Company raised no funds in the year ended December 31, 2024 and raised net proceeds of $2.4 million for the year ended December 31, 2024.
Previous wording
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires retrospective disclosure of significant segment expenses and other segment items on an annual and interim basis. Additionally, it requires disclosure of the title and position of the Chief Operating Decision Maker (“CODM”). This ASU will be effective for the Company’s fiscal December 31, 2024 year-end and interim periods beginning in fiscal 2025, with early adoption permitted. 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.
Current wording
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires retrospective disclosure of significant segment expenses and other segment items on an annual and interim basis. Additionally, it requires disclosure of the title and position of the Chief Operating Decision Maker (“CODM”). This ASU will be effective for the Company’s fiscal December 31, 2024 year-end and interim periods beginning in fiscal 2025, with early adoption permitted. Our CODM is Shai Lustgarten, our CEO. See Note 18 – Operating Segments for required disclosures.