What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-09 compared with 2022-05-10 · 213 added, 156 removed, 316 unchanged (54% of the section changed)

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in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including the Company’s annual

report on Form 10-K for the year ended December 31, 2021 and this quarterly report on Form 10-Q for the three months ended March

report on Form 10-K for the year ended December 31, 2021.

may be other factors of which the Company is currently unaware or which it currently deems immaterial that may cause its actual results

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are headquartered in Woodcliff Lake, New Jersey, with offices located around the globe.

Our patented technologies address the needs

of organizations to monitor and analyze their assets to improve safety, increase efficiency and productivity, reduce

costs, and improve profitability.

patented technologies address the needs of organizations to monitor and analyze their assets to improve safety, increase efficiency and

productivity, reduce costs, and improve profitability.

Our offerings are sold under the global brands PowerFleet, Pointer and Cellocator.

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spectrum of vertical markets, we differentiate ourselves by developing mobility platforms that collect data from unique sensors.

because we are original equipment manufacturer (“OEM”) agnostic, we help organizations view and manage their mixed

assets homogeneously.

All of our solutions are paired with software as a service (“SaaS”) and analytics platforms

to provide an even deeper level of insights and understanding of how assets are utilized and how drivers and operators operate those

These insights include a full set of Key Performance Indicators (“KPI’s”) to drive operational and strategic

Our customers typically get a return on their investment in less than 12 months from deployment.

because we are original equipment manufacturer (“OEM”) agnostic, we help organizations view and manage their mixed assets

homogeneously.

All of our solutions are paired with software as a service (“SaaS”) and analytics platforms to provide an

even deeper level of insights and understanding of how assets are utilized and how drivers and operators operate those assets.

insights include a full set of Key Performance Indicators (“KPI’s”) to drive operational and strategic decisions.

customers typically get a return on their investment in less than 12 months from deployment.

enterprise software applications have machine learning capabilities and are built to integrate with our customers’ management systems

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competitors, adding significant value to customers’ business operations, and helping to contribute to their bottom line.

Our solutions also feature open application programming interfaces (“API’s”) for additional integrations and development

to boost other enterprise management systems and third-party applications.

Our solutions

also feature open application programming interfaces (“API’s”) for additional integrations and development to boost

other enterprise management systems and third-party applications.

market and sell our connected IoT data solutions to a wide range of customers in the commercial and government sectors.

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to operate their high-value assets, manage workforce resources, and distributed sites;

and face environmental,

safety, and other regulatory requirements.

In today’s landscape, it is crucial for these businesses to invest in solutions that

enable easy analysis and sharing of real-time information.

and face environmental, safety, and other regulatory

requirements.

In today’s landscape, it is crucial for these businesses to invest in solutions that enable easy analysis and sharing

of real-time information.

provide critical actionable information that powers unified operations throughout organizations.

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This is achieved through proving such things as two-way integrated workflows for drivers, control assignments

and work change, Electronic Driver Logging (“ELD”) and automated record keeping for regulatory compliance, monitoring

of asset pools and geofence violations, and various reporting insights that flag under-utilized assets, the closest assets, and alerts

on dwell time and exceeding the allotted time for loading and unloading.

and work change, Electronic Driver Logging (“ELD”) and automated record keeping for regulatory compliance, monitoring of

asset pools and geofence violations, and various reporting insights that flag under-utilized assets, the closest assets, and alerts on

dwell time and exceeding the allotted time for loading and unloading.

help customers to automate processes and increase productivity of their employees.

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overviews, troubleshooting guides, and issue escalation procedures.

provide our consulting services both as a stand-alone service to study the potential benefits of implementing an IoT business

intelligence solution and as part of the system implementation itself.

In some instances, customers prepay us for extended maintenance,

support and consulting services.

In those instances, the payment amount is recorded as deferred revenue and revenue is recognized over

the service period.

The ongoing COVID-19 pandemic and its

related impact on the global supply chain, inflation, and the conflict between Russia and Ukraine have resulted in significant economic

disruption and continue to adversely impact the broader global economy, including certain of our customers and suppliers.

Given the dynamic

nature of this situation, we cannot reasonably estimate the impact of COVID-19, the supply chain disruptions, inflation or the conflict

between Russia and Ukraine on our financial condition, results of operations or cash flows into the foreseeable future.

extent of the effects of the COVID-19 pandemic, supply chain disruptions, inflation and the conflict between Russia and Ukraine

on the Company is highly uncertain and will depend on future developments, and such effects could exist for an extended period of

time even after the pandemic subsides.

provide our consulting services both as a stand-alone service to study the potential benefits of implementing an IoT business intelligence

solution and as part of the system implementation itself.

In some instances, customers prepay us for extended maintenance, support and

consulting services.

In those instances, the payment amount is recorded as deferred revenue and revenue is recognized over the service

Rising interest rates, higher inflation, supply chain

disruptions, the ongoing COVID-19 pandemic, and the conflict between Russia and Ukraine have resulted in significant economic disruption

and adversely impacted the broader global economy, including our customers and suppliers.

Given the dynamic and uncertain nature of the

current macroeconomic environment, we cannot reasonably estimate the impact of such developments on our financial condition, results

of operations or cash flows into the foreseeable future.

The ultimate extent of the effects of these developments remain highly uncertain,

and such effects could exist for an extended period of time.

to Our Business

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and commercialize new products and technologies.

of March 31, 2022, we had cash (including restricted cash) and cash equivalents of $20.9 million and working capital of $40.5

Our primary sources of cash are cash flows from operating activities, our holdings of cash, cash equivalents and investments

from the sale of our capital stock and borrowings under our credit facility.

To date, we have not generated sufficient cash flow solely

from operating activities to fund our operations.

believe that our available working capital, anticipated level of future revenues, expected cash flows from operations and available borrowings

under its revolving credit facility with Bank Hapoalim B.M.

will provide sufficient funds to cover capital requirements through May 10,

of June 30, 2022, we had cash (including restricted cash) and cash equivalents of $18.0 million and working capital of $38.5 million.

Our primary sources of cash are cash flows from operating activities, our holdings of cash, cash equivalents and investments from the

sale of our capital stock and borrowings under our credit facility.

To date, we have not generated sufficient cash flow solely from operating

activities to fund our operations.

believe that our available working capital, anticipated level of future revenues, expected cash flows from operations and available

borrowings under its revolving credit facility with Bank Hapoalim B.M.

will provide sufficient funds to cover

capital requirements through August 9, 2023.

risks and uncertainties to which we are subject are described under the heading “Risk Factors” in Part II, Item 1A of this

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Accounting Policies

the three-month period ended March 31, 2022, there were no significant changes to our critical accounting policies as identified in our

the three-month period ended June 30, 2022, there were no significant changes to our critical accounting policies as identified in our

Annual Report on Form 10-K for the year ended December 31, 2021.

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following table sets forth, for the periods indicated, certain operating information expressed as a percentage of revenue:

Three Months Ended March 31,

Cost of Revenue:

Months Ended June 30,

Cost of products

Cost of services

Operating expenses:

Selling, general and administrative expenses

Research and development expenses

Total operating expenses

Selling, general and administrative

and development expenses

operating expenses

Loss from operations

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Interest expense

Other income (expenses) net,

Net loss before income taxes

Income tax benefit (expense)

Net loss before non-controlling interest

Non-controlling interest

Accretion of preferred stock

Preferred stock dividend

Net loss attributable to common shareholders

Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021

Revenues increased by approximately $4.2 million, or 14.3%, to $33.2 million in the three months ended March

31, 2022, from $29.0 million in the same period in 2021.

from products increased approximately $3.0 million, or 26%, to 14.4 million in the three months ended March

31, 2022, from $11.4 million in the same period in 2021.

The increase in product revenue is due to increased

product sales in our PowerFleet for Logistics business.

from services increased approximately $1.2 million, or 6.8%, to $18.8 million in the three months ended March

31, 2022, from $17.6 million in the same period in 2021.

The increase in services revenue is principally due to an

increase in our install base that generates service revenue.

Cost of revenues increased by approximately $4.3 million, or 29.2%, to $18.8 million in the three

months ended March 31, 2022, from $14.5 million for the same period in 2021.

Gross profit was $14.4 million

in three months ended March 31, 2022, compared to $14.5 million for the same period in 2021.

As a percentage of

revenues, gross profit decreased to 43.4% in 2022 from 49.9% in 2021.

income (expenses) net,

Net loss before income

tax benefit (expense)

loss before non-controlling interest

Non-controlling

Accretion of preferred

stock dividend

loss attributable to common shareholders

Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021

Revenues increased by approximately $1.0 million, or 3.1%, to $34.5 million in the three months ended June 30, 2022, from $33.5 million

in the same period in 2021.

from products decreased approximately $0.6 million, or 4.2%, to $14.8 million in the three months ended June 30, 2022, from $15.5 million

in the same period in 2021.

The decrease in product revenue is principally due to decreased product sales in our PowerFleet for Logistics

from services increased approximately $1.7 million, or 9.4%, to $19.8 million in the three months ended June 30, 2022, from $18.1 million

in the same period in 2021.

The increase in services revenue is principally due to an increase in our install base that generates service

revenue and installation revenue.

COST OF REVENUES.

Cost of revenues increased

by approximately $0.9 million, or 4.9%, to $18.4 million in the three months ended June 30, 2022, from $17.5 million for the same period

Gross profit was $16.2 million in the three months ended June 30, 2022, compared to $16.0 million in the same period in 2021.

As a percentage of revenues, gross profit decreased to 46.9% in 2022 from 47.8% in 2021.

The decrease in gross profit as a percentage

of revenue was principally due to the increase in raw materials costs related to the global supply chain issues.

of products increased by approximately $3.8 million, or 46.9%, to $12.0 million in the three months ended March

31, 2022, from $8.2 million in the same period in 2021.

Gross profit for products was $2.4 million in the three

months ended March 31, 2022, compared to $3.2 million in the same period in 2021.

As a percentage of product revenues,

gross profit decreased to 16.8% in 2022 from 28.6% in 2021.

of revenue was principally due to higher raw materials costs related to the global supply chain issues.

Cost of products increased by approximately $0.5 million,

or 4.4%, to $11.3 million in the three months ended June 30, 2022, from $10.9 million in the same period in 2021.

Gross profit for products

was $3.5 million in the three months ended June 30, 2022, compared to $4.6 million in the same period in 2021.

As a percentage of product

revenues, gross profit decreased to 23.5% in 2022 from 29.8% in 2021.

The decrease in gross profit as a percentage of revenue was impacted

by product mix, higher costs associated with supply chain issues and electronic component shortages and inflation.

Cost of services increased by approximately $0.4 million,

or 5.8%, to $7.0 million in the three months ended June 30, 2022, from $6.6 million in the same period in 2021.

Gross profit for services

was $12.7 million in the three months ended June 30, 2022, compared to $11.4 million in the same period in 2021.

As a percentage of service

revenues, gross profit increased to 64.5% in 2022 from 63.3% in 2021.

The increase in gross profit as a percentage of services revenues

was principally due to an increase in our install base that generates service revenue.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES .

Selling, general and administrative (“SG&A”) expenses increased by approximately $2.4 million, or 17.9%, to approximately

$15.8 million in the three months ended June 30, 2022, compared to $13.4 million in the same period in 2021, principally due to increased

salaries and professional services fees and foreign currency translation losses.

As a percentage of revenues, SG&A expenses increased

to 45.7% in the three months ended June 30, 2022, from 40.0% in the same period in 2021, primarily due to the reasons described above.

RESEARCH AND DEVELOPMENT EXPENSES .

and development (“R&D”) expenses decreased by approximately $0.8 million, or 28.0%, to approximately $2.0 million in the

three months ended June 30, 2022, compared to $2.8 million in the same period in 2021 principally due to the capitalization of software

development expenses for new product development.

As a percentage of revenues, R&D expenses decreased to 5.8% in the three months

ended June 30, 2022, from 8.3% in the same period in 2021, primarily due to the reason described above.

INTEREST EXPENSE.

Interest expense decreased

by approximately $2.7 million, or 221.8%, to approximately $(1.5) million in the three months ended June 30, 2022, compared to $1.2 million

in the same period in 2021, principally due to foreign currency translation gains from the Term Facilities.

NET LOSS ATTIBUTABLE TO COMMON STOCKHOLDERS .

Net loss was $1.3 million, or $(0.04) per basic and diluted share, for the three months ended June 30, 2022, as compared to net loss of

$2.6 million, or $(0.08) per basic and diluted share, for the same period in 2021.

The decrease in the net loss was due primarily to the

reasons described above.

Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

Revenues increased by approximately $5.2 million, or 8.3%, to $67.8 million in the six months ended June 30, 2022, from $62.5

million in the same period in 2021.

from products increased by approximately $2.3 million, or 8.6%, to $29.2 million in the six months ended June 30, 2022, from $26.9 million

in the same period in 2021.

The increase in product revenue is due to increased product sales in our PowerFleet for Logistics business.

from services increased by approximately $2.9 million or 8.1%, to $38.5 million in the six months ended June 30, 2022, from $35.7 million

in the same period in 2021.

The increase in services revenue is principally due to an increase in our install base that generates service

COST OF REVENUES .

Cost of revenues increased

by approximately $5.1 million, or 15.9%, to $37.1 million in the six months ended June 30, 2022, from $32.0 million for the same period

Gross profit was $30.6 million in the six months ended June 30, 2022, compared to $30.5 million for the same period in 2021.

As a percentage of revenues, gross profit decreased to 45.2% in 2022 from 48.8% in 2021.

The decrease in gross profit as a percentage

of revenue was impacted by product mix, higher costs associated with supply chain issues and electronic component shortages and inflation.

of services increased by approximately $0.4 million, or 6.5%, to $6.8 million in the three months ended March 31, 2022,

from $6.4 million in the same period in 2021.

Gross profit for services was $12.0 million in the three months

ended March 31, 2022, compared to $11.2 million in the same period in 2021.

As a percentage of service revenues,

gross profit increased to 63.9% in 2022 from 63.8% in 2021.

GENERAL AND ADMINISTRATIVE EXPENSES .

Selling, general and administrative (“SG&A”) expenses increased by approximately

$1.3 million, or 9.6%, to approximately $14.9 million in the three months ended March 31, 2022, compared

to $13.6 million in the same period in 2021, principally due to increased salaries and increased professional services

As a percentage of revenues, SG&A expenses decreased to 45.0% in the three months ended March 31, 2022,

from 46.9% in the same period in 2021.

AND DEVELOPMENT EXPENSES .

Research and development (“R&D”) expenses increased by approximately $0.4 million,

or 17.7%, to approximately $3.2 million in the three months ended March 31, 2022, compared to $2.8 million

in the same period in 2021, principally due to the product development expenses.

As a percentage of revenues, R&D expenses

increased to 9.7% in the three months ended March 31, 2022, from 9.5% in the same period in 2021, primarily

due to the increase in revenue from 2022 to 2021.

LOSS ATTIBUTABLE TO COMMON STOCKHOLDERS .

Net loss was $4.1 million, or $(0.12) per basic and diluted share, for the

three months ended March 31, 2022, as compared to net loss of $3.0 million, or $(0.09) per basic and diluted share,

for the same period in 2021.

The decrease in the net loss was due primarily to the reasons described above.

and Capital Resources

Historically,

our capital requirements have been funded primarily from the net proceeds from the issuance of our securities, including any

issuances of our common stock upon the exercise of options.

As of March 31, 2022, we had cash (including restricted cash) and

cash equivalents of $20.9 million and working capital of $40.5 million.

of revenue was principally due to higher raw materials costs related to the global supply chain issues.

Cost of products increased by approximately $4.3 million,

or 22.6%, to $23.3 million in the six months ended June 30, 2022, from $19.0 million in the same period in 2021.

Gross profit for products

was $5.9 million in the six months ended June 30, 2022, compared to $7.9 million in the same period in 2021.

As a percentage of product

revenues, gross profit decreased to 20.2% in 2022 from 29.3% in 2021.

The decrease in gross profit as a percentage of revenue was impacted

by product mix, higher costs associated with supply chain issues and electronic component shortages and inflation.

Cost of services increased by approximately $0.8 million,

or 6.2%, to $13.8 million in the six months ended June 30, 2022, from $13.0 million in the same period in 2021.

Gross profit for services

was $24.7 million in the six months ended June 30, 2022, compared to $22.6 million in the same period in 2021.

As a percentage of service

revenues, gross profit increased to 64.2% in 2022 from 63.5% in 2021.

The increase in gross profit as a percentage of services revenues

was principally due to an increase in our install base that generates service revenue.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES .

SG&A expenses increased by approximately $3.7 million, or 13.7%, to approximately $30.7 million in the six months ended June 30, 2022,

compared to $27.0 million in the same period in 2021, principally due to increased salaries, travel and professional fees, and

foreign currency translation losses.

As a percentage of revenues, SG&A expenses increased to 45.4% in the six months ended June 30,

2022, from 43.2% in the same period in 2021, primarily due to the reasons described above.

RESEARCH AND DEVELOPMENT EXPENSES .

expenses decreased by approximately $0.3 million, or 5.3%, to approximately $5.2 million in the six months ended June 30, 2022, compared

to $5.5 million in the same period in 2021, principally due to the capitalization of software development expenses for new product development.

As a percentage of revenues, R&D expenses decreased to 7.7% in the six months ended June 30, 2022, from 8.8% in the same period in

2021, primarily due to the reason described above.

INTEREST EXPENSE.

Interest expense decreased by approximately

$2.2, million or 338.1%, to approximately $(1.6) million in the three months ended June 30, 2022, compared to $0.7 million in the same period

in 2021, principally due to foreign currency translation gains from the Term Facilities.

NET LOSS ATTIBUTABLE TO COMMON STOCKHOLDERS.

Net loss was $5.5 million, or $(0.15) per basic and diluted share, for the six months ended June 30, 2022, as compared to net loss of $5.6

million, or $(0.16) per basic and diluted share, for the same period in 2021.

The increase in the net loss was due primarily to the reasons

described above.

Liquidity and Capital Resources

Historically, our capital requirements have been funded

primarily from the net proceeds from the issuance of our securities, including any issuances of our common stock upon the exercise of

As of June 30, 2022, we had cash (including restricted cash) and cash equivalents of $18.0 million and working capital of $38.5

On October 3, 2019, in connection with our acquisition

of Pointer, we issued and sold 50,000 shares of Series A Convertible Preferred Stock, par value $0.01 per share (the “Series

A Preferred Stock”), to ABRY Senior Equity V, L.P., ABRY Senior Equity Co-Investment Fund V, L.P and ABRY Investment Partnership,

(the “Investors”), pursuant to the terms of an Investment and Transaction Agreement, dated as of March 13, 2019 (as

such agreement has been amended from time to time, the “Investment Agreement”) for an aggregate purchase price of $50.0

The proceeds received from such sale were used to finance a portion of the cash consideration payable in our acquisition of

of Pointer, we issued and sold 50,000 shares of Series A Convertible Preferred Stock, par value $0.01 per share (the “Series A Preferred

Stock”), to ABRY Senior Equity V, L.P., ABRY Senior Equity Co-Investment Fund V, L.P and ABRY Investment Partnership, L.P.

“Investors”), pursuant to the terms of an Investment and Transaction Agreement, dated as of March 13, 2019 (as such agreement

has been amended from time to time, the “Investment Agreement”) for an aggregate purchase price of $50.0 million.

received from such sale were used to finance a portion of the cash consideration payable in our acquisition of Pointer.

addition, our wholly-owned subsidiaries, PowerFleet Israel and Pointer (the “Borrowers”) are party to a Credit Agreement

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a five-year revolving credit facility to Pointer in an aggregate principal amount of $10 million (the “Revolving Facility”).

The outstanding amount under the term loan facilities was $22.4 million as of March 31, 2022.

The outstanding amount under the term loan facilities was $21.0 million as of June 30, 2022.

The proceeds of the term loan facilities

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facility may be used by Pointer for general corporate purposes.

As of June 30, 2022, the Company borrowed $2.3 million under the revolving credit facility.

August 23, 2021, the Borrowers entered into an amendment (the “Amendment”), effective as of August 1, 2021, to the Credit

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including a financial covenant regarding the ratio of the Borrowers’ debt levels to Pointer’s EBITDA.

In June 2012, Pointer entered into a one-year

$1,000 revolving credit facility with Discount Bank, which renews annually, subject to the bank’s approval.

The proceeds of the revolving credit facility may be used by Pointer for

general corporate purposes.

The Company did not have any borrowings outstanding under the revolving credit facility as of June 30,

have on file a shelf registration statement on Form S-3 that was declared effective by the SEC on November 27, 2019.

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before deducting the underwriting discounts and commissions and other offering expenses.

The offer and sale of common stock in the Underwritten Public Offering were made pursuant to our shelf registration statement.

As a result of the ongoing COVID-19 pandemic

and its related impact on the global supply chain, inflation, and the conflict between Russia and Ukraine, there remains

uncertainty surrounding the potential impact of such events on our results of operations and cash flows.

We are proactively taking

steps to increase available cash on hand including, but not limited to, targeted reductions in discretionary operating expenses and capital

expenditures and borrowing under the revolving credit facility.

of March 31, 2022, we had cash (including restricted cash) and cash equivalents of $20.9 million and working capital of $40.5

Our primary sources of cash are cash flows from operating activities, our holdings of cash, cash equivalents and investments

from the sale of our capital stock and borrowings under our credit facility.

To date, we have not generated sufficient cash flow solely

from operating activities to fund our operations.

The offer and sale of common stock in the Underwritten

Public Offering were made pursuant to our shelf registration statement.

a result of rising interest rates, higher inflation, supply chain disruptions the ongoing COVID-19 pandemic and the conflict between Russia and Ukraine, there remains uncertainty surrounding the

potential impact of such events on our results of operations and cash flows.

We are proactively taking steps to increase available

cash on hand including, but not limited to, targeted reductions in discretionary operating expenses and capital expenditures and

borrowing under the revolving credit facility.

of June 30, 2022, we had cash (including restricted cash) and cash equivalents of $18.0 million and working capital of $38.5 million.

Our primary sources of cash are cash flows from operating activities, our holdings of cash, cash equivalents and investments from the

sale of our capital stock and borrowings under our credit facility.

To date, we have not generated sufficient cash flow solely from operating

activities to fund our operations.

believe our available working capital, anticipated level of future revenues and expected cash flows from operations will provide sufficient

funds to cover capital requirements through at least May 10, 2023.

funds to cover capital requirements through at least August 9, 2023.

capital requirements depend on a variety of factors, including, but not limited to, the length of the sales cycle, the rate of increase

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on our business, financial condition and results of operations.

cash used in operating activities was $2.1 million for the three months ended March 31, 2022, compared to net cash

provided by operating activities of $0.8 million for the same period in 2021.

The net cash used in operating activities

for the three months ended March 31, 2022, reflects a net loss of $2.9 million and includes non-cash charges of

$0.5 million for stock-based compensation, $2.1 million for depreciation and amortization expense and $0.7 million

for right of use asset amortization.

cash used in operating activities was $2.7 million for the six months ended June 30, 2022, compared to net cash provided by operating

activities of $3.2 million for the same period in 2021.

The net cash used in operating activities for the six months ended June 30, 2022,

reflects a net loss of $3.0 million and includes non-cash charges of $2.1 million for stock-based compensation, $4.1 million for depreciation

and amortization expense and $1.4 million for right of use asset amortization.

Changes in working capital items included:

increase in accounts receivable of $2.9 million;

increase in inventory of $5.4 million;

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increase in accounts payable of $1.9 million;

cash used in investing activities was $0.6 million for the three months ended March 31, 2022, compared to net

cash used in investing activities of $0.6 million for the same period in 2021.

The cash used in investing activities

for the three months ended March 31, 2022, was for the purchase of fixed assets.

The cash used in investing activities

in the same period in 2021 was primarily for the purchase of fixed assets.

cash used in financing activities was $1.6 million for the three months ended March 31, 2022, compared to

net cash provided by financing activities of $24.3 million for the same period in 2021.

The cash used in financing activities

for the three months ended March 31, 2022, was primarily due to the repayment of long-term debt of $1.5 million.

The change from

the same period in 2021 was primarily due to the net proceeds from our stock offering of $26.8 million which was

offset by the repayment of long-term debt of $1.3 million and the payment of preferred stock dividends of $1.0 million.

decrease in lease liabilities of $1.3 million.

cash used in investing activities was $2.0 million for the six months ended June 30, 2022, compared to net cash used in investing activities

of $1.5 million for the same period in 2021.

The cash used in investing activities for the six months ended June 30, 2022 and 2021 was

related to capital expenditures.

cash used in financing activities was $0.8 million for the six months ended June 30, 2022, compared to net cash provided by financing

activities of $22.0 million for the same period in 2021.

The cash used in financing activities for the six months ended June 30, 2022

was primarily due to the repayment of long-term debt of $2.9 million, partially offset by net borrowings under the line of credit of

$2.3 million.

The change from the same period in 2021 was primarily due to the net proceeds from our stock offering of $26.8 million

which was offset by the repayment of long-term debt of $2.7 million and the payment of preferred stock dividends of $2.1 million.

Sheet Arrangements

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condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

of March 31, 2022, there have been no material charges in contractual obligations as disclosed under the caption “Contractual Obligations

of June 30, 2022, there have been no material charges in contractual obligations as disclosed under the caption “Contractual Obligations

and Commitments” in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

inflation and other macroeconomic conditions in the U.S.

have resulted in higher costs of raw materials, freight, and labor, which has

impacted our operating costs.

In addition, we operate in several emerging market economies that are particularly vulnerable to the impact

of inflationary pressures that could materially and adversely impact our operations in the foreseeable future.

Rising inflation and other macroeconomic trends in

have resulted in higher costs of raw materials, freight, and labor, which has impacted our operating costs.

We expect the inflationary

environment to continue for the remainder of the year, resulting in corresponding pressure on our operating costs and gross margins.

addition, we operate in several emerging market economies that are particularly vulnerable to the impact of inflationary pressures that

could materially and adversely impact our operations in the foreseeable future.

of Recently Issued Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis