Company: OMQS
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001813
Chunk: 311

Company: OMNIQ Corp.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 5
Chunk 311
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 forecasted level, and the Company
is unable to recover such costs through price increases, the carrying value of certain of the Company’s intangible assets may prove
to be unrecoverable and we may incur impairment charges of definitive-live intangible assets.

Indefinite-lived
Intangible Assets, Including Goodwill

Indefinite-lived
intangible assets, including goodwill, are not amortized but are required to be reviewed for impairment at least annually or when events
or circumstances indicate that carrying value may exceed fair value. The Company is permitted the option to first assess qualitative
factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the fair value
of the Company’s reporting unit is less than its corresponding carrying value. If, after assessing the totality of events and circumstances,
the Company concludes that it is not more likely than not that the fair value of the reporting unit is less than its corresponding carrying
value then the Company is not required to take further action. However, if the Company concludes otherwise, then the Company must calculate
the fair value of the reporting unit and compare it with its carrying amount, including Indefinite-lived intangible assets and recognize
impairment equal to the difference between the carrying amount of the reporting unit and its fair value, considering the related income
tax effect from any tax-deductible goodwill.

16

Stock
Based Compensation

We
periodically issue stock options and warrants to employees and non-employees in non-capital raising transactions for services and for
financing costs. We account for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided
by Financial Accounting Standards Board (the “FASB”) where the value of the award is measured on the date of grant and recognized
as compensation expense on the straight-line basis over the vesting period.

We
record stock-based compensation expense according to the provisions of ASC Topic 718, Compensation – Stock Compensation (“Topic
718”). Topic 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in
the financial statements based on their fair values. Under the provisions of Topic 718, the Company determines the appropriate fair value
model to be used for valuing share-based payments and the amortization method for compensation cost.

The
fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company estimates
the expected volatility and expected option life consistent with