NOTE 8 – LITIGATION

On November 3, 2024 a commercial real estate company filed a lawsuit against Dangot Computers, OMNIQ Technologies and some of Dangot’s officers alleging breach of a letter of intent for a lease arrangement. The claims were brought in an Israeli court. The initial claim against Dangot Computers is NIS 21 million approximately US $5.6 million. As of July 2026, this case has been settled for approx. USD$ 525,000, to be paid over a 4 year period.

In March 2025, the Company was named a defendant in a case involving a consultant who was terminated and who claims he is owed approximately $389,000 in unpaid fees and commissions. The Company believes it has multiple defenses and cross claims against the former consultant and is evaluating its response to the lawsuit, but plans to vigorously defend the suit.

On June 30, 2025, the Company’s subsidiary Dangot Computers reached at settlement with one of its vendors in Israel related to past due rebates and price protection payments entitled under prior agreements. The vendor agreed to pay Dangot Computers, approximately USD $1.2 million, based on certain milestones related to additional purchases. These payments are being treated as reduction in Cost of Goods sold upon receipt from the Vendor. As of December 31, 2025, the full amount had been received from the vendor.

During 2025, several companies filed third-party and fourth-party claims against our subsidiary, Dangot Computers alleging patent infringement. In the opinion of Dangot’s legal counsel, at this preliminary stage it is not yet possible to assess the likelihood of the claims; therefore, no provision has been recorded in the Company’s financial statements in connection with this matter.