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Item 1A. Risk Factors

2025-06-26 compared with 2024-05-09 · 411 added, 1079 removed, 25 unchanged (98% of the section changed)

In addition to the other information contained in this Form 10-K, the following risk factors should be considered carefully in evaluating the Company’s business.

Our business, financial condition or results of operations could be materially and adversely affected by any of these risks.

Additional risks not presently known to the Company or that the Company currently deems immaterial may also adversely affect our business, financial condition or results of operations.

The summary below is not exhaustive, and investors should read this “Risk Factors” section in full.

These and other risks are described in more detail in this Item 1A.

Risk Factors.

addition to the other information contained in this Form 10-K, the following risk factors should be considered carefully

in evaluating the Company’s business.

Our business, financial condition or results of operations could be materially and adversely

affected by any of these risks.

Additional risks not presently known to the Company or that the Company currently deems immaterial may

also adversely affect our business, financial condition or results of operations.

Factor Summary

business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors”

immediately following this summary.

Risk Factor Summary

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this summary.

These risks include, among others, the following:

may not realize the anticipated benefits and cost savings of the MiX Combination.

our business and MiX Telematics’ business may be more difficult, time-consuming or costly than expected.

market price for shares of our common stock may decline as a result of the MiX Combination, including as a result of some of our

stockholders adjusting their portfolios.

MiX Combination may not be accretive, and may be dilutive, to the combined company’s earnings per share, which may negatively

affect the market price of shares of our common stock.

have incurred significant losses and have a substantial accumulated deficit.

If we cannot achieve profitability, the market price

of our common stock could decline significantly.

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

financial condition and results of operations.

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

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

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

Inaccurate output from artificial intelligence could result in brand

and reputation damage.

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

and our customers’ access to our services.

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

adverse effect on our financial condition and results of operations.

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

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

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

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

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

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

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

rely significantly on channel partners to sell our products, and disruptions to, or our failure to develop and manage our channel

partners would harm our business.

we are unable to protect our intellectual property rights, our financial condition and results of operations could be materially

and adversely affected.

have been, and may continue to become, involved in intellectual property disputes that could subject us to significant liability and divert the time and attention

of our management and prevent us from selling our products.

• We may not realize all of the anticipated benefits of the MiX Combination and the FC Acquisition, and the continued integration of the businesses may involve challenges that could adversely affect our business, financial condition and results of operations.

• We have incurred significant losses and have a substantial accumulated deficit.

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

• We are an international company and may be susceptible to several political, economic, trade and geographic risks that could harm our business.

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

• Disruptions in our global supply chain or failures by subcontractors could materially and adversely affect our business, financial condition and results of operations.

• If we are unable to keep up with rapid technological change, we may be unable to meet the needs of our customers.

• Inaccurate output from AI could result in brand and reputation damage.

• We are subject to breaches of our information technology systems, which could damage our reputation, vendor, and customer relationships, and our customers’ access to our services.

• The industry in which we operate is highly competitive, and competitive pressures from existing and new companies.

• Failure to correctly and efficiently implement ERP and customer relationship management (“CRM”) systems could have a material and adverse effect on our business.

• The international scope of our business exposes us to risks associated with foreign exchange rates, currency fluctuations and economic instability in certain emerging markets.

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

• We rely significantly on third-party channel partners, including telecommunication companies and regional distributors, for market access and sales execution, and any disruption to, or our failure to develop and manage, our channel partners would harm our business.

• Failure to adequately protect our intellectual property rights or defend against third-party claims could materially and adversely affect our business, financial condition and results of operations.

• In connection with the MiX Combination and the FC Acquisition, we have incurred significant additional indebtedness to finance the redemption of our then-outstanding Series A convertible preferred stock and the acquisition of Fleet Complete.

• Our Israeli subsidiaries have incurred significant indebtedness.

The terms of the A&R Credit Agreement restrict

Powerfleet Israel’s and Pointer’s current and future operations, particularly their ability to respond to changes or

take certain actions.

In connection with the MiX Combination, we have incurred

significant additional indebtedness to finance the redemption of our Series A preferred stock.

The restatement of our previously issued consolidated financial statements and the related analysis and ongoing remedial

measures have been time-consuming and expensive and could expose us to additional risks that could materially adversely affect our financial

position, results of operations and cash flows.

In connection with the preparation of our annual financial statements for the fiscal year ended December 31, 2023,

we identified material weaknesses in our internal control over financial reporting.

Any failure to maintain effective internal control

over financial reporting could harm us.

rely on subcontractors to manufacture and deliver our products.

manufacturers rely on a limited number of suppliers for several significant components used in our products.

federal government or independent standards organizations may implement significant regulations or standards that could adversely

affect our ability to produce or market our products.

our products are complex, they may have undetected errors or failures when they are introduced, which could seriously harm our business,

and our product liability insurance may not adequately protect us.

in practices of insurance companies in the markets in which we provide and sell our SVR services and products could adversely affect

our revenues and growth potential.

decline in sales of consumer or commercial vehicles in the markets in which we operate could result in reduced demand for our products

and services.

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

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

use of our products is subject to international regulations.

adoption of industry standards that do not incorporate the technology we use may decrease or eliminate the demand for our services

or products and could harm our results of operations.

financial statements may not reflect certain payments we may be required to make to employees.

of our employees in our subsidiaries are members of labor unions and a dispute between us and any such labor union could result in

a labor strike that could delay or preclude altogether our ability to generate revenues in the markets where such employees are located.

the current laws in jurisdictions in which we operate, we may not be able to enforce non-compete covenants and therefore may be unable

to prevent our competitors from benefiting from the expertise of some of our former employees.

Manufacturing

of many of our products is highly complex, and an interruption by suppliers, subcontractors or vendors could adversely affect our

business, financial condition or results of operations.

we lose our executive officers, or are unable to recruit additional personnel, our ability to manage our business could be materially

and adversely affected.

provide financing to our customers for the purchase of our products, which may increase our credit risks in the event of a deterioration

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

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

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

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

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

uncertainty and volatility in Mexico may adversely affect our business.

Fluctuations in the value of the South African Rand may have a significant

impact on our reported revenue and results of operations, which may make it difficult to evaluate our business performance between reporting

If we do not achieve applicable Broad-Based Black Economic Empowerment objectives in our South African businesses, we risk not being able to renew certain of our existing contracts

which service South African government and quasi-governmental customers, as well as not being awarded future corporate and governmental

contracts, each of which would result in the loss of revenue.

Socio-economic inequality in South Africa or regionally may subject

us to political and economic risks, which may affect the ownership or operation of our business.

concentration of common stock ownership among our executive officers and directors could limit the ability of other stockholders

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

sales of our common stock, including sales of our common stock acquired upon the exercise of outstanding options, may cause the market

price of our common stock to decline.

Amended and Restated Certificate of Incorporation, as amended provides that the Court of Chancery of the State of Delaware will be the exclusive forum for certain legal actions between

us and our stockholders, which could limit stockholders’ ability to obtain a judicial forum viewed by the stockholders as more

favorable for disputes with us or our directors, officers or employees, and the enforceability of the exclusive forum provision may

be subject to uncertainty.

of Delaware law or the Charter could delay or prevent an acquisition of the Company, even if the acquisition would be beneficial

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

Related to Our Business

may not realize the anticipated benefits and cost savings of the MiX Combination.

The success of the

MiX Combination will depend, in part, on our ability to realize the anticipated benefits and cost savings from combining the two businesses.

Our ability to realize these anticipated benefits and cost savings is subject to certain risks, including, among others:

parties’ ability to successfully combine their respective businesses;

risk that the combined businesses will not perform as expected;

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

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

companies and leveraging scale, and creating value resulting from the combination of the two businesses;

possibility that the aggregate consideration being paid for MiX Telematics is greater than the value we will derive from the MiX

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

incurrence of additional indebtedness in connection with the MiX Combination and the resulting limitations placed on the combined

company’s operations;

assumption of known and unknown liabilities of MiX Telematics, including potential tax and employee-related liabilities.

we are not able to successfully integrate the businesses within the anticipated time frame, or at all, the anticipated cost savings,

synergies operational efficiencies and other benefits of the MiX Combination may not be realized fully or may take longer to realize

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

our business and MiX Telematics’ business may be more difficult, time-consuming or costly than expected.

and MiX Telematics have operated independently prior to completion of the MiX Combination on April 2, 2024, and there

can be no assurances that our businesses can be integrated successfully.

It is possible that the integration process could result in

the loss of key employees, the disruption of our company’s ongoing business or unexpected integration issues, such as higher

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

Specifically, issues that must be addressed in integrating the operations of our company and MiX Telematics in order to realize the

anticipated benefits of the MiX Combination so that the combined business performs as expected include, among others:

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

the companies’ technologies, products and services;

and eliminating redundant and underperforming operations and assets;

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

procedures and processes;

possible differences in corporate cultures and management philosophies;

employee morale and retaining key management and other employees;

and recruiting prospective employees;

consolidating

the companies’ corporate, administrative and information technology infrastructure;

sales, distribution and marketing efforts;

the movement of certain businesses and positions to different locations;

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

geographically dispersed organizations;

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

addition, at times, the attention of certain members of our management and our resources may be focused on the integration of the businesses of the two companies and diverted from day-to-day business operations, which may disrupt our ongoing

business and, consequently, the business of the combined company.

market price for shares of our common stock may decline as a result of the MiX Combination, including as a result of some of our stockholders

adjusting their portfolios.

The market value of our common stock at the time of

consummation of the MiX Combination varied significantly from the prices of our common stock on the date the Implementation Agreement

was executed, the date of our special meeting of stockholders relating to the MiX Combination and the closing date of the MiX Combination.

The market price of our common stock may

decline if, among other things, the operational cost savings estimates in connection with the integration of ours and MiX Telematics’

businesses are not realized, or if the costs related to the MiX Combination are greater than expected.

The market price also may decline

if we do not achieve the perceived benefits of the MiX Combination as rapidly or to the extent anticipated by financial or industry analysts

or if the effect of the MiX Combination on our financial position, results of operations or cash flows is not consistent with the expectations

of financial or industry analysts.

In addition, sales of our common stock by our stockholders

after the completion of the MiX Combination may cause the market price of our common stock to decrease.

Shareholders of MiX Telematics

may decide not to hold the shares of our common stock that they received in the MiX Combination.

Certain of our other stockholders, such as funds with limitations on their permitted holdings of stock in individual issuers, may be

required to sell the shares of our common stock that they received in the MiX Combination.

Such sales of our common stock could have the

effect of depressing the market price for our common stock and may take place promptly following the MiX Combination.

Any of these events may make it more difficult for

us to sell equity or equity-related securities and have an adverse impact on the price of our common stock.

The MiX Combination may not be accretive, and

may be dilutive, to the combined company’s earnings per share, which may negatively affect the market price of shares of our common

We currently believe the MiX Combination will result

in a number of benefits, including cost savings, operating efficiencies, and stronger demand for our products and services, and that the

MiX Combination will be accretive to our earnings.

This belief is based, in part, on preliminary current estimates that may materially

In addition, future events and conditions, including adverse changes in market conditions, additional transaction and integration-related

costs and other factors such as the failure to realize some or all of the anticipated benefits of the MiX Combination, could decrease

or delay the accretion that is currently anticipated or could result in dilution.

Any dilution of, or decrease in or delay of any accretion

to, the combined company’s earnings per share could cause the price of shares of our common stock to decline or grow at a reduced

have incurred significant losses and have a substantial accumulated deficit.

If we cannot achieve profitability, the market price of

our common stock could decline significantly.

of December 31, 2023, we had cash (including restricted cash) and cash equivalents of $19.3 million and working capital of $23.5 million.

Our primary sources of cash are cash flows from the sales of products and services, our holdings of cash, cash equivalents and investments

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

To date, we have not generated sufficient cash flow solely

from operating activities to fund our operations.

incurred net losses of approximately $22.1 million (as restated), $16.9 million (as restated) and $17.3 million for the years ended

December 31, 2021, 2022 and 2023, respectively, and have incurred additional net losses since inception.

At December 31, 2023, we

had an accumulated deficit of approximately $146.3 million.

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

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

If our revenues do

not grow or if our operating expenses continue to increase, we may not be able to become profitable and the market price of our

common stock could decline.

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

financial condition and results of operations.

products contain a significant number of components that we source globally.

If our supply chain fails to deliver products to us in

sufficient quality and quantity on a timely basis, we will be challenged to meet our customer order delivery timelines and could

incur significant additional expenses for expedited freight and other related costs.

Similarly, many of our customers are dependent

on an ever-greater number of global suppliers to manufacture their products.

These global supply chains have continued to be

adversely impacted by events outside of our control, including macroeconomic events, trade restrictions, economic recessions and

ongoing geopolitical conflicts.

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

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

These disruptions

have delayed and may continue to delay the timing of some orders and expected deliveries of our products, which has impacted our

business and results of operations.

of the products we supply are reliant on semiconductors.

Globally, there is an ongoing significant shortage of semiconductors.

The semiconductor

supply chain is complex, with capacity constraints occurring throughout.

We have and will continue to work closely with our suppliers

and customers to minimize any potential adverse impacts of the global semiconductor chip shortage and monitor the availability of semiconductor

chips and other key components, customer production schedules and any other supply chain inefficiencies that may arise.

However, if we

are not able to mitigate the impact of the semiconductor chip shortage semiconductor shortage impact, any direct or indirect supply chain

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

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

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

offerings, which can present new and difficult technology challenges, may subject us to claims if customers of these offerings experience

service disruptions or failures or other quality issues.

In addition, profitability, if any, in our newer activities may not meet our

expectations, and we may not be successful enough in these newer activities to recoup our investments in them.

Failure to realize the

benefits of amounts we invest in new technologies, products, or services could result in the value of those investments being written

down or written off.

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

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

market is characterized by rapid technological change and frequent new product announcements.

Significant technological changes could

render our existing technology obsolete.

We are active in the research and development of new products and technologies and in enhancing

our current products.

• The terms of the A&R Credit Agreement restrict Powerfleet Israel’s and Pointer’s current and future operations, particularly their ability to respond to changes or take certain actions.

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

• We have reported material weaknesses in our internal control over financial reporting.

If we fail to remediate the identified material weaknesses and maintain effective internal control, our ability to produce accurate and timely financial statements could be impaired, which may adversely affect our business, results of operations, and investor and customer confidence.

• Our manufacturers rely on a limited number of suppliers for several significant components and raw materials used in our products.

If we or our manufacturers are unable to obtain these components or raw materials on a timely or cost-effective basis, we will be unable to meet our customers’ orders, which could reduce our revenues, subject us to claims for damages and adversely affect our relationships with our customers.

• The use of our products is subject to international regulations.

• The adoption of industry standards that do not incorporate the technology we use may decrease or eliminate the demand for our services or products and could harm our results of operations.

• Under the current laws in jurisdictions in which we operate, we may not be able to enforce non-compete covenants and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees.

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

• Future sales of our common stock, including sales of our common stock acquired upon the exercise of outstanding options, may cause the market price of our common stock to decline.

• The concentration of common stock ownership among our executive officers and directors could limit the ability of other stockholders of the Company to influence the outcome of corporate transactions or other matters submitted for stockholder approval.

• Our Amended and Restated Certificate of Incorporation, as amended provides that the Court of Chancery of the State of Delaware will be the exclusive forum for certain legal actions between us and our stockholders, which could limit stockholders’ ability to obtain a judicial forum viewed by the stockholders as more favorable for disputes with us or our directors, officers or employees, and the enforceability of the exclusive forum provision may be subject to uncertainty.

• Provisions of Delaware law or the Charter could delay or prevent an acquisition of the Company, even if the acquisition would be beneficial to our stockholders and could make it more difficult for stockholders to change our management.

Risks Related to Our Business

We may not realize all of the anticipated benefits of the MiX Combination and the FC Acquisition, and the continued integration of the businesses may involve challenges that could adversely affect our business, financial condition and results of operations.

While we have made meaningful progress integrating MiX Telematics and Fleet Complete into our operations, the ultimate success of the MiX Combination and the FC Acquisition remains subject to a number of risks and uncertainties, including our ability to fully integrate their respective operations, technologies and personnel with our existing business.

We believe these transactions will provide strategic benefits and operational synergies, including cost savings, increased scale and enhanced customer offerings, but such benefits may not be realized within the anticipated timeframe, or at all.

Integrating three historically independent businesses continues to present operational, cultural and logistical challenges and may involve unexpected costs or delays.

These challenges include, among other things:

combining operational, financial and administrative functions;

integrating enterprise resource planning (“ERP”) and other IT systems;

harmonizing policies, procedures and internal controls;

aligning product and service offerings;

consolidating facilities and infrastructure;

managing geographically dispersed operations;

retaining and integrating key employees;

aligning human resources practices;

addressing cultural differences;

coordinating sales and marketing strategies;

and preserving relationships with customers, vendors and other business partners.

While progress has been made, any failure to effectively address these matters may adversely affect our ability to realize all of the anticipated benefits of the MiX Combination and the FC Acquisition.

There can be no assurance that the combined business will perform as expected or that the anticipated synergies, including those related to optimizing operating models, eliminating redundancies, reallocating investments or enhancing free cash flow generation, will be fully achieved.

The aggregate consideration paid in connection with the MiX Combination and the FC Acquisition may ultimately exceed the value realized from these transactions, and our assumptions regarding future financial performance, unlevered free cash flow or earnings accretion may prove inaccurate.

If the MiX Combination or the FC Acquisition is not accretive to our earnings per share, the market price of our common stock could be adversely affected.

Additionally, the transactions have resulted in the incurrence of additional indebtedness and the assumption of existing and contingent liabilities of MiX Telematics and Fleet Complete, including potential tax, employee-related and other obligations, which may further limit our operational flexibility and adversely affect our financial condition.

Moreover, the continued integration efforts may divert management’s time and attention from the day-to-day operation of our business, which could disrupt ongoing operations and impede the achievement of our strategic objectives.

If we are unable to fully integrate MiX Telematics and Fleet Complete, or if the combined company does not perform as anticipated, our business, financial condition, results of operations and the market price of our common stock could be materially and adversely affected.

We have incurred significant losses and have a substantial accumulated deficit.

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

As of March 31, 2024, and March 31, 2025, we had cash (including restricted cash) and cash equivalents of $109.7 million and $48.8 million, respectively, and working capital of $126.2 million and $18.1 million, respectively.

Our primary sources of cash are cash flows from the sales of products and services, our holdings of cash, cash equivalents and investments from the sale of our capital stock and borrowings under our credit facilities.

To date, we have not generated sufficient cash flow solely from operating activities to fund our operations.

We incurred net losses attributable to common stockholders of approximately $(16.9) million, $(17.3) million, $(19.6) million, and $(51.0) million for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024 and the year ended March 31, 2025, respectively, and have incurred additional net losses since inception.

At March 31, 2024, and March 31, 2025, we had an accumulated deficit of approximately $154.8 million and $205.8 million, respectively.

Our ability to increase our revenues from the sale of our solutions will depend on our ability to successfully implement our growth strategy and the continued expansion of our markets.

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

We are an international company and may be susceptible to several political, economic, trade and geographic risks that could harm our business.

We are dependent on sales to customers outside the United States.

Our international sales are likely to account for a significant percentage of our products and services revenue for the foreseeable future.

As a result, the occurrence of any international, political, economic or geographic event (for example, restrictions on international trade, imposition of tariffs, global supply chain disruptions, inflation and other cost increases, and the conflict in the Middle East, could result in a significant decline in our revenue.

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

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

These numerous and sometimes conflicting laws and regulations include internal control and disclosure rules, data privacy and filtering requirements, anti-corruption laws, such as the Foreign Corrupt Practices Act, and other local laws prohibiting corrupt payments to governmental officials, and anti-competition regulations, among others.

Violations of these laws and regulations could result in fines and penalties, criminal sanctions against us, our officers, or employees, prohibitions on the conduct of our business and on our ability to offer our products and services in one or more countries, and could also materially affect our brand, international expansion efforts, ability to attract and retain employees, business, and operating results.

Although we plan to implement policies and procedures

designed to ensure compliance with these laws and regulations, there can be no assurance that our employees, contractors, or agents will not violate our policies.

Some of the risks and challenges of doing business internationally include:

• unexpected changes in regulatory requirements;

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

• imposition of tariffs and other barriers and restrictions;

• sanctions and export regulations;

• management and operation of an enterprise spread over various countries;

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

• application of the income tax laws and regulations of multiple jurisdictions, including relatively low-rate and relatively high-rate jurisdictions, to our sales and other transactions, which results in additional complexity and uncertainty;

• the conduct of unethical business practices in certain developing countries;

• general economic and geopolitical conditions, including inflation and trade relationships;

• war and acts of terrorism;

• kidnapping and high crime rate;

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

• availability of U.S.

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

• changes in export regulations.

While these factors and the impacts of these factors are difficult to predict, any one or more of them could adversely affect our business, financial condition and results of operations in the future.

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

The global economy continues to be adversely affected by stock market volatility, tightening of credit markets, concerns of inflation, restrictions on international trade, adverse business conditions and liquidity concerns.

These events and the related uncertainty about future economic conditions could negatively impact our customers and, among other things, postpone their decision-making, decrease their spending and jeopardize or delay their ability or willingness to make payment obligations, any of which could adversely affect our business and results of operations.

Uncertainty about current global economic conditions, in particular as a result of the continued supply chain disruptions, inflation and other cost increases, and the conflict in the Middle East, could also adversely affect our business and results of operations.

In addition, restrictions on international trade, such as tariffs and other controls on imports or exports of goods, technology or data, can materially adversely affect our business and supply chain.

The impact can be particularly significant if these restrictive measures apply to countries and regions where we derive a significant portion of our revenues and/or have significant supply chain operations.

Restrictive measures can increase the cost of our products and can require us to take various actions, including changing suppliers, restructuring business relationships and operations, ceasing to offer and distribute affected products, services and third-party applications to our customers, and increasing the prices of our products and services.

Changing our business and supply chain in accordance with new or changed restrictions on international trade can be expensive, time-consuming and disruptive to our business and results of operations.

Such restrictions can be announced with little or no advance notice, which can create uncertainty, and we may not be able to effectively mitigate any or all adverse impacts from such measures.

Beginning in the second quarter of 2025, new U.S.

tariffs were announced, including additional tariffs on imports from China, Taiwan, Vietnam and the EU, among others.

In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S.

and other retaliatory measures.

Various modifications, suspensions and delays to the U.S.

tariffs have been announced and further changes are expected to be made in the future, which may include additional sector-based tariffs or other measures.

The ultimate impact remains uncertain and will depend on several factors, including whether additional or

incremental U.S.

tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures.

If disputes and conflicts further escalate, actions by governments in response could be significantly more severe and restrictive.

Any of the foregoing could materially adversely affect our business, results of operations, financial condition and stock price.

During periods of economic downturn, our customers may decrease their demand for AIoT solutions, as well as the maintenance, support and consulting services we provide.

This slowdown may have an adverse effect on the wireless solutions industry in general and on demand for our products and services, but the magnitude of that impact is uncertain.

Our future growth is dependent, in part, on the demand for our products and services.

Prolonged weakness in the economy may cause business enterprises to delay or cancel wireless solutions projects, reduce their overall wireless solutions budgets and/or reduce or cancel orders for our services.

This, in turn, may lead to longer sales cycles, delays in purchase decisions, and payment and collection issues, and may also result in price pressures, causing us to realize lower revenues and operating margins.

Additionally, if our customers cancel or delay their wireless solutions initiatives, our business, financial condition and results of operations could be materially and adversely affected.

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

Disruptions in our global supply chain or failures by subcontractors could materially and adversely affect our business, financial condition and results of operations.

Our ability to manufacture and deliver products in a timely, cost-effective and high-quality manner is dependent on a complex, global supply chain and on subcontractors for key manufacturing and fulfillment operations.

We source a significant number of components—including semiconductors and telecommunications hardware—from a globally distributed network of suppliers and rely on third-party subcontractors for product assembly, testing and logistics.

Any disruption or failure at any point in this network may materially impair our ability to meet customer demand.

The availability of certain critical components, particularly semiconductors, remains constrained due to global supply chain imbalances, capacity limitations and geopolitical tensions.

Although conditions in the semiconductor market have stabilized somewhat, the broader supply chain remains subject to risks, including extended lead times, input cost inflation, production bottlenecks and macroeconomic disruptions.

Events such as trade restrictions, tariffs, sanctions, natural disasters, regional conflicts and labor shortages continue to affect both our direct suppliers and upstream vendors.

In addition, we depend on subcontractors to manufacture and deliver finished products to customers.

If these subcontractors experience quality issues, production shortfalls, labor disruptions or financial instability, our product quality, delivery timelines and customer satisfaction may suffer.

The consolidation of third-party manufacturers within the electronic component industry may reduce our supplier options and increase pricing leverage in favor of those vendors, potentially resulting in higher manufacturing costs.

If we are unable to pass those costs on to customers, our gross margins and profitability may be adversely affected.

There is also intense competition for access to the most qualified and reliable subcontractors.

If we are unable to maintain access to such partners or if their performance deteriorates, we may face significant challenges in scaling production or ensuring service-level commitments.

Any resulting failure to fulfill customer orders on time and in accordance with contractual terms could lead to business interruptions, loss of key accounts, reputational harm, damage claims and reduced revenue.

While we continuously monitor our supply chain and subcontractor performance and seek to diversify sources of supply where feasible, there can be no assurance that we will be able to effectively mitigate these risks.

If we are unable to manage ongoing or future disruptions in our supply chain or subcontractor network, our business, financial condition, and results of operations could be materially and adversely affected.

If we are unable to keep up with rapid technological change, we may be unable to meet the needs of our customers, which could materially and adversely affect our financial condition and results of operations and reduce our ability to increase our market share.

Our market is characterized by rapid technological change and frequent new product announcements.

Significant technological changes could render our existing technology obsolete.

We are active in the research and development of new products and technologies and in enhancing our current products.

However, research and development in our industry is complex and filled with uncertainty.

For example, it is common

for research and development projects to encounter delays due to unforeseen problems, resulting in low initial volume production, fewer

product features than originally considered desirable and higher production costs than initially budgeted, any of which may result in

lost market opportunities.

In addition, these new products may not adequately meet the requirements of the marketplace and may not achieve

any significant degree of market acceptance.

If our efforts do not lead to the successful development, marketing and release of new products

that respond to technological developments or changing customer needs and preferences, our revenues and market share could be materially

and adversely affected.

We may expend a significant amount of resources in unsuccessful research and development efforts.

new products or enhancements by our competitors may cause customers to defer or forego purchases of our products.

Any of the foregoing

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

output from artificial intelligence could result in brand and reputation damage.

intelligence (“AI”) is being integrated into a number of our solutions and/or products and could be a significant factor

in future service offerings.

While AI can present significant benefits, it also presents risks and challenges to our business.

Data sourcing,

technology, integration and process issues, program bias into decision-making algorithms, security challenges and the protection of personal

privacy could impair the adoption and acceptance of AI solutions.

If the output from AI solutions are deemed to be inaccurate or questionable,

our brand and reputation may be harmed and we may potentially be subject to legal liability claims.

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

and our customers’ access to our services.

business operations require that we use and store sensitive data, including intellectual property and proprietary business information

in our secure data centers and on our networks.

We face a number of threats to our data centers and networks in the form of unauthorized

access, security breaches and other system disruptions.

It is critical to our business strategy that our infrastructure remains secure

and is perceived by customers and partners to be secure.

We require usernames and passwords in order to access our information technology

We also use encryption and authentication technologies to secure the transmission and storage of data.

Despite our security

measures, our information technology systems have been, and may continue to be, subject to cybersecurity threats and incidents.

Any such security

breach may compromise information used or stored on our networks and may result in significant data losses or theft of our, our customers’,

or our business partners’ intellectual property or proprietary business information.

A cybersecurity breach could negatively affect

our reputation by adversely affecting the market’s perception of the security or reliability of our products or services.

a cyber-attack could result in other negative consequences, including remediation costs, disruption of internal operations, increased

cybersecurity protection costs, lost revenues or litigation, which could have a material adverse effect on our business, results of operations

and financial condition.

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

effect on our financial condition and results of operations.

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

in technology;

product introductions;

industry standards;

improvements;

changing customer needs;

property invention and protection;

and distribution capabilities;

to attract and retain highly skilled professionals;

from highly capitalized companies;

of new competitors;

of customers to invest in information technology;

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

As the technological and functional capabilities of future products

increase, these products may begin to compete with products being offered by traditional computer, network and communications industry

participants that have substantially greater financial, technical, marketing and manufacturing resources than we do.

we are not aware of any current competitors that provide the precise capabilities of our systems, we are aware of competitors that offer

similar approaches to address the customer needs that our products address.

Those companies include both emerging companies with limited

operating histories and companies with longer operating histories, greater name recognition and/or significantly greater financial, technical

and marketing resources than ours.

attempt to differentiate our solutions by continuing to innovate and by offering a choice of communication mode, patented battery management

technology, sensor options, and installation configurations.

we do not keep pace with product and technology advances, including the development of superior products by our competitors, or if we

are unable to otherwise compete successfully against our competitors, there could be a material adverse effect on our competitive position,

revenues and prospects for growth.

For example, it is common for research and development projects to encounter delays due to unforeseen problems, resulting in low initial volume production, fewer product features than originally considered desirable and higher production costs than initially budgeted, any of which may result in lost market opportunities.

In addition, these new products

may not adequately meet the requirements of the marketplace and may not achieve any significant degree of market acceptance.

If our efforts do not lead to the successful development, marketing and release of new products that respond to technological developments or changing customer needs and preferences, our revenues and market share could be materially and adversely affected.

We may expend a significant number of resources in unsuccessful research and development efforts.

In addition, new products or enhancements by our competitors may cause customers to defer or forego purchases of our products.

Any of the foregoing could materially and adversely affect our financial condition and results of operations and reduce our ability to increase our market share.

Inaccurate output from AI could result in brand and reputation damage.

We have integrated AI and machine learning technologies into certain products and operational processes.

While these technologies offer the potential for significant enhancements in performance, decision-making and customer insights, they also present material risks, including algorithmic bias, data integrity issues and lack of transparency or explainability.

Inaccurate or unpredictable AI-generated outputs could result in operational failures, reputational damage, regulatory scrutiny or legal liability.

Additionally, evolving AI regulations, such as the EU AI Act and prospective U.S.

federal guidance, may impose additional compliance obligations, which could increase operational costs and limit certain product capabilities.

We are subject to breaches of our information technology systems, which could damage our reputation, vendor, and customer relationships, and our customers’ access to our services.

We rely extensively on information technology systems, cloud infrastructure and third-party service providers to support critical business operations, including customer and financial data management.

As a result, we face an increasing risk of cybersecurity threats, including ransomware attacks, insider threats and advanced persistent threats, some of which may be sponsored by nation-state actors.

Despite our security measures, our information technology systems have been, and may continue to be, subject to cybersecurity threats and incidents.

Any successful breach could result in unauthorized access to sensitive data, business interruption, financial loss or reputational harm.

Furthermore, we are subject to various data protection laws and regulations, including the General Data Protection Regulation, the California Consumer Privacy Act and other similar international regimes.

Noncompliance or breach incidents may result in significant financial penalties, remediation costs, regulatory investigations and private litigation.

The industry in which we operate is highly competitive, and competitive pressures from existing and new companies could have a material adverse effect on our financial condition and results of operations.

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

• advances in technology;

• new product introductions;

• evolving industry standards;

• product improvements;

• rapidly changing customer needs;

• intellectual property invention and protection;

• marketing and distribution capabilities;

• ability to attract and retain highly skilled professionals;

• competition from highly capitalized companies;

• entrance of new competitors;

• ability of customers to invest in information technology;

• price competition.

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

As the technological and functional capabilities of future products increase, these products may begin to compete with products being offered by traditional computer, network and communications industry participants that have substantially greater financial, technical, marketing and manufacturing resources than we do.

Although we are not aware of any current competitors that provide the precise capabilities of our systems, we are aware of competitors that offer similar approaches to address the customer needs that our products address.

Those companies include both emerging companies with limited operating histories and companies with longer operating histories, greater name recognition and/or significantly greater financial, technical and marketing resources than ours.

We attempt to differentiate our solutions by continuing to innovate and by offering a choice of communication mode, patented battery management technology, sensor options, and installation configurations.

If we do not keep pace with product and technology advances, including the development of superior products by our competitors, or if we are unable to otherwise compete successfully against our competitors, there could be a material adverse effect on our competitive position, revenues and prospects for growth.

As a result, our financial condition and results of operations could be materially and adversely affected.

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

have been engaged in strategic initiatives to focus on our core business to maximize long-term stockholder value, to improve our cost

structure and efficiency and to increase our selling efforts and developing new business.

We cannot provide any assurance that we will

be able to successfully execute these or other strategic initiatives or that we will be able to execute these initiatives on our expected

We may not be successful in focusing our core business and obtaining operational efficiencies or replacing revenues lost as

a result of these strategic initiatives.

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

are dependent on sales to customers outside the United States.

Our international sales are likely to account for a significant percentage of our

products and services revenue for the foreseeable future.

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

event (for example, continued global supply chain disruptions, inflation and other cost increases, and the conflict between Russia and

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

compliance with complex foreign and U.S.

laws and regulations that apply to our international operations will increase our cost of doing

business in international jurisdictions.

These numerous and sometimes conflicting laws and regulations include internal control and disclosure

rules, data privacy and filtering requirements, anti-corruption laws, such as the Foreign Corrupt Practices Act, and other local laws

prohibiting corrupt payments to governmental officials, and anti-competition regulations, among others.

Violations of these laws and

regulations could result in fines and penalties, criminal sanctions against us, our officers, or employees, prohibitions on the conduct

of our business and on our ability to offer our products and services in one or more countries, and could also materially affect our

brand, international expansion efforts, ability to attract and retain employees, business, and operating results.

Although we plan to

implement policies and procedures designed to ensure compliance with these laws and regulations, there can be no assurance that our employees,

contractors, or agents will not violate our policies.

of the risks and challenges of doing business internationally include:

changes in regulatory requirements;

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

of tariffs and other barriers and restrictions;

and operation of an enterprise spread over various countries;

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

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

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

conduct of unethical business practices in certain developing countries;

economic and geopolitical conditions, including inflation and trade relationships;

and acts of terrorism;

and high crime rate;

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

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

in export regulations.

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

financial condition and results of operations in the future.

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

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

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

These events and the related uncertainty about

future economic conditions could negatively impact our customers and, among other things, postpone their decision-making, decrease

their spending and jeopardize or delay their ability or willingness to make payment obligations, any of which could adversely affect

our business and results of operations.

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

continued global supply chain disruptions, inflation and other cost increases, and the conflicts between Russia and Ukraine and

between Israel and Hamas, and recent bank failures, could also cause volatility of our stock price.

During periods of economic

downturns, our customers may decrease their demand for wireless technology solutions, as well as the maintenance, support and

consulting services we provide.

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

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

Our future growth is dependent, in part, upon the

demand for our products and services.

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

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

This, in turn,

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

pressures, causing us to realize lower revenues and operating margins.

Additionally, if our customers cancel or delay their wireless

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

the current uncertainty in the general economy does not change or continue to improve, our business, financial condition and results

of operations could be harmed.

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

report our financial results in U.S.

However, a significant portion of our net sales, assets, indebtedness and other liabilities,

and costs are denominated in foreign currencies.

These currencies include, among others, the Euro, Israeli shekel, British pound sterling,

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

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

and large external deficits.

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

country or countries.

Failure to correctly and efficiently implement ERP and customer relationship management (“CRM”) systems could have a material and adverse effect on our business.

We have started the process of implementing an integrated ERP and CRM system, starting with our North American and European businesses, leveraging the systems used by Fleet Complete.

The overall aim is to have all of our businesses on the same ERP and CRM to enable management to achieve enhanced quality, reliability and timeliness of information, improve integration and visibility of information from different countries and optimize global management of corporate processes.

The adoption of these systems, which will replace the various accounting systems within the individual operations, poses several challenges relating to, among other things, project governance, migration of data, potential instability of existing systems, changes to processes and controls, communication of new procedures, training of personnel and maintaining an effective control environment.

We are aware of the potential risks associated with a global system implementation and intend to adopt mitigation plans and contingency plans, in order to ensure business continuity.

However, there is no assurance that the ERP and CRM systems will be successfully implemented and failure to do so could have a material adverse effect on our operations and ability to execute on our strategy.

The international scope of our business exposes us to risks associated with foreign exchange rates, currency fluctuations and economic instability in certain emerging markets.

We report our financial results in U.S.

However, a significant portion of our net sales, assets, indebtedness and other liabilities, and costs are denominated in foreign currencies.

These currencies include, among others, the Euro, Israeli shekel, British pound sterling, Canadian dollar, Mexican peso, Argentine peso, Brazilian real and South African rand.

As a result, fluctuations in foreign exchange rates—particularly in emerging markets—can significantly affect our reported revenue, expenses, and overall financial performance.

Currency fluctuations, especially with respect to the South African rand, Mexican peso, and Brazilian real, may materially impact our income and expenses due to the translation of our foreign subsidiaries’ financial statements into U.S.

For example, the majority of subscription agreements and operating expenses of our subsidiary, MiX Telematics, are denominated in foreign currencies and, therefore, subject to such fluctuations.

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

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

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

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

in exchange rates.

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

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

We may implement currency hedges or

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

If we are not successful in mitigating

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

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

may require additional capital in the future to develop and commercialize additional products and technologies or take advantage of other

opportunities that may arise, including potential acquisitions.

We may seek to raise the necessary funds through public or private equity

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

the extent we raise additional capital by issuing equity securities, our existing

stockholders may experience substantial dilution.

In addition, we may be required to relinquish rights to our technologies or systems,

or grant licenses on terms that are not favorable to us in order to raise additional funds through strategic alliance, joint venture

and licensing arrangements.

We cannot provide assurance that the additional sources of funds will be available, or if available, would

have reasonable terms.

If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more

of our development programs, and our business, financial condition, results of operations and stock price could be materially and adversely

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

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

success is highly dependent on the continued market acceptance of our solutions.

The market for our products and services is new and

rapidly evolving.

If the market for our products and services does not become sustainable, or becomes saturated with competing products

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

rely significantly on channel partners to sell our products, and disruptions to, or our failure to develop and manage our channel partners

would harm our business.

and retaining qualified channel partners and training them in our technology and product offerings requires significant time and resources.

In order to develop and expand our distribution channel, we must continue to scale and improve our processes and procedures that support

our channel, including investment in systems and training.

Those processes and procedures may become increasingly complex and difficult

to manage as we grow our organization.

We have no minimum purchase commitments from any of our channel partners, and our contracts with

these channel partners do not prohibit them from offering products or services that compete with ours.

Our competitors may provide incentives

to existing and potential channel partners to favor their products or to prevent or reduce sales of our products.

Our channel partners

may choose not to offer our products exclusively or at all.

Establishing relationships with channel partners who have a history of selling

our competitors’ products may also prove to be difficult.

Our failure to establish and maintain successful relationships with channel

partners would harm our business and operating results.

we are unable to protect our intellectual property rights, our financial condition and results of operations could be materially and

adversely affected.

rely on a combination of patents, copyrights, trademarks, trade secrets and contractual measures to protect our intellectual property

Third parties may seek to challenge, invalidate, circumvent or render unenforceable any patents or proprietary rights owned by

If such challenges are successful, our business will be materially and adversely affected.

employees, consultants and advisors enter into confidentiality agreements with us that prohibit the disclosure or use of our confidential

We also have entered into confidentiality agreements to protect our confidential information delivered to third parties

for research and other purposes.

Despite these efforts, we cannot assure you that we will be able to effectively enforce these agreements

or our confidential information will not be disclosed, that others will not independently develop substantially equivalent confidential

information and techniques or otherwise gain access to our confidential information or that we can meaningfully protect our confidential

may arise in the future with respect to the ownership of rights to any technology developed with advisors or collaborators.

other possible disagreements could lead to delays in the collaborative research, development or commercialization of our systems, or

could require or result in costly and time-consuming litigation that may not be decided in our favor.

Any such event could materially

and adversely affect our financial condition and results of operations.

the unauthorized use of our intellectual property is difficult, and we cannot assure you that the steps we have taken will prevent unauthorized

use of our technology or other intellectual property, particularly in foreign countries where the laws may not protect our proprietary

rights as fully as in the United States.

Accordingly, we may not be able to protect our proprietary rights against unauthorized third

party copying or use.

If we are unsuccessful in protecting our intellectual property, we may lose any technological advantages we have

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

have been, and may continue to become, involved in intellectual property disputes that could subject us to significant liability, divert the time and attention

of our management and prevent us from selling our products, any of which could materially and adversely affect our financial condition

and results of operations.

recent years, there has been significant litigation in the United States and internationally involving claims of alleged infringement

of patents and other intellectual property rights.

Litigation has been, and may continue to be, necessary to enforce our intellectual property rights, defend ourselves

against alleged infringement and determine the scope and validity of our intellectual property rights.

such litigation, whether or not successful, could result in substantial costs, divert the time and attention of our management and prevent

us from selling our products.

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

substantial damages to the party making such claim;

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

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

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

those products or services that incorporate such intellectual property.

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

materially and adversely affect our financial condition and results of operations.

Israeli subsidiaries have incurred significant indebtedness.

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

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

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

We may require additional capital in the future to develop and commercialize additional products and technologies or take advantage of other opportunities that may arise, including potential acquisitions.

We may seek to raise the necessary funds through public or private equity offerings, debt financings, additional operating improvements, asset sales or strategic alliances and licensing arrangements.

To the extent we raise additional capital by issuing equity securities, our existing stockholders may experience substantial dilution.

In addition, we may be required to relinquish rights to our technologies or systems or grant licenses on terms that are not favorable to us in order to raise additional funds through strategic alliance, joint venture and licensing arrangements.

We cannot provide assurance that the additional sources of funds will be available, or if available, would have reasonable terms.

If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of our development programs, and our business, financial condition, results of operations and stock price could be materially and adversely affected.

We rely significantly on third-party channel partners, including telecommunication companies and regional distributors, for market access and sales execution, and any disruption to, or our failure to develop and manage, our channel partners would harm our business.

We depend substantially on third-party channel partners—including telecommunications providers, systems integrators, value-added resellers and managed service providers—to market, sell, install and support our solutions in key domestic and international markets.

These partners play a critical role in extending our global reach, accessing customer segments where direct sales are less effective or impractical, and delivering localized expertise.

Recruiting, onboarding and retaining high-performing channel partners require considerable time, effort and financial investment.

We must provide ongoing training and technical support to ensure that our partners possess the necessary product knowledge and capabilities to effectively position our offerings.

As we expand our business and diversify our portfolio, the management and oversight of this partner ecosystem becomes increasingly complex and resource-intensive.

To stay ahead of these challenges, we must continue to invest in the development of robust governance structures, compliance protocols, performance management systems and scalable partner enablement programs.

There can be no assurance that we will succeed in doing so, and failure to maintain a consistently high-performing channel may negatively impact our ability to execute our go-to-market strategy.

We cannot assure you that our existing channel partners will maintain their historical performance levels, that we will be able to retain or grow these relationships on favorable terms or that new partners will be successfully recruited or onboarded.

If we are unable to establish, maintain or grow effective distribution relationships, or if our key partners fail to meet expectations or cease carrying our products, our revenues, operating margins, market share and long-term strategic objectives could be materially and adversely affected.

Failure to adequately protect our intellectual property rights or defend against third-party claims could materially and adversely affect our business, financial condition and results of operations.

Our ability to compete effectively depends in large part on our proprietary technologies and intellectual property.

We rely on a combination of patents, copyrights, trademarks, trade secrets, know-how and contractual protections, including confidentiality and invention assignment agreements, to safeguard our proprietary rights.

Despite these efforts, there is no assurance that our intellectual property portfolio will be able to prevent third parties from copying or otherwise obtaining and using our technology, or that our rights will not be challenged, narrowed, invalidated or circumvented.

Intellectual property protection is particularly difficult to enforce in certain jurisdictions where legal systems may not offer the same degree of protection as the United States.

We may be unable to prevent unauthorized use of our technology, especially internationally, and may be limited in our ability to assert our rights due to jurisdictional barriers, enforcement limitations, or the cost and complexity of international litigation.

In addition, confidentiality agreements with our employees, contractors, consultants, advisors and third-party providers may be breached, and we may not have adequate remedies in the event of such breaches.

Moreover, others may independently develop technologies or solutions that are substantially equivalent to, or derived from, ours, without violating our proprietary rights.

We may also be subject to disputes with collaborators, contractors or other third parties over ownership or licensing of intellectual property developed through joint efforts, which could result in costly and time-consuming litigation or delays in research, development or commercialization.

Any such dispute, even if resolved in our favor, could divert significant management attention and financial resources.

Additionally, we have been, and may in the future become, involved in legal proceedings relating to alleged infringement of third-party intellectual property rights.

Intellectual property litigation is inherently uncertain, expensive and disruptive to our business operations.

Adverse outcomes in such proceedings could require us to:

• pay significant monetary damages or royalties;

• cease the manufacture, use, marketing or sale of products or services found to infringe;

• obtain licenses to third-party intellectual property, which may not be available on commercially reasonable terms, or at all;

• redesign our products or services to avoid infringement, which could require substantial time and expense.

If we are unable to obtain necessary licenses, successfully defend against infringement claims or protect our own intellectual property rights, our ability to develop, commercialize and sell our products could be materially limited, and our financial condition and operating results could be materially and adversely affected.

In connection with the MiX Combination and the FC Acquisition, we have incurred significant additional indebtedness to finance the redemption of our then-outstanding Series A convertible preferred stock and the acquisition of Fleet Complete.

The closing of debt and/or equity financing in an amount sufficient to provide for the redemption in full in cash of all then-outstanding shares of our Series A convertible preferred stock was a condition to closing the MiX Combination.

On March 7, 2024, we, together with certain of our wholly owned subsidiaries, entered into a facilities agreement (the “Facilities Agreement”) with FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB”), pursuant to which RMB agreed to provide us with two term loan facilities in an aggregate principal amount of $85 million, composed of Facility A and Facility B, each with a principal amount of $42.5 million (“RMB Facility A” and “RMB Facility B,” respectively, and collectively, the “RMB Facilities”), the proceeds of which could be used to redeem all the then-outstanding shares our Series A convertible preferred stock and for general corporate purposes.

On March 13, 2024, we drew down all $85 million available under such facilities.

On April 2, 2024, concurrently with the closing of the MiX Combination, we used the net proceeds received from RMB and from incremental borrowing capacity as a result of the refinancing of Hapoalim Credit Facilities (as defined below) to redeem in full all of the then-outstanding shares of our Series A convertible preferred stock.

Additionally, on September 27, 2024, we entered into a facility agreement (the “Facility Agreement”) with RMB, pursuant to which RMB agreed to provide us with a term loan facility in an aggregate principal amount of $125 million (the “New RMB Term Facility”).

On October 1, 2024, we drew down the full amount of the New RMB Term Facility and used the proceeds to pay a portion of the purchase price in the FC Acquisition.

The indebtedness we incurred in connection with the MiX Combination and FC Acquisition will have the effect of, among other things, reducing our flexibility to respond to changing business and economic conditions, will increase our borrowing costs and, to the extent that such indebtedness is subject to floating interest rates, may increase our vulnerability to fluctuations in market interest rates.

The increased levels of indebtedness could also reduce funds available to fund efforts to combine our, MiX Telematics’ and Fleet Complete’s businesses and realize expected benefits of the MiX Combination and the FC Acquisition and/or engage in investments in product development, capital expenditures and other activities and may create competitive disadvantages for the combined company relative to other companies with lower debt levels.

Our Israeli subsidiaries have incurred significant indebtedness.

On March 18, 2024, Powerfleet Israel Ltd.

Israel”) and Pointer entered into an amended and restated credit agreement (the “A&R Credit Agreement”), with Bank

Hapoalim B.M.

(“Hapoalim”), which refinanced the facilities under, and amended and restated, the prior credit agreement, dated

August 19, 2019 (as amended, the “Prior Credit Agreement”).

The A&R Credit Agreement provides Powerfleet Israel with two

senior secured term loan facilities denominated in New Israeli Shekel (“NIS”) in an aggregate principal amount of $30 million

(comprised of two facilities in the aggregate principal amounts of $20 million and $10 million, respectively (“Facility A”

and “Facility B,” respectively, and collectively, the “Term Facilities”)), and two revolving credit facilities

to Pointer in an aggregate principal amount of $20 million (comprised of two revolvers in the aggregate principal amounts of $10 million

and $10 million, respectively (“Facility C” and “Facility D,” respectively, and, collectively, the “Revolving

Facilities” and, together with the Term Facilities, the “Credit Facilities”)).

The outstanding amount under the facilities

made available pursuant to the Prior Credit Agreement was approximately NIS 40.1 million, or $11.1 million, as of December 31, 2023.

March 18, 2024, Powerfleet Israel drew down $30 million in cash under the Term Facilities and used the proceeds to prepay approximately

$11.2 million, representing the remaining outstanding balance, of the term loans extended to Powerfleet Israel under the Prior Credit

Agreement and distributed the remaining proceeds to Powerfleet.

Such indebtedness will have the effect, among other things, of reducing

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

costs and, because such indebtedness is subject to floating interest rates and exposed to foreign currency fluctuations, may increase

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

Credit Agreement continues to require Powerfleet Israel and Pointer to satisfy various covenants, including negative covenants that directly

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

The indebtedness continues 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.

This may also make it

more difficult for us to engage in future transactions without the consent of the lender.

The increased levels of indebtedness could also

reduce funds available to engage in investments in product development, capital expenditures and other activities and may create competitive

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

We may be required to raise additional financing for working

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

Our ability to arrange additional financing will depend

on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond its

(“Powerfleet Israel”) and Pointer (together with Powerfleet Israel, the “Borrowers”) entered into an amended and restated credit agreement (as amended, the “A&R Credit Agreement”), with Bank Hapoalim B.M.

(“Hapoalim”), which refinanced the facilities under, and amended and restated, the prior credit agreement, dated August 19, 2019 (as amended, the “Prior Credit Agreement”).

The A&R Credit Agreement provides Powerfleet Israel with two senior secured term loan facilities denominated in New Israeli Shekel (“NIS”) in an aggregate principal amount of $30 million (comprised of two facilities in the aggregate principal amounts of $20 million and $10 million, respectively (“Hapoalim Facility A” and “Hapoalim Facility B,” respectively, and collectively, the “Hapoalim Term Facilities”)), and two revolving credit facilities to Pointer in an aggregate principal amount of $20 million (comprised of two revolvers in the aggregate principal amounts of $10 million and $10 million, 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”)).

The outstanding amount under the facilities made available pursuant to the Prior Credit Agreement was approximately NIS 40.1 million, or $11.1 million, as of December 31, 2023.

On March 18, 2024, Powerfleet

Israel drew down $30 million in cash under the Hapoalim Term Facilities and used the proceeds to prepay approximately $11.2 million, representing the remaining outstanding balance, of the term loans extended to Powerfleet Israel under the Prior Credit Agreement and distributed the remaining proceeds to Powerfleet.

On December 30, 2024, the Borrowers entered into an amendment to the A&R Credit Agreement, which increased the principal amount available under Hapoalim Facility D from $10 million to $20 million and provides that the total principal amount of Hapoalim Facility D may be distributed to Powerfleet 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 March 31, 2025, the Borrowers had utilized $17.4 million under the Hapoalim Revolving Facilities.

The undrawn facility balance at March 31, 2025, was $12.6 million.

Such indebtedness will have the effect, among other things, of reducing Powerfleet Israel’s and Pointer’s flexibility to respond to changing business and economic conditions, will increase our borrowing costs and, because such indebtedness is subject to floating interest rates and exposed to foreign currency fluctuations, may increase Powerfleet Israel’s and Pointer’s vulnerability to fluctuations in market interest and foreign exchange rates.

The A&R Credit Agreement continues to require Powerfleet Israel and Pointer to satisfy various covenants, including negative covenants that directly or indirectly restrict our ability to engage in certain transactions without the consent of the lender.

The indebtedness continues 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 its assets, as well as cross guarantees between Powerfleet Israel and Pointer.

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

The increased levels of indebtedness could also reduce funds available to engage in investments in product development, capital expenditures and other activities and may create competitive disadvantages for us relative to other companies with lower debt levels.

We may be required to raise additional financing for working capital, capital expenditure, acquisitions or other general corporate purposes.

Our ability to arrange additional financing will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond its control.

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

The terms of the A&R Credit Agreement restrict

Powerfleet Israel’s and Pointer’s current and future operations, particularly their ability to respond to changes or to take

certain actions.

The A&R Credit Agreement contains a number of

restrictive covenants that impose significant operating and financial restrictions on Powerfleet Israel and Pointer and limits their ability

to engage in acts that may be in their long-term best interest, including restrictions on their ability to:

The terms of the A&R Credit Agreement restrict Powerfleet Israel’s and Pointer’s current and future operations, particularly their ability to respond to changes or to take certain actions.

The A&R Credit Agreement contains several restrictive covenants that impose significant operating and financial restrictions on Powerfleet Israel and Pointer and limits their ability to engage in acts that may be in their long-term best interest, including restrictions on their ability to:

• incur or guarantee additional indebtedness;

• incur liens;

• sell or otherwise dispose of assets;

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• enter into new lines of business.

The A&R Credit Agreement also limits the ability

of Powerfleet Israel and Pointer to consolidate or merge with or into another person.

In addition, the covenants in the A&R

Credit Agreement require Powerfleet Israel and Pointer to maintain specified financial ratios, tested quarterly.

Their ability to meet

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

A breach of the covenants or restrictions under the

A&R Credit Agreement could result in an event of default, which may allow the lender to accelerate the indebtedness thereunder.

addition, an event of default under the A&R Credit Agreement would permit the lender to terminate all commitments to extend further

credit pursuant to the Revolving Facilities.

Furthermore, if Powerfleet Israel and Pointer are unable to repay the amounts due and payable

under the A&R Credit Agreement, the lender could proceed against the collateral granted to it to secure the indebtedness under the

A&R Credit Agreement.

In the event the lender accelerates the repayment of borrowings, Powerfleet Israel and Pointer may not have

sufficient assets to repay that indebtedness.

The A&R Credit Agreement also limits the ability of Powerfleet Israel and Pointer to consolidate or merge with or into another person.

In addition, the covenants in the A&R Credit Agreement require Powerfleet Israel and Pointer to maintain specified financial ratios, tested quarterly.

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

A breach of the covenants or restrictions under the A&R Credit Agreement could result in an event of default, which may allow the lender to accelerate the indebtedness thereunder.

In addition, an event of default under the A&R Credit Agreement would permit the lender to terminate all commitments to extend further credit pursuant to the Revolving Facilities.

Furthermore, if Powerfleet Israel and Pointer are unable to repay the amounts due and payable under the A&R Credit Agreement, the lender could proceed against the collateral granted to it to secure the indebtedness under the A&R Credit Agreement.

In the event the lender accelerates the repayment of borrowings, Powerfleet Israel and Pointer may not have sufficient assets to repay that indebtedness.

As a result of these restrictions, we may be:

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

These restrictions may affect our ability to grow

in accordance with our strategy.

In connection with the MiX Combination, we have

incurred significant additional indebtedness to finance the redemption of our Series A preferred stock.

The closing of debt and/or equity financing in an

amount sufficient to provide for the redemption in full in cash of all outstanding shares of our Series A Preferred Stock was a condition

to closing the MiX Combination.

On March 7, 2024, we, together with certain of our wholly owned subsidiaries, entered into a facilities

agreement (the “Facilities Agreement”) with FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB”),

pursuant to which RMB agreed to provide us with two term loan facilities in an aggregate principal amount of $85 million, the proceeds

of which may be used to redeem all the outstanding shares of the Series A Preferred Stock and for general corporate purposes.

13, 2024, we drew down all $85 million available under such facilities.

On April 2, 2024, concurrently with the closing of the MiX Combination,

we used the net proceeds received from RMB and from incremental borrowing capacity as a result of the refinancing of Credit Facilities

to redeem in full all of the outstanding shares of the Series A Preferred Stock.

Such indebtedness will have the effect of, among other

things, reducing our flexibility to respond to changing business and economic conditions, will increase our borrowing costs and, to the

extent that such indebtedness is subject to floating interest rates, may increase our vulnerability to fluctuations in market interest

The increased levels of indebtedness could also reduce funds available to fund efforts to combine our and MiX Telematics’

businesses and realize expected benefits of the MiX Combination and/or engage in investments in product development, capital expenditures

and other activities and may create competitive disadvantages for the combined company relative to other companies with lower debt levels.

The restatement of

our previously issued consolidated financial statements and the related analysis and ongoing remedial measures have been time consuming

and expensive and could expose us to additional risks that could materially adversely affect our financial position, results of operations

and cash flows.

As discussed in the Explanatory

Note to this Form 10-K and in Note 2 to our consolidated financial statements included in this Form

10-K, we have restated our previously issued audited consolidated financial statements for the fiscal years ended December 31, 2021 and

2022 and our unaudited consolidated financial statements covering each of the interim periods during the 2022 and 2023 fiscal years.

restatements have been, and the remediation efforts we have begun to undertake are and will be, time-consuming and expensive and could

expose us to a number of additional risks that could materially adversely affect our financial position, results of operations and cash

In particular, we have incurred significant

expenses, including audit, legal, consulting and other professional fees, in connection with the restatement of our previously issued

financial statements and the ongoing remediation of material weaknesses in our internal control over financial reporting.

We are implementing and will continue to implement

additional processes to address such material weaknesses utilizing existing resources and adding new resources as needed.

To the extent

these steps are not successful, we could be forced to incur additional time and expense.

Our management’s attention has also been

diverted from the operation of our business in connection with the restatements and ongoing remediation of material weaknesses in our

internal controls.

In addition, the restatements and related matters could impair our reputation and could cause our stakeholders to

lose confidence in us, which could have an adverse effect on our business, results of operations, financial condition and stock price.

In connection with the preparation of our annual

financial statements for the fiscal year ended December 31, 2023, we identified material weaknesses in our internal control over financial

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

Our management is responsible for

establishing and maintaining adequate internal control over financial reporting.

Internal control over financial reporting is a

process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial

statements in accordance with U.S.

generally accepted accounting principles.

We identified material weaknesses in our internal

control over financial reporting as of December 31, 2023, which have not been remediated (see Item 9A of this Form 10-K for more

information).

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting,

such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be

prevented or detected on a timely basis.

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

financial reporting existed as of December 31, 2023 due to the lack of controls related to accounting for the redemption premium on

convertible redeemable preferred stock, the determination of standalone selling price, capitalized software costs and the financial

statement close process.

We are still considering the full extent of the procedures

to implement in order to remediate the material weaknesses described above.

As part of the business combination with MiX Telematics, we

expect to migrate our central corporate accounting function to MiX Telematics’ central corporate accounting function and team.

from this migration will include:

Implementation of a new enterprise resource planning (“ERP”) system;

Access to a larger and highly qualified team;

Mature internal risk team who are responsible for ensuring systems, process and controls are clearly documented and widely understood and followed throughout the organization.

The material weakness for the measurement and valuation of the convertible

redeemable preferred stock that necessitated the need to restate prior period financial statements will not require remediation in 2024

as all of the outstanding shares of the Series A Preferred Stock were redeemed in full in April 2024.

Additionally, the current remediation plan includes:

(i) utilizing external resources to support our efforts to rework certain control gaps across the various processes in Israel and the

United States with identified deficiencies;

(ii) implementing enhanced documentation associated with management review controls and validation

of the completeness and accuracy of key reports in Israel and the United States;

and (iii) training relevant personnel to reinforce existing

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

documentation of internal controls.

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

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

If our management is unable to conclude that we have

effective internal control over financial reporting, or to certify the effectiveness of such controls, or if additional material weaknesses

in our internal controls are identified in the future, we could be subject to regulatory scrutiny and a loss of public confidence, which

could have a material adverse effect on our business and our stock price.

In addition, if we do not maintain adequate financial and management

personnel, processes and controls, we may not be able to manage our business effectively or accurately report our financial performance

on a timely basis, which could cause a decline in our common stock price and adversely affect our results of operations and financial

rely on subcontractors to manufacture and deliver our products.

Any quality or performance failures by our subcontractors or changes

in their financial condition could disrupt our ability to supply quality products to our customers in a timely manner, resulting in business

interruptions, increased costs, claims for damages, reputation damage and reduced revenue.

order to meet the requirements under our customer contracts, we rely on subcontractors to manufacture and deliver our products to our

Any quality or performance failures by our subcontractors or changes in their financial or business condition could disrupt

our ability to supply quality products to our customers in a timely manner.

If we are unable to fulfill orders from our customers in

a timely manner, we could experience business interruptions, increased costs, damage to our reputation and loss of our customers.

addition, we may be subject to claims from our customers for failing to meet our contractual obligations.

Although we have several sources

for production, the inability to provide our products to our customers in a timely manner could result in the loss of customers and our

revenues could be materially reduced.

In addition, there is great competition for the most qualified and competent subcontractors.

we are unable to hire qualified subcontractors, the quality of our services and products could decline.

Furthermore, third-party manufacturers

in the electronic component industry are consolidating.

The consolidation of third-party manufacturers may give remaining manufacturers

greater leverage to increase the prices that they charge, thereby increasing our manufacturing costs.

If this were to occur and we are

unable to pass the increased costs onto our customers, our profitability could be materially and adversely affected.

manufacturers rely on a limited number of suppliers for several significant components and raw materials used in our products.

or our manufacturers are unable to obtain these components or raw materials on a timely basis, we will be unable to meet our customers’

orders, which could reduce our revenues, subject us to claims for damages and adversely affect our relationships with our customers.

rely on a limited number of suppliers for the components and raw materials used in our products.

Although there are many suppliers for

most of our component parts and raw materials, we are dependent on a limited number of suppliers for many of our significant components

and raw materials.

This reliance involves a number of significant risks, including:

unavailability

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

in the quality and price of components and raw materials.

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

In addition, our suppliers may enter

into exclusive arrangements with our competitors, be acquired by our competitors, or stop selling their products or components to us

on commercially reasonable terms or at all.

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

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

We test goodwill for impairment on an annual basis and more often if events occur or circumstances change that would likely reduce the fair value of a reporting unit to an amount below its carrying value.

We also test for other possible intangible impairments if events occur, or circumstances change that would indicate that the carrying amount of such intangible may not be recoverable.

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

Long-lived assets with determinable useful lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Such charges could have a material adverse effect on our results of operations in the period in which they are recorded.

We have reported material weaknesses in our internal control over financial reporting.

Under Section 404 of the Sarbanes-Oxley Act of 2002, we are required to furnish a management certification and an independent auditor attestation regarding the effectiveness of our internal control over financial reporting.

We are required to report, among other things, control deficiencies that constitute a “material weakness” or any changes in internal control that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.

In 2025, we identified two material weaknesses related to:

• Design and execution of controls over journal entries at I.D.

Systems and Pointer Recuperación de México, S.A.

(“Pointer Mexico”);

• Controls over the financial close and reporting process at Fleet Complete - specifically, the controls to ensure the completeness and accuracy of Fleet Complete’s financial reporting information that is consolidated into Powerfleet’s financial statements.

For a discussion of the material weaknesses and our remediation efforts, see Item 9A, Controls and Procedures, in this Annual Report on Form 10-K.

We successfully remediated the previously disclosed material weaknesses relating to controls over the redemption premium on our convertible redeemable preferred stock, determination of standalone selling price, capitalized software costs and the financial statement close process, as of March 31, 2025.

However, there can be no assurance that our current remediation efforts will be successful or that new material weaknesses will not arise in the future.

If we fail to remediate our existing material weakness or to maintain effective internal control, our ability to produce accurate and timely financial statements could be impaired, which could adversely affect our business, results of operations, and investor and customer confidence.

In addition, the identification and disclosure of any future material weaknesses, even if promptly remediated, could negatively impact market perception and the trading price of our common stock.

We also face risks associated with the cost of establishing effective control over financial reporting, insofar as we expect to continue to incur increased costs related to our control over financial reporting to remediate the above-described material weaknesses and further improve our internal control environment.

Our manufacturers rely on a limited number of suppliers for several significant components and raw materials used in our products.

We rely on a limited number of suppliers for the components and raw materials used in our products.

Although there are many suppliers for most of our component parts and raw materials, we are dependent on a limited number of suppliers for many of our significant components and raw materials.

This reliance involves several significant risks, including:

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

• fluctuations in the quality of components and raw materials;

• increases in the price of components and raw materials due to factors such as supply constraints, inflationary pressures, and changes in trade policy, including the imposition of tariffs or import and export restrictions.

Recent changes in international trade policy have introduced new or increased tariffs on a range of imported materials and components, including those sourced from regions such as China and other key manufacturing hubs.

These tariffs may increase our procurement costs and reduce pricing flexibility, particularly if we are unable to pass on such cost increases to customers.

Moreover, ongoing uncertainty regarding the scope and duration of tariff regimes and other trade barriers may make it more difficult to forecast costs and manage supply chain planning.

If we are unable to mitigate these impacts through alternative sourcing, pricing strategies or supply chain adjustments, our business, financial condition and results of operations could be materially and adversely affected.

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

In addition, our suppliers may enter into exclusive arrangements with our competitors, be acquired by our competitors, or stop selling their products or components to us on commercially reasonable terms or at all.

We may not be able to develop alternative sources for the components and raw materials.

if alternate suppliers are available to us or our manufacturers, identifying them is often difficult and time consuming.

manufacturers are unable to obtain an ample supply of product or raw materials from our existing suppliers or alternative sources of

supply, we may be unable to satisfy our customers’ orders, which could reduce our revenues, subject us to claims for damages and

adversely affect our relationships with our customers.

our products are complex, they may have undetected errors or failures when they are introduced, which could seriously harm our business,

and our product liability insurance may not adequately protect us.

products like ours often contain undetected errors or failures when first introduced.

Despite our efforts to eliminate these flaws, there

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

We provide a reserve at the time

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

Because our products are used in business-critical applications,

we could be subject to product liability claims if our systems fail to perform as intended.

Even unsuccessful claims against us could

result in costly litigation and the diversion of management’s time and resources and could damage our reputation and impair the

marketability of our systems.

Although we maintain insurance, there are no assurances that:

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

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

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

and adversely affected.

In addition, any such claims could permanently injure our reputation and customer relationships.

in practices of insurance companies in the markets in which we provide and sell our SVR services and products could adversely affect

our revenues and growth potential.

depend on the practices of insurance companies in the markets in which we provide our SVR services and sell our SVR products.

which is our main SVR market, most of the insurance companies either mandate the use of SVR services and products for certain cars, or

their equivalent, as a prerequisite for providing insurance coverage to owners of certain medium and high-end vehicles, or provide insurance

premium discounts to encourage vehicle owners to subscribe to services and purchase products such as ours.

Therefore, we rely on insurance

companies’ continued practice of accepting vehicle location and recovery technology as a preferred security product.

any of these policies or practices changes, for regulatory or commercial reasons, or if market prices for these services fall, revenues

from sales of our SVR services and products, primarily in Israel, could decline, which could adversely affect our revenues and growth

decline in sales of consumer or commercial vehicles in the markets in which we operate could result in reduced demand for our products

and services.

products are primarily installed before or immediately after the initial sale of private or commercial vehicles.

Consequently, a reduction

in sales of new vehicles could reduce our market for services and products.

New vehicle sales may decline for various reasons, including

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

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

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

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

for our SVR services and products, depends primarily on prevailing or expected vehicle theft rates.

Vehicle theft rates may decline as

a result of various factors such as the availability of improved security systems, implementation of improved or more effective law enforcement

measures, or improved economic or political conditions in markets that have high theft rates.

If vehicle theft rates in some of, or entire

of, our existing markets decline, or if insurance companies or our other customers believe that vehicle theft rates have declined or

are expected to decline, demand for our SVR services and products may decline.

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

increasing availability of low-cost handheld GPRS devices and smartphones may result in a decrease in the demand for our products by

managers of small auto fleets or providers of low-level services.

The availability of such devices has expanded considerably in recent

Any such decline in demand for our products could cause a decline in our revenues and profitability.

use of our products is subject to international regulations.

use of our products is subject to regulatory approvals of government agencies in each of the countries in which our systems are operated,

including Israel.

Even if alternate suppliers are available to us or our manufacturers, identifying them is often difficult and time-consuming.

If we or our manufacturers are unable to obtain an ample supply of product or raw materials from our existing suppliers or alternative sources of supply, we may be unable to satisfy our customers’ orders, which could reduce our revenues, subject us to claims for damages and adversely affect our relationships with our customers.

The use of our products is subject to international regulations.

The use of our products is subject to regulatory approvals of government agencies in each of the countries in which our systems are operated, including Israel.

Our operators typically must obtain authorization from each country in which our systems and products are installed.

While in general, operators have not experienced problems in obtaining regulatory approvals to date, the regulatory schemes in each country

are different and may change from time to time.

We cannot guarantee that approvals, which our operators have obtained, will remain sufficient

in the view of regulatory authorities.

In addition, we cannot assure you that third party operators of our systems and products will

obtain licenses and approvals in a timely manner in all jurisdictions in which we wish to sell our systems or that restrictions on the

use of our systems will not be unduly burdensome.

adoption of industry standards that do not incorporate the technology we use may decrease or eliminate the demand for our services or

products and could harm our results of operations.

are no established industry standards in all of the businesses in which we sell our products.

For example, vehicle location devices may

operate by employing various technologies, including network triangulation, GPS, satellite-based or network-based cellular or direction-finding

homing systems.

The development of industry standards that do not incorporate the technology we use may decrease or eliminate the demand

for our services or products and we may not be able to develop new services and products that are in compliance with such new industry

standards on a cost-effective basis.

If industry standards develop and such standards do not incorporate our products and we are unable

to effectively adapt to such new standards, such development could harm our results of operations.

financial statements may not reflect certain payments we may be required to make to employees.

certain countries, we are not required to reflect future severance fees in our liabilities.

In countries such as Argentina, Brazil and

Mexico, companies do not generally dedicate amounts to potential future severance payments.

Nonetheless, in such cases, companies must

pay a severance payment in cash upon termination of employment.

We also do not have a provision in our financial statements for potential

future severance payments in the above countries and instead such expenses are recorded when such payments are actually made upon termination

of employment.

As a result, our financial statements may not adequately reflect possible future severance payments.

of our employees in our subsidiaries are members of labor unions and a dispute between us and any such labor union could result in a

labor strike that could delay or preclude altogether our ability to generate revenues in the markets where such employees are located.

of our employees in our subsidiaries are members of labor unions.

If a labor dispute were to develop between us and our unionized employees,

such employees could go on strike and we could suffer work stoppage for a significant period of time.

A labor dispute can be difficult

to resolve and may require us to seek arbitration for resolution, which can be time-consuming, distracting to management, expensive and

difficult to predict.

The occurrence of a labor dispute with our unionized employees could delay or preclude altogether our ability to

generate revenues in the markets where such employees are located.

In addition, labor disputes with unionized employees may involve substantial

demands on behalf of the unionized employees, including substantial wage increases, which may not be correlated with our performance,

thus impairing our financial results.

Furthermore, labor laws applicable to our subsidiaries may vary and there is no assurance that

any labor disputes will be resolved in our favor.

the current laws in jurisdictions in which we operate, we may not be able to enforce non-compete covenants and therefore may be unable

to prevent our competitors from benefiting from the expertise of some of our former employees.

currently have non-competition agreements with many of our employees.

However, due to the difficulty of enforcing non-competition agreements

globally, not all of our employees in foreign jurisdictions have such agreements.

These agreements generally prohibit our employees,

if they cease working for the Company, from directly competing with us or working for our competitors for a certain period of time following

termination of their employment agreements.

Israeli courts have required employers seeking to enforce non-compete undertakings of a former

employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of material interests

of the employer which have been recognized by the courts, such as the secrecy of a company’s confidential commercial information

or its intellectual property.

If we cannot demonstrate that harm would be caused to us, we may be unable to prevent our competitors from

benefiting from the expertise of our former employees.

January 2023, the U.S.

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

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

Specifically, the proposed rule would

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

maintain a non-compete

with a worker;

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

While we cannot predict

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

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

with employees in the United States.

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

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

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

Manufacturing

of many of our products is highly complex, and an interruption by suppliers, subcontractors or vendors could adversely affect our business,

financial condition or results of operations.

of our products are the result of complex manufacturing processes and are sometimes dependent on components with a limited source of

As a result, we can provide no assurances that supply sources will not be interrupted from time to time.

Furthermore, our subcontractors

or vendors may fail to obtain supply components and fail to deliver our products.

As a result, a failure to deliver by our subcontractors

or vendors can result in decreased revenues.

Such interruption or delay of our suppliers to deliver components or interruption or delay

of our vendors or subcontractors to deliver our products could affect our business, financial condition or results of operations.

we lose our executive officers, or are unable to recruit additional personnel, our ability to manage our business could be materially

and adversely affected.

are dependent on the continued employment and performance of our executive officers.

We currently do not have employment agreements with

any of our executive officers.

Like other companies in our industry, we face intense competition for qualified personnel.

competitors have greater resources than we have to hire qualified personnel.

Accordingly, if we are not successful in attracting or retaining

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

provide financing to our customers for the purchase of our products, which may increase our credit risks in the event of a deterioration

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

sell our products to a wide range of customers in the commercial and governmental sectors.

We provide financing to customers for a portion

of such sales which could be in the form of notes or leases receivable over two to five years.

Although these customers are extended

credit terms which are approved by us internally, our business could be materially and adversely affected in the event of a deterioration

of the financial condition of one or more of our customers that results in such customers’ inability to repay us.

This risk may

increase during a general economic downturn affecting a large number of our customers or a widespread deterioration in global credit

conditions, and in the event our customers do not adequately manage their businesses or properly disclose their financial condition.

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

maintain our cash and cash equivalents with major financial institutions;

however, our cash and cash equivalent balances with these institutions

exceed the Federal Deposit Insurance Corporation insurance limits.

While we monitor on a systematic basis the cash and cash equivalent

balances in our operating accounts and adjust the balances as appropriate, these balances could be impacted if one or more of the financial

institutions with which we deposit our cash and cash equivalents fails or is subject to other adverse conditions in the financial or

credit markets.

While in general, operators have not experienced problems in obtaining regulatory approvals to date, the regulatory schemes in each country are different and may change from time to time.

We cannot guarantee that the approvals which our operators have obtained will remain sufficient in the view of regulatory authorities.

In addition, we cannot assure you that third party operators of our systems and products will obtain licenses and approvals in a timely manner in all jurisdictions in which we wish to sell our systems or that restrictions on the use of our systems will not be unduly burdensome.

The adoption of industry standards that do not incorporate the technology we use may decrease or eliminate the demand for our services or products and could harm our results of operations.

There are no established industry standards in all the businesses in which we sell our products.

For example, vehicle location devices may operate by employing various technologies, including network triangulation, GPS, satellite-based or network-based cellular or direction-finding homing systems.

The development of industry standards that do not incorporate the technology we use may decrease or eliminate the demand for our services or products and we may not be able to develop new services and products that are in compliance with such new industry standards on a cost-effective basis.

If industry standards develop and such standards do not incorporate our products and we are unable to effectively adapt to such new standards, such development could harm our results of operations.

Under the current laws in jurisdictions in which we operate, we may not be able to enforce non-compete covenants and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees.

We currently have non-competition agreements with many of our employees.

However, due to the difficulty of enforcing non-competition agreements globally, not all of our employees in foreign jurisdictions have such agreements.

These agreements generally prohibit our employees, if they cease working for us, from directly competing with us or working for our competitors for a certain period of time following termination of their employment agreements.

Israeli courts have required employers seeking to enforce non-compete undertakings of a former employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of material interests of the employer which have been recognized by the courts, such as the secrecy of a company’s confidential commercial information or its intellectual property.

If we cannot demonstrate that harm would be caused to us, we may be unable to prevent our competitors from benefiting from the expertise of our former employees.

In the United States, the legal landscape regarding non-competes is rapidly evolving.

In April 2024, the Federal Trade Commission (“FTC”) finalized a rule broadly prohibiting most non-compete clauses, with limited exceptions for senior executives.

Although the rule was set to take effect in September 2024, federal courts enjoined its enforcement shortly before implementation.

Following the 2024 U.S.

presidential election, the new presidential administration halted appeals of these rulings and signaled a departure from the prior administration’s position.

As a result, the FTC’s non-compete ban is not currently in effect, and its future remains uncertain.

As a result, there is ongoing uncertainty regarding the long-term enforceability of non-competition agreements with employees in the United States.

If future legislation, judicial decisions or regulatory actions further limit or invalidate the use of non-compete agreements, our ability to prevent former employees, who received training and experience through their employment with us, from using their knowledge of our business and operations to compete with us.

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

We maintain our cash and cash equivalents with major financial institutions;

however, our cash and cash equivalent balances with these institutions exceed the Federal Deposit Insurance Corporation insurance limits.

While we monitor on a systematic basis the cash and cash equivalent balances in our operating accounts and adjust the balances as appropriate, these balances could be impacted if one or more of the financial institutions with which we deposit our cash and cash equivalents fails or is subject to other adverse conditions in the financial or credit markets.

To date, we have experienced no loss of principal or lack of access to our invested cash or cash equivalents;

we can provide no assurance that access to our invested cash and cash equivalents will not be affected if the financial institutions

in which we hold our cash and cash equivalents fail or the financial and credit markets deteriorate.

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

test goodwill for impairment on an annual basis and more often if events occur or circumstances change that would likely reduce the fair

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

We also test for other possible intangible impairments if events occur

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

Any resulting impairment

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

record a charge.

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

amount of an asset may not be recoverable.

Such charges could have a material adverse effect on our results of operations in the period

in which they are recorded.

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

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

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

A change in the security and political situation

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

Since the establishment of

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

in Lebanon and Hamas in the Gaza Strip.

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

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

and have negatively affected business conditions in Israel.

Most recently, on October 7, 2023, Hamas terrorists invaded southern Israel

and launched missile strikes in a widespread terrorist attack on Israel.

On the same day, the Israeli government declared that the country

was at war and the Israeli military began to call up reservists for active duty, including a number of our Israeli employees, including

members of the management team in Israel.

As of the date of this report, the Israel-Hamas war remains ongoing and the conflict has had

an adverse impact on, and may continue to adversely impact, our supply chain, our ability to manufacture and deliver products in Israel

to customers and the stability of our Israeli workforce.

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

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

It is not clear how this instability will develop

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

several countries, principally in the Middle East, restrict doing business with Israel and Israeli companies, and additional countries

may impose restrictions on doing business with Israel and Israeli companies if hostilities or political instability in the region continues

or intensifies.

These restrictions may limit materially our ability to obtain raw materials from these countries or sell our products

to companies in these countries.

Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its

present trading partners could have a material adverse effect on our business, operating results and financial condition.

downturn in the Israeli economy may also have a significant impact on our business.

Israel’s economy has been subject to numerous

destabilizing factors, including a period of rampant inflation in the early to mid-1980’s, low foreign exchange reserves, fluctuations

in world commodity prices, military conflicts and civil unrest.

The revenues of certain of our products and services may be adversely

affected if fewer vehicles are used as a result of an economic downturn in Israel, an increase in use of mass transportation, an increase

in vehicle related taxes, an increase in the imputed value of vehicles provided as a part of employee compensation or other macroeconomic

changes affecting the use of vehicles.

In addition, our SVR services significantly depend on Israeli insurance companies mandating subscription

to a service such as the Company’s.

If Israeli insurance companies cease to require such subscriptions, our business could be significantly

adversely affected.

however, we can provide no assurance that access to our invested cash and cash equivalents will not be affected if the financial institutions in which we hold our cash and cash equivalents fail or the financial and credit markets deteriorate.

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

Our subsidiaries Powerfleet Israel and Pointer operate in Israel, and therefore our business and operations may be directly influenced by the political, economic and military conditions affecting Israel at any given time.

A change in the security and political situation in Israel could have a material adverse effect on our business, operating results and financial condition.

Since the establishment of the State of Israel in 1948, Israel has experienced numerous armed conflicts with neighboring Arab countries, as well as persistent hostilities involving Iran and Iran-backed groups, including Hezbollah in Lebanon and Hamas in the Gaza Strip.

In the last several years, these conflicts have involved missile strikes against civilian targets in various parts of Israel, particularly in southern Israel where Pointer’s main offices and manufacturing facility are located and have negatively affected business conditions in Israel.

In June 2025, hostilities escalated into direct military conflict between Israel and Iran, further increasing regional instability.

As of the date of this report, the conflict in the Middle East remains ongoing and has had an adverse impact on, and may continue to adversely impact, our supply chain, our ability to manufacture and deliver products in Israel to customers and the stability of our Israeli workforce.

Ongoing unrest and political instability in other countries in the region, including Syria, Iraq and Iran, further contribute to uncertainty in the Middle East, and the potential impact of these developments on Israel’s security situation remains unpredictable.

Furthermore, several countries, principally in the Middle East, restrict doing business with Israel and Israeli companies, and additional countries may impose restrictions on doing business with Israel and Israeli companies if hostilities or political instability in the region continues or intensifies.

These restrictions may limit materially our ability to obtain raw materials from these countries or sell our products to companies in these countries.

Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners could have a material adverse effect on our business, operating results and financial condition.

Any downturn in the Israeli economy may also have a significant impact on our business.

Israel’s economy has been subject to numerous destabilizing factors, including a period of rampant inflation in the early to mid-1980’s, low foreign exchange reserves, fluctuations in world commodity prices, military conflicts and civil unrest.

The revenues of certain of our products and services may be adversely affected if fewer vehicles are used as a result of an economic downturn in Israel, an increase in use of mass transportation, an increase in vehicle related taxes, an increase in the imputed value of vehicles provided as a part of employee compensation or other macroeconomic changes affecting the use of vehicles.

In addition, our security services significantly depend on Israeli insurance companies mandating subscription to a service such as the Company’s.

If Israeli insurance companies cease to require such subscriptions, our business could be significantly adversely affected.

We also rely on the renewal and retention of several operating licenses issued by certain Israeli regulatory authorities.

Should such authorities fail to renew any of these licenses, suspend existing licenses, or require additional licenses, we may be forced

to suspend or cease certain services we provide.

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

non-exempt male adult permanent residents of Israel under the age of 40, including some of Pointer’s employees, are obligated to

perform military reserve duty and may be called to active duty under emergency circumstances.

In the past there have been significant

call ups of military reservists, and it is possible that there will be additional call-ups in the future.

While Pointer has operated

effectively despite these conditions in the past, we cannot assess the impact these conditions may have on it in the future, particularly

if emergency circumstances occur.

Our operations could be disrupted by the absence for a significant period of one or more of our key

employees or a significant number of our other employees due to military service.

Any disruption in our operations would harm our business.

uncertainty and volatility in Mexico may adversely affect our business.

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

and Pointer Logistica y Monitoreo, S.A.

operate in Mexico, which has gradually

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

dollar, together with growing inflation

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

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

may trigger further increases in inflation.

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

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

actions, may contribute significantly to economic uncertainty in Mexico.

Economic instability and or government imposition of exchange

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

pesos into U.S.

dollars and other currencies.

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

and thereby our business.

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

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

in the value of the South African Rand may have a significant impact on our reported revenue and results of operations, which may make

it difficult to evaluate our business performance between reporting periods.

majority of subscription agreements and operating expenses of our subsidiary, MiX Telematics, are incurred outside the United States

and denominated in foreign currencies and are subject to fluctuations due to changes in foreign currency exchange rates, particularly

changes in the South African Rand.

Currency fluctuations, particularly those in respect of the South African Rand, may positively or

negatively impact our reported income and expenses due to the effects of translating the functional currency of our foreign subsidiaries

into our reporting currency of U.S.

we do not achieve applicable Broad-Based Black Economic Empowerment objectives in our South African businesses,

we risk not being able to renew certain of our existing contracts which service South African government and quasi-governmental customers,

as well as not being awarded future corporate and governmental contracts, each of which would result in the loss of revenue.

South African government established a legislative framework for the promotion of Broad-Based Black Economic Empowerment (“B-BBEE”).

Achievement of B-BBEE objectives is measured by a scorecard which establishes a weighting for the various components of B-BBEE which

– measuring the share of Black ownership and corresponding rights in the business,

including voting rights among others.

Control – reflecting the percentage of Black people in managerial positions ranging from junior management

Development – measuring the amount of money that was spent on the training and development of Black people

including amongst others short courses, bursaries and learnerships.

and Supplier Development (including Preferential Procurement) – with enterprise development measuring

contributions to, and the development of small Black-owned businesses with the objective of enabling them to

supply goods and services to the company in the future;

with supplier development measuring contributions to,

and the development of Black-owned suppliers to help grow their businesses;

and with preferential procurement

measuring the extent to which goods and services are procured from suppliers that are empowered and have a good

B-BBEE rating;

● Socio-Economic

Development – assessing the initiatives that the company supports often to the benefit

of groups of individuals and communities with the objective of promoting income-generating

activities and sustainable access to the economy for these beneficiaries.

B-BBEE Codes have a continuous review process and are updated from time to time.

Various amendments and clarifications with more onerous

compliance requirements have been made over the years.

is important for us to make a meaningful contribution to the country, and we view the applicable B-BBEE objectives as an opportunity

for us to ensure a brighter future for all, moreover in the context of the National Development Plan 2030.

In addition, B-BBEE objectives

are pursued, by and large, by requiring parties who contract with corporate, governmental and state-owned enterprises in South Africa

to achieve B-BBEE compliance through satisfaction of the applicable scorecard.

Parties improve their B-BBEE contributor level when contracting

with businesses that have earned good B-BBEE contributor levels in relation to their scorecards.

subsidiary, MiX Telematics Enterprise SA (PTY) Ltd.

(“MiX Enterprise”), engages with government and state-owned enterprises

in tendering for business and is therefore required to maintain at least a certain B-BBEE contributor level to continue to provide the

Currently, certain material end-customers require MiX Enterprise to maintain at least a B-BBEE contributor between levels 1

and 2 as measured under the new B-BBEE Codes.

Additionally,

the Employment Equity Act of 1998 (the “Employment Equity Act”) promotes equality in the workplace and ensures that employees

are treated fairly and have equal opportunities within the workplace.

In April 2023, the Employment Equity Amendment Bill (the “Amendment

Bill”) was signed into law.

The main objectives of the Amendment Bill are to enable the Employment and Labour Minister to impose

sector-specific Employment Equity (“EE”) targets and compliance criteria to issue EE Compliance Certificates in terms of

Section 53 of the Employment Equity Act.

This has bestowed the South African government with the right to set specific equity targets

by sector and region.

Companies that want to do business with the South African government will be required to submit a certificate from

the Department of Employment and Labour confirming that they comply with the Employment Equity Act and its objectives.

Accordingly, MiX

Telematics will not set its own EE targets, but certain targets will be imposed by the South African government.

to achieve applicable B-BBEE and EE objectives could jeopardize our ability to maintain existing business or to secure future business

from corporate, governmental or state-owned enterprises that could materially and adversely affect our business, financial condition

and results of operations.

Socio-economic

inequality in South Africa or regionally may subject us to political and economic risks, which may affect the ownership or operation

of our business.

own significant operations in South Africa.

Should such authorities fail to renew any of these licenses, suspend existing licenses, or require additional licenses, we may be forced to suspend or cease certain services we provide.

If we do not achieve applicable Broad-Based Black Economic Empowerment objectives in our South African businesses, we risk not being able to renew certain of our existing contracts which service South African government and quasi-governmental customers, as well as not being awarded future corporate and governmental contracts, each of which would result in the loss of revenue.

The South African government established a legislative framework for the promotion of Broad-Based Black Economic Empowerment (“B-BBEE”).

Achievement of B-BBEE objectives is measured by a scorecard which establishes a weighting for the various components of B-BBEE which relates to:

• Ownership – measuring the share of Black ownership and corresponding rights in the business, including voting rights among others;

• Management Control – reflecting the percentage of Black people in managerial positions ranging from junior management upwards;

• Skills Development – measuring the amount of money that was spent on the training and development of Black people including amongst others short courses, bursaries and learnerships;

• Enterprise and Supplier Development (including Preferential Procurement) – with enterprise development measuring contributions to, and the development of small Black-owned businesses with the objective of enabling them to supply goods and services to the company in the future;

with supplier development measuring contributions to, and the development of Black-owned suppliers to help grow their businesses;

and with preferential procurement measuring the extent to which goods and services are procured from suppliers that are empowered and have a good B-BBEE rating;

• Socio-Economic Development – assessing the initiatives that the company supports often to the benefit of groups of individuals and communities with the objective of promoting income-generating activities and sustainable access to the economy for these beneficiaries.

The B-BBEE Codes have a continuous review process and are updated from time to time.

Various amendments and clarifications with more onerous compliance requirements have been made over the years.

Our subsidiary, MiX Telematics Enterprise SA Pty Ltd (“MiX Enterprise”), engages with government and state-owned enterprises in tendering for business and is therefore required to maintain at least a certain B-BBEE contributor level to continue to provide the service.

Currently, certain material end-customers require MiX Enterprise to maintain level 1 or 2 B-BBEE contributor status as measured under the new B-BBEE Codes.

Furthermore, certain employment equity regulations and legislative measures that have been enacted in South Africa impose robust compliance obligations on employers in South Africa, which include establishment of numerical targets for employment equity and development and implementation of an employment equity plan for the next five years.

Failing to achieve applicable B-BBEE and EE objectives could result in financial penalties and could jeopardize our ability to maintain existing business or to secure future business from corporate, governmental or state-owned enterprises that could materially and adversely affect our business, financial condition and results of operations.

Socio-economic inequality in South Africa or regionally may subject us to political and economic risks, which may affect the ownership or operation of our business.

We own significant operations in South Africa.

As a result, we are subject to political and economic risks relating to South Africa.

Africa was transformed from a racially based government into a democracy in 1994, with successful rounds of democratic elections held

under a modern constitution during 1994, 1999, 2004, 2009, 2014 and most recently, in May 2019.

The next national elections are scheduled

to be held in 2024.

We fully support government policies aimed at redressing the disadvantages suffered by the majority of citizens under

the previous non-democratic dispensation and recognize that in order to implement these policies, our operations and profits may be impacted.

However, South Africa faces many challenges in overcoming substantial racial differences in levels of economic and social development

among its people.

While South Africa features highly developed and sophisticated business sectors and financial and legal infrastructure

at the core of its economy, large parts of the country’s black population, particularly in rural areas, do not have access to adequate

education, health care, housing and other services, including water and electricity.

In addition, South Africa also has a higher level

of unemployment than the United States.

ruling party which has controlled the South African government since democracy has committed itself to creating a stable, democratic,

free market economy, which it has largely achieved.

It remains difficult however, to predict the future political, social and economic

direction of South Africa or the manner in which any future government will attempt to address the country’s inequalities.

also difficult to predict the impact that addressing these inequalities will have on our business.

Furthermore, there has been regional,

political and economic instability in countries neighboring South Africa, which could materially and adversely affect our business, results

of operations and financial condition.

political conditions in South Africa are generally stable, changes may occur in the composition of its ruling party or in its political,

fiscal and legal systems which might affect the ownership or operation of our business, which may, in turn, materially and adversely

affect our business, financial condition and results of operations.

These risks may include changes in legislation, arbitrary interference

with private ownership of contract rights, and changes to exchange controls, taxation and other laws or policies affecting foreign trade

or investment and could materially and adversely affect our business, financial condition and results of operations.

Any changes in investment

ratings, regulations and policies or a shift in political attitudes both within and towards South Africa are beyond our control and could

materially and adversely affect our business, financial condition and results of operations.

Although political conditions in South Africa are generally stable, recent geopolitical developments.

including possible sanctions may negatively impact the international sentiment towards South Africa, which may, in turn, materially and adversely affect our business, financial condition and results of operations.

These risks may include changes in legislation, arbitrary interference with private ownership of contract rights, and changes to exchange controls, taxation and other laws or policies affecting foreign trade or investment and could materially and adversely affect our business, financial condition and results of operations.

Any resultant changes in investment ratings, regulations and policies or a shift in political attitudes both within and towards South Africa are beyond our control and could materially and adversely affect our business, financial condition and results of operations.

Risks Related to Our Securities

concentration of common stock ownership among our executive officers and directors could limit the ability of other stockholders of the

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

of May 1, 2024, our executive officers and directors beneficially owned, in the aggregate, approximately 6.47% of our outstanding

common stock, not including approximately 1,392,309 shares of common stock that our executive officers and directors may acquire

upon the exercise of outstanding options and stock appreciation rights, or if they otherwise acquire additional shares of common

stock in the future.

As a result, our officers and directors may have the ability to influence the outcome of all corporate actions

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

election of directors;

of stock option or other equity incentive compensation plans;

amendment of our organizational documents;

approval of certain mergers and other significant corporate transactions, including a sale of substantially all of our assets.

sales of our common stock, including sales of our common stock acquired upon the exercise of outstanding options, may cause the market

price of our common stock to decline.

market price of our common stock could decline as a result of sales by our existing stockholders of shares of common stock in the market,

or sales of our common stock acquired upon the exercise of outstanding options, or the perception that these sales could occur.

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

have 107,349,987 shares of common stock outstanding as of May 1, 2024, of which 100,400,538 shares are freely transferable without

restriction, and 6,949,449 shares are held by our officers and directors and, as such, are subject to the applicable volume, manner

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

In addition, as of December 31, 2023, time-based

options and market-based stock options subject to performance-based vesting conditions, to purchase 2,192,000 and 5,445,000 shares

of our common stock, respectively, were issued and outstanding, of which 1,189,000 and 0, respectively, were vested.

weighted-average exercise price of the vested non-market-based stock options is $5.54.

We also may issue additional shares of stock

in connection with our business, including in connection with acquisitions, and may grant additional stock options to our employees,

officers, directors and consultants under our stock option plans or warrants to third parties.

If a significant portion of these

shares of common stock were sold in the public market, the market value of our common stock could be adversely affected.

Amended and Restated Certificate of Incorporation, as amended, provides that the Court of Chancery of the State of Delaware will be the exclusive forum for certain legal actions between us

and our stockholders, which could limit stockholders’ ability to obtain a judicial forum viewed by the stockholders as more favorable

for disputes with us or our directors, officers or employees, and the enforceability of the exclusive forum provision may be subject

to uncertainty.

SIXTEENTH of our Amended and Restated Certificate of Incorporation (as amended,

the “Charter”) provides, subject to certain exceptions enumerated in Article SIXTEENTH, that, unless we consent in writing

to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any

stockholder to bring (i) any derivative action brought on behalf of the Company, (ii) any action asserting a claim of breach of fiduciary

duty owed by any current or former director, officer or other employee or stockholder of the Company, (iii) any action asserting a claim

arising pursuant to the General Corporation Law of Delaware (the “DGCL”) or the Charter or our Amended and Restated Bylaws

or as to which the DGCL confers jurisdiction on such court, or (iv) any action asserting a claim governed by the internal affairs doctrine,

except for, in each of the aforementioned actions, among other things, any claims which are vested in the exclusive jurisdiction of a

court or forum other than the Court of Chancery of the State of Delaware or for which the Court of Chancery of the State of Delaware

does not have subject matter jurisdiction.

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

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

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

consented to the provisions of Article SIXTEENTH.

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

laws and the rules and regulations thereunder.

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

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

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

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

Further, in the event a court finds

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

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

of Delaware law or the Charter could delay or prevent an acquisition of the Company, even if the acquisition would be beneficial to our

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

Charter contains provisions that may discourage an unsolicited takeover

proposal that stockholders may consider to be in their best interests.

We are also subject to anti-takeover provisions under Delaware

law, which could delay or prevent a change of control.

Together, these provisions may make more difficult the removal of management and

may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

provisions include:

Future sales of our common stock, including sales of our common stock acquired upon the exercise of outstanding options, may cause the market price of our common stock to decline.

The market price of our common stock could decline as a result of sales by our existing stockholders of shares of common stock in the market, or sales of our common stock acquired upon the exercise of outstanding options, or the perception that these sales could occur.

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

We have 133,370,542 shares of common stock outstanding as of June 25, 2025, of which 125,479,189 shares are freely transferable without restriction, and 7,891,353 shares are held by our officers and directors and, as such, are subject to the applicable volume, manner of sale, holding period and other limitations of Rule 144 under the Securities Act.

In addition, as of June 25, 2025, time-based options and market-based stock options subject to performance-based vesting conditions, to purchase 1,890,000 and 5,200,000 shares of our common stock, respectively, were issued and outstanding, of which 1,627,000 and 0, respectively, have vested.

As of March 31, 2025, the weighted-average exercise price of the vested non-market-based stock options was $6.37.

We also may issue additional shares of stock in connection with our business, including in connection with acquisitions, and may grant additional stock options to our employees, officers, directors and consultants under our stock option plans or warrants to third parties.

If a significant portion of these shares of common stock were sold on the public market, the market value of our common stock could be adversely affected.

The concentration of common stock ownership among our executive officers and directors could limit the ability of other stockholders of the Company to influence the outcome of corporate transactions or other matters submitted for stockholder approval.

As of June 25, 2025, our executive officers and directors beneficially owned, in the aggregate, approximately 5.9% of our outstanding common stock, not including approximately 965,000 shares of common stock that our executive officers and directors may acquire upon the exercise of outstanding options and stock appreciation rights, or if they otherwise acquire additional shares of common stock in the future.

As a result, our officers and directors may have the ability to influence the outcome of all corporate actions requiring stockholder approval, irrespective of how our other stockholders may vote, including the following actions:

• the election of directors;

• adoption of stock option or other equity incentive compensation plans;

• the amendment of our organizational documents;

• the approval of certain mergers and other significant corporate transactions, including the sale of substantially all of our assets.

Our Amended and Restated Certificate of Incorporation, as amended, provides that the Court of Chancery of the State of Delaware will be the exclusive forum for certain legal actions between us and our stockholders, which could limit stockholders’ ability to obtain a judicial forum viewed by the stockholders as more favorable for disputes with us or our directors, officers or employees, and the enforceability of the exclusive forum provision may be subject to uncertainty.

Article SIXTEENTH of our Amended and Restated Certificate of Incorporation (as amended, the “Charter”) provides, subject to certain exceptions enumerated in Article SIXTEENTH, that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any stockholder to bring (i) any derivative action brought on behalf of the Company, (ii) any action asserting a claim of breach of fiduciary duty owed by any current or former director, officer or other employee or stockholder of the Company, (iii) any action asserting a claim arising pursuant to the General Corporation Law of Delaware (the “DGCL”) or the Charter or our Amended and Restated Bylaws or as to which the DGCL confers jurisdiction on such court, or (iv) any action asserting a claim governed by the internal affairs doctrine, except for, in each of the aforementioned actions, among other things, any claims which are vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery of the State of Delaware or for which the Court of Chancery of the State of Delaware does not have subject matter jurisdiction.

Accordingly, the exclusive forum provision will not apply to claims arising under the Securities Act the Exchange Act or other federal securities laws for which there is exclusive federal or concurrent federal and state jurisdiction.

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

Stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

Although we believe this exclusive forum provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, this exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims.

Further, in the event a court finds the exclusive forum provision contained in the Charter to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

Provisions of Delaware law or the Charter could delay or prevent an acquisition of the Company, even if the acquisition would be beneficial to our stockholders, and could make it more difficult for stockholders to change our management.

The Charter contains provisions that may discourage an unsolicited takeover proposal that stockholders may consider to be in their best interests.

We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control.

Together, these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

These provisions include:

the absence of cumulative voting in the election of directors;

the ability of our board of directors to issue up to

50,000 shares of currently undesignated and unissued preferred stock without prior stockholder approval;

advance notice requirements for

stockholder proposals or nominations of directors;

limitations on the ability of stockholders to call special meetings or act by written

the requirement that certain amendments to the Charter be approved by 75% of the voting power of the outstanding shares of our

capital stock;

the ability of our board of directors to issue up to 50,000 shares of currently undesignated and unissued preferred stock without prior stockholder approval;

advance notice requirements for stockholder proposals or nominations of directors;

limitations on the ability of stockholders to call special meetings or act by written consent;

the requirement that certain amendments to the Charter be approved by 75% of the voting power of the outstanding shares of our capital stock;

and the ability of our board of directors to amend our bylaws without stockholder approval.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors