Company: OMQS
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001813
Chunk: 8

Company: OMNIQ Corp.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 8
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 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.

Cost
of Goods Sold

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.

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