What changed in this filing

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Item 1A. Risk Factors

2023-03-31 compared with 2022-03-16 · 443 added, 429 removed, 812 unchanged (52% of the section changed)

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These risks include, among others, the following:

may not realize the anticipated benefits and cost savings of the Transactions.

Systems’ and Pointer’s businesses may be more difficult, time-consuming or costly than expected.

have incurred significant losses and have a substantial accumulated deficit.

If we cannot achieve profitability, the market price

of our common stock could decline significantly.

inability of our supply chain to deliver certain key components, such as semiconductors, could materially adversely affect our business,

financial condition and results of operations.

expansion into new products, services, and technologies subjects us to additional risks.

we are unable to keep up with rapid technological change, we may be unable to meet the needs of our customers, which could materially

and adversely affect our financial condition and results of operations and reduce our ability to grow our market share.

may be subject to breaches of our information technology systems, which could damage our reputation, vendor, and customer relationships,

and our customers’ access to our services.

industry in which we operate is highly competitive, and competitive pressures from existing and new companies could have a material

adverse effect on our financial condition and results of operations.

may not be able to successfully execute our strategic initiatives or meet our long-term financial goals.

are an international company and may be susceptible to a number of political, economic and geographic risks that could harm our business.

and changes in the global economic environment may adversely affect our business and financial results.

international scope of our business exposes us to risks associated with foreign exchange rates.

expect that the impact of COVID-19 will continue to adversely affect our business, results of operations and financial condition.

may need to obtain additional capital to fund our operations that could have negative consequences on our business.

the market for our technology does not develop or become sustainable, expands more slowly than we expect or becomes saturated, our

revenues will decline and our financial condition and results of operations could be materially and adversely affected.

We have incurred significant

losses and have a substantial accumulated deficit.

If we cannot achieve profitability, the market price of our common stock could

decline significantly.

The inability of our supply

chain to deliver certain key components, such as semiconductors, could materially adversely affect our business, financial condition

and results of operations.

We provide no assurance that we will be able to successfully integrate any businesses, products, technologies or

personnel that we have acquired or might acquire in the future.

Our expansion into new

products, services, and technologies subjects us to additional risks.

If we are unable to keep

up with rapid technological change, we may be unable to meet the needs of our customers, which could materially and adversely affect

our financial condition and results of operations and reduce our ability to grow our market share.

We may be subject to breaches

of our information technology systems, which could damage our reputation, vendor, and customer relationships, and our customers’

access to our services.

The industry in which we

operate is highly competitive, and competitive pressures from existing and new companies could have a material adverse effect on

our financial condition and results of operations.

We may not be able to successfully

execute our strategic initiatives or meet our long-term financial goals.

We are an international

company and may be susceptible to a number of political, economic and geographic risks that could harm our business.

Conditions and changes

in the global economic environment may adversely affect our business and financial results.

The international scope

of our business exposes us to risks associated with foreign exchange rates.

We may need to obtain additional

capital to fund our operations that could have negative consequences on our business.

If the market for our technology

does not develop or become sustainable, expands more slowly than we expect or becomes saturated, our revenues will decline and our

financial condition and results of operations could be materially and adversely affected.

may incur additional charges for excess and obsolete inventory, which could adversely affect our cost of sales and gross profit.

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reduction in vehicle theft rates may adversely impact demand for our SVR services and products.

increasing availability of handheld GPRS devices may reduce the demand for our products for small fleet management.

increasing availability of handheld general packet radio service GPRS devices may reduce the demand for our products for small fleet

use of our products is subject to international regulations.

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and adversely affected.

provide no assurance that we will be able to successfully integrate any businesses, products, technologies or personnel that we have

acquired or might acquire in the future.

unpredictability of our quarterly operating results could adversely affect the market price of our common stock.

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in a customer’s financial condition or in global credit conditions.

rate fluctuations may adversely affect our income and results of operations.

cash and cash equivalents could be adversely affected by a downturn in the financial and credit markets.

Our cash and cash equivalents could be adversely affected by a downturn

in the financial and credit markets.

impairment or intangible impairment charges may affect our results of operations in the future.

In connection with the preparation of our annual financial

statements for the fiscal year ended December 31, 2021, we identified a material weakness in our internal control over financial

Any failure to maintain effective internal control over financial reporting could harm us.

connection with the preparation of our annual financial statements for the fiscal year ended December 31, 2022, we identified material

weaknesses in our internal control over financial reporting.

Any failure to maintain effective internal control over financial reporting

could harm us.

have operations located in Israel, and therefore our results may be adversely affected by

political, military and economic conditions in Israel.

of our employees in Israel are required to perform military reserve duty.

may be adversely affected by a change of the Israeli Consumer Price Index.

Argentine government may enact or enforce measures to preempt or respond to social unrest

or economic turmoil which may adversely affect our business in Argentina.

uncertainty and volatility in Brazil may adversely affect our business.

Brazilian government has exercised, and may continue to exercise, significant influence over the Brazilian economy.

instability in Brazil may adversely affect Brazil’s economy and investment levels and have a material adverse effect on the

uncertainty and volatility in Mexico may adversely affect our business.

of our Series A Preferred Stock can exercise significant control over the Company, which could limit the ability of our stockholders

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price of our common stock to decline.

issuance of equity or debt securities under our shelf registration statement could have a negative impact on the price of our common

Charter provides that the Court of Chancery of the State of Delaware will be the exclusive forum for certain legal actions between

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to our stockholders, and could make it more difficult for stockholders to change our management.

Related to the Transactions:

may not realize the anticipated benefits and cost savings of the Transactions.

success of the Transactions will depend, in part, on our ability to realize the anticipated benefits and cost savings from combining

Systems’ and Pointer’s businesses.

Our ability to realize these anticipated benefits and cost savings is subject to

certain risks, including, among others:

ability to successfully combine I.D.

Systems’ and Pointer’s businesses;

risk that the combined businesses will not perform as expected;

extent to which we will be able to realize the expected synergies, which include realizing potential savings from re-assessing priority

assets and aligning investments, eliminating duplication and redundancy, adopting an optimized operating model between both companies

and leveraging scale, and creating value resulting from the combination of I.D.

Systems’ and Pointer’s businesses;

possibility that the aggregate consideration being paid for Pointer is greater than the value we will derive from the Transactions;

possibility that the combined company will not achieve the free cash flow that we have projected;

reduction of cash available for operations and other uses and the incurrence of indebtedness to finance the Transactions;

assumption of known and unknown liabilities of Pointer, including potential tax and employee-related liabilities;

possibility of costly litigation challenging the Transactions.

Systems and Pointer are not able to successfully integrate their businesses within the anticipated time frame, or at all, the anticipated

cost savings, synergies operational efficiencies and other benefits of the Transactions may not be realized fully or may take longer

to realize than expected, and the combined company may not perform as expected.

Systems’ and Pointer’s businesses may be more difficult, time-consuming or costly than expected.

to completion of the Transactions, I.D.

Systems and Pointer operated independently, and there can be no assurances that their businesses

can be integrated successfully.

It is possible that the integration process could result in the loss of key employees, the disruption

of either company’s or both companies’ ongoing businesses or unexpected integration issues, such as higher than expected

integration costs and an overall post-completion integration process that takes longer than originally anticipated.

Specifically, issues

that must be addressed in integrating the operations of I.D.

Systems and Pointer in order to realize the anticipated benefits of the

Transactions, so the combined business performs as expected include, among others:

the companies’ separate operational, financial, reporting and corporate functions;

the companies’ technologies, products and services;

and eliminating redundant and underperforming operations and assets;

the companies’ operating practices, employee development, compensation and benefit programs, internal controls and other policies,

procedures and processes;

possible differences in corporate cultures and management philosophies;

employee morale and retaining key management and other employees;

and recruiting prospective employees;

consolidating

the companies’ corporate, administrative and information technology infrastructure;

sales, distribution and marketing efforts;

the movement of certain businesses and positions to different locations;

existing agreements with customers and vendors and avoiding delays in entering into new agreements with prospective customers and

geographically dispersed organizations;

potential actions that may be required in connection with obtaining regulatory approvals.

addition, at times, the attention of certain members of our management and our resources may be focused on the integration of the businesses

of the two companies and diverted from day-to-day business operations, which may disrupt our business.

Related to Our Business:

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our common stock could decline significantly.

of December 31, 2021, we had cash (including restricted cash,) and cash equivalents of $26.8 million and working capital of $43.6

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.

incurred net losses of approximately $12 million, $13.6 million, and $18.1 million for the years ended December 31, 2019, 2020

and 2021, respectively, and have incurred additional net losses since inception.

At December 31, 2021, we had an accumulated deficit

of approximately $134.4 million.

Our ability to increase our revenues from the sale of our solutions will depend on our

ability to successfully implement our growth strategy and the continued expansion of our markets.

If our revenues do not grow or if our

operating expenses continue to increase, we may not be able to become profitable and the market price of our common stock could decline.

of December 31, 2022, we had cash (including restricted cash) and cash equivalents of $18.0 million and working capital of $35.5 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.

incurred net losses of approximately $13.6 million, $18.1 million and $11.9 million for the years ended December 31, 2020, 2021 and

2022, respectively, and have incurred additional net losses since inception.

At December 31, 2022, we had an accumulated deficit of approximately

$141.4 million.

Our ability to increase our revenues from the sale of our solutions will depend on our ability to successfully implement

our growth strategy and the continued expansion of our markets.

If our revenues do not grow or if our operating expenses continue to

increase, we may not be able to become profitable and the market price of our common stock could decline.

inability of our supply chain to deliver certain key components, such as semiconductors, could materially adversely affect our business,

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number of global suppliers to manufacture their products.

These global supply chains have been, and may continue to be, adversely impacted

by events outside of our control, including macroeconomic events, trade restrictions, economic recessions or natural occurrences, such

as the ongoing disruptions from the COVID-19 pandemic.

As a result of COVID-19, we have experienced delays in supply chain deliveries,

These global supply chains have continued to be, adversely impacted

by events outside of our control, including macroeconomic events, trade restrictions, economic recessions and ongoing disruptions from the COVID-19 pandemic.

Over the past two years, we have experienced delays in supply chain deliveries,

extended lead times and shortages of key components, some raw material cost increases and slowdowns at certain production facilities.

These disruptions have delayed and may continue to delay the timing of some orders and expected deliveries of our products.

If the impact

of the supply chain disruptions are more severe than we expect, it could result in longer lead times, inventory supply challenges and

further increased costs, all of which could materially adversely affect our business, financial condition and results of operations.

These disruptions have delayed and may continue to delay the timing of some orders and expected deliveries of our products, which has impacted our business and results of operations.

of the products we supply are reliant on semiconductors.

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disruptions may have a material adverse impact on our business, financial condition and results of operations.

expansion into new products, services, and technologies, subjects us to additional

provide no assurance that we will be able to successfully integrate any businesses, products, technologies or personnel that we have

acquired or might acquire in the future.

may, from time to time, consider combinations with or acquisitions of complementary companies, products, or technologies.

the event of any future acquisitions or combinations, we could:

stock that would dilute our current stockholders’ percentage ownership;

expenses related to the impairment of goodwill;

large and immediate write-offs.

may not be able to identify suitable acquisition candidates, and if we do identify suitable candidates, we may not be able to make these

acquisitions on acceptable terms, or at all.

example, on March 6, 2023, we entered into a definitive share purchase and transfer agreement (the “SPA”) with Swiss Re

Reinsurance Holding Company Ltd (“Swiss Re”) to acquire all of the outstanding shares of Movingdots GmbH

(“Movingdots”), a leading provider of insurance telematics and sustainable mobility solutions and wholly owned

subsidiary of Swiss Re.

Our operation of any acquired business, including Movingdots, will involve numerous risks,

integrating the acquired operations, personnel, technologies or products;

unanticipated

of management’s time and attention from our core businesses;

effects on existing business relationships with suppliers and customers;

associated with entering markets in which we have no or limited prior experience;

loss of key employees, particularly those of acquired companies.

addition, if we make changes to our business strategy or if external conditions adversely affect our business operations, we may be required

to record an impairment charge for goodwill or intangibles, which would lead to decreased assets and reduced net operating performance.

expansion into new products, services, and technologies, subjects us to additional risks.

may have limited or no experience in our newer market segments, and our customers may not adopt our product or service offerings.

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industry in which we operate is highly competitive and influenced by the following:

in technology;

product introductions;

industry standards;

improvements;

changing customer needs;

property invention and protection;

and distribution capabilities;

to attract and retain highly skilled professionals;

from highly capitalized companies;

of new competitors;

of customers to invest in information technology;

advances in technology;

new product introductions;

evolving industry standards;

product improvements;

rapidly changing customer

intellectual property invention

and protection;

marketing and distribution

capabilities;

ability to attract and

retain highly skilled professionals;

competition from highly

capitalized companies;

entrance of new competitors;

ability of customers to

invest in information technology;

price competition.

products marketed by us and our competitors are becoming more complex.

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As a result, the occurrence of any international, political, economic or geographic

event (for example, the COVID-19 pandemic, continued global supply chain disruptions, inflation and other cost increases, and the

conflict between Russia and Ukraine) could result in a significant decline in our revenue.

In addition, compliance with complex foreign

event (for example, the COVID-19 pandemic, continued global supply chain disruptions, inflation and other cost increases, and the conflict

between Russia and Ukraine) could result in a significant decline in our revenue.

In addition, compliance with complex foreign and U.S.

laws and regulations that apply to our international operations will increase our cost of doing business in international jurisdictions.

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of the risks and challenges of doing business internationally include:

changes in regulatory requirements;

in international currency exchange rates including its impact on unhedgeable currencies and our forecast variations for hedgeable

of tariffs and other barriers and restrictions;

and operation of an enterprise spread over various countries;

burden of complying with a variety of laws and regulations in various countries;

of the income tax laws and regulations of multiple jurisdictions, including relatively low-rate and relatively high-rate jurisdictions,

to our sales and other transactions, which results in additional complexity and uncertainty;

conduct of unethical business practices in certain developing countries;

economic and geopolitical conditions, including inflation and trade relationships;

and acts of terrorism;

and high crime rate;

disasters or pandemics (for example, the COVID-19 pandemic);

dollars especially in countries with economies highly dependent on resource exports, particularly oil;

in export regulations.

unexpected changes in regulatory

requirements;

fluctuations in international

currency exchange rates including its impact on unhedgeable currencies and our forecast variations for hedgeable currencies;

imposition of tariffs and

other barriers and restrictions;

management and operation

of an enterprise spread over various countries;

the burden of complying

with a variety of laws and regulations in various countries;

application of the income

tax laws and regulations of multiple jurisdictions, including relatively low-rate and relatively high-rate jurisdictions, to our

sales and other transactions, which results in additional complexity and uncertainty;

the conduct of unethical

business practices in certain developing countries;

general economic and geopolitical

conditions, including inflation and trade relationships;

war and acts of terrorism;

kidnapping and high crime

natural disasters or pandemics

(for example, the COVID-19 pandemic);

availability of U.S.

especially in countries with economies highly dependent on resource exports, particularly oil;

changes in export regulations.

these factors and the impacts of these factors are difficult to predict, any one or more of them could adversely affect our business,

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and changes in the global economic environment may adversely affect our business and financial results.

global economy continues to be adversely affected by stock market volatility, tightening of credit markets, concerns of inflation, adverse

business conditions and liquidity concerns.

These events and the related uncertainty about future economic conditions could negatively

impact our customers and, among other things, postpone their decision-making, decrease their spending and jeopardize or delay their ability

or willingness to make payment obligations, any of which could adversely affect our business and results of operations.

Uncertainty about

current global economic conditions, in particular as a result of the COVID-19 pandemic, continued global supply chain disruptions,

inflation and other cost increases, and the conflict between Russia and Ukraine, could also cause volatility of our stock price.

During periods of economic downturns, our customers may decrease their demand for wireless technology solutions, as well as the maintenance,

support and consulting services we provide.

This slowdown may have an adverse effect on the wireless solutions industry in general and

on demand for our products and services, but the magnitude of that impact is uncertain.

Our future growth is dependent, in part, upon

the demand for our products and services.

Prolonged weakness in the economy may cause business enterprises to delay or cancel wireless

solutions projects, reduce their overall wireless solutions budgets and/or reduce or cancel orders for our services.

This, in turn, may

lead to longer sales cycles, delays in purchase decisions, and payment and collection issues, and may also result in price pressures,

causing us to realize lower revenues and operating margins.

Additionally, if our customers cancel or delay their wireless solutions initiatives,

our business, financial condition and results of operations could be materially and adversely affected.

If the current uncertainty in

the general economy does not change or continue to improve, our business, financial condition and results of operations could be harmed.

global economy continues to be adversely affected by stock market volatility, tightening of credit markets, concerns of inflation,

adverse business conditions and liquidity concerns as well as recent bank failures.

These events and the related uncertainty about future economic conditions could

negatively impact our customers and, among other things, postpone their decision-making, decrease their spending and jeopardize or

delay their ability or willingness to make payment obligations, any of which could adversely affect our business and results of

Uncertainty about current global economic conditions, in particular as a result of the continued global supply chain

disruptions, inflation and other cost increases, and the conflict between Russia and Ukraine and recent bank failures, could also cause volatility of our

During periods of economic downturns, our customers may decrease their demand for wireless technology solutions, as

well as the maintenance, support and consulting services we provide.

This slowdown may have an adverse effect on the wireless

solutions industry in general and on demand for our products and services, but the magnitude of that impact is uncertain.

growth is dependent, in part, upon the demand for our products and services.

Prolonged weakness in the economy may cause business

enterprises to delay or cancel wireless solutions projects, reduce their overall wireless solutions budgets and/or reduce or cancel

orders for our services.

This, in turn, may lead to longer sales cycles, delays in purchase decisions, and payment and collection

issues, and may also result in price pressures, causing us to realize lower revenues and operating margins.

Additionally, if our

customers cancel or delay their wireless solutions initiatives, our business, financial condition and results of operations could be

materially and adversely affected.

If the current uncertainty in the general economy does not change or continue to improve, our

business, financial condition and results of operations could be harmed.

recently, the closures of Silicon Valley Bank and Signature Bank and their placement into receivership with the Federal Deposit Insurance

Corporation (“FDIC”) created bank-specific and broader financial institution liquidity risk and concerns.

Although the Department

of the Treasury, the Federal Reserve, and the FDIC jointly released a statement that depositors at Silicon Valley Bank and Signature

Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, future adverse developments with respect

to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages.

of any bank in which we deposit our funds could reduce the amount of cash we have available for our operations or delay our ability to

access such funds.

Any such failure may increase the possibility of a sustained deterioration of financial market liquidity, or illiquidity

at clearing, cash management and/or custodial financial institutions.

In the event we have a commercial relationship with a bank that

has failed or is otherwise distressed, we may experience delays or other issues in meeting our financial obligations.

If other banks

and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking

system and financial markets, our ability to access our cash and cash equivalents may be threatened and could have a material adverse

effect on our business and financial condition.

international scope of our business exposes us to risks associated with foreign exchange rates.

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Mexican peso, Argentine peso, Brazilian real and South African rand.

addition, several emerging market economies are particularly vulnerable to the impact of rising interest rates, inflationary pressures, and large external deficits.

Risks in one country can limit our opportunities for growth and negatively

affect our operations in another country or countries.

As a result, any such unfavorable conditions or developments could have an adverse

impact on our operations.

Our results of operations and, in some cases, cash flows, have in the past been, and may in the future be,

adversely affected by movements in exchange rates.

addition, several emerging market economies are particularly vulnerable to the impact of rising interest rates, inflationary pressures,

and large external deficits.

Risks in one country can limit our opportunities for growth and negatively affect our operations in another

country or countries.

As a result, any such unfavorable conditions or developments could have an adverse impact on our operations.

results of operations and, in some cases, cash flows, have in the past been, and may in the future be, adversely affected by movements

in exchange rates.

In addition, we may also be exposed to credit risks in some of those markets.

implement currency hedges or take other actions intended to reduce our exposure to changes in foreign currency exchange rates.

are not successful in mitigating the effects of changes in exchange rates on our business, any such changes could materially impact our

expect that the impact of COVID-19 will continue to adversely affect our business, results of operations and financial

global outbreak of COVID-19, and mitigation efforts by governments to attempt to control its spread, has resulted in significant economic

disruption and continues to adversely impact the broader global economy.

COVID-19 may continue to negatively affect our future

business, results of operations and financial condition.

The duration and extent of the impact of the pandemic on our business and financial

results will depend largely on the future developments that cannot be accurately predicted at this time, including the duration of the

spread of the outbreak and COVID-19 variants, the extent and effectiveness of containment actions and vaccination campaigns,

and the impact of these and other factors on capital and financial markets and the related impact on the financial circumstances

of our employees, customers, and suppliers.

We may implement currency hedges or

take other actions intended to reduce our exposure to changes in foreign currency exchange rates.

If we are not successful in mitigating

the effects of changes in exchange rates on our business, any such changes could materially impact our results.

may need to obtain additional capital to fund our operations that could have negative consequences on our business.

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offerings, debt financings, additional operating improvements, asset sales or strategic alliances and licensing arrangements.

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

The shelf registration

statement allows us to raise up to an aggregate of $60.0 million from the sale of common stock, preferred stock, warrants, debt securities

and units or any combination of the foregoing.

On May 14, 2020, we entered into an equity distribution agreement for an “at-the-market

offering” program (the “ATM Offering”) with Canaccord Genuity LLC (“Canaccord”) as sales agent, pursuant

to which we issued and sold an aggregate of 809,846 shares of common stock for approximately $4.2 million in gross proceeds.

We terminated

the equity distribution agreement effective as of August 14, 2020.

On February 1, 2021, we closed an underwritten public offering (the

“Underwritten Public Offering”) of 4,427,500 shares of common stock (which includes the full exercise of the underwriters’

over-allotment option) for gross proceeds of approximately $28.8 million, before deducting the underwriting discounts and commissions

and other estimated offering expenses.

The offer and sale of common stock in the ATM Offering and the Underwritten Public Offering were

made pursuant to our shelf registration statement.

the extent we raise additional capital by issuing equity securities, including pursuant to our shelf registration statement, our existing

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If a claim of patent infringement was decided against us, we could be required to, among other things:

substantial damages to the party making such claim;

selling, making, having made or using products or services that incorporate the challenged intellectual property;

from the holder of the infringed intellectual property right a license to sell, make or use the relevant technology, which license

may not be available on commercially reasonable terms, or at all;

those products or services that incorporate such intellectual property.

pay substantial damages

to the party making such claim;

stop selling, making, having

made or using products or services that incorporate the challenged intellectual property;

obtain from the holder

of the infringed intellectual property right a license to sell, make or use the relevant technology, which license may not be available

on commercially reasonable terms, or at all;

redesign those products

or services that incorporate such intellectual property.

failure to obtain the necessary licenses or other rights could preclude the sale, manufacture or distribution of our products and could

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This reliance involves a number of significant risks, including:

unavailability

of materials and interruptions in delivery of components and raw materials from our suppliers, which could result in manufacturing

in the quality and price of components and raw materials.

unavailability of materials

and interruptions in delivery of components and raw materials from our suppliers, which could result in manufacturing delays;

fluctuations in the quality

and price of components and raw materials.

currently do not have any long-term or exclusive purchase commitments with any of our suppliers.

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still may be errors or failures in our products, even after the commencement of commercial shipments.

We provide a warranty reserve at

We provide a reserve at

the time of shipment, which may not be sufficient to cover actual repair costs.

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Although we maintain insurance, there are no assurances that:

insurance will provide adequate coverage against potential liabilities if our products cause harm or fail to perform as promised;

product liability insurance will continue to be available to us in the future on commercially reasonable terms or at all.

our insurance will provide

adequate coverage against potential liabilities if our products cause harm or fail to perform as promised;

adequate product liability

insurance will continue to be available to us in the future on commercially reasonable terms or at all.

our insurance is insufficient to pay any product liability claims, our financial condition and results of operations could be materially

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New vehicle sales may decline for various reasons, including

inflation, an increase in new vehicle tariffs, taxes or gas prices, an increased difficulty in obtaining credit or financing in

the applicable local or global economy, or the occurrence of natural disasters or public health crises, such as the COVID-19 pandemic.

A decline in sales of new vehicles in the markets in which we operate could result in reduced demand for our services and products.

inflation, an increase in new vehicle tariffs, taxes or gas prices, an increased difficulty in obtaining credit or financing in the applicable

local or global economy, or the occurrence of natural disasters or public health crises, such as the COVID-19 pandemic.

sales of new vehicles in the markets in which we operate could result in reduced demand for our services and products.

reduction in vehicle theft rates may adversely impact demand for our SVR services and products.

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benefiting from the expertise of our former employees.

January 2023, the U.S.

Federal Trade Commission (“FTC”) announced a Notice of Proposed Rulemaking for a broad ban on non-compete

clauses between employers and workers and is currently seeking public comment on the proposed rule.

Specifically, the proposed rule would

make it illegal for an employer to, among other things, enter into or attempt to enter into a non-compete with a worker;

maintain a non-compete

with a worker;

or represent to a worker, under certain circumstances, that the worker is subject to a non-compete.

While we cannot predict

whether or when the FTC’s proposed ban on non-compete arrangements will be implemented, or the impact that such ban will have on

our operations if implemented, there is now increased uncertainty regarding the long-term enforceability of our non-competition agreements

with employees in the U.S.

If the enforceability of non-competition agreements is affected by future lawmaking or regulatory action,

it may impede our ability to ensure that former employees, who received training and experience through their employment with us, refrain

from using their knowledge of our business and operations to compete with us.

Manufacturing

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connection with the Transactions, Powerfleet Israel Ltd.

(“PowerFleet Israel”) and Pointer entered into a credit agreement,

dated August 19, 2019 (the “Credit Agreement”), with Bank Hapoalim B.M.

(“Hapoalim”), pursuant to which Hapoalim

agreed to provide PowerFleet Israel with two senior secured term loan facilities in an aggregate principal amount of $30,000,000 (comprised

of two facilities in the aggregate principal amount of $20,000,000 and $10,000,000) and a five-year revolving credit facility to Pointer

in an aggregate principal amount of $10,000,000.

The outstanding amount under the term loan facilities was $24,400,000 as of December 31, 2021.

Such indebtedness will have the effect, among other things, of reducing PowerFleet Israel’s

and Pointer’s flexibility to respond to changing business and economic conditions, will increase our borrowing costs and, to the

extent that such indebtedness is subject to floating interest rates, may increase PowerFleet Israel’s and Pointer’s vulnerability

to fluctuations in market interest rates.

The Credit Agreement requires PowerFleet Israel and Pointer to satisfy various covenants, including

negative covenants that directly or indirectly restrict our ability to engage in certain transactions without the consent of the lender.

The indebtedness is secured by first ranking and exclusive fixed and floating charges, including by PowerFleet Israel over the entire

share capital of Pointer and by Pointer over all of its assets, as well as cross guarantees between PowerFleet Israel and Pointer.

may also make it more difficult for us to engage in future transactions without the consent of the lender.

The increased levels of indebtedness

could also reduce funds available to fund efforts to integrate I.D.

Systems’ and Pointer’s businesses and realize expected

benefits of the Transactions and/or engage in investments in product development, capital expenditures and other activities and may create

competitive disadvantages for us relative to other companies with lower debt levels.

We may be required to raise additional financing

for working capital, capital expenditures, acquisitions or other general corporate purposes.

Our ability to arrange additional financing

will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors

beyond its control.

We cannot assure you that we will be able to obtain additional financing on terms acceptable to us or at all.

terms of the Credit Agreement restrict PowerFleet Israel’s and Pointer’s current and future operations, particularly their

ability to respond to changes or to take certain actions.

Credit Agreement contains a number of restrictive covenants that impose significant operating and financial restrictions on PowerFleet

Israel and Pointer and limit their ability to engage in acts that may be in their long-term best interest, including restrictions on

their ability to:

or guarantee additional indebtedness;

or otherwise dispose of assets;

into transactions with affiliates;

into new lines of business.

Credit Agreement also limits the ability of PowerFleet Israel and Pointer to consolidate or merge with or into another person.

(“Powerfleet Israel”) and Pointer entered into a credit

agreement, dated August 19, 2019 (the “Credit Agreement”), with Bank Hapoalim B.M.

(“Hapoalim”), pursuant to

which Hapoalim agreed to provide Powerfleet Israel with two senior secured term loan facilities denominated in New Israeli Shekel

(NIS) in an initial aggregate principal amount of $30,000,000 (comprised of two facilities in the initial aggregate principal

amount of $20,000,000 and $10,000,000, (the “Term A Facility” and “Term B Facility,” respectively, and collectively, the “Term

Facilities”)) and a five-year revolving credit facility to Pointer in an aggregate principal amount of

On October 31, 2022, Powerfleet Israel and Pointer entered into an amendment to the Credit Agreement with Hapoalim,

which provided for, among other things, a new revolving credit facility to Pointer in the aggregate principal amount of $10,000,000

(the “New Revolver”).

The outstanding amount under the term loan facilities was NIS 55,298,000, or $15,877,000, as of

December 31, 2022.

Such indebtedness will have the effect, among other things, of reducing Powerfleet Israel’s and

Pointer’s flexibility to respond to changing business and economic conditions, will increase our borrowing costs and, because such indebtedness is subject to floating interest rates and exposed to foreign currency fluctuations, may increase

Powerfleet Israel’s and Pointer’s vulnerability to fluctuations in market interest and foreign exchange rates.

Credit Agreement requires Powerfleet Israel and Pointer to satisfy various covenants, including negative covenants that directly or

indirectly restrict our ability to engage in certain transactions without the consent of the lender.

The indebtedness is secured by

first ranking and exclusive fixed and floating charges, including by Powerfleet Israel over the entire share capital of Pointer and

by Pointer over all of its assets, and a first ranking fixed pledge and assignment by Pointer over its bank account that was opened

in connection with the New Revolver and all of the rights relating thereunder, as well as cross guarantees between Powerfleet Israel

This may also make it more difficult for us to engage in future transactions without the consent of the lender.

increased levels of indebtedness could also reduce funds available to fund efforts to integrate I.D.

Pointer’s businesses and realize expected benefits of the Transactions and/or engage in investments in product development,

capital expenditures and other activities and may create competitive disadvantages for us relative to other companies with lower

We may be required to raise additional financing for working capital, capital expenditures, acquisitions or other

general corporate purposes.

Our ability to arrange additional financing will depend on, among other factors, our financial position

and performance, as well as prevailing market conditions and other factors beyond its control.

We cannot assure you that we will be

able to obtain additional financing on terms acceptable to us or at all.

terms of the Credit Agreement restrict Powerfleet Israel’s and Pointer’s current and future operations, particularly

their ability to respond to changes or to take certain actions.

Credit Agreement contains a number of restrictive covenants that impose significant operating and financial restrictions on

Powerfleet Israel and Pointer and limit their ability to engage in acts that may be in their long-term best interest, including

restrictions on their ability to:

incur or guarantee additional

indebtedness;

sell or otherwise dispose

enter into transactions

with affiliates;

enter into new lines of

Credit Agreement also limits the ability of Powerfleet Israel and Pointer to consolidate or merge with or into another

addition, the covenants in the Credit Agreement require Powerfleet Israel and Pointer to maintain specified financial ratios, tested

Their ability to meet those financial ratios can be affected by events beyond their control, and they may be unable to meet

breach of the covenants or restrictions under the Credit Agreement could result in an event of default, which may allow the lender to

accelerate the indebtedness thereunder.

In addition, an event of default under the Credit Agreement would permit the lender to terminate

all commitments to extend further credit pursuant to the revolving credit facility.

Furthermore, if PowerFleet Israel and Pointer are

unable to repay the amounts due and payable under the Credit Agreement, the lender could proceed against the collateral granted to it

to secure the indebtedness under the Credit Agreement.

In the event the lender accelerates the repayment of borrowings, PowerFleet Israel

and Pointer may not have sufficient assets to repay that indebtedness.

Their ability to meet those financial ratios can be affected by events beyond their control, and they may be unable to

breach of the covenants or restrictions under the Credit Agreement could result in an event of default, which may allow the lender

to accelerate the indebtedness thereunder.

In addition, an event of default under the Credit Agreement would permit the lender to

terminate all commitments to extend further credit pursuant to the revolving credit facility.

Furthermore, if Powerfleet Israel and

Pointer are unable to repay the amounts due and payable under the Credit Agreement, the lender could proceed against the collateral

granted to it to secure the indebtedness under the Credit Agreement.

In the event the lender accelerates the repayment of

borrowings, Powerfleet Israel and Pointer may not have sufficient assets to repay that indebtedness.

a result of these restrictions, we may be:

in our flexibility in planning for, or reacting to, changes in our business and the markets we serve;

to raise additional debt or equity financing to fund working capital, capital expenditures, new product development expenses and

other general corporate requirements;

to compete effectively or to take advantage of new business or strategic acquisition opportunities.

limited in our flexibility

in planning for, or reacting to, changes in our business and the markets we serve;

unable to raise additional

debt or equity financing to fund working capital, capital expenditures, new product development expenses and other general corporate

requirements;

unable to compete effectively

or to take advantage of new business or strategic acquisition opportunities.

restrictions may affect our ability to grow in accordance with our strategy.

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qualified personnel in the future, our ability to manage our business could be materially and adversely affected.

provide no assurance that we will be able to successfully integrate any businesses, products, technologies or personnel that we have

acquired or might acquire in the future.

may, from time to time, continue to consider investments in or acquisitions of complementary companies, products or technologies.

the event of any future acquisitions, we could:

stock that would dilute our current stockholders’ percentage ownership;

expenses related to the impairment of goodwill;

large and immediate write-offs.

may not be able to identify suitable acquisition candidates, and if we do identify suitable candidates, we may not be able to make these

acquisitions on acceptable terms, or at all.

operation of any acquired business will also involve numerous risks, including:

integrating the acquired operations, personnel, technologies or products;

unanticipated

of management’s time and attention from our core businesses;

effects on existing business relationships with suppliers and customers;

associated with entering markets in which we have no or limited prior experience;

loss of key employees, particularly those of acquired companies.

addition, if we make changes to our business strategy or if external conditions adversely affect our business operations, we may be required

to record an impairment charge for goodwill or intangibles, which would lead to decreased assets and reduced net operating performance.

unpredictability of our quarterly operating results could adversely affect the market price of our common stock.

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the following:

in the sales of our products to our significant customers;

in the mix of products and services provided by us;

timing and completion of initial programs and larger or enterprise-wide purchases of our products by our customers;

length and variability of the sales cycle for our products;

timing and size of sales;

in market and economic conditions, including fluctuations in demand for our products;

announcements

of new products by our competitors.

variations in the sales

of our products to our significant customers;

variations in the mix of

products and services provided by us;

the timing and completion

of initial programs and larger or enterprise-wide purchases of our products by our customers;

the length and variability

of the sales cycle for our products;

the timing and size of

changes in market and economic

conditions, including fluctuations in demand for our products;

announcements of new products

by our competitors.

a result of these and other factors, revenues for any quarter are subject to significant variation that could adversely affect the market

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value of a reporting unit to an amount below its carrying value.

We also test for other possible intangible impairments if

events occur or circumstances change that would indicate that the carrying amount of such intangible may not be recoverable.

Any resulting

impairment loss would be a non-cash charge and may have a material adverse impact on our results of operations in any future period in

which we record a charge.

We also test for other possible intangible impairments if events occur

or circumstances change that would indicate that the carrying amount of such intangible may not be recoverable.

Any resulting impairment

loss would be a non-cash charge and may have a material adverse impact on our results of operations in any future period in which we

record a charge.

assets with determinable useful lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying

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in which they are recorded.

connection with the preparation of our annual financial statements for the fiscal year ended December 31, 2021, we identified a material

weakness in our internal control over financial reporting.

connection with the preparation of our annual financial statements for the fiscal year ended December 31, 2022, we identified material

weaknesses in our internal control over financial reporting.

Any failure to maintain effective internal control over financial reporting

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generally accepted accounting principles.

We identified a material weakness in our internal

control over financial reporting as of December 31, 2021, which has not been remediated (see Item 9A of this Annual Report on Form 10-K

We identified material weaknesses in our internal

control over financial reporting as of December 31, 2022, which have not been remediated (see Item 9A of this Annual Report on Form 10-K

for more information).

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or detected on a timely basis.

Our management has concluded that a material weakness in our internal control over financial reporting

existed as of December 31, 2021 due to the lack of controls to ensure accurate reporting of financial results in Israel.

are still considering the full extent of the procedures to implement in order to remediate the material weakness described above;

the current remediation plan includes:

(i) utilizing external resources to support our efforts to rework certain control gaps across

the various processes in Israel with identified deficiencies, (ii) implementing enhanced documentation associated with management review

controls and validation of the completeness and accuracy of key reports in Israel, and (iii) training relevant personnel to reinforce

existing policies and enhancing policies with regard to appropriate steps and procedures required to be performed related to the execution

and documentation of internal controls.

We cannot assure you that any of our remedial measures will be effective in resolving this material

weakness or that we will not suffer from other material weaknesses in the future.

Our management has concluded that material weaknesses in our internal control over financial reporting

existed as of December 31, 2022 due to the lack of controls related to the determination of standalone selling price, capitalized software

costs and the financial statement close process.

are still considering the full extent of the procedures to implement in order to remediate the material weaknesses described above;

however, the current remediation plan includes:

(i) implementation of a new enterprise resource planning (ERP) system (ii) utilizing

external resources to support our efforts to rework certain control gaps across the various processes in Israel and the U.S.

identified deficiencies, (iii) implementing enhanced documentation associated with management review controls and validation of the

completeness and accuracy of key reports in Israel and the U.S., and (iv) training relevant personnel to reinforce existing policies and

enhancing policies with regard to appropriate steps and procedures required to be performed related to the execution and

documentation of internal controls.

We cannot assure you that any of our remedial measures will be effective in resolving this

material weakness or that we will not suffer from other material weaknesses in the future.

our management is unable to conclude that we have effective internal control over financial reporting, or to certify the effectiveness

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have operations located in Israel, and therefore our results may be adversely affected by political, military and economic conditions

Our subsidiaries PowerFleet Israel and Pointer operate

in Israel, and therefore our business and operations may be directly influenced by the political, economic and military conditions affecting

Israel at any given time.

A change in the security and political situation in Israel could have a material adverse effect on our business,

operating results and financial condition.

Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken

place between Israel and its Arab neighbors, including Hezbollah in Lebanon and Hamas in the Gaza Strip.

In the last several years,

these conflicts have involved missile strikes against civilian targets in various parts of Israel, particularly in southern Israel where

Pointer’s main offices and manufacturing facility are located and have negatively affected business conditions in Israel.

political uprisings and conflicts in various countries in the Middle East, including Syria and Iraq, are affecting the political

stability of those countries.

It is not clear how this instability will develop and how it will affect the political and security situation

in the Middle East.

subsidiaries Powerfleet Israel and Pointer operate in Israel, and therefore our business and operations may be directly influenced by

the political, economic and military conditions affecting Israel at any given time.

A change in the security and political situation

in Israel could have a material adverse effect on our business, operating results and financial condition.

Since the establishment of

the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its Arab neighbors, including Hezbollah

in Lebanon and Hamas in the Gaza Strip.

In the last several years, these conflicts have involved missile strikes against civilian targets

in various parts of Israel, particularly in southern Israel where Pointer’s main offices and manufacturing facility are located

and have negatively affected business conditions in Israel.

In addition, political uprisings and conflicts in various countries in the

Middle East, including Syria and Iraq, are affecting the political stability of those countries.

It is not clear how this instability

will develop and how it will affect the political and security situation in the Middle East.

the event that our facilities are damaged as a result of hostile action or hostilities otherwise disrupt the ongoing operation of our

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salaries at a rate which could adversely affect Pointer Argentina’s business.

Economic uncertainty and volatility in Brazil may adversely affect our business.

uncertainty and volatility in Brazil may adversely affect our business.

operate through our wholly owned subsidiary Pointer do Brasil Comercial Ltda.

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experienced extremely high rates of inflation.

In 2021, Brazil reached the double-digit inflation rate.

Inflation, along with

governmental measures to fight inflation and public speculation about possible future measures, has had significant negative effects

on the Brazilian economy.

In addition, future governmental actions, including actions to adjust the value of the Brazilian real, may

trigger increases in inflation.

In 2021, Brazil reached a double-digit inflation rate.

Inflation, along with governmental

measures to fight inflation and public speculation about possible future measures, has had significant negative effects on the Brazilian

In addition, future governmental actions, including actions to adjust the value of the Brazilian real, may trigger increases

in inflation.

There can be no assurance that inflation will not affect our business in Brazil in the future.

any Brazilian government’s actions to maintain economic stability, as well as public speculation about possible future actions,

may contribute significantly to economic uncertainty in Brazil.

It is also difficult to assess the impact that turmoil in the credit

markets will have on the Brazilian economy and on our future operations and financial results or our operations in Brazil.

In addition, any Brazilian

government’s actions to maintain economic stability, as well as public speculation about possible future actions, may contribute

significantly to economic uncertainty in Brazil.

It is also difficult to assess the impact that turmoil in the credit markets will have

on the Brazilian economy and on our future operations and financial results or our operations in Brazil.

Brazilian currency has devalued frequently, including during the last two decades.

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impacting our ability to finance our operations in Brazil.

August 2014, Pointer Brazil received a notice from the Brazilian tax authority alleging that it had not paid an aggregate of $190,000

in value-added tax, the Brazilian ICMS tax, plus $957,000 of interest and penalties, resulting in a total amount of $1,147,000 of

alleged tax deficiency as of December 31, 2021.

In July 2015, Pointer Brazil received another tax deficiency notice alleging that the services provided by Pointer Brazil should

be classified as “telecommunication services” and therefore Pointer Brazil should be subject to the state value-added tax.

operations in Brazil are also subject to uncertainties in the Brazilian legal and regulatory system.

In August 2014, Pointer Brazil

received a notice from the Brazilian tax authority alleging that it had not paid an aggregate of $197,000 in value-added tax, the

Brazilian ICMS tax, plus $1,057,000 of interest and penalties, resulting in a total amount of $1,254,000 of alleged tax deficiency

as of December 31, 2022.

In July 2015, Pointer Brazil received another tax deficiency notice alleging that the services provided by

Pointer Brazil should be classified as “telecommunication services” and therefore Pointer Brazil should be subject to

the state value-added tax.

The aggregate amount claimed to be owed under the notice was approximately $11,777,535 as of December 31,

On August 14, 2018, the

lower chamber of the State Tax Administrative Court in São Paulo rendered a decision that was favorable to Pointer Brazil in relation

to the ICMS demands, but adverse with respect to the clerical obligation of keeping in good order a set of ICMS books and related tax

The state has the opportunity to appeal to the higher chamber of the State Tax Administrative Court.

While our legal counsel

is of the opinion that it is probable that we will prevail in these proceedings and that no material costs will arise in respect to these

claims, litigation is inherently subject to many uncertainties and we cannot provide any assurance that we will ultimately be successful.

On August 14, 2018, the lower chamber of the State Tax Administrative Court in São Paulo rendered a decision that was

favorable to Pointer Brazil in relation to the ICMS demands, but adverse with respect to the clerical obligation of keeping in good

order a set of ICMS books and related tax receipts.

The state has the opportunity to appeal to the higher chamber of the State Tax

Administrative Court.

While our legal counsel is of the opinion that it is probable that we will prevail in these proceedings and

that no material costs will arise in respect to these claims, litigation is inherently subject to many uncertainties and we cannot

provide any assurance that we will ultimately be successful.

Brazilian government has exercised, and may continue to exercise, significant influence over the Brazilian economy.

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response to the following factors:

● devaluations

other exchange rate movements;

● investments;

instability ;

capital and lending markets ;

diplomatic, social and economic developments in or affecting Brazil, including election years

for president, governors, and national congress.

devaluations and other

exchange rate movements;

exchange control policies;

employment levels;

social instability;

price instability;

energy shortages;

interest rates;

liquidity of domestic capital

and lending markets;

other political, diplomatic,

social and economic developments in or affecting Brazil, including election years for president, governors, and national congress.

instability in Brazil may adversely affect Brazil’s economy and investment levels and have a material adverse effect on the Company.

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uncertainty and volatility in Mexico may adversely affect our business.

Our subsidiaries Pointer Recuperacion Mexico S.A.,

subsidiaries Pointer Recuperacion Mexico S.A., de C.V.

and Pointer Logistica y Monitoreo, S.A.

operate in Mexico, which has gradually experienced, since 2013, substantial decrease

in the value of the Mexican peso against the U.S.

dollar, together with growing inflation rates.

The devaluation of the Mexican peso and

rise in inflation rate has triggered demonstrations and heightened political tension.

Severe devaluation may lead to future governmental

actions, including actions to adjust the value of the Mexican peso, policies which may trigger further increases in inflation.

be no assurance that inflation will not affect our business in Mexico in the future.

In addition, any Mexican government’s actions

to maintain economic stability, as well as public speculation about possible future actions, may contribute significantly to economic

uncertainty in Mexico.

Economic instability and or government imposition of exchange controls may also result in the disruption of the

international foreign exchange markets and may limit our ability to transfer or convert pesos into U.S.

operate in Mexico, which has gradually

experienced, since 2013, substantial decrease in the value of the Mexican peso against the U.S.

dollar, together with growing inflation

The devaluation of the Mexican peso and rise in inflation rate has triggered demonstrations and heightened political tension.

Severe devaluation may lead to future governmental actions, including actions to adjust the value of the Mexican peso, policies which

may trigger further increases in inflation.

There can be no assurance that inflation will not affect our business in Mexico in the future.

In addition, any Mexican government’s actions to maintain economic stability, as well as public speculation about possible future

actions, may contribute significantly to economic uncertainty in Mexico.

Economic instability and or government imposition of exchange

controls may also result in the disruption of the international foreign exchange markets and may limit our ability to transfer or convert

pesos into U.S.

Dollars and other currencies.

Such policies could destabilize the country and adversely and materially affect the economy, and thereby our business.

Additionally, due

to agreements with the Confederation of Workers of Mexico in Mexico and the country’s high inflation rate, we may be required to

increase employee salaries at a rate which could adversely affect our business.

Such policies could destabilize the country and adversely and materially affect the economy,

and thereby our business.

Additionally, due to agreements with the Confederation of Workers of Mexico in Mexico and the country’s

high inflation rate, we may be required to increase employee salaries at a rate which could adversely affect our business.

Related to our Securities

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to influence the outcome of key transactions, including a change of control.

connection with the closing of the Transactions, we issued 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”).

The Series A Preferred Stock represents a

significant percentage of the aggregate voting power of the Company.

Based on an initial conversion price of $7.319, the Investors, who

are the initial holders of the Series A Preferred Stock, own approximately 17% of the Company on an as-converted basis as of March

Except as required by applicable law or as otherwise specifically set forth in our Amended and Restated Certificate of

Incorporation (the “Charter”), the holders of Series A Preferred Stock will not be entitled to vote on any matter presented

to our stockholders unless and until any holder of Series A Preferred Stock provides written notification to the Company that such holder

is electing, on behalf of all holders of Series A Preferred Stock, to activate their voting rights and in doing so rendering the Series

A Preferred Stock voting capital stock of the Company (such notice, a “Series A Voting Activation Notice”).

From and after

the delivery of Series A Voting Activation Notice, all holders of the Series A Preferred Stock will be entitled to vote with the holders

of our common stock as a single class on an as-converted basis unless and until such time as the holders of at least a majority of the

outstanding shares of Series A Preferred Stock provide further written notice to the Company that they elect to deactivate their voting

In addition, the aggregate voting power of the Series A Preferred Stock may increase further in connection with the accrual of

dividends at an initial minimum rate of 7.5% per annum, which may be payable, at our election, in kind through the issuance of additional

shares of Series A Preferred Stock.

However, to the extent voting rights of the Series A Preferred Stock have been activated, any holder

of Series A Preferred Stock shall not be entitled to cast votes for the number of shares of our common stock issuable upon conversion

of shares of Series A Preferred Stock held by such holder that exceeds the quotient of (i) the aggregate Series A Issue Price (as defined

below) for such shares of Series A Preferred Stock divided by (ii) $5.57 (subject to adjustment for stock splits, stock dividends, combinations,

connection with the closing of the Transactions, we issued 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.

(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”).

Preferred Stock represents a significant percentage of the aggregate voting power of the Company.

Based on an initial conversion

price of $7.319, the Investors, who are the initial holders of the Series A Preferred Stock, own approximately 18% of the Company on

an as-converted basis as of March 20, 2023.

Except as required by applicable law or as otherwise specifically set forth in our

Amended and Restated Certificate of Incorporation (the “Charter”), the holders of Series A Preferred Stock will not be

entitled to vote on any matter presented to our stockholders unless and until any holder of Series A Preferred Stock provides

written notification to the Company that such holder is electing, on behalf of all holders of Series A Preferred Stock, to activate

their voting rights and in doing so rendering the Series A Preferred Stock voting capital stock of the Company (such notice, a

“Series A Voting Activation Notice”).

From and after the delivery of Series A Voting Activation Notice, all holders of

the Series A Preferred Stock will be entitled to vote with the holders of our common stock as a single class on an as-converted

basis unless and until such time as the holders of at least a majority of the outstanding shares of Series A Preferred Stock provide

further written notice to the Company that they elect to deactivate their voting rights.

In addition, the aggregate voting power of

the Series A Preferred Stock may increase further in connection with the accrual of dividends at an initial minimum rate of 7.5% per

annum, which may be payable, at our election, in kind through the issuance of additional shares of Series A Preferred Stock.

However, to the extent voting rights of the Series A Preferred Stock have been activated, any holder of Series A Preferred Stock

shall not be entitled to cast votes for the number of shares of our common stock issuable upon conversion of shares of Series A

Preferred Stock held by such holder that exceeds the quotient of (i) the aggregate Series A Issue Price (as defined below) for such

shares of Series A Preferred Stock divided by (ii) $5.57 (subject to adjustment for stock splits, stock dividends, combinations,

reclassifications and similar events, as applicable).

As a result, the holders of shares of the Series A Preferred Stock have the ability

to significantly influence the outcome of any matter submitted for the vote of our stockholders.

As a result, the holders of shares of the Series A Preferred Stock have the

ability to significantly influence the outcome of any matter submitted for the vote of our stockholders.

addition, the Series A Preferred Stock will have representation on our board of directors and will have significant control over the

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Company to influence the outcome of corporate transactions or other matters submitted for stockholder approval.

of March 10, 2022, our executive officers and directors beneficially owned, in the aggregate, 8% of our outstanding common stock,

not including 5,563,594 shares of common stock that our executive officers and directors may acquire upon the exercise of outstanding

options or if they otherwise acquire additional shares of common stock in the future.

As a result, our officers and directors may have

the ability to influence the outcome of all corporate actions requiring stockholder approval, irrespective of how our other stockholders

may vote, including the following actions:

of March 20, 2023, our executive officers and directors beneficially owned, in the aggregate, approximately 3% of our outstanding common stock,

not including approximately 6,055,000 shares of common stock that our executive officers and directors may acquire upon the

exercise of outstanding options or if they otherwise acquire additional shares of common stock in the future.

As a result, our

officers and directors may have the ability to influence the outcome of all corporate actions requiring stockholder approval,

irrespective of how our other stockholders may vote, including the following actions:

the election of directors;

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sales also may make it more difficult for us to sell equity securities at a time and price that we deem appropriate.

We have 35,967,442 shares of common stock

outstanding as of March 10, 2022, of which 33,263,698 shares are freely transferable without restriction, and 2,703,744

shares are held by our officers and directors and, as such, are subject to the applicable volume, manner of sale, holding period

and other limitations of Rule 144 under the Securities Act.

In addition, as of December 31, 2021, options to purchase 3,470,000

shares of our common stock were issued and outstanding, of which 1,546,000 were vested.

The weighted-average exercise price

of the vested stock options is $5.67.

have 36,170,299 shares of common stock outstanding as of March 20, 2023, of which 35,088,407 shares are freely transferable without

restriction, and 1,081,892 shares are held by our officers and directors and, as such, are subject to the applicable volume, manner

of sale, holding period and other limitations of Rule 144 under the Securities Act.

In addition, as of December 31, 2022, time-based

options and market-based stock options subject to performance-based vesting conditions, to purchase 2,728,000 and 5,065,000 shares of our common stock, respectively, were issued

and outstanding, of which 1,247,000 and 0, respectively were vested.

The weighted-average exercise price of the vested

non-market based stock options is $5.79.

We also may issue additional shares of stock in connection with our business, including

in connection with acquisitions, and may grant additional stock options to our employees, officers, directors and consultants under our

stock option plans or warrants to third parties.

If a significant portion of these shares of common stock were sold in the public market,

the market value of our common stock could be adversely affected.

issuance of equity or debt securities under our shelf registration statement could have a negative impact on the price of our common

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

The shelf registration

statement allows us to raise up to an aggregate of $60.0 million from the sale of common stock, preferred stock, warrants, debt securities,

and units, or any combination of the foregoing.

To date, we have sold, pursuant to the shelf registration statement, an aggregate of

809,846 shares of common stock for approximately $4.2 million of gross proceeds in connection with our ATM Offering and an aggregate

of 4,427,500 shares of common stock for gross proceeds of approximately $28.8 million in connection with our Underwritten Public Offering.

If we issue all of the remaining available securities included in the shelf registration statement, there could be a substantial dilutive

effect on our common stock and an adverse effect on the price of our common stock.

in connection with acquisitions, and may grant additional stock options to our employees, officers, directors and consultants under

our stock option plans or warrants to third parties.

If a significant portion of these shares of common stock were sold in the

public market, the market value of our common stock could be adversely affected.

Charter provides that the Court of Chancery of the State of Delaware will be the exclusive forum for certain legal actions between us

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Accordingly, the exclusive forum provision will not apply to claims arising under the Securities

Act the Exchange Act or other federal securities laws for which there is exclusive

federal or concurrent federal and state jurisdiction.

Article SIXTEENTH provides that any person or entity who acquires an interest in

our capital stock will be deemed to have notice of and consented to the provisions of Article SIXTEENTH.

Stockholders will not be deemed

to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

Although we believe this exclusive

forum provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it

applies, this exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable

for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to

Further, in the event a court finds the exclusive forum provision contained in the Charter to be unenforceable or inapplicable

in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business,

operating results and financial condition.

Act the Exchange Act or other federal securities laws for which there is exclusive federal or concurrent federal and state jurisdiction.

Article SIXTEENTH provides that any person or entity who acquires an interest in our capital stock will be deemed to have notice of and

consented to the provisions of Article SIXTEENTH.

Stockholders will not be deemed to have waived our compliance with the federal securities

laws and the rules and regulations thereunder.

Although we believe this exclusive forum provision benefits us by providing increased

consistency in the application of Delaware law in the types of lawsuits to which it applies, this exclusive forum provision may limit

a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors,

officers, other employees or stockholders, which may discourage lawsuits with respect to such claims.

Further, in the event a court finds

the exclusive forum provision contained in the Charter to be unenforceable or inapplicable in an action, we may incur additional costs

associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

Charter contains a provision renouncing our interest and expectancy in certain corporate opportunities which may prevent us from receiving

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businesses similar to the Company, and without such assurances, the Investors would be unwilling or unable to enter into the Investment

a result of this provision, we may be not be offered certain corporate opportunities which could be beneficial to us and our stockholders.

a result of this provision, we may not be offered certain corporate opportunities which could be beneficial to us and our stockholders.

While we are unable at this time to predict how this provision may adversely impact our stockholders, it is possible that we would not

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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-K

Item 1A. Risk Factors