Company: OMQS
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001813
Chunk: 84

Company: OMNIQ Corp.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 2
Chunk 84
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 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.

Operating
Expenses

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.

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.

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.

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.

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.

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