Company: OMQS
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001813
Chunk: 692

Company: OMNIQ Corp.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 9
Chunk 692
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,303 
  
    Valuation allowance 
     (16,316) 
     (14,947)
  
    Total deferred tax assets 
    $1,239  
    $356 

The
valuation allowance for deferred tax assets as of December 31, 2024 and 2023 was $16.3 million and $14.9 million, respectively. In assessing
the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred
tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income
in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred
tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Management has recorded a 100%
valuation allowance, against its U.S. net deferred tax assets, since Management believes it is more likely than not that it will not
be realized at the date of this statement. The Company will continue to monitor the potential utilization of this asset. Should factors
and evidence change to aid in this assessment, a potential adjustment to the valuation allowance in future periods may occur. The Company
records any penalties and interest as a component of operating expenses.

The
reconciliation between statutory rate and effective rate is as follows as of December 31,:

 SCHEDULE OF RECONCILIATION OF STATUTORY RATE AND EFFECTIVE TAX RATE

    2024  
    2023 
  
    Federal statutory tax rate 
     21.00% 
     21.00%
  
    State taxes 
     (0.10)% 
     (0.03)%
  
    Foreign income taxes 
     0.28% 
     (5.78)%
  
    Change in valuation allowance 
     (12.17)% 
     (6.67)%
  
    Return to provision adjustments 
     0.00% 
     0.00%
  
    Other 
     0.00% 
     (10.31)%

    Effective tax rate 
     9.01% 
     (1.78)%

The
Company reported no uncertain tax liability as of December 31, 2024 and expects no significant change to the uncertain tax liability
over the next twelve months. The Company’s 2021, 2022, 2023, and 202