5 unchanged sentences
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) under the Exchange Act.
−Removed: Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness, as of December 31, 2024, of our internal control over financial reporting.
−Removed: Based on that evaluation, we concluded that our internal control over financial reporting was not effective as of December 31, 2024, due to material weaknesses in our internal control over financial reporting as disclosed in the 2023 Annual Report and the Form 10-KT.
+Added: Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness, as of June 30, 2025, of our internal control over financial reporting.
+Added: Based on that evaluation, we concluded that our internal control over financial reporting was not effective as of June 30, 2025, due to material weaknesses in our internal control over financial reporting as disclosed in our Form 10-K.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
−Removed: Management has identified material weaknesses in the design and operation of controls related to the determination of standalone selling prices, cost capitalized for internal use software, the accounting for business acquisitions, 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 our financial reporting processes, the related process-level information technology dependent manual controls and application controls.
−Removed: As disclosed in Note 3, “Acquisition,” in Part I, Item 1, “Financial Statements (Unaudited),” we completed the MiX Combination on April 2, 2024 and the FC Acquisition on October 1, 2024.
−Removed: We excluded both MiX Telematics’ and Fleet Complete’s disclosure controls and procedures that are subsumed by their internal control over financial reporting from the scope of management’s assessment of the effectiveness of our disclosure controls and procedures.
+Added: Management has identified material weaknesses in the design and operation of controls over manual journal entries at I.D.
+Added: Systems and Pointer Recuperación de México, S.A.
+Added: de C.V ( “ Pointer Mexico ” ).
+Added: Specifically, the control deficiencies related to the configuration of an automated control within the ERP system at I.D.
+Added: Systems which caused a segregation of duties issue related to the processing of journal entries and review of balance sheet reconciliations.
+Added: At Pointer Mexico, the control deficiency related to the lack of workflow approval and sufficient documentation supporting the review of journal entries.
+Added: As disclosed in Note 3, “Acquisition,” in Part I, Item 1, “Financial Statements (Unaudited),” we completed the FC Acquisition on October 1, 2024.
+Added: We excluded Fleet Complete’s disclosure controls and procedures that are subsumed by their internal control over financial reporting from the scope of management’s assessment of the effectiveness of our disclosure controls and procedures.
This exclusion is in accordance with the guidance issued by the SEC that an assessment of a recently acquired business’s internal control over financial reporting may be omitted from management’s assessment of internal control over financial reporting for one year following the business combination and/or acquisition.
−Removed: As a result of our integration of MiX Telematics’ and Fleet Complete’s disclosure controls and procedures, certain controls will be evaluated and may be changed.
−Removed: MiX Telematics’ total revenues constituted approximately 50% of our consolidated revenues for the nine months ended December 31, 2024.
−Removed: MiX Telematics’ total assets constituted approximately 28% of our consolidated total assets as of December 31, 2024.
−Removed: Fleet Complete’s total revenues constituted approximately 28% of our consolidated revenues for the three months (since the acquisition) ended December 31, 2024.
−Removed: Fleet Complete’s total assets constituted approximately 16% of our consolidated total assets as of December 31, 2024.
+Added: As a result of our integration efforts, certain controls will be evaluated and may be changed.
+Added: Fleet Complete’s total revenues constituted approximately 28% of our consolidated revenues for the three months ended June 30, 2025.
+Added: Fleet Complete’s total assets constituted approximately 24% of our consolidated total assets as of June 30, 2025.
+Added: Despite the exclusion of Fleet Complete from our assessment of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2025, we identified a material weakness in controls over the financial close and reporting process.
+Added: Specifically, there were insufficient effective controls in place to ensure the completeness and accuracy of Fleet Complete’s financial reporting information that is consolidated into Powerfleet’s financial statements.
As described in “Item 9A.
−Removed: Controls and Procedures” in Part II of the 2023 Annual Report and the Form 10-KT, we started the implementation of the remediation plan to address the material weaknesses mentioned above, including the material weakness reported for MiX Telematics.
−Removed: The remediation plan includes:
−Removed: • Investigating and understanding the root causes of the control deficiencies that resulted in the material weaknesses, and continuing to refine the remediation plan in conjunction with the integration of operations, procedures, control processes and information systems;
−Removed: • Utilizing external resources to support efforts to rework certain control gaps across the various processes in Israel and the United States with identified deficiencies;
−Removed: • Implementing enhanced documentation associated with management review controls and validation of the completeness and accuracy of key reports across the group;
−Removed: • Training of relevant personnel reinforcing existing and/or enhanced policies with regards to the appropriate steps and procedures required to be performed related to the execution and documentation of internal controls.
−Removed: In addition, as part of the integration of MiX Telematics’ and Fleet Complete’s businesses, we are in the process of migrating and integrating the central corporate accounting functions and teams.
−Removed: This integration includes:
−Removed: • Adopting and implementing a standardized ERP system to be used across the company;
−Removed: • Evaluating and integrating accounting principles to align and adopt consistent accounting policies and practices;
−Removed: • Leveraging a larger highly qualified central corporate accounting team;
−Removed: • Utilizing a more mature internal risk team to coordinate management’s efforts to design and implement systems, processes and controls that are documented and widely understood and followed throughout the organization.
+Added: Controls and Procedures” in Part II of our Form 10-K, we started the implementation of the remediation plan to address the material weaknesses mentioned above.
+Added: Management has completed, or is in the process of completing, the following remediation activities:
+Added: • As of April 1, 2025, redesigned and implemented automated controls within the ERP system used by I.D.
+Added: Systems to prevent users from editing journal entries they did not create and to require a senior independent authorized individual to approve and post such journal entries.
+Added: • Initiated plans to decommission the ERP system currently used by I.D.
+Added: Systems in the second quarter of fiscal 2026, replacing it with a standardized ERP platform designated for use across the Company.
+Added: • Designing and implementing workflow approval on critical transactions, such as manual journal entries for I.D.
+Added: • Implementing controls that require documentation of independent reviews of manual journal entries at Pointer Mexico.
+Added: • Designing and implementing controls over general information technology controls within the standardized ERP system related to user access and program change management over IT systems that support financial reporting processes at Fleet Complete.
+Added: • Designing and implementing internal control over financial reporting for processes specific to Fleet Complete.
Management will continue with the implementation of the remediation plan and will reassess and test the design and operating effectiveness of controls.
1 unchanged sentence
Changes in internal control over financial reporting.
−Removed: Except for the controls related to the material weaknesses reported in the 2023 Annual Report and the Form 10-KT related to the measurement and valuation of the acquired assets and liabilities assumed in connection with the business acquisitions, the annual measurement and valuation of our reporting unit, controls over the financial statement close process, specifically that the primary ERP had ineffective IT general controls in the area of user access and change management over key IT systems that support the financial reporting processes, and the measurement and valuation of the convertible redeemable preferred stock, there were no other changes in our system of internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
During the quarter ended June 30, 2024, we completed the MiX Combination and during the quarter ended December 31, 2024, we completed the FC Acquisition.
−Removed: As part of our ongoing post-transactions activities, we continue the process of planning and rolling out the implementation of a single ERP and subscription billing system to all Powerfleet operations.
+Added: As part of our integration activities, we are continuing the implementation of a single ERP and subscription billing system to all Powerfleet operations.
Furthermore, as part of our integration activities, we expect additional changes to the internal control over financial reporting as we continue with our integration activities, which include the evaluation, rationalization and standardization of internal control over financial reporting.
While we believe the controls in the post-transaction environment, supported by a uniform ERP system, will enhance the internal control environment, there are inherent risks associated to the integration and implementation of a new ERP system.
−Removed: We will continue to evaluate the processes and controls related to the integration and system implementation, as well as the assessment of the design adequacy and operating effectiveness of internal control over financial reporting throughout fiscal year 2025.
−Removed: Other than as described above under “ Remediation ”, the integration efforts and the implementation of the ERP system, there were no changes to the Company's internal control over financial reporting, as defined in Rule 13a-15(f) and 15d- 15(f) promulgated under the Exchange Act, during the three months ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
+Added: We will continue to evaluate the processes and controls related to the integration and system implementation, as well as the assessment of the design adequacy and operating effectiveness of internal control over financial reporting throughout this fiscal year.
+Added: Other than as described above under “ Remediation ”, the integration efforts and the implementation of the ERP system, there were no changes to our internal control over financial reporting, as defined in Rule 13a-15(f) and 15d- 15(f) promulgated under the Exchange Act, during the three months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
PART II - OTHER INFORMATION
Legal Proceedings
−Removed: In the ordinary course of its business, we are at times subject to various legal proceedings.
−Removed: For a description of our material pending legal proceedings, see Note 22 to our consolidated financial statements contained in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
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.