OMNIQ Narrows Losses Amid Revenue Dip, Going Concern Doubts Persist

Ticker: OMQS · Form: 10-Q · Filed: Nov 14, 2025 · CIK: 278165

Sentiment: bearish

Topics: Going Concern, Net Loss, Working Capital Deficit, Debt Covenants, Revenue Decline, Gross Profit Improvement, Financial Risk

TL;DR

**OMNIQ is bleeding cash and facing a going concern warning, making it a high-risk bet despite narrowing losses.**

AI Summary

OMNIQ Corp. (OMQS) reported a net loss of $747,000 for the three months ended September 30, 2025, a significant improvement from the $1,599,000 net loss in the same period of 2024. For the nine months ended September 30, 2025, the company posted a net loss of $784,000, substantially better than the $6,742,000 loss in the prior year, primarily due to a $2,691,000 'Other income' compared to a $1,142,000 'Other expenses' in 2024. Revenues decreased to $8,826,000 for the three months ended September 30, 2025, from $9,454,000 in 2024, and for the nine-month period, revenues fell to $24,213,000 from $27,040,000. Gross profit, however, increased to $2,959,000 (33.5% of revenue) for the quarter from $2,092,000 (22.1% of revenue) in 2024, and to $7,124,000 (29.4% of revenue) for the nine months from $6,220,000 (23.0% of revenue). The company faces a working capital deficit of $11.8 million and an accumulated deficit of $124.7 million as of September 30, 2025, raising substantial doubt about its ability to continue as a going concern. A key business change was the sale of the CodeBlocks Ltd. entity on June 30, 2025, which was acquired in January 2024, and the conclusion of the Quest Marketing, Inc. factoring agreement concurrent with its asset sale.

Why It Matters

OMNIQ's continued net losses and significant working capital deficit of $11.8 million as of September 30, 2025, signal severe financial distress, directly impacting investor confidence and potentially future access to capital. The company's inability to comply with certain financial covenants on its Bank Leumi and Bank Hapoalim debt further exacerbates its precarious position, raising red flags for lenders and bondholders. For employees, the going concern warning could lead to job insecurity and operational instability, while customers might face concerns about long-term product support and service continuity. In a competitive market, OMNIQ's financial struggles could make it vulnerable to rivals with stronger balance sheets and greater capacity for innovation and market expansion.

Risk Assessment

Risk Level: high — OMNIQ has an accumulated deficit of $124.7 million and a working capital deficit of $11.8 million as of September 30, 2025. Furthermore, the company is not in compliance with certain financial covenants related to its Bank Leumi and Bank Hapoalim debt, indicating significant financial instability and a high risk of default.

Analyst Insight

Investors should exercise extreme caution and consider divesting from OMQS given the explicit 'going concern' warning, substantial accumulated deficit, and non-compliance with debt covenants. The company's ability to execute its mitigation plans, such as increasing sales with prime customers and reducing expenditures, is critical but highly uncertain.

Financial Highlights

debt To Equity
N/A
revenue
$24,213,000
operating Margin
N/A
total Assets
N/A
total Debt
N/A
net Income
-$784,000
eps
-$0.07
gross Margin
29.4%
cash Position
N/A
revenue Growth
-10.4%

Key Numbers

Key Players & Entities

FAQ

What is OMNIQ Corp.'s net loss for the nine months ended September 30, 2025?

OMNIQ Corp. reported a net loss of $784,000 for the nine months ended September 30, 2025. This is a substantial improvement compared to the net loss of $6,742,000 for the same period in 2024.

Did OMNIQ Corp.'s revenue increase or decrease in the latest quarter?

OMNIQ Corp.'s revenues decreased for the three months ended September 30, 2025, falling to $8,826,000 from $9,454,000 in the prior year's comparable quarter.

What is OMNIQ Corp.'s working capital deficit as of September 30, 2025?

As of September 30, 2025, OMNIQ Corp. had a working capital deficit of $11.8 million. This significant deficit is identified as a principal condition raising substantial doubt about the company's ability to continue as a going concern.

What is the accumulated deficit for OMNIQ Corp. as of September 30, 2025?

OMNIQ Corp.'s accumulated deficit stood at $124.7 million as of September 30, 2025. This substantial deficit is a key factor contributing to the going concern warning.

Is OMNIQ Corp. in compliance with its debt covenants?

No, as of September 30, 2025, OMNIQ Corp. was not in compliance with certain financial covenants related to its debt with Bank Leumi and Bank Hapoalim. This non-compliance indicates a heightened financial risk.

What strategic actions is OMNIQ Corp. taking to address its financial challenges?

Management is evaluating operating expenses to reduce expenditures without negatively impacting current operations, focusing on increasing sales with prime customers, and concentrating sales efforts on the most profitable product lines to mitigate financial challenges.

What was the impact of 'Other income (expenses)' on OMNIQ Corp.'s net income for the nine months ended September 30, 2025?

For the nine months ended September 30, 2025, OMNIQ Corp. reported $2,691,000 in 'Other income', a significant positive change compared to 'Other expenses' of $1,142,000 in the same period of 2024. This swing contributed substantially to the narrowed net loss.

How many common shares of OMNIQ Corp. were outstanding as of November 4, 2025?

As of November 4, 2025, there were 11,602,930 shares of OMNIQ Corp. common stock, $0.001 par value, outstanding.

What was the gross profit margin for OMNIQ Corp. for the nine months ended September 30, 2025?

OMNIQ Corp.'s gross profit margin for the nine months ended September 30, 2025, was approximately 29.4% ($7,124,000 gross profit on $24,213,000 revenue). This is an improvement from 23.0% in the same period of 2024.

What is the significance of the 'going concern' disclosure for OMNIQ Corp.?

The 'going concern' disclosure for OMNIQ Corp. indicates that management has identified conditions, such as the $11.8 million working capital deficit and $124.7 million accumulated deficit, that raise substantial doubt about the company's ability to continue operating for at least one year from the financial statement issuance date. This is a critical warning for investors and stakeholders.

Risk Factors

Industry Context

OMNIQ Corp. operates in a competitive landscape where companies often undergo restructuring, including divestitures and changes in financing arrangements. The industry is sensitive to economic cycles, impacting demand for services and the ability to secure favorable financing.

Regulatory Implications

The company's financial health and disclosures are subject to SEC regulations. The going concern warning necessitates clear communication with investors and potential regulatory scrutiny if financial conditions do not improve.

What Investors Should Do

  1. Monitor cash flow and liquidity closely.
  2. Analyze the sustainability of improved gross margins.
  3. Investigate the drivers of 'Other Income'.
  4. Evaluate the impact of business divestitures.

Key Dates

Glossary

Working Capital Deficit
Occurs when a company's current liabilities exceed its current assets, indicating potential short-term liquidity issues. (OMNIQ Corp. has an $11.8 million deficit, a key factor contributing to going concern doubts.)
Accumulated Deficit
The cumulative net losses of a company since its inception that have not been offset by profits or capital contributions. (OMNIQ Corp.'s $124.7 million accumulated deficit highlights a history of unprofitability.)
Going Concern
An accounting assumption that a business will continue to operate for the foreseeable future, typically at least 12 months. (The company's financial condition raises substantial doubt about its ability to continue as a going concern.)
Gross Profit Margin
Measures how efficiently a company produces its goods or services, calculated as (Revenue - Cost of Goods Sold) / Revenue. (OMNIQ Corp. improved its YTD gross profit margin to 29.4% from 23.0% in the prior year, indicating better cost management in production.)
Other Income (Expenses)
Income or expenses not related to a company's primary business operations, such as gains or losses from asset sales or interest income/expense. (A significant swing from 'Other expenses' to 'Other income' ($2.7 million in YTD 2025) was a major driver of the reduced net loss.)

Year-Over-Year Comparison

Compared to the prior year, OMNIQ Corp. has significantly reduced its net loss for both the quarter and year-to-date periods, largely driven by a substantial positive swing in 'Other income'. However, revenues have declined, indicating top-line challenges. Gross profit margins have notably improved, suggesting better operational efficiency or pricing power in its core business, but the company continues to grapple with a severe working capital deficit and accumulated deficit, raising substantial going concern doubts.

Filing Stats: 4,950 words · 20 min read · ~17 pages · Grade level 12.4 · Accepted 2025-11-14 16:13:12

Key Financial Figures

Filing Documents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION F-1

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS F-1 CONDENSED CONSOLIDATED BALANCE SHEETS AT SEPTEMBER 30, 2025 AND DECEMBER 31, 2024 (UNAUDITED) F-1 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED) F-2 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED) F-3 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED) F-4 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS F-5

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 7

CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES 7

- OTHER INFORMATION

PART II - OTHER INFORMATION 8

LEGAL PROCEEDINGS

ITEM 1. LEGAL PROCEEDINGS. 8

RISK FACTORS

ITEM 1A. RISK FACTORS. 8

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. 8

DEFAULTS UPON SENIOR SECURITIES

ITEM 3. DEFAULTS UPON SENIOR SECURITIES. 8

MINE SAFETY DISCLOSURES

ITEM 4. MINE SAFETY DISCLOSURES. 8

OTHER INFORMATION

ITEM 5. OTHER INFORMATION. 8

EXHIBITS

ITEM 6. EXHIBITS. 9

SIGNATURES

SIGNATURES 10 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS OMNIQ CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) As of September 30, 2025 December 31, 2024 ( UNAUDITED ) ASSETS Current assets Cash and cash equivalents $ 679 $ 2,349 Accounts receivable, net 10,579 20,945 Inventory 3,492 7,405 Prepaid expenses 696 1,085 Other current assets 38 96 Total current assets 15,484 31,880 Property and equipment, net of accumulated depreciation 668 721 Goodwill 1,891 2,918 Trade name, net of accumulated amortization 1,159 1,187 Customer relationships, net of accumulated amortization 2,842 3,115 Other intangibles, net of accumulated amortization 354 410 Right of use lease asset 371 1,076 Other assets 2,251 2,282 Total Assets $ 25,020 $ 43,589 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued liabilities $ 12,432 $ 66,097 Line of credit 2,019 535 Accrued payroll and sales tax 3,020 2,903 Notes payable – current portion 5,667 8,512 Lease liability – current portion 218 701 Related party advances 1,995 - Other current liabilities 1,400 7,575 Total current liabilities 26,751 86,323 Long-term liabilities Accrued interest and accrued liabilities, related party - 73 Notes payable, less current portion 543 234 Related party notes payable 9,987 - Notes payable 9,987 - Lease liability 91 353 Other long term liabilities 728 494 Total liabilities 38,100 87,477 Stockholders' equity (deficit) 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 1 1 Preferred

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