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Item 1A. Risk Factors

2026-06-15 compared with 2025-06-26 · 184 added, 210 removed, 226 unchanged (64% of the section changed)

In addition to the other information contained in this Form 10-K, the following risk factors should be considered carefully in evaluating the Company’s business.

Our business, financial condition or results of operations could be materially and adversely affected by any of these risks.

Additional risks not presently known to the Company or that the Company currently deems immaterial may also adversely affect our business, financial condition or results of operations.

In addition to the other information contained in this Form 10-K, the following risk factors should be considered carefully in evaluating the Company and our business.

The risks described below could materially and adversely affect our business, financial condition or results of operations.

Additional risks and uncertainties not presently known to the Company or that the Company currently deems immaterial may also adversely affect our business, financial condition or results of operations.

The summary below is not exhaustive, and investors should read this “Risk Factors” section in full.

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Risk Factor Summary

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this summary.

Our business is subject to numerous risks and uncertainties, including those described under the section titled “Risk Factors” immediately following this summary.

These risks include, among others, the following:

• We may not realize all of the anticipated benefits of the MiX Combination and the FC Acquisition, and the continued integration of the businesses may involve challenges that could adversely affect our business, financial condition and results of operations.

• We may not fully realize the anticipated benefits of our acquisitions and ongoing business transformation initiatives, and these integration and business transformation initiatives may adversely affect our business, financial condition and results of operations, including our financial reporting and internal control over financial reporting.

• We have incurred significant losses and have a substantial accumulated deficit.

If we cannot achieve profitability, the market price of our common stock could decline significantly.

• We are an international company and may be susceptible to several political, economic, trade and geographic risks that could harm our business.

• Conditions and changes in the global economic environment may adversely affect our business and financial results.

• Disruptions in our global supply chain or failures by subcontractors could materially and adversely affect our business, financial condition and results of operations.

• If we are unable to keep up with rapid technological change, we may be unable to meet the needs of our customers.

• Inaccurate output from AI could result in brand and reputation damage.

• As an international company, we are exposed to macroeconomic, geopolitical, trade, sanctions and regulatory risks that could materially and adversely affect our business and financial results.

• Disruptions in our global supply chain, performance issues with subcontractors, or our reliance on a limited number of suppliers for critical components may materially and adversely affect our ability to manufacture and deliver products and may reduce our revenues and gross margins.

• If we are unable to keep up with rapid technological change, we may be unable to meet the needs of our customers, which could materially and adversely affect our financial condition and results of operations and reduce our ability to increase our market share.

• We use AI and machine learning in our products and operations, but these technologies are rapidly evolving and subject to operational and regulatory risks, and failures or regulatory constraints in their development or use could adversely affect our business, results of operations and reputation.

• We are subject to breaches of our information technology systems, which could damage our reputation, vendor, and customer relationships, and our customers’ access to our services.

• The industry in which we operate is highly competitive, and competitive pressures from existing and new companies.

• The industry in which we operate is highly competitive, and competitive pressures from existing and new companies could have a material adverse effect on our financial condition and results of operations.

• Failure to correctly and efficiently implement ERP and customer relationship management (“CRM”) systems could have a material and adverse effect on our business.

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• Failure to adequately protect our intellectual property rights or defend against third-party claims could materially and adversely affect our business, financial condition and results of operations.

• In connection with the MiX Combination and the FC Acquisition, we have incurred significant additional indebtedness to finance the redemption of our then-outstanding Series A convertible preferred stock and the acquisition of Fleet Complete.

• We have incurred significant additional indebtedness in connection with acquisitions, refinancing activities, business integration initiatives and general corporate financing needs, which could adversely affect our financial condition, liquidity and operating flexibility.

• Our Israeli subsidiaries have incurred significant indebtedness.

• The terms of the A&R Credit Agreement restrict Powerfleet Israel’s and Pointer’s current and future operations, particularly their ability to respond to changes or take certain actions.

• The terms of the A&R Credit Agreement restrict Powerfleet Israel’s and Pointer’s current and future operations, particularly their ability to respond to changes or to take certain actions.

• Goodwill impairment or intangible impairment charges may affect our results of operations in the future.

• We have reported material weaknesses in our internal control over financial reporting.

If we fail to remediate the identified material weaknesses and maintain effective internal control, our ability to produce accurate and timely financial statements could be impaired, which may adversely affect our business, results of operations, and investor and customer confidence.

• Our manufacturers rely on a limited number of suppliers for several significant components and raw materials used in our products.

If we or our manufacturers are unable to obtain these components or raw materials on a timely or cost-effective basis, we will be unable to meet our customers’ orders, which could reduce our revenues, subject us to claims for damages and adversely affect our relationships with our customers.

• Failure to maintain effective internal control over financial reporting could adversely affect our business and investor confidence.

• The use of our products is subject to international regulations.

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• The concentration of common stock ownership among our executive officers and directors could limit the ability of other stockholders of the Company to influence the outcome of corporate transactions or other matters submitted for stockholder approval.

• Our Amended and Restated Certificate of Incorporation, as amended provides that the Court of Chancery of the State of Delaware will be the exclusive forum for certain legal actions between us and our stockholders, which could limit stockholders’ ability to obtain a judicial forum viewed by the stockholders as more favorable for disputes with us or our directors, officers or employees, and the enforceability of the exclusive forum provision may be subject to uncertainty.

and the enforceability of the exclusive forum provision may be subject to uncertainty.

• Provisions of Delaware law or the Charter could delay or prevent an acquisition of the Company, even if the acquisition would be beneficial to our stockholders and could make it more difficult for stockholders to change our management.

Risks Related to Our Business

We may not realize all of the anticipated benefits of the MiX Combination and the FC Acquisition, and the continued integration of the businesses may involve challenges that could adversely affect our business, financial condition and results of operations.

While we have made meaningful progress integrating MiX Telematics and Fleet Complete into our operations, the ultimate success of the MiX Combination and the FC Acquisition remains subject to a number of risks and uncertainties, including our ability to fully integrate their respective operations, technologies and personnel with our existing business.

We believe these transactions will provide strategic benefits and operational synergies, including cost savings, increased scale and enhanced customer offerings, but such benefits may not be realized within the anticipated timeframe, or at all.

Integrating three historically independent businesses continues to present operational, cultural and logistical challenges and may involve unexpected costs or delays.

These challenges include, among other things:

combining operational, financial and administrative functions;

integrating enterprise resource planning (“ERP”) and other IT systems;

harmonizing policies, procedures and internal controls;

aligning product and service offerings;

consolidating facilities and infrastructure;

managing geographically dispersed operations;

retaining and integrating key employees;

aligning human resources practices;

addressing cultural differences;

coordinating sales and marketing strategies;

and preserving relationships with customers, vendors and other business partners.

While progress has been made, any failure to effectively address these matters may adversely affect our ability to realize all of the anticipated benefits of the MiX Combination and the FC Acquisition.

There can be no assurance that the combined business will perform as expected or that the anticipated synergies, including those related to optimizing operating models, eliminating redundancies, reallocating investments or enhancing free cash flow generation, will be fully achieved.

The aggregate consideration paid in connection with the MiX Combination and the FC Acquisition may ultimately exceed the value realized from these transactions, and our assumptions regarding future financial performance, unlevered free cash flow or earnings accretion may prove inaccurate.

If the MiX Combination or the FC Acquisition is not accretive to our earnings per share, the market price of our common stock could be adversely affected.

Additionally, the transactions have resulted in the incurrence of additional indebtedness and the assumption of existing and contingent liabilities of MiX Telematics and Fleet Complete, including potential tax, employee-related and other obligations, which may further limit our operational flexibility and adversely affect our financial condition.

Moreover, the continued integration efforts may divert management’s time and attention from the day-to-day operation of our business, which could disrupt ongoing operations and impede the achievement of our strategic objectives.

If we are unable to fully integrate MiX Telematics and Fleet Complete, or if the combined company does not perform as anticipated, our business, financial condition, results of operations and the market price of our common stock could be materially and adversely affected.

We may not fully realize the anticipated benefits of our acquisitions and ongoing business transformation initiatives, and these integration and business transformation initiatives may adversely affect our business, financial condition and results of operations, including our financial reporting and internal control over financial reporting.

We have completed the acquisitions of MiX Telematics and Fleet Complete and have made progress in integrating these businesses into our operations.

In addition, we recently completed the acquisition of RTS Solutions Africa (Pty) Ltd., and expect to commence integration activities following the fiscal year end.

While integration activities have progressed and certain operational efficiencies and strategic benefits have been realized, integration, optimization and transformation initiatives remain ongoing, and we may not fully realize the anticipated strategic, operational and financial benefits of these transactions within the expected timeframe, or at all.

As a result, during transition periods, we may experience, among other things:

• inefficiencies and increased costs associated with maintaining multiple systems and processes;

• data inconsistencies and challenges in achieving a unified view of customers, operations and financial performance;

• delays in realizing anticipated cost savings, operational efficiencies and revenue synergies;

• challenges in standardizing, implementing and maintaining effective internal controls, including controls over financial reporting;

• system disruptions, data inaccuracies, temporary control deficiencies, reliance on parallel systems and manual processes, which could adversely affect our financial reporting, billing, revenue recognition and customer data integrity during the integration period;

• disruptions to customer relationships or employee retention during ongoing transformation efforts;

• failure, disruption or delays in implementation that could adversely affect our operations and our ability to execute on our strategy.

In addition, our ability to realize the anticipated benefits of these acquisitions and transformation initiatives depends on a number of factors, including our ability to continue executing integration activities effectively, retain key personnel, and manage broader macroeconomic and industry conditions.

If we are unable to effectively complete these integration and optimization efforts, or if such efforts are more costly or time-consuming than anticipated, our business, financial condition and results of operations could be materially and adversely affected.

We have incurred significant losses and have a substantial accumulated deficit.

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As of March 31, 2025, and March 31, 2026, we had cash (including restricted cash) and cash equivalents of $48.8 million and $40.8 million, respectively, and working capital of $18.1 million and $21.2 million, respectively.

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

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

We incurred net losses attributable to common stockholders of approximately $(16.9) million, $(17.3) million, $(19.6) million, and $(51.0) million for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024 and the year ended March 31, 2025, respectively, and have incurred additional net losses since inception.

At March 31, 2024, and March 31, 2025, we had an accumulated deficit of approximately $154.8 million and $205.8 million, respectively.

Our ability to increase our revenues from the sale of our solutions will depend on our ability to successfully implement our growth strategy and the continued expansion of our markets.

If our revenues do not grow or if our operating expenses continue to increase, we may not be able to become profitable, and the market price of our common stock could decline.

We are an international company and may be susceptible to several political, economic, trade and geographic risks that could harm our business.

We are dependent on sales to customers outside the United States.

Our international sales are likely to account for a significant percentage of our products and services revenue for the foreseeable future.

As a result, the occurrence of any international, political, economic or geographic event (for example, restrictions on international trade, imposition of tariffs, global supply chain disruptions, inflation and other cost increases, and the conflict in the Middle East, could result in a significant decline in our revenue.

In addition, compliance with complex foreign and U.S.

laws and regulations that apply to our international operations will increase our cost of doing business in international jurisdictions.

These numerous and sometimes conflicting laws and regulations include internal control and disclosure rules, data privacy and filtering requirements, anti-corruption laws, such as the Foreign Corrupt Practices Act, and other local laws prohibiting corrupt payments to governmental officials, and anti-competition regulations, among others.

Violations of these laws and regulations could result in fines and penalties, criminal sanctions against us, our officers, or employees, prohibitions on the conduct of our business and on our ability to offer our products and services in one or more countries, and could also materially affect our brand, international expansion efforts, ability to attract and retain employees, business, and operating results.

Although we plan to implement policies and procedures

designed to ensure compliance with these laws and regulations, there can be no assurance that our employees, contractors, or agents will not violate our policies.

Some of the risks and challenges of doing business internationally include:

• unexpected changes in regulatory requirements;

• fluctuations in international currency exchange rates including its impact on unhedgeable currencies and our forecast variations for hedgeable currencies;

• imposition of tariffs and other barriers and restrictions;

• sanctions and export regulations;

• management and operation of an enterprise spread over various countries;

• the burden of complying with a variety of laws and regulations in various countries;

• application of the income tax laws and regulations of multiple jurisdictions, including relatively low-rate and relatively high-rate jurisdictions, to our sales and other transactions, which results in additional complexity and uncertainty;

• the conduct of unethical business practices in certain developing countries;

• general economic and geopolitical conditions, including inflation and trade relationships;

• war and acts of terrorism;

• kidnapping and high crime rate;

• natural disasters or pandemics (for example, the COVID-19 pandemic);

• availability of U.S.

dollars especially in countries with economies highly dependent on resource exports, particularly oil;

• changes in export regulations.

While these factors and the impacts of these factors are difficult to predict, any one or more of them could adversely affect our business, financial condition and results of operations in the future.

Conditions and changes in the global economic environment may adversely affect our business and financial results.

The global economy continues to be adversely affected by stock market volatility, tightening of credit markets, concerns of inflation, restrictions on international trade, adverse business conditions and liquidity concerns.

These events and the related uncertainty about future economic conditions could negatively impact our customers and, among other things, postpone their decision-making, decrease their spending and jeopardize or delay their ability or willingness to make payment obligations, any of which could adversely affect our business and results of operations.

Uncertainty about current global economic conditions, in particular as a result of the continued supply chain disruptions, inflation and other cost increases, and the conflict in the Middle East, could also adversely affect our business and results of operations.

In addition, restrictions on international trade, such as tariffs and other controls on imports or exports of goods, technology or data, can materially adversely affect our business and supply chain.

The impact can be particularly significant if these restrictive measures apply to countries and regions where we derive a significant portion of our revenues and/or have significant supply chain operations.

Restrictive measures can increase the cost of our products and can require us to take various actions, including changing suppliers, restructuring business relationships and operations, ceasing to offer and distribute affected products, services and third-party applications to our customers, and increasing the prices of our products and services.

Changing our business and supply chain in accordance with new or changed restrictions on international trade can be expensive, time-consuming and disruptive to our business and results of operations.

Such restrictions can be announced with little or no advance notice, which can create uncertainty, and we may not be able to effectively mitigate any or all adverse impacts from such measures.

Beginning in the second quarter of 2025, new U.S.

tariffs were announced, including additional tariffs on imports from China, Taiwan, Vietnam and the EU, among others.

In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S.

and other retaliatory measures.

Various modifications, suspensions and delays to the U.S.

tariffs have been announced and further changes are expected to be made in the future, which may include additional sector-based tariffs or other measures.

The ultimate impact remains uncertain and will depend on several factors, including whether additional or

incremental U.S.

tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures.

If disputes and conflicts further escalate, actions by governments in response could be significantly more severe and restrictive.

Any of the foregoing could materially adversely affect our business, results of operations, financial condition and stock price.

During periods of economic downturn, our customers may decrease their demand for AIoT solutions, as well as the maintenance, support and consulting services we provide.

This slowdown may have an adverse effect on the wireless solutions industry in general and on demand for our products and services, but the magnitude of that impact is uncertain.

Our future growth is dependent, in part, on the demand for our products and services.

Prolonged weakness in the economy may cause business enterprises to delay or cancel wireless solutions projects, reduce their overall wireless solutions budgets and/or reduce or cancel orders for our services.

This, in turn, may lead to longer sales cycles, delays in purchase decisions, and payment and collection issues, and may also result in price pressures, causing us to realize lower revenues and operating margins.

Additionally, if our customers cancel or delay their wireless solutions initiatives, our business, financial condition and results of operations could be materially and adversely affected.

If the current uncertainty in the general economy does not change or continue to improve, our business, financial condition and results of operations could be harmed.

Disruptions in our global supply chain or failures by subcontractors could materially and adversely affect our business, financial condition and results of operations.

Our ability to manufacture and deliver products in a timely, cost-effective and high-quality manner is dependent on a complex, global supply chain and on subcontractors for key manufacturing and fulfillment operations.

We source a significant number of components—including semiconductors and telecommunications hardware—from a globally distributed network of suppliers and rely on third-party subcontractors for product assembly, testing and logistics.

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

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

We incurred net losses attributable to common stockholders of approximately $17.3 million, $19.6 million, $51.0 million, and $20.6 million for the year ended December 31, 2023, the three months ended March 31, 2024 and the years ended March 31, 2025 and 2026, respectively, and have incurred additional net losses since inception.

As of March 31, 2025 and March 31, 2026, we had an accumulated deficit of approximately $205.8 million and $226.3 million, respectively.

Our ability to increase revenue from the sale of our solutions depends on, among other things, our ability to successfully execute our growth strategy and the continued expansion of our markets.

If our revenue does not grow or if our operating expenses continue to increase, we may not be able to achieve or sustain profitability, and the market price of our common stock could decline.

As an international company, we are exposed to macroeconomic, geopolitical, trade, sanctions and regulatory risks that could materially and adversely affect our business and financial results.

We are dependent on sales to customers outside the United States and international sales are expected to account for a significant percentage of our products and services revenue for the foreseeable future.

As a result, the occurrence of international, political, economic or geographic events (including restrictions on international trade, imposition of tariffs, inflation and other cost increases, global supply chain disruptions, and regional conflicts) may result in a significant decline in our revenue.

The global economy continues to be adversely affected by stock market volatility, tightening credit markets, inflationary pressures, restrictions on international trade, adverse business conditions and liquidity concerns.

These conditions and the related uncertainty may negatively affect our customers and could, among other things, delay purchasing decisions, reduce customer spending and impair customers’ ability or willingness to satisfy their payment obligations.

Restrictions on international trade (including tariffs and other controls on imports or exports of goods, technology or data) can materially and adversely affect our business and supply chain and may require us to take various actions, including changing suppliers, restructuring business relationships and operations, or increasing prices.

There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on our business.

Changes in the legal basis for, scope of, or enforcement posture relating to tariffs and other trade restrictions could also create compliance uncertainty and increase costs.

Given our global operations, we may be exposed to risks that our products or services may be provided, directly or indirectly, to restricted parties or jurisdictions, including through third-party distributors, resellers, partners or other intermediaries that may not fully comply with applicable sanctions and export control laws and regulations.

Changes in sanctions or export control regimes may require us to exit certain markets, terminate customer relationships or modify our operations, and any actual or perceived violations of such laws and regulations could result in significant fines, penalties, civil or criminal liability, restrictions on operations and reputational damage.

Compliance with complex foreign and U.S.

laws and regulations applicable to our international operations may increase our cost of doing business.

These laws and regulations include, among others, data privacy and localization rules, anti-corruption laws (including the U.S.

Foreign Corrupt Practices Act), export controls, economic and trade sanctions, and competition laws.

These laws and regulations are complex, evolving and, in some cases, subject to differing interpretations and enforcement priorities across jurisdictions.

As a result, we may face increased compliance costs and operational burdens, including the need to implement additional policies, controls and procedures.

Any actual or alleged noncompliance with these laws and regulations could result in significant fines, penalties, civil or criminal sanctions, restrictions on or prohibitions against conducting our business and limitations on our ability to offer our products and services in one or more countries.

In addition, any such violations or enforcement actions could materially and adversely affect our brand, international expansion efforts, business and operating results.

While we plan to implement policies and procedures designed to promote compliance with applicable laws and regulations, there can be no assurance that our employees, contractors or agents will comply with our policies or that such policies and procedures will be effective in preventing or detecting violations.

If geopolitical tensions, disputes or conflicts further escalate, governmental responses may become significantly more severe and restrictive.

Any of the foregoing could materially and adversely affect our business, results of operations, financial condition and stock price.

Disruptions in our global supply chain, performance issues with subcontractors, or our reliance on a limited number of suppliers for critical components may materially and adversely affect our ability to manufacture and deliver products and may reduce our revenues and gross margins.

Our ability to manufacture and deliver products in a timely, cost-effective and high-quality manner is dependent on a complex global supply chain, subcontractors for key manufacturing and fulfillment operations, and a limited number of suppliers for certain significant components and raw materials.

Any disruption or failure at any point in this network may materially impair our ability to meet customer demand.

The availability of certain critical components, particularly semiconductors, remains constrained due to global supply chain imbalances, capacity limitations and geopolitical tensions.

Although conditions in the semiconductor market have stabilized somewhat, the broader supply chain remains subject to risks, including extended lead times, input cost inflation, production bottlenecks and macroeconomic disruptions.

Events such as trade restrictions, tariffs, sanctions, natural disasters, regional conflicts and labor shortages continue to affect both our direct suppliers and upstream vendors.

In addition, we depend on subcontractors to manufacture and deliver finished products to customers.

If these subcontractors experience quality issues, production shortfalls, labor disruptions or financial instability, our product quality, delivery timelines and customer satisfaction may suffer.

The consolidation of third-party manufacturers within the electronic component industry may reduce our supplier options and increase pricing leverage in favor of those vendors, potentially resulting in higher manufacturing costs.

If we are unable to pass those costs on to customers, our gross margins and profitability may be adversely affected.

There is also intense competition for access to the most qualified and reliable subcontractors.

If we are unable to maintain access to such partners or if their performance deteriorates, we may face significant challenges in scaling production or ensuring service-level commitments.

Any resulting failure to fulfill customer orders on time and in accordance with contractual terms could lead to business interruptions, loss of key accounts, reputational harm, damage claims and reduced revenue.

While we continuously monitor our supply chain and subcontractor performance and seek to diversify sources of supply where feasible, there can be no assurance that we will be able to effectively mitigate these risks.

If we are unable to manage ongoing or future disruptions in our supply chain or subcontractor network, our business, financial condition, and results of operations could be materially and adversely affected.

We source a significant number of components, including semiconductors and telecommunications hardware, from a globally distributed network of suppliers and rely on third‑party subcontractors for product assembly, testing and logistics and may be subject to export controls, import restrictions and other regulatory requirements affecting sourcing, shipment and end use of such components.

The availability of certain critical components remains subject to a variety of risks, including extended lead times, input cost inflation, production bottlenecks, geopolitical tensions, trade restrictions, tariffs, sanctions, natural disasters, regional conflicts and labor shortages.

We also rely on a limited number of suppliers for certain significant components and raw materials.

This reliance involves a variety of risks, including unavailability of materials, supply and delivery interruptions, variability in quality and component price volatility due to supply constraints, inflationary pressures and changes in trade policy, including tariffs and other import or export restrictions.

If subcontractors experience quality issues, production shortfalls, labor disruptions or financial instability, our product quality, delivery timelines and customer satisfaction may suffer, and we may face damage claims, loss of key accounts, reputational harm and reduced revenue.

In addition, if we are unable to pass increased costs on to customers, our gross margins and profitability may be adversely affected.

While we monitor our supply chain and seek to diversify sources where feasible, there can be no assurance that we will be able to effectively mitigate these risks.

If we are unable to keep up with rapid technological change, we may be unable to meet the needs of our customers, which could materially and adversely affect our financial condition and results of operations and reduce our ability to increase our market share.

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For example, it is common for research and development projects to encounter delays due to unforeseen problems, resulting in low initial volume production, fewer product features than originally considered desirable and higher production costs than initially budgeted, any of which may result in lost market opportunities.

In addition, these new products

may not adequately meet the requirements of the marketplace and may not achieve any significant degree of market acceptance.

In addition, these new products may not adequately meet the requirements of the marketplace and may not achieve any significant degree of market acceptance.

If our efforts do not lead to the successful development, marketing and release of new products that respond to technological developments or changing customer needs and preferences, our revenues and market share could be materially and adversely affected.

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Any of the foregoing could materially and adversely affect our financial condition and results of operations and reduce our ability to increase our market share.

Inaccurate output from AI could result in brand and reputation damage.

We have integrated AI and machine learning technologies into certain products and operational processes.

While these technologies offer the potential for significant enhancements in performance, decision-making and customer insights, they also present material risks, including algorithmic bias, data integrity issues and lack of transparency or explainability.

Inaccurate or unpredictable AI-generated outputs could result in operational failures, reputational damage, regulatory scrutiny or legal liability.

Additionally, evolving AI regulations, such as the EU AI Act and prospective U.S.

federal guidance, may impose additional compliance obligations, which could increase operational costs and limit certain product capabilities.

We use AI and machine learning in our products and operations, but these technologies are rapidly evolving and subject to operational and regulatory risks, and failures or regulatory constraints in their development or use could adversely affect our business, results of operations and reputation.

We have integrated AI and machine learning technologies into certain of our products and operational processes and expect to expand such capabilities.

AI technologies are complex, rapidly evolving and subject to significant uncertainty.

The development, deployment and use of AI-enabled features present operational, legal, regulatory, reputational and competitive risks that may be difficult to anticipate or fully mitigate, including risks associated with the use of such technologies in safety-critical, compliance-sensitive or mission-critical environments.

AI-enabled features may not perform as intended and may generate inaccurate, incomplete or misleading outputs, including due to flawed algorithms, model limitations, inadequate training data, bias, “hallucinations,” or improper human oversight.

If AI-driven recommendations or analyses are relied upon by customers in making operational, compliance, safety or other business decisions, errors or performance failures could result in service disruptions, reduced customer satisfaction, increased support costs, contractual disputes, loss of customers, claims of damages, and reputational harm.

In addition, the effectiveness of AI capabilities may degrade over time as data patterns change, models drift, or as adversaries attempt to exploit model behavior.

Our use of AI depends on the availability, quality, and lawful processing of data, including data received from customers, devices and third-party sources.

Limitations on data access, data quality issues, or restrictions arising from privacy, data protection, data localization, cybersecurity or sector-specific rules may reduce the effectiveness of AI models or prevent us from offering certain AI-enabled functionality in particular jurisdictions or to certain customers.

If we fail to appropriately secure data used in AI systems, implement effective governance controls, or comply with applicable privacy and data protection requirements, we could be subject to regulatory investigations, enforcement actions, fines, litigation, remediation costs and reputational damage and could be required to restrict, suspend or discontinue certain AI-enabled features in some jurisdictions or customer environments.

The regulatory landscape for AI is rapidly developing and uncertain, with new and evolving laws, regulations, standards and enforcement approaches emerging across jurisdictions.

These frameworks may impose additional obligations relating to transparency, explainability, bias testing, documentation, risk assessments, incident reporting, human oversight, and limitations on certain uses of automated decision-making.

For example, the European Union Artificial Intelligence Act (the “EU AI Act”) entered into force on August 1, 2024 and established a comprehensive, risk-based governance framework for AI in the European Union (“EU”).

The majority of its substantive requirements will apply starting August 2, 2026, with additional requirements applying on a staggered basis thereafter depending on the system type and the company’s role (including as a provider, deployer, importer or distributor).

The EU AI Act applies to companies that develop, use and/or provide AI in the EU and includes requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security, accuracy, general purpose AI and foundation models, and provides for fines of up to 7% of global annual turnover for noncompliance.

In the United States, several states have proposed or enacted laws addressing the development and use of AI technologies, such as California’s regulations under the California Consumer Privacy Act (the “CCPA”) regarding the use of automated decision-making and Colorado’s Artificial Intelligence Act, which will require developers and deployers of “high-risk” AI systems to implement certain safeguards against algorithmic discrimination.

Compliance with these requirements may require significant management attention and increase costs, delay product development and deployment, and necessitate changes to our products, business practices, contracting approaches and go-to-market strategies.

We may also rely on third-party technologies and services to develop or deliver AI-enabled capabilities.

Any interruption, degradation, change in terms, pricing increases, service limitations, security incident, or regulatory restriction affecting these third parties could adversely impact our products and services.

The development and deployment of AI technologies are areas of intense competition, and our competitors or other third parties may develop or deploy AI capabilities more quickly or effectively than us, which could put us at a competitive disadvantage.

If we are unable to develop, integrate, offer or deploy AI or machine learning technologies in a timely or cost-effective manner, or if our offerings are not competitive in terms of performance, quality or functionality, our business, operations, reputation and financial results could be adversely affected.

Lastly, public perception and customer acceptance of AI technologies are evolving and may be influenced, by concerns about privacy, fairness, accountability, or safety.

If we are unable to maintain customer trust in our AI-enabled solutions, demonstrate appropriate controls, or clearly communicate the role of human oversight, we may lose our competitive position.

Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.

We are subject to breaches of our information technology systems, which could damage our reputation, vendor, and customer relationships, and our customers’ access to our services.

As a result, we face an increasing risk of cybersecurity threats, including ransomware attacks, insider threats and advanced persistent threats, some of which may be sponsored by nation-state actors.

We rely extensively on information technology systems, cloud infrastructure and third-party service providers to support critical business operations, including customer and financial data management and the collection, transmission, storage and processing of data generated by connected devices and sensors deployed in customer environments.

As a result, we face an increasing risk of cybersecurity threats, including ransomware, phishing, social engineering, business email compromise and advanced persistent attacks.

Despite our security measures, our information technology systems have been, and may continue to be, subject to cybersecurity threats and incidents.

Any successful breach could result in unauthorized access to sensitive data, business interruption, financial loss or reputational harm.

Furthermore, we are subject to various data protection laws and regulations, including the General Data Protection Regulation, the California Consumer Privacy Act and other similar international regimes.

Cybersecurity incidents may result in unauthorized access to systems or data, operational disruption, theft or diversion of funds, loss of confidential information, regulatory exposure, financial losses and reputational damage.

Furthermore, we are subject to various data protection laws and regulations, including the General Data Protection Regulation, the CCPA and other similar international regimes.

Noncompliance or breach incidents may result in significant financial penalties, remediation costs, regulatory investigations and private litigation.

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We attempt to differentiate our solutions by continuing to innovate and by offering a choice of communication mode, patented battery management technology, sensor options, and installation configurations.

If we do not keep pace with product and technology advances, including the development of superior products by our competitors, or if we are unable to otherwise compete successfully against our competitors, there could be a material adverse effect on our competitive position, revenues and prospects for growth, including due to competitors’ ability to obtain or deploy AI models, data, compute infrastructure or strategic partnerships on more favorable terms.

As a result, our financial condition and results of operations could be materially and adversely affected.

Failure to correctly and efficiently implement ERP and customer relationship management (“CRM”) systems could have a material and adverse effect on our business.

We have started the process of implementing an integrated ERP and CRM system, starting with our North American and European businesses, leveraging the systems used by Fleet Complete.

The overall aim is to have all of our businesses on the same ERP and CRM to enable management to achieve enhanced quality, reliability and timeliness of information, improve integration and visibility of information from different countries and optimize global management of corporate processes.

The adoption of these systems, which will replace the various accounting systems within the individual operations, poses several challenges relating to, among other things, project governance, migration of data, potential instability of existing systems, changes to processes and controls, communication of new procedures, training of personnel and maintaining an effective control environment.

We are aware of the potential risks associated with a global system implementation and intend to adopt mitigation plans and contingency plans, in order to ensure business continuity.

However, there is no assurance that the ERP and CRM systems will be successfully implemented and failure to do so could have a material adverse effect on our operations and ability to execute on our strategy.

We have completed the implementation of an integrated ERP and CRM system across our North American and certain European operations and are currently planning the next phase of rollout to the remaining European and Australian operations.

While the implementation across our North American and certain European operations have been completed, the continued expansion of these systems into additional regions and operations continues to present a number of risks and challenges, including those relating to project governance, migration and integrity of data, potential instability or disruption of existing systems, changes to business processes and internal controls, communication and adoption of new procedures, training of personnel, cybersecurity considerations, and the maintenance of an effective control environment throughout that transition process.

In addition, the ongoing optimization, integration and stabilization of the implemented systems may require significant management attention and resources.

Although we have adopted, and intend to continue adopting, mitigation and contingency plans designed to support business continuity and reduce implementation risk, there can be no assurance that future phases of the ERP and CRM system rollout will be completed successfully, on schedule, or without operational disruption or increased costs.

Any failure, delay, disruption or ineffective implementation could adversely affect our operations, financial reporting processes, internal controls, customer service capabilities and ability to execute our strategic objectives, which could have a material adverse effect on our business, financial condition and results of operations.

The international scope of our business exposes us to risks associated with foreign exchange rates, currency fluctuations and economic instability in certain emerging markets.

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Recruiting, onboarding and retaining high-performing channel partners require considerable time, effort and financial investment.

We must provide ongoing training and technical support to ensure that our partners possess the necessary product knowledge and capabilities to effectively position our offerings.

As we expand our business and diversify our portfolio, the management and oversight of this partner ecosystem becomes increasingly complex and resource-intensive.

To stay ahead of these challenges, we must continue to invest in the development of robust governance structures, compliance protocols, performance management systems and scalable partner enablement programs.

There can be no assurance that we will succeed in doing so, and failure to maintain a consistently high-performing channel may negatively impact our ability to execute our go-to-market strategy.

We provide training and technical support to help our partners develop the necessary product knowledge and capabilities to position our offerings effectively.

As we expand our business and diversify our portfolio, the management and oversight of this partner ecosystem will become increasingly complex and resource-intensive.

To stay ahead of these challenges, we will need to continue to invest in the development of governance structures, compliance protocols, performance management systems and scalable partner enablement programs.

There can be no assurance that our efforts will be successful, and any failure to maintain a consistently high-performing channel partner network could adversely affect our ability to execute our go-to-market strategy.

We cannot assure you that our existing channel partners will maintain their historical performance levels, that we will be able to retain or grow these relationships on favorable terms or that new partners will be successfully recruited or onboarded.

If we are unable to establish, maintain or grow effective distribution relationships, or if our key partners fail to meet expectations or cease carrying our products, our revenues, operating margins, market share and long-term strategic objectives could be materially and adversely affected.

Our revenue may be adversely affected if we lose one or more significant customers or if such customers reduce or delay purchases.

A portion of our revenue is derived from a limited number of significant customers and multi-year customer arrangements.

As a result, our operating results may be materially and adversely affected by changes in the business, financial condition or purchasing decisions of these customers.

Our largest customers may account for a meaningful percentage of our total revenue in any given period, and the composition of our customer base may fluctuate from period to period due to the timing, size and duration of customer contracts.

In addition, certain of our customer arrangements are subject to renewal, renegotiation or termination, and may include volume-based pricing, minimum purchase commitments, termination rights or other provisions that could adversely affect our revenue predictability.

The loss of, or a significant reduction in business from, one or more key customers—whether due to competitive pressures, consolidation within our customer base, changes in customer strategy, financial distress, or other factors—could result in:

• a significant decline in revenue;

• reduced operating margins;

• increased customer acquisition costs to replace lost business;

• adverse impacts on our financial condition and results of operations.

In addition, large enterprise customers often have significant negotiating leverage, which may result in pricing pressure, extended payment terms, higher service expectations or other contractual obligations that could negatively impact our profitability and cash flows.

The composition of our significant customers may change from period to period, which may result in variability in our operating results.

Furthermore, macroeconomic conditions, including economic downturns, inflationary pressures and budget constraints, may cause our customers to delay, reduce or cancel planned purchases of our solutions, which could further increase variability in our revenue and results of operations.

Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.

Failure to adequately protect our intellectual property rights or defend against third-party claims could materially and adversely affect our business, financial condition and results of operations.

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Moreover, others may independently develop technologies or solutions that are substantially equivalent to, or derived from, ours, without violating our proprietary rights.

Furthermore, the intellectual property ownership and license rights, including copyright, surrounding AI technologies have not been fully addressed by courts or national or local laws or regulations, and the use or adoption of third-party AI technologies into our products and services may result in exposure to claims of copyright infringement or other intellectual property misappropriation.

If we do not have sufficient rights to use the data or other material used with, or relied upon by, an AI application, we may incur liability through the alleged violation of applicable laws and regulations, intellectual property, data privacy, or other rights, or contractual obligations.

We may also be subject to disputes with collaborators, contractors or other third parties over ownership or licensing of intellectual property developed through joint efforts, which could result in costly and time-consuming litigation or delays in research, development or commercialization.

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If we are unable to obtain necessary licenses, successfully defend against infringement claims or protect our own intellectual property rights, our ability to develop, commercialize and sell our products could be materially limited, and our financial condition and operating results could be materially and adversely affected.

In connection with the MiX Combination and the FC Acquisition, we have incurred significant additional indebtedness to finance the redemption of our then-outstanding Series A convertible preferred stock and the acquisition of Fleet Complete.

The closing of debt and/or equity financing in an amount sufficient to provide for the redemption in full in cash of all then-outstanding shares of our Series A convertible preferred stock was a condition to closing the MiX Combination.

On March 7, 2024, we, together with certain of our wholly owned subsidiaries, entered into a facilities agreement (the “Facilities Agreement”) with FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB”), pursuant to which RMB agreed to provide us with two term loan facilities in an aggregate principal amount of $85 million, composed of Facility A and Facility B, each with a principal amount of $42.5 million (“RMB Facility A” and “RMB Facility B,” respectively, and collectively, the “RMB Facilities”), the proceeds of which could be used to redeem all the then-outstanding shares our Series A convertible preferred stock and for general corporate purposes.

We have incurred significant additional indebtedness in connection with acquisitions, refinancing activities, business integration initiatives and general corporate financing needs, which could adversely affect our financial condition, liquidity and operating flexibility.

In connection with the MiX Combination, the acquisition of Fleet Complete and related refinancing, and integration and transformation activities, we entered into and amended various credit facilities.

These financing arrangements have been used to fund acquisition consideration, redeem outstanding preferred equity securities, refinance existing indebtedness, support integration and transformation initiatives and provide additional working capital and operational liquidity.

On March 7, 2024, we, together with certain of our wholly owned subsidiaries, entered into a facilities agreement (the “Facilities Agreement”) with FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB”), pursuant to which RMB agreed to provide us with two term loan facilities in an aggregate principal amount of $85 million, composed of Facility A and Facility B, each with a principal amount of $42.5 million (“RMB Facility A” and “RMB Facility B,” respectively, and collectively, the “RMB Facilities”), the proceeds of which could be used to redeem all the then-outstanding shares of our Series A convertible preferred stock and for general corporate purposes.

On March 13, 2024, we drew down all $85 million available under such facilities.

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

Additionally, on September 27, 2024, we entered into a facility agreement (the “Facility Agreement”) with RMB, pursuant to which RMB agreed to provide us with a term loan facility in an aggregate principal amount of $125 million (the “New RMB Term Facility”).

On September 27, 2024, we entered into a facility agreement (the “Facility Agreement”) with RMB, pursuant to which RMB agreed to provide us with a term loan facility in an aggregate principal amount of $125 million (the “New RMB Term Facility”).

On October 1, 2024, we drew down the full amount of the New RMB Term Facility and used the proceeds to pay a portion of the purchase price in the FC Acquisition.

The indebtedness we incurred in connection with the MiX Combination and FC Acquisition will have the effect of, among other things, reducing our flexibility to respond to changing business and economic conditions, will increase our borrowing costs and, to the extent that such indebtedness is subject to floating interest rates, may increase our vulnerability to fluctuations in market interest rates.

The increased levels of indebtedness could also reduce funds available to fund efforts to combine our, MiX Telematics’ and Fleet Complete’s businesses and realize expected benefits of the MiX Combination and the FC Acquisition and/or engage in investments in product development, capital expenditures and other activities and may create competitive disadvantages for the combined company relative to other companies with lower debt levels.

On February 5, 2026, we, together with certain of our wholly owned subsidiaries, entered into a facilities agreement (the “New Facilities Agreement”) with RMB, pursuant to which RMB agreed to provide us and MiX Telematics (the “New RMB Borrowers”) with revolving credit facilities in the aggregate principal amounts of $10 million (“New RMB Facility A”) and 180 million South African rand (“New RMB Facility B” and, together with New RMB Facility A, the “New RMB Facilities”), respectively.

The proceeds of the New RMB Facilities may be used by the New RMB Borrowers for general corporate purposes only.

As a result of these financings, we have materially increased our levels of indebtedness and expanded our reliance on credit facilities to support our business operations, acquisitions and strategic initiatives.

Our indebtedness and related financing arrangements could have the effect of, among other things:

• limiting our ability to obtain additional financing or refinance existing indebtedness on favorable terms or at all;

• increasing our exposure to rising interest rates and fluctuations in SOFR and other benchmark interest rates;

• requiring us to dedicate a substantial portion of our cash flows from operations to debt service obligations, financing costs and covenant compliance requirements;

• reducing our flexibility to respond to changing business, economic and competitive conditions;

• restricting our ability to pursue strategic acquisitions, investments, restructuring initiatives or other corporate opportunities;

• increasing the risk of non-compliance with financial and operational covenants under our financing arrangements;

• placing us at a competitive disadvantage relative to competitors with lower leverage levels or greater financial flexibility.

In addition, the increased leverage associated with our acquisitions and related financing activities may make it more difficult to successfully integrate acquired businesses, including MiX Telematics and Fleet Complete, achieve anticipated synergies and cost savings, execute transformation initiatives and realize the expected benefits of these transactions within anticipated timeframes or at all.

If we are unable to generate sufficient cash flows to service our indebtedness, maintain compliance with applicable covenants or refinance our obligations as they become due, we may be required to seek additional financing, refinance or restructure existing indebtedness, delay or reduce investments and capital expenditures, dispose of assets or pursue other strategic alternatives, any of which may not be available on acceptable terms or at all and could adversely affect our business, financial condition and results of operations.

Our Israeli subsidiaries have incurred significant indebtedness.

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The outstanding amount under the facilities made available pursuant to the Prior Credit Agreement was approximately NIS 40.1 million, or $11.1 million, as of December 31, 2023.

On March 18, 2024, Powerfleet

Israel drew down $30 million in cash under the Hapoalim Term Facilities and used the proceeds to prepay approximately $11.2 million, representing the remaining outstanding balance, of the term loans extended to Powerfleet Israel under the Prior Credit Agreement and distributed the remaining proceeds to Powerfleet.

On December 30, 2024, the Borrowers entered into an amendment to the A&R Credit Agreement, which increased the principal amount available under Hapoalim Facility D from $10 million to $20 million and provides that the total principal amount of Hapoalim Facility D may be distributed to Powerfleet or any of its subsidiaries by no later than December 31, 2025, subject to certain terms and conditions of the A&R Credit Agreement.

On March 18, 2024, Powerfleet Israel drew down $30 million in cash under the Hapoalim Term Facilities and used the proceeds to prepay approximately $11.2 million, representing the remaining outstanding balance, of the term loans extended to Powerfleet Israel under the Prior Credit Agreement and distributed the remaining proceeds to Powerfleet.

On December 30, 2024, the Borrowers entered into an amendment to the A&R Credit Agreement, which increased the principal amount available under Hapoalim Facility D from $10 million to $20 million and provides that the total principal amount of Hapoalim Facility D may be distributed to Powerfleet or any of its subsidiaries by no later than June 30, 2026, subject to certain terms and conditions of the A&R Credit Agreement.

As of March 31, 2026, the Borrowers had utilized $18.4 million under the Hapoalim Revolving Facilities.

The undrawn facility balance at March 31, 2026, was $11.6 million.

Such indebtedness will have the effect, among other things, of reducing Powerfleet Israel’s and Pointer’s flexibility to respond to changing business and economic conditions, will increase our borrowing costs and, because such indebtedness is subject to floating interest rates and exposed to foreign currency fluctuations, may increase Powerfleet Israel’s and Pointer’s vulnerability to fluctuations in market interest and foreign exchange rates.

Such indebtedness will have the effect of, among other things, reducing Powerfleet Israel’s and Pointer’s flexibility to plan for, or respond to, changing business and economic conditions, increasing our borrowing costs and, because such indebtedness is subject to floating interest rates and exposed to foreign currency fluctuations, increasing Powerfleet Israel’s and Pointer’s exposure to fluctuations in market interest and foreign exchange rates.

The A&R Credit Agreement continues to require Powerfleet Israel and Pointer to satisfy various covenants, including negative covenants that directly or indirectly restrict our ability to engage in certain transactions without the consent of the lender.

The indebtedness continues 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 its assets, as well as cross guarantees between Powerfleet Israel and Pointer.

This may also make it more difficult for us to engage in future transactions without the consent of the lender.

The increased levels of indebtedness could also reduce funds available to engage in investments in product development, capital expenditures and other activities and may create competitive disadvantages for us relative to other companies with lower debt levels.

These restrictions and security arrangements may further limit our operational and strategic flexibility, including our ability to engage in future transactions without the consent of the lender.

The increased levels of indebtedness could require us to dedicate cash flow to debt services, thereby reducing the availability of funds to engage in investments in product development, capital expenditures and other activities.

and may also place us at a competitive disadvantage relative to less leveraged competitors.

We may be required to raise additional financing for working capital, capital expenditure, acquisitions or other general corporate purposes.

Our ability to arrange additional financing will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond its control.

Our ability to arrange additional financing will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond our control.

We cannot assure you that we will be able to obtain additional financing on terms acceptable to us or at all.

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Such charges could have a material adverse effect on our results of operations in the period in which they are recorded.

We have reported material weaknesses in our internal control over financial reporting.

Under Section 404 of the Sarbanes-Oxley Act of 2002, we are required to furnish a management certification and an independent auditor attestation regarding the effectiveness of our internal control over financial reporting.

We are required to report, among other things, control deficiencies that constitute a “material weakness” or any changes in internal control that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.

In 2025, we identified two material weaknesses related to:

• Design and execution of controls over journal entries at I.D.

Failure to maintain effective internal control over financial reporting could adversely affect our business and investor confidence.

We previously identified material weaknesses in our internal control over financial reporting, including the design and operating effectiveness of controls over journal entries at I.D.

Systems and Pointer Recuperación de México, S.A.

(“Pointer Mexico”);

• Controls over the financial close and reporting process at Fleet Complete - specifically, the controls to ensure the completeness and accuracy of Fleet Complete’s financial reporting information that is consolidated into Powerfleet’s financial statements.

For a discussion of the material weaknesses and our remediation efforts, see Item 9A, Controls and Procedures, in this Annual Report on Form 10-K.

We successfully remediated the previously disclosed material weaknesses relating to controls over the redemption premium on our convertible redeemable preferred stock, determination of standalone selling price, capitalized software costs and the financial statement close process, as of March 31, 2025.

However, there can be no assurance that our current remediation efforts will be successful or that new material weaknesses will not arise in the future.

If we fail to remediate our existing material weakness or to maintain effective internal control, our ability to produce accurate and timely financial statements could be impaired, which could adversely affect our business, results of operations, and investor and customer confidence.

In addition, the identification and disclosure of any future material weaknesses, even if promptly remediated, could negatively impact market perception and the trading price of our common stock.

We also face risks associated with the cost of establishing effective control over financial reporting, insofar as we expect to continue to incur increased costs related to our control over financial reporting to remediate the above-described material weaknesses and further improve our internal control environment.

Our manufacturers rely on a limited number of suppliers for several significant components and raw materials used in our products.

We rely on a limited number of suppliers for the components and raw materials used in our products.

Although there are many suppliers for most of our component parts and raw materials, we are dependent on a limited number of suppliers for many of our significant components and raw materials.

This reliance involves several significant risks, including:

• unavailability of materials and interruptions in delivery of components and raw materials from our suppliers, which could result in manufacturing delays;

• fluctuations in the quality of components and raw materials;

• increases in the price of components and raw materials due to factors such as supply constraints, inflationary pressures, and changes in trade policy, including the imposition of tariffs or import and export restrictions.

Recent changes in international trade policy have introduced new or increased tariffs on a range of imported materials and components, including those sourced from regions such as China and other key manufacturing hubs.

These tariffs may increase our procurement costs and reduce pricing flexibility, particularly if we are unable to pass on such cost increases to customers.

Moreover, ongoing uncertainty regarding the scope and duration of tariff regimes and other trade barriers may make it more difficult to forecast costs and manage supply chain planning.

If we are unable to mitigate these impacts through alternative sourcing, pricing strategies or supply chain adjustments, our business, financial condition and results of operations could be materially and adversely affected.

In addition, we currently do not have any long-term or exclusive purchase commitments with any of our suppliers.

In addition, our suppliers may enter into exclusive arrangements with our competitors, be acquired by our competitors, or stop selling their products or components to us on commercially reasonable terms or at all.

We may not be able to develop alternative sources for the components and raw materials.

Even if alternate suppliers are available to us or our manufacturers, identifying them is often difficult and time-consuming.

If we or our manufacturers are unable to obtain an ample supply of product or raw materials from our existing suppliers or alternative sources of supply, we may be unable to satisfy our customers’ orders, which could reduce our revenues, subject us to claims for damages and adversely affect our relationships with our customers.

(“Pointer Mexico”), and controls over the financial statement close and reporting process at Fleet Complete.

As discussed in Item 9A, Controls and Procedures, in this Form 10-K, management implemented certain remediation measures and concluded that these material weaknesses were remediated as of March 31, 2026.

However, there can be no assurance that our internal control over financial reporting will continue to operate effectively or that additional material weaknesses or significant deficiencies will not be identified in the future.

Under Section 404 of the Sarbanes-Oxley Act of 2002, we are required to maintain effective internal control over financial reporting and provide management’s assessment, together with an independent auditor’s attestation, regarding the effectiveness of our internal control over financial reporting.

Effective internal control over financial reporting is necessary to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements in accordance with U.S.

generally accepted accounting principles.

If we are unable to maintain effective internal control over financial reporting, or if additional material weaknesses are identified in the future, we may be unable to timely and accurately report our financial results, and there is a risk that material misstatements in our financial statements would not be prevented or detected on a timely basis.

Any such failure could result in restatements of our financial statements, increased regulatory scrutiny, harm to our reputation, reduced investor confidence, and a decline in the market price of our common stock.

The use of our products is subject to international regulations.

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Our operators typically must obtain authorization from each country in which our systems and products are installed.

While in general, operators have not experienced problems in obtaining regulatory approvals to date, the regulatory schemes in each country are different and may change from time to time.

We cannot guarantee that the approvals which our operators have obtained will remain sufficient in the view of regulatory authorities.

In addition, we cannot assure you that third party operators of our systems and products will obtain licenses and approvals in a timely manner in all jurisdictions in which we wish to sell our systems or that restrictions on the use of our systems will not be unduly burdensome.

While, in general, operators have not experienced significant issues in obtaining regulatory approvals to date, regulatory schemes differ by country and may change from time to time.

We cannot assure you that the approvals our operators have obtained will remain sufficient in the view of regulatory authorities.

In addition, we cannot assure you that third-party operators of our systems and products will obtain licenses and approvals on a timely basis in all jurisdictions in which we seek to sell our systems, or that restrictions on the use of our systems will not be burdensome.

The adoption of industry standards that do not incorporate the technology we use may decrease or eliminate the demand for our services or products and could harm our results of operations.

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In the United States, the legal landscape regarding non-competes is rapidly evolving.

In April 2024, the Federal Trade Commission (“FTC”) finalized a rule broadly prohibiting most non-compete clauses, with limited exceptions for senior executives.

In April 2024, the Federal Trade Commission (“FTC”) finalized a rule broadly prohibiting most non-compete clauses, with limited exceptions for certain senior executives.

Although the rule was set to take effect in September 2024, federal courts enjoined its enforcement shortly before implementation.

Following the 2024 U.S.

presidential election, the new presidential administration halted appeals of these rulings and signaled a departure from the prior administration’s position.

The ultimate outcome of the related litigation and any appeals, as well as the potential for future federal or state legislative or regulatory action, remain uncertain.

As a result, the FTC’s non-compete ban is not currently in effect, and its future remains uncertain.

As a result, there is ongoing uncertainty regarding the long-term enforceability of non-competition agreements with employees in the United States.

If future legislation, judicial decisions or regulatory actions further limit or invalidate the use of non-compete agreements, our ability to prevent former employees, who received training and experience through their employment with us, from using their knowledge of our business and operations to compete with us.

Accordingly, there is ongoing uncertainty regarding the long-term enforceability of non-competition agreements with employees in the United States.

If future legislation, judicial decisions or regulatory actions further limit or invalidate the use of non-compete agreements, we may be unable to prevent former employees, who received training and experience through their employment with us, from using their knowledge of our business and operations to compete with us.

Our cash and cash equivalents could be adversely affected by a downturn in the financial and credit markets.

We maintain our cash and cash equivalents with major financial institutions;

however, our cash and cash equivalent balances with these institutions exceed the Federal Deposit Insurance Corporation insurance limits.

While we monitor on a systematic basis the cash and cash equivalent balances in our operating accounts and adjust the balances as appropriate, these balances could be impacted if one or more of the financial institutions with which we deposit our cash and cash equivalents fails or is subject to other adverse conditions in the financial or credit markets.

however, our cash and cash equivalent balances with these institutions exceed Federal Deposit Insurance Corporation insurance limits.

While we monitor the balances in our operating accounts and may adjust the balances as appropriate, these balances could be impacted if one or more of the financial institutions with which we deposit our cash and cash equivalents fails or is subject to other adverse conditions in the financial or credit markets.

To date, we have experienced no loss of principal or lack of access to our invested cash or cash equivalents;

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Since the establishment of the State of Israel in 1948, Israel has experienced numerous armed conflicts with neighboring Arab countries, as well as persistent hostilities involving Iran and Iran-backed groups, including Hezbollah in Lebanon and Hamas in the Gaza Strip.

In the last several years, these conflicts have involved missile strikes against civilian targets in various parts of Israel, particularly in southern Israel where Pointer’s main offices and manufacturing facility are located and have negatively affected business conditions in Israel.

In June 2025, hostilities escalated into direct military conflict between Israel and Iran, further increasing regional instability.

As of the date of this report, the conflict in the Middle East remains ongoing and has had an adverse impact on, and may continue to adversely impact, our supply chain, our ability to manufacture and deliver products in Israel to customers and the stability of our Israeli workforce.

In recent years, these conflicts have involved missile strikes against civilian targets in various parts of Israel, particularly in southern Israel where Pointer’s main offices and manufacturing facility are located and have negatively affected business conditions in Israel.

Hostilities, including acts of war, terrorism and civil unrest in Israel and the broader Middle East, have periodically escalated and may continue or intensify, including through actions by state and non-state actors and through retaliatory measures by governments.

As of the date of this report, the conflict in the Middle East remains ongoing and has had, and may continue to have, an adverse impact on our supply chain, our ability to manufacture and deliver products in Israel to customers and the stability of our Israeli workforce.

Ongoing unrest and political instability in other countries in the region, including Syria, Iraq and Iran, further contribute to uncertainty in the Middle East, and the potential impact of these developments on Israel’s security situation remains unpredictable.

Furthermore, several countries, principally in the Middle East, restrict doing business with Israel and Israeli companies, and additional countries may impose restrictions on doing business with Israel and Israeli companies if hostilities or political instability in the region continues or intensifies.

These restrictions may limit materially our ability to obtain raw materials from these countries or sell our products to companies in these countries.

Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners could have a material adverse effect on our business, operating results and financial condition.

Any downturn in the Israeli economy may also have a significant impact on our business.

Israel’s economy has been subject to numerous destabilizing factors, including a period of rampant inflation in the early to mid-1980’s, low foreign exchange reserves, fluctuations in world commodity prices, military conflicts and civil unrest.

The revenues of certain of our products and services may be adversely affected if fewer vehicles are used as a result of an economic downturn in Israel, an increase in use of mass transportation, an increase in vehicle related taxes, an increase in the imputed value of vehicles provided as a part of employee compensation or other macroeconomic changes affecting the use of vehicles.

These restrictions may materially limit our ability to obtain raw materials from these countries or sell our products to companies located in these countries.

Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its current trading partners could have a material adverse effect on our business, operating results and financial condition.

Any downturn in Israel’s economy may also have a significant impact on our business.

Israel’s economy has been subject to numerous destabilizing factors, including periods of high inflation in the early to mid-1980s, low foreign exchange reserves, fluctuations in global commodity prices, military conflicts and civil unrest.

The revenues of certain of our products and services may be adversely affected if fewer vehicles are used as a result of an economic downturn in Israel, an increased use of mass transportation, increases in vehicle-related taxes, increases in the imputed value of vehicles provided as a part of employee compensation or other macroeconomic changes affecting the use of vehicles.

In addition, our security services significantly depend on Israeli insurance companies mandating subscription to a service such as the Company’s.

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Furthermore, certain employment equity regulations and legislative measures that have been enacted in South Africa impose robust compliance obligations on employers in South Africa, which include establishment of numerical targets for employment equity and development and implementation of an employment equity plan for the next five years.

Failing to achieve applicable B-BBEE and EE objectives could result in financial penalties and could jeopardize our ability to maintain existing business or to secure future business from corporate, governmental or state-owned enterprises that could materially and adversely affect our business, financial condition and results of operations.

Socio-economic inequality in South Africa or regionally may subject us to political and economic risks, which may affect the ownership or operation of our business.

We own significant operations in South Africa.

As a result, we are subject to political and economic risks relating to South Africa.

Although political conditions in South Africa are generally stable, recent geopolitical developments.

including possible sanctions may negatively impact the international sentiment towards South Africa, which may, in turn, materially and adversely affect our business, financial condition and results of operations.

These risks may include changes in legislation, arbitrary interference with private ownership of contract rights, and changes to exchange controls, taxation and other laws or policies affecting foreign trade or investment and could materially and adversely affect our business, financial condition and results of operations.

Any resultant changes in investment ratings, regulations and policies or a shift in political attitudes both within and towards South Africa are beyond our control and could materially and adversely affect our business, financial condition and results of operations.

Failing to achieve applicable B-BBEE and Employment Equity objectives could result in financial penalties and could jeopardize our ability to maintain existing business or to secure future business from corporate, governmental or state-owned enterprises that could materially and adversely affect our business, financial condition and results of operations.

Political and economic conditions in South Africa or regionally may adversely affect the operation of our business.

We have significant operations in South Africa and are therefore subject to political, economic, regulatory and legal risks associated with operating in that jurisdiction.

South Africa has generally maintained stable democratic institutions and a relatively developed legal and financial system compared to many other emerging markets;

however, the country has experienced periods of economic volatility, including fluctuating GDP growth, unemployment levels, inflationary pressures, currency volatility and intermittent electricity supply constraints.

These conditions may increase operating costs, disrupt operations or affect demand for our products and services.

We are also subject to evolving laws and regulations in South Africa, including in areas such as taxation, labor and employment, exchange controls, data protection and privacy, competition law and foreign investment.

Changes in applicable laws or regulatory interpretation, or shifts in enforcement practices, could increase compliance costs, restrict capital flows or otherwise adversely affect our operations.

In addition, fluctuations in the value of the South African rand relative to other currencies may adversely impact our results of operations and the value of cash flows generated in the region.

Broader macroeconomic or geopolitical developments affecting South Africa or emerging markets generally, including changes in investor sentiment or capital market conditions, may also impact our business.

Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.

Risks Related to Our Securities

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The concentration of common stock ownership among our executive officers and directors could limit the ability of other stockholders of the Company to influence the outcome of corporate transactions or other matters submitted for stockholder approval.

As of June 25, 2025, our executive officers and directors beneficially owned, in the aggregate, approximately 5.9% of our outstanding common stock, not including approximately 965,000 shares of common stock that our executive officers and directors may acquire upon the exercise of outstanding options and stock appreciation rights, or if they otherwise acquire additional shares of common stock in the future.

As of June 12, 2026, our executive officers and directors beneficially owned, in the aggregate, approximately 5.2% of our outstanding common stock, not including approximately 920,000 shares of common stock that our executive officers and directors may acquire upon the exercise of outstanding options or if they otherwise acquire additional shares of common stock in the future.

As a result, our officers and directors may have the ability to influence the outcome of all corporate actions requiring stockholder approval, irrespective of how our other stockholders may vote, including the following actions:

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What changed 10-K

Item 1A. Risk Factors