What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-28 compared with 2023-11-13 · 665 added, 1001 removed, 198 unchanged (89% of the section changed)

Financial Statements

Financial Statements (Unaudited)

POWERFLEET, INC.

AND SUBSIDIARIES

Balance Sheets

thousands, except per share data)

December 31, 2022

September 30, 2023

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

March 31, 2024 * June 30, 2024

Current assets:

1 unchanged sentence

Restricted cash 85,310 1,151

Accounts receivable, net of allowance for credit losses of $ 2,567 and $ 2,677 in 2022 and 2023,

Accounts receivables, net of allowance for credit losses of $ 3,197 and $ 3,727 as of March 31, 2024 and June 30, 2024, respectively

30,333 60,132

Inventory, net 21,658 25,832

3 unchanged sentences

Fixed assets, net 12,719 49,705

Goodwill 83,487 300,775

Intangible assets, net 19,652 170,093

2 unchanged sentences

Deferred tax asset 2,781 3,544

Other assets 9,029 12,435

Total assets $ 308,680 $ 684,913

Current liabilities:

12 unchanged sentences

Commitments and Contingencies (Note 22)

MEZZANINE EQUITY

Convertible redeemable preferred stock:

Series A - 100 shares authorized, $ 0.01 par value;

59 and 60 shares issued and outstanding at December 31, 2022 and September 30, 2023

60 and 0 shares issued and outstanding at March 31, 2024 and June 30, 2024, respectively, at redemption value of $ 90,273 at March 31, 2024

STOCKHOLDERS’ EQUITY

Preferred stock;

2 unchanged sentences

authorized 175,000 shares, $ 0.01 par value;

37,605 and 38,699 shares issued at

December 31, 2022 and September 30, 2023, respectively;

shares outstanding, 36,170 and 37,214 at December 31, 2022 and

September 30, 2023, respectively

38,709 and 109,641 s hares issued at March 31, 2024 and June 30, 2024, respectively;

shares outstanding, 37,212 and 107,578 at March 31, 2024 and June 30, 2024, respectively

Additional paid-in capital 202,607 578,514

2 unchanged sentences

Treasury stock;

1,435 and 1,485 common shares at cost at December 31, 2022 and September 30, 2023, respectively

1,497 and 2,063 common shares at cost at March 31, 2024 and June 30, 2024, respectively

( 8,682 ) ( 11,518 )

Total Powerfleet, Inc.

1 unchanged sentence

Non-controlling interest 105 131

Total liabilities and stockholders’ equity

from audited balance sheet as of December 31, 2022.

accompanying notes to unaudited condensed consolidated financial statements.

Total equity 38,636 390,548

Total liabilities, convertible redeemable preferred stock, and stockholders’ equity $ 308,680 $ 684,913

* Derived from audited balance sheet as of March 31, 2024.

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC.

AND SUBSIDIARIES

Consolidated Statements of Operations

thousands, except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

Three Months Ended June 30,

(As Restated) 2024

Products $ 11,084 $ 18,738

Services 21,008 56,692

Total revenues 32,092 75,430

3 unchanged sentences

Total cost of revenues 16,074 35,782

Gross profit 16,018 39,648

Operating expenses:

4 unchanged sentences

Interest income 22 304

Interest expense, net

Interest expense ( 173 ) ( 2,691 )

Bargain purchase - Movingdots 283 —

Other (expense) income, net

Other income, net — ( 624 )

Net loss before income taxes ( 3,269 ) ( 21,246 )

Income tax expense

Income tax benefit/(expense) 6 ( 1,053 )

Net loss before non-controlling interest ( 3,263 ) ( 22,299 )

Non-controlling interest ( 6 ) ( 13 )

Net loss ( 3,269 ) ( 22,312 )

Accretion of preferred stock ( 1,772 ) —

1 unchanged sentence

Net loss attributable to common stockholders $ ( 6,170 ) $ ( 22,337 )

Net loss per share attributable to common stockholders - basic

Net loss per share attributable to common stockholders - diluted

Weighted average common shares outstanding - basic

Weighted average common shares outstanding - diluted

accompanying notes to unaudited condensed consolidated financial statements.

Net loss per share attributable to common stockholders - basic and diluted $ ( 0.17 ) $ ( 0.21 )

Weighted average common shares outstanding - basic and diluted 35,605 107,136

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC.

AND SUBSIDIARIES

Consolidated Statements of Comprehensive Loss

thousands, except per share data)

Three Months Ended

Nine Months Ended

September 30,

Condensed Consolidated Statements of Comprehensive Loss

(In thousands)

Three Months Ended June 30,

(As Restated) 2024

Net loss attributable to common stockholders $ ( 6,170 ) $ ( 22,337 )

Other comprehensive income (loss), net:

Foreign currency translation adjustment 100 418

Total other comprehensive income (loss)

Total other comprehensive income 100 418

Comprehensive loss $ ( 6,070 ) $ ( 21,919 )

accompanying notes to unaudited condensed consolidated financial statements.

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC.

AND SUBSIDIARIES

Consolidated Statement of Changes in Stockholders’ Equity

thousands, except per share data)

Paid-in Capital

Other Comprehensive Income (Loss)

Non-controlling

Stockholders’

Balance at January 1, 2023

$ ( 141,440 )

Net income (loss) attributable to common stockholders

Net loss attributable to non-controlling interest

Foreign currency translation adjustment

Issuance of restricted shares

Forfeiture of restricted shares

Shares withheld pursuant to vesting of restricted stock

Stock based compensation

Warrant issuance in connection with acquisition

Balance at March 31, 2023

$ ( 136,671 )

Condensed Consolidated Statement of Changes in Stockholders’ Equity

(In thousands)

Three Months Ended June 30, 2023 and 2024

Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Treasury Stock Non-Controlling Interest Total Stockholder’s Equity

Number of Shares Amount

Balance as of April 1, 2023 (As Restated) 37,621 $ 376 $ 218,473 $ ( 135,961 ) $ ( 1,098 ) $ ( 8,554 ) $ 66 $ 73,302

Net loss attributable to common stockholders — — ( 2,901 ) ( 3,269 ) — — — ( 6,170 )

6 unchanged sentences

Stock-based compensation — — 852 — — — — 852

Balance at June 30, 2023

$ ( 139,648 )

Net loss attributable to common stockholders

Foreign currency translation adjustment

Issuance of restricted shares

Shares withheld pursuant to vesting of restricted stock

Stock based compensation

Balance at September 30, 2023

$ ( 143,322 )

Number of Shares

Additional Paid-in Capital

Accumulated Deficit

Other Comprehensive Income (Loss)

Treasury Stock

Non-controlling Interest

Stockholders’

Balance at January 1, 2022

$ ( 134,437 )

Balance as of June 30, 2023 (As Restated) 37,717 $ 377 $ 216,458 $ ( 139,230 ) $ ( 998 ) $ ( 8,558 ) $ 63 $ 68,112

Balance as of April 1, 2024 38,709 $ 387 $ 202,607 $ ( 154,796 ) $ ( 985 ) $ ( 8,682 ) $ 105 $ 38,636

Net loss attributable to common stockholders — — ( 25 ) ( 22,312 ) — — — ( 22,337 )

Net income attributable to non-controlling interest

Net loss attributable to non-controlling interest — — — — — — 13 13

Foreign currency translation adjustment — — — — 418 — 8 426

Issuance of restricted shares 54 1 ( 1 ) — — — — —

Forfeiture of restricted shares

Vesting of restricted stock units

Shares withheld pursuant to vesting of restricted stock

Stock based compensation

Balance at March 31, 2022

$ ( 137,366 )

Net loss attributable to common stockholders

Net income attributable to non-controlling interest

Foreign currency translation adjustment

Forfeiture of restricted shares

Shares withheld pursuant to vesting of restricted stock

Stock based compensation

Balance at June 30, 2022

Shares issued for transaction bonus

174 1 888 — — — — 889

Net loss attributable to common stockholders

Net income (loss) attributable to common stockholders

Net income attributable to non-controlling interest

Net income (loss) attributable to non-controlling interest

Foreign currency translation adjustment

Issuance of restricted shares

Forfeiture of restricted shares

Shares issued in connection with MiX Combination 70,704 707 361,298 — — — — 362,005

Acquired through MiX Combination — — 7,818 — — — 5 7,823

Shares withheld pursuant to vesting of restricted stock — — — — — ( 2,836 ) — ( 2,836 )

Stock-based compensation — — 5,929 — — — — 5,929

Balance at September 30, 2022

$ ( 139,784 )

accompanying notes to unaudited condensed consolidated financial statements.

Balance as of June 30, 2024 109,641 $ 1,096 $ 578,514 $ ( 177,108 ) $ ( 567 ) $ ( 11,518 ) $ 131 $ 390,548

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

thousands, except per share data)

Nine Months Ended September 30,

Condensed Consolidated Statements of Cash Flows

(In thousands)

Three Months Ended June 30,

Cash flows from operating activities

Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities:

Net loss $ ( 3,269 ) $ ( 22,312 )

Adjustments to reconcile net loss to cash used in operating activities:

Non-controlling interest 6 13

4 unchanged sentences

Right-of-use assets, non-cash lease expense 660 760

Bad debt expense

Bad debts expense 598 1,993

Deferred income taxes ( 24 ) 1,021

Shares issued for transaction bonuses — 889

Other non-cash items 27 482

Accounts receivable

Prepaid expenses and other assets

Changes in operating assets and liabilities:

Accounts receivables ( 668 ) ( 6,973 )

Inventories 389 ( 624 )

Prepaid expenses and other current assets 344 ( 1,518 )

Deferred costs 185 ( 1,789 )

5 unchanged sentences

Cash flows from investing activities

Acquisitions, net of cash assumed

Purchase of investments

Acquisition, net of cash assumed

Capitalized software development costs ( 997 ) ( 2,308 )

5 unchanged sentences

Purchase of treasury stock upon vesting of restricted stock

Payment of preferred stock dividend

Proceeds from exercise of stock options

Net cash used in financing activities

( 4 ) ( 2,836 )

Payment of preferred stock dividend and redemption of preferred stock ( 1,129 ) ( 90,298 )

Proceeds from exercise of stock options, net 36 —

Cash paid on dividends to affiliates — ( 4 )

Net cash from/(used in) financing activities 311 ( 89,470 )

Effect of foreign exchange rate changes on cash and cash equivalents ( 941 ) ( 823 )

Net (decrease) increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash - beginning of period

Cash, cash equivalents and restricted cash - end of period

Reconciliation of cash, cash equivalents, and restricted cash, beginning of period

Net decrease in cash and cash equivalents, and restricted cash ( 3,051 ) ( 78,271 )

Cash and cash equivalents, and restricted cash at beginning of the period 25,089 109,664

Cash and cash equivalents, and restricted cash at end of the period $ 22,038 $ 31,393

Reconciliation of cash and cash equivalents, and restricted cash, at beginning of the period

Cash and cash equivalents 24,780 24,354

Restricted cash 309 85,310

Cash, cash equivalents, and restricted cash, beginning of period

Reconciliation of cash, cash equivalents, and restricted cash, end of period

Cash and cash equivalents, and restricted cash, at beginning of the period $ 25,089 $ 109,664

Reconciliation of cash and cash equivalents, and restricted cash, at end of the period

Cash and cash equivalents 21,729 30,242

Restricted cash 309 1,151

Cash, cash equivalents, and restricted cash, end of period

Cash and cash equivalents, and restricted cash, at end of the period $ 22,038 $ 31,393

Supplemental disclosure of cash flow information:

Cash paid for:

Taxes $ 101 $ 41

Interest $ 238 $ 3,057

Noncash investing and financing activities:

Value of warrant issued in connection with Movingdots acquisition

accompanying notes to unaudited condensed consolidated financial statements.

Common stock issued for transaction bonus $ — $ 9

Shares issued in connection with MiX Combination $ — $ 362,005

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC.

AND SUBSIDIARIES

to Unaudited Condensed Consolidated Financial Statements

thousands (except per share data)

1 - DESCRIPTION OF THE COMPANY AND BASIS OF PRESENTATION

of the Company

(the “Company” or “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.

Notes to Condensed Consolidated Financial Statements

June 30, 2024

In thousands (except per share data)

NOTE 1 - DESCRIPTION OF THE COMPANY AND BASIS OF PRESENTATION

Description of the Company

Powerfleet, Inc.

(the “Company” or “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.

Systems, Inc.

Systems”) was incorporated in the State of Delaware in 1993.

Powerfleet was incorporated in the State

of Delaware in February 2019 for the purpose of effectuating the transactions (the “Transactions”) pursuant to which the

Company acquired Pointer Telocation Ltd.

Powerfleet was incorporated in the State of Delaware in February 2019 for the purpose of effectuating the transactions pursuant to which the Company acquired Pointer Telocation Ltd.

(“Pointer”) and commenced operations on October 3, 2019.

Upon the closing of the

Transactions, Powerfleet became the parent entity of I.D.

Upon the closing of such transactions, Powerfleet became the parent entity of I.D.

Systems and Pointer.

of Presentation

unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned and

majority-owned subsidiaries.

On April 2, 2024 (the “Implementation Date”), the Company consummated the transactions contemplated by the Implementation Agreement, dated as of October 10, 2023 (the “Implementation Agreement”), that the Company entered into with Main Street 2000 Proprietary Limited, a private company incorporated in the Republic of South Africa and a wholly owned subsidiary of the Company (“Powerfleet Sub”), and MiX Telematics Limited, a public company incorporated under the laws of the Republic of South Africa (“MiX Telematics”), pursuant to which MiX Telematics became an indirect, wholly owned subsidiary of the Company (the “MiX Combination”).

The consolidated financial statements as of and for the three months ended June 30, 2024 include the financial results of MiX Telematics and its subsidiaries from the Implementation Date.

See Note 3 for additional information.

Basis of Preparation

The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries.

All material intercompany balances and transactions have been eliminated in consolidation.

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles

generally accepted in the United States of America (“U.S.

GAAP”) for interim financial information and the instructions

to Form 10-Q.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) for interim financial information and the instructions to Form 10-Q.

Accordingly, they do not include all of the information and footnotes required by U.S.

GAAP for complete financial

In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which

are considered necessary for a fair presentation of the consolidated financial position of the Company as of September 30, 2023, the

consolidated results of its operations for the three- and nine-month periods ended September 30, 2022 and 2023, the consolidated

change in stockholders’ equity for the three-month periods ended March 31, June 30 and September 30, 2022 and 2023, and the

consolidated cash flows for the nine-month periods ended September 30, 2022 and 2023.

The results of operations for the three- and

nine-month periods ended September 30, 2023 are not necessarily indicative of the operating results for the full year.

financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures for

the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K for the year then ended.

of September 30, 2023, the Company had cash (including restricted cash) and cash equivalents of $ 19,600

and working capital approximately $ 34,500 .

The Company’s primary sources of cash are cash flows from the sales of its products and services, its holdings of cash, cash equivalents and investments

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

To date, the Company has not generated sufficient cash flows

solely from operating activities to fund its operations.

addition, the Company’s subsidiaries, PowerFleet Israel Ltd.

(“Powerfleet Israel”) and Pointer Telocation Ltd.

and, together with Powerfleet Israel, the “Borrowers”) are party to a Credit Agreement (the “Credit Agreement”)

with Bank Hapoalim B.M.

(“Hapoalim”), pursuant to which Hapoalim provided Powerfleet Israel with two senior secured term

loan facilities denominated in New Israeli Shekels (NIS) in an initial aggregate principal amount of $ 30,000 (comprised of two facilities

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

principal amount of $ 10,000 .

The proceeds of the term loan facilities were used to finance a portion of the cash consideration payable

in the Company’s acquisition of Pointer.

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

The Company borrowed net NIS 8,420 , or $ 2,200 , under the revolving credit facility as of September 30, 2023.

13 for additional information.

October 31, 2022, the Borrowers entered into a third amendment to the Credit Agreement (the “Third Amendment”) with Hapoalim.

The Third Amendment provides for, among other things, a new revolving credit facility to Pointer denominated in NIS in an initial aggregate

principal amount of $ 10,000 (the “New Revolver”).

The New Revolver is available for a period of one month that commenced

on October 31, 2022, and will continue to be available for successive one-month periods until and including October 30, 2023, unless

the Borrowers deliver a notice to Hapoalim of their request not to renew the New Revolver.

The Company borrowed net NIS 32,500 , or $ 8,500 ,

under the New Revolver facility as of September 30, 2023.

See Note 13 for additional information.

New Revolver initially bears interest at the Secured Overnight Financing Rate (“SOFR”) plus 2.59%.

Such interest is subject

to monthly changes by Hapoalim, provided that Hapoalim gives Pointer advance notice regarding such change prior to the end of the applicable

calendar month.

New Revolver is secured by a first ranking fixed pledge and assignment by Pointer over its new bank account, which was opened in connection

with the New Revolver, and all of the rights relating thereunder as well as a cross guarantee by Powerfleet Israel.

is required to pay a credit allocation fee equal to 0.5 % per annum on undrawn and uncancelled amounts of the New Revolver.

October 10, 2023, the Company entered into an Implementation Agreement (the “Implementation Agreement”), by and among

the Company, Main Street 2000 Proprietary Limited, a private company incorporated in the Republic of South Africa and a wholly owned

subsidiary of the Company (“Powerfleet Sub”), and MiX Telematics Limited, a public company incorporated under the laws

of the Republic of South Africa (“MiX Telematics”), pursuant to which MiX Telematics will become an indirect, wholly

owned subsidiary of the Company.

The Implementation Agreement requires, as a condition to closing of the transactions contemplated

therein, that the Company obtain a debt and/or equity financing (the “Financing”) in an amount sufficient to provide for

the redemption in full of all outstanding shares of the Company’s Series A Convertible Preferred Stock (“Series A

Preferred Stock”).

Company has incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of $ 143.3

million as of September 30, 2023.

The Company anticipates incurring additional losses until such time that growth in revenue and gross

margin from its strategic plan centered on its Unity SaaS platform and Industrial safety product offerings exceed necessary investments

in operating expenses, capital expenditures and debt financing costs.

The Company has received credit committee

approval from its existing lender, Hapoalim, to enter into a new 5-year term debt facility with an approximate value of $ 30

While the Company believes it is highly probable that it will enter into a binding credit agreement by year end, there can

be no assurance that the Company will enter into such a credit agreement.

If the Company does not enter into a binding credit agreement with Hapoalim by year end, the Company may be required to delay key strategic

product initiatives and market expansion activities, which could adversely affect its business prospects.

believes the Company’s cash and cash equivalents of $ 19.6

million as of September 30, 2023 in conjunction with cash generated from the execution of its strategic plan over the next 12

months, are sufficient to fund the projected operations for at least the next 12 months from the issuance date of these

financial statements (November 13, 2024) and service the Company’s outstanding obligations.

Such expectation is based, in part, on the achievement of a certain

volume of assumed revenue and gross margin;

however, there is no guarantee the Company will achieve this amount of revenue and gross

margin during the assumed time period.

Management assessed various additional operating cost reduction options that are available to

the Company and would be implemented, if assumed levels of revenue and gross margin are not achieved and additional funding is not

2 – USE OF ESTIMATES

preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements

and the reported amounts of revenues and expenses during the reporting period.

The Company continually evaluates estimates used in the

preparation of the financial statements for reasonableness.

The most significant estimates relate to realization of deferred tax assets,

accounting for uncertain tax positions, the impairment of intangible assets, including goodwill, capitalized software development costs,

stock-based compensation costs related to market based awards, warrant assumptions, and standalone selling price related to multiple

element revenue arrangements.

GAAP for complete financial statements.

In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the consolidated financial position of the Company as of March 31, 2024 and June 30, 2024, the consolidated results of its operations for the three-month periods ended June 30, 2023 and 2024, the consolidated change in stockholders’ equity for the three-month periods ended June 30, 2023 and 2024, and the consolidated cash flows for the three-month periods ended June 30, 2023 and 2024.

The results of operations for the three-month period ended June 30, 2024 are not necessarily indicative of the operating results for the full year.

On May 8, 2024, our Board of Directors approved a change in our fiscal year end from December 31 to March 31 in order to better align our reporting calendar with the April 2, 2024 close of the MiX Combination and MiX Telematics’ historical March 31 fiscal year end.

These financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures for the fiscal year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K for the year then ended, and the audited consolidated financial statements and related disclosures for the three-month transition period ended March 31, 2024 included in the Company’s Transition Report on Form 10-KT for the period then ended .

Restatement of Previously Issued Consolidated Financial Statements

In connection with the preparation of the Company’s audited consolidated financial statements for the year ended December 31, 2023, the Company determined that the accounting for the redemption premium associated with its Series A convertible preferred stock (“Series A Preferred Stock”) was understated resulting in an understatement of “net loss attributable to common stockholders” and “net loss per share attributable to common stockholders” for each period, an understatement of the value of the convertible redeemable preferred stock as of each balance sheet date, and an overstatement of the additional paid-in capital as of each balance sheet date.

The required adjustments to correct the redemption value of the calculation of the Series A Preferred Stock and the related accretion of the value of the preferred stock in the consolidated statement of operations included the recording of a non-cash accretion which resulted in an increase in the net loss attributable to common stockholders, an increase in the “convertible redeemable preferred stock”, and a decrease of “additional paid-in capital” for the fiscal years ended December 31, 2021 and 2022 and each of the interim periods during the 2022 and 2023 fiscal years.

The correction of the error resulted in reporting the value of the convertible preferred stock including the accretion to the redemption value from the date of original issuance through each balance sheet date applying the interest method.

The restatement to non-cash accretion resulted in an increase in the net loss attributable to common stockholders and a decrease in “additional paid-in capital” of $ 1,604 for the 3 months ended June 30, 2023.

The Company had determined that it was appropriate to restate the financial statements for the fiscal years ended December 31, 2021 and 2022 and each of the interim periods during the 2022 and 2023 fiscal years included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”).

In addition, the Company also corrected other unrelated immaterial errors that were previously either unrecorded or recorded as out-of-period adjustments.

For additional information refer to Note 2 to the financial statements included in the 2023 Annual Report.

Going Concern

As of June 30, 2024, the Company had cash and cash equivalents of $ 30,242 and working capital of $ 25,044 .

The Company’s primary sources of cash are cash flows from sales of products and services, its holdings of cash, cash equivalents and proceeds from the sale of its capital stock and borrowings under its credit facilities.

See Note 13 for additional information on the Company’s available credit facilities.

Management believes the Company’s cash, cash equivalents, and restricted cash of $ 31,393 as of June 30, 2024 in conjunction with cash generated from the execution of its strategic plan over the next 12 months, and proceeds from the debt agreements are sufficient to fund the projected operations for at least the next 12 months from the issuance date of these financial statements ( August 28, 2024) a nd service the Company’s outstanding obligations.

Such expectation is based, in part, on the achievement of a certain volume of assumed revenue and gross margin;

however, there is no guarantee the Company will achieve this amount of revenue and gross margin during the assumed time period.

Management assessed various additional operating cost reduction options that are available to the Company and would be implemented, if assumed levels of revenue and gross margin are not achieved and additional funding is not obtained.

NOTE 2 - USE OF ESTIMATES

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The Company continually evaluates estimates used in the preparation of the financial statements for reasonableness.

The most significant estimates relate to assumptions used in business combinations, allowance for credit losses, income taxes, realization of deferred tax assets, accounting for uncertain tax positions, the impairment of intangible assets, including goodwill and long-lived assets, capitalized software development costs, inventory reserves, standalone selling prices (“SSP”), valuation of the derivative asset, and market-based stock-based compensation costs.

Actual results could differ from those estimates.

3 – ACQUISITION

March 6, 2023, the Company entered into a share purchase and transfer agreement (the “Agreement”) with Swiss Re Reinsurance

Holding Company Ltd (the “Seller”), pursuant to which the Company would acquire all of the outstanding shares of Movingdots

GmbH (“Movingdots”), a wholly owned subsidiary of the Seller, for consideration consisting of € 1 and the issuance by

the Company of a ten-year warrant to purchase 800,000 shares of the Company’s common stock at an exercise price of $ 7.00 per share

(the “Common Stock Warrants”) and with fair value of approximately $ 1,300 at March 31, 2023 and noncash consideration with

an immaterial fair value in the form of a non-exclusive irrevocable, perpetual, fully paid-up, royalty free license agreement between

Movingdots and the Seller for certain of the acquired intellectual property (the “Acquisition”).

The Acquisition was consummated

on March 31, 2023 (the “Movingdots Closing”).

a result of the Acquisition, Movingdots, a German company providing insurance telematics and sustainable mobility solutions, became a

direct, wholly owned subsidiary of Powerfleet.

Movingdots end-to-end telematics app solution will enhance Powerfleet’s software-as-a-service (“SaaS”)-based

fleet intelligence platform, Unity, with additional customization capabilities and insurance risk insights.

Movingdots’ expertise

in safety and sustainability aligns with Unity’s focus on data-powered applications.

The Acquisition also strengthens Powerfleet’s

global reach, particularly in Europe.

part of the Agreement the Seller was also obligated to (i) transfer certain intellectual property rights from the Seller to Movingdots,

(ii) enter into a distribution agreement pursuant to which the Seller is allowed to promote the Movingdots solutions, and (iii) grant

a license agreement between the Seller’s affiliates and Movingdots.

warrant was valued using the Black-Scholes Model using the following assumptions at the date of issuance:

OF WARRANTS VALUATION ASSUMPTIONS

Expected volatility

Expected term (in years)

Risk free interest rate

Dividend yield

Fair value per share

Warrants measurement input

Price Allocation

Acquisition met the criteria for a business combination to be accounted for using the acquisition method under ASC 805, Business

Combinations (“ASC 805”), with the Company identified as the legal and the accounting acquirer.

There was certain

information that was not readily available at the time the financial statements of Movingdots were prepared as the Acquisition

closed on March 31, 2023.

For provisional purchase price allocation purposes, the assets acquired and liabilities assumed are stated

at their carrying values which management assumed approximates their fair values given their short-term nature.

Also, the Company

recognized approximately $ 0

of acquisition-related costs which were expensed in the consolidated statement of operations for the three- and -nine-month periods

ending September 30, 2023, respectively.

following table details the provisional allocation of the purchase price to the assets acquired and liabilities assumed in connection

with the acquisition of Movingdots:

OF PURCHASE PRICE ALLOCATION IN ASSETS ACQUIRED AND LIABILITIES

Consideration:

Fair value of Powerfleet warrants on March 31, 2023

Total consideration

NOTE 3 - ACQUISITION

On April 2, 2024, the Company consummated the MiX Combination.

On the Implementation 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 in accordance with Sections 114 and 115 of the South African Companies Act, No.

71 of 2008, as amended, in exchange for shares of the Company’s common stock.

As a result, MiX Telematics became the Company’s indirect, wholly owned subsidiary.

The MiX Combination met the criteria for a business combination to be accounted for using the acquisition method under ASC 805, Business Combinations (“ASC 805”), with the Company identified as the legal and the accounting acquirer.

The Company was determined to be the accounting acquirer under Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”) based on the evaluation of the following facts and circumstances favoring Powerfleet as the accounting acquirer over those supporting MiX Telematics as the accounting acquirer:

• The majority of the Board of Directors is comprised by Directors with prior affiliation to the Company.

In addition the Company’s Board Chairperson continued in the role post the acquisition date;

• Post acquisition the majority of the senior management team, including the Chief Executive Officer, comprised of the Company’s senior management team who were already operating in that capacity for the company prior to the acquisition date;

• While the voting rights of 65.5 % in favor of MiX Telematics is an indicator that MiX Telematics is the acquirer, the Company believes that the weight of the indicator is tempered given that the negotiated premium paid by Powerfleet to MiX Telematics contributed to the relative ownership split, and that, qualitatively, the significant reduction in the

carryover MiX Telematics institutional investor base would have reduced the legacy MiX Telematics shareholders’ ability to control the combined entity, particularly in the light of the significant concentration of institutional investors on the Powerfleet side;

• While no individual or organized group owns a large minority interest in the combined entity, the Company notes that the largest institutional investor post-transaction is an investor of legacy Powerfleet.

Additionally, the Company also notes that, immediately following the closing of the Business Combination, 30 % out of the approximately 35 % of total shares held by shareholders of legacy Powerfleet were concentrated in the Company’s top 20 institutional shareholders, compared to only 9 % out of the approximately 65 % of total shares held by shareholders of legacy MiX Telematics.

The acquisition of MiX Telematics and its business will, among other things:

• create a mobile asset IoT SaaS organization with significant scale, serving all mobile asset types.

The increased scale is expected to enable the combined entity to more efficiently serve its customers and create advantages to compete in an industry characterized by the need for high pace of development and innovation;

• enable the Company to maximize significant cross-sell and upsell opportunities within its large joint customer base due to the joint entity’s combined geographical footprint, deep vertical expertise and expanded software solution sets coupled with its extensive direct and indirect sales channel capabilities;

• enable the combined organization to accelerate the delivery of top-class solutions with improved competitive advantage by integrating Powerfleet’s and MiX Telematics’ world-class engineering and technology teams.

The preliminary estimated fair value of the consideration transferred for MiX Telematics was $ 362.0 million as of the Implementation Date, which consisted of the following:

(in thousands, except for share price and exchange ratio) April 2,

Number of MiX Telematics ordinary shares outstanding 554,021

Exchange ratio 0.12762

Shares of Powerfleet common stock to be issued for MiX Telematics ordinary shares outstanding 70,704

Powerfleet stock price* 5.12

Fair value of Powerfleet common stock transferred to MiX Telematics shareholders 362,005

Replacement of acquiree’s equity awards by the acquirer** 7,818

Total fair value of preliminary consideration 369,823

* Powerfleet’s closing share price on April 2, 2024.

** The portion of the fair-value-based measure of the replacement award that is part of the consideration transferred in exchange for the acquiree equals the portion of the acquiree award that is attributable to pre-combination vesting.

Preliminary Allocation of Purchase Price

The purchase price was allocated to the assets and liabilities assumed based on the estimated fair values at the date of acquisition.

The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill.

Goodwill is primarily attributed to the assembled workforce, expected synergies from future expected economic benefits, including enhanced revenue growth from expanded products and capabilities, as well as substantial cost savings from duplicative overheads, streamlined operations and enhanced efficiency.

Goodwill is not deductible for tax purposes.

Goodwill associated with the acquisition has not yet been assigned to the Company's geographical regions pending finalization of the purchase accounting.

The preliminary allocation of purchase price was as follows (in thousands):

Assets acquired:

Accounts receivable

Prepaid expenses

Cash and cash equivalents $ 26,737

Restricted cash 794

Accounts receivable, net 24,675

Inventory, net 4,142

Prepaid expenses and other current assets 8,886

Fixed assets, net 35,587

Intangible assets, net 153,000

Right-of-use asset 3,794

Deferred tax assets 1,093

Other assets 973

Total assets acquired $ 259,681

Liabilities assumed:

Short-term bank debt and current maturities of long-term debt $ 20,158

Accounts payable and accrued expenses 26,400

Deferred revenue - current 6,394

Lease liability - current 859

Income taxes payable 355

Lease liability - less current portion 2,852

Deferred tax liability 48,725

Other long-term liabilities 484

Total liabilities assumed $ 106,227

Total identifiable net assets acquired $ 153,454

Gain on bargain purchase

Non-controlling interest ( 5 )

Goodwill 216,374

Purchase price consideration $ 369,823

provisional fair value estimates of the assets acquired and liabilities assumed, including intangibles, income taxes, and the non-cash

consideration, are subject to subsequent adjustments as additional information is obtained during the applicable measurement period.

Determining the fair values of the assets and liabilities of Movingdots required certain assumptions and judgment.

During the second

quarter of 2023, the valuation of certain assets acquired and liabilities assumed were revised resulting in an increase in the gain on

bargain purchase of $ 283 .

with the requirements of ASC 805, the Company assessed whether all assets acquired and liabilities assumed have been appropriately identified,

measured and recognized, and performed re-measurements to verify that the consideration paid, assets acquired and liabilities assumed

have been properly valued.

After applying the requirements of ASC 805-30-25-4, the Company recognized a gain on bargain purchase as the

estimated fair value of the identifiable net assets acquired exceeded the purchase consideration transferred by approximately $ 7,517 .

Management believes that the recognized gain on bargain purchase represents the best estimates of the economic effect of the Acquisition

based on all information that was available and existed as of the dates the financial statements were issued.

gain on bargain purchase primarily resulted from the Seller’s motivation to divest its investment in Movingdots and its telematics

business, which was deemed a non-core business of the Seller on a go-forward basis.

The sale of Movingdots was not subject to a competitive

bidding process.

Under the Agreement, the Seller also agreed to make a cash injection into Movingdots prior to the Movingdots Closing

in a form of additional paid in capital to ensure Movingdots had available cash in the amount of € 8,000 to be used to ensure the

liquidity of Movingdots and for broader combined business activities.

the Company makes an on-sale transfer of any shares of Movingdots that were acquired in connection with the Acquisition at any time

between the signing date of the Agreement and through 12 months after the Movingdots Closing, to any third-party purchaser (an

“on-sale transfer”), for an amount that is in excess of the purchase price consideration transferred, then the Company

shall pay the Seller an amount in cash (“on sale compensation”) equal to (i)

€8,000, plus (ii) the difference between such on-sale transfer price less the purchase price net of the net present value of

the Common Stock Warrants.

The Company does not currently intend to enter into an on-sale transfer.

views that the insurance telematics and sustainability are important spaces for the Company to have propositions to enable future strategic

value, supporting the more evolved, IOT data-rich mass subscription space.

The acquisition of Movingdots and its business will, among

other things:

strategic relationships with some key customers such as Mercedes, BMW and Vodafone;

greater go-to-market opportunity to the Company with the European beachhead for future regional expansion, customer acquisition tool

to upsell the Company’s portfolio into German and European markets, and maintain a distribution channel and partnership with

the Company with access to a team with technical skillsets across application development and management, cloud platform development,

user experience/user interface design development and technical product management;

following table represents the combined pro forma revenue and earnings for the three- and nine-month periods ended September 30,

OF PRO FORMA REVENUE AND EARNINGS

Three Months Ended

September 30, 2022

Nine Months Ended

September 30, 2022

Operating loss

Net loss per share - basic and diluted

Net loss per share - basic

following table represents the combined pro forma revenue and earnings for the three- and nine-month periods ended September 30, 2023:

Three Months Ended

September 30, 2023

Nine Months Ended

September 30, 2023

Operating loss

Net loss per share – basic and diluted

Net loss per share – basic

unaudited combined pro forma revenue and earnings for the three and nine-month periods ended September 30, 2022 and 2023 were prepared

as though the Acquisition had occurred as of January 1, 2022.

This summary is not necessarily indicative of what the results of operations

would have been had the Acquisition occurred as of such date, nor does it purport to represent results of operations for any future periods.

4 – CASH AND CASH EQUIVALENTS

Company considers all highly liquid debt instruments with an original maturity of three months or less when purchased to be cash equivalents

unless they are legally or contractually restricted.

The Company’s cash and cash equivalent balances exceed Federal Deposit Insurance

Corporation (“FDIC”) and other local jurisdictional limits (in Israel and Germany).

Restricted cash at December 31, 2022

and September 30, 2023 consists of cash held in escrow for purchases from a vendor.

5 - REVENUE RECOGNITION

Company and its subsidiaries generate revenue from sales of systems and products and from customer SaaS and hosting infrastructure fees.

The above fair values of assets acquired and liabilities assumed are preliminary and are based on the information that was available as of the reporting date.

The Company’s allocation of the preliminary purchase price to certain assets acquired and liabilities assumed is provisional and the Company will continue to adjust those estimates as additional information pertaining to events or circumstances present at April 2, 2024 becomes available and final valuation and analysis are completed.

In addition, the Company is still in the process of determining the fair value of acquired assets and assumed liabilities, which may also result in adjustments of the provisional amounts recorded.

The fair values of the assets acquired and liabilities assumed, including the identifiable assets acquired, have been preliminarily determined using the income and cost approach, and are partially based on inputs that are unobservable.

The Company used discounted cash flow (“DCF”) analyses, which represent Level 3 fair value measurements, to assess certain components of its purchase price allocation as a result of the acquisition.

The fair value of the customer relationships was determined using the multi-period excess earnings method.

The fair value of the tradename and developed technology was determined using an income approach based on the relief from royalty method.

For the fair value estimates, the Company used (i) forecasted future cash flows, (ii) historical and projected financial information, (iii) synergies including cost savings, (iv) revenue growth rates, (v) customer attrition rates, (vi) royalty rates, and (vii) discount rates, as relevant, that market participants would consider when estimating fair values.

These estimates require judgment and are subject to change.

Differences between the preliminary estimates and final accounting may occur, and those could be material.

The Company believes that the information provides a reasonable basis for estimating the fair values of the acquired assets and assumed liabilities, but the potential for measurement period adjustments exists based on the Company’s continuing review of

matters related to the acquisition.

Adjustments to initial preliminary fair value of the assets acquired and assumed liabilities during the measurement period until April 2, 2025, will be recorded during the period in which the adjustments are determined, including the effect on earnings of any amounts we would have recorded in previous periods if the accounting had been completed (i.e.

the historical reported financial statements will not be retrospectively adjusted).

The provisional amounts for assets acquired and liabilities assumed include:

• The fair value of accounts receivable and other receivables which may be subject to adjustment for reassessment of collectability as of the date of acquisition, collections and other adjustment subsequent to the acquisition;

• Property, and equipment, for which the preliminary estimates are subject to revision for finalization of preliminary appraisals;

• Right-of-use assets and lease liabilities, which will be subject to adjustment upon completion of the review of the inputs, including sublease assumptions, for the calculations;

• Acquired inventory, which values are still being assessed on an individual basis;

• Prepaid expenses, accounts payable and accrued expenses, which will be subject to adjustment based upon completion of working capital clean up and assessment of other factors;

• The recognition and measurement of contract assets and contract liabilities acquired in accordance with ASC 606 will be subject to adjustment upon completion of assessment;

• Acquired intangible assets will be subject to adjustment as additional assets are identified, estimates and forecasts are refined and disaggregated, useful lives are finalized, and other factors deemed relevant are considered;

• Deferred income taxes will be subject to adjustment based upon the completion of the review of the book and tax bases of assets acquired and liabilities assumed, applicable tax rates and the impact of the revisions of estimates for the items described above;

• Goodwill will be subject to adjustment for the impact of the revisions of estimates for the items described above.

The Company expects to complete the purchase price allocation as soon as practicable, but no later than one year from the acquisition date.

Acquired Identifiable Intangible Assets

The following table sets forth preliminary estimated fair values of the components of the identifiable intangible assets acquired and their estimated useful lives:

(in thousands) Fair value Weighted average useful lives

Trade name $ 10,000 14 years

Developed technology 30,000 5 years

Customer relationships 113,000 13 years

Acquisition-Related Expenses

The Company expensed a total of $ 20,291 of acquisition-related costs in the consolidated statement of operations related to the MiX Combination, of which $ 14,491 was expensed in the three-month period ended June 30, 2024.

Unaudited Pro Forma Financial Information

The business acquired in the MiX Combination contributed revenue of $ 43,689 and a net loss of $ 6,932 , after amortization of identified intangibles, for the three months ended June 30, 2024.

NOTE 4 - CASH AND CASH EQUIVALENTS

The Company considers all highly liquid debt instruments with an original maturity of three months or less when purchased to be cash equivalents unless they are legally or contractually restricted.

The Company’s cash and cash equivalent balances exceed Federal Deposit Insurance Corporation (“FDIC”) and other local jurisdictional limits.

Restricted cash at March 31, 2024 consisted of escrow amounts of $ 85,000 for the Facilities Agreement deposited in escrow for the MiX Combination and cash of $ 310 held in escrow for purchases from a vendor.

Restricted cash at June 30, 2024 consists of cash of $ 310 held in escrow for purchases from a vendor, cash of $ 787 held by MiX Telematics Enterprise BEE Trust (a VIE which is consolidated) to be used

solely for the benefit of its beneficiaries and c ash securing guarantees of $ 54 issued in respect of property lease agreements entered into by MiX Telematics Australasia .

NOTE 5 - REVENUE RECOGNITION

The Company and its subsidiaries generate revenue from sales of systems and products and from customer SaaS and hosting infrastructure fees.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services.

Sales, value add, and other taxes the Company collects concurrently with revenue-producing activities are excluded from revenue.

items that are immaterial in the context of the contract are recognized as expense.

The expected costs associated with the Company’s

base warranties continue to be recognized as expense when the products are sold (see Note 14).

is recognized when performance obligations under the terms of a contract with our customer are satisfied.

Product sales are

recognized at a point in time when title transfers, when the products are shipped, or when control of the system is transferred to

the customer, which usually is upon delivery of the system and when contractual performance obligations have been satisfied.

products which do not have standalone value to the customer separate from the SaaS services provided, the Company considers both

hardware and SaaS services a bundled performance obligation.

Under the applicable accounting guidance, all of the Company’s

billings for equipment and the related cost for these systems are deferred, recorded, and classified as a current and long-term

liability and a current and long-term asset, respectively.

The deferred revenue and cost are recognized over the service contract

life, ranging from one to five years, beginning at the time that a customer acknowledges acceptance of the equipment and

Company recognizes revenue for remotely hosted SaaS agreements and post-contract maintenance and support agreements beyond our standard

warranties over the life of the contract.

Revenue is recognized ratably over the service periods and the cost of providing these services

is expensed as incurred.

Amounts invoiced to customers which are not recognized as revenue are classified as deferred revenue and classified

as short-term or long-term based upon the terms of future services to be delivered.

Deferred revenue also includes prepayment of extended

maintenance, hosting and support contracts.

Company earns other service revenues from installation services, training and technical support services which are short-term in nature

and revenue for these services are recognized at the time of performance when the service is provided.

Company also derives revenue from leasing arrangements.

Such arrangements provide for monthly payments covering product or system sale,

maintenance, support and interest.

Incidental items that are immaterial in the context of the contract are recognized as an expense.

The expected costs associated with the Company’s base warranties continue to be recognized as an expense when the products are sold (see Note 14).

Revenue is recognized when performance obligations under the terms of a contract with the customer are satisfied.

Product sales are recognized at a point in time when title transfers, when the products are shipped, or when control of the system is transferred to the customer, which usually is upon delivery of the system and when contractual performance obligations have been satisfied.

The Company utilizes significant judgment to determine whether control of the hardware has transferred to the customer (i.e.

distinct to the customer separate from SaaS services provided).

For products which are not distinct to the customer separate from the SaaS services provided, the Company considers both hardware and SaaS services a bundled performance obligation.

Under the applicable accounting guidance, all of the Company’s billings for future services are deferred and classified as a current and long-term liability.

The deferred revenue is recognized over the service contract life, ranging from one to five years, beginning at the time that a customer acknowledges acceptance of the equipment and service.

Payment terms are generally 30 days after invoice date.

The Company recognizes revenue for remotely hosted SaaS agreements and post-contract maintenance and support agreements beyond its standard warranties over the life of the contract.

Revenue is recognized ratably over the service periods and the cost of providing these services is expensed as incurred.

Amounts invoiced to customers which are not recognized as revenue are classified as deferred revenue and classified as current or long-term based upon the terms of future services to be delivered.

Deferred revenue also includes prepayment of extended maintenance, hosting and support contracts.

The Company earns other service revenues from installation services, training and technical support services which are short-term in nature and revenue for these services is recognized at the time of performance when the service is provided.

The Company also derives revenue from leasing arrangements.

Such arrangements provide for monthly payments covering product or system sale, maintenance, support and interest.

These arrangements meet the criteria to be accounted for as operating or sales-type leases.

for sales-type leases an asset is established for the “sales-type lease receivable” at the present value of the expected

lease payments and revenue is deferred and recognized over the service contract, as described above.

Maintenance revenues and interest

income are recognized monthly over the lease term.

Company’s contracts with customers may include multiple performance obligations.

For such arrangements, the Company allocates revenue

to each performance obligation based on its relative standalone selling price.

The Company generally determines standalone selling prices

based on observable prices charged to customers or adjusted market assessment or using expected cost-plus margin when one is available.

Adjusted market assessment price is determined based on overall pricing objectives taking into consideration market conditions and entity

specific factors.

Company recognizes an asset for the incremental costs of obtaining the contract arising from the sales commissions to employees because

the Company expects to recover those costs through future fees from the customers.

The Company amortizes the asset over one to five years

because the asset relates to the services transferred to the customer during the contract term of one to five years.

Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one

year or less and (ii) contracts for which the Company recognizes revenue at the amount to which the Company has the right to invoice

for services performed.

following table presents the Company’s revenues disaggregated by revenue source for the three -and nine-months ended September

30, 2022 and 2023:

OF REVENUE DISAGGREGATED BY REVENUE SOURCE

Three Months Ended

September 30,

Nine Months Ended

September 30,

balances of contract assets and contract liabilities from contracts with customers are as follows as of December 31, 2022 and September

OF CONTRACT ASSETS AND CONTRACT LIABILITIES FROM CONTRACTS WITH CUSTOMERS

December 31, 2022

September 30, 2023

Accordingly, for sales-type leases an asset is established for the “sales-type lease receivable” at the present value of the expected lease payments and revenue is deferred and recognized over the service contract, as described above.

Maintenance revenues and interest income are recognized monthly over the lease term.

The Company’s contracts with customers may include multiple performance obligations.

For such arrangements, the Company allocates revenue to each performance obligation based on its relative SSP.

Judgment is required to determine the SSP for each distinct performance obligation.

The Company generally determines standalone selling prices based on observable prices charged to customers.

Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of its transactions, the customer demographic, price lists, its go-to-market strategy and historical and current sales and contract prices.

As the Company’s go-to-market strategies evolve, it may modify its pricing practices in the future, which could result in changes to SSP.

In certain cases, the Company is able to establish SSP based on observable prices of products or services sold separately in comparable circumstances to similar customers.

The Company uses a single amount to estimate SSP when it has observable prices.

If SSP is not directly observable, for example when pricing is highly variable, the Company uses a range of SSP.

The Company determines the SSP range using information that may include pricing practices or other observable inputs.

The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customer size.

The Company recognizes an asset for the incremental costs of obtaining the contract arising from the sales commissions to distributors and employees because the Company expects to recover those costs through future fees from the customers.

The Company amortizes the asset over one to five years because the asset relates to the services transferred to the customer during the contract term of one to five years.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which the Company has the right to invoice for services performed.

The following table presents the Company’s revenues disaggregated by revenue source for the three-months ended June 30, 2023 and 2024 (in thousands):

Three Months Ended June 30,

Products $ 11,084 $ 18,738

Services 21,008 56,692

$ 32,092 $ 75,430

The balances of contract assets and contract liabilities from contracts with customers are as follows as of March 31, 2024 and June 30, 2024 (in thousands):

March 31, 2024 June 30, 2024

Contract Assets:

Deferred contract cost (1)

Deferred cost

$ 2,632 $ 4,322

Deferred costs - current $ 42 $ 24

Contract Liabilities

Deferred revenue – services (2)

$ 10,674 $ 14,724

Deferred revenue – products (2)

Deferred revenue

Deferred revenue and contract liabilities – current portion

Deferred revenue and contract liabilities – less current portion

Company records deferred revenues when cash payments are received or due in advance of the Company’s performance.

three-month periods ended September 30, 2022 and 2023, the Company recognized revenue of $ 1,457

and $ 1,407 ,

respectively, which was included in the deferred revenue balance at the beginning of each reporting period.

For the nine-month

periods ended September 30, 2022 and 2023, the Company recognized revenue of $ 5,349

and $ 5,413 ,

respectively, which was included in the deferred revenue balance at the beginning of each reporting period.

The Company expects to

recognize as revenue these deferred revenue balances before the year 2028, when the services are performed and, therefore, satisfies

its performance obligation to the customers.

6 – ALLOWANCE FOR CREDIT LOSSES

Company’s receivables were evaluated to determine an appropriate allowance for credit losses.

For trade receivables, the Company’s

historical collections were analyzed by the number of days past due to determine the uncollectible rate in each range of days past due

and considerations of any changes expected in the future.

The estimate of the allowance for credit losses is charged to the allowance

for credit losses based on the age of receivables multiplied by the historical uncollectible rate for the range of days past due or earlier

if the account is deemed uncollectible for other reasons.

Recoveries of amounts previously charged as uncollectible are credited to the

allowance for credit losses.

analysis of the allowance for credit losses for the period ended September 30, 2023 is as follows:

OF ALLOWANCE FOR CREDIT LOSSES

Allowance for credit losses, December 31, 2022

Allowance for credit losses, beginning balance

10,734 14,844

Deferred revenue – current ( 5,842 ) ( 10,019 )

Deferred revenue – less current portion $ 4,892 $ 4,825

(1) Deferred Contract costs are included in Other assets on the Condensed Consolidated Balance sheets.

(2) The Company records deferred revenues when cash payments are received or due in advance of the Company’s performance.

For the three-month periods ended June 30, 2023 and 2024, the Company recognized revenue of $ 1,766 an d $ 2,986 , respectively, which was included in the deferred revenue balance at the beginning of each reporting period.

The Company expects to recognize as revenue through year 2029, when it transfers those goods and services and, therefore, satisfies its performance obligation to the customers.

NOTE 6 - ALLOWANCE FOR CREDIT LOSSES

The Company’s receivables were evaluated to determine an appropriate allowance for credit losses.

For trade receivables, the Company’s historical collections were analyzed by the number of days past due to determine the uncollectible rate in each range of days past due and considerations of any changes expected in the future.

The estimate of the allowance for credit losses is charged to the allowance for credit losses based on the age of receivables multiplied by the historical uncollectible rate for the range of days past due or earlier if the account is deemed uncollectible for other reasons.

Recoveries of amounts previously charged as uncollectible are credited to the allowance for credit losses.

An analysis of the allowance for credit losses for the periods ended June 30, 2023 and 2024 is as follows (in thousands):

Three Months Ended June 30,

Allowance for credit losses, March 31 $ 2,328 $ 3,197

Current period provision for expected credit losses 598 1,993

Write-offs charged against the allowance

( 222 ) ( 1,509 )

Foreign currency translation 62 46

Allowance for credit losses, September 30, 2023

Allowance for credit losses, ending balance

the nine-months ended September 30, 2023, the change in the allowance for credit losses was due to the change in the age of trade receivables.

7 – PREPAID EXPENSES AND OTHER ASSETS

expenses and other current assets consist of the following:

OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

December 31, 2022

September 30, 2023

Allowance for credit losses, June 30 $ 2,766 $ 3,727

NOTE 7 - PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other current assets comprise the following (in thousands):

2024 June 30,

Sales-type lease receivables, current $ 1,100 $ 1,125

1 unchanged sentence

Contract assets 1,162 1,141

Tax receivables 125 790

Vat receivable — 2,059

Sundry debtors — 2,602

Other current assets 2,887 3,009

Prepaid expenses and other current assets

8 - INVENTORY

which primarily consists of finished goods and components used in the Company’s products, is stated at the lower of cost or net

realizable value using the “moving average” cost method or the first-in first-out (FIFO) method.

Inventory is shown net of

a valuation reserve of $ 453 at December 31, 2022 and $ 701 at September 30, 2023.

consist of the following:

OF INVENTORIES

December 31, 2022

September 30, 2023

$ 8,091 $ 16,498

*This represents the prepaid portion of total deferred contract assets

NOTE 8 - INVENTORY

Inventory, which primarily consists of finished goods and components used in the Company’s products, is stated at the lower of cost or net realizable value using the “moving average” cost method or the first-in first-out (FIFO) method.

Inventory is shown net of a valuation reserve of $ 538 at March 31, 2024 and $ 97 at June 30, 2024.

Inventories consist of the following (in thousands):

2024 June 30,

Components $ 9,403 $ 9,195

Work in process 49 1,788

Finished goods, net 12,206 14,849

Inventory, Net

9 - FIXED ASSETS

assets are stated at cost, less accumulated depreciation and amortization, and are summarized as follows:

OF FIXED ASSETS

December 31, 2022

September 30, 2023

Installed products

$ 21,658 $ 25,832

NOTE 9 - FIXED ASSETS

Fixed assets are stated at cost, less accumulated depreciation and amortization, and are summarized as follows (in thousands):

2024 June 30,

Installed and uninstalled products $ 11,030 $ 46,129

Computer software 11,496 12,231

2 unchanged sentences

Leasehold improvements 1,498 1,445

Plant and equipment — 293

Assets in progress — 19

32,564 70,976

Accumulated depreciation and amortization ( 19,845 ) ( 21,271 )

and amortization expense of fixed assets for the three- and nine-month periods ended September 30, 2022 was $ 752

and $ 2,336 ,

respectively, and for the three- and nine-month periods ended September 30, 2023 was $ 657

and $ 2,641 ,

respectively.

This includes amortization of costs associated with computer software for the three- and nine-month periods ended September

30, 2022 of $ 11

respectively, and for the three- and nine-month periods ended September 30, 2023 of $ 24

respectively.

10 - INTANGIBLE ASSETS AND GOODWILL

incurred internally in researching and developing software products are charged to expense until technological feasibility has been established

for the product.

Once technological feasibility is established, software costs are capitalized until the product is available for general

release to customers.

$ 12,719 $ 49,705

Depreciation and amortization expense for the three-month periods ended June 30, 2023 and 2024 was $ 967 and $ 4,749 , respectively.

NOTE 10 - INTANGIBLE ASSETS AND GOODWILL

The Company capitalizes costs for software to be sold, marketed, or leased to customers.

Costs incurred internally in researching and developing software products are charged to expense until technological feasibility has been established for the product.

Once technological feasibility is established, software costs are capitalized until the product is available for general release to customers.

Judgment is required in determining when technological feasibility of a product is established.

The amortization

of these costs will be included in cost of revenue over the estimated life of the products.

following table summarizes identifiable intangible assets of the Company as of December 31, 2022 and September 30, 2023:

OF INTANGIBLE ASSETS

September 30, 2023

Useful Lives (In Years)

Gross Carrying

The amortization of these costs is included in cost of revenue over the estimated life of the products.

The following table summarizes identifiable intangible assets of the Company as of March 31, 2024 and June 30, 2024 (in thousands):

June 30, 2024 Useful Lives (In Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount

Customer relationships 1 - 13

$ 132,264 $ ( 10,834 ) $ 121,430

Trademark and tradename 3 - 15

Favorable contract interest

Covenant not to compete

17,553 ( 4,253 ) 13,300

Patents 7 - 11

628 ( 486 ) 142

Technology 1 - 20

44,561 ( 14,236 ) 30,325

Software to be sold or leased 3 - 6

5,727 ( 996 ) 4,731

200,733 ( 30,805 ) 169,928

Customer list 104 — 104

Trademark and tradename 61 — 61

December 31, 2022

Useful Lives (In Years)

Gross Carrying

Total $ 200,898 $ ( 30,805 ) $ 170,093

March 31, 2024 Useful Lives (In Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount

Customer relationships 9 - 12

$ 19,264 $ ( 8,012 ) $ 11,252

Trademark and tradename 3 - 15

Favorable contract interest

Covenant not to compete

7,553 ( 3,877 ) 3,676

Patents 7 - 11

628 ( 464 ) 164

10,911 ( 10,911 ) —

Software to be sold or leased 3

5,159 ( 764 ) 4,395

43,515 ( 24,028 ) 19,487

Customer list 104 — 104

Trademark and tradename 61 — 61

uncertainties continue to adversely impact the broader global economy and have caused significant volatility in financial markets.

there is a lack of recovery or further global softening in certain markets, or a sustained decline in the value of the Company’s

common stock, the Company may conclude that indicators of impairment exist and would then be required to calculate whether or not an

impairment exists for its goodwill, other intangibles, and long-lived assets, the results of which could result in material impairment

The Company tests goodwill and other indefinite lives intangible assets on an annual basis in the fourth quarter and more frequently

if the Company believes indicators of impairment exists.

As of December 31, 2022 and September 30, 2023, the Company determined that

no impairment existed to the goodwill, customer list and trademark and trade name of its acquired intangibles.

September 30, 2023, the weighted-average amortization period for the intangible assets was 8.5 years.

At September 30, 2023, the weighted-average

amortization periods for customer relationships, trademarks and trade names, patents, technology, and capitalized software to be sold

or leased were 11.9 , 9.6 , 7.0 , 4.3 , and 3.0 years, respectively.

expense for the three- and nine-month periods ended September 30, 2022 was $ 1,267

and $ 3,816 ,

respectively, and for the three- and nine-month periods ended September 30, 2023 was $ 1,766

and $ 4,285 ,

respectively.

Estimated future amortization expense for each of the five succeeding fiscal years for these intangible assets is as

SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS AMORTIZATION EXPENSE

Total $ 43,680 $ ( 24,028 ) $ 19,652

At June 30, 2024, the weighted-average amortization periods for customer relationships, trademarks and trade names, patents, technology, and capitalized software to be sold or leased were 12.7 , 12.1 , 7 , 11.6 , and 3.0 years, respectively.

For the three months ended June 30, 2023 and 2024, amortization expense of $ 1,356 and $ 5,586 respectively was recognized in both periods.

Estimated future amortization expense for each of the five succeeding fiscal years for these intangible assets is as follows:

2025 (remaining) $ 15,528

intangible assets

have been no changes in the carrying amount of goodwill from January 1, 2023 to September 30, 2023.

the nine-month period ended September 30, 2023, the Company did not identify any indicators of impairment.

11 - STOCK-BASED COMPENSATION

the first fiscal quarter of 2023, the Company granted 75 shares of restricted stock to certain executives, which vest in four equal

installments over a four-year period, provided that the executive is employed by the Company on each scheduled vesting date.

the first fiscal quarter of 2023, the Company granted options to purchase 405 shares of the Company’s common stock to certain executives,

consisting of options to purchase 130 shares of common stock with time-based vesting conditions and options to purchase 275 shares of

common stock with performance-based vesting conditions (which we refer to as “market-based stock options”).

The options have

an exercise price of $ 3.00 .

The market-based stock options will vest and become exercisable if the volume weighted average price of the

Company’s common stock during a consecutive 60-day trading period (the “60 Day VWAP”) reaches $ 12.00 .

The Company valued

the market-based stock option awards using a Monte Carlo simulation model using a daily price forecast over ten years until expiration

utilizing Geometric Brownian Motion that considers a variety of factors including, but not limited to, the Company’s common stock

price, risk-free rate ( 3.7 %), and expected stock price volatility ( 50 %) over the expected life of awards ( 5.1 years).

The weighted average

fair value of market-based stock options granted during the period was $ 1.38 .

the second fiscal quarter of 2023, the Company issued 162

shares of restricted stock to certain employees,

which vests over four equal installments over a four-year period, provided that the employee is employed by the Company on each scheduled

vesting date.

the second fiscal quarter of 2023, the Company issued options to purchase 930 shares of the Company’s common stock to certain employees,

consisting of options to purchase 340 shares of common stock with time-based vesting conditions and options to purchase 590 shares of

common stock with performance-based vesting conditions (which we refer to as “market-based stock options”).

The options have

an exercise price of $ 3.13 .

The market-based stock options will vest and become exercisable if the 60 Day VWAP reaches $ 12.00 .

valued the market-based stock option awards using a Monte Carlo simulation model using a daily price forecast over ten years until expiration

utilizing Geometric Brownian Motion that considers a variety of factors including, but not limited to, the Company’s common stock

price, risk-free rate ( 3.7 %), and expected stock price volatility ( 50 %) over the expected life of awards ( 5.1 years).

The weighted average

fair value of market-based stock options issued during the period was $ 1.56 .

the third fiscal quarter of 2023, the Company granted 900 shares of restricted stock to Steve Towe, the Company’s Chief Executive

Officer, which vest over four equal installments over a four-year period, provided that the Mr.

Towe is employed by the Company on each

scheduled vesting date.

Additionally, 82 shares of restricted stock were granted to certain members of the board of directors, which

vest in full on the date of grant, provided that the director is a director of the Company on such date.

Stock Options:

following table summarizes the activity relating to the Company’s market-based stock options that were granted to certain executives

and employees for the nine-month period ended September 30, 2023:

SCHEDULE OF STOCK OPTIONS ACTIVITY

Exercise Price

Intrinsic Value

Outstanding at beginning of year

Forfeited or expired

Outstanding at end of period

Exercisable at end of period

following table summarizes the activity relating to the Company’s stock options, excluding the market-based stock options that

were granted to certain executives and employees, for the nine-month period ended September 30, 2023:

Exercise Price

Intrinsic Value

Outstanding at beginning of year

Forfeited or expired

Outstanding at end of period

Exercisable at end of period

fair value of each option grant on the date of grant is estimated using the Black-Scholes option-pricing model reflecting the following

weighted-average assumptions:

SCHEDULE OF FAIR VALUE STOCK OPTION ASSUMPTIONS

September 30,

Thereafter 78,472

Refer to Note 3 for the change in the carrying amount of goodwill from April 1, 2024 to June 30, 2024 as a result of the MiX Combination.

For the three-month period ended June 30, 2024, the Company did not identify any indicators of impairment.

NOTE 11 - STOCK-BASED COMPENSATION

During the three-month period ended June 30, 2024, the Company granted options to purchase 375 shares of common stock with time-based vesting conditions.

[A] Stock Options:

The following table summarizes the activity relating to the Company’s market-based stock options for the three-month period ended June 30, 2024:

Options Weighted-

Exercise Price Weighted Average Contractual Remaining Term (years) Aggregate Intrinsic Values (in thousands)*

Outstanding as of April 1, 2024 5,445 13.39 — —

Granted — — — —

Exercised — — — —

Forfeited — — — —

Outstanding as of June 30, 2024 5,445 13.39 7.72 $ 1,488

Vested as of June 30, 2024 — — — $ —

The following table summarizes the activity relating to the Company’s stock options, excluding the market-based stock options, for the three-month period ended June 30, 2024:

Options Weighted-

Exercise Price Weighted Average Contractual Remaining Term (years) Aggregate Intrinsic Values (in thousands)*

Outstanding as of April 1, 2024 1,979 4.68 — —

Granted 375 4.31 — —

Exercised — — — —

Forfeited ( 6 ) 6.10 — —

Outstanding as of June 30, 2024 2,348 4.62 7.2 $ 779

Vested as of June 30, 2024 1,973 4.67 6.6 $ 779

The fair value of each option grant on the date of grant is estimated using the Black-Scholes option-pricing model reflecting the following weighted-average assumptions:

June 30, 2023 June 30, 2024

Expected volatility 55.6 % 60.2 %

Expected life of options (in years)

Expected life of options 6.1 6.5

Risk free interest rate 3.87 % 4.23 %

1 unchanged sentence

Weighted-average fair value of options granted during the year $ 1.66 $ 2.66

volatility is based on historical volatility of the Company’s common stock and the expected life of options is based on historical

data with respect to employee exercise periods.

Company recorded stock-based compensation expense of $ 809 and $ 2,110 for the three- and nine-month periods ended September 30, 2022,

respectively, and $ 781 and $ 1,984 for the three- and nine-month periods ended September 30, 2023, respectively, in connection with awards

made under the stock option plans.

fair value of options vested during the nine-month periods ended September 30, 2022 and 2023 was $ 409 and $ 582 , respectively.

of September 30, 2023, there was $ 1,561 of total unrecognized compensation cost related to non-vested options granted under the Company’s

stock option plans that exclude the market-based stock options that were granted to certain senior managers, including the Company’s

executive officers.

Expected volatility is based on historical volatility of the Company’s common stock and the expected life of options is based on historical data with respect to employee exercise periods.

The Company recorded stock-based compensation expense of $ 585 and $ 1,817 for the three-month periods ended June 30, 2023 and June 30, 2024, respectively, in connection with awards made under the stock option plans.

The increase in the recognized expense is due to the approved acceleration of vesting of unvested restricted stock and stock option awards with time-based vesting conditions that are outstanding under the Powerfleet equity plans (including any inducement awards with time-based vesting).

The accelerated vesting of the Company’s equity awards is not part of what was acquired in the MiX Combination, nor what was paid for in the MiX Combination because it was for the benefit of the Company’s employees rather than for the benefit of MiX Telematics employees.

Therefore, the acceleration of the equity awards was treated as a separate transaction from the MiX Combination and the acceleration of vesting was accounted for immediately upon closing of the MiX Combination on April 2, 2024.

The fair value of options vested during the three-month periods ended June 30, 2023 and 2024 was $ 562 and $ 1,457 , respectively.

There were no option exercises that occurred during the three-month periods ended June 30, 2023 and 2024.

As of June 30, 2024, there was $ 983 of total unrecognized compensation costs related to non-vested options granted under the Company’s stock option plans excluding the market-based stock options that were granted to certain senior managers, including the Company’s executive officers.

That cost is expected to be recognized over a weighted-average period of 1.34 years.

of September 30, 2023, there was $ 5,245 of total unrecognized compensation cost related to non-vested options granted under the Company’s

stock option plans for the market-based stock options that were granted to certain senior managers, including the Company’s executive

As of June 30, 2024, there was $ 3,597 of total unrecognized compensation costs related to non-vested options granted under the Company’s stock option plans for the market-based stock options that were granted to certain senior managers, including the Company’s executive officers.

That cost is expected to be recognized over a weighted-average period of 7.72 years.

Company estimates forfeitures at the time of valuation and reduces expense ratably over the vesting period.

This estimate is adjusted

periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate.

Restricted Stock Awards:

Company grants restricted stock to employees, whereby the employees are contractually restricted from transferring the shares until they

The Company estimates forfeitures at the time of valuation and reduces expenses ratably over the vesting period.

This estimate is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate.

[B] Restricted Stock Awards:

The Company grants restricted stock to employees, whereby the employees are contractually restricted from transferring the shares until they are vested.

The stock is unvested at the time of grant, and, upon vesting, there are no legal restrictions on the stock.

The fair value

of each share is based on the Company’s closing stock price on the date of the grant.

A summary of all non-vested restricted stock

for the nine-month period ended September 30, 2023 is as follows:

SCHEDULE OF NON-VESTED RESTRICTED STOCK ACTIVITY

Number of Non-

Vested Shares

Average Grant

Date Fair Value

Restricted stock, non-vested, beginning of year

Restricted stock, non-vested, end of period

Company recorded stock-based compensation expenses of $ 254

for the three- and nine-month periods ended September 30, 2022, respectively, and $ 320

for the three -and nine-month periods ended September 30, 2023, respectively, in connection with restricted stock grants.

September 30, 2023, there was $ 3,704

of total unrecognized compensation cost related to non-vested shares.

That cost is expected to be recognized over a weighted-average

period of 3.16

12 - NET LOSS PER SHARE

loss per share for the three- and nine-month periods ended September 30, 2022 and 2023 are as follows:

SCHEDULE OF NET LOSS PER SHARE BASIC AND DILUTED

Three Months Ended

Nine Months Ended

September 30,

Some participants have the option to have their shares withheld for their taxes upon vesting.

Shares withheld for taxes are treated as a purchase of treasury stock.

The fair value of each share is based on the Company’s closing stock price on the date of the grant.

A summary of all non-vested restricted stock for the three-month period ended June 30, 2024 is as follows:

Non-Vested Shares

Weighted- Average

Grant Date Fair Value

Non-vested, March 31, 2024 1,370 2.68

Granted 54 5.45

Vested ( 1,369 ) 2.68

Forfeited or expired — —

Non-vested, June 30, 2024 55 2.68

The Company recorded stock-based compensation expenses of $ 267 and $ 3,095 for the three-month periods ended June 30, 2023 and 2024, respectively, in connection with restricted stock grants.

As of June 30, 2024, there was $ 258 of total unrecognized compensation cost related to non-vested shares.

That cost is expected to be recognized over a weighted-average period of 0.88 years.

[C] Stock Appreciation Rights:

In connection with the closing of the MiX Combination, the Company assumed each of the MiX Telematics’ share plans.

MiX Telematics issued equity-classified share incentives under the MiX Telematics Long-Term Incentive Plan (“LTIP”) to directors and certain key employees within the Company.

The LTIP provides for three types of grants to be issued, namely performance shares, restricted share units and stock appreciation rights (“SARs”).

On the Implementation Date,the only issued and outstanding equity awards under the LTIP were SARs, and the Company assumed the outstanding SARs in issue.

No additional performance shares or restricted share units will be issued or assumed by the Company.

The replacement of MiX Telematics’ share-based payment awards has been treated as a modification under ASC 718, Compensation—Stock Compensation as of the Implementation Date.

The fair value of the replacement SARs issued was allocated between pre-combination and post-combination service based on the vesting period.

The fair value related to pre-combination service is included as part of the fair value of the consideration in the MiX Combination (see Note 3), and the fair value related to post-combination service is to be recognized as an expense over the remaining vesting period.

The total stock-based compensation expense recognized during the three months ended June 30, 2024 was $ 1.0 million.

The following table summarizes the activities for the outstanding SARs:

Number of SARs Weighted-

Exercise Price Weighted Average Contractual Remaining Term (years) Aggregate Intrinsic Values (in thousands)*

Outstanding as of April 1, 2024 — —

Acquired through MiX Combination 5,740 2.61

Exercised — —

Forfeited — —

Outstanding as of June 30, 2024 5,740 2.61 3.33

Vested as of June 30, 2024 1,813 2.98 1.80 $ 2,881

As of June 30, 2024, there w as $ 7.5 million of unrecognized compensation cost related to unvested SARs.

This amount is expected to be recognized over a weighted-average period of 3.26 years.

NOTE 12 - NET LOSS PER SHARE

Net loss per share for the three-month periods ended June 30, 2023 and 2024 are as follows:

Three Months Ended June 30,

Basic and diluted loss per share

Net loss attributable to common stockholders $ ( 6,170 ) $ ( 22,337 )

Net loss per share attributable to common stockholders - basic and diluted $ ( 0.17 ) $ ( 0.21 )

Weighted-average common share outstanding - basic and diluted 35,605 107,136

Net loss attributable to common stockholders – basic and diluted

loss per share is calculated by dividing net loss attributable to common shareholders by the weighted-average number of common

shares outstanding during the period.

Diluted loss per share reflects the potential dilution assuming common shares were issued upon

the exercise of outstanding options and the proceeds thereof were used to purchase outstanding common shares.

Dilutive potential

common shares include outstanding stock options, warrants and restricted stock and performance share awards.

participating securities (unvested share-based payment awards and equivalents that contain non-forfeitable rights to dividends or

dividend equivalents) in the computation of earnings per share pursuant to the two-class method.

Our participating securities

consist solely of preferred stock, which have contractual participation rights equivalent to those of stockholders of unrestricted

common stock.

The two-class method of computing earnings per share is an allocation method that calculates earnings per share for

common stock and participating securities.

During periods of net loss, no effect is given to the participating securities because

they do not share in the losses of the Company.

For the nine-month periods ended September 30, 2022 and 2023, the basic and diluted

weighted-average shares outstanding are the same, since the effect from the potential exercise of outstanding stock options,

conversion of preferred stock, and vesting of restricted stock and restricted stock units totaling 16,517

and 18,265 , respectively, would have been anti-dilutive due to the loss.

13 - SHORT-TERM BANK DEBT AND LONG-TERM DEBT

SCHEDULE OF LONG TERM DEBT

September 30,

Basic loss per share is calculated by dividing net loss attributable to common shareholders by the weighted-average number of common shares outstanding during the period.

Diluted loss per share reflects the potential dilution assuming common shares were issued upon the exercise of outstanding options and the proceeds thereof were used to purchase outstanding common shares.

Dilutive potential common shares include outstanding stock options, warrants and restricted stock and performance share awards.

We include participating securities (unvested share-based payment awards and equivalents that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of earnings per share pursuant to the two-class method.

The Company’s participating securities consist solely of preferred stock, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock.

The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities.

During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company.

NOTE 13 - SHORT-TERM BANK DEBT AND LONG-TERM DEBT

2024 June 30,

Short-term bank debt $ — $ 25,007

1 unchanged sentence

Long-term debt - less current maturities $ 113,810 $ 111,957

connection with the Transactions, Powerfleet Israel incurred NIS denominated debt in term loan borrowings on October 3, 2019 which was

the closing date of the Transactions (the “Closing Date”), under the Credit Agreement, pursuant to which Hapoalim agreed

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

of two facilities in the aggregate principal amount of $ 20,000 and $ 10,000 , respectively (the “Term A Facility” and “Term

B Facility”, respectively, and collectively, the “Term Facilities”)) and a five-year revolving credit facility (the

“Revolving Facility”) to Pointer denominated in NIS in an initial aggregate principal amount of $ 10,000 (collectively, the

“Credit Facilities”).

As of September 30, 2023, the Company borrowed NIS 8,420 , or $ 2,200 , under the Revolving Facility.

Credit Facilities will mature on the date that is five years from the Closing Date, or October 3, 2024.

The indicative interest rate

provided for the Term Facilities in the original Credit Agreement was approximately 4.73 % for the Term A Facility and 5.89 % for the Term

The interest rate for the Revolving Facility is, with respect to NIS-denominated loans, Hapoalim’s prime rate + 2.5%,

and with respect to US dollar-denominated loans, LIBOR + 4.6% (amended to SOFR + 2.15%).

In addition, the Company agreed to pay a 1%

commitment fee on the unutilized and uncancelled availability under the Revolving Facility .

The Credit Facilities are secured by the

shares held by Powerfleet Israel in Pointer and by Pointer over all of its assets.

The original Credit Agreement includes customary representations,

warranties, affirmative covenants, negative covenants (including the following financial covenants, tested quarterly:

net debt to EBITDA;

Pointer’s net debt to working capital;

minimum equity of Powerfleet Israel;

Powerfleet Israel equity to total

Powerfleet Israel net debt to EBITDA;

and Pointer EBITDA to current payments and events of default).

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

Agreement with Hapoalim.

The Amendment memorializes the agreements between the Borrowers and Hapoalim regarding a reduction in the interest

rates of the two Term Facilities.

Pursuant to the Amendment, commencing as of November 12, 2020, the interest rate with respect to the

Term A Facility was reduced to a fixed rate of 3.65 % per annum and the interest rate with respect to the Term B Facility was reduced

to a fixed rate of 4.5 % per annum.

The Amendment also provides, among other things, for (i) a reduction in the credit allocation fee

on undrawn and uncancelled amounts of the Revolving Facility from 1 % to 0.5 % per annum, (ii) removal of the requirement that Powerfleet

Israel maintain $ 3,000 on deposit in a separate reserve fund, and (iii) modifications to certain of the affirmative and negative covenants,

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

The Company is in compliance

with all covenants as of September 30, 2023.

connection with the Credit Facilities, the Company incurred debt issuance costs of $ 742 .

For the three-month periods ended September 30, 2022 and 2023, the Company recorded $ 49

respectively, of amortization of the debt issuance costs.

For the nine-month periods ended September 30, 2022 and 2023, the Company

recorded $ 168

respectively, of amortization of the debt issuance costs.

The Company recorded charges of $ 196

to interest expense on its consolidated statements of operations for the three-month periods ended September 30, 2022 and 2023,

respectively, related to interest expense associated with the Credit Facilities.

The Company recorded charges of $ 642

to interest expense on its consolidated statements of operations for the nine-month periods ended September 30, 2022 and 2023,

respectively, related to interest expense associated with the Credit Facilities.

October 31, 2022, the Borrowers entered into the Third Amendment with Hapoalim.

The Third Amendment provides for, among other things,

the New Revolver.

The New Revolver will be available for a period of one month, commencing on October 31, 2022, and will continue to

be available for successive one-month periods until and including October 30, 2023, unless the Borrowers deliver a notice to Hapoalim

of their request not to renew the New Revolver.

As of September 30, 2023, the Company borrowed NIS 32,500 , or $ 8,500 , under the New Revolver.

New Revolver will initially bear interest at the SOFR + 2.59%.

Such interest is subject to monthly changes by Hapoalim, provided that

Hapoalim gives Pointer advance notice regarding such change prior to the end of the applicable calendar month .

New Revolver is secured by a first ranking fixed pledge and assignment by Pointer over its new bank account, which was opened in connection

with the New Revolver, and all of the rights relating thereunder as well as a cross guarantee by Powerfleet Israel.

is required to pay a credit allocation fee equal to 0.5 % per annum on undrawn and uncancelled amounts of the New Revolver.

maturities of the long-term debt as of September 30, 2023 are as follows:

SCHEDULE OF MATURITIES OF LONG TERM DEBT

October 2023 - September 2024

Short-Term Bank Debt

As of June 30, 2024 short-term debt comprised $ 24,323 of borrowing facilities and $ 684 of book overdrafts .

Investec Facility

The Investec Bank Limited (“Investec”) credit facility was a 364-day renewable committed general credit facility of R 350,000 (the equivalent of $ 19,232 as of June 30, 2024) (the “Committed Facility”).

As of June 30, 2024, $ 19,232 of the Committed Facility was utilized.

The Committed Facility was settled in August 2024 and closed.

Under the Committed Facility, MiX Telematics paid a commitment fee charged at 30 bps on any undrawn portion of the Committed Facility (plus VAT on such amount), calculated monthly and payable, free of deduction, monthly in arrears on the first business day of each month.

The loans under the Committed Facility bore interest at South African prime interest rate less 1.5 % per annum.

As of June 30, 2024, the South African prime interest rate was 11.75%.

Interest was payable monthly in arrears on the first business day of each month, or as otherwise specified in the credit agreement between Investec and MiX Telematics.

MiX Telematics Africa (Pty) Ltd, MiX Telematics International (Pty) Ltd and MiX Telematics Enterprise SA (Pty) Ltd issued guarantees in favor of Investec in terms of which they guaranteed the performance by MiX Telematics of all its obligations to Investec.

Standard Bank Facility

The Standard Bank facility is in the form of a customer foreign currency account overdraft facility (the “CFC Overdraft Facility”).

The CFC Overdraft Facility entitles MiX Telematics to utilize a maximum amount of R 70,000 (the equivalent of $ 3,846 as of June 30, 2024).

The CFC Overdraft Facility bears interest at the South African prime interest rate less 1.2 % per annum.

As of June 30, 2024, $ 554 of the CFC Overdraft Facility was utilized.

There is a suretyship agreement entered into with Standard Bank providing that MiX Telematics and only one subsidiary being MiX Telematics International (Pty) Ltd , binds themselves as surety(ies) and co-principal debtor(s) for the payment, when due, of all the present and future debts of any kind of M iX Telematics and MiX Telematics International to Standard Bank .

The Standard Bank facility has no fixed renewal date and is repayable on demand.

On March 7, 2024, as part of the MiX Combination, MiX Telematics and Powerfleet entered into the Facilities Agreement with RMB.

Following the signing of the Facilities Agreement, MiX Telematics entered into a Facility Notice and General Terms and Conditions (the “Credit Agreement”) with RMB on March 14, 2024 for a 364-day committed general banking facility of R 350,000 (the equivalent of $ 19,200 as at June 30, 2024) (the “RMB General Facility”).

The Credit Agreement and the rights and obligations of the parties are subject to the terms and conditions of the Facilities Agreement entered into on March 7, 2024, which is described in more detail below.

The RMB General Facility is repayable on demand and has a term of 365 days from the Available Date (as defined therein).

Repayment of the RMB General Facility, including capitalized interest, is due by the earlier of (a) the Available Date or (b) April 2, 2025, unless extended by agreement between MiX Telematics and RMB.

Interest rate for the RMB General Facility is calculated at South African prime rate minus 0.75% per annum and will be calculated on the daily outstanding balance, compounded monthly in arrears and repaid quarterly.

A s of June 30, 2024, MiX Telematics had not borrowed anything under the RMB General Facility .

The RMB General Facility was utilized in August 2024 to settle the Committed Facility.

Hapoalim Debt

As of June 30, 2024, Pointer Israel had utilized approximately $ 4,388 under the Hapoalim Revolving Facilities, which are described below .

Long-Term Debt

Hapoalim Debt

In connection with the Pointer acquisition, Powerfleet Israel incurred NIS denominated debt in term loan borrowings on October 3, 2019 under the Prior Credit Agreement, pursuant to which Hapoalim agreed to provide Powerfleet Israel with two

senior secured term loan facilities in an initial aggregate principal amount of $ 30,000 (composed of two facilities in the aggregate principal amount of $ 20,000 and $ 10,000 , respectively and a five-year revolving credit facility to Pointer denominated in NIS in an initial aggregate principal amount of $ 10,000 (collectively, the “Prior Credit Facilities”).

The Prior Credit Facilities were scheduled to mature on October 3, 2024.

On March 18, 2024, the Borrowers entered into the A&R Credit Agreement, which refinanced the facilities under, and amended and restated, the Prior Credit Agreement.

The A&R Credit Agreement provides for (i) two senior secured term loan facilities denominated in NIS to Powerfleet Israel in an aggregate principal amount of $ 30,000 (composed of two facilities in the aggregate principal amounts of $ 20,000 and $ 10,000 , respectively) (the “Hapoalim Term Facilities”) and (ii) two revolving credit facilities to Pointer in an aggregate principal amount of $ 20,000 (composed of two revolvers in the aggregate principal amounts of $ 10,000 and $ 10,000 , respectively) (the “Hapoalim Revolving Facilities” and, together with the Hapoalim Term Facilities, the “Hapoalim Credit Facilities”)).

Powerfleet Israel drew down $ 30,000 in cash under the Hapoalim Term Facilities on March 18, 2024 and used the proceeds to prepay approximately $ 11,200 , representing the remaining outstanding balance, of the term facilities extended to Powerfleet Israel under the Prior Credit Agreement and remaining proceeds will be distributed to Powerfleet.

The proceeds of the Hapoalim Revolving Facilities may be used by Pointer for general corporate purposes, including working capital and capital expenditures.

As of June 30, 2024, Pointer had utilized $ 4,388 under the revolving facilities.

The available undrawn facility balance at June 30, 2024 was $ 15,612 .

The interest rates for borrowings under Hapoalim Facility A and Hapoalim Facility B are Hapoalim’s prime rate + 2.2 % per annum, and Hapoalim’s prime rate + 2.3 % per annum, respectively.

Hapoalim’s prime rate at June 30, 2024 was 6 % .

Interest is payable quarterly on March 25, June 25, September 25, and December 25 over five years.

The first interest period ended on June 25, 2024.

Hapoalim Facility A amortizes in quarterly installments over its five-year term and will be payable in the following aggregate annual amounts:

(i) 10 % of the principal amount of Hapoalim Facility A from March 18, 2024 until March 18, 2025, (ii) 25 % of the principal amount of Hapoalim Facility A from March 18, 2025 until March 18, 2026, (iii) 27.5 % of the principal amount of Hapoalim Facility A from March 18, 2026 until March 18, 2027, (iv) 27.5 % of the principal amount of Hapoalim Facility A from March 18, 2027 until March 18, 2028, and (v) 10 % of the principal amount of Hapoalim Facility A from March 18, 2028 until March 18, 2029.

Hapoalim Facility B does not amortize and will be payable in full on March 18, 2029.

The interest rate for borrowings under Hapoalim Facility C is, with respect to NIS-denominated loans, Hapoalim’s prime rate + 2.5 %, and with respect to U.S.

dollar-denominated loans, SOFR + 2.15 %.

Borrowings under Hapoalim Facility D will bear interest at the applicable interest rate set forth in the standard form documents entered into in connection with each utilization of Hapoalim Facility D.

In addition, Pointer is required to pay a credit allocation fee in NIS, with respect to Hapoalim Facility C, and a non-utilization fee in U.S.

dollars, with respect to Hapoalim Facility D, in each case, equal to 0.5 % per annum on undrawn and uncancelled amounts of the revolving facilities during the period commencing on March 18, 2024 and ending on the last day of the applicable availability period of such revolving facilities.

The Borrowers have also paid certain upfront fees and other fees and expenses to Hapoalim in connection with the A&R Credit Agreement.

The Hapoalim Revolving Facilities mature on March 18, 2025.

Borrowings under the Hapoalim Term Facilities are voluntarily prepayable at any time, in whole or in part, and are not subject to any prepayment premium.

Voluntary prepayments of the Hapoalim Term Facilities must be made in minimum increments of NIS 1 million.

In addition to certain customary mandatory prepayment requirements, the A&R Credit Agreement also requires Powerfleet Israel to make prepayments on the Hapoalim Term Facilities to the extent it receives distributions from Pointer, except for any such distributions made to cover certain expenses of Powerfleet Israel in its normal course of operations.

The A&R Credit Agreement contains certain customary affirmative and negative covenants, including financial covenants with respect to Pointer’s net debt levels which must be less than 100 % of Working Capital as defined in the A&R Credit Agreement, the ratio of each Borrower’s net debt to Pointer’s EBITDA must not exceed 4.75 , Powerfleet Israel’s minimum equity which must not be less than $ 60,000 , and the ratio of Powerfleet Israel’s equity to its total assets which must be greater than 35 % and the ratio of Pointer’s net debt to EBITDA ratio must not exceed 2 .

The occurrence of any event of default under the A&R Credit Agreement may result in all outstanding indebtedness under the Hapoalim Credit Facilities becoming immediately due and payable.

The financial covenants have been met for the quarter ending June 30, 2024.

The Hapoalim Credit Facilities continue to be 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, except that the Borrowers’ holdings in Pointer do Brasil Comercial Ltda., Pointer Argentina and Pointer South Africa are excluded from such floating charges.

No other assets of the Company will serve as collateral under the Hapoalim Credit Facilities.

The Hapoalim Term Facilities under the A&R Credit Agreement have been accounted for as modifications of the term facilities that were provided under the Prior Credit Agreement because the change in the present value of the cash flows under the A&R

Credit Agreement is less than 10 % of the present value of the cash flows under the Prior Credit Agreement.

The proceeds of the Hapoalim Term Facilities ($ 30,000 ), less the prepayment of the term loans under the Prior Credit Facility (approximately $ 11,200 ), amounting to approximately $ 18,800 , has been recognized as an increase in the carrying value of the prior term loans that was recognized previously.

For the three months ended June 30, 2023, the Company recorded $ 35 of additional deferred costs to the original debt issuance costs and the refinancing fee paid to Hapoalim.

For the three months ended June 30, 2024, the Company recorded $ 30 of amortization of the original debt issuance costs and the refinancing fee paid to Hapoalim.

The Company recorded charges of $ 152 and $ 655 to interest expense on its consolidated statements of operations for the three months ended June 30, 2023 and 2024, respectively, related to interest expense associated with the Hapoalim debt.

On March 7, 2024, the Company entered into the Facilities Agreement with RMB, pursuant to which RMB agreed to provide the Company with two term loan facilities in an aggregate principal amount of $ 85,000 , composed of Facility A and Facility B, each with a principal amount of $ 42,500 (“RMB Facility A” and “RMB Facility B,” respectively, and collectively, the “RMB Facilities”).

The Company drew down $ 85,000 in cash under the term loan facilities on March 13, 2024, and the proceeds to redeem all the outstanding shares of the Series A Preferred Stock and for general corporate purposes.

The RMB Facilities are guaranteed by the Company, I.D.

Systems and Movingdots, and there is a security agreement over the shares in Main Street 2000 Proprietary Limited, I.D.

Systems, and Movingdots.

The interest rates of borrowings under RMB Facility A and RMB Facility B are 8.699 % per annum and 8.979 % per annum, respectively.

Interest is payable quarterly in arrears.

RMB Facility A matures on March 31, 2027, and RMB Facility B matures on March 31, 2029.

The Company may prepay the RMB Facilities at any time, subject to a minimum reduction of $ 5,000 and multiples of $ 1,000 .

If the Company prepays any amount during the first or second annual period of the funding, a refinancing fee equal to 2 % or 1 %, respectively, of the prepayment will be payable.

Also, the RMB Facilities are mandatorily prepayable upon the occurrence of uncertain future events, such as a change of control or a transfer of the business.

In the event that either prepayment occurs, the respective prepayment amount will be adjusted for RMB’s break gains or losses, which relate mainly to the unwinding of interest rate derivatives (the “Prepayment Derivative”) which RMB entered into with third parties to fix the interest rates on the RMB Facilities.

Since RMB’s break gains/losses could result in the Company prepaying at a discount, or a premium, of 10 % or more to the initial carrying amount of the RMB Facilities, the optional and contingent repayment features were to be embedded derivatives in the scope of ASC 815-15 Embedded Derivatives.

The Prepayment Derivative within each RMB Facility has been bifurcated and accounted for at fair value separately from the respective debt-host contracts which are accounted for at amortized cost.

The terms of the debt-host contracts have been bifurcated to adjust the carrying value of the debt upon separating the derivative.

Upon initial recognition of the RMB Facilities, a Prepayment Derivative asset of $ 610 and $ 1,616 for RMB Facility A and RMB Facility B, respectively, was recognized with a corresponding increase in the initial carrying amount of each debt-host contract.

The fair value of the embedded derivative is estimated using a “with-and-without” approach as the difference between the value of the RMB Facilities with and without the embedded derivative using both the binomial lattice model and discounted cash flow analysis.

Key assumptions used were:

Facility A Facility B

Credit spread volatility 50 % 35 %

Credit spread 4.48 % 4.99 %

Credit rating B- B-

Risk free rate SOFR Spot Rate SOFR Spot rate

The Prepayment Derivative is classified as a level 3 in the fair value hierarchy due to the use of at least one significant unobservable input which is the credit spread volatility .

At inception, the credit spread was an observable input based on the transaction price of the debt;

however, in future periods, it will also be an unobservable input.

For the Prepayment Derivative asset in RMB Facility A, a change of -10% in credit spread volatility would result in a decrease in the derivative asset of $ 190 , while a change of +10% in credit spread volatility would result in an increase in the derivative asset of $ 158 .

For the Prepayment Derivative asset in RMB Facility B, a change of -10% in credit spread volatility would result in a decrease in the derivative asset of $ 465 , while a change of +10% in credit spread volatility would result in an increase in the derivative asset of $ 416 .

The Prepayment Derivative assets are included in Other assets and their fair values were $ 610 and $ 1,616 for RMB Facility A and RMB Facility B, respectively, as of March 31, 2024 and June 30, 2024.

The debt-host contracts are accounted for at amortized cost.

Total debt issuance costs of approximately $ 1,000 were incurred.

For the three months ended June 30, 2024, the Company recorded $ 77 of amortization of the original debt issuance costs and the refinancing fee to RMB.

For the three-month periods ended March 31, 2024 and June 30, 2024, the Company recorded interest expense of $ 400 and $ 1,870 , respectively.

Scheduled contractual maturities of the long-term debt as of June 30, 2024 are as follows:

2025 (remaining)

Current portion ( 2,597 )

Term B Facility is not subject to amortization over the life of the loan and instead the original principal amount is due in one installment

on the fifth anniversary of the Closing Date.

14 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

payable and accrued expenses consist of the following:

OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

September 30,

Plus debt costs and prepayment 885

Total $ 111,957

NOTE 14 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following (in thousands):

2024 June 30,

Accounts payable $ 20,025 46,104

3 unchanged sentences

Other current liabilities 827 2,557

Accounts payable and accrued expenses

Company’s products are warranted against defects in materials and workmanship for a period of one to eight years from the date

of acceptance of the product by the customer .

The customers may purchase an extended warranty providing coverage up to a maximum of 60

A provision for estimated future warranty costs is recorded for expected or historical warranty matters related to equipment

shipped and is included in accounts payable and accrued expenses in the Condensed Consolidated Balance Sheets as of December 31, 2022

and September 30, 2023.

following table summarizes warranty activity for the nine-month periods ended September 30, 2022 and 2023:

OF PRODUCT WARRANTY LIABILITY

Nine Months Ended September 30,

$ 34,008 $ 68,771

The following table summarizes warranty activity for the three months ended June 30, 2023 and 2024 (in thousands):

Three Months Ended June 30,

Accrued warranty reserve, beginning of year $ 2,255 2,926

2 unchanged sentences

Expiration of warranties ( 70 ) ( 9 )

Acquired through MiX Combination — 356

Foreign currency translation difference — —

Accrued warranty reserve, end of period (1)

non-current accrued warranty included in other long-term liabilities at September 30, 2022 and September 30, 2023 of $ 167 and $ 168 ,

respectively.

15 - STOCKHOLDERS’ EQUITY

Redeemable Preferred Stock

Company is authorized to issue 150 shares of preferred stock, par value $ 0.01 per share of which 100 shares are designated Series A

Preferred Stock and 50 shares are undesignated.

A Preferred Stock

connection with the completion of the Transactions, on October 3, 2019, the Company issued 50

shares of 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.

$ 2,505 3,434

(1) Includes non-current accrued warranty included in other long-term liabilities at June 30, 2023 and 2024 of $ 1,739 and $ 1,884 , respectively.

NOTE 15 - STOCKHOLDERS' EQUITY

Convertible Redeemable Preferred Stock:

The Company is authorized to issue 150 shares of preferred stock, par value $ 0.01 per share of which 100 shares are designated Series A convertible preferred stock (“Series A Preferred Stock”) and 50 shares are undesignated.

Series A Preferred Stock

In connection with the completion of the Pointer acquisition, on October 3, 2019, the Company issued 50 shares of 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”).

For the nine-month periods ended September 30, 2022 and 2023, the Company issued 3

additional shares of Series A Preferred Stock, respectively.

Series A Preferred Stock has a liquidation preference equal to the greater of (i) the original issuance price of $ 1,000.00 per share,

subject to certain adjustments (the “Series A Issue Price”), plus all accrued and unpaid dividends thereon (except in the

case of a deemed liquidation event, then 150% of such amount), and (ii) the amount such holder would have received if the Series A Preferred

Stock had converted into common stock immediately prior to such liquidation .

of Series A Preferred Stock are entitled to receive cumulative dividends at a minimum rate of 7.5 %

per annum (calculated on the basis of the Series A Issue Price), quarterly in arrears.

The dividends are payable at the

Company’s election, in kind, through the issuance of additional shares of Series A Preferred Stock, or in cash, provided no

dividend payment failure has occurred and is continuing and that there has not previously occurred two or more dividend payment

Commencing on the 66-month anniversary of the date on which any shares of Series A Preferred Stock are first issued (the

“Original Issuance Date”), and on each monthly anniversary thereafter, the dividend rate will increase by 100 basis

points, until the dividend rate reaches 17.5 %

per annum, subject to the Company’s right to defer the increase for up to three consecutive months on terms set forth in the

Company’s Amended and Restated Certificate of Incorporation (the “Charter”).

During the three -and nine-month

periods ended September 30, 2022, the Company paid dividends in shares in amounts equal to $ 1,067

respectively, to the holders of the Series A Preferred Stock.

During the three -and nine-month periods ended September 30, 2023, the

Company paid dividends in shares in amounts equal to $ 0

and $ 1,107 ,

respectively, to the holders of the Series A Preferred Stock.

During the three -and nine-month periods ended September 30, 2023, the

Company paid dividends in cash in amounts equal to $ 1,128

and $ 2,257 ,

respectively, to the holders of the Series A Preferred Stock.

As of September 30, 2023, dividends in arrears were $- 0 -.

Consent Rights

holders of Series A Preferred Stock will be given notice by the Company of any meeting of stockholders or action to be taken by written

consent in lieu of a meeting of stockholders as to which the holders of common stock are given notice at the same time as provided in,

and in accordance with, the Company’s Amended and Restated Bylaws.

Except as required by applicable law or as otherwise specifically

set forth in the Charter, the holders of Series A Preferred Stock are not entitled to vote on any matter presented to the Company’s

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

of common stock as a single class on an as-converted basis (provided, however, that any holder of Series A Preferred Stock shall not

be entitled to cast votes for the number of shares of common stock issuable upon conversion of such shares of Series A Preferred Stock

held by such holder that exceeds the quotient of (1) the aggregate Series A Issue Price for such shares of Series A Preferred Stock divided

by (2) $5.57 (subject to adjustment for stock splits, stock dividends, combinations, reclassifications and similar events, as applicable)).

So long as shares of Series A Preferred Stock are outstanding and convertible into shares of common stock that represent at least 10%

of the voting power of the common stock, or the Investors or their affiliates continue to hold at least 33% of the aggregate amount of

Series A Preferred Stock issued to the Investors on the Original Issuance Date, the consent of the holders of at least a majority of

the outstanding shares of Series A Preferred Stock will be necessary for the Company to, among other things, (i) liquidate the Company

or any operating subsidiary or effect any deemed liquidation event (as such term is defined in the Charter), except for a deemed liquidation

event in which the holders of Series A Preferred Stock receive an amount in cash not less than the Redemption Price (as defined below),

(ii) amend the Company’s organizational documents in a manner that adversely affects the Series A Preferred Stock, (iii) issue

any securities that are senior to, or equal in priority with, the Series A Preferred Stock or issue additional shares of Series A Preferred

Stock to any person other than the Investors or their affiliates, (iv) incur indebtedness above the agreed-upon threshold, (v) change

the size of the Company’s board of directors to a number other than seven, or (vi) enter into certain affiliated arrangements or

transactions .

any time, each holder of Series A Preferred Stock may elect to convert each share of such holder’s then-outstanding Series A Preferred

Stock into the number of shares of the Company’s common stock equal to the quotient of (x) the Series A Issue Price, plus any accrued

and unpaid dividends, divided by (y) the Series A Conversion Price in effect at the time of conversion.

The Series A Conversion Price

is initially equal to $ 7.319 , subject to certain adjustments as set forth in the Charter.

any time after the third anniversary of the Original Issuance Date, subject to certain conditions, the Company may redeem the Series

A Preferred Stock for an amount per share, equal to the greater of (i) the product of (x) 1.5 multiplied by (y) the sum of the Series

A Issue Price, plus all accrued and unpaid dividends and (ii) the product of (x) the number of shares of common stock issuable upon conversion

of such Series A Preferred Stock multiplied by (y) the volume weighted average price of the common stock during the 30 consecutive trading

day period ending on the trading date immediately prior to the date of such redemption notice or, if calculated in connection with a

deemed liquidation event, the value ascribed to a share of common stock in such deemed liquidation event (the “Redemption Price”) .

at any time (i) after the 66-month anniversary of the Original Issuance Date, (ii) following delivery of a mandatory conversion notice

by us, or (iii) upon a deemed liquidation event, subject to Delaware law governing distributions to stockholders, the holders of the

Series A Preferred Stock may elect to require us to redeem all or any portion of the outstanding shares of Series A Preferred Stock for

an amount per share equal to the Redemption Price.

16 - ACCUMULATED OTHER COMPREHENSIVE LOSS

Comprehensive

loss includes net loss and foreign currency translation gains and losses.

accumulated balances for each classification of other comprehensive loss for the nine-month period ended September 30, 2023 are as follows:

OF ACCUMULATED OTHER COMPREHENSIVE LOSS

Foreign currency

translation adjustment

Accumulated other

comprehensive

Balance at January 1, 2023

Concurrently with the closing of the MiX Combination on April 2, 2024, the Company used the net proceeds received from RMB and from incremental borrowing capacity as a result of the refinancing of credit facilities with Hapoalim to redeem in full for $ 90,300 for all of the outstanding shares of the Series A Preferred Stock.

Holders of Series A Preferred Stock were entitled to receive cumulative dividends at a minimum rate of 7.5 % per annum (calculated on the basis of the Series A Issue Price), quarterly in arrears.

The dividends were payable at the Company’s election, in kind, through the issuance of additional shares of Series A Preferred Stock, or in cash, provided no dividend payment failure had occurred and was continuing and that there had not previously occurred two or more dividend payment failures.

Commencing on the 66-month anniversary of the date on which any shares of Series A Preferred Stock were first issued (the “Original Issuance Date”), and on each monthly anniversary thereafter, the dividend rate would increase by 100 basis points, until the dividend rate reached 17.5 % per annum, subject to the Company’s right to defer the increase for up to three consecutive months on terms set forth in the Company’s Amended and Restated Certificate of Incorporation (the “Charter”).

During the three-month periods ended June 30, 2023 and June 30, 2024, the Company paid dividends in amounts equal to $ 1,129 and $ 25 respectively, to the holders of the Series A Preferred Stock.

Dividends for the period ended March 31, 2024, plus accrued dividends through April 2, 2024, were paid in cash on the redemption date of the Series A Preferred Stock.

NOTE 16 - ACCUMULATED OTHER COMPREHENSIVE LOSS

Comprehensive loss includes net loss and foreign currency translation gains and losses.

The accumulated balances for each classification of other comprehensive loss for the three-month period ended June 30, 2024 are as follows (in thousands):

Foreign currency translation adjustment Accumulated other comprehensive loss

Balance at April 1, 2024

$ ( 985 ) $ ( 985 )

Net current period change 418 418

Balance at September 30, 2023

accumulated balances for each classification of other comprehensive loss for the nine-month period ended September 30, 2022 are as

Foreign currency

translation adjustment

Accumulated other

comprehensive

income/(loss)

Balance at January 1, 2022

Balance at June 30, 2024

$ ( 567 ) $ ( 567 )

The accumulated balances for each classification of other comprehensive loss for the three-month period ended June 30, 2023 are as follows (in thousands):

Foreign currency translation adjustment Accumulated other comprehensive loss

Balance at April 1, 2023

$ ( 1,098 ) $ ( 1,098 )

Net current period change 100 100

Balance at September 30, 2022

Company’s reporting currency is the U.S.

dollar (“USD”).

For businesses where the majority of the revenues are generated

in USD or linked to the USD and a substantial portion of the costs are incurred in USD, the Company’s management believes that

the USD is the primary currency of the economic environment and thus their functional currency.

Due to the fact that Argentina has been

determined to be highly inflationary, the financial statements of our subsidiary in Argentina have been remeasured as if its functional

currency was the USD.

The Company also has foreign operations where the functional currency is the local currency.

For these operations,

assets and liabilities are translated using the end-of-period exchange rates and revenues, expenses and cash flows are translated using

average rates of exchange for the period.

Equity is translated at the rate of exchange at the date of the equity transaction.

adjustments are recognized in stockholders’ equity as a component of accumulated other comprehensive income (loss).

Net translation

losses from the translation of foreign currency financial statements of $( 1,441 ) and $ ( 694 ) at September 30, 2022 and 2023, respectively,

are included in comprehensive income (loss) in the Consolidated Statement of Changes in Stockholders’ Equity.

currency transaction gains and losses related to operational expenses denominated in a currency other than the functional currency

are included in determining net income or loss.

Foreign currency transaction losses for the three- and nine-month periods ended

September 30, 2022 of $( 922 )

and $( 1,844 ),

respectively, and for the three- and nine-month periods ended September 30, 2023 of $ ( 358 )

and $ ( 126 ) ,

respectively, are included in selling, general and administrative expenses in the Consolidated Statement of Operations.

currency transaction gains related to long-term debt for the three- and nine-month periods ended September 30, 2022 of $ 191

and $ 2,803 ,

respectively, and for the three- and-nine month periods ended September 30, 2023 of $ 429

and $ 1,139 ,

respectively, are included in interest expense in the Consolidated Statement of Operations.

17 – SEGMENT INFORMATION

Company operates in one reportable segment, wireless IoT asset management.

The following table summarizes revenues by geographic region.

OF REVENUES AND LONG LIVED ASSETS BY GEOGRAPHICAL REGION

Three Months Ended

September 30,

Nine Months Ended

September 30,

United States

Total revenues

September 30,

Balance at June 30, 2023

$ ( 998 ) $ ( 998 )

NOTE 17 - SEGMENT INFORMATION

The Company operates in one reportable segment, wireless IoT asset management.

The following table summarizes revenues by geographic region (in thousands):

Three Months Ended June 30,

North America

$ 16,765 $ 21,392

10,905 10,661

Europe and Middle East

$ 32,092 $ 75,430

March 31, 2024 June 30, 2024

Long lived assets by geographic region:

United States

Long lived assets

18 - INCOME TAXES

The Company records its interim tax provision based upon a projection of the Company’s annual effective tax

rate (“AETR”).

This AETR is applied to the year-to-date consolidated pre-tax income to determine the interim provision for

income taxes before discrete items.

The Company updates the AETR on a quarterly basis as the pre-tax income projections are revised and

tax laws are enacted.

The effective tax rate (“ETR”) each period is impacted by a number of factors, including the relative

mix of domestic and foreign earnings and adjustments to recorded valuation allowances.

The currently forecasted ETR may vary from the

actual year-end due to the changes in these factors.

SCHEDULE OF INCOME BEFORE INCOME TAX DOMESTIC AND FOREIGN

Three Months Ended

September 30,

Nine Months Ended

September 30,

North America

$ 4,083 $ 8,716

Europe and Middle East

$ 12,719 $ 49,705

NOTE 18 - INCOME TAXES

The Company records its interim tax provision based upon a projection of the Company’s annual effective tax rate (“AETR”).

This AETR is applied to the year-to-date consolidated pre-tax income to determine the interim provision for income taxes before discrete items.

The Company updates the AETR on a quarterly basis as the pre-tax income projections are revised and tax laws are enacted.

The effective tax rate (“ETR”) each period is impacted by a number of factors, including the relative mix of domestic and foreign earnings and adjustments to recorded valuation allowances.

The currently forecasted ETR may vary from the actual year-end due to the changes in these factors.

Three Months Ended June 30,

Domestic pre-tax book loss $ ( 10,470 ) $ ( 16,475 )

Foreign pre-tax book income

Foreign pre-tax book income (expense) 7,201 ( 4,771 )

Total loss before income taxes ( 3,269 ) ( 21,246 )

Income tax expense

Income tax benefit (expense) 6 ( 1,053 )

Total loss after taxes $ ( 3,263 ) $ ( 22,299 )

Effective tax rate 0.18 % ( 4.96 ) %

For the three- and nine-month periods ended September 30, 2022 and 2023, the effective tax rate differed from the

statutory tax rates primarily due to the mix of domestic and foreign earnings amongst taxable jurisdictions, recorded valuation allowances

to fully reserve against deferred tax assets in non-Israel jurisdictions, and certain discrete items.

On August 16, 2022, the President of the United States signed into law H.R.

5376, commonly referred to as the Inflation

Reduction Act of 2022 (the “IRA”).

The IRA is federal legislation designed to raise revenue from, among other things, the

imposition of certain corporate tax measures, while authorizing spending on energy and climate change initiatives and subsidizing the

Affordable Care Act.

The IRA also introduced a 1 % excise tax on certain corporate stock buybacks, which would impose a nondeductible 1%

excise tax on the fair market value of certain stock that is “repurchased” during the taxable year by a publicly traded U.S.

corporation or acquired by certain of its subsidiaries.

The passage of the IRA did not have a material impact to the Company nor its calculated

AETR as of September 30, 2023.

On August 9, 2022, the President of the United States signed into law H.R.

4346, “The CHIPS and Science Act

of 2022.” CHIPS is a federal statue providing funding for research and domestic production of semiconductors.

Additional funding

can be provided through CHIPS to various federal agencies as well as towards climate science research.

Tax measures include a 25% advanced

investment tax credit for certain investments in semiconductor manufacturing.

The passage of the CHIPS and Science Act did not have a

material impact to the Company nor its calculated AETR as of September 30, 2023.

Company has operating leases for office space and office equipment.

The Company’s leases have remaining lease terms of one year

to three years , some of which include options to extend the lease term for up to five years.

Company has lease arrangements which are classified as short-term in nature.

These leases meet the criteria for operating lease classification.

Lease costs associated with the short-term leases are included in selling, general and administrative expenses on the Company’s

condensed consolidated statements of operations during the three- and nine-months ended September 30, 2022 and 2023.

of lease expense are as follows:

OF COMPONENTS OF LEASE EXPENSE

Three Months Ended

September 30,

Nine Months Ended

September 30,

For the three-month periods ended June 30, 2023 and June 30, 2024, the effective tax rate differed from the statutory tax rates primarily due to the mix of domestic and foreign earnings amongst taxable jurisdictions, recorded valuation allowances to fully reserve against deferred tax assets in jurisdictions, and certain discrete items.

NOTE 19 - LEASES

The Company determines whether an arrangement is a lease at inception.

The Company has operating leases for office space, office equipment and vehicles.

The Company’s leases have remaining lease terms of 1 year to 5 years, some of which include options to extend the lease term for up to 5 years.

Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term.

The operating lease ROU asset also includes any lease payments made in advance of lease commencement and excludes lease incentives.

The lease terms used in the calculations of the operating ROU assets and operating lease liabilities include options to extend or terminate the lease when the Company is reasonably certain that it will exercise those options.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The Company has lease agreements with lease and non-lease components, which are generally not accounted for separately.

Where lease terms are 12-months or less, and meet the criteria for short-term lease classification, no ROU asset and no lease liability are recognized.

Lease costs associated with the short-term leases are included in selling, general and administrative expenses on the Company’s condensed consolidated statements of operations.

The components of lease cost are as follows (in thousands):

Three Months Ended June 30,

Short-term lease cost $ 119 $ 207

cash flow information and non-cash activity related to our operating leases are as follows:

OF CASH FLOW INFORMATION AND NON CASH ACTIVITY OF OPERATING LEASES

Nine Months Ended

September 30,

Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows (in thousands):

Three Months Ended June 30,

Non-cash activity:

Weighted-average

remaining lease term and discount rate for our operating leases are as follows:

OF WEIGHTED AVERAGE REMAINING LEASE TERM AND DISCOUNT RATE

September 30, 2023

Weighted-average remaining lease term (in years)

Right-of-use assets obtained in exchange for lease obligations $ 424 $ 490

Weighted-average remaining lease term and discount rate for our operating leases are as follows:

Weighted-average remaining lease term - operating leases (in years) (1)

Weighted-average discount rate 7.3 %

maturities of operating lease liabilities outstanding as of September 30, 2023 are as follows:

MATURITIES OF OPERATING LEASE LIABILITIES

October-December 2023

(1) Including expected renewals where appropriate.

Scheduled maturities of operating lease liabilities outstanding as of June 30, 2024 are as follows (in thousands):

July 2024 - March 2025 $ 3,029

Thereafter 1,432

Total lease payments 12,627

Imputed interest ( 1,631 )

Present value of lease liabilities

20 - FAIR VALUE OF FINANCIAL INSTRUMENTS

Company’s cash and cash equivalents are carried at fair value.

The carrying value of financing receivables approximates fair value

due to the interest rate implicit in the instruments approximating current market rates.

The carrying value of accounts receivables,

accounts payable and accrued liabilities and short term bank debt approximates their fair values due to the short period to maturity

of these instruments.

The fair value of the Company’s long-term debt is based on observable relevant market information and future

cash flows discounted at current rates, which are Level 2 measurements.

SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS

September 30, 2023

Carrying Amount

Long-term debt

21 - CONCENTRATION OF CUSTOMERS

the three- and nine-month periods ended September 30, 2022 and 2023, there were no customers who generated revenues greater than 10 %

of the Company’s consolidated total revenues or generated greater than 10 %

of the Company’s consolidated accounts receivable.

22 - COMMITMENTS AND CONTINGENCIES

for normal operating leases, the Company is not currently subject to any material commitments.

time to time, the Company is involved in various litigation matters involving claims incidental to its business and acquisitions, including

employment matters, acquisition related claims, patent infringement and contractual matters, among other issues.

While the outcome of

any such litigation matters cannot be predicted with certainty, management currently believes that the outcome of these proceedings,

including the matters described below, either individually or in the aggregate, will not have a material adverse effect on its business,

results of operations or financial condition.

The Company records reserves related to legal matters when losses related to such litigation

or contingencies are both probable and reasonably estimable.

August 2014, Pointer do Brasil Comercial Ltda.

(“Pointer Brazil”) received a notification of lack of payment of VAT tax

(Brazilian ICMS tax) in the amount of $ 211

of interest and penalty, totaling $ 1,330

as of September 30, 2023.

The Company is vigorously defending this tax assessment before the administrative court in Brazil, but in

light of the administrative and judicial processes in Brazil, it could take up to 14 years before the dispute is finally resolved.

In case the administrative court rules against the Company, the Company could claim before the judicial court, an appellate court in

Brazil, a substantial reduction of interest charged, potentially reducing the Company’s total exposure.

The Company’s

legal counsel is of the opinion that the chance of loss is not probable and for this reason the Company has not made any

July 2015, Pointer Brazil received a 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 $ 12,861

as of September 30, 2023.

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 in regards to the clerical obligation of

keeping in good order a set of ICMS books and related tax receipts.

Present value of lease payments $ 10,996

NOTE 20 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s cash and cash equivalents, restricted cash and investments in securities are carried at fair value.

The carrying value of financing receivables approximates fair value due to the interest rate implicit in the instruments approximating current market rates.

The carrying value of accounts receivable, accounts payable and accrued liabilities and short-term bank debt approximates their fair values due to the short period to maturity of these instruments.

The fair value of the loans to external parties included in other non-current assets is determined using unobservable market data (Level 3 inputs), that represent management ’ s estimate of current interest rates that a commercial lender would charge the borrower s.

The fair value of the Company’s debt is based on observable relevant market information and future cash flows discounted at current rates, which are Level 2 measurements.

The Prepayment Derivative within the RMB Facilities is classified as a level 3 in the fair value hierarchy due to the use of at least one significant unobservable input which is the credit spread volatility (see Note 13).

March 31, 2024 June 30, 2024

Carrying Amount Fair Value Carrying Amount Fair Value

Loans to external parties $ 475 $ 475 $ 492 $ 492

Debt $ 115,761 $ 116,278 $ 139,561 $ 136,818

Prepayment derivative $ 2,226 $ 2,226 $ 2,226 $ 2,226

NOTE 21 - CONCENTRATION OF CUSTOMERS

For the three-month periods ended June 30, 2023 and 2024, there were no customers that generated revenues greater than 10% of the Company’s consolidated total revenues or generated greater than 10% of the Company’s consolidated accounts receivable.

NOTE 22 - COMMITMENTS AND CONTINGENCIES

From time to time, the Company is involved in various litigation matters involving claims incidental to its business and acquisitions, including employment matters, acquisition related claims, patent infringement and contractual matters, among other issues.

While the outcome of any such litigation matters cannot be predicted with certainty, management currently believes that the outcome of these proceedings, including the matters described below, either individually or in the aggregate, will not have a material adverse effect on its business, results of operations or financial condition.

The Company records reserves related to legal matters when losses related to such litigation or contingencies are both probable and reasonably estimable.

In August 2014, Pointer do Brasil Comercial Ltda.

(“Pointer Brazil”) received a notification of lack of payment of VAT tax (Brazilian ICMS tax) in the amount of $ 189 plus $ 1,019 of interest and penalty, totaling $ 1,347 as of March 31, 2024 and $ 1,208 as of June 30, 2024.

The Company is vigorously defending this tax assessment before the administrative court in Brazil,

but in light of the administrative and judicial processes in Brazil, it could take up to 14 years before the dispute is finally resolved.

In case the administrative court rules against the Company, the Company could claim before the judicial court, an appellate court in Brazil, a substantial reduction of interest charged, potentially reducing the Company’s total exposure.

The Company’s legal counsel is of the opinion that the chance of loss is not probable and for this reason the Company has not made any provision.

In July 2015, Pointer Brazil received a 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 $ 12,110 as of June 30, 2024.

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 in regards to the clerical obligation of keeping in good order a set of ICMS books and related tax receipts.

The remaining claim after this administrative decision is $ 205 .

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

The Company’s legal

counsel is of the opinion that the chance of loss is not probable and that no material costs will arise in respect to these claims.

The Company’s legal counsel is of the opinion that the chance of loss is not probable and that no material costs will arise in respect to these claims.

For this reason, the Company has not made any provision.

February 24, 2022, Pointer Mexico received a notification for 2016 and 2017 tax assessment in the amounts of $ 268 and $ 476 , respectively,

regarding the underpayment of VAT and government fees from the Mexican Tax Service (“MTS”).

Under the statute and case law,

Pointer Mexico was entitled to appeal before the MTS or file a lawsuit before the Federal Court of Administrative Justice.

2022, Pointer Mexico filed an appeal for revocation of the assessment.

On May 2, 2022, Pointer Mexico filed additional evidence before

As of August 31, 2023, the cases have been closed and no payments were imposed.

23 - RECENT ACCOUNTING PRONOUNCEMENTS

June 2016, the FASB issued ASU No.

2016-13, “Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on

Financial Instruments,” which amends the guidance on measuring credit losses on financial assets held at amortized cost.

The amendment

is intended to address the issue that the previous “incurred loss” methodology was restrictive for an entity’s ability

to record credit losses based on not yet meeting the “probable” threshold.

The new language will require these assets to

be valued at amortized cost presented at the net amount expected to be collected with a valuation provision.

The Company adopted ASU

2016-13 on January 1, 2023.

The adoption of the standard did not result in a material impact on the consolidated financial statements.

NOTE 24 – SUBSEQUENT EVENTS

October 10, 2023, the Company entered into the Implementation Agreement with Powerfleet Sub and MiX Telematics, pursuant to which, subject

to the terms and conditions thereof, Powerfleet Sub will acquire all of 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 the Company’s common stock.

As a result of the transactions, including the Scheme, contemplated by the

Implementation Agreement (the “Scheme Transactions”), MiX Telematics will become an indirect, wholly owned subsidiary of

The Scheme Transactions have been approved by the boards of directors of both companies, are subject to customary closing

conditions, including approval by the Company’s stockholders and MiX Telematics’ shareholders.

The Scheme Transactions are

expected to close in the first quarter of 2024.

the closing of the Scheme Transactions, the combined company will remain Powerfleet and the Company’s common stock will continue

to be listed on The Nasdaq Global Market and the Tel Aviv Stock Exchange under the symbol “PWFL.” Additionally, the Company’s

common stock will be listed on the Johannesburg Stock Exchange by way of a secondary inward listing.

Telematics is a leading global provider of fleet and mobile asset management solutions delivered as SaaS to over one million global subscribers

spanning more than 120 countries.

MiX Telematics’ products and services provide enterprise fleets, small fleets, and consumers

with efficiency, safety, compliance, and security solutions.

The pending Scheme Transactions are expected to provide the Company with

operational synergies and access to a broader base of customers.

pending Scheme Transactions will be accounted for as a business combination and the Company has been identified as the accounting acquirer.

Mobile Telephone Networks Proprietary Limited (“MTN”), a network service provider of MiX Telematics Africa, a subsidiary of the company, is entitled to claw back payments from MiX Telematics Africa in the event of early cancellation of the agreement or certain base connections not being maintained over the term of an amended network services agreement between the parties or certain base connections not being maintained over the term of such agreement.

No connection incentive s will be received in terms of the amended network services agreement.

The maximum potential liability under the arrangement as of March 31, 2024 and June 30, 2024 was $ 841 and $ 808 , respectively.

No loss is consider ed probable under this arrangement.

NOTE 23 - RECENT ACCOUNTING PRONOUNCEMENTS

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires additional operating segment disclosures in annual and interim consolidated financial statements.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and for interim periods beginning after December 15, 2024 on a retrospective basis, with early adoption permitted.

The Company is evaluating the effect of adopting ASU 2023-07.

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a retrospective or prospective basis.

The Company is evaluating the effect of adopting ASU 2023-09.

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

What changed 10-Q

Item 1. Financial Statements