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

Company: OMNIQ Corp.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 31
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is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

Critical
Audit Matters

The
critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill
and Intangible Assets— Refer to Note 9 to the financial statements

As
described in Note 9 to the financial statements, the Company has $4.7million of intangible assets and $2.9 million of goodwill. The Company
evaluates its goodwill and intangible assets at least annually or more frequently when events or changes in circumstances indicate the
carrying value may not be recoverable. In consideration of impairment, the Company employed a third-party specialist to prepare a valuation
based on management’s estimates and market information.

We
identified valuation of these assets as a critical audit matter because of the significant estimates and assumptions made by management
to estimate fair value, including the impact of forecasted growth, and the difference between the fair values and the carrying values
as of December 31, 2024. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve
our fair value specialist, when performing audit procedures to evaluate the