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Item 7. Management’s Discussion and Analysis

2025-06-26 compared with 2024-05-09 · 332 added, 535 removed, 38 unchanged (96% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

following discussion is intended to assist you in understanding our financial condition and results of operations and should be read

in conjunction with the financial statements and related notes included elsewhere in this Form 10-K.

Many of the amounts

and percentages in this section have been rounded for convenience of presentation, but actual recorded amounts have been used in computations.

Accordingly, some information may appear not to compute accurately.

Restatement of Previously Issued Consolidated Financial

described in the Explanatory Note included in this Form 10-K, we have restated our previously issued consolidated financial

statements for the Non-Reliance Periods.

As a result, we have also restated certain previously reported financial information for the

fiscal years ended December 31, 2022 and 2021 in this “Item 7.

Management’s Discussion and Analysis of Financial Condition

and Results of Operations,” including but not limited to financial information under the sections entitled “Results of Operations”

and “Liquidity and Capital Resources—Capital Requirements” to conform the discussion with the restated information.

See Note 2 to our consolidated financial statements, included Item 8 of this Form 10-K, for additional information on

the restatement of, and the related effects on, our consolidated financial statements for the Non-Reliance Periods.

is a global leader of IOT solutions providing valuable business intelligence for managing high-value enterprise

assets that improve operational efficiencies.

are headquartered in Woodcliff Lake, New Jersey, with offices located around the globe.

On April 2, 2024, we consummated the MiX Combination, pursuant to which MiX Telematics became our indirect, wholly

owned subsidiary.

Powerfleet for Warehouse solutions are designed to provide on-premise or in-facility asset and operator management, monitoring, and

visibility for warehouse trucks such as forklifts, man-lifts, tuggers and ground support equipment at airports.

These solutions utilize

a variety of communications capabilities such as Bluetooth ® , WiFi, and proprietary radio frequency.

Powerfleet for Logistics solutions are designed to provide bumper-to-bumper asset management, monitoring, and visibility for over-the-road

based assets such as heavy trucks, dry-van trailers, refrigerated trailers and shipping containers and their associated cargo.

systems provide mobile-asset tracking and condition-monitoring solutions to meet the transportation market’s desire for greater

visibility, safety, security, and productivity throughout global supply chains.

Powerfleet for Vehicles solutions are designed both to enhance the vehicle fleet management process, whether it’s a rental car,

a private fleet, or automotive OEM partners.

We achieve this by providing critical information that

can be used to increase revenues, reduce costs and improve customer service.

patented technologies address the needs of organizations to monitor and analyze their assets to improve safety, increase efficiency and

productivity, reduce costs, and improve profitability.

Our offerings are sold under the global brands Powerfleet, Pointer and Cellocator.

We deliver advanced mobility solutions that connect

assets to increase visibility operational efficiency and profitability by leveraging our Unity platform product strategy.

Across our vertical

markets we differentiate ourselves by being OEM agnostic and helping mixed fleets view and manage their assets similarly.

All of our solutions

are paired with SaaS analytics platforms to provide an even deeper layer of insights.

These insights include a full set of operational

KPIs to drive operational and strategic decisions.

These KPIs leverage industry comparisons to show how a company is performing versus

The more data the system collects, the more accurate a client’s understanding becomes.

analytics platform, which is integrated into our customers’ management systems, is designed to provide a single, integrated view

of asset and operator activity across multiple locations that provides enterprise-wide benchmarks and peer-industry comparisons.

for analytics, as well as the data contained therein, to differentiate us from our competitors, make a growing contribution to revenue,

add value to our solutions, and help keep us at the forefront of the wireless asset management markets we serve.

sell our wireless mobility solutions to both corporate-level executives, division heads and site-level management within the enterprise.

We also utilize channel partners such as independent dealers and OEMs who may opt for us to white label our product.

Typically, our initial

system deployment serves as a basis for potential expansion across the customer’s organization.

We work closely with customers

to help maximize the utilization and benefits of our system and demonstrate the value of enterprise-wide deployments.

Post-implementation,

we consult with our customers to further extend and customize the benefits to the enterprise by delivering enhanced analytics capabilities.

market and sell our solutions to a wide range of customers in the commercial and government sectors.

Our customers operate in diverse

markets, such as automotive manufacturing, heavy industry, retail food and grocery distribution, logistics, wholesale distribution, transportation,

aviation, manufacturing, aerospace and defense, homeland security and vehicle rental.

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.

As of December 31, 2023, we

had cash (including restricted cash) and cash equivalents of $19.3 million, working capital of $23.5 million, and an accumulated

deficit of $146.3 million.

Our primary sources of cash are cash flows from 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.

Accounting Policies and Estimates

have adopted various accounting policies that govern the application of accounting principles generally accepted in the United States

in the preparation of our financial statements.

Our significant accounting policies are described in Note 3 to our consolidated financial

statements included in this Form 10-K.

Certain accounting policies involve significant judgments and assumptions by

our management that can have a material impact on the carrying value of certain assets and liabilities.

We consider such accounting policies

to be our critical accounting policies.

The judgments and assumptions used by our management in these critical accounting policies are

based on historical experience and other factors that our management believes to be reasonable under the circumstances.

Because of the

nature of these judgments and assumptions, actual results could differ significantly from these judgments and estimates, which could

have a material impact on the carrying values of our assets and liabilities and our results of operations.

Our critical accounting policies

are described below.

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

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing

Sales, value add, and other taxes we collect concurrently with revenue-producing activities are excluded from

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

The expected costs

associated with our base warranties continue to be recognized as an expense when the products are sold.

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

Product sales are recognized

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

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

For products which are

not distinct to the customer separate from the SaaS services provided, we consider both hardware and SaaS services a bundled

performance obligation.

Under the applicable accounting guidance, all of our billings for future services are deferred

and classified as a current and long-term liability.

The deferred revenue is recognized over the service contract life, ranging from

one to five years, beginning at the time that a customer acknowledges acceptance of the equipment and service.

Payment terms are generally

30 days after invoice date.

We recognize revenue for remotely hosted SaaS agreements and post-contract maintenance and support agreements beyond our standard

warranties over the life of the contract.

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

is expensed as incurred.

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

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

Deferred revenue also includes prepayment of extended

maintenance, hosting and support contracts.

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

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

also derive revenue from leasing arrangements.

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

maintenance, support and interest.

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

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

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

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

Our contracts with customers may include multiple performance obligations.

For such arrangements, we allocate revenue

to each performance obligation based on our relative standalone selling price (“SSP”).

Judgment is required to determine

the SSP for each distinct performance obligation.

We generally determine standalone selling prices based on observable prices

charged to customers.

Significant pricing practices

taken into consideration include our discounting practices, the size and volume of our transactions, the customer demographic, price

lists, our go-to-market strategy and historical and current sales and contract prices.

As our go-to-market strategies evolve, we may

modify our pricing practices in the future, which could result in changes to SSP.

certain cases, we are able to establish SSP based on observable prices of products or services sold separately in comparable circumstances

to similar customers.

We use a single amount to estimate SSP when it has observable prices.

If SSP is not directly observable, for example

when pricing is highly variable, we use a range of SSP.

We determine the SSP range using information that may include pricing practices

or other observable inputs.

We typically have more than one SSP for individual products and services due to the stratification of those

products and services by customer size.

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

we expect to recover those costs through future fees from the customers.

We amortize the asset over one to five years

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

and Intangibles

represents costs in excess of fair values assigned to the underlying net assets of acquired businesses.

Goodwill and intangible

assets deemed to have indefinite lives are not amortized and are tested for impairment on an annual basis and between annual tests

whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Intangible assets other than

goodwill are amortized over their useful lives unless the lives are determined to be indefinite.

Intangible assets are carried at

cost, less accumulated amortization.

Intangible assets consist of trademarks and trade names, patents, customer relationships and

other intangible assets.

Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below

the operating segment.

We operate in one reportable segment which is our only reporting unit.

We test our goodwill for impairment

annually, which is the first day of our fourth quarter or when an indicator of impairment exists, by comparing the fair value of the

reporting unit to its carrying value.

test for goodwill impairment at the reporting unit level on October 1 of each year and between annual tests if a triggering event indicates

the possibility of an impairment.

We performed a quantitative assessment whereby the fair value of the reporting unit is calculated using

a market approach and a discounted cash flow method, as a form of the income approach.

The market approach includes the use of comparative

revenue multiples to complement discounted cash flow results.

The discounted cash flow method is based on the present value of the projected

cash flows and a terminal value.

The terminal value represents the expected normalized future cash flows of the reporting unit beyond

the cash flows from the discrete projection period.

The fair value of the reporting unit is calculated based on the sum of the present

value of the cash flows from the discrete period and the present value of the terminal value.

The discount rate represented our estimate

of the WACC, or expected return, that a marketplace participant would have required as of the valuation date.

The application of our

goodwill impairment test required key assumptions underlying our valuation model.

discounted cash flow analysis factored in assumptions on discount rates and terminal growth rates to reflect risk profiles, as well as

revenue and cost growth relative to history and market trends and expectations.

The market multiples approach incorporated judgment involved

in the selection of comparable public company multiples and benchmarks.

The selection of companies and multiples was influenced by differences

in growth and profitability, and volatility in market prices of peer companies.

These valuation inputs are inherently judgmental, and

an adverse change in one or a combination of these inputs could trigger a goodwill impairment loss in the future.

In connection with our goodwill impairment testing as of October 1, 2023, the estimated fair value exceeded its carrying

value by approximately 6%.

the years ended December 31, 2021, 2022 and 2023, we did not incur an impairment charge.

accordance with ASC 805 , Business Combinations (ASC 805), we recognize the tangible and intangible assets

acquired and liabilities assumed based on their estimated fair values.

Determining these fair values requires management to make significant

estimates and assumptions, especially with respect to intangible assets.

recognize identifiable assets acquired and liabilities assumed at their acquisition date fair value.

During the measurement period, which may be

up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding

offset to goodwill or bargain purchase to the extent we identify adjustments to the preliminary fair values.

Upon the conclusion of the

measurement period or final determination of the values of assets acquired or liabilities assumed, any subsequent adjustments are recorded

to the consolidated statements of operations.

use the asset and liability method of accounting for deferred income taxes.

Deferred income taxes are measured by applying enacted statutory

rates to net operating loss carryforwards and to the differences between the financial reporting and tax bases of assets and liabilities.

Deferred tax assets are reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the

deferred tax assets will not be realized.

recognize uncertainty in income taxes in the financial statements using a recognition threshold and measurement attribute of a tax position

taken or expected to be taken in a tax return.

We apply the “more-likely-than-not” recognition threshold to all tax positions.

We have opted to classify interest and penalties that would accrue according to the provisions of relevant tax law as selling, general,

and administrative expenses, in the consolidated statement of operations.

For the years ended December 31, 2021, 2022 and 2023, interest

and penalties were immaterial.

of Operations

following table sets forth certain items related to our statement of operations as a percentage of revenues for the periods

indicated and should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in

this Form 10-K.

The following discussion is intended to assist you in understanding our financial condition and results of operations and should be read in conjunction with the financial statements and related notes included elsewhere in this Form 10-K.

Many of the amounts and percentages in this section have been rounded for convenience of presentation, but actual recorded amounts have been used in computations.

Accordingly, some information may appear not to be computed accurately.

We are a global provider of AIoT solutions providing valuable business intelligence for managing high-value enterprise and mid-market assets that improve operational efficiencies.

We are headquartered in Woodcliff Lake, New Jersey, with offices located around the globe.

Our Unity data highway and AIoT ecosystem is the centerpiece of our strategy.

Unity has the capability to ingest data from multiple data sources, harmonizing and transforming the dataset, and delivering simply understood insights through a unified SaaS platform and deep integrations with customer business systems.

Unity provides mission-critical solutions from warehouse to trailer to vehicle, allowing customers to consolidate suppliers and gain end-to-end control of their operations in a single pane of glass.

Unity enables customers to consume their data in multiple ways, from data-powered applications to unified operations integrations, which provide the ability to improve performance of the asset, the individual in charge of the asset, and the business process, continuously improving our customers’ business performance.

Within the Unity ecosystem, our Powerfleet for Warehouse and Factory AIoT solutions are designed to provide on-premise or in-facility asset and operator management, monitoring, and visibility for warehouse and factory trucks such as forklifts, man-lifts, tuggers and ground support equipment at airports.

These solutions utilize a variety of communications capabilities such as Bluetooth®, WiFi, and proprietary radio frequency technology.

Additionally, within the Unity ecosystem, our Powerfleet for On-Road AIoT solutions are designed to provide bumper-to-bumper AIoT asset management, monitoring, and visibility for over-the-road based assets such as heavy trucks, dry-van trailers, refrigerated trailers and shipping containers and their associated cargo.

These AIoT solutions provide mobile-asset tracking and condition-monitoring solutions to meet the transportation market’s desire for greater visibility, safety, security, and productivity throughout global supply chains.

Our On-Road AIoT solutions extend to all mobile assets, whether it is a rental car, a private fleet, or automotive OEM partners.

We achieve this by providing critical information that can be used to increase revenues, reduce costs, enhance safety and sustainability, deliver compliance, and improve customer service.

Our patented technologies are proven solutions for organizations that must monitor and analyze their assets to improve safety, increase efficiency, reduce costs, and drive profitability.

Our offerings are sold under the global brands Powerfleet, Pointer, Cellocator, MiX by Powerfleet and Fleet Complete.

We have incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of $205.8 million as of March 31, 2025.

Critical Accounting Estimates

We have adopted various accounting policies that govern the application of accounting principles generally accepted in the United States in the preparation of our consolidated financial statements.

We believe the following accounting policies involve a high degree of judgment and complexity, and our other significant accounting policies are described in Note 2 to our consolidated financial statements included in this Form 10-K.

Certain accounting policies involve significant judgments and assumptions by our management that can have a material impact on the carrying value of certain assets and liabilities.

The judgments and assumptions used by our management are based on historical experience and other factors that our management believes to be reasonable under the circumstances.

Because of the nature of these judgments and assumptions, actual results could differ significantly from these judgments and estimates, which could have a material

impact on the carrying values of our assets and liabilities and our results of operations.

Our critical accounting estimates, assumptions and judgments that we believe have the most significant impact on our consolidated results are described below.

Goodwill and Intangibles

Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses.

Goodwill and intangible assets deemed to have indefinite lives are not amortized and are tested for impairment on an annual basis and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Intangible assets other than goodwill are amortized over their useful lives unless the lives are determined to be indefinite.

Intangible assets are carried at cost, less accumulated amortization.

Intangible assets consist of trademarks and trade names, patents, customer relationships and other intangible assets.

Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment.

We operate with one operating segment, which is our only reporting unit and segment presented in the consolidated financial statements.

We test our goodwill for impairment annually, which is October 1 or when an indicator of impairment exists, by comparing the fair value of the reporting unit to its carrying value.

We test for goodwill impa irment at the reporting unit level on October 1 of each year and between annual tests if a triggering event indicates the possibility of an impairment.

As of October 1, 2024, we performed a quantitative assessment whereby the fair value of the reporting unit is calculated using a market approach.

The fair value of the reporting unit was substantially more than its carrying value.

For the year ended March 31, 2025, we performed a qualitative assessment of goodwill.

We considered such factors as our market capitalization as of March 31, 2025, and over a certain period of time, macroeconomic conditions, industry and market considerations, and overall financial performance.

The fair value of the reporting unit was substantially more than its carrying value.

For the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025, we did not incur an impairment charge.

Business Combinations

We recognize the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values.

Determining these fair values requires management to make significant estimates and assumptions, especially with respect to intangible assets.

We recognize identifiable assets acquired and liabilities assumed at their acquisition date fair value.

We used discounted cash flow analyses, to assess certain components of our purchase price allocation.

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

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

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

During the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill or bargain purchase to the extent we identify adjustments to the preliminary fair values.

Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, any subsequent adjustments are recorded to the Consolidated Statement of Operations.

Results of Operations

The following table sets forth certain items related to our Consolidated Statement of Operations as a percentage of revenues for the periods indicated and should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Form 10-K.

A detailed discussion of the material changes in our operating results is set forth below.

Year Ended December 31,

2021 (As restated)

2022 (As restated)

December 31, Three Months Ended

March 31, Year Ended March 31,

2023 2024 2025

Products 41.9 % 37.2 % 35.8 % 21.1 % 23.6 %

Services 58.1 % 62.8 % 64.2 % 78.9 % 76.4 %

Total revenues 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

2 unchanged sentences

Cost of services 20.9 % 22.6 % 23.8 % 29.6 % 29.2 %

Total cost of revenues 52.2 % 49.8 % 52.0 % 47.2 % 46.3 %

Gross profit 47.8 % 50.2 % 48.0 % 52.8 % 53.7 %

Operating expenses:

6 unchanged sentences

Bargain purchase - Movingdots — % 6.8 % — % — % — %

Other (expense) income, net

Other income (expense), net 0.0% — % 0.0% (0.2) % (0.3) %

Net loss before income taxes (4.3) % (3.8) % (24.2) % (12.3) % (12.8) %

2 unchanged sentences

Non-controlling interest 0.0% 0.0% 0.0% 0.0% 0.0%

Net loss (5.0) % (4.2) % (25.2) % (12.0) % (14.1) %

Accretion of preferred stock (4.3) % (5.3) % (29.6) % — % — %

1 unchanged sentence

Net loss attributable to common stockholders (12.4) % (12.9) % (58.2) % (12.0) % (14.1) %

Ended December 31, 2023 Compared to Year Ended December 31, 2022

decreased by approximately $2.2 million, or 1.6%, to $133.7 million in 2023 from $135.9 million (as restated) in 2022.

Revenues from products decreased by

approximately $7.2 million, or 12.7%, to $49.7 million in 2023 from $56.9 million (as restated) in 2022.

The decrease in product

revenues was due to decreased product sales in Germany, where we are actively shutting down sales from low margin contracts, large

logistics companies recalibrating demand following aggressive builds during the pandemic, and lower product sales in and out of

Israel reflecting geopolitical headwinds and a proactive decision to shutter our hardware-only line of business.

These decreases

were offset by increases in product revenue in our Powerfleet for Vehicles business in the United States due to new unit purchases

from new and existing customers.

Revenues from services increased by

approximately $5.0 million, or 6.4%, to $84.0 million in 2023 from $79.0 million (as restated) in 2022.

The increase in services

revenues was principally due to an increase in our install base that generates service revenue, with revenue growth concentrated in

North America where a positive market response to our Unity SaaS product offering has been a significant contributing factor.

Year Ended March 31, 2025 Compared to Year Ended December 31, 2023

Revenues increased by $228.8 million, or 171.1%, to $362.5 million in the year ended March 31, 2025, from $133.7 million in the year ended December 31, 2023.

Revenues from products increased by $35.8 million, or 72.1%, to $85.6 million in the year ended March 31, 2025, from $49.7 million in the year ended December 31, 2023.

The increase in product revenues was primarily due to the MiX Telematics business acquired, which contributed $31.8 million, and the Fleet Complete business acquired, which contributed $9.5 million, in product revenues for the year ended March 31, 2025, offset by lower demand from logistics customers in North America.

Revenues from services increased by $192.9 million, or 229.7%, to $276.9 million in the year ended March 31, 2025, from $84.0 million in the year ended December 31, 2023.

The increase in services revenues was principally due to the MiX Telematics business acquired, which contributed $139.4 million, and the Fleet Complete business acquired, which contributed $49.5 million, in service revenues for the year ended March 31, 2025.

COST OF REVENUES.

Cost of revenues decreased

by approximately $4.3 million, or 6.0%, to $66.7 million in 2023 from $70.9 million in 2022.

Gross profit was $67.1 million in 2023 compared

to $65.0 million (as restated) in 2022.

As a percentage of revenues, gross profit increased to 50.2% in 2023 from 47.8% in 2022.

Cost of products decreased by approximately $6.2

million, or 14.5%, to $36.4 million in 2023 from $42.6 million in 2022.

Gross profit for products was $13.3 million in 2023 compared

to $14.4 million (as restated) in 2022.

Cost of revenues increased by $101.3 million, or 152.0%, to $168.0 million in the year ended March 31, 2025, from $66.7 million in the year ended December 31, 2023.

The MiX Telematics business acquired contributed $71.8 million, and the Fleet Complete business acquired contributed $18.3 million to cost of revenues for the year ended March 31, 2025.

Gross profit was $194.5 million in the year ended March 31, 2025, compared to $67.1 million in the year ended December 31, 2023.

As a percentage of revenues, gross profit increased to 53.7% in the year ended March 31, 2025 from 50.2% in the year ended December 31, 2023.

Cost of products increased by $25.6 million, or 70.2%, to $62.0 million in the year ended March 31, 2025, from $36.4 million in the year ended December 31, 2023.

Gross profit for products was $23.6 million in the year ended March 31, 2025, compared to $13.3 million in the year ended December 31, 2023.

As a percentage of product revenues, gross profit increased to 27.6% in the year ended March 31, 2025 from 26.8% in the year ended December 31, 2023.

The increase in gross profit as a percentage of product revenues was principally due to a larger proportion of sales being driven by higher margin product lines.

Cost of services increased by $75.8 million, or 250.4%, to $106.0 million in the year ended March 31, 2025, from $30.3 million in the year ended December 31, 2023.

The MiX Telematics business acquired contributed $49.5 million, the Fleet Complete business acquired contributed $11.2 million, and the amortization of MiX Telematics and Fleet Complete acquisition-related intangibles contributed $14.8 million to cost of services for the year ended March 31, 2025.

Gross profit for services was $170.9 million in the year ended March 31, 2025, compared to $53.7 million in the year ended December 31, 2023.

As a percentage of service revenues, gross profit decreased to 61.7% in the year ended March 31, 2025 from 64.0% in the year ended December 31, 2023.

The decrease in gross profit as a percentage of revenues was mainly due to the commencement of amortization of MiX Telematics and Fleet Complete acquisition-related intangibles.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

Selling, general and administrative (“SG&A”) expenses increased by $133.1 million, or 186.8%, to $204.4 million for the year ended March 31, 2025, compared to $71.3 million for the year ended December 31, 2023.

The increase was primarily driven by the inclusion of SG&A expenses from the MiX Telematics business acquired, which contributed $73.9 million , and the Fleet Complete business acquired, which contributed $28.0 million.

In addition, the increase reflects $21.3 million in acquisition-related expenses, $4.9 million in integration-related costs, $10.1 million in restructuring charges, and $4.7 million in accelerated stock-based compensation expenses, all incurred during the year ended March 31, 2025.

As a percentage of revenues, SG&A expenses, excluding $41.1 million in acquisition-related, restructuring and accelerated stock-based compensation costs, decreased to 45.0% in the year ended March 31, 2025, from 53.3% in the year ended December 31, 2023.

RESEARCH AND DEVELOPMENT EXPENSES.

Research and development (“R&D”) expenses increased by $7.7 million, or 91.7%, to $16.1 million in the year ended March 31, 2025, compared to $8.4 million in the year ended December 31, 2023, principally due to $5.9 million incurred from the MiX Telematics business acquired, and $2.5 million incurred from the Fleet Complete business acquired, following completion of the transactions.

As a percentage of revenues, R&D expenses decreased to 4.4% in the year ended March 31, 2025, from 6.3% in the year ended December 31, 2023.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.

Net loss attributable to common stockholders was $51.0 million, or $(0.43) per basic and diluted share, for the year ended March 31, 2025, as compared to net loss of $17.3 million, or $(0.49) per basic and diluted share, for the year ended December 31, 2023.

The net loss was primarily the result of $21.3 million in a cquisition-related expenses , $4.9 million in integration-related costs , $10.1 million in restructuring costs, and $14.8 million from the comme

ncement of amortization of MiX Telematics and Fleet Complete acquisition-related intangibles, partially offset by $0.5 million gain in other income from the derivative mark-to-market adjustment .

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Revenues increased by $69.9 million, or 207.2%, to $103.6 million in the three months ended March 31, 2025, from $33.7 million in the same period in 2024.

Revenues from products increased by $9.8 million, or 81.0%, to $21.9 million in the three months ended March 31, 2025, from $12.1 million in the same period in 2024.

The increase in product revenues was primarily due to the MiX Telematics business acquired, which contributed $6.2 million, and the Fleet Complete business acquired, which contributed $4.6 million, in product revenues for the three months ended March 31, 2025, offset by lower demand from logistics customers in North America.

Revenues from services increased by $60.1 million, or 277.5%, to $81.8 million in the three months ended March 31, 2025, from $21.7 million in the same period in 2024.

The increase in services revenues was primarily due to the MiX Telematics business acquired, which contributed $34.6 million, and the Fleet Complete business acquired, which contributed $24.7 million, in service revenues for the three months ended March 31, 2025.

COST OF REVENUES.

Cost of revenues increased by $31.3 million, or 178.7%, to $48.9 million in the three months ended March 31, 2025, from $17.5 million for the same period in 2024.

The MiX Telematics business acquired contributed $18.1 million, and the Fleet Complete business acquired contributed $9.1 million to cost of revenues for the three months March 31, 2025.

Gross profit was $54.8 million in the three months ended March 31, 2025, compared to $16.2 million for the same period in 2024.

As a percentage of revenues, gross profit increased to 52.8% in the three months ended March 31, 2025 from 48.0% in the same period in 2024.

Cost of products increased by $8.6 million, or 90.8%, to $18.2 million in the three months ended March 31, 2025, from $9.5 million in the same period in 2024.

Gross profit for products was $3.7 million in the three months ended March 31, 2025, compared to $2.6 million in the same period in 2024.

As a percentage of product revenues, gross profit decreased to 17.0% in the three months ended March 31, 2025 from 21.2% in the same period in 2024.

The decrease in gross profit as a percentage of product revenues was principally due to a larger proportion of sales being driven by lower margin product lines.

Cost of services increased by $22.7 million, or 282.9%, to $30.7 million in the three months ended March 31, 2025, from $8.0 million in the same period in 2024.

The MiX Telematics business acquired contributed $13.3 million, the Fleet Complete business acquired contributed $5.5 million, and the amortization of MiX Telematics and Fleet Complete acquisition-related intangibles contributed $5.2 million to cost of services for the three months ended March 31, 2025.

Gross profit for services was $51.0 million in the three months ended March 31, 2025, compared to $13.6 million in the same period in 2024.

As a percentage of service revenues, gross profit decreased to 62.4% in the three months ended March 31, 2025 from 63.0% in the same period in 2024.

The decrease in gross profit as a percentage of revenues was mainly due to the commencement of amortization of MiX Telematics and Fleet Complete acquisition-related intangibles.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

SG&A expenses increased by $35.0 million, or 160.3%, to $56.8 million in the three months ended March 31, 2025, compared to $21.8 million in the same period in 2024, principally due to the MiX Telematics business acquired, which contributed $20.6 million, and the Fleet Complete business acquired, which contributed $13.1 million, of SG&A expenses for the three months ended March 31, 2024.

SG&A expenses included $0.4 million in acquisition-related expenses, $2.6 million in integration related expenses and $7.0 million in restructuring costs for the three month s ended March 31, 2025.

As a percentage of revenues, SG&A expenses, excluding $10.1 million in acquisition-related, integration related and restructuring, decreased to 45.0% in the three months ended March 31, 2025, from 64.7% in the same period in 2024.

RESEARCH AND DEVELOPMENT EXPENSES.

R&D expenses increased by $2.9 million, or 143.0%, to $4.9 million in the three months ended March 31, 2025, compared to $2.0 million in the same period in 2024, principally due to $1.6 million incurred from the MiX Telematics business acquired, and $1.3 million incurred from the Fleet Complete business acquired, following completion of the transactions.

As a percentage of revenues, R&D expenses decreased to 4.7% in the three months ended March 31, 2025, from 6.0% in the same period in 2024.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.

Net loss attributable to common stockholders was $12.4 million, or $(0.09) per basic and diluted share, for the three months ended March 31, 2025, as compared to net loss of $19.6 million, or $(0.55) per basic and diluted share, for the same period in 2024.

The net loss was primarily the result of $0.4 million in acquisition-related expenses

, $2.6 million in integration-related costs, $7.0 million in restructuring costs, and $5.2 million from the commencement of amortization of MiX Telematics and Fleet Complete acquisition-related intangibles.

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

Revenues decreased by approximately $2.2 million, or 1.6%, to $133.7 million in 2023 from $135.9 million in 2022.

Revenues from products decreased by approximately $7.2 million, or 12.7%, to $49.7 million in 2023 from $56.9 million in 2022.

The decrease in product revenues was due to decreased product sales in Germany, where we are actively shutting down sales from low margin contracts, large logistics companies recalibrating demand following aggressive builds during the pandemic, and lower product sales in and out of Israel reflecting geopolitical headwinds and a proactive decision to shutter our hardware-only line of business.

These decreases were offset by increases in product revenue in our Powerfleet for Vehicles business in the United States due to new unit purchases from new and existing customers.

Revenues from services increased by approximately $5.0 million, or 6.4%, to $84.0 million in 2023 from $79.0 million in 2022.

The increase in services revenues was principally due to an increase in our install base that generates service revenue, with revenue growth concentrated in North America where a positive market response to our Unity SaaS product offering has been a significant contributing factor.

COST OF REVENUES.

Cost of revenues decreased by approximately $4.3 million, or 6.0%, to $66.7 million in 2023 from $70.9 million in 2022.

Gross profit was $67.1 million in 2023 compared to $65.0 million in 2022.

Cost of products decreased by approximately $6.2 million, or 14.5%, to $36.4 million in 2023 from $42.6 million in 2022.

Gross profit for products was $13.3 million in 2023 compared to $14.4 million in 2022.

As a percentage of product revenues, gross profit increased to 26.8% in 2023 from 25.2% in 2022.

The increase in gross profit as a percentage of product revenues was principally due to decisions to stop fulfilling low margin

orders and decreases in raw materials costs related to global supply chain issues, which were more prevalent in 2022 than 2023.

Cost of services increased by approximately $1.9 million, or 6.7%,

to $30.3 million in 2023 from $28.4 million in 2022.

Gross profit for services was $53.7 million in 2023 compared to $50.6 million (as restated)

The increase in gross profit as a percentage of product revenues was principally due to decisions to stop fulfilling low margin orders and decreases in raw materials costs related to global supply chain issues, which were more prevalent in 2022 than 2023.

Cost of services increased by approximately $1.9 million, or 6.7%, to $30.3 million in 2023 from $28.4 million in 2022.

Gross profit for services was $53.7 million in 2023 compared to $50.6 million in 2022.

As a percentage of service revenues, gross profit minimally decreased to 64.0% in 2023 from 64.1% in 2022.

The decrease in gross

profit as a percentage of services revenues was principally due to an increase in our install base that generates service revenue, offset

by reduction due to the commencement of amortization for our Unity SaaS platform.

The decrease in gross profit as a percentage of services revenues was principally due to an increase in our install base that generates service revenue, offset by reduction due to the commencement of amortization for our Unity SaaS platform.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

Selling, general and administrative (“SG&A”) expenses increased by approximately $7.8 million, or 12.2%, to $71.3

million in 2023 compared to $63.5 million (as restated) in 2022.

The increase was principally due to an aggregate of $5.5 million in transaction-related

costs in connection with our acquisition of Movingdots GmbH (“Movingdots”) and business combination with MiX Telematics,

$2.1 million in SG&A costs incurred by Movingdots after the closing of such transaction, and increased salaries, investments in marketing

programs and professional services fees.

As a percentage of revenues, SG&A expenses increased to 53.3% in the year ended December

31, 2023, from 46.7% in the same period in 2022.

SG&A expenses increased by approximately $7.8 million, or 12.2%, to $71.3 million in 2023 compared to $63.5 million in 2022.

The increase was principally due to an aggregate of $5.5 million in transaction-related costs in connection with our acquisition of Movingdots GmbH (“Movingdots”) and business combination with MiX Telematics, $2.1 million in SG&A costs incurred by Movingdots after the closing of such transaction, and increased salaries, investments in marketing programs and professional services fees.

As a percentage of revenues, SG&A expenses increased to 53.3% in the year ended December 31, 2023, from 46.7% in the same period in 2022.

RESEARCH AND DEVELOPMENT EXPENSES.

and development (“R&D”) expenses decreased by approximately $0.1 million, or 1.1%, to $8.4 million in 2023 compared to

$8.5 million (as restated) in 2022, principally due to the capitalization of software development expenses for new product development and

reduction in salaries and wages offset in part by the acquisition of Movingdots, which added $2.0 million to expenses.

As a percentage

of revenues, R&D expenses increased to 6.3% in the year ended December 31, 2023 from 6.2% in the same period in 2022.

INTEREST EXPENSE.

R&D expenses decreased by approximately $0.1 million, or 1.1%, to $8.4 million in 2023 compared to $8.5 million in 2022, principally due to the capitalization of software development expenses for new product development and reduction in salaries and wages offset in part by the acquisition of Movingdots, which added $2.0 million to expenses.

As a percentage of revenues, R&D expenses increased to 6.3% in the year ended December 31, 2023, from 6.2% in the same period in 2022.

INTEREST EXPENSE.

increased by $2.6 million, or 261.2%, to $1.6 million in 2023 from $(1.0) million in 2022, principally due to foreign currency

translation gains from the term facilities under the Prior Credit Agreement with Hapoalim.

NET LOSS ATTRIBUTABLE TO COMMON

STOCKHOLDERS.

Net loss attributable to common stockholders was $17.3 million, or $(0.49) per basic and diluted share, for 2023

as compared to net loss of $16.9 million (as restated), or $(0.48) per basic and diluted share, for the same period in 2022.

increase in net loss was due primarily to transaction costs of $5.5 million with respect to the Movingdots acquisition and the

business combination with MiX Telematics, plus incremental SG&A spend from the Movingdots acquisition of $2.1 million, plus

an increase in accretion of preferred stock of $1.2 million, offset by the bargain gain on the purchase of Movingdots of $9.0

Ended December 31, 2022 Compared to Year Ended December 31, 2021

Revenues increased by approximately $10.0 million, or 7.9%,

to $135.9 million (as restated) in 2022 from $126.0 million (as restated) in 2021.

Revenues from products increased by approximately $4.0 million, or

7.6%, to $56.9 million (as restated) in 2022 from $52.9 million (as restated) in 2021.

The increase in product revenues was attributable to an

increase in sales by our Powerfleet for Logistics and Powerfleet for Warehouse products.

Revenues from services increased by approximately $5.9 million, or

8.1%, to $79.0 million (as restated) in 2022 from $73.1 million (as restated) in 2021.

The increase in services revenues was principally due to

an increase in our install base that generates service revenue.

Cost of revenues increased by approximately $4.7 million, or 7.1%, to $70.9 million (as restated) in 2022 from $66.2

million (as restated) in 2021.

Gross profit was $65.0 million (as restated) in 2022 compared to $59.8 million (as restated) in 2021.

percentage of revenues, gross profit increased to 47.8% in 2022 from 47.4% in 2021.

The minimal increase in gross profit as a

percentage of revenues was principally due to less significant increases in raw material costs as a result of global supply chain

issues in 2022 than in 2021.

Cost of products increased by approximately $2.9 million, or 7.4%,

to $42.6 million in 2022 from $39.6 million (as restated) in 2021.

Gross profit for products was $14.4 million (as restated) in 2022 compared

to $13.3 million (as restated) in 2021.

As a percentage of product revenues, gross profit minimally increased to 25.2% in 2022 from 25.1% in

The gross profit as a percentage of product revenues was impacted by product mix, higher costs associated with supply chain issues,

electronic component shortages and inflation.

Cost of services increased by approximately $1.8 million, or 6.7%,

to $28.4 million in 2022 from $26.6 million in 2021.

Gross profit for services was $50.6 million (as restated) in 2022 compared to $46.5 million

(as restated) in 2021.

As a percentage of service revenues, gross profit increased to 64.1% in 2022 from 63.6% in 2021.

The increase in gross

profit as a percentage of services revenues was principally due to an increase in our install base that generates service revenue.

GENERAL AND ADMINISTRATIVE EXPENSES.

SG&A expenses increased by approximately $7.0 million, or 12.3%, to $63.5

million (as restated) in 2022 compared to $56.5 million (as restated) in 2021, inclusive of higher foreign currency losses of $0.7 million and

higher severance costs of $0.7 million.

Other drivers of the increase in expenses include increased salaries and related expenses, professional

fees, and marketing and travel expenses.

As a percentage of revenues, SG&A expenses increased to 46.7% in the year ended December

31, 2022, from 44.9% in the same period in 2021.

AND DEVELOPMENT EXPENSES.

R&D expenses decreased by approximately $3.0 million, or 25.9%, to $8.5

million (as restated) in 2022 compared to $11.4 million (as restated) in 2021, principally due to the capitalization of software development expenses

for new product development, which increased by $1.7 million in 2022.

As a percentage of revenues, R&D expenses decreased to 6.2%

in the year ended December 31, 2022 from 9.1% in the same period in 2021.

Interest expense decreased by $3.8 million, or 136.0%, to $(1.0) million in 2022 from $2.8 million in 2021, principally

due to foreign currency translation gains from the term facilities under the Prior Credit Agreement with Hapoalim.

LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.

Net loss attributable to common stockholders was $16.9 million (as restated), or

$(0.48) per basic and diluted share, for 2022 as compared to net loss of $22.1 million (as restated), or $(0.64) per basic and

diluted share, for the same period in 2021.

The decrease in the net loss was due primarily to the reasons described

Loss Earnings (Loss) per Share

connection with our secondary listing on the Johannesburg Stock Exchange (“JSE”), we are required to calculate and publicly

disclose headline earnings (loss) per share and diluted headline earnings (loss) per share.

Headline loss per share is calculated using

net loss which has been determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

loss for the period represents the loss for the period attributable to common stockholders of Powerfleet adjusted for the

remeasurements that are more closely aligned to the operating or trading results as set forth below, and headline loss per share

represents headline loss divided by the weighted average number of shares of common stock outstanding.

table below presents a reconciliation between net loss attributable to common stockholders to headline loss for the years ended December

31, 2021 (as restated), 2022 (as restated) and 2023.

Year Ended December 31,

Interest expense increased by $2.6 million, or 261.2%, to $1.6 million in 2023 from $(1.0) million in 2022, principally due to foreign currency translation gains from the term facilities under the Prior Credit Agreement with Hapoalim.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.

Net loss attributable to common stockholders was $17.3 million, or $(0.49) per basic and diluted share, for 2023 as compared to net loss of $16.9 million, or $(0.48) per basic and diluted share, for the same period in 2022.

The increase in net loss was due primarily to transaction costs of $5.5 million with respect to the Movingdots acquisition and the business combination with MiX Telematics, plus incremental SG&A spend from the Movingdots acquisition of $2.1 million, plus an increase in accretion of preferred stock of $1.2 million, offset by the bargain gain on the purchase of Movingdots of $9.0 million.

Non-GAAP Financial Information

We use certain measures to assess the financial performance of our business, as well as to comply with the reporting requirements of the JSE.

Certain of these measures are termed “non-GAAP measures” because they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with GAAP, or are calculated using financial measures that are not calculated in accordance with GAAP.

These non-GAAP measures include adjusted EBITDA, headline loss, and headline loss per common share.

An explanation of the relevance of the non-GAAP measure, a reconciliation of the non-GAAP measure to the most directly comparable measure calculated and presented in accordance with GAAP and a discussion of its limitations is set out below.

We do not regard these non-GAAP measures as a substitute for, or superior to, the equivalent measure calculated and presented in accordance with GAAP or that calculated using financial measures that are calculated in accordance with GAAP.

Adjusted EBITDA

We define adjusted EBITDA as net loss attributable to common stockholders before non-controlling interest, preferred stock dividend and accretion, interest expense (net), other (income) expense, net, income tax expense (benefit), depreciation and amortization, stock-based compensation, foreign currency (gains) losses, restructuring-related expenses, gain on bargain purchase (Movingdots), severance-related expenses, derivative mark-to market adjustment, recognition of pre-October 1, 2024 contract assets (Fleet Complete), Movingdots-related expenses, acquisition-related expenses, and integration-related expenses.

We have included adjusted EBITDA in this Form 10-K because it is a key measure that our management and board of directors use to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short and long-term operational plans.

In particular, the exclusion of certain expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business.

Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results.

Because our method for calculating adjusted EBITDA may differ from other companies’ methods, the non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

A reconciliation of net loss attributable to common stockholders (the most directly comparable financial measure presented in accordance with GAAP) to adjusted EBITDA for the periods shown is presented below.

Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA

December 31, Three Months Ended

March 31, Year Ended March 31,

(In thousands)

2023 2024 2025

Net loss attributable to common stockholders $ (16,891) $ (17,307) $ (19,640) $ (12,439) $ (51,012)

Non-controlling interest 2 35 12 1 18

Preferred stock dividend and accretion 10,137 11,632 11,125 — 25

Interest expense, net 1,624 1,903 601 5,560 19,404

Other (income) expense, net

(24) (3) 55 — —

Income tax expense (benefit)

870 589 352 (304) 4,517

Depreciation and amortization 8,262 9,445 1,943 14,452 47,494

Stock-based compensation 4,343 3,908 1,028 924 9,362

Foreign currency (gains) losses

(1,842) (839) 43 502 1,790

Restructuring-related expenses — 711 324 6,969 10,077

Gain on bargain purchase - Movingdots — (9,034) — — —

Severance-related expenses

1,667 134 — — —

Derivative mark-to-market adjustment — — — (29) (504)

Recognition of pre-October 1, 2024 contract assets (Fleet Complete)

— — — 1,768 3,809

Movingdots-related expenses

Acquisition-related expenses — 5,140 6,078 428 21,300

Integration-related expenses

— — — 2,592 4,851

Adjusted EBITDA $ 8,148 $ 6,631 $ 1,921 $ 20,424 $ 71,131

Our use of adjusted EBITDA has limitations as analytical tools and should not be considered as performance measures in isolation from, or as a substitute for, analysis of our results as reported under GAAP.

Some of these limitations are:

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

• adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;

• adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;

• other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure;

• certain of the adjustments (such as restructuring-related expenses and integration-related expenses) made in calculating adjusted EBITDA are those that management believes are not representative of our underlying operations and, therefore, are subjective in nature.

Because of these limitations, adjusted EBITDA should be considered alongside other financial performance measures, including loss from operations, net loss and our other results.

Headline Loss per Share

In connection with our secondary listing on the JSE, we are required to calculate and publicly disclose headline loss per share and diluted headline loss per share.

Headline loss per share is calculated using net loss which has been determined in accordance with GAAP.

Headline loss for the period represents the loss for the period attributable to our common stockholders adjusted for the remeasurements that are more closely aligned to the operating or trading results as set forth below, and headline loss per share represents headline loss divided by the weighted average number of shares of common stock outstanding.

The table below presents a reconciliation between net loss attributable to common stockholders to headline loss for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025.

December 31, Three Months Ended

March 31, Year Ended March 31,

(In thousands, except per share data)

(As restated)

2023 2024 2025

Net loss attributable to common stockholders $ (16,891) $ (17,307) $ (19,639) $ (12,439) $ (51,012)

Adjusted for:

Reversal of Bargain purchase – Movingdots

Bargain purchase - Movingdots

— (9,034) — — —

Profit on sale of plant and equipment

— — — (21) (17)

Impairment of intangibles

Headline loss

$ (16,891) $ (26,341) $ (19,639) $ (12,455) $ (51,021)

Weighted average common shares outstanding on which the net loss attributable to common shareholders per share and headline loss per share has been calculated - basic and diluted

35,393 35,628 35,813 132,793 119,877

Net loss per share attributable to common stockholders – basic and diluted

$ (0.48) $ (0.49) $ (0.55) $ (0.09) $ (0.43)

Headline loss per share attributable to common stockholders – basic and diluted

of Non-GAAP Measures

above disclosure was prepared for the purpose of complying with the reporting requirements of the JSE and includes certain non-GAAP measures,

such as headline earnings (loss) and headline earnings (loss) per common share, and related reconciliations.

$ (0.48) $ (0.74) $ (0.55) $ (0.09) $ (0.43)

The above disclosure was prepared for the purpose of complying with the reporting requirements of the JSE and includes certain non-GAAP measures, such as headline loss and headline loss per common share, and related reconciliations.

Liquidity and Capital Resources

On October 3, 2019, in connection with the completion of the Pointer

Merger, we issued and sold 50,000 shares of the Series A Preferred Stock to ABRY Senior Equity V, L.P., ABRY Senior Equity Co-Investment

Fund V, L.P and ABRY Investment Partnership, L.P.

(the “Investors”) pursuant to the terms of an Investment and Transaction

Agreement, dated as of March 13, 2019 (as amended, the “Investment Agreement”), for an aggregate purchase price of $50.0 million.

The proceeds received from such sale were used to finance a portion of the cash consideration payable in our acquisition of Pointer.

In addition, our wholly owned

subsidiaries, Powerfleet Israel and Pointer (collectively, the “Borrowers”) were party to the Prior Credit Agreement with

Hapoalim, pursuant to which Hapoalim agreed to provide Powerfleet Israel with two senior secured term loan facilities denominated in NIS

in an initial aggregate principal amount of $30 million (comprised of two facilities in the aggregate principal amounts of $20 million

and $10 million, respectively) and a five-year revolving credit facility to Pointer denominated in NIS in an initial aggregate principal

amount of $10 million.

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

acquisition of Pointer.

The outstanding amount under the revolving facility was approximately NIS 4,915, or $1,355, as of December 31,

On March 18, 2024, the Borrowers

entered into the A&R Credit Agreement, which refinanced the facilities under, and amended and restated, the Prior Credit Agreement.

The A&R Credit Agreement provides for (i) two senior secured term loan facilities denominated in NIS to Powerfleet Israel in an aggregate

principal amount of $30 million (comprised of Facility A and Facility B in the aggregate principal amounts of $20 million and $10 million,

respectively) and (ii) two revolving credit facilities to Pointer in an aggregate principal amount of $20 million (comprised of Facility

C and Facility D in the aggregate principal amounts of $10 million and $10 million, respectively).

The Term Facilities will mature on

March 18, 2029.

The Revolving Facilities are available for successive one-month periods until and including March 18, 2025, unless the

Borrowers deliver prior notice to Hapoalim of their request not to renew the Revolving Facilities.

On 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.

The proceeds of the Revolving Facilities may be used by Pointer for general corporate purposes, including

working capital and capital expenditures.

The Credit Facilities continue

to be secured by first ranking and exclusive fixed and floating charges, including by Powerfleet Israel over the entire share capital

of Pointer and by Pointer over all of its assets, as well as cross guarantees between Powerfleet Israel and Pointer, except that the Borrowers’

holdings in Pointer do Brasil Comercial Ltda., Pointer Argentina and Pointer South Africa are excluded from such floating charges.

other assets of our company will serve as collateral under the Credit Facilities.

Borrowings under the Term Facilities

will bear interest at a variable rate equal to the applicable prime interest rate, plus, in the case of borrowings under Facility A, 2.2%

per annum, and, in the case of borrowings under Facility B, 2.3% per annum.

Borrowings under Facility C will bear interest, in the case

of borrowings made in NIS, at the applicable prime interest rate plus 2.5%, or, in the case of borrowings made in U.S.

dollars, at SOFR

Borrowings under Facility D will bear interest at the applicable interest rate set forth in the standard form documents entered

into in connection with each utilization of Facility D.

Borrowings under the Term Facilities will be denominated in NIS, based on the

applicable conversion rate at the time of conversion but will be made available to the Borrowers in U.S.

dollars if requested by the Borrowers.

Pointer is required to pay a credit allocation fee

in NIS, with respect to Facility C, and a non-utilization fee in U.S.

dollars, with respect to Facility D, in each case, equal to 0.5%

per annum on undrawn and uncancelled amounts of the Revolving Facilities during the period commencing on March 18, 2024 and ending on

the last day of the applicable availability period of such Revolving Facilities.

As a result of global supply chain disruptions, the

conflicts between Russia and Ukraine and between Israel and Hamas, rising interest rates, fluctuations in currency values, inflation and

other cost increases, there remains uncertainty surrounding the potential impact of such events on our results of operations and cash

We are proactively taking steps to increase available cash on hand including, but not limited to, targeted reductions in discretionary

operating expenses and capital expenditures and borrowing under the revolving credit facility.

On April 2, 2024, we consummated the MiX

Combination, pursuant to which MiX Telematics became our indirect, wholly owned subsidiary.

The Implementation Agreement required,

as a condition to closing of the MiX Combination, that we obtain debt and/or equity financing in an amount sufficient to provide for

the redemption in full of all outstanding shares of our Series A Preferred Stock.

In order to meet this condition, we entered into

the Facilities Agreement on March 7, 2024 and shortly thereafter drew down $85 million in cash under the facilities provided

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 the full $90.3 million value of

the outstanding shares of Series A Preferred Stock.

We have incurred recurring losses and negative cash

flows from operations since inception and had an accumulated deficit of $146.3 million as of December 31, 2023.

We anticipate incurring

additional losses until such time that growth in revenue and gross margin from our strategic plan centered on our Unity SaaS platform

and Warehouse safety product offerings exceed necessary investments in operating expenses, capital expenditures and debt financing costs.

Management believes our cash and cash equivalents

of $19.3 million as of December 31, 2023, in conjunction with the debt proceeds from our lenders, plus cash generated from the execution

of our strategic plan over the next 12 months, are sufficient to fund the projected operations for at least the next 12 months from the

issuance date of these financial statements (May 9, 2024) and service our outstanding obligations.

On April 2, 2024, we consummated the MiX Combination, pursuant to which MiX Telematics became our indirect, wholly owned subsidiary.

The Implementation Agreement required, as a condition to closing of the MiX Combination, that we obtain debt and/or equity financing in an amount sufficient to provide for the redemption in full of all then-outstanding shares of our Series A convertible preferred stock.

On April 2, 2024, concurrently with the closing of the MiX Combination, we used the net proceeds received from the RMB Facilities described below and incremental borrowing capacity as a result of the refinancing of Hapoalim Credit Facilities to redeem the full $90.3 million value of the then-outstanding shares of Series A convertible preferred stock.

In addition, our wholly owned subsidiaries, Powerfleet Israel and Pointer were party to the Prior Credit Agreement with Hapoalim, pursuant to which Hapoalim agreed to provide Powerfleet Israel with two senior secured term loan facilities denominated in NIS in an initial aggregate principal amount of $30 million (composed of two facilities in the aggregate principal amounts of $20 million and $10 million, respectively) and a five-year revolving credit facility to Pointer denominated in NIS in an initial aggregate principal amount of $10 million.

The proceeds of the term loan facilities were used to finance a portion of the cash consideration payable in our acquisition of Pointer.

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

The A&R Credit Agreement provides for (i) two senior secured term loan facilities denominated in NIS to Powerfleet Israel in an aggregate principal amount of $30 million (composed of Hapoalim Facility A and Hapoalim Facility B in the aggregate principal amounts of $20 million and $10 million, respectively) and (ii) two revolving credit facilities to Pointer in an aggregate principal amount of $20 million (composed of Hapoalim Facility C and Hapoalim Facility D in the aggregate principal amounts of $10 million and $10 million, respectively).

The Hapoalim Term Facilities will mature on March 18, 2029.

The Hapoalim Revolving Facilities are available for successive one-month periods until and including February 27, 2026, unless the Borrowers deliver prior notice to Hapoalim of their request not to renew the Hapoalim Revolving Facilities.

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 us.

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

On December 30, 2024, the Borrowers entered into an amendment (the “Amendment”) to the A&R Credit Agreement.

The Amendment increases 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 us or any of our 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, Powerfleet Israel had utilized approximately $17.4 million under the Hapoalim Revolving Facilities.

The Hapoalim Credit Facilities continue to be secured by first ranking and exclusive fixed and floating charges, including by Powerfleet Israel over the entire share capital of Pointer and by Pointer over all of its assets, as well as cross guarantees between Powerfleet Israel and Pointer, except that the Borrowers’ holdings in Pointer do Brasil Comercial Ltda., Pointer Argentina and Pointer South Africa are excluded from such floating charges.

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

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

Hapoalim’s prime rate at December 31, 2024 was 6%.

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

The first interest period ended on June 25, 2024.

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

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

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

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

dollar-denominated loans, SOFR + 2.15%.

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

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

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

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

On March 7, 2024, we entered into the Facilities Agreement with RMB, pursuant to which RMB agreed to provide us with the RMB Facilities in an aggregate principal amount of $85 million, composed of RMB Facility A and RMB Facility B, each having a principal amount of $42.5 million.

We drew down $85 million in cash under the RMB Facilities on March 13, 2024.

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

Interest is payable quarterly in arrears.

The principal under RMB Facility A and RMB Facility B is repayable in one installment on March 31, 2027 and March 31, 2029, respectively.

Following the signing of the Facilities Agreement, MiX Telematics entered into a Facility Notice and General Terms and Conditions (the “Credit Agreement”) with RMB on March 14, 2024 for a 364-day committed general banking facility of R350 million (the equivalent of $19.0 million as at March 31, 2025) (the “RMB General Facility”).

The Credit Agreement and the rights and obligations of the parties are subject to the terms and conditions of the Facilities Agreement.

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

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

The RMB General Facility repayment terms were extended by a further 365 days based on the same terms and conditions of the Facility Agreement entered into on March 7, 2024.

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

During April 2025, the RMB General Facility repayment terms were extended by an additional 365 days on the same terms and conditions of the Facilities Agreement.

As of March 31, 2025, $18.0 million of the RMB General Facility was utilized.

On September 27, 2024, we entered into the Facility Agreement with RMB, pursuant to which RMB agreed to provide us with the New RMB Term Facility in an aggregate principal amount of $125 million.

On October 1, 2024, we drew down $125 million in cash under the New RMB Term Facility to pay a portion of the Purchase Price for the FC Acquisition.

Interest is payable quarterly in arrears at an interest rate of 5% per annum plus the applicable term SOFR reference rate.

The principal is repayable in one installment on October 31, 2029.

As a result of global supply chain disruptions, the conflict in the Middle East, rising interest rates, fluctuations in currency values, restrictions on international trade (such as tariffs and other controls on imports or exports of goods, technology or data) and inflation and other cost increases, there remains uncertainty surrounding the potential impact of such events on our results of operations and cash flows.

We are proactively taking steps to increase the available cash on hand including, but not limited to, targeted reductions in discretionary operating expenses and capital expenditures and borrowing under our revolving credit facility.

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

Management believes our cash and cash equivalents (including restricted cash) of $48.8 million as of March 31, 2025, in conjunction with cash expected to be generated from the execution of our strategic plan over the next 12 months and proceeds from our credit facilities, are sufficient to fund the projected operations for at least the next 12 months from the issuance date of these consolidated financial statements ( June 26, 2025) a nd service our outstanding obligations.

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

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

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

Capital Requirements

As of December 31, 2023, we had cash (including

restricted cash), cash equivalents and marketable securities of $19.3 million and working capital of $23.5 million, compared to cash

(including restricted cash) and cash equivalents of $17.9 million and working capital of $36.7 million (as restated) as of December 31,

Our primary sources of cash are cash flows from 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.

The MiX Combination is also expected to

be a source of positive cash flow.

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

Our capital requirements depend on a variety of factors,

including, but not limited to, the length of the sales cycle, the rate of increase or decrease in our existing business base, the success,

timing, and amount of investment required to bring new products to market, revenue growth or decline and potential acquisitions.

to generate positive cash flow from operations will have a material adverse effect on our business, financial condition and results of

Net cash provided by operating activities was

$4.4 million for the year ended December 31, 2023, compared to net cash provided by operating activities of $1.2 million (as restated)

for the same period in 2022.

The net cash provided by operating activities for the year ended December 31, 2023 reflects a net loss

of $5.7 million and includes non-cash charges of $3.9 million for stock-based compensation, $9.4 million for depreciation and

amortization expense, a gain on bargain purchase of $9.0 million, and $2.8 million for right of use asset amortization.

operating assets and liabilities included:

increase in accounts receivable of $1.5 million;

increase in inventory of $1.7 million;

decrease in lease liabilities of $2.9 million;

increase in accounts payable and accrued expenses of $4.5 million.

cash provided by operating activities was $1.2 million (as restated) for the year ended December 31, 2022, compared to net cash used in

operating activities of $5.4 million (as restated) for the same period in 2021.

The net cash provided by operating activities for the

year ended December 31, 2022 reflects a net loss of $6.8 million (as restated) and includes non-cash charges of $4.3 million for

stock-based compensation, $8.3 million for depreciation and amortization expense and $2.8 million for right of use asset

amortization.

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

The FC Acquisition and MiX Combination are also expected to be a source of positive cash flow.

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

Our capital requirements depend on a variety of factors, including, but not limited to, the length of the sales cycle, the rate of increase or decrease in our existing business base, the success, timing, and amount of investment required to bring new products to market, revenue growth or decline and potential acquisitions.

Failure to generate positive cash flow from operations will have a material adverse effect on our business, financial condition and results of operations.

Operating Activities

During the year ended March 31, 2025, net cash used in operating activities was $3.3 million, compared to net cash provided by operating activities of $4.4 million during the year ended December 31, 2023.

The net cash used in operating activities for the year ended March 31, 2025 primarily included non-cash charges of $47.5 million for depreciation and amortization expense, $9.4 million for bad debts expense, $9.4 million for stock-based compensation, $5.0 million for ROU asset amortization, $4.5 million for inventory write-downs, $1.1 million for other non-cash items and $0.9 million for shares issued for transaction bonuses in connection with the MiX Combination, partially offset by $0.5 million for derivative mark-to-market adjustment.

Changes in operating assets and liabilities included:

increase in accounts receivable of $1.4 million (as restated);

increase in inventory of $4.5 million;

decrease in lease liabilities of $2.7 million;

decrease in accounts payable and accrued expenses of $0.6 (as restated) million.

cash provided by investing activities was $1.5 million for the year ended December 31, 2023, compared to net cash used in investing

activities of $6.3 million (as restated) for the same period in 2022.

The increase in net cash provided by investing activities was

primarily due to $8.7 million in net proceeds from the acquisition of Movingdots, partially offset by $3.6 million for the purchase

of fixed assets and $3.5 million (as restated) for capitalized software development costs.

cash used in investing activities was $6.3 million (as restated) for the year ended December 31, 2022, compared to net cash used in

investing activities of $3.0 million (as restated) for the same period in 2021.

The cash used in investing activities for the years

ended December 31, 2022 and 2021 was for the purchase of fixed assets and capitalized software development.

cash used in financing activities was $3.7 million for the year ended December 31, 2023, compared to net cash used in financing

activities of $0.3 million for the same period in 2022.

The increase in net cash used in financing activities was primarily due to

the payment in cash of preferred stock dividends totaling $3.4 million compared to $0 in 2022, net of the changes in the repayment of long-term debt and change in short-term debt, net balance.

cash used in financing activities was $0.3 million for the year ended December 31, 2022, compared to net cash provided by financing activities

of $16.2 million for the same period in 2021.

The 2021 period was represented by net proceeds from our stock offering of $26.9 million

offset by the net repayment of long-term debt of $5.6 million and the payment of preferred stock dividends of $4.1 million.

dividends were not paid in cash and the net cash used in financing was primarily from the repayment of long-term debt, net of proceeds

inflation and other macroeconomic conditions in the U.S.

have resulted in higher costs of raw materials, freight, and labor, which has

impacted our operating costs.

In addition, we operate in several emerging market economies that are particularly vulnerable to the impact

of inflationary pressures that could materially and adversely impact our operations in the foreseeable future.

addition to focusing on our core applications, we adapt our systems to meet our customers’ broader asset management needs and seek

opportunities to expand our solution offerings through strategic acquisitions.

March 6, 2023, we entered into a definitive share purchase and transfer agreement (the “SPA”) with Swiss Re Reinsurance Holding

Company Ltd (“Swiss Re”) to acquire all of the outstanding shares of Movingdots for consideration consisting of €1 and

the issuance by us of a ten-year warrant to purchase 800,000 shares of our common stock at an exercise price of $7.00 per share.

the SPA, Swiss Re was required to ensure that Movingdots had available cash and cash equivalents of at least €8,000,000 as of the

closing date.

The transaction closed on March 31, 2023.

On April 2, 2024, we consummated the MiX Combination, pursuant to which Powerfleet Sub acquired all the issued ordinary

shares of MiX Telematics, including those represented by MiX Telematics’ American Depositary Shares, through the implementation

of the Scheme in accordance with Sections 114 and 115 of the Companies Act, in exchange for shares of our common stock.

As a result, MiX

Telematics became our indirect, wholly owned subsidiary.

a result of the MiX Combination, the combined company remains Powerfleet and our common stock continues to be listed on The Nasdaq

Global Market and the Tel Aviv Stock Exchange under the symbol “PWFL.” Additionally, our common stock has been listed on

the JSE by way of a secondary inward listing under the symbol “PWR.”

Telematics is a leading global provider of fleet and mobile asset management solutions delivered as SaaS to over one million global subscribers

spanning more than 120 countries.

MiX Telematics’ products and services provide enterprise fleets, small fleets, and consumers

with efficiency, safety, compliance, and security solutions.

The MiX Combination is expected to provide us with operational synergies

and access to a broader base of customers.

MiX Combination has been accounted for as a business combination, and we have been identified as the accounting acquirer.

Sheet Arrangements

do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial

condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources

that is material to investors.

Issued Accounting Pronouncements

In November 2023, the Financial

Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires additional operating segment disclosures

in annual and interim consolidated financial statements.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023

and for interim periods beginning after December 15, 2024 on a retrospective basis, with early adoption permitted.

We are evaluating

the effect of adopting ASU 2023-07.

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, “Income Taxes (Topic 740):

to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of disaggregated income taxes paid, prescribes

standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures.

2023-09 is effective for annual periods beginning after December 15, 2024 on a retrospective or prospective basis.

We are evaluating

the effect of adopting ASU 2023-09.

In June 2016, the FASB issued ASU No.

2016-13, “Financial Instruments - Credit Losses

(Topic 326) Measurement of Credit Losses on Financial Instruments,” which amends the guidance on measuring credit losses on financial

assets held at amortized cost.

The amendment is intended to address the issue that the previous “incurred loss” methodology

was restrictive for an entity’s ability to record credit losses based on not yet meeting the “probable” threshold.

new language will require these assets to be valued at amortized cost presented at the net amount expected to be collected with a valuation

We adopted ASU No.

2016-13 on January 1, 2023.

The adoption of the standard did not result in a material impact on

the consolidated financial statements.

• an increase in accounts receivables of $14.0 million;

• a decrease in accounts payable of $12.2 million;

• a decrease in deferred costs of $8.4 million;

• a decrease in lease liabilities of $4.6 million;

• a decrease in inventory, net of write-downs of $5.7 million;

• a decrease in prepaid expenses and other assets of $5.5 million;

• an increase in deferred revenue of $1.7 million;

• an increase in net severance fund of $1.2 million.

During the three months ended March 31, 2025, net cash provided by operating activities was $13.5 million, compared to net cash used in operating activities of $0.2 million for the same period in 2024.

The net cash used in operating activities for the three months ended March 31, 2025 primarily included non-cash charges of $14.5 million for depreciation and amortization expense, $2.9 million for inventory write-downs, $2.2 million for bad debts expense, $0.9 million for stock-based compensation, $0.7 million for right-of-use asset amortization and $0.3 million for other non-cash items.

Changes in operating assets and liabilities included:

• a decrease in deferred costs of $3.3 million;

• a decrease in lease liabilities of $0.5 million;

• an increase in accounts payable of $3.5 million;

• a decrease in prepaid expenses and other assets of $3.4 million;

• a decrease in inventory, net of write-downs of $3.1 million;

• an increase in net severance fund of $1.8 million,

• an increase in deferred revenue of $0.7 million;

• a decrease in accounts receivables of $1.2 million.

Net cash provided by operating activities was $4.4 million for the year ended December 31, 2023, compared to net cash provided by operating activities of $1.2 million for the same period in 2022.

The net cash provided by operating activities for the year ended December 31, 2023 reflects a net loss of $5.7 million and includes non-cash charges of $3.9 million for stock-based compensation, $9.4 million for depreciation and amortization expense, a gain on bargain purchase of $9.0 million, and $2.8 million for right-of-use asset amortization.

Changes in operating assets and liabilities included:

• an increase in accounts receivable of $1.5 million;

• an increase in inventory of $1.7 million;

• a decrease in lease liabilities of $2.9 million;

• an increase in accounts payable and accrued expenses of $4.5 million.

Investing Activities

Net cash used in investing activities for the year ended March 31, 2025 was $170.6 million, compared to net cash provided by investing activities of $1.5 million for the year ended December 31, 2023.

The net cash used by investing activities was primarily due to $137.1 million in acquisitions, net of cash assumed from the MiX Combination and FC acquisition, $20.0 million for the purchase of fixed assets and $13.8 million for capitalized software development costs.

The net cash provided by investing activities of $1.5 million in the year ended December 31, 2023 was primarily due to $8.7 million in net proceeds from the acquisition of Movingdots, partially offset by $3.6 million for capitalized software development costs and $3.5 million the purchase of fixed assets.

Net cash used in investing activities for the three months ended March 31, 2025 was $10.1 million, compared to net cash used in investing activities of $1.9 million for the three months ended March 31, 2024 .

The net cash used by investing activities was primarily due to $3.4 million for the purchase of fixed assets and $6.5 million for capitalized software development costs.

The net cash used in investing activities of $1.9 million in the three months ended March 31, 2024 was primarily due to $1.3 million for the purchase of fixed assets and $0.6 million for capitalized software development costs.

Net cash provided by investing activities was $1.5 million for the year ended December 31, 2023, compared to net cash used in investing activities of $6.3 million for the same period in 2022.

The increase in net cash provided by investing activities was primarily due to $8.7 million in net proceeds from the acquisition of Movingdots, partially offset by $3.6 million for capitalized software development costs and $3.5 million for the purchase of fixed assets.

Financing Activities

Net cash provided by financing activities was $115.7 million for the year ended March 31, 2025 , compared to net cash used in financing activities of $3.7 million for the year ended December 31, 2023.

The increase was primarily driven by $125.0 million in proceeds from long-term debt and $66.5 million in gross proceeds from a private placement completed in connection with the FC Acquisition, partially offset by related offering costs.

Additional sources of cash included $19.6 million in proceeds from short-term bank borrowings and $1.9 million from the exercise of stock options.

These inflows were partially offset by $90.3 million used for the redemption of Series A convertible preferred stock in connection with the MiX Combination, $2.8 million used for the repurchase of common stock related to tax withholding on vested restricted stock awards, and $2.6 million in repayments of long-term debt.

Debt issuance costs totaled $1.4 million during the period.

During the three months ended March 31, 2025 , net cash provided by financing activities was $8.2 million, compared to $92.8 million net cash provided by financing activities for the three months ended March 31, 2024 .

The cash provided by financing activities was primarily due to $7.7 million received from s hort-term bank debt, and $1.0 million proceeds from exercise of stock options, partially offset by r epayment of long-term debt of $0.5 million.

Net cash used in financing activities was $3.7 million for the year ended December 31, 2023, compared to net cash used in financing activities of $0.3 million for the same period in 2022.

The increase in net cash used in financing activities was primarily due to the payment in cash of preferred stock dividends totaling $3.4 million compared to $0 in 2022, net of the changes in the repayment of long-term debt and change in short-term debt, net balance.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Impact of Recently Issued Accounting Pronouncements

The Company is subject to recently issued accounting standards, accounting guidance and disclosure requirements.

For a description of these new accounting standards, see Note 2 to our consolidated financial statements contained in Item 8 of Part II of this Annual Report on Form 10-K, which is incorporated herein by reference.

Quantitative and Qualitative Disclosures About Market Risks

Not applicable.

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 7. Management’s Discussion and Analysis