Company: OMQS
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001813
Chunk: 9

Company: OMNIQ Corp.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 9
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 December 31, 2023.

Impairment
of Goodwill – During the year ended December 31, 2024, the Company performed and quantitative goodwill impairment
analysis and it was determined no impairment was needed during the year. During the year ended December 31, 2023 the Company
experienced significant decline in our stock price and sustained losses from operations. Therefore, we completed a quantitative
goodwill impairment analysis as of December 31, 2023. The results of the analysis indicated an impairment loss for goodwill related
to acquisitions prior to 2021, and we recorded a non-cash impairment of $14.7 million.

13

Other
Income and Expenses

The
Company incurred $3.5 million in interest expense for the year ended December 31, 2024,
compared to $3.3 million for the year ended December 31, 2023. The interest expense is comprised of interest incurred on promissory notes
payable, the company’s line of credit, and vendor payables.

Foreign
Currency Transactions

The
Company has multiple subsidiaries conducting operations in Israel, therefore there were transactions denominated in currency other than
US dollars for both 2024 and 2023. Foreign transaction gains and losses are reported on the consolidated statement of operations and
comprehensive loss and were included in the amount of loss from comprehensive income.

Provision
for Income Taxes

For the year ended December 31, 2024, the Company has $12 thousand of current
income tax expense (US State & Local and Foreign) and $882 thousand deferred income tax benefit.

For
the year ended December 31, 2023, the Company has $741 thousand of current income tax provision (US State & Local and Foreign) and
$221 thousand deferred income tax expense.

Net
loss

The
Company realized a net loss of $10 million for the year ended December
31, 2024, compared to a net loss of $29.4 million for the year ended December 31, 2023. The decreased loss in 2024 is due primarily to
impairment of goodwill from prior year not in 2024 and the decrease in revenue.

Liquidity
and Capital Resources

As
of December 31, 2024, the Company had cash in the amount of $2.3 million
and a working capital deficit of $54 million, compared to cash in the amount of $1.7 million, and