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These inherent limitations include, but are not limited to, faulty judgments in decision-making, breakdown in controls can occur because of a simple error or mistake and/or controls can be circumvented by the individual act of persons, by the collusion of two or more people, or by management override of control.
−Removed: 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 June 30, 2025, 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 June 30, 2025, due to material weaknesses in our internal control over financial reporting as disclosed in our Form 10-K.
−Removed: 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 over manual journal entries at I.D.
−Removed: Systems and Pointer Recuperación de México, S.A.
−Removed: de C.V ( “ Pointer Mexico ” ).
−Removed: Specifically, the control deficiencies related to the configuration of an automated control within the ERP system at I.D.
−Removed: Systems which caused a segregation of duties issue related to the processing of journal entries and review of balance sheet reconciliations.
+Added: Management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
+Added: As disclosed in “Item 9A.
+Added: Controls and Procedures” in Part II of our Form 10-K, management previously identified material weaknesses in our internal control over financial reporting.
+Added: Specifically:
+Added: Systems, the configuration of an automated control within the ERP system created a segregation of duties issue related to the processing of journal entries and the review of balance sheet reconciliations;
• At Pointer Mexico, the control deficiency related to the lack of workflow approval and sufficient documentation supporting the review of journal entries.
−Removed: As disclosed in Note 3, “Acquisition,” in Part I, Item 1, “Financial Statements (Unaudited),” we completed the FC Acquisition on October 1, 2024.
+Added: In addition, as disclosed in Note 3, “Acquisition,” in Part I, Item 1, “Financial Statements (Unaudited),” we completed the FC Acquisition on October 1, 2024.
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.
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As a result of our integration efforts, certain controls will be evaluated and may be changed.
−Removed: Fleet Complete’s total revenues constituted approximately 28% of our consolidated revenues for the three months ended June 30, 2025.
−Removed: Fleet Complete’s total assets constituted approximately 24% of our consolidated total assets as of June 30, 2025.
−Removed: 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: Fleet Complete’s total revenues constituted approximately 27% of our consolidated revenues for the six months ended September 30, 2025.
+Added: Fleet Complete’s total assets constituted approximately 23% of our consolidated total assets as of September 30, 2025.
+Added: Despite the permitted 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.
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.
+Added: As of September 30, 2025, we carried out an evaluation, with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).
+Added: Due to the material weaknesses in internal control over financial reporting described above and previously disclosed in our Form 10-K, management concluded that our disclosure controls and procedures were not effective as of September 30, 2025.
+Added: Notwithstanding the existence of these material weaknesses, management believes that the condensed consolidated financial statements in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 present, in all material aspects, our financial condition as reported, in conformity with U.S.
As described in “Item 9A.
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• Initiated plans to decommission the ERP system currently used by I.D.
−Removed: Systems in the second quarter of fiscal 2026, replacing it with a standardized ERP platform designated for use across the Company.
+Added: Systems in the third quarter of fiscal 2026, replacing it with a standardized ERP platform designated for use across the Company.
• Designing and implementing workflow approval on critical transactions, such as manual journal entries for I.D.
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Management will continue with the implementation of the remediation plan and will reassess and test the design and operating effectiveness of controls.
−Removed: The material weaknesses will not be considered remediated until applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are designed and operating effectively.
+Added: The material weaknesses will not be considered remediated until applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are both designed and operating effectively.
Changes in 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 integration activities, we are continuing 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 across 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.
−Removed: 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.
+Added: While we believe the controls in the post-integration environment, supported by a uniform ERP system, will enhance the internal control environment, there are inherent risks associated with the integration and implementation of a new ERP system.
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.
−Removed: 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.
+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 September 30, 2025, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
PART II - OTHER INFORMATION
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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.