Company: OMQS
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001813
Chunk: 922

Company: OMNIQ Corp.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 11
Chunk 922
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. Management has recorded a 100%
valuation allowance, against its U.S. net deferred tax assets, since Management believes it is more likely than not that it will not
be realized at the date of this statement. The Company will continue to monitor the potential utilization of this asset. Should factors
and evidence change to aid in this assessment, a potential adjustment to the valuation allowance in future periods may occur. The Company
records any penalties and interest as a component of operating expenses.

The
reconciliation between statutory rate and effective rate is as follows as of December 31,:

 SCHEDULE OF RECONCILIATION OF STATUTORY RATE AND EFFECTIVE TAX RATE

    2024  
    2023 
  
    Federal statutory tax rate 
     21.00% 
     21.00%
  
    State taxes 
     (0.10)% 
     (0.03)%
  
    Foreign income taxes 
     0.28% 
     (5.78)%
  
    Change in valuation allowance 
     (12.17)% 
     (6.67)%
  
    Return to provision adjustments 
     0.00% 
     0.00%
  
    Other 
     0.00% 
     (10.31)%

    Effective tax rate 
     9.01% 
     (1.78)%

The
Company reported no uncertain tax liability as of December 31, 2024 and expects no significant change to the uncertain tax liability
over the next twelve months. The Company’s 2021, 2022, 2023, and 2024 federal and state income tax returns are open for examination
by the applicable governmental authorities.

As
of December 31, 2024, the Company had a net operating loss (NOL) carryforward of approximately $45.7 million. A portion of the NOL carryforward
begins to expire in 2028. Under Section 382 of the Internal Revenue Code of 1986, as amended (“IRC Section 382”), a corporation
that undergoes an “ownership change” is subject to limitations on its use of pre-change NOL carryforwards to offset future
taxable income. Within the meaning of IRC Section 382, an “ownership change” occurs when the aggregate stock ownership of
certain stockholders (generally 5% shareholders, applying certain look-through rules and aggregation rules which combine