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Item 7. Management’s Discussion and Analysis

2026-06-15 compared with 2025-06-26 · 136 added, 256 removed, 114 unchanged (77% of the section changed)

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Accordingly, some information may appear not to be computed accurately.

We are a global provider of AIoT solutions providing valuable business intelligence for managing high-value enterprise and mid-market assets that improve operational efficiencies.

This section of this Form 10-K discusses our financial condition and results of operations for the fiscal years ended March 31, 2026 and 2025, and year-to-year comparisons between fiscal years 2026 and 2025 in accordance with GAAP.

A discussion of our financial condition and results of operations and our liquidity and capital resources for the fiscal year ended December 31, 2023 and the three months ended March 31, 2025 and 2024 and year-to-year comparisons between the fiscal years ended March 31, 2025 and December 31, 2023, and the three months ended March 31, 2025 and 2024 that are not included in this Form 10-K can be found under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the SEC on June 26, 2025.

We are a global provider of AIoT solutions providing valuable connected business intelligence for managing high-value enterprise and mid-market assets that improve operational efficiencies.

We are headquartered in Woodcliff Lake, New Jersey, with offices located around the globe.

Our Unity data highway and AIoT ecosystem is the centerpiece of our strategy.

Unity has the capability to ingest data from multiple data sources, harmonizing and transforming the dataset, and delivering simply understood insights through a unified SaaS platform and deep integrations with customer business systems.

Unity has the capability to ingest data from multiple data sources, harmonizing and transforming the dataset, and delivering simply understood actionable insights through a unified SaaS platform and deep integrations with customer business systems.

Unity provides mission-critical solutions from warehouse to trailer to vehicle, allowing customers to consolidate suppliers and gain end-to-end control of their operations in a single pane of glass.

Unity enables customers to consume their data in multiple ways, from data-powered applications to unified operations integrations, which provide the ability to improve performance of the asset, the individual in charge of the asset, and the business process, continuously improving our customers’ business performance.

Within the Unity ecosystem, our Powerfleet for Warehouse and Factory AIoT solutions are designed to provide on-premise or in-facility asset and operator management, monitoring, and visibility for warehouse and factory trucks such as forklifts, man-lifts, tuggers and ground support equipment at airports.

These solutions utilize a variety of communications capabilities such as Bluetooth®, WiFi, and proprietary radio frequency technology.

Additionally, within the Unity ecosystem, our Powerfleet for On-Road AIoT solutions are designed to provide bumper-to-bumper AIoT asset management, monitoring, and visibility for over-the-road based assets such as heavy trucks, dry-van trailers, refrigerated trailers and shipping containers and their associated cargo.

Within the Unity ecosystem, our Powerfleet for Warehouse, Yard and Site AIoT solutions are designed to provide on-premise or in-facility asset safety, compliance and operator management, monitoring, and visibility for warehouse and factory trucks such as forklifts, man-lifts, tuggers and ground support equipment at airports.

These solutions utilize a variety of communications capabilities such as Bluetooth®, WiFi, and proprietary radio frequency technology, as well as AI video solutions for pedestrian proximity detection and incident prevention.

Additionally, within the Unity ecosystem, our Powerfleet for On-Road AIoT and AI video solutions are designed to provide bumper-to-bumper AIoT asset management, monitoring, and visibility for over-the-road based assets such as heavy trucks, dry-van trailers, refrigerated trailers and shipping containers and their associated cargo.

These AIoT solutions provide mobile-asset tracking and condition-monitoring solutions to meet the transportation market’s desire for greater visibility, safety, security, and productivity throughout global supply chains.

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The judgments and assumptions used by our management are based on historical experience and other factors that our management believes to be reasonable under the circumstances.

Because of the nature of these judgments and assumptions, actual results could differ significantly from these judgments and estimates, which could have a material

impact on the carrying values of our assets and liabilities and our results of operations.

Because of the nature of these judgments and assumptions, actual results could differ significantly from these judgments and estimates, which could have a material impact on the carrying values of our assets and liabilities and our results of operations.

Our critical accounting estimates, assumptions and judgments that we believe have the most significant impact on our consolidated results are described below.

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We test our goodwill for impairment annually, which is October 1 or when an indicator of impairment exists, by comparing the fair value of the reporting unit to its carrying value.

We test for goodwill impa irment at the reporting unit level on October 1 of each year and between annual tests if a triggering event indicates the possibility of an impairment.

We test for goodwill impairment at the reporting unit level on October 1 of each year and between annual tests if a triggering event indicates the possibility of an impairment.

As of October 1, 2025, we performed a quantitative assessment whereby the fair value of the reporting unit is calculated using a market approach.

The fair value of the reporting unit was substantially more than its carrying value.

For the year ended March 31, 2025, we performed a qualitative assessment of goodwill.

We considered such factors as our market capitalization as of March 31, 2025, and over a certain period of time, macroeconomic conditions, industry and market considerations, and overall financial performance.

The fair value of the reporting unit was substantially more than its carrying value.

For the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025, we did not incur an impairment charge.

During the quarter ended March 31, 2026, we experienced a decline in our market capitalization as a result of a decrease in our stock price, which represented a triggering event requiring our management to perform quantitative goodwill impairment tests.

We performed a quantitative assessment whereby the fair value of our single reporting unit, including the implied control premium, was estimated and compared to our market capitalization as of March 31, 2026 to determine if the fair value is reasonable compared to external market indicators.

Market capitalization is determined by multiplying the number of shares of our common stock outstanding by the market price of our common stock as of the assessment date.

The control premium, or the amount paid by a new controlling shareholder for the benefits resulting from synergies and other potential benefits derived from controlling the acquired company, is determined by utilizing data from publicly available premium studies for similarly situated public company transactions.

As a result of this quantitative assessment, we determined that the fair value of the reporting unit was not less than its carrying amount and thus goodwill was not impaired as of March 31, 2026.

Changes in judgments, assumptions, and estimates could result in significantly different fair value estimates.

For the year ended December 31, 2023, the three months ended March 31, 2024, and the years ended March 31, 2025 and 2026, we did not incur an impairment charge.

Business Combinations

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We recognize identifiable assets acquired and liabilities assumed at their acquisition date fair value.

We used discounted cash flow analyses, to assess certain components of our purchase price allocation.

The fair value of the customer relationships was determined using the multi-period excess earnings method.

The fair value of the tradename and developed technology was determined using an income approach based on the relief from royalty method.

For the fair values, we 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.

During the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill or bargain purchase to the extent we identify adjustments to the preliminary fair values.

Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, any subsequent adjustments are recorded to the Consolidated Statement of Operations.

During the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill or bargain purchase to the extent that we identify adjustments to the preliminary fair values.

Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, any subsequent adjustments are recorded to the consolidated statements of operations.

For the fair value estimates, we used (i) forecasted future cash flows, (ii) historical and projected financial information, (iii) revenue growth rates, (iv) customer attrition rates, (v) royalty rates, and (vi) discount rates, as relevant, that market participants would consider when estimating fair values.

Results of Operations

The following table sets forth certain items related to our Consolidated Statement of Operations as a percentage of revenues for the periods indicated and should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Form 10-K.

The following table sets forth certain items related to our consolidated statements of operations as a percentage of revenues for the periods indicated and should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Form 10-K.

A detailed discussion of the material changes in our operating results is set forth below.

December 31, Three Months Ended

March 31, Year Ended March 31,

2023 2024 2025

Year Ended March 31,

Products 23.6 % 18.9 %

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Total operating expenses 60.8 % 51.1 %

Loss from operations (5.1) % (9.4) % (22.7) % (6.7) % (7.1) %

(Loss) income from operations (7.1) % 4.4 %

Interest income 0.3 % 0.2 %

Interest expense, net 0.7 % (1.2) % (2.1) % (5.5) % (5.6) %

Bargain purchase - Movingdots — % 6.8 % — % — % — %

Other income (expense), net 0.0% — % 0.0% (0.2) % (0.3) %

Interest expense (5.6) % (6.2) %

Other expense (0.3) % (0.9) %

Net loss before income taxes (12.8) % (2.5) %

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Net loss (14.1) % (4.6) %

Accretion of preferred stock (4.3) % (5.3) % (29.6) % — % — %

Preferred stock dividend 0.0% 0.0%

Net loss attributable to common stockholders (14.1) % (4.6) %

Year Ended March 31, 2025 Compared to Year Ended December 31, 2023

Revenues increased by $228.8 million, or 171.1%, to $362.5 million in the year ended March 31, 2025, from $133.7 million in the year ended December 31, 2023.

Revenues from products increased by $35.8 million, or 72.1%, to $85.6 million in the year ended March 31, 2025, from $49.7 million in the year ended December 31, 2023.

The increase in product revenues was primarily due to the MiX Telematics business acquired, which contributed $31.8 million, and the Fleet Complete business acquired, which contributed $9.5 million, in product revenues for the year ended March 31, 2025, offset by lower demand from logistics customers in North America.

Revenues from services increased by $192.9 million, or 229.7%, to $276.9 million in the year ended March 31, 2025, from $84.0 million in the year ended December 31, 2023.

The increase in services revenues was principally due to the MiX Telematics business acquired, which contributed $139.4 million, and the Fleet Complete business acquired, which contributed $49.5 million, in service revenues for the year ended March 31, 2025.

COST OF REVENUES.

Cost of revenues increased by $101.3 million, or 152.0%, to $168.0 million in the year ended March 31, 2025, from $66.7 million in the year ended December 31, 2023.

The MiX Telematics business acquired contributed $71.8 million, and the Fleet Complete business acquired contributed $18.3 million to cost of revenues for the year ended March 31, 2025.

Gross profit was $194.5 million in the year ended March 31, 2025, compared to $67.1 million in the year ended December 31, 2023.

As a percentage of revenues, gross profit increased to 53.7% in the year ended March 31, 2025 from 50.2% in the year ended December 31, 2023.

Cost of products increased by $25.6 million, or 70.2%, to $62.0 million in the year ended March 31, 2025, from $36.4 million in the year ended December 31, 2023.

Gross profit for products was $23.6 million in the year ended March 31, 2025, compared to $13.3 million in the year ended December 31, 2023.

As a percentage of product revenues, gross profit increased to 27.6% in the year ended March 31, 2025 from 26.8% in the year ended December 31, 2023.

The increase in gross profit as a percentage of product revenues was principally due to a larger proportion of sales being driven by higher margin product lines.

Cost of services increased by $75.8 million, or 250.4%, to $106.0 million in the year ended March 31, 2025, from $30.3 million in the year ended December 31, 2023.

The MiX Telematics business acquired contributed $49.5 million, the Fleet Complete business acquired contributed $11.2 million, and the amortization of MiX Telematics and Fleet Complete acquisition-related intangibles contributed $14.8 million to cost of services for the year ended March 31, 2025.

Gross profit for services was $170.9 million in the year ended March 31, 2025, compared to $53.7 million in the year ended December 31, 2023.

As a percentage of service revenues, gross profit decreased to 61.7% in the year ended March 31, 2025 from 64.0% in the year ended December 31, 2023.

The decrease in gross profit as a percentage of revenues was mainly due to the commencement of amortization of MiX Telematics and Fleet Complete acquisition-related intangibles.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

Selling, general and administrative (“SG&A”) expenses increased by $133.1 million, or 186.8%, to $204.4 million for the year ended March 31, 2025, compared to $71.3 million for the year ended December 31, 2023.

The increase was primarily driven by the inclusion of SG&A expenses from the MiX Telematics business acquired, which contributed $73.9 million , and the Fleet Complete business acquired, which contributed $28.0 million.

In addition, the increase reflects $21.3 million in acquisition-related expenses, $4.9 million in integration-related costs, $10.1 million in restructuring charges, and $4.7 million in accelerated stock-based compensation expenses, all incurred during the year ended March 31, 2025.

As a percentage of revenues, SG&A expenses, excluding $41.1 million in acquisition-related, restructuring and accelerated stock-based compensation costs, decreased to 45.0% in the year ended March 31, 2025, from 53.3% in the year ended December 31, 2023.

RESEARCH AND DEVELOPMENT EXPENSES.

Research and development (“R&D”) expenses increased by $7.7 million, or 91.7%, to $16.1 million in the year ended March 31, 2025, compared to $8.4 million in the year ended December 31, 2023, principally due to $5.9 million incurred from the MiX Telematics business acquired, and $2.5 million incurred from the Fleet Complete business acquired, following completion of the transactions.

As a percentage of revenues, R&D expenses decreased to 4.4% in the year ended March 31, 2025, from 6.3% in the year ended December 31, 2023.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.

Net loss attributable to common stockholders was $51.0 million, or $(0.43) per basic and diluted share, for the year ended March 31, 2025, as compared to net loss of $17.3 million, or $(0.49) per basic and diluted share, for the year ended December 31, 2023.

The net loss was primarily the result of $21.3 million in a cquisition-related expenses , $4.9 million in integration-related costs , $10.1 million in restructuring costs, and $14.8 million from the comme

ncement of amortization of MiX Telematics and Fleet Complete acquisition-related intangibles, partially offset by $0.5 million gain in other income from the derivative mark-to-market adjustment .

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Revenues increased by $69.9 million, or 207.2%, to $103.6 million in the three months ended March 31, 2025, from $33.7 million in the same period in 2024.

Revenues from products increased by $9.8 million, or 81.0%, to $21.9 million in the three months ended March 31, 2025, from $12.1 million in the same period in 2024.

The increase in product revenues was primarily due to the MiX Telematics business acquired, which contributed $6.2 million, and the Fleet Complete business acquired, which contributed $4.6 million, in product revenues for the three months ended March 31, 2025, offset by lower demand from logistics customers in North America.

Revenues from services increased by $60.1 million, or 277.5%, to $81.8 million in the three months ended March 31, 2025, from $21.7 million in the same period in 2024.

The increase in services revenues was primarily due to the MiX Telematics business acquired, which contributed $34.6 million, and the Fleet Complete business acquired, which contributed $24.7 million, in service revenues for the three months ended March 31, 2025.

COST OF REVENUES.

Cost of revenues increased by $31.3 million, or 178.7%, to $48.9 million in the three months ended March 31, 2025, from $17.5 million for the same period in 2024.

The MiX Telematics business acquired contributed $18.1 million, and the Fleet Complete business acquired contributed $9.1 million to cost of revenues for the three months March 31, 2025.

Gross profit was $54.8 million in the three months ended March 31, 2025, compared to $16.2 million for the same period in 2024.

As a percentage of revenues, gross profit increased to 52.8% in the three months ended March 31, 2025 from 48.0% in the same period in 2024.

Cost of products increased by $8.6 million, or 90.8%, to $18.2 million in the three months ended March 31, 2025, from $9.5 million in the same period in 2024.

Gross profit for products was $3.7 million in the three months ended March 31, 2025, compared to $2.6 million in the same period in 2024.

As a percentage of product revenues, gross profit decreased to 17.0% in the three months ended March 31, 2025 from 21.2% in the same period in 2024.

The decrease in gross profit as a percentage of product revenues was principally due to a larger proportion of sales being driven by lower margin product lines.

Cost of services increased by $22.7 million, or 282.9%, to $30.7 million in the three months ended March 31, 2025, from $8.0 million in the same period in 2024.

The MiX Telematics business acquired contributed $13.3 million, the Fleet Complete business acquired contributed $5.5 million, and the amortization of MiX Telematics and Fleet Complete acquisition-related intangibles contributed $5.2 million to cost of services for the three months ended March 31, 2025.

Gross profit for services was $51.0 million in the three months ended March 31, 2025, compared to $13.6 million in the same period in 2024.

As a percentage of service revenues, gross profit decreased to 62.4% in the three months ended March 31, 2025 from 63.0% in the same period in 2024.

The decrease in gross profit as a percentage of revenues was mainly due to the commencement of amortization of MiX Telematics and Fleet Complete acquisition-related intangibles.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

SG&A expenses increased by $35.0 million, or 160.3%, to $56.8 million in the three months ended March 31, 2025, compared to $21.8 million in the same period in 2024, principally due to the MiX Telematics business acquired, which contributed $20.6 million, and the Fleet Complete business acquired, which contributed $13.1 million, of SG&A expenses for the three months ended March 31, 2024.

SG&A expenses included $0.4 million in acquisition-related expenses, $2.6 million in integration related expenses and $7.0 million in restructuring costs for the three month s ended March 31, 2025.

As a percentage of revenues, SG&A expenses, excluding $10.1 million in acquisition-related, integration related and restructuring, decreased to 45.0% in the three months ended March 31, 2025, from 64.7% in the same period in 2024.

RESEARCH AND DEVELOPMENT EXPENSES.

R&D expenses increased by $2.9 million, or 143.0%, to $4.9 million in the three months ended March 31, 2025, compared to $2.0 million in the same period in 2024, principally due to $1.6 million incurred from the MiX Telematics business acquired, and $1.3 million incurred from the Fleet Complete business acquired, following completion of the transactions.

As a percentage of revenues, R&D expenses decreased to 4.7% in the three months ended March 31, 2025, from 6.0% in the same period in 2024.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.

Net loss attributable to common stockholders was $12.4 million, or $(0.09) per basic and diluted share, for the three months ended March 31, 2025, as compared to net loss of $19.6 million, or $(0.55) per basic and diluted share, for the same period in 2024.

The net loss was primarily the result of $0.4 million in acquisition-related expenses

, $2.6 million in integration-related costs, $7.0 million in restructuring costs, and $5.2 million from the commencement of amortization of MiX Telematics and Fleet Complete acquisition-related intangibles.

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

Revenues decreased by approximately $2.2 million, or 1.6%, to $133.7 million in 2023 from $135.9 million in 2022.

Revenues from products decreased by approximately $7.2 million, or 12.7%, to $49.7 million in 2023 from $56.9 million in 2022.

The decrease in product revenues was due to decreased product sales in Germany, where we are actively shutting down sales from low margin contracts, large logistics companies recalibrating demand following aggressive builds during the pandemic, and lower product sales in and out of Israel reflecting geopolitical headwinds and a proactive decision to shutter our hardware-only line of business.

These decreases were offset by increases in product revenue in our Powerfleet for Vehicles business in the United States due to new unit purchases from new and existing customers.

Revenues from services increased by approximately $5.0 million, or 6.4%, to $84.0 million in 2023 from $79.0 million in 2022.

The increase in services revenues was principally due to an increase in our install base that generates service revenue, with revenue growth concentrated in North America where a positive market response to our Unity SaaS product offering has been a significant contributing factor.

Year Ended March 31, 2026 Compared to Year Ended March 31, 2025

Revenues increased by $81.3 million, or 22.4%, to $443.8 million in the year ended March 31, 2026, from $362.5 million in the year ended March 31, 2025.

Revenues from products decreased by $1.6 million, or 1.9%, to $84.0 million in the year ended March 31, 2026, from $85.6 million in the year ended March 31, 2025.

The decline in product revenues reflects the continued transition toward bundled service offerings and the impact of higher tariffs in the United States.

Revenues from services increased by $82.9 million, or 29.9%, to $359.8 million in the year ended March 31, 2026, from $276.9 million in the year ended March 31, 2025.

The increase was primarily attributable to the FC Acquisition, which added $55.8 million of incremental service revenues for the year ended March 31, 2026.

Excluding the impact of the acquisition, the increase in services revenues was driven primarily by underlying organic growth initiatives across the combined business, partially offset by the continued strategic de-emphasis of certain non-core lines of business.

COST OF REVENUES.

Cost of revenues decreased by approximately $4.3 million, or 6.0%, to $66.7 million in 2023 from $70.9 million in 2022.

Gross profit was $67.1 million in 2023 compared to $65.0 million in 2022.

Cost of products decreased by approximately $6.2 million, or 14.5%, to $36.4 million in 2023 from $42.6 million in 2022.

Gross profit for products was $13.3 million in 2023 compared to $14.4 million in 2022.

As a percentage of product revenues, gross profit increased to 26.8% in 2023 from 25.2% in 2022.

The increase in gross profit as a percentage of product revenues was principally due to decisions to stop fulfilling low margin orders and decreases in raw materials costs related to global supply chain issues, which were more prevalent in 2022 than 2023.

Cost of services increased by approximately $1.9 million, or 6.7%, to $30.3 million in 2023 from $28.4 million in 2022.

Gross profit for services was $53.7 million in 2023 compared to $50.6 million in 2022.

As a percentage of service revenues, gross profit minimally decreased to 64.0% in 2023 from 64.1% in 2022.

The decrease in gross profit as a percentage of services revenues was principally due to an increase in our install base that generates service revenue, offset by reduction due to the commencement of amortization for our Unity SaaS platform.

Cost of revenues increased by $29.4 million, or 17.5%, to $197.4 million in the year ended March 31, 2026, from $168.0 million in the year ended March 31, 2025.

Gross profit was $246.4 million in the year ended March 31, 2026, compared to $194.5 million in the year ended March 31, 2025.

As a percentage of revenues, gross profit increased to 55.5% in the year ended March 31, 2026, from 53.7% in the year ended March 31, 2025.

This was primarily driven by high margin services revenue comprising 81.1% of total revenues in year ended March 31, 2026, compared to 76.4% for the same period in 2025.

Cost of products decreased by $2.8 million, or 4.5%, to $59.2 million in the year ended March 31, 2026, from $62.0 million in the year ended March 31, 2025.

Gross profit for products was $24.8 million in the year ended March 31, 2026, compared to $23.6 million in the year ended March 31, 2025.

As a percentage of product revenues, gross profit increased to 29.6% in the year ended March 31, 2026, from 27.6% in the year ended March 31, 2025.

The increase in gross profit as a percentage of product revenues was primarily attributable to more favorable product mix, with a larger proportion of sales generated by higher-margin product lines, including in-warehouse solutions.

Cost of services increased by $32.2 million, or 30.4%, to $138.2 million in the year ended March 31, 2026, from $106.0 million in the year ended March 31, 2025.

The amortization of acquisition intangibles for the MiX Telematics, Fleet Complete, and RTS Solutions Africa transactions contributed $22.8 million and $14.8 million in the aggregate to cost of services for the year ended March 31, 2026 and March 31, 2025, respectively.

Gross profit for services was $221.6 million in the year ended March 31, 2026, compared to $170.9 million in the year ended March 31, 2025.

As a percentage of service revenues, gross profit remained relatively consistent at 61.6% in the year ended March 31, 2026 compared to 61.7% in the year ended March 31, 2025.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

SG&A expenses increased by approximately $7.8 million, or 12.2%, to $71.3 million in 2023 compared to $63.5 million in 2022.

The increase was principally due to an aggregate of $5.5 million in transaction-related costs in connection with our acquisition of Movingdots GmbH (“Movingdots”) and business combination with MiX Telematics, $2.1 million in SG&A costs incurred by Movingdots after the closing of such transaction, and increased salaries, investments in marketing programs and professional services fees.

As a percentage of revenues, SG&A expenses increased to 53.3% in the year ended December 31, 2023, from 46.7% in the same period in 2022.

Selling, general and administrative (“SG&A”) expenses increased by $4.1 million, or 2.0%, to $208.5 million for the year ended March 31, 2026, compared to $204.4 million for the year ended March 31, 2025.

For the year ended March 31, 2025, SG&A expenses included $21.3 million in acquisition-related expenses, $4.9 million in integration-related costs, $10.1 million in restructuring charges, and $4.7 million in accelerated stock-based compensation expenses.

For the year ended March 31, 2026, SG&A expenses included $1.7 million in acquisition-related expenses, $3.9 million in integration-related costs, $4.9 million in restructuring charges.

The significant reduction in these transaction- and integration-related costs was more than offset by the inclusion of SG&A expenses from the Fleet Complete business acquired, which was the primary driver of the year-over-year increase in SG&A expenses.

RESEARCH AND DEVELOPMENT EXPENSES.

R&D expenses decreased by approximately $0.1 million, or 1.1%, to $8.4 million in 2023 compared to $8.5 million in 2022, principally due to the capitalization of software development expenses for new product development and reduction in salaries and wages offset in part by the acquisition of Movingdots, which added $2.0 million to expenses.

As a percentage of revenues, R&D expenses increased to 6.3% in the year ended December 31, 2023, from 6.2% in the same period in 2022.

INTEREST EXPENSE.

Interest expense increased by $2.6 million, or 261.2%, to $1.6 million in 2023 from $(1.0) million in 2022, principally due to foreign currency translation gains from the term facilities under the Prior Credit Agreement with Hapoalim.

Research and development (“R&D”) expenses increased by $2.3 million, or 14.3%, to $18.4 million in the year ended March 31, 2026, compared to $16.1 million in the year ended March 31, 2025.

The FC Acquisition added an incremental $2.5 million of R&D expenses for the year ended March 31, 2026.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.

Net loss attributable to common stockholders was $17.3 million, or $(0.49) per basic and diluted share, for 2023 as compared to net loss of $16.9 million, or $(0.48) per basic and diluted share, for the same period in 2022.

The increase in net loss was due primarily to transaction costs of $5.5 million with respect to the Movingdots acquisition and the business combination with MiX Telematics, plus incremental SG&A spend from the Movingdots acquisition of $2.1 million, plus an increase in accretion of preferred stock of $1.2 million, offset by the bargain gain on the purchase of Movingdots of $9.0 million.

Net loss attributable to common stockholders was $20.6 million, or $(0.15) per basic and diluted share, for the year ended March 31, 2026, as compared to net loss of $51.0 million, or $(0.43) per basic and diluted share, for the year ended March 31, 2025.

The $30.5 million decrease in net loss was driven primarily by reduction of $19.6 million of acquisition-related expenses, $1.0 million integration-related costs, $5.2 million restructuring charges, and $4.7 million accelerated stock-based compensation expenses.

Non-GAAP Financial Information

We use certain measures to assess the financial performance of our business, as well as to comply with the reporting requirements of the JSE.

We use certain measures to assess the financial performance of our business.

Certain of these measures are termed “non-GAAP measures” because they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with GAAP, or are calculated using financial measures that are not calculated in accordance with GAAP.

These non-GAAP measures include adjusted EBITDA, headline loss, and headline loss per common share.

These non-GAAP measures include adjusted EBITDA.

An explanation of the relevance of the non-GAAP measure, a reconciliation of the non-GAAP measure to the most directly comparable measure calculated and presented in accordance with GAAP, and a discussion of its limitations is set out below.

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Adjusted EBITDA

We define adjusted EBITDA as net loss attributable to common stockholders before non-controlling interest, preferred stock dividend and accretion, interest expense (net), other (income) expense, net, income tax expense (benefit), depreciation and amortization, stock-based compensation, foreign currency (gains) losses, restructuring-related expenses, gain on bargain purchase (Movingdots), severance-related expenses, derivative mark-to market adjustment, recognition of pre-October 1, 2024 contract assets (Fleet Complete), Movingdots-related expenses, acquisition-related expenses, and integration-related expenses.

We define adjusted EBITDA as net loss attributable to common stockholders before non-controlling interest, preferred stock dividend and accretion, interest expense (net), other (income) expense, net, income tax expense (benefit), depreciation and amortization, stock-based compensation, foreign currency (gains) losses, restructuring-related expenses, derivative mark-to-market adjustment, acquisition-related expenses, and integration-related expenses.

We have included adjusted EBITDA in this Form 10-K because it is a key measure that our management and board of directors use to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short and long-term operational plans.

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Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA

December 31, Three Months Ended

March 31, Year Ended March 31,

Year Ended March 31,

(In thousands)

2023 2024 2025

Net loss attributable to common stockholders $ (51,012) $ (20,552)

Non-controlling interest 18 608

Preferred stock dividend and accretion 10,137 11,632 11,125 — 25

Preferred stock dividend 25 —

Interest expense, net 19,404 26,746

Other (income) expense, net

(24) (3) 55 — —

Income tax expense (benefit)

870 589 352 (304) 4,517

Depreciation and amortization 47,494 60,280

Stock-based compensation 9,362 7,541

Foreign currency (gains) losses

(1,842) (839) 43 502 1,790

Foreign currency losses 1,790 3,862

Restructuring-related expenses 10,077 4,923

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

Severance-related expenses

1,667 134 — — —

Derivative mark-to-market adjustment (504) (775)

Recognition of pre-October 1, 2024 contract assets (Fleet Complete)

— — — 1,768 3,809

Movingdots-related expenses

Acquisition-related expenses 21,300 1,689

Integration-related expenses

— — — 2,592 4,851

Adjusted EBITDA $ 67,322 $ 97,032

(1) Following the closing of the FC Acquisition, we included an EBITDA adjustment related to the recognition of pre-October 1, 2024, contract assets.

This adjustment represented recoveries, through customer billings, of the contract asset recognized at acquisition for hardware delivered by Fleet Complete prior to October 1, 2024.

This adjustment was intended to give investors a clearer view of underlying operating performance and cash generation.

The goal was to better align adjusted EBITDA with operating cash flows.

For the years ended March 31, 2025 and 2026, we reported adjusted EBITDA of $67.3 million and $97.0 million, respectively.

During the same periods, we also invoiced recoveries of $3.8 million, and $5.0 million, respectively, which are included in cash flows from operating activities in the condensed consolidated statement of cash flows.

Our use of adjusted EBITDA has limitations as analytical tools and should not be considered as performance measures in isolation from, or as a substitute for, analysis of our results as reported under GAAP.

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Because of these limitations, adjusted EBITDA should be considered alongside other financial performance measures, including loss from operations, net loss and our other results.

Headline Loss per Share

In connection with our secondary listing on the JSE, we are required to calculate and publicly disclose headline loss per share and diluted headline loss per share.

Headline loss per share is calculated using net loss which has been determined in accordance with GAAP.

Headline loss for the period represents the loss for the period attributable to our common stockholders adjusted for the remeasurements that are more closely aligned to the operating or trading results as set forth below, and headline loss per share represents headline loss divided by the weighted average number of shares of common stock outstanding.

The table below presents a reconciliation between net loss attributable to common stockholders to headline loss for the years ended December 31, 2022 and 2023, the three months ended March 31, 2024, and the year ended March 31, 2025.

December 31, Three Months Ended

March 31, Year Ended March 31,

(In thousands, except per share data)

2023 2024 2025

Net loss attributable to common stockholders $ (16,891) $ (17,307) $ (19,639) $ (12,439) $ (51,012)

Adjusted for:

Bargain purchase - Movingdots

— (9,034) — — —

Profit on sale of plant and equipment

— — — (21) (17)

Impairment of intangibles

Headline loss

$ (16,891) $ (26,341) $ (19,639) $ (12,455) $ (51,021)

Weighted average common shares outstanding on which the net loss attributable to common shareholders per share and headline loss per share has been calculated - basic and diluted

35,393 35,628 35,813 132,793 119,877

Net loss per share attributable to common stockholders – basic and diluted

$ (0.48) $ (0.49) $ (0.55) $ (0.09) $ (0.43)

Headline loss per share attributable to common stockholders – basic and diluted

$ (0.48) $ (0.74) $ (0.55) $ (0.09) $ (0.43)

The above disclosure was prepared for the purpose of complying with the reporting requirements of the JSE and includes certain non-GAAP measures, such as headline loss and headline loss per common share, and related reconciliations.

Liquidity and Capital Resources

On April 2, 2024, we consummated the MiX Combination, pursuant to which MiX Telematics became our indirect, wholly owned subsidiary.

The Implementation Agreement required, as a condition to closing of the MiX Combination, that we obtain debt and/or equity financing in an amount sufficient to provide for the redemption in full of all then-outstanding shares of our Series A convertible preferred stock.

On April 2, 2024, concurrently with the closing of the MiX Combination, we used the net proceeds received from the RMB Facilities described below and incremental borrowing capacity as a result of the refinancing of Hapoalim Credit Facilities to redeem the full $90.3 million value of the then-outstanding shares of Series A convertible preferred stock.

In addition, our wholly owned subsidiaries, Powerfleet Israel and Pointer were party to the Prior Credit Agreement with Hapoalim, pursuant to which Hapoalim agreed to provide Powerfleet Israel with two senior secured term loan facilities denominated in NIS in an initial aggregate principal amount of $30 million (composed of two facilities in the aggregate principal amounts of $20 million and $10 million, respectively) and a five-year revolving credit facility to Pointer denominated in NIS in an initial aggregate principal amount of $10 million.

The proceeds of the term loan facilities were used to finance a portion of the cash consideration payable in our acquisition of Pointer.

On March 18, 2024, the Borrowers entered into the A&R Credit Agreement, which refinanced the facilities under, and amended and restated, the Prior Credit Agreement.

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 million (composed of Hapoalim Facility A and Hapoalim Facility B in the aggregate principal amounts of $20 million and $10 million, respectively) and (ii) two revolving credit facilities to Pointer in an aggregate principal amount of $20 million (composed of Hapoalim Facility C and Hapoalim Facility D in the aggregate principal amounts of $10 million and $10 million, respectively).

The Hapoalim Term Facilities will mature on March 18, 2029.

The Hapoalim Revolving Facilities are available for successive one-month periods until and including February 27, 2026, unless the Borrowers deliver prior notice to Hapoalim of their request not to renew the Hapoalim Revolving Facilities.

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 us.

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 (the “Amendment”) to the A&R Credit Agreement.

The Amendment increases 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 us or any of our subsidiaries by no later than December 31, 2025, subject to certain terms and conditions of the A&R Credit Agreement.

On April 2, 2024, we completed the MiX Combination, pursuant to which MiX Telematics became our indirect, wholly owned subsidiary.

Concurrently with the closing, we redeemed all outstanding shares of our Series A Preferred Stock for approximately $90.3 million using proceeds from the RMB Facilities and incremental borrowing capacity available under our refinanced Hapoalim credit facilities.

Since the closing of the MiX Combination, we have continued to optimize our capital structure through the refinancing of existing debt facilities, including the A&R Credit Agreement and RMB Facilities Agreements (as defined below).

These transactions have enhanced our liquidity and extended our debt maturities, while increasing our available revolving borrowing capacity to support working capital and growth initiatives.

Debt Facilities

Hapoalim Debt

On March 18, 2024, our wholly owned subsidiaries Powerfleet Israel and Pointer entered into the A&R Credit Agreement with Hapoalim, which refinanced the prior facilities under, and amended and restated, the Prior Credit Agreement.

The A&R Credit Agreement provides an aggregate borrowing capacity of approximately $50 million, consisting of two NIS-denominated term loans totaling $30 million (Hapoalim Facility A and Hapoalim Facility B) and two revolving credit facilities totaling $20 million (Hapoalim Facility C and Hapoalim Facility D).

Powerfleet Israel drew $30 million in March 2024, using a portion to repay approximately $11.2 million under the prior term loans under the Prior Credit Agreement and distributing the remainder to us.

In December 2024, the Borrowers entered into an amendment to the A&R Credit Agreement, increasing the principal amount available under Hapoalim Facility D from $10 million to $20 million, available through June 30, 2026.

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

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 our company will serve as collateral under the Hapoalim Credit Facilities.

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 December 31, 2024 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.

Borrowings are secured by first ranking and exclusive fixed and floating charges, including over the entire share capital of Pointer and over the assets of Pointer and excluding the Borrowers’ holdings in specified foreign subsidiaries.

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% (Hapoalim’s prime rate was 5.5% at March 31, 2026), respectively.

The Hapoalim Term Facilities will mature on March 18, 2029, with Hapoalim Facility A amortizing quarterly and Hapoalim Facility B due at maturity.

Interest rates for borrowings under Hapoalim Facility C is, with respect to NIS-denominated loans, Hapoalim’s prime rate + 2.5% and, with respect to U.S.

dollar-denominated loans, SOFR + 2.15%.

Borrowings under Hapoalim Facility D will bear interest at the applicable interest rate set forth in the standard form documents entered into in connection with each utilization of Hapoalim Facility D.

In addition, Pointer is required to pay a credit allocation fee in NIS, with respect to Hapoalim Facility C, and a non-utilization fee in U.S.

dollars, with respect to Hapoalim Facility D, in each case, equal to 0.5% per annum on undrawn and uncancelled amounts of the revolving facilities during the period commencing on March 18, 2024 and ending on the last day of the applicable availability period of such revolving facilities.

The Borrowers have also paid certain upfront fees and other fees and expenses to Hapoalim in connection with the A&R Credit Agreement.

On March 7, 2024, we entered into the Facilities Agreement with RMB, pursuant to which RMB agreed to provide us with the RMB Facilities in an aggregate principal amount of $85 million, composed of RMB Facility A and RMB Facility B, each having a principal amount of $42.5 million.

We drew down $85 million in cash under the RMB Facilities on March 13, 2024.

The interest rates of RMB Facility A and RMB Facility B are 8.699% per annum and 8.979% per annum, respectively.

Interest is payable quarterly in arrears.

The principal under RMB Facility A and RMB Facility B is repayable in one installment on March 31, 2027 and March 31, 2029, respectively.

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 R350 million (the equivalent of $19.0 million as at March 31, 2025) (the “RMB General Facility”).

The Credit Agreement and the rights and obligations of the parties are subject to the terms and conditions of the Facilities Agreement.

The RMB General Facility is repayable on demand and has a term of 365 days from the Available Date (as defined therein).

Repayment of the RMB General Facility, including capitalized interest, is due by the earlier of (a) the Available Date or (b) April 2, 2025, unless extended by agreement between MiX Telematics and RMB.

The RMB General Facility repayment terms were extended by a further 365 days based on the same terms and conditions of the Facility Agreement entered into on March 7, 2024.

Interest rate for the RMB General Facility is calculated at South African prime rate minus 0.75% per annum and will be calculated on the daily outstanding balance, compounded monthly in arrears and repaid quarterly.

During April 2025, the RMB General Facility repayment terms were extended by an additional 365 days on the same terms and conditions of the Facilities Agreement.

Borrowings under Hapoalim Facility D bear interest at SOFR + 2.59%.

In addition, Pointer is required to pay a credit allocation fee in NIS, in each case, equal to 0.5% per annum on undrawn and uncancelled amounts of the Hapoalim Revolving Facilities during the period commencing on March 18, 2024 and ending on the last day of the applicable availability period of the Hapoalim Revolving Facilities.

The Hapoalim Revolving Facilities are available for successive one-month periods until and including February 27, 2027, unless the Borrowers deliver prior notice to Hapoalim of their request not to renew the Hapoalim Revolving Facilities.

On March 7, 2024, we entered into the Facilities Agreement with RMB, pursuant to which RMB agreed to provided us with the RMB Facilities totaling $85 million, composed of RMB Facility A and RMB Facility B, each having a principal amount of $42.5 million.

We drew $85 million in March 2024, which primarily funded our Series A Preferred Stock redemption.

On October 31, 2025, we 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, (ii) update the interest rates of the RMB Facilities, and (iii) update certain financial covenants to conform to the Facility Agreement.

Pursuant to a First Amendment and Restatement Agreement with RMB, which amended and restated the Facilities Agreement (as amended and restated, the “Amended and Restated Facilities Agreement” and, together with the Facility Agreement, the “RMB Facilities Agreements”), interest is payable quarterly, at a fixed annual rate of 8.699% until March 31, 2027 and, thereafter, 4.85% per annum plus the applicable term SOFR reference rate, with respect to RMB Facility A, and a fixed annual rate of 8.979%, with respect to RMB Facility B, with principal repayments for RMB Facility A and RMB Facility B due March 31, 2028 and March 31, 2029, respectively.

MiX Telematics also maintains the RMB General Facility, repayable on demand, with a 365-day term and an interest rate linked to the South African prime rate minus 0.75% per annum.

Repayment of the RMB General Facility, including capitalized interest, is due by the earlier of (a) the Available Date (as defined therein) or (b) April 2, 2026, unless extended by agreement between MiX Telematics and RMB.

As of March 31, 2026, $20.6 million of the RMB General Facility was utilized.

On September 27, 2024, we entered into the Facility Agreement with RMB, pursuant to which RMB agreed to provide us with the New RMB Term Facility in an aggregate principal amount of $125 million.

On October 1, 2024, we drew down $125 million in cash under the New RMB Term Facility to pay a portion of the Purchase Price for the FC Acquisition.

Interest is payable quarterly in arrears at an interest rate of 5% per annum plus the applicable term SOFR reference rate.

The principal is repayable in one installment on October 31, 2029.

As a result of global supply chain disruptions, the conflict in the Middle East, rising interest rates, fluctuations in currency values, restrictions on international trade (such as tariffs and other controls on imports or exports of goods, technology or data) and inflation and other cost increases, there remains uncertainty surrounding the potential impact of such events on our results of operations and cash flows.

We are proactively taking steps to increase the available cash on hand including, but not limited to, targeted reductions in discretionary operating expenses and capital expenditures and borrowing under our revolving credit facility.

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

Management believes our cash and cash equivalents (including restricted cash) of $48.8 million as of March 31, 2025, in conjunction with cash expected to be generated from the execution of our strategic plan over the next 12 months and proceeds from our credit facilities, are sufficient to fund the projected operations for at least the next 12 months from the issuance date of these consolidated financial statements ( June 26, 2025) a nd service our outstanding obligations.

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

however, there is no guarantee we will achieve this amount of revenue and gross margin during the assumed time period.

Management assessed various additional operating cost reduction options that are available to us and would be implemented, if assumed levels of revenue and gross margin are not achieved and additional funding is not obtained.

Capital Requirements

Subsequent to March 31, 2026, we continued discussions with RMB regarding the establishment of a new general banking facility and certain additional operational banking facilities in connection with the transition of our South African transactional banking relationship to RMB.

The proposed arrangements include a general banking facility intended to support working capital and cash management requirements, as well as additional operational banking facilities supporting transactional banking activities.

The proposed facilities have received credit approval from RMB and remain subject to the execution of definitive documentation and receipt of certain corporate approvals.

We expect to finalize the arrangements following completion of these internal approval and documentation processes.

On September 27, 2024, we entered into the Facility Agreement with RMB, pursuant to which RMB agreed to provide us with the New RMB Term Facility totaling $125 million.

We drew $125 million on October 1, 2024 to fund a portion of the purchase price for the FC Acquisition.

Interest is payable quarterly at an interest rate of 5% per annum plus the applicable term SOFR reference rate and matures on October 31, 2029.

On February 5, 2026, we entered into the New Facilities Agreement with RMB, pursuant to which RMB agreed to provide us and MiX Telematics with the New RMB Facilities, composed of New RMB Facility A in the aggregate principal amount of $10 million and New RMB Facility B in the aggregate principal amount of R180 million.

New RMB Facility A bears interest at 2.50% per annum (provided no event of default is continuing), plus the three-month SOFR reference rate (or, if unavailable, an interpolated, historic or interpolated historic SOFR rate, or, if none of the foregoing are available, the three-month Treasury bill rate).

New RMB Facility B bears interest at 1.95% per annum (provided no event of default is continuing), plus the South African rand overnight index average.

Interest is payable quarterly in arrears.

The New RMB Facilities will mature one year from the closing date of the New Facilities Agreement.

As of March 31, 2026, $5.0 million of the New RMB Facilities was utilized.

Debt obligations are further discussed in Note 11, “Short-Term Bank Debt and Long-Term Debt” to our consolidated financial statements included elsewhere in this Form 10-K.

Liquidity Position

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

The FC Acquisition and MiX Combination are also expected to be a source of positive cash flow.

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

Our capital requirements depend on a variety of factors, including, but not limited to, the length of the sales cycle, the rate of increase or decrease in our existing business base, the success, timing, and amount of investment required to bring new products to market, revenue growth or decline and potential acquisitions.

Failure to generate positive cash flow from operations will have a material adverse effect on our business, financial condition and results of operations.

As of March 31, 2026, Pointer had $18.4 million outstanding under the Hapoalim Revolving Facilities, with $11.6 million of remaining borrowing capacity.

As of March 31, 2026, $21.4 million of the RMB General Facility was outstanding.

As of March 31, 2026, $5.0 million of the New RMB Facilities was outstanding and the $5.0 million remained available for borrowing.

No amounts were outstanding under the New RMB Facility B, which had available borrowing capacity of R180 million or $10.6 million at March 31, 2026.

In the aggregate, we had approximately $27.1 million of available short-term borrowing capacity as of March 31, 2026.

We continue to monitor the effects of inflation, foreign currency volatility, and regional geopolitical instability, including the ongoing conflicts in the Middle East, on our supply chain and operating cash flows.

There remains uncertainty surrounding the potential impact of such events on our results of operations and cash flows.

Management is proactively managing liquidity through reductions in discretionary operating expenses and capital expenditures and increased utilization of available credit facilities to preserve cash.

Capital Requirements and Outlook

Our primary sources of liquidity are cash generated from operations, existing cash balances, and available borrowing capacity under our revolving facilities.

Although we expect the MiX Combination and FC Acquisition to generate incremental cash flow benefits through operational synergies, we have not yet generated sufficient cash flow solely from operations to fund all our capital and financing needs.

Our future capital requirements will depend on several factors, including, but not limited to:

• the timing and success of new product launches;

• revenue growth and margin trends;

• integration costs and realized synergies from recent business combinations and acquisitions;

• the pace of discretionary spending and capital investments;

• potential strategic acquisitions.

We believe that our current cash balances, expected cash flows from operations, and borrowing capacity under our existing credit facilities will be sufficient to meet our operating, debt service, and capital expenditure requirements for at least the next 12 months.

We may, however, seek additional financing or capital market transactions to support long-term strategic initiatives or refinance existing debt.

Operating Activities

During the year ended March 31, 2025, net cash used in operating activities was $3.3 million, compared to net cash provided by operating activities of $4.4 million during the year ended December 31, 2023.

The net cash used in operating activities for the year ended March 31, 2025 primarily included non-cash charges of $47.5 million for depreciation and amortization expense, $9.4 million for bad debts expense, $9.4 million for stock-based compensation, $5.0 million for ROU asset amortization, $4.5 million for inventory write-downs, $1.1 million for other non-cash items and $0.9 million for shares issued for transaction bonuses in connection with the MiX Combination, partially offset by $0.5 million for derivative mark-to-market adjustment.

During the year ended March 31, 2026, net cash provided by operating activities was $30.5 million, compared to net cash used in operating activities of $3.3 million during the year ended March 31, 2025.

The net cash provided by operating activities for the year ended March 31, 2026 primarily included non-cash charges of $60.3 million for depreciation and amortization expense, $11.0 million for bad debts expense, $7.5 million for stock-based compensation, $4.1 million for ROU asset amortization, and $2.3 million for inventory write-downs, partially offset by $2.2 million for other non-cash items and $0.8 million for derivative mark-to-market adjustment.

Changes in operating assets and liabilities included:

• an increase in accounts receivables of $21.2 million;

• a decrease in accounts payable of $12.2 million;

• a decrease in deferred costs of $8.4 million;

• a decrease in lease liabilities of $4.6 million;

• a decrease in inventory, net of write-downs of $5.7 million;

• an increase in inventory, net of write-downs of $4.5 million;

• a decrease in prepaid expenses and other assets of $2.2 million;

• an increase in deferred costs of $8.5 million;

• an increase in deferred revenue of $1.6 million;

• an increase in net severance fund of $1.2 million.

During the three months ended March 31, 2025, net cash provided by operating activities was $13.5 million, compared to net cash used in operating activities of $0.2 million for the same period in 2024.

The net cash used in operating activities for the three months ended March 31, 2025 primarily included non-cash charges of $14.5 million for depreciation and amortization expense, $2.9 million for inventory write-downs, $2.2 million for bad debts expense, $0.9 million for stock-based compensation, $0.7 million for right-of-use asset amortization and $0.3 million for other non-cash items.

Changes in operating assets and liabilities included:

• a decrease in deferred costs of $3.3 million;

• a decrease in lease liabilities of $0.5 million;

• an increase in accounts payable of $5.2 million;

• a decrease in prepaid expenses and other assets of $3.4 million;

• a decrease in inventory, net of write-downs of $3.1 million;

• an increase in net severance fund of $1.8 million,

• an increase in deferred revenue of $0.7 million;

• a decrease in accounts receivables of $1.2 million.

Net cash provided by operating activities was $4.4 million for the year ended December 31, 2023, compared to net cash provided by operating activities of $1.2 million for the same period in 2022.

The net cash provided by operating activities for the year ended December 31, 2023 reflects a net loss of $5.7 million and includes non-cash charges of $3.9 million for stock-based compensation, $9.4 million for depreciation and amortization expense, a gain on bargain purchase of $9.0 million, and $2.8 million for right-of-use asset amortization.

Changes in operating assets and liabilities included:

• an increase in accounts receivable of $1.5 million;

• an increase in inventory of $1.7 million;

• a decrease in lease liabilities of $2.9 million;

• an increase in accounts payable and accrued expenses of $4.5 million.

• an increase in lease liabilities of $3.7 million;

• a decrease in net severance fund of $1.0 million.

Investing Activities

Net cash used in investing activities for the year ended March 31, 2025 was $170.6 million, compared to net cash provided by investing activities of $1.5 million for the year ended December 31, 2023.

The net cash used by investing activities was primarily due to $137.1 million in acquisitions, net of cash assumed from the MiX Combination and FC acquisition, $20.0 million for the purchase of fixed assets and $13.8 million for capitalized software development costs.

The net cash provided by investing activities of $1.5 million in the year ended December 31, 2023 was primarily due to $8.7 million in net proceeds from the acquisition of Movingdots, partially offset by $3.6 million for capitalized software development costs and $3.5 million the purchase of fixed assets.

Net cash used in investing activities for the three months ended March 31, 2025 was $10.1 million, compared to net cash used in investing activities of $1.9 million for the three months ended March 31, 2024 .

Net cash used in investing activities for the year ended March 31, 2026 was $39.7 million, compared to net cash used in investing activities of $170.6 million for the year ended March 31, 2025.

The net cash used by investing activities was primarily due to $21.6 million for the purchase of fixed assets and $18.5 million for capitalized software development costs.

The net cash used in investing activities of $1.9 million in the three months ended March 31, 2024 was primarily due to $1.3 million for the purchase of fixed assets and $0.6 million for capitalized software development costs.

Net cash provided by investing activities was $1.5 million for the year ended December 31, 2023, compared to net cash used in investing activities of $6.3 million for the same period in 2022.

The increase in net cash provided by investing activities was primarily due to $8.7 million in net proceeds from the acquisition of Movingdots, partially offset by $3.6 million for capitalized software development costs and $3.5 million for the purchase of fixed assets.

The net cash used in investing activities of $170.6 million in the year ended March 31, 2025 was primarily due to $137.1 million in acquisitions, net of cash assumed from the MiX Combination and FC Acquisition, $20.0 million for the purchase of fixed assets and $13.8 million for capitalized software development costs.

Financing Activities

Net cash provided by financing activities was $115.7 million for the year ended March 31, 2025 , compared to net cash used in financing activities of $3.7 million for the year ended December 31, 2023.

The increase was primarily driven by $125.0 million in proceeds from long-term debt and $66.5 million in gross proceeds from a private placement completed in connection with the FC Acquisition, partially offset by related offering costs.

Net cash provided by financing activities was $0.2 million for the year ended March 31, 2026, compared to net cash provided by financing activities of $115.7 million for the year ended March 31, 2025.

The 2026 balance was primarily driven by $5.6 million in repayments of long-term debt and $5.7 million in proceeds from short-term bank borrowings.

The cash provided by financing activities in the 2025 period was primarily driven by $125.0 million in proceeds from long-term debt and $66.5 million in gross proceeds from a private placement completed in connection with the FC Acquisition, partially offset by related offering costs.

Additional sources of cash included $19.6 million in proceeds from short-term bank borrowings and $1.9 million from the exercise of stock options.

These inflows were partially offset by $90.3 million used for the redemption of Series A convertible preferred stock in connection with the MiX Combination, $2.8 million used for the repurchase of common stock related to tax withholding on vested restricted stock awards, and $2.6 million in repayments of long-term debt.

These inflows were partially offset by $90.3 million used for the redemption of Series A Preferred Stock in connection with the MiX Combination, $2.8 million used for the repurchase of common stock related to tax withholding on vested restricted stock awards, and $2.6 million in repayments of long-term debt.

Debt issuance costs totaled $1.4 million during the 2025 period.

During the three months ended March 31, 2025 , net cash provided by financing activities was $8.2 million, compared to $92.8 million net cash provided by financing activities for the three months ended March 31, 2024 .

The cash provided by financing activities was primarily due to $7.7 million received from s hort-term bank debt, and $1.0 million proceeds from exercise of stock options, partially offset by r epayment of long-term debt of $0.5 million.

Net cash used in financing activities was $3.7 million for the year ended December 31, 2023, compared to net cash used in financing activities of $0.3 million for the same period in 2022.

The increase in net cash used in financing activities was primarily due to the payment in cash of preferred stock dividends totaling $3.4 million compared to $0 in 2022, net of the changes in the repayment of long-term debt and change in short-term debt, net balance.

Contractual Obligations and Commitments

Our estimated future obligations consist of leases and debt as of March 31, 2026.

For additional discussion on our leases and other commitments, refer to Notes 11, “Short-Term Bank Debt and Long-Term Debt,” and 18, “Leases,” to our consolidated financial statements included elsewhere in this Form 10-K.

Off-Balance Sheet Arrangements

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The Company is subject to recently issued accounting standards, accounting guidance and disclosure requirements.

For a description of these new accounting standards, see Note 2 to our consolidated financial statements contained in Item 8 of Part II of this Annual Report on Form 10-K, which is incorporated herein by reference.

Quantitative and Qualitative Disclosures About Market Risks

Not applicable.

For a description of these new accounting standards, see Note 2 to our consolidated financial statements contained in Item 8 of Part II of this Form 10-K, which is incorporated herein by reference.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis