Powerfleet, Inc. 10-Q

Item 1. Financial Statements (Unaudited) POWERFLEET, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) March 31, 2025 September 30, 2025 ASSETS Current assets: Cash and cash equivalents $ 44,392 $ 27,898 Restricted cash 4,396 4,583 Accounts receivables, net of allowance for credit losses of $ 4,057 and $ 9,490 as of March 31, 2025 and September 30, 2025, respectively 78,623 85,032 Inventory, net 18,350 22,466 Prepaid expenses and other current assets 23,319 27,858 Total current assets 169,080 167,837 Fixed assets, net 58,011 63,277 Goodwill 383,146 401,216 Intangible assets, net 258,582 262,765 Right-of-use asset 12,339 12,079 Severance payable fund 3,796 4,330 Deferred tax asset 3,934 3,962 Other assets 21,183 21,427 Total assets $ 910,071 $ 936,893 LIABILITIES Current liabilities: Short-term bank debt and current maturities of long-term debt $ 41,632 $ 43,206 Accounts payable 41,599 49,768 Accrued expenses and other current liabilities 45,327 41,419 Deferred revenue - current 17,375 17,199 Lease liability - current 5,076 4,756 Total current liabilities 151,009 156,348 Long-term debt - less current maturities 232,160 231,906 Deferred revenue - less current portion 5,197 4,899 Lease liability - less current portion 8,191 8,363 Accrued severance payable 6,039 5,584 Deferred tax liability 57,712 58,680 Other long-term liabilities 3,021 2,134 Total liabilities 463,329 467,914 Commitments and Contingencies (Note 23) STOCKHOLDERS’ EQUITY Preferred stock; authorized 50,000 shares, $ 0.01 par value — — Common stock; authorized 175,000 shares, $ 0.01 par value; 135,379 and 135,870 shares issued at March 31, 2025 and September 30, 2025, respectively; shares outstanding, 133,316 and 133,806 at March 31, 2025 and September 30, 2025, respectively 1,343 1,343 Additional paid-in capital 671,400 675,847 3 Accumulated deficit ( 205,783 ) ( 220,305 ) Accumulated other comprehensive (loss) income ( 8,850 ) 23,462 Treasury stock; 2,063 and 2,063 common shares at cost at March 31, 2025 and September 30, 2025, respectively ( 11,518 ) ( 11,518 ) Total Powerfleet, Inc. stockholders’ equity 446,592 468,829 Non-controlling interest 150 150 Total equity 446,742 468,979 Total liabilities and stockholders’ equity $ 910,071 $ 936,893 See accompanying notes to condensed consolidated financial statements. 4 POWERFLEET, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended September 30, Six Months Ended September 30, 2024 2025 2024 2025 Revenues: Products $ 20,293 $ 22,370 $ 39,031 $ 40,027 Services 56,725 89,309 113,417 175,773 Total revenues 77,018 111,679 152,448 215,800 Cost of revenues: Cost of products 13,929 15,318 26,680 28,546 Cost of services 21,746 33,772 44,777 68,184 Total cost of revenues 35,675 49,090 71,457 96,730 Gross profit 41,343 62,589 80,991 119,070 Operating expenses: Selling, general and administrative expenses 37,335 54,151 92,117 107,814 Research and development expenses 3,435 4,194 6,536 9,051 Total operating expenses 40,770 58,345 98,653 116,865 Profit (loss) from operations 573 4,244 ( 17,662 ) 2,205 Interest income 168 262 472 458 Interest expense, net ( 4,042 ) ( 6,977 ) ( 6,733 ) ( 13,763 ) Other income (expense), net 1,674 ( 546 ) 1,050 ( 1,789 ) Net loss before income taxes ( 1,627 ) ( 3,017 ) ( 22,873 ) ( 12,889 ) Income tax expense ( 256 ) ( 1,271 ) ( 1,309 ) ( 1,633 ) Net loss before non-controlling interest ( 1,883 ) ( 4,288 ) ( 24,182 ) ( 14,522 ) Non-controlling interest ( 5 ) — ( 18 ) — Net loss ( 1,888 ) ( 4,288 ) ( 24,200 ) ( 14,522 ) Preferred stock dividend — — ( 25 ) — Net loss attributable to common stockholders $ ( 1,888 ) $ ( 4,288 ) $ ( 24,225 ) $ ( 14,522 ) Net loss per share attributable to common stockholders - basic and diluted $ ( 0.02 ) $ ( 0.03 ) $ ( 0.23 ) $ ( 0.11 ) Weighted average common shares outstanding - basic and diluted 107,532 133,676 107,335 133,510 See accompanying notes to condensed consolidated financial statements. 5 POWERFLEET, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Comprehensive (Loss) Income (In thousands) (Unaudited) Three Months Ended September 30, Six Months Ended September 30, 2024 2025 2024 2025 Net loss attributable to common stockholders $ ( 1,888 ) $ ( 4,288 ) $ ( 24,225 ) $ ( 14,522 ) Foreign currency translation adjustment ( 797 ) 9,793 ( 379 ) 32,312 Total other comprehensive (loss) income ( 797 ) 9,793 ( 379 ) 32,312 Comprehensive (loss) income $ ( 2,685 ) $ 5,505 $ ( 24,604 ) $ 17,790 See accompanying notes to condensed consolidated financial statements. 6 POWERFLEET, INC. AND SUBSIDIARIES Condensed Consolidated Statement of Changes in Stockholders’ Equity (In thousands) (Unaudited) Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income Treasury Stock Non-Controlling Interest Total Stockholders’ Equity Number of Shares Amount Balance as of April 1, 2025 135,379 $ 1,343 $ 671,400 $ ( 205,783 ) $ ( 8,850 ) $ ( 11,518 ) $ 150 $ 446,742 Net loss attributable to common stockholders — — — ( 10,234 ) — — — ( 10,234 ) Foreign currency translation adjustment — — — — 22,519 — — 22,519 Stock-based compensation — — 1,853 — — — — 1,853 Issue of stock appreciation rights 127 — — — — — — — Balance as of June 30, 2025 135,506 $ 1,343 $ 673,253 $ ( 216,017 ) $ 13,669 $ ( 11,518 ) $ 150 $ 460,880 Net loss attributable to common stockholders — — — ( 4,288 ) — — — ( 4,288 ) Foreign currency translation adjustment — — — — 9,793 — — 9,793 Stock-based compensation — — 2,594 — — — — 2,594 Issue of stock appreciation rights and restricted share awards 364 — — — — — — — Balance as of September 30, 2025 135,870 $ 1,343 $ 675,847 $ ( 220,305 ) $ 23,462 $ ( 11,518 ) $ 150 $ 468,979 7 Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Treasury Stock Non-Controlling Interest Total Stockholders’ Equity Number of Shares Amount Balance as of April 1, 2024 38,709 $ 387 $ 202,607 $ ( 154,796 ) $ ( 985 ) $ ( 8,682 ) $ 105 $ 38,636 Net loss attributable to common stockholders — — ( 25 ) ( 22,312 ) — — — ( 22,337 ) Net income attributable to non-controlling interest — — — — — — 13 13 Foreign currency translation adjustment — — — — 418 — 8 426 Issuance of restricted shares 54 1 ( 1 ) — — — — — Shares issued for transaction bonus 174 1 888 — — — — 889 Shares issued in connection with MiX Combination 70,704 707 361,298 — — — — 362,005 Acquired through MiX Combination — — 7,818 — — — 5 7,823 Shares withheld pursuant to vesting of restricted stock — — — — — ( 2,836 ) — ( 2,836 ) Stock-based compensation — — 5,929 — — — — 5,929 Balance as of June 30, 2024 109,641 $ 1,096 $ 578,514 $ ( 177,108 ) $ ( 567 ) $ ( 11,518 ) $ 131 $ 390,548 Net loss attributable to common stockholders — — — ( 1,888 ) — — — ( 1,888 ) Net income attributable to non-controlling interest — — — — — — 5 5 Foreign currency translation adjustment — — — — ( 797 ) — 20 ( 777 ) Proceeds from private placement, net of costs to issue common stock — — 61,851 — — — — 61,851 Exercise of stock options 243 — — — — — — — Stock-based compensation — — 1,371 — — — — 1,371 Balance as of September 30, 2024 109,884 $ 1,096 $ 641,736 $ ( 178,996 ) $ ( 1,364 ) $ ( 11,518 ) $ 156 $ 451,110 See accompanying notes to condensed consolidated financial statements. 8 POWERFLEET, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Six Months Ended September 30, 2024 2025 Cash flows from operating activities Net loss $ ( 24,200 ) $ ( 14,522 ) Adjustments to reconcile net loss to cash (used in) provided by operating activities: Non-controlling interest 18 — Inventory reserve 904 1,182 Stock-based compensation expense 7,300 4,447 Depreciation and amortization 19,399 31,824 Right-of-use assets, non-cash lease expense 1,515 627 Derivative mark-to-market adjustment ( 2,197 ) ( 786 ) Bad debts expense 4,369 4,378 Deferred income taxes ( 283 ) ( 1,864 ) Shares issued for transaction bonuses 889 — Lease termination and modification losses 184 91 Other non-cash items 1,522 1,564 Changes in operating assets and liabilities: Accounts receivables ( 12,553 ) ( 7,562 ) Inventories 955 ( 4,763 ) Prepaid expenses and other current assets ( 3,009 ) ( 984 ) Deferred costs ( 3,619 ) ( 4,718 ) Deferred revenue ( 99 ) ( 612 ) Accounts payable, accrued expenses and other current liabilities ( 71 ) 2,524 Lease liabilities ( 1,856 ) ( 964 ) Accrued severance payable, net 40 381 Net cash (used in) provided by operating activities ( 10,792 ) 10,243 Cash flows from investing activities Acquisition, net of cash assumed 27,531 45 Proceeds from sale of fixed assets 217 18 Capitalized software development costs ( 4,676 ) ( 11,491 ) Capital expenditures ( 10,454 ) ( 12,452 ) Repayment of loan advanced to external parties 294 — Net cash provided by (used in) investing activities 12,912 ( 23,880 ) Cash flows from financing activities Repayment of long-term debt ( 978 ) ( 2,710 ) Short-term bank debt, net 9,955 ( 617 ) Purchase of treasury stock upon vesting of restricted stock ( 2,836 ) — Payment of preferred stock dividend and redemption of preferred stock ( 90,298 ) — Proceeds from private placement, net 61,851 — Cash paid on dividends to affiliates ( 6 ) — 9 Net cash used in financing activities ( 22,312 ) ( 3,327 ) Effect of foreign exchange rate changes on cash and cash equivalents ( 436 ) 657 Net decrease in cash and cash equivalents, and restricted cash ( 20,628 ) ( 16,307 ) Cash and cash equivalents, and restricted cash at beginning of the period 109,664 48,788 Cash and cash equivalents, and restricted cash at end of the period $ 89,036 $ 32,481 Reconciliation of cash and cash equivalents, and restricted cash, at beginning of the period Cash and cash equivalents 24,354 44,392 Restricted cash 85,310 4,396 Cash and cash equivalents, and restricted cash, at beginning of the period $ 109,664 $ 48,788 Reconciliation of cash and cash equivalents, and restricted cash, at end of the period Cash and cash equivalents 25,962 27,898 Restricted cash 63,074 4,583 Cash and cash equivalents, and restricted cash, at end of the period $ 89,036 $ 32,481 Supplemental disclosure of cash flow information: Cash paid for: Taxes $ 774 $ 2,914 Interest $ 6,262 $ 12,192 Noncash investing and financing activities: Common stock issued for transaction bonus $ 9 $ — Shares issued in connection with MiX Combination $ 362,005 $ — See accompanying notes to condensed consolidated financial statements. 10 POWERFLEET, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements September 30, 2025 In thousands (except per share data) (Unaudited) NOTE 1 - DESCRIPTION OF THE COMPANY AND BASIS OF PRESENTATION Description of the Company Powerfleet, Inc. (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 three and six months ended September 30, 2025 include the financial results of MiX Telematics and its subsidiaries. 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 three and six months ended September 30, 2025 include the financial results of Fleet Complete and its subsidiaries. See Note 3 for additional information. Basis of Preparation The unaudited condensed 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. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, these unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the consolidated financial position of the Company as of March 31, 2025 and September 30, 2025, the consolidated results of its operations for the three- and six-month periods ended September 30, 2024 and 2025, the consolidated change in stockholders’ equity for the three- and six-month periods ended September 30, 2024 and 2025, and the consolidated cash flows for the six-month period ended September 30, 2024 and 2025. The results of operations for the three- and six-month periods ended September 30, 2025 are not necessarily indicative of the operating results for the full year. These financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures for the fiscal year ended March 31, 2025 included in the Company’s Annual Report on Form 10-K for the year then ended. For the quarter ended September 30, 2025, the Company enhanced its disclosures to include its accounting policy for restructuring expenses. 11 The Company records one-time employee termination benefits associated with exit or disposal activities in accordance with ASC 420-10, Exit or Disposal Cost Obligations (“ASC 420”), and post-employment benefits under ASC 712-10, Compensation – Nonretirement Postemployment Benefits, when such obligations are probable and reasonably estimable. A liability for one-time termination benefits is recognized on the date the plan is communicated to affected employees, provided that no more-than-insignificant future service is required. Contract termination and other exit costs are recognized when the related obligation is incurred. Lease-related items are accounted for in accordance with ASC 842, Leases (“ASC 842”), including right-of-use (“ROU”) asset impairments and lease modifications. Only costs that are not lease liabilities under ASC 842 and that meet the recognition criteria of ASC 420 are included in restructuring charges. The Company reassesses expected restructuring expenses each reporting period and records adjustments to estimates, including reversals, as necessary. NOTE 2 - USE OF ESTIMATES The preparation of condensed 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 condensed 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. NOTE 3 - ACQUISITION FC Acquisition On 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, Business Combinations, 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) October 1, 2024 Shares of Powerfleet common stock issued 4,286 Powerfleet stock price* 4.98 Fair value of Powerfleet common stock transferred $ 21,343 Cash consideration to former shareholders 16,225 Repayment of Fleet Complete’s existing debt 152,382 Total fair value of consideration $ 189,950 * 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 FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB”), as described in Note 13 below. 12 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 for 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 , net of costs, received on October 1, 2024. 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 allocation of purchase price was as follows (in thousands): October 1, 2024 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 99,000 Computer software 2,261 Right-of-use asset 2,823 Deferred tax assets — Other assets 4,555 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 1,118 Lease liability - less current portion 75 Accrued severance payable 216 Other long-term liabilities 405 Deferred tax liabilities 5,599 Total liabilities assumed $ 44,323 Total identifiable net assets acquired $ 107,705 Goodwill 82,245 Purchase price consideration $ 189,950 13 The above fair values of assets acquired and liabilities assumed, including 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 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. The initial accounting for the business combination was completed as September 30, 2025. 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 the 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 $ 4,000 4.5 years Developed technology 25,000 5.5 years Customer relationships 70,000 9.5 years $ 99,000 Acquisition-Related Expenses The Company expensed a total of $ 17 of acquisition-related costs in the consolidated statements of operations related to the FC Acquisition for the three-month period ended September 30, 2025. The Company expensed a total of $ 1,147 of acquisition-related costs in the consolidated statements of operations related to the FC Acquisition for the six-month period ended September 30, 2025. Unaudited Pro Forma Financial Information If the business acquired in the FC Acquisition was acquired on April 1, 2024, it would have contributed revenue of $ 29,988 and a net loss of $ 10,081 , of which $ 3,021 related to the amortization of acquired identifiable intangible assets, for the three-month period ended September 30, 2024. If the business acquired in the FC Acquisition was acquired on April 1, 2024, it would have contributed revenue of $ 60,638 and a net loss of $ 15,335 , of which $ 6,401 related to the amortization of acquired identifiable intangible assets, for the six-month period ended September 30, 2024. NOTE 4 - 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 and other local jurisdictional limits. Restricted cash at March 31, 2025 consisted of escrow amounts 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 cash securing guarantees of $ 51 issued in respect of property lease agreements entered into by MiX Telematics Australasia. Restricted cash at September 30, 2025 consisted of cash of $ 3,336 held in escrow related to the FC Acquisition to secure certain tax liabilities, cash of $ 312 held in escrow for purchases from a vendor, cash of $ 792 held by MiX Telematics Enterprise BEE Trust to be used solely for the benefit of its beneficiaries, c ash securing guarantees of $ 56 issued in 14 respect of property lease agreements entered into by MiX Telematics Australasia, cash securing guarantees of $ 76 issued in respect of property lease agreements entered into by Fleet Complete Australia, and security deposits of $ 11 . NOTE 5 - 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. Incidental items that are immaterial in the context of the contract are recognized as an 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 14). 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 the 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 services 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. 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. 15 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 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. The following table presents the Company’s revenues disaggregated by revenue source for the three and six months ended September 30, 2024 and 2025 (in thousands): Three Months Ended September 30, Six Months Ended September 30, 2024 2025 2024 2025 Products $ 20,293 $ 22,370 $ 39,031 $ 40,027 Services 56,725 89,309 113,417 175,773 $ 77,018 $ 111,679 $ 152,448 $ 215,800 The balances of contract assets and contract liabilities from contracts with customers are as follows as of March 31, 2025 and September 30, 2025 (in thousands): March 31, 2025 September 30, 2025 Contract Assets: Deferred contract cost (1) $ 11,894 $ 11,379 Deferred costs - current $ 2 $ 432 Contract Liabilities: Deferred revenue – services (2) $ 21,466 $ 20,764 Deferred revenue – products (2) 1,106 1,334 22,572 22,098 Less: Deferred revenue – current ( 17,375 ) ( 17,199 ) Deferred revenue – long term $ 5,197 $ 4,899 (1) Deferred contract costs are included in Other assets on the condensed 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 three-month periods ended September 30, 2024 and 2025, the Company recognized revenue of $ 2,499 and $ 5,095 , respectively, which was included in the deferred revenue balance at the beginning of each reporting period. For the six-month periods ended September 30, 2024 and 2025, the Company recognized revenue of $ 5,468 and $ 10,563 , 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 2029, when it transfers those goods and services and, therefore, satisfies its performance obligation to the customers. 16 NOTE 6 - ALLOWANCE FOR CREDIT 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. An analysis of the allowance for credit losses for the periods ended September 30, 2024 and 2025 is as follows (in thousands): Six Months Ended September 30, 2024 2025 Allowance for credit losses, March 31 $ 3,197 $ 4,057 Current period provision for expected credit losses 4,369 8,807 Write-offs charged against the allowance ( 2,688 ) ( 4,274 ) Foreign currency translation 443 900 Allowance for credit losses, September 30 $ 5,321 $ 9,490 NOTE 7 - PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other current assets comprise the following (in thousands): March 31, 2025 September 30, 2025 Sales-type lease receivables, current $ 1,062 $ 957 Prepaid expenses 9,038 9,536 Contract assets 5,088 6,229 Tax receivables 553 605 VAT receivable 1,901 1,853 Sundry debtors 5,424 8,365 Other current assets 253 314 $ 23,319 $ 27,858 NOTE 8 - 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): March 31, 2025 September 30, 2025 Components $ 11,859 $ 8,654 Work in process — — Finished goods, net 6,491 13,812 $ 18,350 $ 22,466 17 NOTE 9 - FIXED ASSETS Fixed assets are stated at cost, less accumulated depreciation and amortization, and are summarized as follows (in thousands): March 31, 2025 September 30, 2025 Installed and uninstalled products $ 61,564 $ 72,963 Computer software 11,523 12,954 Computer and electronic equipment 6,294 6,537 Furniture and fixtures 3,054 3,955 Leasehold improvements 1,459 1,709 Plant and equipment 276 332 Assets in progress 7 21 84,177 98,471 Accumulated depreciation ( 26,166 ) ( 35,194 ) $ 58,011 $ 63,277 Depreciation expense for the three- and six-month periods ended September 30, 2024 was $ 5,227 and $ 9,976 , respectively, and for the three- and six-month periods ended September 30, 2025 was $ 6,277 and $ 12,449 , respectively . NOTE 10 - 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 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, 2025 and September 30, 2025 (in thousands): September 30, 2025 Useful Lives (In Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived: Customer relationships 9 - 13 $ 210,200 $ ( 31,497 ) $ 178,703 Trademark and tradename 3 - 15 22,840 ( 7,044 ) 15,796 Patents 7 - 11 2,128 ( 681 ) 1,447 Technology 5 - 7 81,902 ( 29,767 ) 52,135 Software to be sold or leased 3 - 7 18,087 ( 3,568 ) 14,519 335,157 ( 72,557 ) 262,600 Indefinite-lived: Customer list 104 — 104 Trademark and tradename 61 — 61 165 — 165 Total $ 335,322 $ ( 72,557 ) $ 262,765 18 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 — 61 165 — 165 Total $ 310,758 $ ( 52,176 ) $ 258,582 The weighted-average amortization periods for customer relationships, trademarks and tradenames, patents, technology, and capitalized software to be sold or leased for September 30, 2025 were 11.2 , 10.3 , 6.5 , 3.9 , and 3.8 years, respectively, and for March 31, 2025 were 11.7 , 10.8 , 7.0 , 4.4 , and 4.3 years, respectively . Amortization expense for the three- and six-month periods ended September 30, 2024 was $ 3,837 and $ 9,423 , respectively, and for the three- and six-month periods ended September 30, 2025 was $ 9,516 and $ 19,375 , respectively . Estimated future amortization expense for each of the five succeeding fiscal years for these intangible assets is as follows: 2026 (remaining) $ 25,436 2027 41,073 2028 35,995 2029 31,506 2030 23,597 Thereafter 104,993 $ 262,600 19 Reconciliation of Total Goodwill The following table is a reconciliation of the carrying amount of goodwill as of March 31, 2025 and September 30, 2025 (in thousands): March 31, 2025 September 30, 2025 Goodwill Opening balance $ 83,487 $ 383,146 Businesses acquired MiX Combination 216,799 — FC Acquisition 82,245 — Acquisition — 552 Foreign currency translation difference 615 17,518 Closing balance $ 383,146 $ 401,216 For the six-month period ended September 30, 2025, the Company did not identify any indicators of impairment. NOTE 11 - STOCK-BASED COMPENSATION [A] Stock Options: During the three- and six-month periods ended September 30, 2025, the Company did not grant any market-based stock options. The following table summarizes the activity relating to the Company’s market-based stock options for the six-month period ended September 30, 2025: Options (in thousands) Weighted- Average Exercise Price ($) Weighted Average Contractual Remaining Term (years) Aggregate Intrinsic Values (in thousands) Outstanding as of April 1, 2025 5,200 13.85 — — Granted — — — — Exercised — — — — Forfeited ( 40 ) 3.13 — — Outstanding as of September 30, 2025 5,160 13.94 6.45 $ 2,196 Vested as of September 30, 2025 — — — $ — During the three- and six-month periods ended September 30, 2025, the Company did no t grant any options to purchase shares of common stock with time-based vesting conditions. 20 The following table summarizes the activity relating to the Company’s stock options, excluding the market-based stock options, for the six-month period ended September 30, 2025: Options (in thousands) Weighted- Average Exercise Price ($) Weighted Average Contractual Remaining Term (years) Aggregate Intrinsic Values (in thousands) Outstanding as of April 1, 2025 1,890 4.51 — — Granted — — — — Exercised — — — — Forfeited ( 7 ) 5.98 — — Outstanding as of September 30, 2025 1,883 4.50 6.27 $ 1,721 Vested as of September 30, 2025 1,695 4.52 6.00 $ 1,546 The Company recorded stock-based compensation expense of $ 627 and $ 2,444 for the three- and six-month periods ended September 30, 2024, respectively, and $ 406 and $ 853 for the three- and six-month periods ended September 30, 2025, respectively, in connection with awards made under the stock option plans, including market-based and time-based options. The decrease in the recognized expense is because the prior year included 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 fair value of options vested during the six-month periods ended September 30, 2024 and 2025 was $ 1,552 and $ 199 , respectively. There were no option exercises that occurred during the six-month periods ended September 30, 2024 and 2025. As of September 30, 2025, there was $ 484 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 0.72 years. As of September 30, 2025, there was $ 1,461 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 1.46 years. 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. 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. During the six-month period ended September 30, 2025, the Company granted 373 restricted shares of common stock to the Company’s senior management team, which vest in equal installments over a three-year period, provided that they remain employed by the Company on each scheduled vesting date. The Company also granted an additional 11 restricted shares of common stock to the Company’s senior management team, which vest in equal installments over a 12-month period, provided that they remain employed by the Company on each scheduled vesting date. The grant date for these awards was determined to be April 23, 2025. 21 During the six-month period ended September 30, 2025, the Company granted 1,475 restricted shares of common stock to the Company’s executive officers and senior management team, which vest in full if specified performance targets are achieved and provided that they remain employed by the Company on the scheduled vesting date. The grant date for these awards was determined to be April 23, 2025. A summary of all unvested restricted stock for the six-month period ended September 30, 2025 is as follows: Time-Based Restricted Shares Market-Based Restricted Shares Performance-Based Restricted Shares Number of Unvested Shares (in thousands) Weighted- Average Grant Date Fair Value ($) Number of Unvested Shares (in thousands) Weighted- Average Grant Date Fair Value ($) Number of Unvested Shares (in thousands) Weighted- Average Grant Date Fair Value ($) Unvested, March 31, 2025 732 5.58 938 5.35 — — Granted 384 4.75 — — 1,475 4.75 Vested/Exercised ( 364 ) 5.35 — — — — Forfeited or expired — — — — — — Unvested, September 30, 2025 752 5.26 938 5.35 1,475 4.75 The Company recorded stock-based compensation expenses of $ 125 and $ 3,220 for the three- and six-month periods ended September 30, 2024, respectively, and $ 1,769 and $ 2,589 for the three- and six-month periods ended September 30, 2025, respectively, in connection with restricted stock grants. As of September 30, 2025, there was $ 7,921 of total unrecognized compensation cost related to unvested shares. [C] Stock Appreciation Rights: The following table summarizes the activity relating to the Company’s stock appreciation rights (“SARs”) for the six-month period ended September 30, 2025: Number of SARs (in thousands) Weighted- Average Exercise Price ($) Weighted Average Contractual Remaining Term (years) Aggregate Intrinsic Values (in thousands) Outstanding as of April 1, 2025 3,238 2.44 Granted — — Exercised ( 490 ) 2.90 Forfeited ( 210 ) 2.17 Outstanding as of September 30, 2025 2,538 2.37 2.78 Vested as of September 30, 2025 776 2.49 1.97 $ 2,136 The total stock-based compensation expense recognized during the three- and six-month periods ended September 30, 2024 was $ 637 and $ 1,600 , respectively, and during the three- and six-month periods ended September 30, 2025 was $ 361 and $ 722 , respectively. As of September 30, 2025, there was $ 3,234 of unrecognized compensation cost related to unvested SARs. This amount is expected to be recognized over a weighted-average period of 2.23 years. [D] Warrants: On April 21, 2025, the Company issued to Private Capital Management Holdings, L.P., an affiliate of Private Capital Management, LLC (“PCM”), a warrant to purchase 130,275 shares of common stock in lieu of granting certain equity 22 compensation to Andrew Martin, one of the Company’s directors and a partner and member of the investment research team at PCM. The warrants become exercisable in 10 equal installments on the last day of each quarter starting June 30, 2024. The fair value of each warrant on grant date is estimated using the Black-Scholes option-pricing model reflecting the following assumptions: Expected volatility 70.0 % Expected life of warrants 5.2 Risk free interest rate 4.0 % Dividend yield — Fair value of warrants granted during the quarter $ 2.79 The total stock-based compensation expense recognized during the three- and six-month periods ended September 30, 2025 was $ 58 and $ 283 , respectively. As of September 30, 2025, there was $ 80 of unrecognized compensation cost related to unvested warrants. This amount is expected to be recognized over a weighted-average period of 1.00 year. NOTE 12 - NET LOSS PER SHARE Net loss per share for the three- and six-month periods ended September 30, 2024 and 2025 are as follows: Three Months Ended September 30, Six Months Ended September 30, 2024 2025 2024 2025 Basic and diluted loss per share Net loss attributable to common stockholders $ ( 1,888 ) $ ( 4,288 ) $ ( 24,225 ) $ ( 14,522 ) Net loss per share attributable to common stockholders - basic and diluted $ ( 0.02 ) $ ( 0.03 ) $ ( 0.23 ) $ ( 0.11 ) Weighted-average common share outstanding - basic and diluted 107,532 133,676 107,335 133,510 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. 23 NOTE 13 - SHORT-TERM BANK DEBT AND LONG-TERM DEBT March 31, 2025 September 30, 2025 Short-term bank debt $ 36,788 $ 37,477 Current maturities of long-term debt $ 4,844 $ 5,729 Long-term debt - less current maturities $ 232,160 $ 231,906 Short-Term Bank Debt As of September 30, 2025, short-term debt comprised $ 37,461 of borrowing facilities and $ 16 of book overdrafts . RMB Facility On March 7, 2024, as part of the MiX Combination, Powerfleet, together with certain of its wholly owned subsidiaries, entered into a Facilities Agreement (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 $ 20,249 as of September 30, 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, 2026, 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. As of September 30, 2025, $ 20,246 of the RMB General Facility was utilized. Hapoalim Debt As of September 30, 2025, Powerfleet Israel Ltd. (“Powerfleet Israel”) had utilized approximately $ 17,215 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,” respectively, 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 24 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 September 30, 2025, Pointer had utilized $ 17,215 under the Hapoalim Revolving Facilities. The available undrawn facility balance at September 30, 2025 was $ 12,785 . 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 September 30, 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, Secured Overnight Financing Rate (“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 mature on 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 total 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 September 30, 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 25 $ 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 three-month period ended September 30, 2024, the Company recorded $ 15 of amortization of the original debt issuance costs and the refinancing fee paid to Hapoalim. For the six-month period ended September 30, 2024, the Company recorded a credit of $ 15 net of additional deferred costs to the original debt issuance costs and amortization of the original debt issuance costs. For the three- and six-month periods ended September 30, 2025, the Company recorded $ 15 and $ 30 of additional deferred costs to the original debt issuance costs and the refinancing fee paid to Hapoalim, respectively. The Company recorded charges of $ 591 and $ 1,246 to interest expense on its Consolidated Statement of Operations for the three- and six-month periods ended September 30, 2024, respectively, and $ 608 and $ 1,232 for the three- and six-month periods ended September 30, 2025, respectively, related to interest expense associated with the Hapoalim debt. RMB Debt On March 7, 2024, the Company, together with certain of its wholly owned subsidiaries, 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, the proceeds of which were used 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 (“I.D. Systems”), Movingdots GmbH (“Movingdots”) and Powerfleet Inc. (“Powerfleet”), and there is a security agreement over the shares in Main Street 2000 Proprietary Limited (“MS2000”), I.D. Systems, and Movingdots. On October 31, 2025, the Company, together with certain of its wholly owned subsidiaries (the “Obligors”), entered into a First Amendment and Restatement Agreement with RMB, pursuant to which the Obligors and RMB agreed to amend and restate the Facilities Agreement (as amended and restated, the “Amended and Restated Facilities Agreement”) to, among other things, (i) extend the final maturity date of RMB Facility A by 12 months, (ii) update the interest rates of the RMB Facilities, and (iii) update certain financial covenants to conform to the Facility Agreement (as defined below), each as further described below. Pursuant to the Amended and Restated Facilities Agreement, borrowings under RMB Facility A bear interest at 8.699 % per annum until March 31, 2027 and, thereafter, at 4.85 % (provided no event of default is continuing), plus the applicable term SOFR reference rate (or, if unavailable, an interpolated, historic or interpolated historic SOFR rate, or, if none of the foregoing are available, the 3-month Treasury bill rate). Borrowings under RMB Facility B continue to bear interest at 8.979 % per annum. Interest is payable quarterly in arrears. Pursuant to the Amended and Restated Facilities Agreement, RMB Facility A now matures on March 31, 2028, 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. 26 The following key assumptions were used in September 30, 2025: Facility A Facility B Credit spread volatility 39.73 % 25.51 % Credit spread 3.64 % 3.64 % Credit rating B B Risk free rate US Treasury rate US Treasury rate As of March 31, 2025, the SOFR spot rate was 4.41 % and, as of September 30, 2025, the US Treasury rate was 4.73 % . 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 no change in the derivative asset, and a change of +10% in credit spread volatility would also result in no change in the derivative asset. 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 $ 20 , while a change of +10% in credit spread volatility would result in an increase in the derivative asset of $ 10 . The Prepayment Derivative assets are included in Other assets and their fair values were $ 850 and $ 1,880 for RMB Facility A and RMB Facility B, respectively, as of March 31, 2025 and, $ 864 and $ 2,652 for RMB Facility A and RMB Facility B, respectively, as of September 30, 2025. The debt-host contracts are accounted for at amortized cost. Total debt issuance costs of appr oximately $ 1,000 were incurred. For the three- and six-month periods ended September 30, 2025, the Company recorded $ 74 and $ 146 of amortization of the original debt issuance costs and the refinancing fee to RMB, respectively. For the three- and six-month periods ended September 30, 2025, the Company recorded interest expense of $ 1,920 and $ 3,840 , respectively. 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” and, together with the Amended and Restated Facilities Agreement, the “RMB Facilities Agreements”) 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, Movingdots and Powerfleet Canada Holdings Inc. 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, 27 September 30, and December 31 each year, and on October 31, 2029. The stated interest rate at September 30, 2025 was 9.20 %. 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 $ 1,433 were incurred. For the three- and six-month periods ended September 30, 2025, the Company recorded $ 60 and $ 118 , respectively, of amortization of these costs. For the three- and six-month periods ended September 30, 2025, the Company recorded $ 2,905 and $ 5,843 of interest expense. The RMB Facilities Agreements contain 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, which must be less than (i) 4.00 at September 30, 2025, (ii) 3.50 at December 31, 2025, (iii) 3.00 at March 31, 2026, (iv) 2.75 from June 30, 2026 through March 30, 2027, and (v) 2.50 thereafter, and the ratio of the Company’s consolidated EBITDA to consolidated total finance costs, which must exceed (i) 3.00 from September 30, 2025 through September 29, 2026 and (ii) 3.50 thereafter. The RMB Facilities Agreements also include representations, warranties, events of default and other provisions customary for financings of this type. The occurrence of any event of default under the RMB Facilities Agreements may result in all outstanding indebtedness under the RMB Facilities or New RMB Term Facility, as applicable, becoming immediately due and payable. The RMB Facilities Agreements include an equity cure provision, allowing the Company to remedy a breach of the above financial covenants by receiving a qualifying shareholder contribution (a “Cure Amount”) within 45 days of the relevant Measurement Date (as defined in each of the RMB Facilities Agreements). The Cure Amount may be applied as a notional reduction in net borrowings or finance costs solely for covenant compliance purposes. The use of this provision is limited to (i) no more than two consecutive Measurement Periods (as defined in each of the RMB Facilities Agreements) and (ii) a maximum of three times over the life of RMB Facilities Agreements, as applicable. All Cure Amounts must be applied toward mandatory prepayment of outstanding loans under the RMB Facilities or New RMB Term Facility, as applicable. The financial covenants for the RMB Facilities Agreements have been met for the quarter ended September 30, 2025. Scheduled contractual maturities of the long-term debt as of September 30, 2025 are as follows (in thousands): 2026 (remaining) $ 2,762 2027 48,577 2028 6,077 2029 55,760 2030 125,000 Thereafter — 238,176 Less: Current portion ( 5,729 ) Less: Debt costs and prepayment ( 541 ) Total $ 231,906 NOTE 14 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following (in thousands): March 31, 2025 September 30, 2025 Accrued warranty $ 1,479 $ 1,348 Accrued compensation 27,825 28,277 Government authorities 6,982 8,125 Other current liabilities 9,041 3,669 $ 45,327 $ 41,419 28 The following table summarizes warranty activity for the six months ended September 30, 2024 and 2025 (in thousands): Six Months Ended September 30, 2024 2025 Accrued warranty reserve, beginning of year $ 2,926 $ 3,618 Accrual for product warranties issued 242 217 Product replacements and other warranty expenditures ( 202 ) ( 608 ) Expiration of warranties (under (over) warranty accrual) 15 ( 788 ) Acquired through MiX Combination 356 — Foreign currency translation difference 33 79 Accrued warranty reserve, end of period (1) $ 3,370 $ 2,518 (1) Includes non-current accrued warranty included in other long-term liabilities at September 30, 2024 and 2025 of $ 1,847 and $ 1,170 , respectively. NOTE 15 - RESTRUCTURING EXPENSES The Company initiated restructuring actions in connection with the integration of MiX Telematics and Fleet Complete to streamline operations and capture operating synergies. These actions included workforce reductions and employee terminations related to consolidation of overlapping functions. The Company’s restructuring plans are generally country- or region-specific and are typically completed within a one-year period. For the three-month periods ended September 30, 2024 and 2025, the Company recognized restructuring expenses of $ 492 and $ 770 , respectively, primarily consisting of employee termination costs. For the six-month periods ended September 30, 2024 and 2025, the Company recognized restructuring expenses of $ 1,235 and $ 2,765 , respectively, primarily consisting of employee termination costs. Restructuring expenses are recorded in selling, general and administrative expenses in the condensed consolidated statements of operations. The following table summarizes the details of the Company’s restructuring liability (included in accrued expenses and other current liabilities on the condensed consolidated balance sheet) (in thousands): March 31, 2025 September 30, 2025 Opening balance 60 1,324 Assumed in business combination 216 — Charges 4,673 2,765 Cash payments ( 3,604 ) ( 2,499 ) Foreign currency translation ( 21 ) 30 Closing balance 1,324 1,620 As of September 30, 2025, the Company incurred expenses of $ 7,438 in connection with restructuring activities and expects to incur additional charges, primarily for severance, with most related cash outflows expected within the next 12 months. As the Company continues executing its adjusted EBITDA expansion strategy, it may identify further cost synergies, which may result in additional restructuring-related expenses. In addition to these restructuring expenses, the Company recognized inventory write-downs related to hardware rationalization (included in cost of revenue) and retention, leadership transition, and other professional costs (included in selling, general and administrative expenses) associated with the restructuring activities. Lease-related impairments and modifications, if any, are accounted for under ASC 842 (included in other income/expenses). 29 NOTE 16 - 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 for all of the outstanding shares of the Series A Preferred Stock. Dividends 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”). During the six-month period ended September 30, 2024 the Company paid $ 25 in dividends to the holders of the Series A Preferred Stock, which included d ividends for the period ended March 31, 2024, plus accrued dividends through April 2, 2024. NOTE 17 - ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME Comprehensive (loss) income includes net loss and foreign currency translation gains and losses. The accumulated balances for each classification of other comprehensive income for the six-month period ended September 30, 2025 are as follows (in thousands): Foreign currency translation adjustment Accumulated other comprehensive (loss) income Balance at April 1, 2025 $ ( 8,850 ) $ ( 8,850 ) Current period change 32,312 32,312 Balance at September 30, 2025 $ 23,462 $ 23,462 The accumulated balances for each classification of other comprehensive loss for the six-month period ended September 30, 2024 are as follows (in thousands): Foreign currency translation adjustment Accumulated other comprehensive loss Balance at April 1, 2024 $ ( 985 ) $ ( 985 ) Current period change ( 379 ) ( 379 ) Balance at September 30, 2024 $ ( 1,364 ) $ ( 1,364 ) 30 NOTE 18 - 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): Three Months Ended September 30, Six Months Ended September 30, 2024 2025 2024 2025 Total revenues $ 77,018 $ 111,679 $ 152,448 $ 215,800 Total cost of revenues 35,675 49,090 71,457 96,730 Selling and marketing expenses 9,397 19,402 18,709 36,999 General and administrative expenses 25,132 32,518 67,942 65,794 Development costs incurred 6,059 8,934 11,273 17,493 Development costs capitalized ( 2,624 ) ( 4,740 ) ( 4,737 ) ( 8,442 ) Depreciation and amortization 2,806 2,231 5,466 5,021 Interest income 168 262 472 458 Interest expense, net ( 4,042 ) ( 6,977 ) ( 6,733 ) ( 13,763 ) Other income (expense), net 1,674 ( 546 ) 1,050 ( 1,789 ) Income tax expense ( 256 ) ( 1,271 ) ( 1,309 ) ( 1,633 ) Net loss before non-controlling interest ( 1,883 ) ( 4,288 ) ( 24,182 ) ( 14,522 ) Non-controlling interest ( 5 ) — ( 18 ) — Preferred stock dividend — — ( 25 ) — Net loss attributable to common stockholders $ ( 1,888 ) $ ( 4,288 ) $ ( 24,225 ) $ ( 14,522 ) The following table summarizes revenues by geographic region (in thousands): Three Months Ended September 30, Six Months Ended September 30, 2024 2025 2024 2025 North America $ 21,255 $ 41,243 $ 42,396 $ 78,668 Israel 11,751 14,566 22,411 27,471 Africa 24,178 26,832 48,578 52,287 Europe and Middle East 9,178 13,042 17,043 25,394 Australia 5,508 10,651 11,561 21,269 Other 5,148 5,345 10,459 10,711 $ 77,018 $ 111,679 $ 152,448 $ 215,800 31 The following table summarizes long-lived assets by geographic region (in thousands): March 31, 2025 September 30, 2025 North America $ 13,051 $ 15,470 Israel 2,249 1,715 Africa 32,391 34,247 Europe and Middle East 4,824 5,617 Australia 825 725 Other 4,671 5,503 $ 58,011 $ 63,277 NOTE 19 - INCOME TAXES The Company records its interim tax provision based upon a projection of the Company’s annual effective tax rate (“AETR”). This AETR is applied to the year-to-date consolidated pre-tax income to determine the estimated interim provision for income taxes before discrete items. The Company updates the AETR on a quarterly basis as the pre-tax income projections are revised and tax laws are enacted. The effective tax rate (“ETR”) each period is impacted by a number of factors, including the relative mix of domestic and foreign earnings and adjustments to recorded valuation allowances. The currently forecasted ETR may vary from the actual year-end due to the changes in these factors. Three Months Ended September 30, Six Months Ended September 30, 2024 2025 2024 2025 Domestic pre-tax book loss $ ( 7,136 ) $ ( 8,204 ) $ ( 23,611 ) $ ( 18,549 ) Foreign pre-tax book (expense) income 5,509 5,187 738 5,660 Total loss before income taxes ( 1,627 ) ( 3,017 ) ( 22,873 ) ( 12,889 ) Income tax expense ( 256 ) ( 1,271 ) ( 1,309 ) ( 1,633 ) Net loss before non-controlling interest $ ( 1,883 ) $ ( 4,288 ) $ ( 24,182 ) $ ( 14,522 ) Effective tax rate ( 15.73 ) % ( 42.13 ) % ( 5.72 ) % ( 12.67 ) % For the three- and six-month periods ended September 30, 2024 and 2025, the effective tax rate differed from the statutory tax rates primarily due to the mix of domestic and foreign earnings amongst taxable jurisdictions, recorded valuation allowances to fully reserve against deferred tax assets in jurisdictions, and certain discrete items. NOTE 20 - 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. 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. 32 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 condensed consolidated statements of operations. The components of lease cost are as follows (in thousands): Three Months Ended September 30, Six Months Ended September 30, 2024 2025 2024 2025 Short-term lease cost $ 228 $ 396 $ 435 $ 814 Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows (in thousands): Six Months Ended September 30, 2024 2025 Non-cash activity: Right-of-use assets obtained in exchange for lease obligations $ 1,262 $ 1,401 Reduction of right-of-use assets due to MiX Combination (1) $ ( 933 ) $ — (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: September 30, 2025 Weighted-average remaining lease term - operating leases (in years) (1) 4.26 Weighted-average discount rate 7.9 % (1) Including expected renewals where appropriate. Scheduled maturities of operating lease liabilities outstanding as of September 30, 2025 are as follows (in thousands): October 2025 - March 2026 $ 3,611 2027 4,021 2028 2,842 2029 1,940 2030 1,063 Thereafter 2,007 Total lease payments 15,484 Less: Imputed interest ( 2,365 ) Present value of lease payments $ 13,119 NOTE 21 - FAIR VALUE OF FINANCIAL INSTRUMENTS 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 33 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 within the RMB Facilities 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 13). 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 year ended March 31, 2025 and the three and six months ended September 30, 2025. As of September 30, 2025 Fair Value Carrying Amount Total Fair Value Level 1 Level 2 Level 3 Loans to external parties $ 207 $ 207 $ — $ — $ 207 Debt $ 275,111 $ 277,502 $ — $ 277,502 $ — Prepayment derivative $ 3,516 $ 3,516 $ — $ — $ 3,516 As of March 31, 2025 Fair Value Carrying Amount Total Fair Value Level 1 Level 2 Level 3 Loans to external parties $ 194 $ 194 $ — $ — $ 194 Debt $ 273,792 $ 275,179 $ — $ 275,179 $ — Prepayment derivative $ 2,730 $ 2,730 $ — $ — $ 2,730 NOTE 22 - CONCENTRATION OF CUSTOMERS For the three- and six-month periods ended September 30, 2024 and 2025, there were no customers that generated revenues greater than 10% of the Company’s consolidated total revenues or generated greater than 10% of the Company’s consolidated accounts receivable. NOTE 23 - 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. In July 2015, Pointer do Brasil Comercial Ltda. (“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 $ 5,493 as of September 30, 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 regard 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. In April 2025, the Company 34 obtained a tax certificate indicating that the claim is under discussion and should not be recognized as a liability to the Company. For this reason, the Company has not made 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 and September 30, 2025 was $ 609 and $ 515 , respectively. 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. Fleet Connect made a settlement demand of $ 3.45 million, and the parties involved in the complaint are in the process of finalizing the settlement. 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 entered into an agreement with a third party that is negotiating a license from Fleet Connect on behalf of a number of other alleged infringers. Through such third party, a patent license with Fleet Connect was finalized. Fleet Connect has since dismissed both lawsuits, and the dismissals were effective as of October 11, 2025. As a result, both cases are now closed. NOTE 24 - RECENT 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. The Company is evaluating the effect of adopting ASU 2023-09. 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. On September 18, 2025, the FASB released ASU 2025-06, which amends certain aspects of the accounting for, and disclosure of, software costs under ASC 350-40. The amendments also supersede the guidance on website development costs in ASC 350-50 and relocate that guidance, along with the recognition requirements for development costs specific to websites, to ASC 350-40. Although the ASU makes targeted improvements to ASC 350-40, it does not fully align the framework for accounting for internally developed software costs that are subject to ASC 350-40 with the framework applied to software to be sold or marketed externally that is subject to ASC 985-20. The FASB also chose not to amend the guidance on costs of software licenses that are within the scope of ASC 985-20. The amendments “are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.” Early adoption is permitted as of the beginning of an annual reporting period. The Company is evaluating the effect of adopting ASU 2025-06. NOTE 25 - SUBSEQUENT EVENTS RMB Debt As described in Note 13 above, on October 31, 2025, the Company, together with the Obligors, entered into the First Amendment and Restatement Agreement with RMB, pursuant to which the Obligors and RMB agreed to amend and restate the Facilities Agreement to, among other things, (i) extend the final maturity date of RMB Facility A by 12 months to March 31, 2028, (ii) update the interest rates of the RMB Facilities, and (iii) update certain financial covenants to conform to the Facility Agreement. 35