Company: OMQS
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001813
Chunk: 120

Company: OMNIQ Corp.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 2
Chunk 120
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 there is objective and reliable evidence of their standalone selling price. The total contract transaction
price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations.
The standalone selling price is based on an observable price for services sold to other comparable customers.

As
discussed in more detail below, revenue is recognized when a customer obtains control of promised goods or services under the terms of
a contract and is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services.
We do not have any material extended payment terms, as payment is due at or shortly after the time of the sale. Sales, value-added and
other taxes collected concurrently with revenue producing activities are excluded from revenue.

A
contract liability is recognized as deferred revenue when we invoice customers, or receive customer cash payments, in advance of satisfying
the related performance obligation(s) under the terms of a contract. Deferred revenue is recognized as revenue when we have satisfied
the related performance obligation.

    F-11

We
have four main revenue streams: (1) Hardware sales, (2) Hardware installation/configuration, (3) Hardware service contracts, and (4)
Third-party software sales. For all these revenue streams, our performance obligations are satisfied at a point in time, and therefore,
revenue is recognized at point in time when a customer takes control of the good or asset created by the service. Factors that may indicate
transfer of control are when we have the right to receive payment for the good or service, when the legal title of the asset as 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