What changed in this filing

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Item 1. Financial Statements

2024-11-12 compared with 2024-08-28 · 245 added, 160 removed, 703 unchanged (37% of the section changed)

4 unchanged sentences

(In thousands, except per share data)

March 31, 2024 * June 30, 2024

March 31, 2024 * September 30, 2024

Current assets:

1 unchanged sentence

Restricted cash 85,310 63,074

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

Accounts receivables, net of allowance for credit losses of $ 3,197 and $ 5,321 as of March 31, 2024 and September 30, 2024, respectively

30,333 64,819

27 unchanged sentences

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

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

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

STOCKHOLDERS’ EQUITY

3 unchanged sentences

authorized 175,000 shares, $ 0.01 par value;

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

38,709 and 109,884 s hares issued at March 31, 2024 and September 30, 2024, respectively;

shares outstanding, 37,212 and 107,821 at March 31, 2024 and September 30, 2024, respectively

Additional paid-in capital 202,607 641,736

2 unchanged sentences

Treasury stock;

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

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

( 8,682 ) ( 11,518 )

10 unchanged sentences

(In thousands, except per share data)

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

(As Restated) 2024 2023 2024

11 unchanged sentences

Total operating expenses 20,204 40,770 39,622 98,653

Loss from operations ( 3,401 ) ( 18,235 )

(Loss)/profit from operations

( 3,097 ) 573 ( 6,497 ) ( 17,662 )

Interest income 23 168 45 472

1 unchanged sentence

Bargain purchase - Movingdots — — 283 —

Other income, net — ( 624 )

Other (expense)/income, net ( 25 ) 1,674 ( 25 ) 1,050

Net loss before income taxes ( 3,253 ) ( 1,627 ) ( 6,521 ) ( 22,873 )

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

Income tax expense

( 295 ) ( 256 ) ( 289 ) ( 1,309 )

Net loss before non-controlling interest ( 3,548 ) ( 1,883 ) ( 6,810 ) ( 24,182 )

11 unchanged sentences

(In thousands)

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

(As Restated) 2024 2023 2024

8 unchanged sentences

(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

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 )

2 unchanged sentences

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

Shares issued for transaction bonus

174 1 888 — — — — 889

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

Net loss attributable to common stockholders — — — ( 1,888 ) — — — ( 1,888 )

Net income attributable to non-controlling interest — — — — — — 5 5

Foreign currency translation adjustment — — — — ( 797 ) — 20 ( 777 )

Proceeds from private placement, net of costs to issue common stock — — 61,851 — — — — 61,851

Exercise of stock options 243 — — — — — — —

Stock-based compensation — — 1,371 — — — — 1,371

Balance as of September 30, 2024 109,884 1,096 641,736 ( 178,996 ) ( 1,364 ) ( 11,518 ) 156 451,110

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 March 31, 2023 (As Restated) 37,621 $ 376 $ 218,473 $ ( 135,961 ) $ ( 1,098 ) $ ( 8,554 ) $ 66 $ 73,302

Net loss attributable to common stockholders (As restated) — — ( 2,902 ) ( 3,269 ) — — — ( 6,171 )

Net income attributable to non-controlling interest — — — — — — 6 6

Foreign currency translation adjustment — — — — 100 — ( 9 ) 91

Issuance of restricted shares 162 1 ( 1 ) — — — — —

Forfeiture of restricted shares ( 82 ) — — — — — — —

3 unchanged sentences

Balance as of June 30, 2023 (As restated)

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

37,717 377 216,458 ( 139,230 ) ( 998 ) ( 8,558 ) 63 68,112

Net loss attributable to common stockholders (As restated) — — ( 2,962 ) ( 3,548 ) — — — ( 6,510 )

Foreign currency translation adjustment — — — — ( 906 ) — — ( 906 )

Issuance of restricted shares 982 10 ( 10 ) — — — — —

Shares issued for transaction bonus

174 1 888 — — — — 889

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 — — — — — ( 90 ) — ( 90 )

Stock-based compensation — — 1,101 — — — — 1,101

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

Balance as of September 30, 2023 (As Restated) 38,699 $ 387 $ 214,587 $ ( 142,778 ) $ ( 1,904 ) $ ( 8,648 ) $ 63 $ 61,707

See accompanying notes to condensed consolidated financial statements.

3 unchanged sentences

(In thousands)

Three Months Ended June 30,

Six Months Ended September 30,

Cash flows from operating activities

7 unchanged sentences

Right-of-use assets, non-cash lease expense 1,242 1,515

Derivative mark-to-market adjustment — ( 2,197 )

Bad debts expense 933 4,369

1 unchanged sentence

Shares issued for transaction bonuses — 889

Lease termination and modification losses

Other non-cash items 126 1,522

11 unchanged sentences

Acquisition, net of cash assumed

Proceeds from sale of fixed assets — 217

Capitalized software development costs ( 2,047 ) ( 4,676 )

Capital expenditures ( 1,441 ) ( 10,454 )

Repayment of loan advanced to external parties — 294

Net cash (used in)/provided by investing activities ( 3,488 ) 12,912

5 unchanged sentences

Payment of preferred stock dividend and redemption of preferred stock ( 2,257 ) ( 90,298 )

Proceeds from private placement, net

Proceeds from exercise of stock options, net 36 —

24 unchanged sentences

Notes to Condensed Consolidated Financial Statements

June 30, 2024

September 30, 2024

In thousands (except per share data)

3 unchanged sentences

(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.

The Company has a primary listing on The Nasdaq Global Market and a secondary listing on the Main Board of the Johannesburg Stock Exchange.

Systems, Inc.

5 unchanged sentences

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.

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

See Note 3 for additional information.

6 unchanged sentences

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.

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 September 30, 2024, the consolidated results of its operations for the three- and six-month periods ended September 30, 2023 and 2024, the consolidated change in stockholders’ equity for the three- and six-month periods ended September 30, 2023 and 2024, and the consolidated cash flows for the six-month periods ended September 30, 2023 and 2024.

The results of operations for the three- and six-month periods ended September 30, 2024 are not necessarily indicative of the operating results for the full year.

On May 8, 2024, the Company’s Board of Directors approved a change in our fiscal year end from December 31 to March 31 in order to better align the Company’s 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 .

3 unchanged sentences

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 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 and $ 1,667 for the three-month period ended June 30, 2023 and three-month period ended September 30, 2023, respectively.

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”).

2 unchanged sentences

Going Concern

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

As of September 30, 2024, the Company had cash and cash equivalents and restricted cash of $ 89,036 and working capital of $ 81,209 .

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.

Management believes the Company’s cash, cash equivalents, and restricted cash of $ 89,036 as of September 30, 2024, in conjunction with cash expected to be generated from the execution of its strategic plan over the next 12 months, and proceeds from the Company’s credit facilities are sufficient to fund the projected operations for at least the next 12 months from the issuance date of these financial statements ( November 12, 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;

17 unchanged sentences

• 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;

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 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.

5 unchanged sentences

• 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:

The preliminary estimated fair value of the consideration transferred for MiX Telematics was $ 362,005 as of the Implementation Date, which consisted of the following:

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

43 unchanged sentences

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.

During the three-month period ended September 30, 2024, the Company recognized an adjustment of $ 425 against goodwill.

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.

6 unchanged sentences

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.

18 unchanged sentences

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.

The Company expensed a total of $ 20,443 of acquisition-related costs in the consolidated statement of operations related to the MiX Combination, of which $ 152 was expensed in the three-month period ended September 30, 2024 and $ 14,643 was expensed in the six-month period ended September 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.

The business acquired in the MiX Combination contributed revenue of $ 43,825 and a net profit of $ 2,007 , after amortization of identified intangibles, for the three-month period ended September 30, 2024 and revenue of $ 87,514 and a net loss of $ 4,925 for the six-month period ended September 30, 2024 .

NOTE 4 - CASH AND CASH EQUIVALENTS

1 unchanged sentence

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 .

Restricted cash at March 31, 2024 consisted of escrow amounts of $ 85,000 for a facilities agreement (the “Facilities Agreement”) with FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB”) deposited in escrow for the MiX Combination and cash of $ 310 held in escrow for purchases from a vendor.

Restricted cash at September 30, 2024 consists of cash of $ 311 held in escrow for purchases from a vendor, cash of $ 856 held by MiX Telematics Enterprise BEE Trust (a VIE which is consolidated) to be used solely for the benefit of its beneficiaries, c ash securing guarantees of $ 56 issued in respect of property lease agreements entered into by MiX Telematics Australasia, and $ 61,850 held by the Company in accordance with the terms of the Subscription Agreement, dated as of September 18, 2024 (the “Subscription Agreement”), by and among the Company and various accredited investors party thereto (the “Investors”), pursuant to which the Investors purchased from the Company, and the Company agreed to issue to such Investors, an aggregate of 20,000,000 shares of the Company’s common stock at a price per share of $ 3.50 for aggregate gross proceeds of $ 70,000 (the “Private Placement”).

The Private Placement was consummated on October 1, 2024.

See Note 24 - Subsequent Events for additional information on the Private Placement and related transactions.

NOTE 5 - REVENUE RECOGNITION

26 unchanged sentences

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.

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.

7 unchanged sentences

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,

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

Three Months Ended September 30, Six Months Ended September 30,

2023 2024 2023 2024

Products $ 13,233 $ 20,293 $ 24,317 $ 39,031

1 unchanged sentence

$ 34,243 $ 77,018 $ 66,335 $ 152,448

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

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

March 31, 2024 September 30, 2024

Contract Assets:

11 unchanged sentences

(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.

For the three-month periods ended September 30, 2023 and 2024, the Company recognized revenue of $ 1,416 and $ 2,499 , respectively, which was included in the deferred revenue balance at the beginning of each reporting period.

For the six-month periods ended September 30, 2023 and 2024, the Company recognized revenue of $ 3,190 an d $ 5,486 , 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.

4 unchanged sentences

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,

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

Six Months Ended September 30,

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

3 unchanged sentences

Foreign currency translation 33 443

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

Allowance for credit losses, September 30 $ 2,677 $ 5,321

NOTE 7 - PREPAID EXPENSES AND OTHER ASSETS

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

2024 June 30,

2024 September 30,

Sales-type lease receivables, current $ 1,100 $ 1,135

6 unchanged sentences

$ 8,091 $ 17,985

*This represents the prepaid portion of total deferred contract assets

*This includes 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.

Inventory is shown net of a valuation reserve of $ 538 at March 31, 2024 a nd $ 1,330 at September 30, 2024.

Inventories consist of the following (in thousands):

2024 June 30,

2024 September 30,

Components $ 9,403 $ 11,133

4 unchanged sentences

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

2024 June 30,

2024 September 30,

Installed and uninstalled products $ 11,030 $ 50,322

8 unchanged sentences

$ 12,719 $ 51,928

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

Depreciation and amortization expense for the three- and six-month periods ended September 30, 2023 was $ 671 and $ 1,638 , respectively, and for the three- and six- month periods ended September 30, 2024 was $ 5,227 and $ 9,976 , respectively.

NOTE 10 - INTANGIBLE ASSETS AND GOODWILL

4 unchanged sentences

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

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

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

Customer relationships 9 - 13

26 unchanged sentences

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.

At September 30, 2024 , the weighted-average amortization periods for customer relationships, trademarks and tradenames, patents, technology, and capitalized software to be sold or leased were 12.8 , 12.1 , 7.0 , 5.0 , and 3.0 years , res pectively.

Amortization expense for the three- and six-month periods ended September 30, 2023 was $ 1,813 and $ 3,169 , respectively, and for the three- and six-month periods ended September 30, 2024 was $ 3,837 and $ 9,423 , respectively.

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

1 unchanged sentence

Thereafter 82,009

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.

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

For the six-month period ended September 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.

During the three-month period ended September 30, 2024, the Company did no t grant any options to purchase 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:

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

Options Weighted-

1 unchanged sentence

Outstanding as of April 1, 2024

5,445 13.39 — —

Granted — — — —

1 unchanged sentence

Forfeited ( 50 ) 3.13 — —

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:

Outstanding as of September 30, 2024

5,395 13.48 7.46 $ 2,293

Vested as of September 30, 2024

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

Options Weighted-

1 unchanged sentence

Outstanding as of April 1, 2024

1,979 4.68 — —

Granted 375 4.31 — —

1 unchanged sentence

Forfeited ( 45 ) 5.96 — —

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

Outstanding as of September 30, 2024

2,309 4.59 6.82 $ 1,600

Vested as of September 30, 2024

1,972 4.64 6.33 $ 1,370

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

September 30, 2023 September 30, 2024

Expected volatility 55.6 % 60.2 %

4 unchanged sentences

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 Company recorded stock-based compensation expense of $ 781 and $ 1,366 for the three- and six-month periods ended September 30, 2023, respectively, and $ 627 and $ 2,444 for the three- and six-month periods ended September 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 were outstanding under the Powerfleet equity plans (including any inducement awards with time-based vesting) in connection with the closing of the MiX Combination.

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.

The fair value of options vested during the six-month periods ended September 30, 2023 and 2024 was $ 42 and $ 1,552 , respectively.

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

As of September 30, 2024, there was $ 883 of total unrecognized compensation costs related to unvested 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 1.21 years.

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.

As of September 30, 2024, there was $ 3,021 of total unrecognized compensation costs related to unvested 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 2.23 years.

7 unchanged sentences

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

A summary of all unvested restricted stock for the six-month period ended September 30, 2024 is as follows:

Unvested Shares

Weighted- Average

Grant Date Fair Value

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

Unvested, March 31, 2024

Granted 54 5.45

1 unchanged sentence

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.

Unvested, September 30, 2024

The Company recorded stock-based compensation expenses of $ 320 and $ 587 for the three- and six-month periods ended September 30, 2023, respectively, and $ 125 and $ 3,220 for the three- and six-month periods ended September 30, 2024, respectively, in connection with restricted stock grants.

As of September 30, 2024, there was $ 183 of total unrecognized compensation cost related to unvested shares.

That cost is expected to be recognized over a weighted-average period of 0.62 years.

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.

1 unchanged sentence

[C] Stock Appreciation Rights:

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

In connection with the closing of the MiX Combination, the Company assumed each of 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.

5 unchanged sentences

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 total stock-based compensation expense recognized during the three- and six-month periods ended September 30, 2024 was $ 637 and $ 1,600 , respectively.

The following table summarizes the activities for the outstanding SARs:

5 unchanged sentences

Forfeited ( 491 ) 2.42

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.

Outstanding as of September 30, 2024

4,572 2.57 3.16

Vested as of September 30, 2024

1,420 3.08 1.41 $ 2,710

As of September 30, 2024, there was $ 6,848 of unrecognized compensation cost related to unvested SARs.

This amount is expected to be recognized over a weighted-average period of 3.05 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,

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

Three Months Ended September 30, Six Months Ended September 30,

2023 2024 2023 2024

Basic and diluted loss per share

10 unchanged sentences

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

2024 June 30,

2024 September 30,

Short-term bank debt $ — $ 31,968

2 unchanged sentences

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.

As of September 30, 2024 short-term debt comprised $ 31,813 of borrowing facilities and $ 155 of book overdrafts .

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 entitles MiX Telematics to utilize a maximum amount of R 70,000 (the equivalent of $ 4,090 as of September 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.

As of September 30, 2024, the South African prime interest rate was 11.50 %.

As of September 30, 2024, $ 0 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 .

1 unchanged sentence

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”).

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 $ 20,451 as at September 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.

2 unchanged sentences

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.

As of September 30, 2024, $ 19,728 of the RMB General Facility was utilized.

Hapoalim Debt

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

As of September 30, 2024, Powerfleet Israel Ltd.

(“Powerfleet Israel”) had utilized approximately $ 12,085 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”).

In connection with the Pointer acquisition, Powerfleet Israel incurred New Israeli Shekels (“NIS”) denominated debt in term loan borrowings on October 3, 2019 under a Credit Agreement (the “Prior Credit Agreement”) with Bank Hapoalim B.M.

(“Hapoalim”), pursuant to which Hapoalim agreed to provide Powerfleet Israel with two senior secured term loan facilities in an 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.

On March 18, 2024, Powerfleet Israel and Pointer (collectively, the “Borrowers”) entered into an amended and restated credit agreement (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) (“Hapoalim Facility A” and “Hapoalim Facility B,” respectively, and, collectively, 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) (“Hapoalim Facility C” and “Hapoalim Facility D,” respectively, and, collectively, 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 Prior Credit Facilities, with the remaining proceeds 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 .

As of September 30, 2024, Pointer had utilized $ 12,085 under the Hapoalim Revolving Facilities.

The available undrawn facility balance at September 30, 2024 was $ 7,915 .

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 % .

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

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

15 unchanged sentences

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 financial covenants have been met for the quarter ending September 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.

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.

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- and six-month periods ended September 30, 2023, the Company recorded $ 29 and $ 64 , respectively, of additional deferred costs to the original debt issuance costs and the refinancing fee paid to Hapoalim.

For the three-month period ended September 30, 2024, the Company recorded $ 15 of amortization of the original debt issuance costs and the refinancing fee paid to Hapoalim.

For the six-month period ended September 30, 2024, the Company recorded a credit of $ 15 net of additional deferred costs to the original debt issuance costs and amortization of the original debt issuance costs.

The Company recorded charges of $ 133 and $ 285 to interest expense on its consolidated statements of operations for the three- and six-month periods ended September 30, 2023, respectively, and $ 591 and $ 1,246 for the three- and six-month periods ended September 30, 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 Company drew down $ 85,000 in cash under the RMB 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 GmbH (“Movingdots”), and there is a security agreement over the shares in Main Street 2000 Proprietary Limited (“MS2000”), I.D.

Systems, and Movingdots.

11 unchanged sentences

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:

The following key assumptions were used in March 31, 2024 and September 30, 2024:

Facility A Facility B

2 unchanged sentences

Credit rating B- B-

Risk free rate SOFR Spot Rate SOFR Spot rate

Risk free rate SOFR spot rate*

SOFR spot rate*

* As of March 31, 2024 and September 30, 2024, the Secured Overnight Financing Rate ( SOFR ) spot rate was 5.34 % and 4.96 % respectively .

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 .

3 unchanged sentences

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 $ 265 , while a change of +10% in credit spread volatility would result in an increase in the derivative asset of

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 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, $ 1,536 and $ 2,887 for RMB Facility A and RMB Facility B, respectively, as of September 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:

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

For the three- and six-month periods ended September 30, 2024, the Company recorded $ 69 and $ 146 , respectively, of amortization of the original debt issuance costs and the refinancing fee to RMB.

For the three- and six-month periods ended September 30, 2024, the Company recorded interest expense of $ 1,920 and $ 3,790 , respectively.

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

2025 (remaining) $ 984

4 unchanged sentences

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

2024 June 30,

2024 September 30,

Accounts payable $ 20,025 $ 41,821

4 unchanged sentences

$ 34,008 $ 66,098

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

Three Months Ended June 30,

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

Six Months Ended September 30,

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

1 unchanged sentence

Product replacements and other warranty expenditures ( 210 ) ( 202 )

Expiration of warranties ( 70 ) ( 9 )

Expiration of warranties ((over)/under warranty accrual) ( 141 ) 15

Acquired through MiX Combination — 356

2 unchanged sentences

$ 2,614 $ 3,370

(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.

(1) Includes non-current accrued warranty included in other long-term liabilities at September 30, 2023 and 2024 of $ 1,822 and $ 1,847 , 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.

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 Preferred Stock and 50 shares are undesignated.

Series A Preferred Stock

5 unchanged sentences

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.

During the three- and six-month periods ended September 30, 2023, the Company paid dividends in amounts equal to $ 1,129 and $ 2,257 , respectively, to the holders of the Series A Preferred Stock, and $ 25 during the six-month period ended September 30, 2024.

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.

1 unchanged sentence

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):

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

Foreign currency translation adjustment Accumulated other comprehensive loss

2 unchanged sentences

Net current period change ( 379 ) ( 379 )

Balance at June 30, 2024

Balance at September 30, 2024

$ ( 1,364 ) $ ( 1,364 )

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

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

Foreign currency translation adjustment Accumulated other comprehensive loss

2 unchanged sentences

Net current period change ( 806 ) ( 806 )

Balance at June 30, 2023

Balance at September 30, 2023

$ ( 1,904 ) $ ( 1,904 )

2 unchanged sentences

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

Three Months Ended June 30,

North America

$ 16,765 $ 21,392

Three Months Ended September 30, Six Months Ended September 30,

2023 2024 2023 2024

North America $ 20,212 $ 21,255 $ 36,977 $ 42,396

Israel 10,247 11,751 21,152 22,411

Africa 807 24,178 1,670 48,578

Europe and Middle East 430 9,178 1,029 17,043

Other 2,547 10,656 5,507 22,020

$ 34,243 $ 77,018 $ 66,335 $ 152,448

March 31, 2024 June 30, 2024

2024 September 30,

Long lived assets by geographic region:

North America $ 4,083 $ 8,621

$ 4,083 $ 8,716

Israel 3,946 2,804

Africa 705 31,031

Europe and Middle East 2,850 4,898

Other 1,135 4,574

$ 12,719 $ 51,928

5 unchanged sentences

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

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2023 2024 2023 2024

Domestic pre-tax book loss $ ( 4,123 ) $ ( 7,136 ) $ ( 14,312 ) $ ( 23,611 )

2 unchanged sentences

Income tax benefit (expense) ( 295 ) ( 256 ) ( 289 ) ( 1,309 )

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

Net loss before non-controlling interest

$ ( 3,548 ) $ ( 1,883 ) $ ( 6,810 ) $ ( 24,182 )

Effective tax rate ( 9.07 ) % ( 15.73 ) % ( 4.43 ) % ( 5.72 ) %

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.

For the three- and six-month periods ended September 30, 2023 and 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

12 unchanged sentences

The components of lease cost are as follows (in thousands):

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2023 2024 2023 2024

Short-term lease cost $ 119 $ 228 $ 238 $ 435

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,

Six Months Ended September 30,

Non-cash activity:

Right-of-use assets obtained in exchange for lease obligations $ 856 $ 1,262

Reduction of right-of-use assets due to MiX Combination (1)

$ — $ ( 933 )

(1) Subsequent to the MiX Combination, certain leases were terminated or modified due to the consolidation of leased space.

Weighted-average remaining lease term and discount rate for our operating leases are as follows:

September 30,

Weighted-average remaining lease term - operating leases (in years) (1)

1 unchanged sentence

(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

Scheduled maturities of operating lease liabilities outstanding as of September 30, 2024 are as follows (in thousands):

October 2024 - March 2025 $ 2,331

Thereafter 1,420

9 unchanged sentences

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

March 31, 2024 September 30, 2024

Carrying Amount Fair Value Carrying Amount Fair Value

3 unchanged sentences

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.

For the three- and six-month periods ended September 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

3 unchanged sentences

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.

(“Pointer Brazil”) received a notification of lack of payment of VAT tax (Brazilian ICMS tax) in the amount of $ 195 plus $ 1,055 of interest and penalty, totaling $ 1,347 as of March 31, 2024 and $ 1,250 a s of September 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.

In July 2015, Pointer Brazil received a tax deficiency notice alleging that th e services provided by Pointer Brazil should be classified as “telecommunication services” and therefore Pointer Brazil should be subject to the state value-added tax.

The aggregate amount claimed to be owed under the notice was approximately $ 11,770 as of September 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.

5 unchanged sentences

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.

The maximum potential liability under the arrangement as of March 31, 2024 and September 30, 2024 was $ 841 and $ 791 , respectively.

No loss is consider ed probable under this arrangement.

On August 30, 2024, Fleet Connect Solutions LLC (“Fleet Connect”) filed a complaint against the Company in the United States District Court for the Eastern District of Texas alleging infringement of a number of Fleet Connect’s patents.

The Company filed an answer to Fleet Connect’s complaint on November 8, 2024, denying the claims together with counterclaims to invalidate Fleet Connect’s patents.

The Company simultaneously filed a Section 101 motion seeking to invalidate some of the patents.

The Company is evaluating the claims with patent counsel, however based on currently available information, the Company is unable to make a reasonable estimate of loss or range of losses, if any, arising from this matter.

NOTE 23 - RECENT ACCOUNTING PRONOUNCEMENTS

9 unchanged sentences

The Company is evaluating the effect of adopting ASU 2023-09.

NOTE 24 - SUBSEQUENT EVENTS

Business Combination

On October 1, 2024, the Company consummated the acquisition of Fleet Complete (as defined below) contemplated by the Share Purchase Agreement, dated as of September 18, 2024 (as amended, the “Purchase Agreement”), by and among Golden Eagle Topco, LP (“Golden Eagle LP”), the persons that are party to the Purchase Agreement under the heading “Other Sellers” (the “Other Sellers” and, together with Golden Eagle LP, the “Sellers”), the Company and Powerfleet Canada Holdings Inc.

and a wholly owned subsidiary of the Company (the “Canadian SPV” and, together with the Company, the “Purchasers”).

The foregoing transactions are hereinafter referred to as the “FC Acquisition.”.

Pursuant to the terms the Purchase Agreement, the Purchasers acquired all of the direct and indirect common shares in the capital of Golden Eagle Canada Holdings, Inc.

(“Canada Holdco”) and Complete Innovations Holdings Inc.

(“CIH”), and all of the issued and outstanding shares of common stock of Golden Eagle Holdings, Inc.

(together with Canada Holdco and CIH, “Fleet Complete”), in exchange for payment by the Purchasers of an aggregate purchase price of $ 200 million, subject to certain customary working capital and other adjustments as described in the Purchase Agreement (as adjusted, the “Purchase Price”).

$ 15 million of the Purchase Price payable in the FC Acquisition was satisfied by the issuance of 4,285,714 shares of the Company’s common stock to an existing indirect shareholder of Fleet Complete, with the remainder paid in cash.

$ 60 million of the cash portion of the Purchase Price was funded by the Private Placement, as described below, and $ 125 million of the cash portion of the Purchase Price was funded with a senior secured term loan facility provided by RMB, as described below.

$ 3.85 million of the Purchase Price has been placed into escrow to secure purchase price adjustment payment obligations under the Purchase Agreement and certain tax liabilities.

Concurrently with the closing of the FC Acquisition, on October 1, 2024, the Company consummated the Private Placement.

$ 60 million of such gross proceeds funded a portion of the Purchase Price with the remaining $ 10 million in proceeds expected to be used by the Company for working capital and general corporate purposes.

$ 62 million, net of costs, was received by September 30, 2024, with the remaining $ 8 million received on October 1, 2024.

Given the proximity between the transaction close date and the Company’s Quarterly Report on Form 10-Q, the preliminary purchase price allocation has not yet been completed.

Management expects to complete the purchase price allocation in the third quarter of the 2025 fiscal year.

RMB Term Facility

On September 27, 2024, the Company, together with I.D.

Systems and Movingdots, each a wholly owned subsidiary of the Company, entered into a Facility Agreement (the “Facility Agreement”) with RMB, pursuant to which RMB agreed to provide the Company with a term loan facility in an aggregate principal amount of $ 125 million (the “New RMB Term Facility”).

The Company drew down the full amount of the New RMB Term Facility on October 1, 2024, and used the proceeds to pay a portion of the Purchase Price, as described above.

The Company’s obligations under the New RMB Term Facility are guaranteed, on a joint and several basis, by the Company, I.D.

Systems and Movingdots.

The New RMB Term Facility is secured by a first priority security interest over the entire share capital of I.D.

Systems, Movingdots, MS2000 and Canadian SPV, each a wholly owned subsidiary of the Company.

No other assets of the Company will serve as collateral under the New RMB Term Facility.

The New RMB Term Facility is repayable on October 31, 2029.

The New RMB Term Facility may be voluntarily prepaid at any time upon prior written notice, in whole or in part, subject to payment of a refinancing fee equal to (i) 2 % of the amount prepaid if such prepayment occurs before October 1, 2025, or (ii) 1 % of the amount prepaid if such prepayment occurs on or after October 1, 2025, but before October 1, 2026.

No refinancing fee is payable if prepayment occurs on or after October 1, 2026.

If voluntary prepayments are made in part, they must be made in minimum amounts of $ 5 million in integral multiples of $ 1 million.

In addition, the Facility Agreement provides for certain customary mandatory prepayment requirements.

In the event of any prepayment during a quarterly interest period the Company is also required to pay, or receive from, RMB an amount, such that RMB would be in the same economic position for that interest period had the prepayment only occurred at the end of such period.

The amount payable or receivable will be calculated relative to the interest that RMB would be able to obtain by placing the amount prepaid on deposit with a leading bank in the London interbank market for a period from the prepayment until the end of such interest period.

The New RMB Term Facility bears interest at 5 % per annum (or 7 %, if an event of default is occurring), plus the applicable term SOFR reference rate (or an interpolated rate if SOFR is unavailable), payable quarterly on March 31, June 30, September 30, and December 31 each year, and on October 31, 2029.

The Company paid a non-refundable deal structuring fee of $ 1.25 million to RMB on October 1, 2024.

The Company may be required to make certain indemnity-type payments to RMB should RMB’s returns on the New RMB Term Facility be lower than those envisaged, for example due to changes in tax implications and increased costs of servicing the facility.

The Facility Agreement contains certain customary affirmative and negative covenants, including financial covenants with respect to the ratio of the Company’s consolidated total net borrowings to consolidated EBITDA and the ratio of the Company’s consolidated EBITDA to consolidated total finance costs.

The Facility Agreement also includes representations, warranties, events of default and other provisions customary for financings of this type.

The occurrence of any event of default under the Facility Agreement may result in all outstanding indebtedness under the New RMB Term Facility becoming immediately due and payable.

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