What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-06-26 compared with 2024-05-09 · 1268 added, 2357 removed, 232 unchanged (94% of the section changed)

Financial Statements and Supplementary Data

TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Balance Sheets at December 31, 2022 (As restated) and 2023

Statements of Operations for the Years Ended December 31, 2021 (As restated), 2022 (As restated) and 2023

Statements of Comprehensive Loss for the Years Ended December 31, 2021 (As restated), 2022 (As restated) and 2023

Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2021 (As restated), 2022 (As restated) and

Statements of Cash Flows for the Years Ended December 31, 2021 (As restated), 2022 (As restated) and 2023

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of the Independent Registered Public Accounting Firm - Deloitte & Touche (PCAOB ID No.

Report of the Independent Registered Public Accounting Firm - Ernst & Young LLP (PCAOB ID No.

Consolidated Balance Sheets as of March 31, 2024 and 2025

Consolidated Statements of Operations for the Years Ended December 31, 2022 and 2023, Three Months Ended March 31, 2024, and Year Ended March 31, 2025

Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2022 and 2023, Three Months Ended March 31, 2024, and Year Ended March 31, 2025

Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2022 and 2023, Three Months Ended March 31, 2024, and Year Ended March 31, 2025

Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2023, Three Months Ended March 31, 2024, and Year Ended March 31, 2025

Notes to the Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Stockholders and the Board of Directors of Powerfleet, Inc.

on the Financial Statements

We have audited the accompanying

consolidated balance sheets of PowerFleet, Inc.

and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated

statements of operations, comprehensive loss, changes in stockholders’ equity and cash flows for each of the three years in the

period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company

at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December

31, 2023, in conformity with U.S.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Powerfleet, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Powerfleet, Inc.

and subsidiaries (the “Company”) as of March 31, 2025, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows, for the year ended March 31, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025, and the results of its operations and its cash flows for the year ended March 31, 2025, in conformity with the accounting principles generally accepted in the United States of America.

The consolidated balance sheets of the Company as of March 31, 2024, December 31, 2023, and December 31, 2022, and the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the three-months period ended March 31, 2024 and for the years ended December 31, 2023, and December 31, 2022, (the “comparative financial statements”), before the effects of the retrospective adjustments to the disclosures for a change in the composition of reportable segments and the adoption of ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (ASU 2023-07), discussed in Notes 2 and 15 to the financial statements, were audited by a predecessor auditor whose report, dated August 22, 2024, expressed an unqualified opinion on those statements.

We also have audited the adjustments to these comparative financial statements to retrospectively adjust the disclosures to apply the change in accounting for the adoption of ASU 2023-07 in 2025, as discussed in Notes 2 and 15 to the financial statements.

Our procedures included 1) comparing the adjustment amounts of segment revenues, cost of revenues, selling and marketing expenses, general and administrative expenses, development costs incurred, development costs capitalized, depreciation and amortization expenses, and assets to the Company’s accounting records, (2) testing the mathematical accuracy of the reconciliations of segment amounts to the comparative financial statements, and (3) comparing the amounts of significant segment expenses to the Company’s accounting records.

In our opinion, such retrospective adjustments are appropriate and have been properly applied.

However, we were not engaged to audit, review, or apply any procedures to the consolidated balance sheets of the Company as of March 31, 2024, December 31, 2023, and December 31, 2022, and the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the three-months period ended March 31, 2024 and for the years ended December 31, 2023, and December 31, 2022 other than with respect to these retrospective adjustments, and accordingly, we do not express an opinion or any other form of assurance on those comparative financial statements taken as a whole.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated June 26, 2025, expressed an adverse opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and

we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Determination of Accounting Acquirer and Assessment of the Accounting Treatment - Refer to Note 3 to the financial statements

Critical Audit Matter Description

As described in Note 3 to the financial statements, the Company consummated the MiX Combination and acquired MiX Telematics Limited (“MiX”) on April 2, 2024, for $370 million.

We identified the determination of the accounting acquirer and assessment of the accounting treatment in the combination with MiX as a critical audit matter.

Evaluating the Company’s accounting treatment of the combination required significant auditor judgment.

Specifically, a high degree of auditor judgment was required to evaluate the Company’s determination of the accounting acquirer.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the determination of the accounting acquirer and assessment of the accounting treatment included the following, among others:

• We evaluated the design and tested the operating effectiveness over the Company's control to evaluate the determination of the accounting acquirer.

• We evaluated management’s accounting memorandum that documented the factors in ASC 805 that the Company considered in determining the accounting acquirer, including voting interests held by the former shareholder groups and the composition of the board of directors and senior management of the combined Company and corroborated the information in the accounting analysis to third party sources and underlying supporting information.

• We utilised our accounting technical specialists to evaluate the Company’s determination of the accounting acquirer including the assessment of the voting interests of the various shareholder groups held in the Company post transaction and the composition of the board of directors and senior management of the combined entities.

MiX Combination - Refer to Note 2Y and 3 to the financial statements

Critical Audit Matter Description

The Company completed the MiX Combination for $370 million on April 2, 2024.

The Company accounted for the acquisition under the acquisition method of accounting for business combinations.

Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including trade name of $10 million, developed technology of $30 million and customer relationships of $113 million (the “acquired intangible assets”).

Management estimated the fair value of the trade name and developed technology using the relief from royalty method.

Management estimated the fair value of the customer relationships using the multi-period excess earnings method, which is a discounted cash flow method.

The fair value determination of the trade name, developed technology, and customer relationships required management to make significant estimates and assumptions related to future cash flows and the selection of the discount rates.

We identified the fair value of acquired trade name, developed technology and customer relationships from the MiX Combination as a critical audit matter because of the significant assumptions and estimates used in the valuation of the acquired intangible assets that possess higher degrees of complexity and sensitivity to the valuations.

This required a high degree of audit judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s assumptions.

The significant assumptions and estimates management makes to fair value the acquired intangible assets primarily relate to the future projected revenue and the discount rates applied to the future cash flows.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to future projected revenue and the selection of the discount rates applied to the future cash flows for the acquired intangible assets included the following, among others:

• We tested the effectiveness of internal controls over management’s accounting and valuation of intangible assets, including the review of forecasts of future cash flows, revenue growth rates and the selection of the discount rate.

• With the assistance of our fair value specialists, we evaluated the valuation methodologies, and the reasonableness of the customer attrition rates, useful lives, royalty rates and discount rates, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the customer attrition rates, useful lives and royalty rates selected by management.

• We assessed the reasonableness of management’s future projected revenue by comparing the projections to historical results, certain peer companies, industry data, and Board of Directors presentations.

• We evaluated whether the future projected revenue was consistent with evidence obtained in other areas of the audit.

Fleet Complete Acquisition - Refer to Note 2Y and 3 to the financial statements

Critical Audit Matter Description

The Company completed the Fleet Complete acquisition for $190 million on October 1, 2024.

The Company accounted for the acquisition under the acquisition method of accounting for business combinations.

Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including trade name of $4 million, developed technology of $25 million and customer relationships of $70 million (the “acquired intangible assets”).

Management estimated the fair value of the trade name and developed technology using the relief from royalty method.

Management estimated the fair value of the customer relationships using the multi-period excess earnings method, which is a discounted cash flow method.

We identified the fair value of acquired trade name, developed technology and customer relationships from the Fleet Complete acquisition as a critical audit matter because of the significant assumptions and estimates used in the valuation of the acquired intangible assets that possess higher degrees of complexity and sensitivity to the valuations.

How the Critical Audit Matter Was Addressed in the Audit

• We evaluated whether the future projected revenue was consistent with evidence obtained in other areas of the audit.

/s/ Deloitte & Touche

Johannesburg, South Africa

June 26, 2025

We have served as the Company’s auditor since 2024.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Powerfleet, Inc.

Opinion on the Financial Statements

We have audited the consolidated balance sheet of Powerfleet, Inc.

and subsidiaries (the Company) as of March 31, 2024, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity and cash flows for the three-month period ended March 31, 2024 and each of the two years in the period ended December 31, 2023, and the related notes (the 2024 transition period consolidated financial statements).

In our opinion, the 2024 transition period consolidated financial statements, present fairly, in all material respects, the financial position of the Company at March 31, 2024, and the results of its operations and its cash flows for the three-month period ended March 31, 2024 and each of the two years in the period ended December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company

Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based

on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway

Commission (2013 framework), and our report dated May 9, 2024 expressed an adverse opinion thereon.

Restatement of 2022 and 2021 Financial Statements

As discussed in Note 2 to

the consolidated financial statements, the 2022 and 2021 consolidated financial statements have been restated to correct misstatements.

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance

with the U.S.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures

included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Audit Matters

The critical audit matters communicated below are

matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the

audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially

challenging, subjective, or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on

the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing

a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

of the Matter

At December 31, 2023, the Company reported $83.5 million of goodwill.

As discussed in Notes 3 and 9 to the consolidated

financial statements, goodwill is tested for impairment at least annually at the reporting unit level.

Auditing management’s annual goodwill impairment test was complex and highly judgmental due to the significant

estimation required to determine the fair value of the reporting unit.

In particular, the fair value estimate was sensitive to significant

assumptions, such as the weighted average cost of capital, revenue growth and cost growth all of which are affected by expectations about

future operations and market conditions.

Further, the identified material weakness relating to management not adequately preparing and

maintaining evidence of their review of significant assumptions relating to the annual goodwill impairment assessment affected our audit

procedures in this area.

We Addressed the

To test the fair value of the

Company’s reporting unit, we performed audit procedures with the assistance of internal valuation specialists that included,

among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the

Company in its analysis.

We compared the significant assumptions used by management to current industry and economic trends,

including key performance indicators, and evaluated whether changes in the Company’s business would affect the significant

We assessed the historical accuracy of management’s estimates and performed a sensitivity analysis of significant

assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions.

compared the data used in the analysis to supporting documentation and analyses.

The nature and extent of our audit procedures

considered the inability to rely on controls over management’s goodwill impairment review process as a result of the material

weakness described above.

Uncertain Tax Positions

of the Matter

As discussed in Note 18 of the consolidated financial statements, the Company has recorded a liability of $0.3 million

related to uncertain tax positions as of December 31, 2023.

The Company conducts business in the US and various foreign countries and

is therefore subject to US federal and state income taxes, as well as income taxes of multiple foreign jurisdictions.

Due to the multinational

operations of the Company and changes in global income tax laws and regulations, including those in the US, there is complexity in the

accounting for and monitoring of the provision for uncertain tax positions.

Auditing management’s identification and measurement of uncertain tax positions involved complex analysis and

auditor judgment related to the evaluation of the income tax consequences of changes in income tax laws and regulations in various jurisdictions,

which are often subject to interpretation.

We Addressed the Matter in Our Audit

Our audit procedures included, among others, evaluating the Company’s assumptions and the underlying data used

to identify its uncertain tax positions and to estimate the amount of the related unrecognized income tax benefits by jurisdiction.

obtained an understanding of the Company’s legal structure by reviewing its organizational charts.

Due to the complexity of the

tax law in various jurisdictions, we involved our income tax professionals to assess the Company’s interpretation of and compliance

with tax laws in these jurisdictions, as well as to identify relevant tax law changes.

In certain circumstances, we involved our income

tax professionals to evaluate the technical merits of the Company’s tax positions and to evaluate income tax opinions or other third-party

advice obtained by the Company.

Ernst & Young LLP

have served as the Company’s auditor since 2019.

of Independent Registered Public Accounting Firm

the Stockholders and the Board of Directors of Powerfleet, Inc.

on Internal Control Over Financial Reporting

We have audited PowerFleet, Inc.

and subsidiaries’ internal control over financial reporting as of December

31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations

of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, because of the effect of the material weaknesses described

below on the achievement of the objectives of the control criteria, PowerFleet, Inc.

and subsidiaries (the Company) has not maintained

effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

A material weakness is a deficiency, or

combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a

material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely

The following material weaknesses have been identified and included in management’s assessment.

Management has

identified material weaknesses in the design and operation of controls related to the determination of standalone selling price,

capitalized software, the Movingdots GmbH business combination, valuation of goodwill, measurement and valuation of the convertible

redeemable preferred stock and the financial statement close process, which includes the information technology general controls in

the areas of user access and change management over key information technology systems that support the Company’s financial

reporting processes, the related process-level information technology dependent manual controls and application controls.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)

(PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations,

comprehensive loss, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31,

2023, and the related notes.

These material weaknesses were considered in determining the nature, timing and extent of audit tests applied

in our audit of the 2023 consolidated financial statements, and this report does not affect our report dated May 9, 2024, which expressed

an unqualified opinion thereon.

The Company’s management is responsible for

maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial

reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to

express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm

registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance

with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting,

assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control

based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our

audit provides a reasonable basis for our opinion.

and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial

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

financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control

over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,

accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions

are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and

that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition

of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because

of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Ernst & Young LLP

/s/ Ernst & Young LLP

We served as the Company’s auditor from 2019 to 2024.

Iselin, New Jersey

August 22, 2024

POWERFLEET, INC.

AND SUBSIDIARIES

Balance Sheets

thousands, except per share data)

December 31, 2022

(As restated)

December 31, 2023

Consolidated Balance Sheets

(In thousands, except per share data)

March 31, 2024

March 31, 2025

Current assets:

1 unchanged sentence

Restricted cash 85,310 4,396

Accounts receivable, net of allowance for credit losses of $ 2,567 and $ 2,797

in 2022 and 2023, respectively

Accounts receivable, net of allowance for credit losses of $ 3,197 and $ 4,057 as of March 31, 2024 and 2025, respectively

30,333 78,623

Inventory, net 21,658 18,350

Deferred costs – current

Prepaid expenses and other current assets 8,133 23,319

1 unchanged sentence

Fixed assets, net 12,719 58,011

Goodwill 83,487 383,146

Intangible assets, net 19,652 258,582

2 unchanged sentences

Deferred tax asset 2,781 3,934

Other assets 9,029 21,183

Total assets $ 308,680 $ 910,071

Current liabilities:

Short-term bank debt and current maturities of long-term debt $ 1,951 $ 41,632

Accounts payable and accrued expenses

Accounts payable

20,025 41,599

Accrued expenses and other current liabilities

13,983 45,327

Deferred revenue - current 5,842 17,375

10 unchanged sentences

Convertible redeemable preferred stock:

Series A – 100

shares authorized, $ 0.01

shares issued and outstanding at December 31, 2022 and December 31, 2023, respectively, at redemption value of $ 90,273 at December 31, 2023

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

60 and 0 shares issued and outstanding at March 31, 2024 and 2025, respectively, at redemption value of $ 90,273 at March 31, 2024

STOCKHOLDERS’ EQUITY

Preferred stock;

authorized 50,000

shares, $ 0.01 par value;

authorized 50,000 shares, $ 0.01 par value

Common stock;

authorized 175,000 shares, $ 0.01 par value;

37,605 and 38,716 shares issued at December 31, 2022 and December 31, 2023, respectively;

shares outstanding, 36,170 and 37,229 at December 31, 2022 and December 31, 2023, respectively

38,709 and 135,379 shares issued at March 31, 2024 and March 31, 2025, respectively;

shares outstanding, 37,212 and 133,316 at March 31, 2024 and 2025, respectively

Additional paid-in capital 202,607 671,400

2 unchanged sentences

Treasury stock;

1,435 and 1,487 common shares at cost at December 31, 2022 and December 31, 2023, respectively

1,497 and 2,063 common shares at cost at March 31, 2024 and 2025, respectively

( 8,682 ) ( 11,518 )

Total Powerfleet, Inc.

1 unchanged sentence

Non-controlling interest 105 150

Total equity 38,636 446,742

Total liabilities, convertible redeemable preferred stock, and stockholders’ equity $ 308,680 $ 910,071

ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

See accompanying notes to consolidated financial statements.

POWERFLEET, INC.

AND SUBSIDIARIES

Statements of Operations

thousands, except per share data)

Year Ended December 31,

Consolidated Statements of Operations

(In thousands, except per share data)

December 31, Three Months Ended

March 31, Year Ended March 31,

2022 2023 2024 2025

Products $ 56,945 $ 49,741 $ 12,080 $ 85,584

Services 78,967 83,995 21,660 276,931

Total revenues 135,912 133,736 33,740 362,515

3 unchanged sentences

Total cost of revenues 70,919 66,660 17,537 167,978

Gross profit 64,993 67,076 16,203 194,537

Operating expenses:

3 unchanged sentences

Loss from operations

( 6,971 ) ( 12,557 ) ( 7,647 ) ( 25,885 )

Interest income 71 103 259 926

1 unchanged sentence

Bargain purchase - Movingdots — 9,034 — —

Other (expense) income, net

Other income (expense), net

24 ( 29 ) ( 55 ) ( 1,163 )

Net loss before income taxes ( 5,882 ) ( 5,051 ) ( 8,152 ) ( 46,452 )

2 unchanged sentences

Non-controlling interest ( 2 ) ( 35 ) ( 11 ) ( 18 )

Net loss ( 6,754 ) ( 5,675 ) ( 8,515 ) ( 50,987 )

Accretion of preferred stock ( 5,906 ) ( 7,139 ) ( 9,996 ) —

Preferred stock dividends

Preferred stock dividend ( 4,231 ) ( 4,493 ) ( 1,128 ) ( 25 )

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

1 unchanged sentence

Weighted average common shares outstanding - basic and diluted 35,393 35,628 35,813 119,877

ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

See accompanying notes to consolidated financial statements.

POWERFLEET, INC.

AND SUBSIDIARIES

Statements of Comprehensive Loss

thousands, except per share data)

Consolidated Statements of Comprehensive Loss

(In thousands)

December 31, Three Months Ended

March 31, Year Ended March 31,

2022 2023 2024 2025

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

Foreign currency translation adjustment ( 1,601 ) 594 ( 369 ) ( 7,865 )

Total other comprehensive income (loss)

Total other comprehensive (loss) income

( 1,601 ) 594 ( 369 ) ( 7,865 )

Comprehensive loss $ ( 18,492 ) $ ( 16,713 ) $ ( 20,008 ) $ ( 58,877 )

ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

See accompanying notes to consolidated financial statements.

POWERFLEET, INC.

AND SUBSIDIARIES

Statements of Changes in Stockholders’ Equity

thousands, except per share data)

Comprehensive

Income (Loss)

Non-controlling

Stockholders’

Balance at January 1, 2021 (As issued)

Consolidated Statements of Changes in Stockholders’ Equity

(In thousands)

Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss)

Treasury Stock Non-Controlling Interest Total Stockholder’s Equity

Number of Shares Amount

Balance at January 1, 2022

37,263 $ 373 $ 224,852 $ ( 134,052 ) $ 391 $ ( 8,299 ) $ 86 $ 83,351

Restatement adjustments

at January 1, 2021 (As restated)

loss attributable to common stockholders (As restated)

loss attributable to non-controlling interest

currency translation adjustment

of restricted shares

of restricted stock units

issued pursuant to exercise of stock options

withheld pursuant to exercise of stock options

withheld pursuant to vesting of restricted stock

shares issued, net of issuance costs

based compensation

at December 31, 2021 (As restated)

Net loss attributable to common stockholders

— — ( 10,137 ) ( 6,754 ) — — — ( 16,891 )

loss attributable to common stockholders (As restated)

income attributable to non-controlling interest

currency translation adjustment

of restricted shares

of restricted stock units

withheld pursuant to vesting of restricted stock

based compensation

at December 31, 2022 (As restated)

Net income attributable to non-controlling interest — — — — — — 2 2

Foreign currency translation adjustment — — — — ( 1,601 ) — ( 10 ) ( 1,611 )

Issuance of restricted shares 492 5 ( 5 ) — — — — —

Forfeiture of restricted shares ( 186 ) ( 2 ) 2 — — — — —

Vesting of restricted stock units 36 — — — — — — —

Shares withheld pursuant to vesting of restricted stock — — — — — ( 211 ) — ( 211 )

Stock-based compensation

— — 4,343 — — — — 4,343

Balance at December 31, 2022

37,605 $ 376 $ 219,055 $ ( 140,806 ) $ ( 1,210 ) $ ( 8,510 ) $ 78 $ 68,983

Retained earnings adjustment for adoption of ASU 2016-13 — — — 200 — — — 200

loss attributable to common stockholders (As restated)

income attributable to non-controlling interest

income (loss) attributable to non-controlling interest

issued in connection with acquisition

currency translation adjustment

of restricted shares

of stock options

withheld pursuant to vesting of restricted stock

based compensation

at December 31, 2023

Net loss attributable to common stockholders

— — ( 11,632 ) ( 5,675 ) — — — ( 17,307 )

Net income attributable to non-controlling interest — — — — — — 35 35

Warrant issued in connection with acquisition — — 1,347 — — — — 1,347

Foreign currency translation adjustment — — — — 594 — ( 11 ) 583

Issuance of restricted shares 1,247 13 ( 13 ) — — — — —

Forfeiture of restricted shares ( 152 ) ( 2 ) 2 — — — — —

Exercise of stock options 16 — 36 — — — — 36

Shares withheld pursuant to vesting of restricted stock — — — — — ( 141 ) — ( 141 )

Stock-based compensation

— — 3,908 — — — — 3,908

ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Balance at December 31, 2023 38,716 $ 387 $ 212,703 $ ( 146,281 ) $ ( 616 ) $ ( 8,651 ) $ 102 $ 57,644

Net loss attributable to common

stockholders — — ( 11,124 ) ( 8,515 ) — — — ( 19,639 )

Net income attributable to non-controlling

interest — — — — — — 11 11

Foreign currency translation adjustment — — — — ( 369 ) — ( 8 ) ( 377 )

Forfeiture of restricted shares ( 7 ) — — — — — — —

Shares withheld pursuant to vesting of

restricted stock — — — — — ( 31 ) — ( 31 )

Stock-based compensation — — 1,028 — — — — 1,028

Balance at March 31, 2024 38,709 387 $ 202,607 $ ( 154,796 ) $ ( 985 ) $ ( 8,682 ) $ 105 $ 38,636

Net loss attributable to common stockholders — — ( 25 ) ( 50,987 ) — — — ( 51,012 )

Net income attributable to non-controlling interest — — — — — — 18 18

Foreign currency translation adjustment — — — — ( 7,865 ) — 22 ( 7,843 )

Proceeds from private placement, net of costs to issue common stock 20,000 200 66,259 — — — — 66,459

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

Shares issued in connection with MiX

Combination 70,704 707 361,298 — — — — 362,005

Shares issued in connection with FC Acquisition 4,286 43 21,300 — — — — 21,343

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

Shares issued for transaction bonus

174 1 888 — — — — 889

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

Issue of stock appreciation rights

842 — — — — — — —

Exercise of stock options

610 4 1,894 — — — — 1,898

Stock-based compensation — — 9,362 — — — — 9,362

Balance as of March 31, 2025 135,379 1,343 671,400 ( 205,783 ) ( 8,850 ) ( 11,518 ) 150 446,742

See accompanying notes to consolidated financial statements.

POWERFLEET, INC.

AND SUBSIDIARIES

Statements of Cash Flows

thousands (except per share data)

Year Ended December 31,

2021 (As restated)

2022 (As restated)

Consolidated Statements of Cash Flows

(In thousands)

December 31, Three Months Ended

March 31, Year Ended March 31,

2022 2023 2024 2025

Cash flows from operating activities

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

Net loss $ ( 6,754 ) $ ( 5,675 ) $ ( 8,515 ) $ ( 50,987 )

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

Non-controlling interest 2 35 11 18

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

Inventory reserve

Inventory write-downs

149 1,500 59 4,480

Stock-based compensation expense

4,343 3,908 1,028 9,362

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

Right-of-use assets, non-cash lease expense 2,756 2,814 763 5,007

Bad debt expense

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

Bad debts expense 66 1,767 970 9,418

Deferred income taxes 708 ( 6 ) 97 ( 4,872 )

Shares issued for transaction bonuses — — — 889

Lease termination and modification losses

Other non-cash items 707 103 ( 112 ) 1,061

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses and other assets

( 1,368 ) ( 1,460 ) 746 ( 14,048 )

( 4,473 ) ( 1,743 ) 726 5,729

Prepaid expenses and other current assets ( 816 ) 791 ( 1,440 ) 5,474

Deferred costs 1,608 679 41 ( 8,437 )

2 unchanged sentences

Lease liabilities ( 2,739 ) ( 2,851 ) ( 694 ) ( 4,558 )

Accrued severance payable, net

Net cash (used in) provided by operating activities

Accrued severance payable

( 42 ) ( 21 ) 36 1,248

Net cash provided by (used in) operating activities

1,249 4,397 ( 208 ) ( 3,345 )

Cash flows from investing activities

Acquisitions, net of cash assumed

Acquisition, net of cash assumed

— 8,722 — ( 137,112 )

Purchase of investments ( 100 ) ( 100 ) — —

Proceeds from sale of fixed assets — — — 12

Capitalized software development costs ( 2,219 ) ( 3,629 ) ( 591 ) ( 13,782 )

Capital expenditures ( 4,011 ) ( 3,464 ) ( 1,309 ) ( 20,008 )

Repayment of loan advanced to external parties — — — 294

Net cash (used in) provided by investing activities

( 6,330 ) 1,529 ( 1,900 ) ( 170,596 )

Cash flows from financing activities

Net proceeds from stock offering

Repayment of long-term debt ( 5,659 ) ( 4,408 ) ( 11,037 ) ( 2,642 )

1 unchanged sentence

Purchase of treasury stock upon vesting of restricted stock

( 211 ) ( 141 ) ( 31 ) ( 2,836 )

Repayment of financing lease

Payment of preferred stock dividend

( 121 ) ( 129 ) — —

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

Proceeds from private placement, net

Proceeds from long-term debt

— — 115,000 125,000

Payment of long-term debt costs

— — ( 1,081 ) ( 1,410 )

Proceeds from exercise of stock options, net — 36 — 1,898

Net cash (used in) provided by financing activities

( 282 ) ( 3,706 ) 92,821 115,722

Effect of foreign exchange rate changes on cash and cash equivalents ( 3,408 ) ( 877 ) ( 381 ) ( 2,657 )

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

Cash, cash equivalents and restricted cash - beginning of year

Cash, cash equivalents and restricted cash - end of year

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

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

( 8,771 ) 1,343 90,332 ( 60,876 )

Cash and cash equivalents, and restricted cash at beginning of the period 26,760 17,989 19,332 109,664

Cash and cash equivalents, and restricted cash at end of the period $ 17,989 $ 19,332 $ 109,664 $ 48,788

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

Cash and cash equivalents 26,452 17,680 19,022 24,354

Restricted cash 308 309 310 85,310

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

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

Cash and cash equivalents, and restricted cash, at beginning of the period $ 26,760 $ 17,989 $ 19,332 $ 109,664

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

Cash and cash equivalents 17,680 19,022 24,354 44,392

Restricted cash 309 310 85,310 4,396

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

Cash and cash equivalents, and restricted cash, at end of the period $ 17,989 $ 19,332 $ 109,664 $ 48,788

Supplemental disclosure of cash flow information:

Cash paid for:

Taxes $ 63 $ 175 $ 262 $ 4,283

Interest $ 1,308 $ 1,656 $ 447 $ 15,335

Noncash investing and financing activities:

Value of shares withheld pursuant to exercise of stock options

Issuance of derivative on long-term debt $ — $ — $ 2,226 $ —

Common stock issued for transaction bonus $ — $ — $ — $ 9

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

Shares issued in connection with FC Acquisition

$ — $ — $ — $ 21,343

Value of warrant issued in connection with Movingdots acquisition $ — $ 1,347 $ — $ —

Value of licensed intellectual property acquired in connection with Movingdots acquisition

Preferred stock dividends paid in shares

ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2022 and 2023

thousands (except per share data)

1 - DESCRIPTION OF BUSINESS AND LIQUIDITY

Company is a global leader of Internet-of-Things (“IoT”) solutions providing valuable business intelligence for managing

high-value enterprise assets that improve operational efficiencies.

Systems, Inc.

was incorporated in the State of Delaware in 1993.

Powerfleet, Inc.

was incorporated in the State of Delaware in February

2019 for the purpose of effectuating the transactions pursuant to which the Company acquired Pointer Telocation Ltd.

(the “Pointer Merger”)

and commenced operations on October 3, 2019, upon the closing of the Pointer Merger.

of Macroeconomic Conditions and Supply Chain Disruptions

interest rates and inflation, fluctuations in currency values, and the conflicts between Russia

and Ukraine and between Israel and Hamas have resulted in significant economic disruption and adversely impacted the broader global

economy, including our customers and suppliers.

The extent of the impact of such conditions on our business and financial results will

depend largely on future developments that cannot be accurately predicted at this time, including the duration of higher interest rates

and inflation, the resilience of currency values, and the resolution or escalation of geopolitical conflicts, particularly those between

Russia and Ukraine and between Israel and Hamas, and the impact of these and other factors on capital and financial markets and the related

impact on the financial circumstances of our employees, customers and suppliers.

addition, the Company has experienced a significant impact to its supply chain given the challenges stemming from ongoing

macroeconomic conditions, including delays in supply chain deliveries, extended lead times and shortages of certain key components,

some raw material cost increases and slowdowns at certain production facilities.

As a result of these supply chain issues, the

Company has had to increase its volume of inventory beginning in 2022 to ensure supply.

The Company incurred supply chain constraint

expenses which lowered its gross margins and decreased its profitability primarily during the last six months of 2021 and first nine

months of 2022.

The supply chain disruptions have delayed and may continue to delay the timing of some orders and expected

deliveries of the Company’s products.

If the impact of the supply chain disruptions is more severe than the Company expects,

it could result in longer lead times, inventory supply challenges and further increased costs, all of which could result in the

deterioration of the Company’s results, potentially for a longer period than currently anticipated.

of the date of these audited consolidated financial statements, the full extent to which global economic conditions and geopolitical

conflicts may materially impact the Company’s business, results of operations and financial condition is uncertain.

of December 31, 2023, the Company had cash (including restricted cash) and cash equivalents of $ 19,300 and working capital of $ 23,500 .

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

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

To date, the Company has not generated sufficient

cash flows solely from operating activities to fund its operations.

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

(“Powerfleet Israel”) and Pointer Telocation Ltd.

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

“Prior Credit Agreement”) with Bank Hapoalim B.M.

(“Hapoalim”), pursuant to which Hapoalim provided

Powerfleet Israel with two senior secured term loan facilities denominated in New Israeli Shekels (“NIS”) in an initial

aggregate principal amount of $ 30,000

(comprised of two facilities in the aggregate principal amounts of $ 20,000

and $ 10,000 )

and a five-year

revolving credit facility to Pointer in an initial aggregate principal amount of $ 10,000 .

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

acquisition of Pointer.

The Company borrowed net NIS 4,915 ,

under the revolving credit facility as of December 31, 2023.

See Note 12 for additional information.

On March 18, 2024, the Borrowers entered into an amended

and restated credit agreement (the “A&R Credit Agreement”), which refinanced the facilities under, and amended and restated,

the Prior Credit Agreement.

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

Powerfleet Israel in an aggregate principal amount of $ 30,000 (comprised of two facilities in the aggregate principal amounts of $ 20,000

and $ 10,000 , respectively) and (ii) two revolving credit facilities to Pointer in an aggregate principal amount of $ 20,000 (comprised

of two revolvers in the aggregate principal amounts of $ 10,000 and $ 10,000 , respectively).

On March 18, 2024, Powerfleet Israel

drew down $ 30,000 in cash under the term loan facilities and used the proceeds to prepay approximately $ 11,200 , 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.

On April 2, 2024, the Company

consummated the transactions contemplated by the Implementation Agreement, dated as of October 10, 2023 (the “Implementation

Agreement”), that the Company entered into with Main Street 2000 Proprietary Limited, a private company incorporated in the

Republic of South Africa and a wholly owned subsidiary of the Company, and MiX Telematics Limited, a public company incorporated

under the laws of the Republic of South Africa (“MiX Telematics”), pursuant to which MiX Telematics became an indirect,

wholly owned subsidiary of the Company (the “MiX Combination”).

The Implementation Agreement required, as a condition to

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

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

In order to meet this condition, the Company entered into a facilities agreement (the “Facilities

Agreement”) with FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB”) on March 7, 2024

and shortly thereafter drew down $ 85,000 in

cash under the Facilities Agreement.

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

net proceeds received from RMB and from incremental borrowing capacity as a result of the refinancing of credit facilities with

Hapoalim to redeem in full $ 90,300 for the outstanding shares of the Series A Preferred Stock.

See Note 20 for additional information on the

financings that occurred after the year ended December 31, 2023.

believes the Company’s cash and cash equivalents of $ 19.3

million as of December 31, 2023 in conjunction with cash generated from the execution of its strategic plan over the next 12 months, and proceeds from the debt agreements are sufficient to fund the projected operations for at least the next 12 months from the

issuance date of these financial statements (May 9, 2024) and service the Company’s outstanding obligations.

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

however, there is no

guarantee the Company will achieve this amount of revenue and gross margin during the assumed time period.

Management assessed

various additional operating cost reduction options that are available to the Company and would be implemented, if assumed levels of

revenue and gross margin are not achieved and additional funding is not obtained.

2 – RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

of Restatement Adjustments

connection with the preparation of the Company’s audited consolidated financial statements for the year ended December 31,

2023, the Company determined that the accounting for the redemption premium associated with the Series A Preferred Stock was

understated resulting in an understatement of “net loss attributable to common stockholders” and “net loss per

share attributable to common stockholders” for each period, an understatement of the value of the convertible redeemable

preferred stock as of each balance sheet date, and an overstatement of the additional paid-in capital as of each balance sheet date.

The required adjustments to correct the redemption value of the calculation of the Series A Preferred Stock and the related

accretion of the value of the preferred stock in the consolidated statement of operations include the recording of a non-cash

accretion resulting in an increase in the net loss attributable to common stockholders, an increase in the

“convertible redeemable preferred stock”, and a decrease of “additional paid-in capital” for all annual and

interim periods in fiscal years 2021, 2022, and through September 30, 2023.

The correction of the error results in reporting the value of the convertible preferred stock including

the accretion to the redemption value from the date of original issuance through each balance sheet date applying the interest method.

The Company determined that it is appropriate to restate the financial statements for the fiscal years ended December 31, 2021 and 2022

and each of the interim periods during the 2022 and 2023 fiscal years included

in this Annual Report on Form 10-K in addition to correcting other unrelated immaterial errors that were previously either unrecorded

or recorded as out-of-period adjustments.

The following tables present the impact of all

of these adjustments on the Company’s previously reported consolidated financial statements.

The “As Reported” amounts

in the following tables are amounts derived from the Company’s previously filed Annual Reports on Form 10-K and Quarterly Reports

on Form 10-Q.

The amounts in the columns labeled “Redemption Premium Adjustment” represent the effect of adjustments resulting

from the correction of the understatement of the Company’s net loss attributable to common stockholders and net loss per share

attributable to common stockholders for each period for each period, as well as the impact of the cumulative amount on the value of the

convertible redeemable preferred stock and additional paid-in capital as of each balance sheet date.

The amounts in the columns labeled

“Other Adjustments” represent the effect of other adjustments that relate to other unrelated errors in previously filed financial

statements that were not material, individually or in the aggregate, to such filed financial statements.

The effects of the restatement

have been corrected in all impacted tables and footnotes throughout these consolidated financial statements.

Consolidation Financial Statements – Restatement

Reconciliation Tables

OF CONSOLIDATION FINANCIAL STATEMENTS

Audited Financial Statements

following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Balance

Sheet as of December 31, 2022:

31, 2022 (As restated)

Premium Adjustment

and cash equivalents

costs - current

expenses and other current assets

current assets

costs less current portion

bank debt and current maturities of long-term debt

payable and accrued expenses

revenue - current

liability - current

current liabilities

debt - less current maturities

revenue - less current portion

liability - less current portion

severance payable

tax liability

long-term liabilities

and Contingencies (note 19)

redeemable preferred stock

paid-in capital

other comprehensive loss

STOCKHOLDERS’ EQUITY

Powerfleet, Inc.

stockholders’ equity

Non-controlling

liabilities, convertible redeemable preferred stock, and stockholders’ equity

following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement

of Operations for the year ended December 31, 2021:

Ended December 31, 2021 (As restated)

Premium Adjustment

cost of revenues

general and administrative expenses

and development expenses

operating expenses

from operations

purchase – Movingdots

(expense) income, net

loss before income taxes

tax (expense) benefit

loss before non-controlling interest

Non-controlling

of preferred stock

stock dividends

loss attributable to common stockholders

loss per share attributable to common

stockholders – basic and diluted

average common shares outstanding – basic and diluted

following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement

of Operations for the year ended December 31, 2022:

Ended December 31, 2022 (As restated)

Premium Adjustment

cost of revenues

general and administrative expenses

and development expenses

operating expenses

from operations

purchase – Movingdots

(expense) income, net

loss before income taxes

tax (expense) benefit

loss before non-controlling interest

Non-controlling

of preferred stock

stock dividends

loss attributable to common stockholders

loss per share attributable to common stockholders – basic and diluted

average common shares outstanding – basic and diluted

The following table presents the impact of the financial statement adjustments on the Company’s previously reported

Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2021 and 2022, respectively:

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

premium adjustment

Paid-In Capital

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

premium adjustment

at December 31, 2020

$ — $ 1,517 $ — $ —

$ ( 121,287 )

loss attributable to common stockholders

of restricted shares

issued pursuant to exercise of stock options

shares issued, net of issuance costs

based compensation

at December 31, 2021

$ ( 134,437 )

$ ( 134,052 )

loss attributable to common stockholders

of restricted shares

based compensation

at December 31, 2022

$ ( 141,440 )

$ ( 140,806 )

following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement

of Comprehensive Loss for the years ended December 31, 2021 and 2022, respectively:

Ended December 31,

(As restated)

loss attributable to common stockholders

currency translation adjustment

other comprehensive loss

Comprehensive

following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement

of Cash Flows for the year ended December 31, 2021:

Ended December 31,

(As restated)

flows from operating activities

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

Non-controlling

on bargain purchase

based compensation expense

and amortization

assets, non-cash lease expense

non-cash items

expenses and other assets

payable and accrued expenses

severance payable, net

cash used in operating activities

flows from investing activities:

Acquisitions,

net of cash assumed

of investments

software development costs

cash (used in) provided by investing activities

flows from financing activities:

proceeds from stock offering

of long-term debt

of financing lease

bank debt, net

of treasury stock upon vesting of restricted stock

of preferred stock dividend

from exercise of stock options, net

cash used in financing activities

of foreign exchange rate changes on cash and cash equivalents

Net increase in cash, cash equivalents and restricted cash

cash equivalents and restricted cash – beginning of period

cash equivalents and restricted cash – end of period

Reconciliation

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

and cash equivalents

cash equivalents, and restricted cash, beginning of period

Reconciliation

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

and cash equivalents

cash equivalents, and restricted cash, end of period

disclosure of cash flow information:

investing and financing activities:

of shares withheld pursuant to exercise of stock options

The following table presents the impact of the

financial statement adjustments on the Company’s previously reported Consolidated Statement of Cash Flows for the year ended

December 31, 2022:

flows from operating activities

Ended December 31,

(As restated)

flows from operating activities

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

Non-controlling

on bargain purchase

based compensation expense

and amortization

assets, non-cash lease expense

non-cash items

expenses and other assets

payable and accrued expenses

severance payable, net

cash provided by operating activities

flows from investing activities:

Acquisitions,

net of cash assumed

of investments

software development costs

cash used in investing activities

flows from financing activities:

proceeds from stock offering

of long-term debt

of financing lease

bank debt, net

of treasury stock upon vesting of restricted stock

of preferred stock dividend

from exercise of stock options, net

cash used in financing activities

of foreign exchange rate changes on cash and cash equivalents

Net decrease in cash, cash equivalents and restricted cash

cash equivalents and restricted cash – beginning of period

cash equivalents and restricted cash – end of period

Reconciliation

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

and cash equivalents

cash equivalents, and restricted cash, beginning of period

Reconciliation

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

and cash equivalents

cash equivalents, and restricted cash, end of period

disclosure of cash flow information:

investing and financing activities:

Preferred stock dividends paid in shares

Unaudited Financial Statements

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited Consolidated

Balance Sheet as of March 31, 2022:

Premium Adjustment

31, 2022 (As restated)

Premium Adjustment

and cash equivalents

costs – current

expenses and other current assets

current assets

costs less current portion

bank debt and current maturities of long-term debt

payable and accrued expenses

revenue current

liability – current

current liabilities

debt – less current maturities

revenue – less current portion

liability – less current portion

severance payable

tax liability

long-term liabilities

and Contingencies (note 19)

redeemable preferred stock

STOCKHOLDERS’ EQUITY

paid-in capital

other comprehensive loss

Powerfleet, Inc.

stockholders’ equity

Non-controlling

liabilities, convertible redeemable preferred stock, and stockholders’ equity

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited

Consolidated Balance Sheet as of June 30, 2022:

30, 2022 (As restated)

Premium Adjustment

and cash equivalents

costs – current

expenses and other current assets

current assets

costs less current portion

bank debt and current maturities of long-term debt

payable and accrued expenses

revenue – current

liability – current

current liabilities

debt – less current maturities

revenue – less current portion

liability – less current portion

severance payable

tax liability

long-term liabilities

and Contingencies (note 19)

redeemable preferred stock

STOCKHOLDERS’ EQUITY

paid-in capital

other comprehensive loss

Powerfleet, Inc.

stockholders’ equity

Non-controlling

liabilities, convertible redeemable preferred stock, and stockholders’ equity

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited

Consolidated Balance Sheet as of September 30, 2022:

30, 2022 (As restated)

Premium Adjustment

and cash equivalents

costs - current

expenses and other current assets

current assets

costs less current portion

bank debt and current maturities of long-term debt

payable and accrued expenses

revenue - current

liability - current

current liabilities

debt - less current maturities

revenue - less current portion

liability - less current portion

severance payable

tax liability

long-term liabilities

and Contingencies (note 19)

redeemable preferred stock

STOCKHOLDERS’ EQUITY

paid-in capital

other comprehensive loss

Powerfleet, Inc.

stockholders’ equity

Non-controlling

liabilities, convertible redeemable preferred stock, and stockholders’ equity

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited

Consolidated Balance Sheet as of March 31, 2023:

31, 2023 (As restated)

Premium Adjustment

and cash equivalents

costs – current

expenses and other current assets

current assets

costs less current portion

bank debt and current maturities of long-term debt

payable and accrued expenses

revenue – current

liability – current

current liabilities

debt – less current maturities

revenue – less current portion

liability – less current portion

severance payable

tax liability

long-term liabilities

and Contingencies (note 19)

redeemable preferred stock

STOCKHOLDERS’ EQUITY

paid-in capital

other comprehensive loss

Powerfleet, Inc.

stockholders’ equity

Non-controlling

liabilities, convertible redeemable preferred stock, and stockholders’ equity

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited

Consolidated Balance Sheet as of June 30, 2023:

30, 2023 (As restated)

Premium Adjustment

and cash equivalents

costs – current

expenses and other current assets

current assets

costs less current portion

bank debt and current maturities of long-term debt

payable and accrued expenses

revenue – current

liability – current

current liabilities

debt – less current maturities

revenue – less current portion

liability – less current portion

severance payable

tax liability

long-term liabilities

and Contingencies (note 19)

redeemable preferred stock

STOCKHOLDERS’ EQUITY

paid-in capital

other comprehensive loss

$ 4,231 $ 1,108 $ — $ —

See accompanying notes to consolidated financial statements.

POWERFLEET, INC.

stockholders’ equity

Non-controlling

liabilities, convertible redeemable preferred stock, and stockholders’ equity

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited Consolidated

Balance Sheet as of September 30, 2023:

30, 2023 (As restated)

Premium Adjustment

and cash equivalents

costs - current

expenses and other current assets

current assets

costs less current portion

bank debt and current maturities of long-term debt

payable and accrued expenses

revenue – current

liability – current

current liabilities

debt – less current maturities

revenue – less current portion

liability – less current portion

severance payable

tax liability

long-term liabilities

and Contingencies (note 19)

redeemable preferred stock

STOCKHOLDERS’ EQUITY

paid-in capital

other comprehensive loss

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

In thousands (except per share data)

NOTE 1 - DESCRIPTION OF THE COMPANY

Description of the Company

Powerfleet, Inc.

stockholders’ equity

Non-controlling

liabilities, convertible redeemable preferred stock, and stockholders’ equity

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited Consolidated

Statement of Operations for the three months ended March 31, 2022 and 2023:

Months Ended March 31, 2022

(As restated)

Months Ended March 31, 2023

(As restated)

Premium Adjustment

Total cost of revenues

general and administrative expenses

and development expenses

operating expenses

from operations

purchase – Movingdots

(expense) income, net

loss before income taxes

tax (expense) benefit

loss before non-controlling interest

Non-controlling

of preferred stock

stock dividends

loss attributable to common stockholders

loss per share attributable to common

stockholders - basic and diluted

average common shares outstanding - basic

average common shares outstanding - diluted

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited

Consolidated Statement of Operations for the three months ended June 30, 2022 and 2023:

Months Ended June 30, 2022

(As restated)

Months Ended June 30, 2023

(As restated)

Premium Adjustment

cost of revenues

general and administrative expenses

and development expenses

operating expenses

from operations

purchase – Movingdots

(expense) income, net

loss before income taxes

tax (expense) benefit

loss before non-controlling interest

Non-controlling

of preferred stock

stock dividends

loss attributable to common stockholders

loss per share attributable to common

stockholders – basic and diluted

average common shares outstanding – basic

average common shares outstanding – diluted

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited Consolidated

Statement of Operations for the six months ended June 30, 2022 and 2023:

Months Ended June 30, 2022

(As restated)

Months Ended June 30, 2023

(As restated)

Premium Adjustment

cost of revenues

general and administrative expenses

and development expenses

operating expenses

from operations

purchase – Movingdots

(expense) income, net

loss before income taxes

tax (expense) benefit

loss before non-controlling interest

Non-controlling

of preferred stock

stock dividends

loss attributable to common stockholders

loss per share attributable to common

stockholders – basic and diluted

average common shares outstanding – basic

average common shares outstanding – diluted

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited

Consolidated Statement of Operations for the three months ended September 30, 2022 and 2023:

Months Ended September 30, 2022

(As restated)

Months Ended September 30, 2023

(As restated)

Premium Adjustment

cost of revenues

general and administrative expenses

and development expenses

operating expenses

from operations

purchase – Movingdots

(expense) income, net

loss before income taxes

tax (expense) benefit

loss before non-controlling interest

Non-controlling

of preferred stock

stock dividends

loss attributable to common stockholders

loss per share attributable to common

stockholders – basic and diluted

average common shares outstanding – basic

average common shares outstanding – diluted

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited

Consolidated Statement of Operations for the nine months ended September 30, 2022 and 2023:

Months Ended September 30, 2022

(As restated)

Months Ended September 30, 2023

(As restated)

Premium Adjustment

Total cost of revenues

general and administrative expenses

and development expenses

operating expenses

from operations

purchase - Movingdots

(expense) income, net

loss before income taxes

tax (expense) benefit

loss before non-controlling interest

Non-controlling

of preferred stock

stock dividends

loss attributable to common stockholders

loss per share attributable to common stockholders – basic and diluted

average common shares outstanding – basic

average common shares outstanding – diluted

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited

Consolidated Statement of Comprehensive Loss for the three months ended March 31, 2022 and 2023, respectively:

Months Ended March 31,

(As restated)

loss attributable to common stockholders

currency translation adjustment (As Restated)

other comprehensive income (loss)

Comprehensive

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited

Consolidated Statement of Comprehensive Loss for the three months ended June 30, 2022 and 2023, respectively:

Months Ended June 30,

(As restated)

loss attributable to common stockholders

currency translation adjustment (As restated)

other comprehensive income (loss)

Comprehensive

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited

Consolidated Statement of Comprehensive Loss for the six months ended June 30, 2022 and 2023, respectively:

Months Ended June 30,

(As restated)

loss attributable to common stockholders

currency translation adjustment (As restated)

other comprehensive income (loss)

Comprehensive

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited

Consolidated Statement of Comprehensive Loss for the three months ended September 30, 2022 and 2023, respectively:

Months Ended September 30,

(As restated)

loss attributable to common stockholders

currency translation adjustment (As restated)

other comprehensive income (loss)

Comprehensive

The following table presents the impact of

the financial statement adjustments on the Company’s previously reported unaudited Consolidated Statement of Comprehensive

Loss for the nine months ended September 30, 2022 and 2023, respectively:

Months Ended September 30,

(As restated)

loss attributable to common stockholders

currency translation adjustment (As restated)

other comprehensive loss

Comprehensive

following table presents the as restated balances in the unaudited

Consolidated Statements of Changes in Stockholders’ Equity for the three-month periods ended March 31, 2022, June 30, 2022,

and September 30, 2022:

Number of Shares

Additional Paid-in Capital

Accumulated Deficit

Accumulated Other Comprehensive Income (Loss)

Treasury Stock

Non-controlling Interest

Stockholders’

Balance at December 31, 2021 (As Reported)

$ ( 134,437 )

Effect of Restatement

Balance at January 1, 2022 (As Restated)

$ ( 134,052 )

Net loss attributable to common stockholders (As restated)

Net loss attributable to non-controlling interest

Foreign currency translation adjustment (As restated)

Issuance of restricted shares

Forfeiture of restricted shares

Vesting of restricted stock units

Shares withheld pursuant to vesting of restricted stock

Stock based compensation (As restated)

Balance at March 31, 2022 (As Restated)

$ ( 137,525 )

Net loss attributable to common stockholders (As restated)

Net loss attributable to non-controlling interest

Foreign currency translation adjustment (As restated)

Forfeiture of restricted shares

Shares withheld pursuant to vesting of restricted stock

Stock based compensation (As restated)

Balance at June 30, 2022 (As Restated)

$ ( 137,932 )

Net loss attributable to common stockholders (As restated)

Net loss attributable to non-controlling interest

Foreign currency translation adjustment

Issuance of restricted shares

Forfeiture of restricted shares

Shares withheld pursuant to vesting of restricted stock

Stock based compensation

Balance at September 30, 2022 (As Restated)

$ ( 139,534 )

following table presents the total quarterly net impact of the financial statement adjustments on the Company’s previously

reported unaudited Consolidated Statements of Changes in Stockholders’ Equity for the three-month periods ended March 31,

2023, June 30, 2023, and September 30, 2023:

Number of Shares

Additional Paid-in Capital

Accumulated Deficit

Accumulated Other Comprehensive Income (Loss)

Treasury Stock

Non-controlling Interest

Stockholders’

Number of Shares

Additional Paid-in Capital

Accumulated Deficit

Accumulated Other Comprehensive Income (Loss)

Treasury Stock

Non-controlling Interest

Stockholders’

Balance at January 1, 2023 (As Restated)

$ ( 140,806 )

Retained earnings adjustment for adoption of ASU 2016-13

Net (loss) income attributable to common stockholders (As restated)

Net loss attributable to non-controlling interest

Foreign currency translation adjustment

Issuance of restricted shares

Forfeiture of restricted shares

Shares withheld pursuant to vesting of restricted stock

Stock based compensation

Warrant issuance in connection with acquisition

Balance at March 31, 2023 (As Restated)

$ ( 135,961 )

Net loss attributable to common stockholders (As restated)

Net income attributable to non-controlling interest

Foreign currency translation adjustment

Issuance of restricted shares

Forfeiture of restricted shares

Exercise of stock options

Shares withheld pursuant to vesting of restricted stock

Stock based compensation

Balance at June 30, 2023 (As Restated)

$ ( 139,230 )

Net loss attributable to common stockholders (As restated)

Net loss attributable to non-controlling interest

Foreign currency translation adjustment

Issuance of restricted shares

Forfeiture of restricted shares

Exercise of stock options

Shares withheld pursuant to vesting of restricted stock

Stock based compensation

Balance at September 30, 2023 (As Restated)

$ ( 142,778 )

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited

Consolidated Statement of Cash Flows for the three months ended March 31, 2022 and 2023:

Months Ended March 31,

(As restated)

flows from operating activities

(loss) income

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

Non-controlling

on bargain purchase

based compensation expense

and amortization

assets, non-cash lease expense

non-cash items

expenses and other assets

payable and accrued expenses

cash (used in) provided by operating activities

flows from investing activities:

Acquisitions,

net of cash assumed

of investments

software development costs

cash (used in) provided by investing activities

flows from financing activities:

of long-term debt

bank debt, net

of treasury stock upon vesting of restricted stock

cash used in by financing activities

of foreign exchange rate changes on cash and cash equivalents

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

cash equivalents and restricted cash - beginning of period

cash equivalents and restricted cash - end of period

Reconciliation

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

and cash equivalents

cash equivalents, and restricted cash, beginning of period

Reconciliation

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

and cash equivalents

cash equivalents, and restricted cash, end of period

disclosure of cash flow information:

investing and financing activities:

of warrant issued in connection with Movingdots acquisition

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited

Consolidated Statement of Cash Flows for the six months ended June 30, 2022 and 2023:

Months Ended June 30,

(As restated)

flows from operating activities

Net loss (income)

Adjustments to reconcile net

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

Non-controlling

bargain purchase

based compensation expense

and amortization

assets, non-cash lease expense

non-cash items

expenses and other assets

payable and accrued expenses

severance payable, net

cash (used in) provided by operating activities

from investing activities:

Acquisitions, net of cash

Purchase of investments

Capitalized software development

cash (used in) provided by investing activities

from financing activities:

Repayment of long-term debt

Short-term bank debt, net

Purchase of treasury stock

upon vesting of restricted stock

Payment of preferred stock

from exercise of stock options

cash used in financing activities

of foreign exchange rate changes on cash and cash equivalents

Net (decrease)

increase in cash, cash equivalents and restricted cash

cash equivalents and restricted cash - beginning of period

cash equivalents and restricted cash - end of period

Reconciliation of cash, cash

equivalents, and restricted cash, beginning of period

cash equivalents

cash equivalents, and restricted cash, beginning of period

Reconciliation of cash, cash

equivalents, and restricted cash, end of period

cash equivalents

cash equivalents, and restricted cash, end of period

disclosure of cash flow information:

investing and financing activities:

of warrant issued in connection with Movingdots acquisition

following table presents the impact of the financial statement adjustments on the Company’s previously reported unaudited

Consolidated Statement of Cash Flows for the nine months ended September 30, 2022 and 2023:

Months Ended September 30,

2022 (As Restated)

(As Restated)

flows from operating activities

Adjustments to reconcile net

loss to cash (used in) provided by operating activities:

Non-controlling

bargain purchase

based compensation expense

and amortization

assets, non-cash lease expense

non-cash items

expenses and other assets

payable and accrued expenses

severance payable, net

cash used in operating activities

from investing activities:

Acquisitions, net of cash

Purchase of investments

Capitalized software development

cash (used in) provided by investing activities

from financing activities:

Repayment of long-term debt

Short-term bank debt, net

Purchase of treasury stock

upon vesting of restricted stock

Payment of preferred stock

from exercise of stock options

cash used in financing activities

of foreign exchange rate changes on cash and cash equivalents

Net (decrease)

increase in cash, cash equivalents and restricted cash

cash equivalents and restricted cash - beginning of period

cash equivalents and restricted cash - end of period

Reconciliation of cash, cash

equivalents, and restricted cash, beginning of period

cash equivalents

cash equivalents, and restricted cash, beginning of period

Reconciliation of cash, cash

equivalents, and restricted cash, end of period

cash equivalents

cash equivalents, and restricted cash, end of period

disclosure of cash flow information:

investing and financing activities:

of warrant issued in connection with Movingdots acquisition

3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation :

consolidated financial statements include the accounts of Powerfleet, Inc.

and its subsidiaries (which, as noted above, are collectively

referred to herein as the “Company”).

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

Use of estimates :

accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the

United States of America (“U.S.

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

GAAP requires

management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent

assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the

reporting period.

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

reasonableness.

The most significant estimates relate to realization of deferred tax assets, accounting for uncertain tax positions,

the impairment of intangible assets, including goodwill, capitalized software development costs, market-based stock-based

compensation costs, and assumptions used in business combinations.

Actual results could differ from those estimates.

of December 31, 2023, the impact of global uncertainties continues to unfold.

As a result, many of our estimates and assumptions required

increased judgment and carry a higher degree of variability and volatility.

As events continue to evolve and additional information becomes

available, our estimates may change materially in future periods.

Cash and cash equivalents :

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

unless they are legally or contractually restricted.

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

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

Restricted cash at December 31, 2022 and 2023 consists of cash

held in escrow for purchases from a vendor.

Accounts receivable and allowance for credit losses :

receivable are recorded at the invoiced amount and do not bear interest.

Amounts collected on trade accounts receivable are included

in net cash provided by operating activities in the consolidated statements of cash flows.

The Company maintains an allowance for credit

losses against its accounts receivable for potential losses.

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

For trade receivables, the Company’s

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

and considerations of any changes expected in the future.

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

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

if the account is deemed uncollectible for other reasons.

Recoveries of amounts previously charged as uncollectible are credited to the

allowance for credit losses.

receivable is net of an allowance for credit losses in the amount of $ 2,567 and $ 2,797 in 2022 and 2023, respectively.

does not have any off-balance sheet credit exposure related to its customers.

analysis of the allowance for credit losses for the period ended December 31, 2023 is as follows:

OF ALLOWANCE FOR CREDIT LOSSES

(the “Company” or “Powerfleet”) is a global provider of Artificial Intelligence-of-Things (“AIoT”) solutions providing valuable business intelligence for managing high-value enterprise assets that improve operational efficiencies.

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

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

The consolidated financial statements as of and for the year ended March 31, 2025 include the financial results of MiX Telematics and its subsidiaries from the Implementation Date.

See Note 3 for additional information.

On October 1, 2024 (the “FC Closing Date”), the Company consummated the transactions contemplated by the Share Purchase Agreement, dated as of September 18, 2024 (the “Purchase Agreement”), by and among Golden Eagle Topco, LP (“Golden Eagle LP”), the persons that are party to the Purchase Agreement under the heading “Other Sellers” (the “Other Sellers” and, together with Golden Eagle LP, the “Sellers”), the Company and Powerfleet Canada Holdings Inc., a wholly owned subsidiary of the Company (the “Canadian SPV” and, together with the Company, the “Purchasers”), pursuant to which the Purchasers acquired all of the direct and indirect common shares in the capital of Golden Eagle Canada Holdings, Inc.

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

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

(together with Canada Holdco and CIH, “Fleet Complete”).

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

The consolidated financial statements as of and for the year ended March 31, 2025 include the financial results of Fleet Complete and its subsidiaries from the FC Closing Date.

See Note 3 for additional information.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

[A] Basis of preparation and consolidation:

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

GAAP”) and should be read in conjunction with the accompanying notes thereto.

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

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

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

We round amounts in the consolidated financial statements to thousands.

[B] Use of estimates:

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

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

Such management estimates include, but are not limited to, assumptions used in business combinations, allowance for credit losses, income taxes, realization of deferred tax assets, accounting for uncertain tax positions, the impairment of intangible assets, including goodwill and long-lived assets, capitalized software development costs, standalone selling prices (“SSP”), valuation of the derivative asset, and market-based stock-based compensation costs.

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

[C] Cash and cash equivalents:

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

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

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

Restricted cash at March 31, 2025 consisted of cash of $ 3,336 held in escrow related to the FC Acquisition to secure certain tax liabilities, cash of $ 311 held in escrow for purchases from a vendor, cash of $ 698 held by MiX Telematics Enterprise BEE Trust to be used solely for the benefit of its beneficiaries and c ash securing guarantees of $ 51 issued in respect of property lease agreements entered into by MiX Telematics Australasia.

[D] Accounts receivable and allowance for credit losses:

Accounts receivable are recorded at the invoiced amount and do not bear interest.

Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the Consolidated Statement of Cash Flows.

The Company maintains an allowance for credit losses against its accounts receivable for potential losses.

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

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

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

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

The Company does not have any off-balance sheet credit exposure related to its customers.

An analysis of the allowance for credit losses for the periods ended March 31, 2024 and 2025 is as follows (in thousands):

Allowance for credit losses, December 31, 2023 $ 2,797

Allowance for credit losses, beginning balance

Adjustment for adoption of ASU 2016-13

Current period provision for expected credit losses 970

1 unchanged sentence

Foreign currency translation ( 25 )

Allowance for credit losses, December 31, 2023

Allowance for credit losses, ending balance

the year ended December 31, 2023, the change in the allowance for credit losses was due to the change in the age of trade

receivables, offset by write-offs of bad debts.

Revenue recognition :

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

Allowance for credit losses, March 31, 2024 $ 3,197

Current period provision for expected credit losses 9,418

Write-offs charged against the allowance ( 8,908 )

Foreign currency translation 350

Allowance for credit losses, March 31, 2025 $ 4,057

[E] Revenue recognition:

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

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

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

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

The expected costs associated with the Company’s

base warranties continue to be recognized as an expense when the products are sold (see Note 13).

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

Product sales are recognized

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

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

For products which are

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

performance obligation.

Under the applicable accounting guidance, all of the Company’s billings for future services are deferred

and classified as a current and long-term liability.

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

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

Payment terms are generally

30 days after invoice date.

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

warranties over the life of the contract.

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

is expensed as incurred.

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

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

Deferred revenue also includes prepayment of extended

maintenance, hosting and support contracts.

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

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

Company also derives revenue from leasing arrangements.

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

maintenance, support and interest.

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

The expected costs associated with the Company’s base warranties continue to be recognized as an expense when the products are sold (see Note 12).

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

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

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

distinct to the customer separate from SaaS services provided).

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

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

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

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

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

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

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

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

Payment terms are generally 30 days after invoice date.

The Company recognizes revenue for remotely hosted SaaS agreements and post-contract maintenance and support agreements beyond 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 current or long-term based upon the terms of future services to be delivered.

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

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

The Company also derives revenue from leasing arrangements.

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

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

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

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

Maintenance revenues and interest

income are recognized monthly over the lease term.

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

For such arrangements, the Company allocates

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

Judgment is required to

determine the SSP for each distinct performance obligation.

The Company generally determines standalone selling prices based on

observable prices charged to customers.

Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of its

transactions, the customer demographic, price lists, its go-to-market strategy and historical and current sales and contract prices.

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

changes to SSP.

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

circumstances to similar customers.

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

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

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

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

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

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

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

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

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

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

If SSP is not

directly observable, for example when pricing is highly variable, the Company uses a range of SSP.

The Company determines the SSP

range using information that may include pricing practices or other observable inputs.

The Company typically has more than one SSP

for individual products and services due to the stratification of those products and services by customer size.

The Company recognizes

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

to recover those costs through future fees from the customers.

The Company amortizes the asset over one to five years because the asset

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

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

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

for services performed.

Deferred costs :

product costs consist of Powerfleet for Logistics equipment costs deferred in accordance with our revenue recognition policy.

evaluates the realizability of the carrying amount of the deferred contract costs.

To the extent the carrying value of the deferred contract

costs exceeds the contract revenue, an impairment loss will be recognized.

are stated at the lower of cost or net realizable value.

Cost is determined using the “moving average” cost method or the

first-in first-out (“FIFO”) method.

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

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

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

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

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

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

[F] Inventory:

Inventories are stated at the lower of cost or net realizable value.

Cost is determined using the “moving average” cost method or the first-in first-out (“FIFO”) method.

Inventory consists of components, work in process and finished products.

valuation reserves are established in order to report inventories at the lower of cost or net realizable value in the consolidated balance

The determination of inventory valuation reserves requires management to make estimates and judgments on the future salability

of inventories.

Valuation reserves for obsolete and slow-moving inventory are estimated based on assumptions of future sales forecasts,

product life cycle expectations, the impact of new product introductions, production requirements, and specific identification of items,

such as product discontinuance or engineering/material changes and by comparing the inventory levels to historical usage rates.

Fixed assets and depreciation :

assets are recorded at cost, net of accumulated depreciation.

Depreciation and amortization are recognized using the straight-line method

over the estimated useful lives of the assets.

Inventory write-downs are established in order to report inventories at the lower of cost or net realizable value in the Consolidated Balance Sheet.

The determination of inventory valuation reserves requires management to make estimates and judgments on the future salability of inventories.

Valuation reserves for obsolete and slow-moving inventory are estimated based on assumptions of future sales forecasts, product life cycle expectations, the impact of new product introductions, production requirements, and specific identification of items, such as product discontinuance or engineering/material changes and by comparing the inventory levels to historical usage rates.

[G] Fixed assets and depreciation:

Fixed assets are recorded at cost, net of accumulated depreciation.

Depreciation and amortization are recognized using the straight-line method over the estimated useful lives of the assets.

The following table provides the range of estimated useful lives used for each asset type:

OF ESTIMATED USEFUL LIVES OF ASSET

and electronic equipment

of useful life or lease term

Long-lived assets :

assets, which includes definite lived intangible assets and fixed assets, are reviewed for impairment whenever events or changes in circumstances

indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is assessed by a comparison

of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the asset.

If such assets

are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds

the fair value of the assets and would be charged to earnings.

Fair value is determined through various valuation techniques including

discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Goodwill 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 name, patents, customer relationships, software to be sold or leased,

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.

The Company operates in one operating segment which is its only reporting unit.

The Company tests its goodwill

for impairment annually, which is the first day of the Company’s fourth quarter or when an indicator of impairment exists, by comparing

the fair value of the reporting unit to its carrying value.

the evaluation of goodwill for impairment, the Company has the option to perform a qualitative assessment to determine whether further

impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying

amount, including goodwill.

Under the qualitative assessment, an entity is not required to calculate the fair value of a reporting unit

unless the entity determines that it is more likely than not that its fair value is less than its carrying amount.

By eliminating “Step

2” from the goodwill impairment test, the quantitative analysis of goodwill will result in an impairment loss for the amount that

the carrying value of the reporting unit exceeds its fair value which is limited to the total amount of goodwill allocated to the reporting

Company 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 and adjusted

EBITDA 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 the Company’s 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, the Company did not incur an impairment charge.

Product warranties :

Company typically provides a 1 – 5-year warranty on its products.

Estimated future warranty costs are accrued in the period that

the related revenue is recognized.

These estimates are derived from historical data and trends of product reliability and costs of repairing

and replacing defective products.

Research and development :

and development costs are charged to expense as incurred and consists primarily of salaries and related expenses, supplies and

contractor costs.

Research and development costs were $ 11,429

(as restated), $ 8,472

(as restated), and $ 8,380

in 2021, 2022 and 2023, respectively.

Patent costs :

incurred in connection with acquiring patent rights are charged to expense as incurred.

Concentrations of credit risk :

instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and

cash equivalents, trade receivables and trade payables.

Company’s cash and cash equivalents are invested primarily in deposits with major banks worldwide.

Generally, these deposits may

be redeemed upon demand and, therefore, bear low risk.

Management believes that the financial institutions that hold the Company’s

investments have a high credit rating.

the years ended December 31, 2023, 2022, and 2021, there were no customers who generated revenues greater than 10 % of the Company’s

consolidated total revenues or generated greater than 10 % of the Company’s consolidated accounts receivable.

Benefit plan :

Company maintains a retirement plan under Section 401(k) of the Internal Revenue Code, which covers all eligible employees.

All employees

Installed products 3 - 5

Computer software 3 - 5

Computers and electronic equipment 3 - 10

Furniture and fixtures 5 - 7

Leasehold improvements Shorter of useful life or lease term

Plant and equipment 1 - 8

[H] Long-lived assets:

Long-lived assets, which include definite lived intangible assets and fixed assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The recoverability of assets to be held and used is assessed by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the asset.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets and would be charged to earnings.

Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

[I] 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.

The Company operates with one operating segment, which is its only reporting unit and aligns with its only reportable segment.

The Company tests 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, the Company 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, the Company performed a qualitative assessment of goodwill.

The Company considered such factors as the Company’s market capitalization as of March 31, 2025 and over a 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, the Company did not incur an impairment charge.

[J] Product warranties:

The Company typically provides a 1 to 8-year warranty on its products.

Estimated future warranty costs are accrued in the period that the related revenue is recognized and are included in accounts payable and accrued expenses in the Consolidated Balance Sheet.

These estimates are derived from historical data and trends of product reliability and costs of repairing and replacing defective products.

[K] Research and development:

Research and development costs are charged to expense as incurred and consist primarily of salaries and related expenses, supplies and contractor costs.

Research and development costs were $ 8,472 , $ 8,380 , $ 2,018 and $ 16,061 for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025, respectively.

The Company capitalizes the portion of its internal-use software development costs that meets the criteria for capitalization.

[L] Internal-use software and technology

The Company capitalizes as intangible assets, internal-use software acquired or developed solely to meet the Company’s internal needs.

Costs, excluding general and administrative costs such as general overheads, legal, research, business process engineering and data conversion costs, are capitalized from the date on which management implicitly or explicitly authorizes, or commits to fund, the project, and it is probable that the project will be completed and the software will perform the intended function (application development stage).

All costs incurred during the preliminary development stage are expensed.

Capitalization ceases when the project is substantially complete and the software is ready for its intended use.

Costs, including annual licenses, associated with maintaining computer software programs, and training costs are expensed as incurred.

Costs incurred for upgrades and enhancements (modifications to existing internal-use software that provides additional functionality) are capitalized during the application development stage.

Software capitalized is amortized on a straight-line basis over its estimated useful life ranging from 3 to 7 years, commencing on the date when the software is ready for its intended use.

[M] Patent costs:

Costs incurred in connection with acquiring patent rights are charged to expense as incurred.

[N] Concentration of credit risk:

Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables.

The Company’s cash and cash equivalents are invested primarily in deposits with major banks worldwide.

Generally, these deposits may be redeemed upon demand and, therefore, bear low risk.

Management believes that the financial institutions that hold the Company’s investments have a high credit rating.

For the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025, there were no customers who generated revenues greater than 10% of the Company’s consolidated total revenues or generated greater than 10% of the Company’s consolidated accounts receivable.

[O] Benefit plan:

The Company maintains a retirement plan under Section 401(k) of the Internal Revenue Code, which covers all eligible employees.

All employees with U.S.

source income are eligible to participate in the plan immediately upon employment.

The Company did not make any contributions

to the plan during the year ended December 31, 2021.

In 2022 and 2023, the Company contributed $ 285 and $ 379 , respectively, to the plan.

Severance pay :

liability of the Company’s subsidiaries in Israel for severance pay is calculated pursuant to Israel’s Severance Pay Law

5273-1963 (the “Severance Law”) based on the most recent salary of the employees multiplied by the number of years of employment

as of balance sheet date and are presented on an undiscounted basis.

Employees are entitled to one month’s salary for each year

of employment, or a portion thereof.

The liability for the Company and its subsidiaries in Israel is fully provided by monthly deposits

with insurance policies and by accrual.

The value of these policies is recorded as an asset in the Company’s balance sheet.

deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to the Severance Law or labor agreements.

of the deposited funds is based on the cash surrendered value of these policies, and includes profits or losses accumulated to balance

of the Company’s employees are subject to Section 14 of the Severance Law and the General Approval of the Labor Minister dated

June 30, 1998, issued in accordance to the said Section 14, mandating that upon termination of such employees’ employment, all

the amounts accrued in their insurance policies shall be released to them.

The severance pay liabilities and deposits covered by these

plans are not reflected in the balance sheet as the severance pay risks have been irrevocably transferred to the severance funds.

Stock-based compensation :

Company accounts for stock-based employee compensation for all share-based payments, including grants of stock options and restricted

stock, as an operating expense based on their fair values on the grant date.

The Company recorded stock-based compensation expense of

and $ 3,908 for

the years ended December 31, 2021, 2022 and 2023, respectively.

Company estimates the fair value of share-based option awards on the grant date using an option pricing model.

The value of the portion

of the award that is ultimately expected to vest is recognized as expense over the requisite service period in the Company’s consolidated

statement of operations.

The Company estimates forfeitures at the time of grant in order to estimate the amount of share-based awards

that will ultimately vest.

For the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025, the Company contributed $ 285 , $ 379 , $ 88 , and $ 456 , respectively, to the plan.

[P] Severance pay:

The liability of the Company’s subsidiaries in Israel for severance pay is calculated pursuant to Israel’s Severance Pay Law 5273-1963 (the “Severance Law”) based on the most recent salary of the employees multiplied by the number of years of

employment as of balance sheet date and are presented on an undiscounted basis.

Employees are entitled to one month’s salary for each year of employment, or a portion thereof.

The liability for the Company and its subsidiaries in Israel is fully provided by monthly deposits with insurance policies and by accrual.

The value of these policies is recorded as an asset and classified as severance payable fund in the Company’s Consolidated Balance Sheet.

The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to the Severance Law or labor agreements.

The value of the deposited funds is based on the cash surrendered value of these policies, and includes profits or losses accumulated to balance sheet date.

Some of the Company’s employees are subject to Section 14 of the Severance Law and the General Approval of the Labor Minister dated June 30, 1998, issued in accordance to the said Section 14, mandating that upon termination of such employees’ employment, all the amounts accrued in their insurance policies shall be released to them.

The severance pay liabilities and deposits covered by these plans are not reflected in the Consolidated Balance Sheet as the severance pay risks have been irrevocably transferred to the severance funds.

[Q] Stock-based compensation:

The Company operates various stock-based compensation plans, under which the entity receives services from employees as consideration for equity instruments of the Company.

Settlement has taken place out of a fresh issue of shares.

The Company accounts for stock-based employee compensation for all share-based payments, including grants of stock options, restricted stock and stock appreciation rights, as an operating expense based on their fair values on the grant date.

The Company recorded stock-based compensation expense of $ 4,343 , $ 3,908 , $ 1,028 , and $ 9,362 , for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025, respectively.

The Company estimates the fair value of share-based option awards on the grant date using an option pricing model.

The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period in the Company’s Consolidated Statement of Operations.

The Company estimates forfeitures at the time of grant in order to estimate the amount of share-based awards that will ultimately vest.

The estimate is based on the Company’s historical rates of forfeitures.

Estimated forfeitures are revised,

if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Income taxes :

Company uses 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

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.

Company recognizes 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.

The Company applies the “more-likely-than-not” recognition

threshold to all tax positions, commencing at the adoption date of the applicable accounting guidance, which resulted in no unrecognized

tax benefits as of such date.

Estimated forfeitures are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

[R] Income taxes:

The Company uses 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.

The Company recognizes 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.

The Company applies the “more-likely-than-not” recognition threshold to all tax positions, commencing at the adoption date of the applicable accounting guidance, which resulted in no unrecognized tax benefits as of such date.

Additionally, there have been no unrecognized tax benefits subsequent to adoption.

The Company has opted

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

expenses and incomes taxes, respectively, in the consolidated statement of operations.

For the years ended December 31, 2021, 2022 and

2023, interest and penalties were immaterial.

The Company has opted to classify interest and penalties that would accrue according to the provisions of relevant tax law as selling, general, and administrative expenses and incomes taxes, respectively, in the Consolidated Statement of Operations.

For the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025, interest and penalties were immaterial.

The Company elected to account for the U.S.

tax on its Global Intangible Low-Taxed Income (“GILTI”) from

its foreign subsidiaries as a period cost and, therefore included GILTI expense in its effective tax rate calculation.

Fair value of financial instruments :

Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad

tax on its Global Intangible Low-Taxed Income (“GILTI”) from its foreign subsidiaries as a period cost and, therefore included GILTI expense in its effective tax rate calculation.

[S] Fair value of financial instruments:

The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.

The following is a brief description of those levels:

1 unchanged sentence

Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.

These include quoted

prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets

that are not active.

These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Unobservable inputs that reflect the reporting entity’s estimates of market participant assumptions.

Company’s cash and cash equivalents and investments in securities are carried at fair value.

The carrying value of financing receivables

approximates fair value due to the interest rate implicit in the instruments approximating current market rates.

The carrying value of

accounts receivables, accounts payable and accrued liabilities and short-term bank debt approximates their fair values due to the short

period to maturity of these instruments.

The fair value of the Company’s debt is based on observable relevant market information

and future cash flows discounted at current rates, which are Level 2 measurements.

OF FAIR VALUE OF FINANCIAL INSTRUMENTS

December 31, 2023

The carrying value of finance lease receivables approximates fair value due to the interest rate implicit in the instruments approximating current market rates.

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities and short-term bank debt approximates their fair values due to the short period to maturity of these instruments.

The fair value of the loans to external parties included in other non-current assets is determined using unobservable market data (Level 3 inputs) that represent management ’ s estimate of current interest rates that a commercial lender would charge borrower s.

The fair value of the Company’s debt is based on observable relevant market information and future cash flows discounted at current rates, which are Level 2 measurements.

The Prepayment Derivative (as defined below) within the RMB Facilities (as defined below) is classified as a Level 3 in the fair value hierarchy due to the use of at least one significant unobservable input which is the credit spread volatility (see Note 11).

Fair value measurement of financial assets and liabilities on a recurring basis (in thousands):

As of March 31, 2025

Carrying Amount

Advertising and marketing expense :

and marketing costs are expensed as incurred.

Advertising and marketing expense for the years ended December 31, 2021, 2022 and 2023

amounted to $ 1,185 ,

$ 1,130 (as restated),

and $ 2,300 ,

respectively.

Foreign currency :

Company’s reporting currency is the U.S dollar (“USD”).

For businesses where the majority of the revenues are generated

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

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

Due to the fact that Argentina has been

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

currency was the USD.

Total Fair Value

Loans to external parties $ 194 $ 194 $ — $ — $ 194

Debt $ 273,792 $ 275,179 $ — $ 275,179 $ —

Prepayment derivative $ 2,730 $ 2,730 $ — $ — $ 2,730

As of March 31, 2024

Carrying Amount

Total Fair Value

Debt $ 115,761 $ 116,278 $ — $ 116,278 $ —

Prepayment derivative $ 2,226 $ 2,226 $ — $ — $ 2,226

The following table shows a reconciliation from the opening balances to the closing balances for Level 3 fair values (in thousands):

Loans to external parties

Prepayment derivative

Balance at December 31, 2023

Balance at March 31, 2024

Assumed in business combinations

Foreign currency translation difference

Net change in fair value

Balance at March 31, 2025

$ 194 $ 2,730

There were no transfers between Level 1 or Level 2, or transfers in or out of Level 3, of the fair value hierarchy during the three months ended March 31, 2024 and the year ended March 31, 2025.

[T] Advertising and marketing expense:

Advertising and marketing costs are expensed as incurred and are classified a s s elling, general and administrative expenses on the Consolidated Statement of Operations .

Advertising and marketing expense for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025 amounted to $ 1,130 , $ 2,300 $ 1,698 and $ 5,000 , respectively.

[U] Foreign currency:

The Company’s reporting currency is the U.S dollar (“USD”).

For businesses where the majority of the revenues are generated in USD and a substantial portion of the costs are incurred in USD, the Company’s management believes that the USD is the primary currency of the economic environment and thus their functional currency.

Due to the fact that Argentina has been determined to be highly inflationary, the financial statements of our subsidiary in Argentina have been remeasured as if its functional currency was the USD.

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

For these operations,

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

average rates of exchange for the period.

For these operations, assets and liabilities are translated using the end-of-period exchange rates and revenues, expenses and cash flows are translated using average rates of exchange for the period.

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

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

Net translation

gains (losses) from the translation of foreign currency are $ ( 8 ) , $ ( 1,601 ) and $ 594 at December 31, 2021, 2022 and 2023, respectively,

which are included in comprehensive loss in the Consolidated Statement of Changes in Stockholders’ Equity.

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

included in determining net income or loss.

Foreign currency transaction gains (losses) for the years ended December 31, 2021, 2022 and

2023 of $ ( 128 ) ,

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

Foreign currency

transaction gains (losses) related to long-term debt of $ 810 ,

for the years ended December 31, 2021, 2022 and 2023, respectively, are included in interest expense in the Consolidated Statement of

Commitments and contingencies :

time to time, the Company is involved in various litigation matters involving claims incidental to its business and acquisitions, including

employment matters, acquisition related claims, patent infringement and contractual matters, among other issues.

While the outcome of

any such litigation matters cannot be predicted with certainty, management currently believes that the outcome of these proceedings,

including the matters described below, either individually or in the aggregate, will not have a material adverse effect on its business,

results of operations or financial condition.

The Company records reserves related to legal matters when losses related to such litigation

or contingencies are both probable and reasonably estimable.

Recently issued accounting pronouncements :

November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2023-07, “Segment

Reporting (Topic 280):

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

segment disclosures in annual and interim consolidated financial statements.

ASU 2023-07 is effective for annual periods beginning after

December 15, 2023 and for interim periods beginning after December 15, 2024 on a retrospective basis, with early adoption permitted.

The Company is evaluating the effect of adopting ASU 2023-07.

December 2023, the FASB issued Accounting Standards Update No.

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

Foreign currency transaction gains and losses related to operational expenses denominated in a currency other than the functional currency are included in determining net income or loss.

Foreign currency transaction (losses) gains for the years ended December 31, 2022 and 2023, and the three months ended March 31, 2024 of $( 847 ), $ 277 , and $( 193 ), respectively, are included in selling, general and administrative expenses in the Consolidated Statement of Operations.

Foreign currency transaction gains related to long-term debt of $ 2,689 , $ 591 , and $ 151 , for the years ended December 31, 2022 and 2023, and the three months ended March 31, 2024, respectively, are included in interest expense in the Consolidated Statement of Operations.

[V] Commitments and contingencies:

From time to time, the Company is involved in various litigation matters involving claims incidental to its business and acquisitions, including employment matters, acquisition-related claims, patent infringement and contractual matters, among other issues.

While the outcome of any such litigation matters cannot be predicted with certainty, management currently believes that the outcome of these proceedings, including the matters described below, either individually or in the aggregate, will not have a material adverse effect on its business, results of operations or financial condition.

The Company records reserves related to legal matters when losses related to such litigation or contingencies are both probable and reasonably estimable.

[W] Recently adopted accounting pronouncements:

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

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

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires additional operating segment disclosures in annual and interim consolidated financial statements.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and for interim periods beginning after December 15, 2024 on a retrospective basis, with early adoption permitted.

The Company adopted ASU 2023-07 on April 1, 2024, using a retrospective method (see Note 15 – Segment Information).

[X] Recently issued accounting pronouncements:

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

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”

(“ASU 2023-09”), which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components

of the effective tax rate reconciliation and modifies other income tax-related disclosures.

ASU 2023-09 is effective for annual periods

beginning after December 15, 2024 on a retrospective or prospective basis.

Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024.

The Company is 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

This updated standard is effective for fiscal years beginning after December 15, 2022.

The Company adopted ASU No.

on January 1, 2023.

The adoption of the standard did not result in a material impact on the consolidated financial statements.

[X] Business Combinations

In accordance with ASC 805, Business

Combinations (ASC 805), the Company recognizes 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.

The Company recognizes 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, the Company records adjustments to the assets acquired and liabilities assumed with the

corresponding offset to goodwill or bargain purchase to the extent that it identifies adjustments to the preliminary fair values.

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.

Segment Information :

Company has a single operating and reportable segment.

The Company’s chief operating decision maker is its Chief Executive Officer,

who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance,

and allocating resources.

The Company derives its revenue from the sale of systems and products and from customer SaaS and hosting infrastructure

fees (see Note 17 – Segment Information).

4 – ACQUISITION

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

Reinsurance Holding Company Ltd (“Swiss Re”), pursuant to which the Company would acquire all of the outstanding shares of

Movingdots GmbH (“Movingdots”), a wholly owned subsidiary of Swiss Re, for consideration consisting of € 1

and the issuance by the Company of a ten-year

warrant to purchase 800,000

shares of the Company’s common stock at

an exercise price of $ 7.00

per share (the “Swiss Re Warrants”)

with fair value of approximately $ 1,347

at March 31, 2023 and noncash consideration in

the form of a nonexclusive irrevocable, perpetual, fully paid-up, royalty free license agreement between Movingdots and Swiss Re for

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

The Movingdots Acquisition was consummated

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

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

became a direct, wholly owned subsidiary of Powerfleet.

Movingdots’ end-to-end telematics app solution will enhance Powerfleet’s

software-as-a-service (“SaaS”)-based fleet intelligence platform, Unity, with additional customization capabilities and insurance

risk insights.

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

The Movingdots Acquisition also strengthens Powerfleet’s global reach, particularly in Europe.

Revenue and net loss of Movingdots since the Movingdots Closing included in the consolidated income statement was $ 523

and $( 3,808 ), respectively.

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

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

license agreement between Swiss Re’s affiliates and Movingdots.

Swiss Re Warrants were valued using the Black-Scholes Model using the following assumptions at the date of issuance:

OF WARRANTS VALUATION ASSUMPTIONS

Expected volatility

Expected term (in years)

Risk free interest rate

Dividend yield

Fair value per share

Warrants measurement input

Price Allocation

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

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

recognized approximately $ 500

of acquisition-related costs which were expensed in the consolidated statement of operations for the year ended December 31,

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

of Movingdots:

OF PURCHASE PRICE ALLOCATION IN ASSETS ACQUIRED AND LIABILITIES

Consideration:

Fair value of Powerfleet warrants on March 31, 2023

Total consideration

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

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

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

The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

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

[Y] Business combinations:

In accordance with ASC 805, Business Combinations (“ASC 805”), the Company recognizes 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.

The Company recognizes 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, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill or bargain purchase to the extent that it identifies 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.

[Z] Reclassification

During fiscal year 2025, amounts previously presented on the consolidated balance sheets as “accounts payable and accrued expenses” are now presented as “accounts payable” and “accrued expenses and other current liabilities”.

Prior period amounts previously presented as such have been reclassified to conform to the current period’s presentation.

Certain other reclassifications have been made to the prior year’s financial statements to conform to the current year presentation.

These reclassifications had no effect on the previously reported consolidated financial position, results of operations, cash flows, or accumulated deficit.

NOTE 3 - ACQUISITION

MiX Combination

On the Implementation Date (April 2, 2024), the Company consummated the MiX Combination, pursuant to which Powerfleet Sub acquired all the issued ordinary shares of MiX Telematics (including those represented by MiX Telematics’ American Depositary Shares) through the implementation of a scheme of arrangement in accordance with Sections 114 and 115 of the South African Companies Act, No 71 of 2008, as amended, in exchange for shares of the Company’s common stock.

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

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

The Company was determined to be the accounting acquirer under ASC 805, based on the evaluation of the following facts and circumstances favoring Powerfleet as the accounting acquirer over those supporting MiX Telematics as the accounting acquirer:

• The majority of the Company’s board of directors following the MiX Combination was composed of directors with prior affiliation to the Company.

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

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

• While the voting rights of 65.5 % in favor of MiX Telematics was an indicator that MiX Telematics may have been the acquirer, the Company believed that the weight of the indicator was tempered given that the negotiated premium paid by Powerfleet to MiX Telematics contributed to the relative ownership split and that, qualitatively, the significant reduction in the carryover MiX Telematics institutional investor base would have reduced the legacy MiX Telematics shareholders’ ability to control the combined entity, particularly in the light of the significant concentration of institutional investors on the Powerfleet side;

• While no individual or organized group owned a large minority interest in the combined entity, the largest institutional investor following the MiX Combination was an investor of legacy Powerfleet.

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

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

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

Number of MiX Telematics ordinary shares outstanding 554,021

Exchange ratio 0.12762

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

Powerfleet stock price* 5.12

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

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

Total fair value of consideration

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

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

Allocation of Purchase Price

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

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

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

Goodwill is not deductible for tax purposes.

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

Assets acquired:

Accounts receivable

Prepaid expenses

Cash and cash equivalents $ 26,737

Restricted cash 794

Accounts receivable, net 24,250

Inventory, net 4,142

Prepaid expenses and other current assets 8,886

Fixed assets, net 35,587

Intangible assets, net 153,000

Right-of-use asset 3,794

Deferred tax assets 1,093

Other assets 973

Total assets acquired $ 259,256

Liabilities assumed:

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

Accounts payable and accrued expenses 26,400

Deferred revenue - current 6,394

Lease liability - current 859

Income taxes payable 355

Lease liability - less current portion 2,852

Deferred tax liability 48,725

Other long-term liabilities 484

Total liabilities assumed $ 106,227

Total identifiable net assets acquired $ 153,029

Gain on bargain purchase

Non-controlling interest ( 5 )

Goodwill 216,799

Purchase price consideration $ 369,823

The fair value estimates of the assets acquired

and liabilities assumed, including fixed assets and accounts payable and accrued expenses, were

subject to adjustments through the initial measurement period.

As of December 31, 2023, the measurement period was complete and an

adjustment of approximately $ 1,500

was recorded to increase the fixed assets above for valuation of intellectual property, internal use software, and adjustments of an approximate $ 300 increase in net assets acquired related primarily to reductions in accounts

payable and accrued expenses.

Adjustments resulted in an increase to the gain on

bargain purchase.

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

The intellectual property was valued using the

replacement method.

Since this asset does not directly generate revenue (i.e., it is intended to support other revenue-generating

assets and its utility is premised on avoided operating costs), the fair value analysis considers the costs that would be incurred

to recreate the intellectual property in the event that the intellectual property did not exist (or the agreement to license the

intellectual property did not exist).

The replacement cost method utilized assumptions on the length of time expected to be incurred

to recreate the intellectual property, the amount and cost of labor plus a 30% obsolescence factor, and 20% estimated developers

All other assets and liabilities acquired, as detailed

in the allocation chart above, were valued at fair value based on their short-term nature.

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

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

liabilities assumed have been properly valued.

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

bargain purchase as the estimated fair value of the identifiable net assets acquired exceeded the purchase consideration transferred

by approximately $ 9,034 .

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

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

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

business, which was deemed a non-core business of Swiss Re on a go-forward basis.

The sale of Movingdots was not subject to a competitive

bidding process.

Under the Movingdots Agreement, Swiss Re also agreed to make a cash injection into Movingdots prior to the Movingdots

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

the liquidity of Movingdots and for broader combined business activities.

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

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

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

the Company shall pay Swiss Re an amount in cash (“on sale compensation”) equal to (i) €8,000, plus (ii) the difference

between such on-sale transfer price less the purchase price net of the net present value of the Swiss Re Warrants.

The Company does not

currently intend to enter into an on-sale transfer.

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

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

The acquisition of Movingdots and its business

will, among other things:

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

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

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

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

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

following table represents the unaudited combined pro forma revenue and earnings for the annual periods ended December 31, 2022 and

OF PRO FORMA REVENUE AND EARNINGS

Year Ended December 31, 2022

Historical (as restated)

Pro forma combined

Operating loss

Net loss per share – basic and diluted

Net loss per share - basic

Year Ended December 31, 2023

Pro forma combined

Operating loss

Net loss per share – basic and diluted

Net loss per share - basic

unaudited combined pro forma revenue and earnings for the annual periods ended December 31, 2022 and 2023 were prepared as though

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

This summary is not necessarily indicative of what the results of

operations would have been had the Movingdots Acquisition occurred as of such date, nor does it purport to represent results of

operations for any future periods.

5 – REVENUE RECOGNITION

following table presents the Company’s revenues disaggregated by revenue source for the years ended December 31, 2021, 2022 and

OF REVENUE DISAGGREGATED BY REVENUE SOURCE

Year Ended December 31,

2021 (as restated)

2022 (as restated)

balances of contract assets and contract liabilities from contracts with customers are as follows as of December 31, 2022 and 2023 are

OF CONTRACT ASSETS AND CONTRACT LIABILITIES FROM CONTRACTS WITH CUSTOMERS

Year Ended December 31,

2022 (as restated)

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

The Company used discounted cash flow (“DCF”) analyses to assess certain components of its 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, the Company used (i) forecasted future cash flows, (ii) historical and projected financial information, (iii) synergies including cost savings, (iv) revenue growth rates, (v) customer attrition rates, (vi) royalty rates, and (vii) discount rates, as relevant, that market participants would consider when estimating fair values.

The initial accounting for the business combination was complete at December 31, 2024.

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

Acquired Identifiable Intangible Assets

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

(in thousands) Fair value Weighted average useful lives

Trade name $ 10,000 14 years

Developed technology 30,000 5 years

Customer relationships 113,000 13 years

Acquisition-Related Expenses

The Company expensed a total of $ 21,177 of acquisition-related costs related to the MiX Combination, $ 15,377 of which was expensed in the year ended March 31, 2025.

Acquisition-related costs are classified as selling, general and administrative expenses in the Consolidated Statement of Operations.

Financial Information

The business acquired in the MiX Combination contributed revenue of $ 171,167 and a net loss of $ 10,730 for the year ended March 31, 2025.

FC Acquisition

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

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

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

(in thousands, except for share price)

Shares of Powerfleet common stock issued

Powerfleet stock price* 4.98

Fair value of Powerfleet common stock transferred

Cash consideration paid to former shareholders

Repayment of Fleet Complete’s existing debt

Total fair value of consideration

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

$ 60,000 of the cash portion of the Purchase Price was funded by the Private Placement, as described below, and $ 125,000 of the cash portion of the Purchase Price was funded with a senior secured term loan facility provided by RMB, as described in Note 11 below.

Concurrently with the closing of the FC Acquisition, on October 1, 2024, the Company consummated a private placement contemplated by the Subscription Agreement, dated as of September 18, 2024, by and among the Company and various accredited investors party thereto (the “Investors”), pursuant to which the Investors purchased from the Company, and the Company issued to such Investors, an aggregate of 20,000 shares of the Company’s common stock at a price per share of $ 3.50 f

or aggregate gross proceeds of $ 70,000 (the “Private Placement”).

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

Timing of the receipt of proceeds, gross of issuance costs, was $ 62,000 by September 30, 2024, with the remaining $ 8,000 on October 1, 2024.

Preliminary Allocation of Purchase Price

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

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

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

Goodwill is not deductible for tax purposes.

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

Assets acquired:

Cash and cash equivalents $ 3,964

Accounts receivable, net 19,990

Inventory, net 6,598

Prepaid expenses and other current assets 9,144

Fixed assets, net 3,693

Intangible assets, net 101,261

Identifiable intangible assets acquired

Computer software

Right-of-use asset 2,823

Deferred tax assets —

Total assets acquired $ 152,028

Liabilities assumed:

Accounts payable and accrued expenses 30,857

Deferred revenue - current 3,088

Lease liability - current 2,965

Deferred revenue - less current portion

Lease liability - less current portion 75

Accrued severance payable

Deferred tax liability

Other long-term liabilities 405

Total liabilities assumed $ 44,323

Total identifiable net assets acquired $ 107,705

Goodwill 82,245

Purchase price consideration $ 189,950

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

The Company’s allocation of the purchase price to certain assets acquired and liabilities assumed is provisional and the Company will continue to adjust those estimates as additional information pertaining to events or circumstances present at October 1, 2024 becomes available and final valuation and analysis are completed.

During the three-month period ended March 31, 2025, the Company recognized an adjustment of $ 7,496 against goodwill due to the

finalization of deferred income taxes.

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

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

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

These estimates require judgment and are subject to change.

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

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

Adjustments to initial preliminary fair value of the assets acquired and assumed liabilities during the measurement period until October 1, 2025, will be recorded during the period in which the adjustments are determined, including the effect on earnings of any amounts we would have recorded in previous periods if the accounting had been completed (i.e.

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

The provisional amounts for assets acquired and liabilities assumed include:

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

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

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

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

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

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

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

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

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

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

Acquired Identifiable Intangible Assets

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

(in thousands) Fair value Weighted average useful lives

Trade name $ 4,000 4.5 years

Developed technology 25,000 5.5 years

Customer relationships 70,000 9.5 years

Acquisition-Related Expenses

The Company expensed a total of $ 6,443 of acquisition-related costs related to the FC Acquisition in the year ended March 31, 2025.

Acquisition-related costs are classified as selling, general and administrative expenses in the Consolidated Statement of Operations.

Financial Information

If the business acquired in the FC Acquisition was acquired on April 1, 2024, it would have contributed revenue of $ 119,627 and a net loss of $ 8,705 for the year ended March 31, 2025.

Reconciliation of Acquisition, Net of Cash Assumed

The following table is a reconciliation of acquisition, net of cash assumed in the Consolidated Statement of Cash Flows (in thousands):

MiX Combination:

Cash and cash equivalents

Restricted cash

FC Acquisition:

Cash consideration paid to former shareholders

Repayment of Fleet Complete’s existing debt

Cash and cash equivalents

Restricted cash

Acquisition, net of cash assumed

$ ( 137,112 )

NOTE 4 - REVENUE RECOGNITION

The following table presents the Company’s revenues disaggregated by revenue source for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025 (in thousands):

December 31, Three Months Ended

March 31, Year Ended March 31,

2022 2023 2024 2025

Products $ 56,945 $ 49,741 $ 12,080 $ 85,584

Services 78,967 83,995 21,660 276,931

$ 135,912 $ 133,736 $ 33,740 $ 362,515

The balances of contract assets and contract liabilities from contracts with customers are as follows as of March 31, 2024 and 2025 (in thousands):

Contract Assets:

Deferred contract cost (1)

Deferred cost

$ 2,632 $ 11,894

Deferred costs - current $ 42 $ 2

Contract Liabilities:

Deferred revenue – services (2)

$ 10,674 $ 21,466

Deferred revenue – products (2)

Deferred revenue

Deferred revenue – current portion

10,734 22,572

Deferred revenue – current ( 5,842 ) ( 17,375 )

Deferred revenue – long term $ 4,892 $ 5,197

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

years ended December 31, 2022 and 2023, the Company recognized revenue of $ 5,929

(as restated) and $ 6,046 ,

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

The Company expects to

recognize as revenue through year 2028, when it transfers those goods and services and, therefore, satisfies its performance

obligation to the customers.

6 – PREPAID EXPENSES AND OTHER ASSETS

expenses and other current assets consist of the following:

OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

December 31, 2022 (as restated)

December 31, 2023

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

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

For the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025, the Company recognized revenue of $ 5,929 , $ 6,046 , $ 1,975 an d $ 4,666 , respectively, which was included in the deferred revenue balance at the beginning of each reporting period.

The Company expects to recognize as revenue through year 2030, when it transfers those goods and services and, therefore, satisfies its performance obligation to the customers.

NOTE 5 - PREPAID EXPENSES AND OTHER ASSETS

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

Sales-type lease receivables, current $ 1,100 $ 1,062

1 unchanged sentence

Contract assets 1,162 5,088

Tax receivables 125 553

VAT receivable

Sundry debtors — 5,424

Other current assets 2,929 253

Prepaid expenses and other current

7 – INVENTORY

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

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

Inventory is shown net of

a valuation reserve of $ 453 at December 31, 2022 and $ 524 at December 31, 2023.

consist of the following:

OF INVENTORIES

December 31, 2022

December 31, 2023

$ 8,133 $ 23,319

*This includes the prepaid portion of total deferred contract assets.

NOTE 6 - INVENTORY

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

Inventories consist of the following (in thousands):

Components $ 9,403 $ 11,859

Work in process 49 —

Finished goods, net 12,206 6,491

Inventory, Net

8 – FIXED ASSETS

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

OF FIXED ASSETS

December 31, 2022

Installed products

$ 21,658 $ 18,350

NOTE 7 - FIXED ASSETS

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

Installed and uninstalled products $ 11,030 $ 61,564

Computer software 11,496 11,523

2 unchanged sentences

Leasehold improvements 1,498 1,459

Plant and equipment — 276

Assets in progress — 7

32,564 84,177

Accumulated depreciation and amortization ( 19,845 ) ( 26,166 )

and amortization expense for the years ended December 31, 2021, 2022 and 2023 was $ 3,399 ,

and $ 3,876 , respectively.

This includes amortization of costs associated with computer software for the years ended December 31,

2021, 2022 and 2023 of $ 426 ,

respectively.

9 – INTANGIBLE ASSETS AND GOODWILL

in 2022, the Company began to capitalize software costs for software to be sold, marketed, or leased to customers.

Costs incurred internally

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

$ 12,719 $ 58,011

Depreciation and amortization expense for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025 was $ 3,183 , $ 3,876 , $ 955 and $ 19,876 , respectively.

This includes amortization of costs associated with computer software for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025 of $ 179 , $ 605 , $ 339 an d $ 5,734 , respectively.

NOTE 8 - INTANGIBLE ASSETS AND GOODWILL

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

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

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

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

The amortization of these costs will

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

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

OF INTANGIBLE ASSETS

December 31, 2023

Gross Carrying

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

The following table summarizes identifiable intangible assets of the Company as of March 31, 2024 and March 31, 2025 (in thousands):

March 31, 2025 Useful Lives (In Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount

Definite-lived:

Customer relationships 9 - 13

$ 200,868 $ ( 21,994 ) $ 178,874

Trademark and tradename 3 - 15

21,557 ( 5,805 ) 15,752

Patents 7 - 11

628 ( 553 ) 75

Technology 5 - 7

74,050 ( 21,705 ) 52,345

Software to be sold or leased 3 - 7

13,490 ( 2,119 ) 11,371

310,593 ( 52,176 ) 258,417

Indefinite-lived:

Customer list 104 — 104

Trademark and tradename 61 — 61

December 31, 2022

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Total $ 310,758 $ ( 52,176 ) $ 258,582

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

Definite-lived:

Customer relationships 9 - 12

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

Trademark and tradename 3 - 15

7,553 ( 3,877 ) 3,676

Patents 7 - 11

628 ( 464 ) 164

10,911 ( 10,911 ) —

Software to be sold or leased 3

5,159 ( 764 ) 4,395

43,515 ( 24,028 ) 19,487

Indefinite-lived:

Customer list 104 — 104

Trademark and tradename 61 — 61

December 31, 2023, the weighted-average amortization period for the intangible assets was 8.6 years.

At December 31, 2023, the weighted-average amortization periods for customer relationships, trademarks and trade names, patents,

technology, and capitalized software to be sold or leased were 11.9 ,

years, respectively.

expense for the years ended December 31, 2021, 2022 and 2023 was $ 5,154 ,

and $ 5,569 ,

respectively.

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

SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS AMORTIZATION EXPENSE

Year Ending December 31,

intangible assets

Global uncertainties continue to adversely impact

the broader global economy and have caused significant volatility in financial markets.

If there is a lack of recovery or further global

softening in certain markets, or a sustained decline in the value of the Company’s common stock, the Company may conclude that indicators

of impairment exist and would then be required to calculate whether or not an impairment exists for its goodwill, other intangibles, and

long-lived assets, the results of which could result in material impairment charges.

The Company tests 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.

The Company monitors changing business conditions as well as industry and economic factors, among others, for events which could trigger

the need for an interim impairment analysis.

The Company performed a quantitative

impairment analysis at October 1, 2023 using a market-based and income-based quantitative assessment utilizing a combination of the (i)

the guideline public company method applying revenue multiples of similar companies and, (ii) the discounted cash flow method, respectively.

The fair value determination used in the impairment assessment requires estimates of the fair values based present value or other

valuation techniques or a combination thereof, necessitating subjective judgments and assumptions by management.

These estimates and assumptions

could result in significant differences to the amounts reported if underlying circumstances were to change.

The Company concluded that

no impairment relating to goodwill existed at December 31, 2023.

As of December 31, 2022 and 2023, the Company determined

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

There have been

no changes in the carrying amount of goodwill from January 1, 2023 to December 31, 2023.

10 – STOCK-BASED COMPENSATION

Company’s stockholders have approved the Company’s 2018 Incentive Plan (as amended the “2018 Plan”) pursuant

to which the Company may grant stock options, restricted stock and other equity-based awards with respect to up to an aggregate of 7,500

shares of the Company’s common stock with a vesting period of approximately four to five years .

There were 2,158 shares available

for future issuance under the 2018 Plan as of December 31, 2023.

2018 Plan is administered by the Compensation Committee of the Company’s Board of Directors, which has the authority to determine,

among other things, the term during which an option may be exercised (not more than 10 years), the exercise price of an option and the

vesting provisions .

Company recognizes all employee share-based payments in the statement of operations as an operating expense, based on their fair values

on the applicable grant date.

the first fiscal quarter of 2022, the Company granted options to purchase 5,960 shares of the Company’s common stock to certain

senior managers, including the Company’s executive officers, consisting of options to purchase 895 shares of common stock with

time-based vesting conditions and options to purchase 5,065 shares of common stock with performance-based vesting conditions (which we

refer to as “market-based stock options”).

The market-based stock options have an exercise price that range from $ 2.85 to

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

stock during a consecutive 60-day trading period (the “60 Day VWAP”) ranges between $ 10.50 and $ 21.00 .

The Company valued

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

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

price, risk-free rate ( 1.7 %), and expected stock price volatility ( 51.7 %) over the expected life of awards ( 10 years).

The weighted average

fair value of market-based stock options granted during the period was $ 1.60 .

the year ended December 31, 2023, the Company granted options to purchase 1,335 shares of the Company’s common stock to certain senior managers, including the Company’s executive officers, consisting of options

to purchase 470 shares of common stock with time-based vesting conditions and options to purchase 865 shares of common stock with performance-based

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

The market-based stock options will vest and become

exercisable if the volume weighted average price of the Company’s common stock during a consecutive 60-day trading period (the

“60 Day VWAP”) reaches $ 12.00 .

The Company valued the market-based stock option awards using a Monte Carlo simulation model

using a daily price forecast over ten years until expiration utilizing Geometric Brownian Motion that considers a variety of factors

including, but not limited to, the Company’s common stock price, risk-free rate ( 3.7 %), and expected stock price volatility ( 50 %)

over the expected life of awards ( 5.1 years).

The weighted average fair value of market-based stock options granted during the year was

the year ended December 31, 2023, the Company granted 1,247

shares of restricted stock to certain senior managers, including the Company’s executive officers, which vest in four equal

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

grants included (i) a grant of 900

shares of restricted stock to Steve Towe, the Company’s Chief Executive Officer, which vests over four equal installments over

a four-year period, provided that the Mr.

Towe is employed by the Company on each scheduled vesting date, and (ii) grants of 82

shares of restricted stock to certain members of the board of directors, which vest in full on the first anniversary of the date of

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

Stock options:

summary of the status of the Company’s stock options, relating to the Company’s market-based stock options that were granted

to certain senior managers, including the Company’s executive officers, as of December 31, 2021, 2022 and 2023 and changes during

the years then ended, is presented below:

SCHEDULE OF STOCK OPTIONS ACTIVITY

Number of Shares

Exercise Price

Number of Shares

Exercise Price

Number of Shares

Exercise Price

Outstanding at beginning of year

Forfeited or expired

Outstanding at end of year

Exercisable at end of year

following table summarizes information about stock options relating to the market-based stock options that were granted to certain senior

managers, including the Company’s executive officers, at December 31, 2023.

SUMMARY OF STOCK OPTION INFORMATION BY EXERCISE PRICE RANGE

Options Outstanding

Options Exercisable

Exercise Prices ($)

Number Outstanding

Weighted - Average Remaining Contractual Life in Years

Weighted Average Exercise Price

Number Outstanding

Weighted - Average Exercise Price

$ 2.98 - $ 7.48

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

At March 31, 2025 , the weighted-average amortization periods for customer relationships, trademarks and tradenames, patents, technology, and capitalized software to be sold or leased were 11.7 , 10.8 , 7.0 , 4.4 , and 4.3 years, res pectively.

Amortization expense for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025 was $ 5,079 , $ 5,569 , $ 988 and $ 27,619 , respectively.

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

Years ending March 31,

2026 $ 36,334

Thereafter 97,783

Reconciliation of Total Goodwill

The following table is a reconciliation of the carrying amount of goodwill at the beginning and end of the reporting period (in thousands):

Balance at March 31, 2024

Businesses acquired

MiX Combination 216,799

FC Acquisition 82,245

Foreign currency translation difference

Balance at March 31, 2025

A reconciliation for the comparative period has not been presented, as there were no movements in the carrying amount of goodwill during that period.

Refer to Note 3 for additional information regarding the change in the carrying amount of goodwill from April 1, 2024 to March 31, 2025 as a result of the MiX Combination and FC Acquisition.

NOTE 9 - STOCK-BASED COMPENSATION

The Company’s stockholders have approved the Company’s 2018 Incentive Plan (as amended, the “2018 Plan”), pursuant to which the Company may grant stock options, restricted stock and other equity-based awards with respect to up to an aggregate of 17,500 shares of the Company’s common stock with a vesting period of approximately four to five years .

There were 7,040 shares available for future issuance under the 2018 Plan as of March 31, 2025.

The 2018 Plan is administered by the Compensation Committee of the Company’s Board of Directors, which has the authority to determine, among other things, the term during which an option may be exercised (not more than 10 years), the exercise price of an option and the vesting provisions.

The Company recognizes all employee share-based payments in the statement of operations as an operating expense, based on their fair values on the applicable grant date.

[A] Stock Options:

The following table summarizes the activity relating to the Company’s market-based stock options for the year ended March 31, 2025:

(in thousands)

Exercise Price

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

Outstanding as of April 1, 2024

5,445 13.39 — —

Granted — — — —

Exercised — — — —

Forfeited ( 245 ) 3.46 — —

Outstanding as of March 31, 2025

5,200 13.85 6.96 $ 2,549

summary of the status of the Company’s stock options, excluding the market-based stock options that were granted to certain senior

managers, including the Company’s executive officers, as of December 31, 2021, 2022 and 2023 and changes during the years then

ended, is presented below:

SCHEDULE OF STOCK OPTIONS ACTIVITY

Exercise Price

Exercisable as of March 31, 2025

During fiscal year 2025, the Company granted options to purchase 375 shares of common stock with time-based vesting conditions.

The following table summarizes the activity relating to the Company’s stock options, excluding the market-based stock options, for the year ended March 31, 2025:

(in thousands)

Exercise Price

at beginning of year

at end of year

SUMMARY OF STOCK OPTION INFORMATION BY EXERCISE PRICE RANGE

Options Outstanding

Options Exercisable

Exercise Prices ($)

Number Outstanding

Weighted - Average Remaining Contractual Life in Years

Weighted Average Exercise Price

Number Outstanding

Weighted - Average Exercise Price

$ 2.98 - $ 4.23

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

Outstanding as of April 1, 2024

1,979 4.68 — —

Granted 375 4.31 — —

Exercised ( 367 ) 5.07 — —

Forfeited ( 97 ) 5.22 — —

Outstanding as of March 31, 2025

1,890 4.51 6.77 $ 2,089

Exercisable as of March 31, 2025

1,627 4.54 6.37 $ 1,779

SCHEDULE OF OPTIONS OUTSTANDING AND EXERCISABLE

As of December 31, 2023

Intrinsic Value

Weighted - Average

Remaining Contractual

Life in Years

Options outstanding

Options exercisable

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

weighted-average assumptions:

SCHEDULE OF FAIR VALUE STOCK OPTION ASSUMPTIONS

Year Ended December 31,

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

December 31, 2022 December 31, 2023 March 31, 2025

Expected volatility 49.4 % 55.6 % 60.2 %

Expected life of options (years)

Expected life of options 6.5 6.1 6.5

Risk free interest rate 1.73 % 3.87 % 4.23 %

1 unchanged sentence

Weighted-average fair value of options granted during the year $ 2.04 $ 1.66 $ 2.66

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

data with respect to employee exercise periods.

the years ended December 31, 2021, 2022 and 2023, the Company recorded $ 1,684 , $ 2,943 , and $ 2,712 , respectively, of stock-based compensation

expense in connection with the stock option grants.

fair value of options vested during the years ended December 31, 2021, 2022 and 2023 was $ 1,201 , $ 869 , and $ 931 , respectively.

intrinsic value of options exercised during the years ended December 31, 2021, 2022 and 2023 was $ 483 , $ 0 , and $ 9 , respectively.

of December 31, 2023, there was $ 1,342 of total unrecognized compensation costs related to non-vested options granted under the Company’s

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

executive officers.

No options were granted during the three months ended March 31, 2024.

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

The Company recorded stock-based compensation expense of $ 2,943 , $ 2,712 , $ 688 , and $ 3,098 for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025, respectively, in connection with awards made under the stock option plans.

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

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

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

The fair value of options vested during the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025 amounted to $ 869 , $ 931 , $ 532 and $ 1,752 , respectively.

The total intrinsic value of options exercised during the year ended December 31, 2023 amounted to $ 9 .

There were no option exercises that occurred during the years ended December 31, 2022, the three months ended March 31, 2024, and the year ended March 31, 2025.

As of March 31, 2025, there was $ 682 of total unrecognized compensation costs related to unvested options granted under the Company’s stock option plans excluding the market-based stock options that were granted to certain senior managers, including the Company’s executive officers.

That cost is expected to be recognized over a weighted-average period of 0.97 years.

of December 31, 2023, there was $ 4,655 of total unrecognized compensation costs related to non-vested options granted under the Company’s

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

As of March 31, 2025, there was $ 2,177 of total unrecognized compensation costs related to unvested options granted under the Company’s stock option plans for the market-based stock options that were granted to certain senior managers, including the Company’s executive officers.

That cost is expected to be recognized over a weighted-average period of 1.91 years.

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

This estimate is adjusted

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

Restricted Stock Awards:

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

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

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

[B] Restricted Stock Awards:

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

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

The fair value

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

A summary of the non-vested shares for the

years ended December 31, 2021, 2022 and 2023 is as follows:

SCHEDULE OF NON-VESTED RESTRICTED STOCK ACTIVITY

Number of Non-Vested Shares

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

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

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

A summary of all unvested restricted stock for the year ended March 31, 2025 is as follows:

Unvested Shares

(in thousands)

Weighted- Average

Grant Date Fair Value

Non-vested, January 1, 2021

Forfeited or expired

Non-vested, December 31, 2021

Forfeited or expired

Non-vested, December 31, 2022

Unvested, March 31, 2024

Granted 54 5.45

Vested/Exercised

( 1,370 ) 2.68

Forfeited or expired — —

Non-vested, December 31, 2023

the years ended December 31, 2021, 2022 and 2023, the Company recorded $ 2,529 , $ 1,347 , and $ 1,196 , respectively, of stock-based compensation

expense in connection with the restricted stock grants.

As of December 31, 2023, there was $ 3,349 of total unrecognized compensation

cost related to non-vested shares.

Unvested, March 31, 2025

The Company recorded stock-based compensation expenses of $ 1,347 , $ 1,196 , $ 340 , and $ 3,337 for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025, respectively, in connection with restricted stock grants.

As of March 31, 2025, there was $ 36 of total unrecognized compensation cost related to unvested shares.

That cost is expected to be recognized over a weighted-average period of 0.13 years.

Restricted Stock Units:

Company also grants restricted stock units (“RSUs”) to employees.

The following table summarizes the activity relating to

the Company’s RSUs for the years ended December 31, 2021, 2022 and 2023:

SCHEDULE OF NON-VESTED RESTRICTED STOCK ACTIVITY

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

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

Therefore, the accelerat

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

During fiscal year 2025, the Company granted 1,250 restricted shares of common stock to the Company’s Chief Executive Officer, of which 312.5 shares vest in equal installments over a three-year period, provided that the executive is employed by the Company on each scheduled vesting date and 937.5 restricted shares with market-based vesting condition.

The market-based restricted shares will vest in equal installments over a three-year period following the date on which the volume weighted average price of the Company’s common stock during a consecutive 60-day trading period (the “60 Day VWAP”) ranges between $ 6.00 and $ 10.00 .

The Company valued the market-based restricted stock awards using a Monte Carlo simulation model using a daily price forecast over ten years until expiration utilizing Geometric Brownian Motion that considers a variety of factors including, but not limited to, the Company’s common stock price, risk-free rate ( 4.3 )%, and expected stock price volatility ( 57.5 )% over the expected life of awards ( 10 years).

The weighted average fair value of market-based stock options granted during the period was $ 5.35 .

Grant date for these awards was determined to be March 30, 2025.

Time Based Restricted Shares

Market Based Restricted Shares

Unvested Shares

Weighted- Average

Restricted stock-units, non-vested, January 1, 2021

Forfeited or expired

Restricted stock-units, non-vested, December 31, 2021

Grant Date Fair Value Number of

Unvested Shares

Weighted- Average

Grant Date Fair Value

Unvested, March 31, 2024

Granted 313 5.59 938 5.35

Vested/Exercised

Forfeited or expired — — — —

Restricted stock-units, non-vested, December 31, 2022

Unvested, March 31, 2025

313 5.35 938 5.35

In addition to the above, the Company granted 364.6 restricted shares of common stock to the Company’s executive officers, which vest in equal installments over a three-year period, provided that the executive is employed by the Company on each scheduled vesting date.

These grants included a grant of 174.3 shares of restricted stock to the Company’s Chief Executive Officer, which vests over three equal installments over a three-year period, provided that the executive is employed by the Company on each scheduled vesting date.

Grant date for these awards was determined to be March 30, 2025.

Unvested Shares

Weighted- Average

Grant Date Fair Value

Unvested, March 31, 2024

Granted 365 5.59

Vested/Exercised

Forfeited or expired — —

Restricted stock-units, non-vested, December 31, 2023

the years ended December 31, 2021, 2022 and 2023 the Company recorded $ 203 , $ 53 , and $ 0 , respectively, of stock-based compensation expense

in connection with the RSUs.

As of December 31, 2023, there was $- 0 - of total unrecognized compensation cost related to non-vested RSUs.

11 - NET LOSS PER SHARE

SCHEDULE OF NET LOSS PER SHARE BASIC AND DILUTED

Unvested, March 31, 2025

[C] Stock Appreciation Rights:

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

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

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

On the Implementation Date (April 2, 2024), the only issued and outstanding equity awards under the LTIP were SARs, and the Company assumed the outstanding SARs in issue.

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

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

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

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

The total stock-based compensation expense recognized during the year ended March 31, 2025 was $ 2,926 .

The following table summarizes the activities for the outstanding SARs:

Number of SARs

(in thousands)

Exercise Price

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

Outstanding as of April 1, 2024

Acquired through MiX Combination 5,740 2.61

Exercised ( 2,004 ) 2.92

Forfeited ( 498 ) 2.43

Outstanding as of March 31, 2025

3,238 2.44 3.07

Exercisable as of March 31, 2025

856 2.86 1.78 $ 2,249

As of March 31, 2025, there was $ 5,574 of unrecognized compensation cost related to unvested SARs.

This amount is expected to be recognized over a weighted-average period of 2.62 years.

NOTE 10 - NET LOSS PER SHARE

Net loss per share for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025 are as follows (in thousands, except per share data):

December 31, Three Months Ended

March 31, Year Ended March 31,

2022 2023 2024 2025

Basic and diluted loss per share

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

Net loss per share attributable to common stockholders - basic and diluted $ ( 0.48 ) $ ( 0.49 ) $ ( 0.55 ) $ ( 0.43 )

Weighted-average common share outstanding - basic and diluted 35,393 35,628 35,813 119,877

Net loss attributable to common stockholders - basic and diluted

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

outstanding during the period.

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

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

Dilutive potential common shares include

outstanding stock options, warrants and restricted stock and performance share awards.

We include participating securities (unvested

share-based payment awards and equivalents that contain non-forfeitable rights to dividends or dividend equivalents) in the computation

of EPS pursuant to the two-class method.

Our participating securities consist solely of preferred stock, which have contractual participation

rights equivalent to those of stockholders of unrestricted common stock.

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

method that calculates earnings per share for common stock and participating securities.

During periods of net loss, no effect is given

to the participating securities because they do not share in the losses of the Company.

For the years ended December 31, 2021, 2022 and

2023, the basic and diluted weighted-average shares outstanding are the same, since the effect from the potential exercise of outstanding

stock options, conversion of preferred stock and vesting of restricted stock and restricted stock units totaling 11,628 , 16,571 and 18,164 ,

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

12 – SHORT-TERM BANK DEBT AND LONG-TERM DEBT

SCHEDULE OF LONG-TERM DEBT

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

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

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

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

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

The two-class method of computing earnings per share is an

allocation method that calculates earnings per share for common stock and participating securities.

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

NOTE 11 - SHORT-TERM BANK DEBT AND LONG-TERM DEBT

Short-term bank debt $ — $ 36,788

1 unchanged sentence

Long-term debt - less current maturities $ 113,810 $ 232,160

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

two senior secured term loan facilities in an initial aggregate principal amount of $ 30,000

(comprised of two facilities in the aggregate

principal amount of $ 20,000

and $ 10,000 ,

respectively (the “Prior Term A Facility” and “Prior Term B Facility”, respectively, and collectively, the “Prior

Term Facilities”)) and a five-year revolving credit facility (the “Prior Revolving Facility”) to Pointer denominated

in NIS in an initial aggregate principal amount of $ 10,000

(collectively, the “Prior Credit Facilities”).

As of December 31, 2023, the Company borrowed NIS 4,915

under the Prior Revolving Facility.

The available balance at December 31, 2023 was approximately $ 4,800 .

Prior Credit Facilities were scheduled to mature on October

The indicative interest rate provided

for the Prior Term Facilities in the Prior Credit Agreement was approximately 4.73 %

for the Prior Term A Facility and 5.89 %

for the Prior Term B Facility.

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

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

The interest rate at December 31, 2023 was 7.53 %.

In addition, the Company agreed to pay a 1% commitment fee on the unutilized and uncancelled availability under the Prior Revolving Facility .

The Prior Credit Facilities were secured by the shares held by Powerfleet Israel in Pointer and by Pointer over all of its assets.

Prior Credit Agreement included customary representations, warranties, affirmative covenants, negative covenants (including the following

financial covenants, tested quarterly:

Pointer’s net debt to EBITDA;

Pointer’s net debt to working capital;

minimum equity

of Powerfleet Israel;

Powerfleet Israel equity to total assets;

Powerfleet Israel net debt to EBITDA;

and Pointer EBITDA to current payments

and events of default.

August 23, 2021, Powerfleet Israel and Pointer (the “Borrowers”) entered into an amendment (the

“Amendment”), effective as of August 1, 2021, to the Prior Credit Agreement with Hapoalim.

The Amendment memorialized

the agreements between the Borrowers and Hapoalim regarding a reduction in the interest rates of the two Prior Term Facilities.

Pursuant to the Amendment, commencing as of November 12, 2020, the interest rate with respect to the Prior Term A Facility was

reduced to a fixed rate of 3.65 %

per annum and the interest rate with respect to the Prior Term B Facility was reduced to a fixed rate of 4.5 %

The Amendment also provided, among other things, for (i) a reduction in the credit allocation fee on undrawn and

uncancelled amounts of the Prior Revolving Facility from 1 %

per annum, (ii) removal of the requirement that Powerfleet Israel maintain $ 3,000

on deposit in a separate reserve fund, and (iii) modifications to certain of the affirmative and negative covenants, including a

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

The Company was in compliance

with the covenants as of December 31, 2023.

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

For the years ended December 31, 2021, 2022, and 2023, the Company recorded $ 290 ,

respectively, of amortization of the debt issuance costs.

The Company recorded charges of $ 1,078 ,

to interest expense on its consolidated statements of operations for the years ended December 31, 2021, 2022 and 2023 related to

interest expense associated with the Prior Credit Facilities.

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

with Hapoalim.

The Third Amendment provided for, among other things, an additional revolving credit facility to Pointer denominated

in NIS in an initial aggregate principal amount of $ 10

million (the “Second Revolver”).

The Second Revolver was available for a period of one month, commencing on October 31,

2022, and continued to be available for successive one-month periods until the Company’s entry into the A&R Credit

As of December 31, 2023, the Company borrowed NIS 31,464 ,

under the Second Revolver.

The interest rate at December 31, 2023 was 7.97 %.

The available balance at December 31, 2023 was $ 1,325 .

See Note 20 (Subsequent Events) for additional information regarding the debt of the Company, including the A&R Credit Agreement and the Facilities

13 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

payable and accrued expenses consist of the following:

OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

2022 (As restated)

Accounts payable

Short-Term Bank Debt

As of March 31, 2025, short-term debt comprised $ 35,435 of borrowing facilities and $ 1,353 of book overdrafts .

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

Following the signing of the Facilities Agreement, MiX Telematics entered into a Facility Notice and General Terms and Conditions (the “Credit Agreement”) with RMB on March 14, 2024 for a 364-day committed general banking facility of R 350,000 (the equivalent of $ 18,984 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, which is described in more detail below.

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

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

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

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, $ 18,006 of the RMB General Facility was utilized.

Hapoalim Debt

As of March 31, 2025, Powerfleet Israel Ltd.

(“Powerfleet Israel”) had utilized approximately $ 17,422 under the Hapoalim Revolving Facilities, which are described below .

Long-Term Debt

Hapoalim Debt

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

(“Hapoalim”), pursuant to which Hapoalim agreed to provide Powerfleet Israel with two senior secured term loan facilities in an initial aggregate principal amount of $ 30,000 (composed of two facilities in the aggregate principal amount of $ 20,000 and $ 10,000 , respectively and a five-year revolving credit facility to Pointer Telocation Ltd.

(“Pointer”) denominated in NIS in an initial aggregate principal amount of $ 10,000 (collectively, the “Prior Credit Facilities”).

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

On March 18, 2024, Powerfleet Israel and Pointer (collectively, the “Borrowers”) entered into an amended and restated credit agreement (as amended, the “A&R Credit Agreement”), which refinanced the facilities under, and amended and restated, the Prior Credit Agreement.

The A&R Credit Agreement provides for (i) two senior secured term loan facilities denominated in NIS to Powerfleet Israel in an aggregate principal amount of $ 30,000 (composed of two facilities in the aggregate principal amounts of $ 20,000 and $ 10,000 , respectively) (“Hapoalim Facility A” and “Hapoalim Facility B,” respect

ively, and, collectively, the “Hapoalim Term Facilities”) and (ii) two revolving credit facilities to Pointer in an aggregate principal amount of $ 20,000 (composed of two revolvers in the aggregate principal amounts of $ 10,000 and $ 10,000 , respectively) (“Hapoalim Facility C” and “Hapoalim Facility D,” respectively, and, collectively, the “Hapoalim Revolving Facilities” and, together with the Hapoalim Term Facilities, the “Hapoalim Credit Facilities”).

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

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

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

As of March 31, 2025, Pointer had utilized $ 17,422 under the Hapoalim Revolving Facilities.

The available undrawn facility balance at March 31, 2025 was $ 12,578 .

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 March 31, 2025 was 6 % .

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

The first interest period ended on June 25, 2024.

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

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

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

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

dollar-denominated loans, SOFR + 2.15 %.

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

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

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

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

The Hapoalim Revolving Facilities were set to mature on March 18, 2025;

however, on March 2, 2025, the payment terms were extended to February 27, 2026.

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

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

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

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

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

The financial covenants have been met for the quarter ended March 31, 2025.

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

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

The Hapoalim Term Facilities under the A&R Credit Agreement have been accounted for as modifications of the term facilities that were provided under the Prior Credit Agreement because the change in the present value of the cash flows under the A&R Credit Agreement is less than 10 % of the present value of the cash flows under the Prior Credit Agreement.

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

For the years ended December 31, 2022, and 2023, and the three months ended March 31, 2024, the Company recorded $ 15 , $ 133 and $ 110 , respectively, of additional deferred costs to the original debt issuance costs and the refinancing fee paid to Hapoalim.

For the year ended March 31, 2025, the Company recorded a cost of $ 33 net of additional deferred costs and credit to the original debt issuance costs and amortization of the original debt issuance co sts.

The Company recorded charges of $ 824 , $ 572 , $ 111 and $ 2,410 to interest expense on its Consolidated Statement of Operatio ns for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025, respectively, related to interest expense associated with the Hapoalim debt.

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

The Company drew down $ 85,000 in cash under the RMB Facilities on March 13, 2024, and the proceeds to redeem all the then-outstanding shares of the Company’s Series A convertible preferred stock (the “Series A Preferred Stock”) and for general corporate purposes.

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

Systems, Inc.

Systems”) and Movingdots GmbH (“Movingdots”), and there is a security agreement over the shares in Main Street 2000 Proprietary Limited (“MS2000”), I.D.

Systems, and Movingdots.

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

Interest is payable quarterly in arrears.

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

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

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

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

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

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

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

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

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

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

The following key assumptions were used in March 31, 2025:

Facility A Facility B

Credit spread volatility 55 % 35 %

Credit spread 4.48 % 4.99 %

Credit rating B B

Risk free rate SOFR spot rate

SOFR spot rate

As of March 31, 2024 and 2025, the Secured Overnight Financing Rate ( SOFR ) spot rate was 5.34 % and 4.41 %, respectively .

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

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

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

For the Prepayment Derivative asset in RMB Facility A, a change of -10% in credit spread volatility would result in a decrease in the derivative asset of $ 82 , while a change of +10% in credit spread volatility would result in an increase in the derivative asset of $ 81 .

For the Prepayment Derivative asset in RMB Facility B, a change of -10% in credit spread volatility would result in a decrease in the derivative asset of $ 218 , while a change of +10% in credit spread volatility would result in an increase in the derivative asset of $ 224 .

The Prepayment Derivative assets are included in Other assets and their fair values were $ 610 and $ 1,616 for RMB Facility A and RMB Facility B, respectively, as of March 31, 2024 and, $ 850 and $ 1,880 for RMB Facility A and RMB Facility B, respectively, as of March 31, 2025.

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

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

For the year ended March 31, 2025, the Company recorded $ 93 , respectively, of amortization of the original debt issuance costs and the refinancing fee to RMB.

For the year ended March 31, 2025, the Company recorded interest expense of $ 7,588 .

RMB Term Facility

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

Systems and Movingdots, each a wholly owned subsidiary of the Company, entered into a Facility Agreement (the “Facility Agreement”) with RMB, pursuant to which RMB agreed to provide the Company with a term loan facility in an aggregate principal amount of $ 125,000 (the “New RMB Term Facility”).

The Company drew down the full amount of the New RMB Term Facility on October 1, 2024, and used the proceeds to pay a portion of the Purchase Price in connection with the FC Acquisition.

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

Systems and Movingdots.

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

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

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

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

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

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

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

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

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

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

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

The New RMB Term Facility bears interest at 5 % per annum (provided no event of default is continuing), plus the applicable term SOFR reference rate (or an interpolated rate if SOFR is unavailable), payable quarterly in arrears on March 31, June 30, September 30, and December 31 each year, and on October 31, 2029.

The stated interest rate at March 31, 2025 was 9.59 %.

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

Total debt issuance costs, including the $ 1,250 non-refundable deal structuring fee to RMB, of approximately $ 1,443 were incurred.

For the year ended March 31, 2025, the Company recorded $ 113 of amortization of these costs and $ 5,946 of interest expense.

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

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

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

Scheduled contractual maturities of the long-term debt as of March 31, 2025 are as follows (in thousands):

Current portion ( 4,844 )

Debt costs and prepayment penalty ( 507 )

Total $ 232,160

NOTE 12 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following (in thousands):

Accrued warranty $ 1,138 $ 1,479

2 unchanged sentences

Other current liabilities 827 9,041

Accounts payable and accrued expenses

Company’s products are warranted against defects in materials and workmanship for a period of 1-8 years from the date of acceptance

of the product by the customer .

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

for estimated future warranty costs is recorded for expected or historical warranty matters related to equipment shipped and is included

in accounts payable and accrued expenses in the Consolidated Balance Sheets as of December 31, 2022 and 2023.

following table summarizes warranty activity during the years ended December 31, 2022 and 2023:

OF PRODUCT WARRANTY LIABILITY

Year Ended December 31,

Accrued warranty reserve, beginning of year

$ 13,983 $ 45,327

The following table summarizes warranty activity for the periods ended March 31, 2024 and 2025 (in thousands):

Accrued warranty reserve, December 31, 2023

Accrual for product warranties issued

Product replacements and other warranty expenditures ( 165 )

Expiration of warranties

Accrued warranty reserve, end of year (a)

accrued warranty included in other long-term liabilities at December 31, 2022 and 2023 of $ 1,309

(as restated) and $ 1,688 ,

respectively.

Company determines whether an arrangement is a lease at inception.

Company has operating leases for office space and office equipment.

The Company’s leases have remaining lease terms of one

years, some of which include options

to extend the lease term for up to five years .

Right-of-use (“ROU”) assets represent

the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation

to make lease payments arising from the lease.

Operating lease ROU assets and operating lease liabilities are recognized at the lease

commencement date based on the present value of the future lease payments over the lease term.

The operating lease ROU asset also includes

any lease payments made in advance of lease commencement and excludes lease incentives.

The lease terms used in the calculations of the

operating ROU assets and operating lease liabilities include options to extend or terminate the lease when the Company is reasonably certain

that it will exercise those options.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

As the Company’s leases do not provide an implicit

rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present

value of lease payments.

The Company has lease agreements with lease and non-lease

components, which are generally not accounted for separately.

Company has lease agreements which are classified as short-term in nature.

These leases meet the criteria for operating lease classification.

Lease costs associated with the short-term leases are included in selling, general and administrative expenses on the Company’s

consolidated statements of operations.

of lease expense are as follows:

OF COMPONENTS OF LEASE EXPENSE

Year Ended December 31,

Short term lease cost:

cash flow information and non-cash activity related to the Company’s operating leases are as follows:

OF CASH FLOW INFORMATION AND NON CASH ACTIVITY OF OPERATING LEASES

Year Ended December 31,

Non-cash activity:

Right-of-use assets obtained in exchange for lease obligations

Weighted-average

remaining lease term and discount rate for the Company’s operating leases are as follows:

OF WEIGHTED AVERAGE REMAINING LEASE TERM AND DISCOUNT RATE

December 31, 2023

Weighted-average remaining lease term (in years)

Weighted-average discount rate

maturities of operating lease liabilities outstanding as of December 31, 2023 are as follows:

MATURITIES OF OPERATING LEASE LIABILITIES

Year ending December 31,

Total lease payments

Imputed interest

Present value of lease liabilities

15 – CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’

Public Offering:

February 1, 2021 the Company closed an underwritten public offering of 4,428 shares of common stock (which included the full exercise

of the underwriters’ over-allotment option) for gross proceeds of approximately $ 28,800 , before deducting the underwriting discounts

and commissions and other offering expenses.

Convertible Redeemable Preferred Stock:

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

Stock and 50 shares are undesignated.

A Preferred Stock

connection with the completion of the Pointer Merger, on October 3, 2019, the Company issued 50 shares of Series A Preferred Stock to ABRY

Senior Equity V, L.P., ABRY Senior Equity Co-Investment Fund V, L.P and ABRY Investment Partnership, L.P.

(the “Investors”).

For the years ended December 31, 2022 and December 31, 2023, the Company issued 4 and 1 additional shares of Series A Preferred Stock.

OF PREFERRED CONVERTIBLE REDEEMABLE PREFERRED STOCK

Number of Shares

Balance at January 1, 2021

Dividend paid in kind shares issued

Accretion of preferred stock

Balance at December 31, 2021

Dividend paid in kind shares issued

Accretion of preferred stock

Balance at December 31, 2022

Dividend paid in kind shares issued

Accretion of preferred stock

Balance at December 31, 2023

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

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

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

the Series A Preferred Stock had converted into common stock immediately prior to such liquidation .

As of December 31, 2023, the Series A Preferred Stock had a liquidation preference of $ 30,091 calculated in accordance

with clause (i) above.

of Series A Preferred Stock are entitled to receive cumulative dividends at a minimum rate of 7.5 % per annum (calculated on the basis

of the Series A Issue Price), quarterly in arrears.

The dividends are payable at the Company’s election, in kind, through the issuance

of additional shares of Series A Preferred Stock, or in cash, provided no dividend payment failure has occurred and is continuing and

that there has not previously occurred two or more dividend payment failures.

Commencing on the 66-month anniversary of the date on which

any shares of Series A Preferred Stock are first issued (the “Original Issuance Date”), and on each monthly anniversary thereafter,

the dividend rate will increase by 100 basis points, until the dividend rate reaches 17.5 % per annum, subject to the Company’s

right to defer the increase for up to three consecutive months on terms set forth in the Company’s Amended and Restated Certificate

of Incorporation (the “Charter”).

The following table summarizes the dividend paid activity for the years ended December

31, 2021, 2022, and 2023:

OF DIVIDEND PAID ACTIVITY

paid in shares

Year Ended December 31, 2021

Expiration of warranties (over warranty accrual)

Foreign currency translation difference —

Accrued warranty reserve, March 31, 2024 (1)

Accrual for product warranties issued 365

Product replacements and other warranty expenditures ( 510 )

Expiration of warranties (over warranty accrual)

Acquired through MiX Combination and FC Acquisition

Foreign currency translation difference ( 8 )

Accrued warranty reserve, March 31, 2025 (1)

(1) Includes non-current accrued warranty included in other long-term liabilities at March 31, 2024 and 2025 of $ 1,788 and $ 2,139 , respectively.

NOTE 13 - STOCKHOLDERS’ EQUITY

Series A Preferred Stock

In connection with the completion of the Pointer acquisition, on October 3, 2019, the Company issued 50 shares of Series A Preferred Stock to ABRY Senior Equity V, L.P., ABRY Senior Equity Co-Investment Fund V, L.P and ABRY Investment Partnership, L.P.

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

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

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

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

The following table summarizes the dividend paid activity (in thousands):

Dividends paid in cash Dividends paid in shares Total

Year Ended December 31, 2022 $ — $ 4,231 $ 4,231

Year Ended December 31, 2023 $ 3,385 $ 1,108 $ 4,493

of December 31, 2022 and December 31, 2023, dividends in arrears were $- 0 -

respectively.

Consent Rights

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

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

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

Except as required by applicable law or as otherwise

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

the Company’s stockholders unless and until any holder of Series A Preferred Stock provides written notification to the Company

that such holder is electing, on behalf of all holders of Series A Preferred Stock, to activate their voting rights and in doing

so rendering the Series A Preferred Stock voting capital stock of the Company (such notice, a “Series A Voting Activation Notice”).

From and after the delivery of a Series A Voting Activation Notice, all holders of the Series A Preferred Stock will be entitled

to vote with the holders of common stock as a single class on an as-converted basis (provided, however, that any holder of Series

A Preferred Stock shall not be entitled to cast votes for the number of shares of common stock issuable upon conversion of such shares

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

of Series A Preferred Stock divided by (2) $5.57 (subject to adjustment for stock splits, stock dividends, combinations, reclassifications

and similar events, as applicable)).

So long as shares of Series A Preferred Stock are outstanding and convertible into shares of

common stock that represent at least 10% of the voting power of the common stock, or the Investors or their affiliates continue to

hold at least 33% of the aggregate amount of Series A Preferred Stock issued to the Investors on the Original Issuance Date, the

consent of the holders of at least a majority of the outstanding shares of Series A Preferred Stock will be necessary for the Company

to, among other things, (i) liquidate the Company or any operating subsidiary or effect any deemed liquidation event (as such term

is defined in the Charter), except for a deemed liquidation event in which the holders of Series A Preferred Stock receive an amount

in cash not less than the Redemption Price (as defined below), (ii) amend the Company’s organizational documents in a manner

that adversely affects the Series A Preferred Stock, (iii) issue any securities that are senior to, or equal in priority with, the

Series A Preferred Stock or issue additional shares of Series A Preferred Stock to any person other than the Investors or their affiliates,

(iv) incur indebtedness above the agreed-upon threshold, (v) change the size of the Company’s board of directors to a number

other than seven, or (vi) enter into certain affiliated arrangements or transactions .

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

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

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

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

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

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

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

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

consecutive trading day period ending on the trading date immediately prior to the date of such redemption notice or, if calculated

in connection with a deemed liquidation event, the value ascribed to a share of common stock in such deemed liquidation event (the

“Redemption Price”) .

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

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

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

an amount per share equal to the Redemption Price.

The Company classifies its Series A Preferred

Stock outside of stockholders’ equity as the redemption of such shares is outside the Company’s control.

adjusts the carrying values of the Series A Preferred Stock to redemption value to the earliest redemption date using the effective

interest rate method.

Concurrently with the closing of the MiX Combination on April 2,2024, the Company redeemed in full all of the

outstanding shares of the Series A Preferred Stock (see Note

20, Subsequent Events).

16 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Comprehensive

income (loss) includes net loss and unrealized gains or losses on available-for-sale investments and foreign currency translation gains

Cumulative unrealized gains and losses on available-for-sale investments are reflected as accumulated other comprehensive

loss in stockholders’ equity on the Company’s Consolidated Balance Sheets.

accumulated balances for each classification of other comprehensive income (loss) are as follows:

OF ACCUMULATED OTHER COMPREHENSIVE LOSS

Foreign currency translation adjustment

Unrealized gain (losses) on investments

Accumulated other comprehensive income (loss)

Three Months Ended March 31, 2024 (1)

$ 1,128 $ — $ 1,128

Year Ended March 31, 2025 $ 25 $ — $ 25

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

As of each of the periods presented in the above table, dividends in arrears were $ 0 .

NOTE 14 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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

The accumulated balances for each classification of other comprehensive income (loss) are as follows (in thousands):

Foreign currency translation adjustment Accumulated other comprehensive income (loss)

Balance at January 1, 2022 $ 391 $ 391

4 unchanged sentences

Net current period change ( 369 ) ( 369 )

Balance at December 31, 2023

17 – SEGMENT INFORMATION

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

The following table summarizes revenues by geographic region.

OF REVENUES AND LONG LIVED ASSETS BY GEOGRAPHICAL REGION

Year Ended December 31,

2021 (as restated)

2022 (as restated)

United States

Long lived assets by geographic region:

United States

18 - INCOME TAXES

before income taxes consists of the following:

OF LOSS BEFORE INCOME TAXES

2021 (As restated)

2022 (As restated)

Balance at March 31, 2024 $ ( 985 ) $ ( 985 )

Net current period change ( 7,865 ) ( 7,865 )

Balance at March 31, 2025 $ ( 8,850 ) $ ( 8,850 )

NOTE 15 - SEGMENT INFORMATION

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

The Company has a single operating and reportable segment.

The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer, who reviews financial information presented on a consolidated basis.

The CODM makes operating decisions, assesses financial performance, and allocates resources based on consolidated net loss attributable to common stockholders as reported on the Company’s Consolidated Statement of Operations.

The Company derives its revenue from the sale of systems and products and from customer SaaS and hosting infrastructure fees.

The measure of segment assets is reported on the Consolidated Balance Sheet as net fixed assets.

The following table summarizes the revenues and significant expenses and regularly provided to the CODM (in thousands):

December 31, Three Months Ended

March 31, Year Ended March 31,

2022 2023 2024 2025

Total revenues $ 135,912 $ 133,736 $ 33,740 $ 362,515

Total cost of revenues 70,919 66,660 17,537 167,978

Selling and marketing expenses 22,964 24,076 5,720 53,048

General and administrative expenses 34,564 41,303 15,152 141,803

Development costs incurred

10,641 12,716 3,417 28,881

Development costs capitalized

( 2,169 ) ( 4,336 ) ( 1,399 ) ( 12,820 )

Depreciation and amortization 5,964 5,874 960 9,510

Interest income 71 103 259 926

Interest expense, net 994 ( 1,602 ) ( 709 ) ( 20,330 )

Bargain purchase - Movingdots — 9,034 — —

Other income (expense), net

24 ( 29 ) ( 55 ) ( 1,163 )

Income tax expense ( 870 ) ( 589 ) ( 352 ) ( 4,517 )

Net loss before non-controlling interest ( 6,752 ) ( 5,640 ) ( 8,504 ) ( 50,969 )

Non-controlling interest ( 2 ) ( 35 ) ( 11 ) ( 18 )

Accretion of preferred stock ( 5,906 ) ( 7,139 ) ( 9,996 ) —

Preferred stock dividend ( 4,231 ) ( 4,493 ) ( 1,128 ) ( 25 )

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

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

December 31, Three Months Ended

March 31, Year Ended March 31,

2022 2023 2024 2025

North America $ 70,820 $ 74,671 $ 18,090 $ 121,623

Israel 44,580 41,689 11,267 49,555

Africa 3,241 3,283 863 97,586

Europe and Middle East 3,120 1,908 1,016 43,190

Other 14,151 12,185 2,504 19,599

$ 135,912 $ 133,736 $ 33,740 $ 362,515

The following table summarizes long-lived assets by geographic region (in thousands):

2024 March 31,

North America $ 4,083 $ 13,051

Israel 3,946 2,249

Africa 705 32,391

Europe and Middle East 2,850 4,824

Other 1,135 4,671

$ 12,719 $ 58,011

NOTE 16 - INCOME TAXES

Loss before income taxes consists of the following (in thousands):

December 31, Three Months Ended

March 31, Year Ended March 31,

2022 2023 2024 2025

operations $ ( 10,303 ) $ ( 16,494 ) $ ( 7,990 ) $ ( 46,935 )

Foreign operations 4,421 11,443 ( 162 ) 483

Loss before income

provision for income taxes consists of the following for the years ended December 31:

OF PROVISION FOR INCOME TAXES

(As restated)

$ ( 5,882 ) $ ( 5,051 ) $ ( 8,152 ) $ ( 46,452 )

The provision for income taxes consists of the following for the periods presented (in thousands):

December 31, Three Months Ended

March 31, Year Ended March 31,

2022 2023 2024 2025

Federal $ — $ — $ — $ —

State 93 68 25 110

Foreign 69 519 220 6,174

Total current provision $ 162 $ 587 $ 245 $ 6,284

Federal $ — $ — $ — $ —

State — — — ( 85 )

Foreign 708 2 107 ( 1,682 )

Total deferred provision $ 708 $ 2 $ 107 $ ( 1,767 )

Total (benefit) provision for income taxes

difference between income taxes at the statutory federal income tax rate and income taxes reported in the Consolidated Statements of

Operations for the years ended December 31 is attributable to the following:

OF STATUTORY FEDERAL INCOME TAX RATE

(As restated)

Total provision for income taxes $ 870 $ 589 $ 352 $ 4,517

The difference between income taxes at the statutory federal income tax rate and income taxes reported in the Consolidated Statement of Operations for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025 is attributable to the following (in thousands):

December 31, Three Months Ended

March 31, Year Ended March 31,

2022 2023 2024 2025

Income tax benefit at the federal statutory rate $ ( 1,236 ) $ ( 1,061 ) $ ( 1,712 ) $ ( 9,755 )

State and local income taxes, net of federal taxes ( 313 ) ( 298 ) ( 145 ) ( 1,094 )

(Decrease) increase in valuation allowance

Increase (decrease) in valuation allowance ( 1,105 ) 1,488 1,570 7,173

Remeasurement of deferred tax adjustments 359 4 8 542

Permanent differences and other 810 678 222 6,343

Non-deductible (non-taxable) foreign exchange movements

— — — ( 509 )

Over (Under) provision prior years

Foreign rate differential ( 151 ) ( 1,924 ) 396 819

GILTI inclusion 2,425 1,586 — 120

Foreign tax paid

Other 81 57 13 119

Acquisition fees — 59 — —

Income tax expense

tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at

December 31, 2022 and 2023 are presented below:

OF DEFERRED TAX ASSETS AND LIABILITIES

December 31, 2022

(As restated)

operating loss carryforwards

carryforwards

$ 870 $ 589 $ 352 $ 4,517

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at March 31, 2024 and 2025 are presented below (in thousands):

2024 March 31,

Deferred tax assets:

Net operating loss carryforwards $ 28,135 $ 48,572

Capital loss carryforwards 10,377 9,388

Deferred revenue 2,265 4,184

Federal research

and development tax credits

Stock-based compensation 230 306

Federal research and development tax credits 1,058 1,058

Capitalized research 1,524 1,832

Inventories 383 1,062

Bad debt reserve 639 1,588

Deferred lease

deductible temporary differences

Deferred lease liability 388 167

Acquisition costs 1,455 1,004

deferred tax assets

Intangible amortization

deferred tax liabilities

Interest limitation

Other deductible temporary differences 2,859 8,818

Total gross deferred tax assets 49,313 82,810

Set-off of deferred tax balances — ( 25,569 )

Net deferred tax assets before valuation allowance 49,313 57,241

valuation allowance ( 46,532 ) ( 53,307 )

Net deferred tax assets $ 2,781 $ 3,934

Deferred tax liabilities:

reconciliation of the beginning and ending amount of unrecognized tax positions is as follows as of December 31:

SCHEDULE OF UNRECOGNIZED TAX POSITIONS

2022 (As restated)

Balance at the beginning of the year

Additions based on tax provisions taken related to current year

Intangible amortization ( 3,958 ) ( 65,025 )

Right-of-use assets

( 348 ) ( 650 )

Deferred foreign currency gains

Deferred commissions

Other deductible temporary differences ( 159 ) ( 7,952 )

Total deferred tax liabilities ( 4,465 ) ( 83,281 )

Set-off of deferred tax balances — 25,569

Net deferred tax liabilities ( 4,465 ) ( 57,712 )

Net deferred tax liabilities $ ( 1,684 ) $ ( 53,778 )

A reconciliation of the beginning and ending amount of unrecognized tax positions for the periods ended March 31, 2024 and 2025 is as follows (in thousands):

Balance at December 31, 2023

Additions based on tax provisions taken related to current period

Reductions related to expiration of statute of limitations

Balance at the end of year

unrecognized tax benefits, if recognized, would reduce the Company’s annual effective tax rate.

The Company does not expect any

significant changes to its unrecognized tax positions during the next twelve months.

December 31, 2023, the Company had an aggregate net operating loss carryforward of approximately $ 78,675

Balance at March 31, 2024

Additions based on tax provisions taken related to current period 116

Reductions related to expiration of statute of limitations ( 119 )

Balance at March 31, 2025

The unrecognized tax benefits, if recognized, would reduce the Company’s annual effective tax rate.

The Company does not expect any significant changes to its unrecognized tax positions during the next 12 months.

At March 31, 2025, the Company had an aggregate net operating loss (“NOL”) carryforward of approximately $ 83,930 for U.S.

federal income tax purposes.

At December 31, 2023, the Company had an aggregate net operating loss carryforward of approximately $ 39,263

for state income tax purposes and

a foreign net operating loss carryforwards of approximately $ 29,020 .

Substantially all of the net operating loss carryforwards expire from 2024 through 2037 for pre-2018 federal net operating loss carryforwards

and from 2024 through 2042 for state purposes.

The net operating loss carryforwards may be limited to use in any particular year based

on Internal Revenue Code (“IRC”) Section 382 related to change of ownership restrictions.

Section 382 of the IRC imposes

an annual limitation on the utilization of NOL carryforwards based on long-term bond rates and the value of the corporation at the time

of a change in ownership as defined by Section 382 of the IRC.

In 2019, the Company incurred a change in ownership under Section 382

of the IRC and this change of ownership is not expected to materially impact the Company’s ability to utilize its net operating

loss carryforward amounts in the future.

In addition, future stock issuances may subject the Company to further limitations on the utilization

of its net operating loss carryforwards under the same Internal Revenue Code provision.

December 31, 2023, the Company has New Jersey net operating loss carryforwards (“NJ NOLs”) included above in the approximate

amount of $ 8,567 expiring through 2043, which are available to reduce future earnings which would otherwise be subject to state income

Company is asserting permanent reinvestment of all accumulated undistributed earnings of its foreign subsidiaries as of December 31,

2023 in excess of annual debt service costs requirements.

the year ended December 31, 2023, the Company’s valuation allowance increased to $ 44,780 ,

compared to $ 43,692 (as restated) as

of December 31, 2022 primarily due to the increase of net operating losses and other timing differences.

The Company has provided a

valuation allowance against the full amount of its domestic deferred tax assets and the majority of the foreign deferred tax assets.

The valuation allowance was established because of the uncertainty of realization of the deferred tax assets due to lack of

sufficient history of generating taxable income.

Realization is dependent upon generating sufficient taxable income prior to the

expiration of the net operating loss carryforwards in future periods.

The valuation decreased in 2022 by $ 1,333 and

increased in 2023 by $ 1,088 .

for federal income tax returns are closed for the years through 2019.

However, the Internal Revenue Service (“IRS”) can audit

the NOL’s generated during those years in the years that the NOL’s are utilized.

State income tax returns are generally subject

to examination for a period of three to six years after the filing of the respective tax return.

The state impact of any federal changes

remains subject to examination by various states for a period of up to one year after formal notification to the states.

Foreign income

tax returns are generally subject to examination based on the tax laws of the respective jurisdictions.

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

5376, commonly referred to as the Inflation Reduction Act of

2022 (the “IRA”).

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

corporate tax measures, while authorizing spending on energy and climate change initiatives and subsidizing the Affordable Care Act.

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

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

corporation or

acquired by certain of its subsidiaries.

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

as of December 31, 2023.

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

4346, “The CHIPS and Science Act of 2022.” CHIPS

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

Additional funding can be provided through

CHIPS to various federal agencies as well as towards climate science research.

Tax measures include a 25% advanced investment tax credit

for certain investments in semiconductor manufacturing.

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

Company nor its calculated AETR as of December 31, 2023.

19 - COMMITMENTS AND CONTINGENCIES

for normal operating leases, the Company is not currently subject to any material commitments.

Contingencies:

time to time, the Company is involved in various litigation matters involving claims incidental to its business and acquisitions, including

employment matters, acquisition related claims, patent infringement and contractual matters, among other issues.

While the outcome of

any such litigation matters cannot be predicted with certainty, management currently believes that the outcome of these proceedings,

including the matters described below, either individually or in the aggregate, will not have a material adverse effect on its business,

results of operations or financial condition.

The Company records reserves related to legal matters when losses related to such litigation

or contingencies are both probable and reasonably estimable.

August 2014, Pointer do Brasil Comercial Ltda.

(“Pointer Brazil”) received a notification of lack of payment of VAT tax (Brazilian

ICMS tax) in the amount of $ 219 plus $ 1,164 of interest and penalty, totaling $ 1,383 as of December 31, 2023.

The Company is vigorously

defending this tax assessment before the administrative court in Brazil, but in light of the administrative and judicial processes in

Brazil, it could take up to 14 years before the dispute is finally resolved.

In case the administrative court rules against the Company,

the Company could claim before the judicial court, an appellate court in Brazil, a substantial reduction of interest charged, potentially

reducing the Company’s total exposure.

The Company’s legal counsel is of the opinion that the chance of loss is not probable

and for this reason the Company has not made any provision.

July 2015, Pointer Brazil received a tax deficiency notice alleging that the services provided by Pointer Brazil should be classified

as “telecommunication services” and therefore Pointer Brazil should be subject to the state value-added tax.

The aggregate

amount claimed to be owed under the notice was approximately $ 13,482 as of December 31, 2023.

On August 14, 2018, the lower chamber of

the State Tax Administrative Court in São Paulo rendered a decision that was favorable to Pointer Brazil in relation to the ICMS

demands, but adverse in regards to the clerical obligation of keeping in good order a set of ICMS books and related tax receipts.

remaining claim after this administrative decision is $ 226 .

The state has appealed to the higher chamber of the State Tax Administrative

The Company’s legal counsel is of the opinion that the chance of loss is not probable and that no material costs will arise

in respect to these claims.

For this reason, the Company has not made any provision.

February 24, 2022, Pointer Mexico received a notification for 2015 tax assessment in the amount of $ 238 regarding the underpayment of

VAT and government fees from the Mexican Tax Service (“MTS”).

Under the statute and case law, Pointer Mexico was entitled

to appeal before the MTS or file a lawsuit before the Federal Court of Administrative Justice (Tribunal Federal de Justicia Administrativa).

On April 19, 2022, Pointer Mexico filed an appeal for revocation of the assessment.

On May 3, 2022, Pointer Mexico filed additional evidence

before the MTS.

On January 24, 2023, the MTS resolved the administrative revocation appeal, confirming the tax assessment against Pointer

Against this last resolution, Pointer Mexico is entitled to appeal before the Federal Court of Administrative Justice.

for the filing of this appeal lapses on March 8, 2023.

Based on the current analysis of the facts and case, the Company has recorded

a provision of $ 238 .

20 – SUBSEQUENT EVENTS

On February 28, 2024, the Company held a special meeting

of stockholders during which the stockholders approved, among other things, the issuance of shares of common stock of the Company to shareholders

of MiX Telematics pursuant to the Implementation Agreement and an amendment of the Company’s amended and restated certificate of

incorporation to increase the number of authorized shares of common stock from 75 million to 175 million (the “Charter Amendment”).

On March 22, 2024, the Company filed the Charter Amendment with the Secretary of State of the State of Delaware.

On March 7, 2024, the Company entered into the Facilities

Agreement with RMB, pursuant to which RMB agreed to provide the Company with two term loan facilities in an aggregate principal amount

of $ 85 million, comprised of two facilities in the aggregate principal amount of $ 42.5 million and $ 42.5 million, respectively.

of the term loan facilities were used by the Company to redeem all the outstanding shares of the Series A Preferred

Stock and for general corporate purposes.

The Company drew down $85 million in cash under the term loan facilities on March 13, 2024.

On March 18, 2024, the Borrowers entered into

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

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 two facilities 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 two revolvers in the aggregate principal amounts of $ 10

million and $ 10

million, respectively).

Powerfleet Israel drew down $ 30

million in cash under the term loan facilities on March 18, 2024 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.

April 2, 2024, the MiX Combination was consummated, and MiX Telematics became an indirect, wholly owned subsidiary of the Company.

Concurrently with the closing of the MiX Combination, the Company used the net proceeds received from RMB and from incremental

borrowing capacity as a result of the refinancing of credit facilities with Hapoalim to redeem in full for $ 90.3 million for all of

the outstanding shares of the Series A Preferred Stock.

At March 31, 2025, the Company had an aggregate NOL carryforward of approximately $ 37,775 for state income tax purposes and a foreign NOL carryforwards of approximately $ 101,519 .

Substantially all of the NOL carryforwards expire from 2024 through 2037 for pre-2018 federal NOL carryforwards and from 2024 through 2044 for state purposes.

The NOL carryforwards may be limited to use in any particular year based on Section 382 of the Internal Revenue Code of 1986, as amended (“IRC”), related to change of ownership restrictions.

Section 382 of the IRC imposes an annual limitation on the utilization of NOL carryforwards based on long-term bond rates and the value of the corporation at the time of a change in ownership as defined by Section 382 of the IRC.

In 2019 and 2024, the Company incurred a change in ownership under Section 382 of the IRC and this change of ownership is not expected to materially impact the Company’s ability to utilize its NOL carryforward amounts in the future.

In addition, future stock issuances may subject the Company to further limitations on the utilization of its NOL carryforwards under the same IRC provision.

At March 31, 2025, the Company has New Jersey NOL carryforwards included above in the approximate amount of $ 6,528 , expiring through 2044, which are available to reduce future earnings which would otherwise be subject to state income tax.

The Company is asserting permanent reinvestment of all accumulated undistributed earnings of its foreign subsidiaries as of March 31, 2025, in excess of annual debt service costs requirements.

For the year ended March 31, 2025, the Company’s valuation allowance increased to $ 53,307 , compared to $ 46,532 as of March 31, 2024, primarily due to the increase of NOLs and other timing differences.

The Company has provided a valuation allowance against the full amount of its domestic net deferred tax assets and the majority of the foreign net deferred tax assets.

The valuation allowance was established because of the uncertainty of realization of the deferred tax assets due to lack of sufficient history of generating taxable income.

Realization is dependent upon generating sufficient taxable income prior to the expiration of the NOL carryforwards in future periods.

The valuation allowance increased in 2025 by $ 6,775 .

Audits for federal income tax returns are closed for the years through 2020.

However, the Internal Revenue Service (“IRS”) can audit the NOLs generated during those years in the years that the NOLs are utilized.

State income tax returns are generally subject to examination for a period of three to six years after the filing of the respective tax return.

The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states.

Foreign income tax returns are generally subject to examination based on the tax laws of the respective jurisdictions.

NOTE 17 - LEASES

The Company determines whether an arrangement is a lease at inception.

The Company has operating leases for office space, office equipment and vehicles.

The Company’s leases have remaining lease terms ranging from approximately 1 to 10 years.

Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term.

The operating lease ROU asset also includes any lease payments made in advance of lease commencement and

excludes lease incentives.

The lease terms used in the calculations of the operating ROU assets and operating lease liabilities include options to extend or terminate the lease when the Company is reasonably certain that it will exercise those options.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The Company has lease agreements with lease and non-lease components, which are generally not accounted for separately.

Where lease terms are 12 months or less, and meet the criteria for short-term lease classification, no ROU asset and no lease liability are recognized.

Lease costs associated with the short-term leases are included in selling, general and administrative expenses on the Company’s Consolidated Statement of Operations.

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

December 31, Three Months Ended

March 31, Year Ended March 31,

2022 2023 2024 2025

Short-term lease cost $ 443 $ 453 $ 57 $ 840

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

December 31, Three Months Ended

March 31, Year Ended March 31,

2022 2023 2024 2025

Non-cash activity:

Right-of-use assets obtained in exchange for lease obligations $ 1,450 $ 1,198 $ 2,018 $ 3,714

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

$ — $ — $ — $ ( 946 )

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

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

2024 March 31,

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

Weighted-average discount rate 6.1 % 7.8 %

(1) Including expected renewals where appropriate.

Scheduled maturities of operating lease liabilities outstanding as of March 31, 2025 are as follows (in thousands):

Year ending March 31,

Thereafter 1,865

Total lease payments 15,688

Imputed interest ( 2,421 )

Present value of lease payments $ 13,267

NOTE 18 - COMMITMENTS AND CONTINGENCIES

The Company records reserves related to legal matters when losses related to such litigation or contingencies are both probable and reasonably estimable.

In July 2015, Pointer do Brasil Comercial Ltda.

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

The aggregate amount claimed to be owed under the notice was approximately $ 6,890 as of March 31, 2025.

On August 14, 2018, the lower chamber of the State Tax Administrative Court in São Paulo rendered a decision that was favorable to Pointer Brazil in relation to the ICMS demands, but adverse in regards to the clerical obligation of keeping in good order a set of ICMS books and related tax receipts.

The remaining claim after this administrative decision is $ 197 .

The state has appealed to the higher chamber of the State Tax Administrative Court.

Based on the Company’s legal counsel ’ s opinion, management is of the opinion that the chance of loss is not probable and that no material costs will arise in respect of these claims.

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

Mobile Telephone Networks Proprietary Limited (“MTN”), a network service provider of MiX Telematics Africa, a subsidiary of the Company, is entitled to claw back payments from MiX Telematics Africa in the event of early cancellation of the agreement or certain base connections not being maintained over the term of an amended network services agreement between the parties.

No connection incentive s will be received in terms of the amended network services agreement.

The maximum potential liability under the arrangement as of March 31, 2025 was $ 609 .

No loss is consider ed probable under this arrangement.

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

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

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

In addition, on February 11, 2025, Fleet Connect filed a second lawsuit against the Company in the United States District Court of the Eastern District of Texas.

The Company then filed a similar motion under Section 101 challenging the validity of some of the patents involved in this lawsuit as well.

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

NOTE 19 - UNAUDITED CONDENSED FINANCIAL INFORMATION

The unaudited condensed financial information for the three-month period ended March 31, 2023 is as follows (in thousands):

Three Months Ended March 31, 2023

Products $ 12,508

Services 20,344

Total revenues 32,852

Cost of revenues:

Cost of products 9,002

Cost of services 7,276

Total cost of revenues 16,278

Gross profit 16,574

Operating expenses:

Selling, general and administrative expenses 16,941

Research and development expenses 1,723

Total operating expenses 18,664

Loss from operations ( 2,090 )

Interest income 24

Interest expense, net

Bargain purchase - Movingdots 7,234

Other income, net

Net income before income taxes

Income tax expense

Net income before non-controlling interest

Non-controlling interest 3

Accretion of preferred stock ( 1,655 )

Preferred stock dividend ( 1,107 )

Net income attributable to common stockholders

Net income per share attributable to common stockholders - basic and diluted

Weighted average common shares outstanding - basic

Weighted average common shares outstanding - diluted

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data