Company: OMQS
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001813
Chunk: 88

Company: OMNIQ Corp.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 2
Chunk 88
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 are when we have the right to receive payment for the good or service, when the legal title of the asset
has been transferred, physical possession of the asset has been transferred, the customer obtains the significant risks and rewards of
ownership of the asset, and the customer accepts the asset. For some customers, control is transferred when the customer, or the customer’s
courier, picks up the hardware from our warehouse. For other customers, control is transferred upon delivery. For hardware sales which
also include installation and/or configuration as a single performance obligation, control is transferred only when the hardware is delivered
and installed/configured. For hardware service contracts and for third-party software sales, the Company acts as the agent in the transaction,
and thus recognizes revenue on a net basis at a point in time when the transaction has been facilitated.

We
leverage drop-ship shipments with many of our partners and suppliers to deliver hardware to our customers without having to physically
hold the inventory at our warehouses, thereby increasing efficiency and reducing costs. We recognize revenue for drop-ship arrangements
on a gross basis as the principal in the transaction when the product is received by the customer because we control the product prior
to transfer to the customer. We also assume primary responsibility for the fulfillment in the arrangement, we assume inventory risk if
something were to happen to the hardware during shipping, we set the price of the product charged to the customer, we assume credit risk
for nonpayment by our customer, and we work closely with customers to determine their hardware specifications.

Management
reviews historical returns on at least an annual basis to determine the need for an allowance for sales returns. Historically, sales
returns have been extremely limited, with the effect on the financial statements immaterial. Sales returns during any particular year
are so small and so infrequent that management determined that any material reserve against sales returns would likely not be appropriate.

Definite-lived
Intangible Assets Impairment Evaluation

The
Company periodically evaluates the carrying value of definite-lived intangibles when events or changes in circumstances indicate that
the carrying value may not be recoverable. Factors the Company considers important which could trigger an impairment review include,
but are not limited to, significant under-performance relative to historical or projected future operating results, significant changes
in the manner of its use of acquired assets or its overall business strategy, and significant industry or economic trends. The Company
amortizes definite-lived intangible assets on a straight-line basis over their useful lives. The Company recorded no impairment loss