What changed in this filing

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Item 1. Financial Statements

2025-02-10 compared with 2024-11-12 · 319 added, 209 removed, 739 unchanged (42% of the section changed)

4 unchanged sentences

(In thousands, except per share data)

March 31, 2024 * September 30, 2024

March 31, 2024

December 31, 2024

Current assets:

1 unchanged sentence

Restricted cash 85,310 5,011

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

Accounts receivables, net of allowance for credit losses of $ 3,197 and $ 5,483 as of March 31, 2024 and December 31, 2024, respectively

30,333 82,167

27 unchanged sentences

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

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

60 and 0 shares issued and outstanding at March 31, 2024 and December 31, 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 109,884 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

38,709 and 134,556 s hares issued at March 31, 2024 and December 31, 2024, respectively;

shares outstanding, 37,212 and 132,493 at March 31, 2024 and December 31, 2024, respectively

Additional paid-in capital 202,607 669,492

2 unchanged sentences

Treasury stock;

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

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

( 8,682 ) ( 11,518 )

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Total liabilities, convertible redeemable preferred stock, and stockholders’ equity $ 308,680 $ 908,669

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

See accompanying notes to condensed consolidated financial statements.

3 unchanged sentences

(In thousands, except per share data)

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

(As Restated) 2024 2023 2024

Three Months Ended December 31, Nine Months Ended December 31,

2024 2023 2024

Products $ 12,916 $ 24,687 $ 37,232 $ 63,718

10 unchanged sentences

Total operating expenses 21,347 60,026 60,969 158,679

(Loss)/profit from operations

Loss from operations

( 3,968 ) ( 1,243 ) ( 10,467 ) ( 18,905 )

2 unchanged sentences

Bargain purchase - Movingdots 1,517 — 1,800 —

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

Other expense, net

( 8 ) ( 2,011 ) ( 32 ) ( 961 )

Net loss before income taxes ( 3,563 ) ( 10,837 ) ( 10,086 ) ( 33,710 )

Income tax expense

Income tax benefit/(expense)

92 ( 3,513 ) ( 197 ) ( 4,821 )

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(In thousands)

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

(As Restated) 2024 2023 2024

Three Months Ended December 31, Nine Months Ended December 31,

2024 2023 2024

Net loss attributable to common stockholders $ ( 6,510 ) $ ( 14,349 ) $ ( 19,190 ) $ ( 38,573 )

Foreign currency translation adjustment 1,288 ( 6,214 ) 482 ( 6,593 )

Total other comprehensive income ( 906 ) ( 797 ) ( 806 ) ( 379 )

Total other comprehensive income/(loss)

1,288 ( 6,214 ) 482 ( 6,593 )

Comprehensive loss $ ( 5,222 ) $ ( 20,563 ) $ ( 18,708 ) $ ( 45,166 )

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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

Net loss attributable to common stockholders — — — ( 14,349 ) — — — ( 14,349 )

Net income attributable to non-controlling interest — — — — — — ( 1 ) ( 1 )

Foreign currency translation adjustment — — — — ( 6,214 ) — ( 4 ) ( 6,218 )

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

20,000 200 4,408 — — — — 4,608

Shares issued in connection with FC Acquisition

4,286 43 21,300 — — — — 21,343

Exercise of stock options

161 — 910 — — — — 910

Stock based compensation

— — 1,138 — — — — 1,138

Issue of stock appreciation rights

225 — — — — — — —

Balance as of December 31, 2024

134,556 1,339 669,492 ( 193,345 ) ( 7,578 ) ( 11,518 ) 151 458,541

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

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

Net loss attributable to common stockholders

— — ( 3,007 ) ( 3,503 ) — — — ( 6,510 )

Net income attributable to non-controlling interest

— — — — — — 32 32

Foreign currency translation adjustment — — — — 1,288 — 7 1,295

Issuance of restricted shares

28 2 ( 2 ) — — — — —

Forfeiture of restricted shares

( 11 ) ( 2 ) 2 — — — — —

Shares withheld pursuant to vesting of restricted stock

— — — — — ( 3 ) — ( 3 )

Stock-based compensation — — 1,123 — — — — 1,123

Balance as of December 31, 2023

38,716 387 212,703 ( 146,281 ) ( 616 ) ( 8,651 ) 102 57,644

See accompanying notes to condensed consolidated financial statements.

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(In thousands)

Six Months Ended September 30,

Nine Months Ended December 31,

Cash flows from operating activities

Net loss $ ( 10,321 ) $ ( 38,548 )

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

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

Non-controlling interest 38 17

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Accrued severance payable, net ( 21 ) ( 562 )

Net cash used in operating activities ( 2,072 ) ( 10,792 )

Net cash provided by/(used in) operating activities

2,642 ( 16,886 )

Cash flows from investing activities

Acquisition, net of cash assumed

— ( 137,112 )

Proceeds from sale of fixed assets — 256

2 unchanged sentences

Repayment of loan advanced to external parties — 294

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

Net cash used in investing activities

( 5,313 ) ( 160,479 )

Cash flows from financing activities

3 unchanged sentences

( 97 ) ( 2,836 )

Repayment of financing lease

Payment of preferred stock dividend and redemption of preferred stock ( 3,385 ) ( 90,298 )

Proceeds from private placement, net

Proceeds from long-term debt

Payment of long-term debt costs

Proceeds from exercise of stock options, net 36 912

Cash paid on dividends to affiliates — ( 6 )

Net cash from/(used in) financing activities 25 ( 22,312 )

Net cash (used in)/provided by financing activities

( 2,332 ) 107,568

Effect of foreign exchange rate changes on cash and cash equivalents ( 754 ) ( 1,222 )

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

Shares issued in connection with FC Acquisition

Value of licensed intellectual property acquired in connection with Movingdots acquisition

Preferred stock dividends paid in shares

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

September 30, 2024

December 31, 2024

In thousands (except per share data)

2 unchanged sentences

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.

(the “Company” or “Powerfleet”) is a global leader of Artificial Intelligence-of-Things (“AIoT”) 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.

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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 six months ended September 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 nine months ended December 31, 2024 include the financial results of MiX Telematics and its subsidiaries from the Implementation Date.

See Note 3 for additional information.

On October 1, 2024, the Company consummated the transactions contemplated by the Share Purchase Agreement, dated as of September 18, 2024 (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., a wholly owned subsidiary of the Company (the “Canadian SPV” and, together with the Company, the “Purchasers”), pursuant to which 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”).

As a result, Fleet Complete became an indirect, wholly owned subsidiary of the Company (the “FC Acquisition”).

The consolidated financial statements as of and for the three months ended December 31, 2024 include the financial results of Fleet Complete and its subsidiaries from October 1, 2024.

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.

The unaudited 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 on consolidation.

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.

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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 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.

In the opinion of management, these unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and 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 December 31, 2024, the consolidated results of its operations for the three- and nine-month periods ended December 31, 2023 and 2024, the consolidated change in stockholders’ equity for the three- and nine-month periods ended December 31, 2023 and 2024, and the consolidated cash flows for the nine-month periods ended December 31, 2023 and 2024.

The results of operations for the three- and nine-month periods ended December 31, 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.

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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.

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”) resulted 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.

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Going Concern

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

As of December 31, 2024, the Company had cash and cash equivalents and restricted cash of $ 38,645 and working capital of $ 30,506 .

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 $ 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.

Management believes the Company’s cash, cash equivalents, and restricted cash of $ 38,645 as of December 31, 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 ( February 10, 2025) 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;

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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.

Such management estimates include, but are not limited 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, standalone selling prices (“SSP”), valuation of the derivative asset, and market-based stock-based compensation costs.

Actual results could differ materially from those estimates and assumptions made.

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.

MiX Combination

On April 2, 2024, the Company consummated the MiX Combination, pursuant to which 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.

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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;

• The majority of the Company’s board of directors is composed of directors with prior affiliation to the Company.

In addition the Company’s Chairperson continued in the role following the MiX Combination;

• Following the MiX Combination the majority of the senior management team, including the Chief Executive Officer, comprised the Company’s senior management team who were already operating in that capacity for the Company prior to the MiX Combination;

• 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.

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

Additionally, the Company also notes that, immediately following the closing of the MiX Combination, 30 % 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 % 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.

• create a mobile asset AIoT 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;

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• 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 $ 362,005 as of the Implementation Date, which consisted of the following:

The estimated fair value of the consideration transferred for MiX Telematics was $ 369,823 as of the Implementation Date, which consisted of the following:

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

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Exchange ratio 0.12762

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

Shares of Powerfleet common stock issued for MiX Telematics ordinary shares outstanding

Powerfleet stock price* 5.12

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** 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

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.

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):

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Purchase price consideration $ 369,823

The fair values of the assets acquired and liabilities assumed, including the identifiable assets acquired, have been 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 values, 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.

The initial accounting for the business combination is complete at the reporting date.

The fair values of the identifiable assets acquired and liabilities assumed are final and therefore, adjustments to them and the resulting goodwill will not occur in future.

Acquired Identifiable Intangible Assets

The following table sets forth the 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 $ 20,571 of acquisition-related costs in the consolidated statements of operations related to the MiX Combination, $ 128 of which was expensed in the three-month period ended December 31, 2024 and $ 14,771 of which was expensed in the nine-month period ended December 31, 2024.

Unaudited Pro Forma Financial Information

The business acquired in the MiX Combination contributed revenue of $ 42,818 and a net profit of $ 1,098 for the three-month period ended December 31, 2024 and revenue of $ 130,332 and a net loss of $ 3,827 for the nine-month period ended December 31, 2024.

FC Acquisition

On October 1, 2024 (the “FC Closing Date”), the Company consummated the FC Acquisition, pursuant to which Fleet Complete became an indirect, wholly owned subsidiary of the Company in exchange for payment by the Purchasers of an aggregate purchase price of $ 190,000 , subject to certain customary working capital and other adjustments as described in the Purchase Agreement (as adjusted, the “Purchase Price”).

The FC Acquisition met the criteria for a business combination to be accounted for using the acquisition method under ASC 805, Business Combinations, with the Company identified as the legal and the accounting acquirer.

The acquisition of Fleet Complete and its business will, among other things:

• strengthen Powerfleet’s North American presence and fuel top-line growth in key international markets, including Europe and Australia.

The integration of Fleet Complete’s high-velocity mid-market business with Powerfleet’s enterprise operations creates a balanced and resilient business model across regions, reducing risk and enhancing growth potential;

• open significant cross-selling opportunities through Fleet Complete’s well-established indirect channel relationships, especially with major United States and Canadian telecommunication carriers, offering considerable growth potential;

• strengthen Powerfleet’s strategic position as a leader in the AIoT SaaS market.

The increased scale solidifies Powerfleet’s enhanced competitive position relative to the other largest players in the industry.

The preliminary estimated fair value of the consideration transferred for the FC Acquisition was $ 189,950 as of the FC Closing Date, which consisted of the following:

(in thousands, except for share price)

Shares of Powerfleet common stock issued

Powerfleet stock price* 4.98

Fair value of Powerfleet common stock transferred

Cash consideration to former shareholders

Repayment of Fleet Complete’s existing debt

Total fair value of preliminary consideration 189,950

* Powerfleet’s closing share price on October 1, 2024.

$ 60,000 of the cash portion of the Purchase Price was funded by the Private Placement, as described below, and $ 125,000 of the cash portion of the Purchase Price was funded with a senior secured term loan facility provided by FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB”), as described in Note 13 below.

Concurrently with the closing of the FC Acquisition, on October 1, 2024, the Company consummated a private placement contemplated by 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 issued to such Investors, an aggregate of 20,000 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”).

$ 60,000 of such gross proceeds funded a portion of the Purchase Price with the remaining $ 10,000 in proceeds expected to be used by the Company for working capital and general corporate purposes.

$ 62,000 , net of costs, was received by September 30, 2024, with the remaining $ 8,000 , net of costs, received on October 1, 2024.

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 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:

Cash and cash equivalents $ 3,964

Accounts receivable, net 19,990

Inventory, net 6,598

Prepaid expenses and other current assets 9,144

Fixed assets, net 3,693

Intangible assets, net 101,261

Identifiable intangible assets acquired

Computer software

Right-of-use asset 2,823

Deferred tax assets 1,897

Total assets acquired $ 153,925

Liabilities assumed:

Accounts payable and accrued expenses 30,857

Deferred revenue - current 3,088

Lease liability - current 2,965

Deferred revenue - less current portion

Lease liability - less current portion 75

Accrued severance payable

Other long-term liabilities 405

Total liabilities assumed $ 38,724

Total identifiable net assets acquired $ 115,201

Goodwill 74,749

Purchase price consideration $ 189,950

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.

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.

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 October 1, 2024 becomes available and final valuation and analysis are completed.

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 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.

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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.

matters related to the acquisition.

Adjustments to initial preliminary fair value of the assets acquired and assumed liabilities during the measurement period until October 1, 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).

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• 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.

The Company will finalize the purchase price allocation no later than one year from the acquisition date.

Acquired Identifiable Intangible Assets

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Acquisition-Related Expenses

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.

The Company expensed a total of $ 5,299 of acquisition-related costs in the consolidated statements of operations related to the FC Acquisition, $ 4,032 of which was expensed in the three-month period ended December 31, 2024 and $ 5,299 of which was expensed in the nine-month period ended December 31, 2024.

Unaudited Pro Forma Financial Information

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 .

If the business acquired in the FC Acquisition was acquired on April 1, 2024, it would have contributed revenue of $ 29,937 and a net profit of $ 838 for the three-month period ended December 31, 2024 and revenue of $ 90,318 and a net loss of $ 20,597 for the nine-month period ended December 31, 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 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.

Restricted cash at March 31, 2024 consisted of escrow amounts of $ 85,000 for a facilities agreement (the “Facilities Agreement”) with RMB deposited in escrow

for the MiX Combination and cash of $ 310 held in escrow for purchases from a vendor.

Restricted cash at December 31, 2024 consists of cash of $ 3,855 held in escrow related to the FC Acquisition to secure purchase price adjustment payment obligations under the Purchase Agreement and certain tax liabilities, cash of $ 310 held in escrow for purchases from a vendor, cash of $ 794 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 $ 51 issued in respect of property lease agreements entered into by MiX Telematics Australasia.

NOTE 5 - REVENUE RECOGNITION

9 unchanged sentences

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.

When another party is involved in providing products or services to the end customer, the Company evaluates the nature of its promise to determine whether it is acting as an agent or principal in the sales transaction.

The Company considers itself acting as a principal if it controls the specified products or services before they are transferred to the end customers, otherwise the Company is acting as an agent.

The Company determines control as the ability to direct the use of, and obtain substantially all of the remaining benefits from, the products or services.

Control includes the ability to prevent others from directing the use of, and obtaining the benefits from, the products or services.

Revenue is recognized based on the gross amount of consideration to which the Company expects to be entitled to in exchange for the specified products or services when acting as a principal and is recognized based on any fee or commission to which it expects to be entitled to in exchange for arranging for the specified products or services to be provided by the other party.

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.

15 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.

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 and six months ended September 30, 2023 and 2024 (in thousands):

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

The following table presents the Company’s revenues disaggregated by revenue source for the three and nine months ended December 31, 2023 and 2024 (in thousands):

Three Months Ended December 31, Nine Months Ended December 31,

2023 2024 2023 2024

2 unchanged sentences

$ 34,550 $ 106,429 $ 100,884 $ 258,877

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

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

March 31, 2024 December 31, 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 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.

For the three-month periods ended December 31, 2023 and 2024, the Company recognized revenue of $ 914 and $ 5,605 , respectively, which was included in the deferred revenue balance at the beginning of each reporting period.

For the nine-month periods ended December 31, 2023 and 2024, the Company recognized revenue of $ 3,832 an d $ 9,863 , 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 September 30, 2023 and 2024 is as follows (in thousands):

Six Months Ended September 30,

An analysis of the allowance for credit losses for the periods ended December 31, 2023 and 2024 is as follows (in thousands):

Nine Months Ended December 31,

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

Adjustment for adoption of ASU 2016-13

Current period provision for expected credit losses 1,339 7,229

2 unchanged sentences

Foreign currency translation 289 ( 63 )

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

Allowance for credit losses, December 31

$ 2,797 $ 5,483

NOTE 7 - PREPAID EXPENSES AND OTHER ASSETS

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

2024 September 30,

2024 December 31,

Sales-type lease receivables, current $ 1,100 $ 1,096

9 unchanged sentences

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 a nd $ 1,330 at September 30, 2024.

Inventory is shown net of a valuation reserve of $ 538 at March 31, 2024 a nd $ 758 at December 31, 2024.

Inventories consist of the following (in thousands):

2024 September 30,

2024 December 31,

Components $ 9,403 $ 10,434

4 unchanged sentences

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

2024 September 30,

2024 December 31,

Installed and uninstalled products $ 11,030 $ 52,506

8 unchanged sentences

$ 12,719 $ 55,257

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.

Depreciation and amortization expense for the three- and nine-month periods ended December 31, 2023 was $ 1,200 and $ 2,838 , respectively, and for the three- and nine-month periods ended December 31, 2024 was $ 4,586 and $ 14,653 , 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 September 30, 2024 (in thousands):

September 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 December 31, 2024 (in thousands):

December 31, 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 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.

At December 31, 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 , 4.7 , and 5.0 years, res pectively.

Amortization expense for the three- and nine-month periods ended December 31, 2023 was $ 1,148 and $ 4,317 , respectively, and for the three- and nine-month periods ended December 31, 2024 was $ 8,966 and $ 18,389 , respectively.

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

1 unchanged sentence

Thereafter 122,082

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.

Refer to Note 3 for the change in the carrying amount of goodwill from April 1, 2024 to December 31, 2024 as a result of the MiX Combination and FC Acquisition.

For the nine-month period ended December 31, 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.

During the three-month periods ended September 30, 2024 and December 31, 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 six-month period ended September 30, 2024:

The following table summarizes the activity relating to the Company’s market-based stock options for the nine-month period ended December 31, 2024:

Options Weighted-

5 unchanged sentences

Forfeited ( 50 ) 3.13 — —

Outstanding as of September 30, 2024

Outstanding as of December 31, 2024

5,395 13.48 7.21 $ 4,414

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:

Vested as of December 31, 2024

The following table summarizes the activity relating to the Company’s stock options, excluding the market-based stock options, for the nine-month period ended December 31, 2024:

Options Weighted-

5 unchanged sentences

Forfeited ( 86 ) 5.14 — —

Outstanding as of September 30, 2024

Outstanding as of December 31, 2024

2,107 4.54 6.84 $ 4,496

Vested as of September 30, 2024

Vested as of December 31, 2024

1,807 4.58 6.41 $ 3,791

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:

September 30, 2023 September 30, 2024

December 31, 2023 December 31, 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 $ 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 Company recorded stock-based compensation expense of $ 728 and $ 2,094 for the three- and nine-month periods ended December 31, 2023, respectively, and $ 479 and $ 2,884 for the three- and nine-month periods ended December 31, 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.

1 unchanged sentence

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 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.

The fair value of options vested during the nine-month periods ended December 31, 2023 and 2024 was $ 391 and $ 1,652 , respectively.

There were no option exercises that occurred during the nine-month periods ended December 31, 2023 and 2024.

As of December 31, 2024, there was $ 782 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 1.09 years.

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.

As of December 31, 2024, there was $ 2,644 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 2.11 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 unvested restricted stock for the six-month period ended September 30, 2024 is as follows:

A summary of all unvested restricted stock for the nine-month period ended December 31, 2024 is as follows:

Unvested Shares

3 unchanged sentences

Granted 54 5.45

Vested ( 1,370 ) 2.68

Vested/Exercised

( 1,370 ) 2.68

Forfeited or expired — —

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.

Unvested, December 31, 2024

The Company recorded stock-based compensation expenses of $ 395 and $ 982 for the three- and nine-month periods ended December 31, 2023, respectively, and $ 74 and $ 3,240 for the three- and nine-month periods ended December 31, 2024, respectively, in connection with restricted stock grants.

As of December 31, 2024, there was $ 109 of total unrecognized compensation cost related to unvested shares.

That cost is expected to be recognized over a weighted-average period of 0.37 years.

11 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- and six-month periods ended September 30, 2024 was $ 637 and $ 1,600 , respectively.

The total stock-based compensation expense recognized during the three- and nine-month periods ended December 31, 2024 was $ 637 and $ 2,289 , respectively.

The following table summarizes the activities for the outstanding SARs:

5 unchanged sentences

Forfeited ( 498 ) 2.43

Outstanding as of September 30, 2024

Outstanding as of December 31, 2024

3,899 2.51 3.10

Vested as of September 30, 2024

Vested as of December 31, 2024

1,293 2.92 1.80 $ 4,847

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

As of December 31, 2024, there was $ 6,211 of unrecognized compensation cost related to unvested SARs.

This amount is expected to be recognized over a weighted-average period of 2.86 years.

NOTE 12 - NET LOSS PER SHARE

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,

Net loss per share for the three- and nine-month periods ended December 31, 2023 and 2024 are as follows:

Three Months Ended December 31, Nine Months Ended December 31,

2023 2024 2023 2024

11 unchanged sentences

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

2024 September 30,

2024 December 31,

Short-term bank debt $ — $ 30,412

2 unchanged sentences

Short-Term Bank Debt

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 $ 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 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 .

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

As of December 31, 2024, short-term debt comprised $ 30,180 of borrowing facilities and $ 232 of book overdrafts .

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 $ 20,451 as at September 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 $ 18,673 as at December 31, 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.

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

As of December 31, 2024, $ 15,944 of the RMB General Facility was utilized.

Hapoalim Debt

As of September 30, 2024, Powerfleet Israel Ltd.

As of December 31, 2024, Powerfleet Israel Ltd.

(“Powerfleet Israel”) had utilized approximately $ 14,236 under the Hapoalim Revolving Facilities, which are described below .

4 unchanged sentences

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

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.

On March 18, 2024, Powerfleet Israel and Pointer (collectively, the “Borrowers”) entered into an amended and restated credit agreement (as amended, 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”).

1 unchanged sentence

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

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 .

On December 30, 2024, the Borrowers entered into an amendment to the A&R Credit Agreement, which increases the principal amount available under Hapoalim Facility D from $ 10,000 to $ 20,000 and provides that the total principal amount of Hapoalim Facility D may be distributed to the Company or any of its subsidiaries by no later than December 31, 2025, subject to certain terms and conditions of the A&R Credit Agreement.

As of December 31, 2024, Pointer had utilized $ 14,236 under the Hapoalim Revolving Facilities.

The available undrawn facility balance at December 31, 2024 was $ 15,764 .

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 September 30, 2024 was 6 % .

Hapoalim’s prime rate at December 31, 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 September 30, 2024.

The financial covenants have been met for the quarter ending December 31, 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.

1 unchanged sentence

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.

The proceeds of the Hapoalim Term Facilities ($ 40,000 ), less the prepayment of the term loans under the Prior Credit Facility (approximately $ 11,200 ), amounting to approximately $ 28,800 , has been recognized as an increase in the carrying value of the prior term loans that was recognized previously.

For the three- and nine-month periods ended December 31, 2023, the Company recorded $ 26 and $ 90 , respectively, of additional deferred costs to the original debt issuance costs and the refinancing fee paid to Hapoalim.

For the three-month period ended December 31, 2024, the Company recorded $ 22 of amortization of the original debt issuance costs and the refinancing fee paid to Hapoalim.

For the nine-month period ended December 31, 2024, the Company recorded a cost of $ 7 net of additional deferred costs and credit to the original debt issuance costs and amortization of the original debt issuance costs.

The Company recorded charges of $ 127 and $ 412 to interest expense on its consolidated statements of operations for the three- and nine-month periods ended December 31, 2023, respectively, and $ 592 and $ 1,838 for the three- and nine-month periods ended December 31, 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”).

15 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.

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

The following key assumptions were used in December 31, 2024:

Facility A Facility B

4 unchanged sentences

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 .

As of March 31, 2024 and December 31, 2024, the Secured Overnight Financing Rate ( SOFR ) spot rate was 5.34 % and 4.49 %, 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 $ 148 , while a change of +10% in credit spread volatility would result in an increase in the derivative asset of $ 187 .

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 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, $ 795 and $ 1,906 for RMB Facility A and RMB Facility B, respectively, as of December 31, 2024.

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

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:

For the three- and nine-month periods ended December 31, 2024, the Company recorded $ 33 and $ 179 , respectively, of amortization of the original debt issuance costs and the refinancing fee to RMB.

For the three- and nine-month periods ended December 31, 2024, the Company recorded interest expense of $ 1,920 and $ 5,710 , respectively.

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 $ 125,000 (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 in connection with the FC Acquisition.

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 will mature on the last business day of the month that is five years following the closing date of the Facility Agreement (the “Maturity Date”).

The New RMB Term Facility does not amortize and will be payable on the Maturity Date.

Borrowings under 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 (provided no event of default is continuing), plus the applicable term SOFR reference rate (or an interpolated rate if SOFR is unavailable), payable quarterly in arrears on March 31, June 30, September 30, and December 31 each year, and on October 31, 2029.

The stated interest rate at December 31, 2024 was 9.59 %.

The Company paid a non-refundable deal structuring fee of $ 1,250 to RMB on October 1, 2024.

Total debt issuance costs, including the $ 1,250 non-refundable deal structuring fee to RMB, of approximately $ 1,433 were incurred.

For the three- and nine-month periods ended December 31, 2024, the Company recorded $ 56 and $ 56 , respectively of amortization of these costs.

For the three- and nine-month periods ended December 31, 2024, the Company recorded $ 3,031 and $ 3,031 , respectively, of interest expense.

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 RMB Term Facility becoming immediately due and payable.

Scheduled contractual maturities of the long-term debt as of December 31, 2024 are as follows:

2025 (remaining) $ 501

Current portion ( 4,184 )

Plus debt costs and prepayment 828

Less debt costs and prepayment

Total $ 233,750

1 unchanged sentence

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

2024 September 30,

2024 December 31,

Accounts payable $ 20,025 $ 41,916

4 unchanged sentences

$ 34,008 $ 86,481

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

Six Months Ended September 30,

The following table summarizes warranty activity for the nine months ended December 31, 2023 and 2024 (in thousands):

Nine Months Ended December 31,

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

1 unchanged sentence

Product replacements and other warranty expenditures ( 343 ) ( 372 )

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

Acquired through MiX Combination — 356

Expiration of warranties (over warranty accrual)

( 110 ) ( 127 )

Acquired through MiX Combination and FC Acquisition

Foreign currency translation difference — 108

1 unchanged sentence

$ 2,653 $ 3,635

(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.

(1) Includes non-current accrued warranty included in other long-term liabilities at December 31, 2023 and 2024 of $ 1,688 and $ 2,175 , respectively.

NOTE 15 - STOCKHOLDERS' EQUITY

7 unchanged sentences

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- 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.

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- and nine-month periods ended December 31, 2023, the Company paid dividends in amounts equal to $ 1,129 and $ 3,385 , respectively, to the holders of the Series A Preferred Stock, and $ 25 during the nine-month period ended December 31, 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 six-month period ended September 30, 2024 are as follows (in thousands):

The accumulated balances for each classification of other comprehensive loss for the nine-month period ended December 31, 2024 are as follows (in thousands):

Foreign currency translation adjustment Accumulated other comprehensive loss

2 unchanged sentences

Net current period change ( 6,593 ) ( 6,593 )

Balance at September 30, 2024

Balance at December 31, 2024

$ ( 7,578 ) $ ( 7,578 )

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

The accumulated balances for each classification of other comprehensive loss for the nine-month period ended December 31, 2023 are as follows (in thousands):

Foreign currency translation adjustment Accumulated other comprehensive loss

2 unchanged sentences

Net current period change 482 482

Balance at September 30, 2023

Balance at December 31, 2023

$ ( 616 ) $ ( 616 )

NOTE 17 - SEGMENT INFORMATION

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

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

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

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

Three Months Ended December 31, Nine Months Ended December 31,

2023 2024 2023 2024

3 unchanged sentences

Europe and Middle East 660 13,004 1,689 30,047

— 9,290 — 20,851

Other 3,548 5,047 9,052 15,505

$ 34,550 $ 106,429 $ 100,884 $ 258,877

2024 September 30,

2024 December 31,

Long lived assets by geographic region:

7 unchanged sentences

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.

This AETR is applied to the year-to-date consolidated pre-tax income to determine the estimated 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.

1 unchanged sentence

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

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

Three Months Ended December 31, Nine Months Ended December 31,

2023 2024 2023 2024

6 unchanged sentences

Effective tax rate 2.58 % ( 32.42 ) % ( 1.95 ) % ( 14.30 ) %

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.

For the three- and nine-month periods ended December 31, 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 September 30, Six Months Ended September 30,

Three Months Ended December 31, Nine Months Ended December 31,

2023 2024 2023 2024

1 unchanged sentence

Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows (in thousands):

Six Months Ended September 30,

Nine Months Ended December 31,

Non-cash activity:

4 unchanged sentences

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 September 30, 2024 are as follows (in thousands):

October 2024 - March 2025 $ 2,331

Scheduled maturities of operating lease liabilities outstanding as of December 31, 2024 are as follows (in thousands):

January 2025 - March 2025

Thereafter 2,360

4 unchanged sentences

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 finance lease 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 September 30, 2024

March 31, 2024 December 31, 2024

Carrying Amount Fair Value Carrying Amount Fair Value

3 unchanged sentences

NOTE 21 - CONCENTRATION OF CUSTOMERS

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.

For the three- and nine-month periods ended December 31, 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 $ 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.

(“Pointer Brazil”) received a notification of lack of payment of VAT tax (Brazilian ICMS tax) in the amount of $ 171 plus $ 946 of interest and penalty, totaling $ 1,347 as of March 31, 2024 and $ 1,117 as of December 31, 2024.

The Company is vigorously defe nding 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.

1 unchanged sentence

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.

The aggregate amount claimed to be owed under the notice was approximately $ 6,405 as of December 31, 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.

2 unchanged sentences

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.

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.

For this reason, the Company has not m ade any provision.

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 September 30, 2024 was $ 841 and $ 791 , respectively.

The maximum potential liability under the arrangement as of March 31, 2024 and December 31, 2024 was $ 841 and $ 661 , respectively.

No loss is consider ed probable under this arrangement.

14 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.

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.

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 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.

In November 2024, the FASB issued Accounting Standards Update No.

2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses ” (“ASU 2024-03”), which requires disclosure in a tabular format, on an annual and interim basis, purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion for each income statement line item that contains those expenses.

The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, on a retrospective or prospective basis .

Early adoption is permitted.

The Company is evaluating the effect of adopting ASU 2024-3.

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