Item 1. Business
Item
1. Business.
Overview
Powerfleet is a global leader of Internet-of-Things (“IoT”) solutions providing valuable business intelligence for managing high-value enterprise
assets that improve operational efficiencies.
We
are headquartered in Woodcliff Lake, New Jersey, with offices located around the globe.
On April 2, 2024, we consummated the transactions contemplated by the Implementation Agreement, dated as of October
10, 2023 (the “Implementation Agreement”), that we entered into with Main Street 2000 Proprietary Limited, a private company
incorporated in the Republic of South Africa and our wholly owned subsidiary (“Powerfleet Sub”), and MiX Telematics, a public
company incorporated under the laws of the Republic of South Africa (the “MiX Combination”). On such closing date, Powerfleet
Sub acquired all the issued ordinary shares of MiX Telematics (including those represented by MiX Telematics’ American Depositary
Shares) through the implementation of a scheme of arrangement (the “Scheme”) in accordance with Sections 114 and 115 of the
South African Companies Act, No. 71 of 2008, as amended (the “Companies Act”), in exchange for shares of our common stock.
As a result, MiX Telematics became our indirect, wholly owned subsidiary.
Our
Powerfleet for Warehouse solutions are designed to provide on-premise or in-facility asset and operator management, monitoring, and
visibility for warehouse trucks such as forklifts, man-lifts, tuggers and ground support equipment at airports. These solutions utilize
a variety of communications capabilities such as Bluetooth ® , WiFi, and proprietary radio frequency.
Our
Powerfleet for Logistics solutions are designed to provide bumper-to-bumper asset management, monitoring, and visibility for over-the-road
based assets such as heavy trucks, dry-van trailers, refrigerated trailers and shipping containers and their associated cargo. These
systems provide mobile-asset tracking and condition-monitoring solutions to meet the transportation market’s desire for greater
visibility, safety, security, and productivity throughout global supply chains.
Our
Powerfleet for Vehicles solutions are designed both to enhance the vehicle fleet management process, whether it’s a rental car,
a private fleet, or automotive original equipment manufacturer (“OEM”) partners. We achieve this by providing critical information that
can be used to increase revenues, reduce costs and improve customer service.
Our
patented technologies are a proven solution for organizations that must monitor and analyze their assets to improve safety, increase
efficiency, reduce costs, and drive profitability. Our offerings are sold under the global brands Powerfleet, Pointer, and Cellocator.
We
have an established history of IoT device development and innovation creating devices that can withstand harsh and rugged environments.
With 46 patents and patent applications and over 25 years’ experience, we believe we are well positioned to evolve our offerings
for even greater value to customers through our cloud-based applications for unified operations.
We
deliver advanced data solutions that connect mobile assets to increase visibility, operational efficiency and profitability. Across our
spectrum of vertical markets, we differentiate ourselves by developing mobility platforms that collect data from unique sensors. Further,
because we are 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. These insights include a full set of
Key Performance Indicators (“KPIs”) to drive operational and strategic decisions. Our customers typically get a return on their investment
in less than 12 months from deployment.
Our
enterprise software applications have machine learning capabilities and are built to integrate with our customers’ management systems
to provide a single, integrated view of asset and operator activity across multiple locations while providing real-time enterprise-wide
benchmarks and peer-industry comparisons. We look for analytics, as well as the data contained therein, to differentiate us from our
competitors, adding significant value to customers’ business operations, and helping to contribute to their bottom line. Our solutions
also feature open application programming interfaces (“APIs”) for additional integrations and development to boost other enterprise management
systems and third-party applications.
We
market and sell our connected IoT data solutions to a wide range of customers in the commercial and government sectors. Our customers
operate in diverse markets, such as manufacturing, automotive manufacturing, wholesale and retail, food and grocery distribution, pharmaceutical
and medical distribution, construction, mining, utilities, aerospace, vehicle rental, as well as logistics, shipping, transportation,
and field services. Traditionally, these businesses have relied on manual, often paper-based, processes or on-premise legacy software
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.
Our
Solutions
We
provide critical actionable information that powers unified operations throughout organizations. We are solving the challenge of inefficient
data collection, real-time visibility, and analysis that leads to transformative business operations. Our SaaS cloud-based applications
take data from our IoT devices and ecosystem of third-party and partner applications to present actionable information for customers
to increase efficiencies, improve safety and security, and increase their profitability in easy-to-understand reports, dashboards, and
real-time alerts.
Key
Applications of Our IoT Solutions
We
provide real-time intelligence for organizations with high-value assets allowing them to make informed decisions and ultimately improve
their operations, safety, and bottom line. Our applications enable organizations to capture IoT data from various types of assets with
devices and sensors creating a holistic view for analysis and action.
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The
core applications that our IoT solutions address include:
End-to-End
Visibility: Organizations with expensive assets such as vehicles, machinery, or equipment need to keep track of where the assets
are located, monitor for misuse, and understand how and when assets are being used. By having complete visibility of their assets, customers
can improve security, utilization and customer service. In addition, our visibility solutions help with personnel workflows and resource
management, freight visibility through load status, equipment availability status, dwell and idle time, geofencing, two-way temperature
control and management, multizone temperature monitoring, arrival and departure times, and supply chain allocation.
Regulatory
Compliance: Businesses must comply with government regulations and provide proof of compliance, which is commonly an onerous
process to enforce and maintain. Our solutions provide critical data points and reports to help customers stay within compliance, avoid
fines for non-compliance, and automate the reporting process. We deliver real-time position reports, hours-of-service, temperature monitoring
and control, electronic safety checklists, workflow management, controlling vehicle access to only authorized operators, inspection reports,
and history logs of use.
Improve
Safety: Our applications are designed to provide asset and operator management, monitoring, and visibility for safer environments.
Our solutions allow our customers to monitor their fleet of vehicles on various parameters, including but not limited to, vehicle location,
speed, engine fault codes, driver behavior, eco-driving, and ancillary sensors and can receive reports and alerts, either automatically
or upon request wirelessly via the internet, email, mobile phone or an SMS. In addition, our dash camera provides critical video capture
that can be used to help exonerate drivers when in accidents or help bolster training and coaching programs of employees. We also offer
preventative solutions such as safety warning products to alert vehicle operators of objects or pedestrians in their pathway to prevent
accidents, injuries, and damage. Our analytics platform features dashboards with KPIs and can help managers identify patterns, trends
and outliers that can be used as flags for interventions.
Drive
Operational Efficiency & Productivity: To increase utilization of mobile assets, our solutions enable the identification
of a change in status, real-time location, geo-fencing alerts when an asset is approaching or leaving its destination, cargo status,
and on-board intelligence utilizing a motion sensor and proprietary logic that identifies the beginning of a drive and the end of a drive.
Having this information enables customers to increase capacity, speed of service, right-size their fleets, and improve communication
internally and with customers. In addition, customers can increase revenue per mile, reduce claims and claims processing times, and reduce
the number of assets needed. This is achieved through proving such things as two-way integrated workflows for drivers, control assignments
and work change, Electronic Driver Logging 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.
We
help customers to automate processes and increase productivity of their employees. Our applications enable customers to determine where
operators are assigned and can temporarily reassign them based on peak needs, evaluate any disparity in the amount employees are paid
compared to the time they actually spend operating a vehicle. Our applications help answer the question of why does it take some employees
longer than others to do specific tasks, where to focus labor resources, and how to forecast vehicles and operators needed for future
workflow.
In
addition, for our rental car vertical, our applications automatically upload vehicle identification number, mileage and fuel data as
a vehicle enters and exits the rental lot, which can significantly expedite the rental and return processes for travelers, and provide
the rental company with more timely inventory status, more accurate billing data that can generate higher fuel-related revenue, and an
opportunity to utilize customer service personnel for more productive activities, such as inspecting vehicles for damage and helping
customers with luggage.
Our
solution for “car sharing” permits a rental car company to remotely control, track and monitor their rental vehicles wherever
they are parked. Whether for traditional “pod-based” rental or for the emerging rent-anywhere model, the system, through
APIs integrated into any rental company’s fleet management system, (i) manages member reservations by smart phone or Internet,
and (ii) charges members for vehicle use by the hour.
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For
our customers with a variety of make-model-years in their fleet, we have developed an unmatched library of certified vehicle code interfaces
through our second-generation On-Board Diagnostics, industry standard. Our patented fleet management system helps
fleet owners improve asset utilization, reduce capital costs, and cut operating expenses, such as vehicle maintenance or service and
support.
Increase
Security: Our solutions allow our customers to reduce theft and improve inventory management. Customers can lockdown their assets
with automated e-mail or text message alerts, emergency tracking of assets (higher frequency of reports) if theft is expected, geo-fencing
alerts when an asset enters a prohibited geography or location, and near real-time sensors that alert based on changes in temperature
and shock, among other things. We also provide stolen vehicle retrieval (“SVR”) services. Most of the SVR products used to
provide our SVR services are mainly sold to (i) local car dealers and importers that in turn sell the products equipped in the vehicle
to the end users who purchase the SVR services directly from us, or (ii) leasing companies which purchase our SVR services in order to
secure their own vehicles.
Reduce
Costs
We
enable our customers to improve asset utilization, reduce capital costs, and cut operating expenses, such as vehicle maintenance or service
and support. Our solutions provide engine performance, machine diagnostics, fuel consumption, and battery life to improve preventative
maintenance scheduling, increase uptime, and gain a longer service life of equipment. Through our software applications, customers can
optimize capacity, analyze resource allocation, and improve utilization of assets to reduce capital expenses such as purchasing new or
leasing additional equipment. Our applications provide root cause analysis for any cargo claims and help with exoneration of drivers
in accidents via dash camera visibility.
Analytics
and Machine Learning
Our
analytics platforms provide our customers with a holistic view of their asset activity across their enterprise. For example, our image
machine learning system allows us to process images from our freight camera and other sources and identify key aspects of operations
and geospatial information such as location, work being accomplished, type of cargo, how cargo is loaded and if there are any visible
issues such as damage.
Key
Performance Indicators & Benchmarks
Our
cloud-based software applications provide a single, integrated view of asset activity across multiple locations, generating enterprise-wide
benchmarks, peer-industry comparisons, and deeper insights into asset operations. In addition, our customers can set real-time alerts
for exception-based reporting or critical activity that needs immediate attention. This enables management teams to make more informed,
effective decisions, raise asset performance standards, increase productivity, reduce costs, and enhance safety.
Specifically,
our analytics platforms allow users to quantify best-practice enterprise benchmarks for asset utilization and safety, reveal variations
and inefficiencies in asset activity across both sites and geographic regions, or identify opportunities to eliminate or reallocate assets,
to reduce capital and operating costs. We provide an extensive set of decision-making tools and a variety of standard and customized
reports to help businesses improve overall operations.
We
look for analytics and machine learning to make a growing contribution to drive platform and SaaS revenue, further differentiate our
offerings and add value to our solutions. We also use our analytics platform for our own internal platform quality control.
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Services
Hosting
Services : We provide the use of our systems as a remotely hosted service, with the system server and application software residing
in our colocation center or on a cloud platform provider’s infrastructure (e.g., Azure, AWS). This approach helps us reduce support
costs and improve quality control. It separates the system from the restrictions of the customers’ local IT networks, which helps
reduce their system support efforts and makes it easier for them to receive the benefits of system enhancements and upgrades. Our hosting
services are typically offered with extended maintenance and support services over a multi-year term of service, with automatic renewals
following the end of the initial term.
Software
as a Service : We provide system monitoring, help desk technical support, escalation procedure development, routine diagnostic
data analysis and software updates services as part of the ongoing contract term. These services ensure deployed systems remain in optimal
performance condition throughout the contract term and provide access to newly developed features and functions on an annual basis.
Maintenance
Services : We provide a warranty on the hardware components of our system. During the warranty period, we either replace or repair
defective hardware. We also make extended maintenance contracts available to customers and offer ongoing maintenance and support on a
time and materials basis.
Customer
Support and Consulting Services for Ease of Use, Adoption, and Added Value : We have developed a framework for the various phases
of system training and support that offer our customers both structure and flexibility. Major training phases include hardware installation
and troubleshooting, software installation and troubleshooting, “train-the-trainer” training on asset hardware operation,
preliminary software user training, system administrator training, information technology issue training, ad hoc training during system
launch and advanced software user training.
Increasingly,
training services are provided through scalable online interactive training tools. Support and consulting services are priced based on
the extent of training that the customer requests. To help our customers derive the most benefit from our system, we supply a broad range
of documentation and support including videos, interactive online tools, hardware user guides, software manuals, vehicle installation
overviews, troubleshooting guides, and issue escalation procedures.
We
provide our consulting services both as a standalone 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.
Growth
Strategy
Our
objective is to become a leading global provider of IoT SaaS solutions for high-value enterprise assets to drive optimized operations
and create safer environments. In 2023, we consolidated and augmented many of our existing capabilities on a single customer software
platform branded as “Unity.” We have designed our Unity platform to enable rapid and deep integration with IoT devices and
third-party business systems to a highly scalable data pipeline that powers artificial intelligence-driven insights to help companies
save lives, time, and money. Unity is an increasingly important initiative to meet our objective of becoming a leading global provider
of IoT SaaS solutions for high-value enterprise assets to drive optimized operations and create safer environments. To achieve this goal,
we intend to prove value, retain and grow business with existing customers and pursue opportunities with new customers by:
●
focusing
our business solutions by vertical markets and go to market strategies to each market;
●
positioning
ourselves as an innovative thought leader;
●
maintaining
a world class sales and marketing team;
●
identifying,
seizing, and managing revenue opportunities;
●
expanding
our customer base, achieving wider market penetration and educating customers with mixed assets in their organization about our other
applications;
●
implementing
improved marketing, sales and support strategies;
7
●
shortening
our initial sales cycles by helping our customers through:
○
identifying
and quantifying benefits expected from our solutions;
○
accelerating
transitions from implementation to roll-out; and
○
building
service revenue through long-term SaaS contracts;
●
differentiating
our product offering through analytics, machine learning, unique sensors, and value-added services;
●
producing
incremental revenue at a high profit margin; and
●
expanding
our partnerships and integrations.
We
also plan to expand into new applications and markets by:
●
pursuing
opportunities to integrate our system with computer hardware and software vendors, including:
○
OEMs;
○
transportation
management systems;
○
warehouse
management systems;
○
labor
and timecard systems;
○
enterprise
resource planning; and
○
yard
management systems.
●
establishing
relationships with global distributors; and
●
evaluating
and pursuing strategically sound acquisitions of companies.
Sales
and Marketing
Our
sales and marketing objectives are to achieve broad market awareness and penetration, with an emphasis both on expanding business opportunities
with existing customers and on securing new customers.
We
market our systems directly to commercial and government organizations and through indirect sales channels, such as OEMs, vehicle importers,
distributors, and warehouse equipment dealers.
In
addition, we are actively pursuing strategic relationships with key companies in our target markets - including complementary hardware
and software vendors and service providers - to further penetrate these markets by embedding our products in the assets our systems monitor
and integrating our solutions with other systems.
We
sell our systems to corporate-level executives, division heads and site-level management within the enterprise. Typically, our initial
system deployment serves as a basis for potential expansion across the customer’s organization.
We
work closely with customers to demonstrate a return on investment, which is usually less than 12 months, and help maximize the utilization
and benefits of our system and demonstrate the value of enterprise-wide deployments. Post-implementation, we consult with our customers
to further extend and customize the benefits to the enterprise by delivering enhanced analytics capabilities.
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Customers
We
market and sell our wireless solutions to a wide range of customers in the commercial and government sectors. Our customers operate in
diverse markets, such as automotive manufacturing, retail, food and grocery distribution, logistics, shipping, freight transportation,
heavy industry, wholesale distribution, manufacturing, aerospace and vehicle rental.
We
enter into master agreements with our customers in the normal course of business. These agreements define the terms of any sales of products
and/or services by us to the applicable customer, including, but not limited to, terms regarding payment, support services, termination
and assignment rights. These agreements generally obligate us only when products or services are actually sold to the customer thereunder.
We
strive to establish long-term relationships with our customers in order to maximize opportunities for new application development and
increased sales. Some of our global customers that benefit from the Company’s combined solutions to power their specific IoT and
machine to machine mobility needs include Avis, Walmart, Toyota, and XPO Logistics. No individual customer generates revenue equal to
or greater than 10% of the Company’s consolidated total revenue.
Competition
The
market for our solutions is rapidly evolving, highly competitive and fragmented. Our target markets are also subject to quickly changing
product technologies, shifting customer needs, regulatory requirements and frequent introductions of new products and services.
In
each of our global markets, we encounter different competitors due to the dynamics of each market. A significant number of companies
have developed or are developing and marketing software and hardware for wireless products that currently compete or will compete directly
with our solutions. We compete with organizations varying in size, including many small, start-up companies as well as large, well-capitalized
organizations.
While
some of our competitors focus exclusively on providing wireless asset management solutions, many are involved in wireless technology
as an extension of a broader business. Many of our larger competitors are able to dedicate extensive financial resources to the research
and development and deployment of wireless solutions. As government and commercial entities expand the use of wireless technologies,
we expect that competition will continue to increase within our target markets.
Research
and Development
Our
research and development team has expertise in areas such as hardware, software and firmware development and testing, database design
and data analytics, wireless communications, artificial intelligence methods, mechanical and electrical engineering, and both product
and project management. In addition, we utilize external contractors to supplement our team in the areas of software and firmware development,
digital design, test development and product-level testing.
Generally,
our research and development efforts are focused on expanding the capabilities of our products; differentiating our offerings through
our Unity platform build, simplifying the implementation, support and utilization of our solutions, reducing the cost of our solutions,
increasing the reliability of our solutions, expanding the functionality of our solutions to meet customer and market requirements, applying
new advances in technology to enhance existing solutions, and building further competitive advantages through our intellectual property
portfolio.
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Intellectual
Property
Patents
We
attempt to protect our technology and products through a variety of intellectual property protections, including the pursuit of patent
protection in the United States and certain foreign jurisdictions. Because of the differences in patent laws and laws concerning proprietary
rights, the extent of protection provided by U.S. patents or proprietary rights owned by us may differ from that of their foreign counterparts.
Where strategically appropriate, we will attempt to pursue suspected violators of our patents and, whenever possible, monetize our intellectual
property.
We
built a portfolio of patents and patent applications relating to various aspects of our technology and products, including our
wireless asset management systems, connected car products, and vehicle management systems. As of February 29, 2024, our patent
portfolio includes 39 U.S. patents, 3 pending U.S. patent applications, 2 pending foreign patent applications, and 2 foreign
patents. With the timely payment of all maintenance fees, the U.S. patents have expiration dates falling between 2024 and 2040. No
single patent or patent family is considered material to our business.
Trademarks
We
have, or have applied for, U.S. and/or foreign trademark protection for I.D. SYSTEMS ® and Design, the I.D. SYSTEMS Logo ® ,
VEHICLE ASSET COMMUNICATOR ® , POWERFLEET ® , POWERFLEET VISION ® , POWERFLEET IQ ® ,
POWERFLEET YARD ® , VERIWISE IQ ® , didBOX ® , FREIGHTCAM, KEYTROLLER ® , REEFERMATE ® ,
POWERFLEET and DESIGN ® and CAMERA Design ® . Following the MiX Combination, we have additional trademarks for Mix Telematics,
Mix Telematics – Logo, Matrix Vehicle Tracking Logo, Datatrak, Tracking. Simply Sorted, Beame Character Device, Beame Logo 2012,
Beame Logo 2010, Mix-Drive, FM-WEB, Matrix – right by your side (2013 logo), Mix Vision, Mix Safedrive, FM Communicator, MIX ROVI,
Beame Logo, Our Customers Are People, Not Vehicles, Tripmaster, Life Takes You Places, Matrix Brings you Home, MiX Intuition, Recovery.
Simply Sorted, Geoloc Advanced Alert, MiX Now, Mix Recovery Protect, Mix Fleet Manager, Connected and Protected Fleet.
We
attempt to avoid infringing known proprietary rights of third parties in our product development and sales efforts. However, it is difficult
to proceed with certainty in a rapidly evolving technological environment in which there may be numerous patent applications pending,
many of which are confidential at the time of the application filing, with regard to similar technologies. If we were to discover that
our products violate third-party proprietary rights, we may not be able to:
●
obtain
licenses to continue offering such products without substantial reengineering;
●
re-engineer
our products successfully to avoid infringement;
●
obtain
licenses on commercially reasonable terms, if at all;
●
litigate
an alleged infringement successfully; or
●
settle
without substantial expense and damage awards.
Any
claims against us relating to the infringement of third-party proprietary rights, even if without merit, could result in the expenditure
of significant financial and managerial resources or in injunctions preventing us from distributing certain products. Such claims could
materially adversely affect our business, financial condition and results of operations.
Our
software products are susceptible to unauthorized copying and uses that may go undetected, and policing such unauthorized use is difficult.
In general, our efforts to protect our intellectual property rights through patent, copyright, trademark and trade secret laws and contractual
safeguards may not be effective to prevent misappropriation of our technology, or to prevent the development and design by others of
products or technologies similar to, or competitive with, those developed by us. Our failure or inability to protect our proprietary
rights could materially and adversely affect our business, financial condition and results of operations.
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Manufacturing
We
outsource our hardware manufacturing operations to contract manufacturers. This strategy enables us to focus on our core competencies
- designing hardware and software systems and delivering solutions to customers - and avoid investing in capital-intensive electronics
manufacturing infrastructure. Outsourcing also provides us with the ability to ramp up deliveries to meet increases in demand without
increasing fixed expenses.
Our
manufacturers are responsible for obtaining the necessary components and supplies to manufacture our products. While components and supplies
are generally available from a variety of sources, manufacturers generally depend on a limited number of suppliers. In the past, unexpected
demand for communication products has caused worldwide shortages of certain electronic parts and allocation of such parts by suppliers
that had an adverse impact on the ability of manufacturers to deliver products as well as on the cost of producing such products.
Due
to the general availability of manufacturers for our products, we do not believe that the loss of any of our manufacturers would have
a long-term material adverse effect on our business, although there could be a short-term adverse effect on our business.
We
generally attempt to maintain sufficient inventory to meet customer demand for products, as well as to meet anticipated sales levels.
If our product mix changes in unanticipated ways, or if sales for particular products do not materialize as anticipated, we may have
excess inventory or inventory that becomes obsolete. In such cases, our operating results could be negatively affected.
Government
Regulations
The
use of radio emissions is subject to regulation in the United States by various federal agencies, including the Federal Communications
Commission (the “FCC”) and the Occupational Safety and Health Administration. Various state agencies
also have promulgated regulations which concern the use of lasers and radio/electromagnetic emissions standards.
Regulatory
changes in the United States and other countries in which we may operate in the future could require modifications to some of our products
in order for us to continue manufacturing and marketing our products in those areas.
Our
products intentionally transmit radio signals, including narrow band and spread spectrum signals, as part of their normal operation.
We have obtained certification from the FCC for our products that require certification. Users of these products in the United States
do not require any license from the FCC to use or operate our products. To market and sell our integrated wireless solutions in the European
Union, we also utilize unlicensed radio spectra and have obtained the required European Norm certifications.
In
addition, some of our operations use substances regulated under various federal, state and local laws governing the environment and worker
health and safety, including those governing the discharge of pollutants into the ground, air and water, the management and disposal
of hazardous substances and wastes and the cleanup of contaminated sites. Certain of our products are subject to various federal, state
and local laws governing chemical substances in electronic products.
The
adoption of unfavorable regulations, or unfavorable interpretations of existing regulations by courts or regulatory bodies, could require
us to incur significant compliance costs, cause the development of the affected markets to become impractical or otherwise adversely
affect our ability to produce or market our products.
Since
1996, our subsidiary Pointer Telocation Ltd. (“Pointer”) has held an operational license, which is renewed on a regular basis,
from the Ministry of Communications in Israel to operate our wireless messaging system over 2 MHz in the 966 to 968 MHz radio spectrum
band. It also obtains licenses from the Israeli Ministry of Communications in order to manufacture, import, market and sell its products
in Israel.
Our
subsidiary Pointer Argentina S.A. (“Pointer Argentina”) obtains domestic licenses for the deployment of our SVR operation
in Argentina and local operators are required to obtain a specific license for their operations.
We
are currently registered by the Federal Department of Security in Mexico to provide our services.
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Certain
of our South African subsidiaries, including Pointer SA (PTY) Ltd. (“Pointer South Africa”), are currently registered as
security service providers under the Private Security Industry Regulation Act, 2001 in South Africa. Our products are also listed with
the Independent Communications Authority of South Africa.
While
the use of our cellular monitoring units does not require regulatory approvals, in Israel, the use of our radio frequency products is
subject to regulatory approvals from government agencies. In general, applications for regulatory approvals to date have not been problematic.
However, we cannot guarantee that approvals already obtained are or will remain sufficient in the view of regulatory authorities
indefinitely.
Employees
As of April 15,
2024 , we had 780 total employees globally, 100% of whom are
full-time employees. We believe that our relationships with our employees are good.
Recent
Developments
Higher
interest rates and lingering inflation, fluctuations in currency values, continued supply chain disruptions, and ongoing
geopolitical conflicts, such as the wars between Russia and Ukraine and between Israel and Hamas, 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.
Other
Information
I.D.
Systems, Inc. (“I.D. Systems”) was incorporated in the State of Delaware in 1993. Powerfleet, Inc. was incorporated in the
State of Delaware in February 2019 for the purpose of effectuating the transactions pursuant to which we acquired Pointer (the “Pointer Merger”).
Upon the closing of the Pointer Merger, Powerfleet became the parent entity of I.D. Systems and Pointer.
Our
primary website is www.powerfleet.com. We make available on this website, free of charge, our annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and amendments to those reports pursuant to Section 13(a) or 15(d) of the Exchange
Act as soon as reasonably practicable after we electronically file such material with, or furnish such information to, the SEC. Reports and other information we file with the SEC may also be viewed at
the SEC’s website at www.sec.gov. We also make available on this website, free of charge, our Code of Ethics for Senior
Financial Officers, which applies to our principal executive officer, principal financial officer and principal accounting
officer.