Omniq (OMQS) - 2025 Q3 - Quarterly Report

Financial Performance - The company's sales from operations for the nine months ended September 30, 2025, were $24 million, a decrease of approximately $2.8 million, or 10%, compared to the same period in 2024[82]. - The loss from operations for the nine months ended September 30, 2025, was $1.3 million, a decrease of $1.8 million compared to the loss of $3.1 million for the same period in 2024[83]. - For the three months ended September 30, 2025, the company generated net revenues of $8.8 million, a decrease of $628 thousand, or 6.64%, from $9.5 million in the same period in 2024[89]. - Total operating expenses for the three months ended September 30, 2025, were $3.6 million, a 23% increase from $2.9 million in the same period in 2024[92]. - For the nine months ended September 30, 2025, the company recognized a total of $17.1 million in cost of goods sold, which was 71% of net revenues, compared to $20.8 million, or 77% of net revenues, in the same period in 2024[99]. - Selling, general and administrative expenses for the nine months ended September 30, 2025, totaled $6.2 million, a 10.5% decrease from $6.9 million in the same period in 2024[101]. - Interest expense for the nine months ended September 30, 2025, totaled $651 thousand, compared to $820 thousand in the same period in 2024[103]. Cash and Working Capital - As of September 30, 2025, the company had cash of $679 thousand and a working capital deficit of $11.8 million, compared to cash of $2.3 million and a working capital deficit of $54 million as of December 31, 2024[84]. Internal Control and Compliance - As of September 30, 2025, the company's disclosure controls and procedures were deemed ineffective due to a previously reported material weakness in internal control over financial reporting[111]. - A material weakness was identified in the internal control over financial reporting for the year ended December 31, 2024, specifically related to segregation of duties and other immaterial weaknesses in data management and documentation[112]. - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that materially affected the internal control[113]. Settlement and Cost Reduction - A subsidiary, Dangot Computers, reached a settlement with a vendor in Israel for approximately USD$1.2 million over a 12-month period, which will be treated as a reduction in Cost of Goods Sold upon receipt[115].