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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
—————————
FORM 10-Q
—————————
(Mark One)
☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

or

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File Number: 001-39080

POWERFLEET, INC.
(Exact name of registrant as specified in its charter)
Delaware83-4366463
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)
123 Tice Boulevard
Woodcliff Lake,New Jersey07677
(Address of principal executive offices)(Zip Code)
(201)996-9000
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareAIOTThe Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
Accelerated filer
☒
Non-accelerated filer ☐
Smaller reporting company
☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, $0.01 par value per share, outstanding as of the close of business on November 8, 2024 was 132,138,557.


INDEX

POWERFLEET, INC. AND SUBSIDIARIES
 
Page
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of March 31, 2024 and September 30, 2024


Condensed Consolidated Statements of Operations - for the three and six months ended September 30, 2023 and 2024
Condensed Consolidated Statements of Comprehensive Loss - for the three and six months ended September 30, 2023 and 2024
Condensed Consolidated Statement of Changes in Stockholders’ Equity - for the periods April 1, 2023 through September 30, 2023 and April 1, 2024 through September 30,2024
Condensed Consolidated Statements of Cash Flows - for the six months ended September 30, 2023 and 2024
Notes to Condensed Consolidated Financial Statements
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
Signatures
 


2

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)

POWERFLEET, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
March 31, 2024 *September 30, 2024
ASSETS
Current assets:
Cash and cash equivalents$24,354 $25,962 
Restricted cash85,310 63,074 
Accounts receivables, net of allowance for credit losses of $3,197 and $5,321 as of March 31, 2024 and September 30, 2024, respectively
30,333 64,819 
Inventory, net21,658 23,488 
Deferred costs - current42 13 
Prepaid expenses and other current assets8,091 17,985 
Total current assets169,788 195,341 
Fixed assets, net12,719 51,928 
Goodwill83,487 300,283 
Intangible assets, net19,652 167,320 
Right-of-use asset7,428 9,402 
Severance payable fund3,796 3,864 
Deferred tax asset2,781 3,602 
Other assets9,029 16,595 
Total assets$308,680 $748,335 
LIABILITIES
Current liabilities:
Short-term bank debt and current maturities of long-term debt$1,951 $35,339 
Accounts payable and accrued expenses34,008 66,098 
Deferred revenue - current5,842 10,447 
Lease liability - current1,789 2,248 
Total current liabilities43,590 114,132 
Long-term debt - less current maturities113,810 111,011 
Deferred revenue - less current portion4,892 4,674 
Lease liability - less current portion5,921 7,713 
Accrued severance payable4,597 4,677 
Deferred tax liability4,465 52,113 
Other long-term liabilities2,496 2,905 
Total liabilities179,771 297,225 
Commitments and Contingencies (Note 22)
Convertible redeemable preferred stock: Series A - 100 shares authorized, $0.01 par value; 60 and 0 shares issued and outstanding at March 31, 2024 and September 30, 2024, respectively, at redemption value of $90,273 at March 31, 2024
90,273 — 
STOCKHOLDERS’ EQUITY
Preferred stock; authorized 50,000 shares, $0.01 par value
— — 
3

Common stock; authorized 175,000 shares, $0.01 par value; 38,709 and 109,884 shares issued at March 31, 2024 and September 30, 2024, respectively; shares outstanding, 37,212 and 107,821 at March 31, 2024 and September 30, 2024, respectively
387 1,096 
Additional paid-in capital202,607 641,736 
Accumulated deficit(154,796)(178,996)
Accumulated other comprehensive loss(985)(1,364)
Treasury stock; 1,497 and 2,063 common shares at cost at March 31, 2024 and September 30, 2024, respectively
(8,682)(11,518)
Total Powerfleet, Inc. stockholders’ equity38,531 450,954 
Non-controlling interest105 156 
Total equity38,636 451,110 
Total liabilities, convertible redeemable preferred stock, and stockholders’ equity$308,680 $748,335 
    

* Derived from audited balance sheet as of March 31, 2024.

See accompanying notes to condensed consolidated financial statements.





































4

POWERFLEET, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended September 30,Six Months Ended September 30,
2023
(As Restated)		202420232024
Revenues:
Products$13,233 $20,293 $24,317 $39,031 
Services21,010 56,725 42,018 113,417 
Total revenues34,243 77,018 66,335 152,448 
Cost of revenues:
Cost of products8,842 13,929 17,392 26,680 
Cost of services8,294 21,746 15,818 44,777 
Total cost of revenues17,136 35,675 33,210 71,457 
Gross profit17,107 41,343 33,125 80,991 
Operating expenses:
Selling, general and administrative expenses17,778 37,335 34,976 92,117 
Research and development expenses2,426 3,435 4,646 6,536 
Total operating expenses20,204 40,770 39,622 98,653 
(Loss)/profit from operations
(3,097)573 (6,497)(17,662)
Interest income23 168 45 472 
Interest expense(154)(4,042)(327)(6,733)
Bargain purchase - Movingdots— — 283 — 
Other (expense)/income, net(25)1,674 (25)1,050 
Net loss before income taxes(3,253)(1,627)(6,521)(22,873)
Income tax expense
(295)(256)(289)(1,309)
Net loss before non-controlling interest(3,548)(1,883)(6,810)(24,182)
Non-controlling interest— (5)(6)(18)
Net loss(3,548)(1,888)(6,816)(24,200)
Accretion of preferred stock(1,834)— (3,606)— 
Preferred stock dividend(1,128)— (2,257)(25)
Net loss attributable to common stockholders$(6,510)$(1,888)$(12,679)$(24,225)
Net loss per share attributable to common stockholders - basic and diluted$(0.18)$(0.02)$(0.36)$(0.23)
Weighted average common shares outstanding - basic and diluted35,653 107,532 35,629 107,335 

See accompanying notes to condensed consolidated financial statements.
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POWERFLEET, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
(In thousands)
(Unaudited)

Three Months Ended September 30,Six Months Ended September 30,
2023
(As Restated)		202420232024
Net loss attributable to common stockholders$(6,510)$(1,888)$(12,679)$(24,225)
Foreign currency translation adjustment(906)(797)(806)(379)
Total other comprehensive income(906)(797)(806)(379)
Comprehensive loss$(7,416)$(2,685)$(13,485)$(24,604)

See accompanying notes to condensed consolidated financial statements.





































6

POWERFLEET, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Changes in Stockholders’ Equity
(In thousands)
(Unaudited)
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income/(Loss)Treasury StockNon-Controlling InterestTotal Stockholder’s Equity
Number of SharesAmount
Balance as of April 1, 2024 38,709$387 $202,607 $(154,796)$(985)$(8,682)$105 $38,636 
Net loss attributable to common stockholders— — (25)(22,312)— — — (22,337)
Net income attributable to non-controlling interest— — — — — — 13 13 
Foreign currency translation adjustment— — — — 418 — 8 426 
Issuance of restricted shares54 1 (1)— — — — — 
Shares issued for transaction bonus
174 1 888 — — — — 889 
Shares issued in connection with MiX
Combination		70,704 707 361,298 — — — — 362,005 
Acquired through MiX Combination— — 7,818 — — — 5 7,823 
Shares withheld pursuant to vesting of restricted stock— — — — — (2,836)— (2,836)
Stock-based compensation— — 5,929 — — — — 5,929 
Balance as of June 30, 2024 109,641 $1,096 $578,514 $(177,108)$(567)$(11,518)$131 $390,548 
Net loss attributable to common stockholders— — — (1,888)— — — (1,888)
Net income attributable to non-controlling interest— — — — — — 5 5 
Foreign currency translation adjustment— — — — (797)— 20 (777)
Proceeds from private placement, net of costs to issue common stock— — 61,851 — — — — 61,851 
Exercise of stock options243 — — — — — — — 
Stock-based compensation— — 1,371 — — — — 1,371 
Balance as of September 30, 2024109,884 1,096 641,736 (178,996)(1,364)(11,518)156 451,110 
        






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Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income/(Loss)Treasury StockNon-Controlling InterestTotal Stockholder’s Equity
Number of SharesAmount
Balance as of March 31, 2023 (As Restated)37,621$376 $218,473 $(135,961)$(1,098)$(8,554)$66 $73,302 
Net loss attributable to common stockholders (As restated)— — (2,902)(3,269)— — — (6,171)
Net income attributable to non-controlling interest— — — — — — 6 6 
Foreign currency translation adjustment— — — — 100 — (9)91 
Issuance of restricted shares162 1 (1)— — — — — 
Forfeiture of restricted shares(82)— — — — — — — 
Exercise of stock options16 — 36 — — — — 36 
Shares withheld pursuant to vesting of restricted stock— — — — — (4)— (4)
Stock-based compensation— — 852 — — — — 852 
Balance as of June 30, 2023 (As restated)
37,717 377 216,458 (139,230)(998)(8,558)63 68,112 
Net loss attributable to common stockholders (As restated)— — (2,962)(3,548)— — — (6,510)
Foreign currency translation adjustment— — — — (906)— — (906)
Issuance of restricted shares982 10 (10)— — — — — 
Shares withheld pursuant to vesting of restricted stock— — — — — (90)— (90)
Stock-based compensation— — 1,101 — — — — 1,101 
Balance as of September 30, 2023 (As Restated)38,699 $387 $214,587 $(142,778)$(1,904)$(8,648)$63 $61,707 
        
See accompanying notes to condensed consolidated financial statements.



8

POWERFLEET, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

Six Months Ended September 30,
20232024
Cash flows from operating activities
Net loss$(6,816)$(24,200)
Adjustments to reconcile net loss to cash used in operating activities:
Non-controlling interest6 18 
Gain on bargain purchase(283)— 
Inventory reserve617 904 
Stock based compensation expense1,953 7,300 
Depreciation and amortization4,807 19,399 
Right-of-use assets, non-cash lease expense1,242 1,515 
Derivative mark-to-market adjustment— (2,197)
Bad debts expense933 4,369 
Deferred income taxes285 (283)
Shares issued for transaction bonuses— 889 
Lease termination and modification losses
— 184 
Other non-cash items126 1,522 
Changes in operating assets and liabilities:
Accounts receivables(3,866)(12,553)
Inventories(2,023)955 
Prepaid expenses and other current assets51 (3,009)
Deferred costs332 (3,619)
Deferred revenue222 (99)
Accounts payable and accrued expenses1,498 (71)
Lease liabilities(1,247)(1,856)
Accrued severance payable, net91 40 
Net cash used in operating activities(2,072)(10,792)
Cash flows from investing activities
Acquisition, net of cash assumed
— 27,531 
Proceeds from sale of fixed assets— 217 
Capitalized software development costs(2,047)(4,676)
Capital expenditures(1,441)(10,454)
Repayment of loan advanced to external parties— 294 
Net cash (used in)/provided by investing activities (3,488)12,912 
Cash flows from financing activities
Repayment of long-term debt(2,656)(978)
Short-term bank debt, net4,996 9,955 
Purchase of treasury stock upon vesting of restricted stock
(94)(2,836)
Payment of preferred stock dividend and redemption of preferred stock(2,257)(90,298)
Proceeds from private placement, net
— 61,851 
9

Proceeds from exercise of stock options, net36 — 
Cash paid on dividends to affiliates— (6)
Net cash from/(used in) financing activities25 (22,312)
Effect of foreign exchange rate changes on cash and cash equivalents53 (436)
Net decrease in cash and cash equivalents, and restricted cash(5,482)(20,628)
Cash and cash equivalents, and restricted cash at beginning of the period25,089 109,664 
Cash and cash equivalents, and restricted cash at end of the period$19,607 $89,036 
Reconciliation of cash and cash equivalents, and restricted cash, at beginning of the period
Cash and cash equivalents24,780 24,354 
Restricted cash309 85,310 
Cash and cash equivalents, and restricted cash, at beginning of the period$25,089 $109,664 
Reconciliation of cash and cash equivalents, and restricted cash, at end of the period
Cash and cash equivalents19,297 25,962 
Restricted cash310 63,074 
Cash and cash equivalents, and restricted cash, at end of the period$19,607 $89,036 
Supplemental disclosure of cash flow information:
Cash paid for:
Taxes$115 $774 
Interest$538 $6,262 
Noncash investing and financing activities:
Common stock issued for transaction bonus$— $9 
Shares issued in connection with MiX Combination$— $362,005 

See accompanying notes to condensed consolidated financial statements.



10

POWERFLEET, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
September 30, 2024
In thousands (except per share data)
(Unaudited)

NOTE 1 - DESCRIPTION OF THE COMPANY AND BASIS OF PRESENTATION

Description of the Company

Powerfleet, Inc. (the “Company” or “Powerfleet”) is a global leader of Internet-of-Things (“IoT”) solutions providing valuable business intelligence for managing high-value enterprise assets that improve operational efficiencies. The Company has a primary listing on The Nasdaq Global Market and a secondary listing on the Main Board of the Johannesburg Stock Exchange.

I.D. Systems, Inc. (“I.D. Systems”) was incorporated in the State of Delaware in 1993. Powerfleet was incorporated in the State of Delaware in February 2019 for the purpose of effectuating the transactions pursuant to which the Company acquired Pointer Telocation Ltd. (“Pointer”) and commenced operations on October 3, 2019. Upon the closing of such transactions, Powerfleet became the parent entity of I.D. Systems and Pointer.

On April 2, 2024 (the “Implementation Date”), the Company consummated the transactions contemplated by the Implementation Agreement, dated as of October 10, 2023 (the “Implementation Agreement”), that the Company entered into with Main Street 2000 Proprietary Limited, a private company incorporated in the Republic of South Africa and a wholly owned subsidiary of the Company (“Powerfleet Sub”), and MiX Telematics Limited, a public company incorporated under the laws of the Republic of South Africa (“MiX Telematics”), pursuant to which MiX Telematics became an indirect, wholly owned subsidiary of the Company (the “MiX Combination”). The consolidated financial statements as of and for the six months ended September 30, 2024 include the financial results of MiX Telematics and its subsidiaries from the Implementation Date. See Note 3 for additional information.

Basis of Preparation

The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the consolidated financial position of the Company as of March 31, 2024 and September 30, 2024, the consolidated results of its operations for the three- and six-month periods ended September 30, 2023 and 2024, the consolidated change in stockholders’ equity for the three- and six-month periods ended September 30, 2023 and 2024, and the consolidated cash flows for the six-month periods ended September 30, 2023 and 2024. The results of operations for the three- and six-month periods ended September 30, 2024 are not necessarily indicative of the operating results for the full year. On May 8, 2024, the Company’s Board of Directors approved a change in our fiscal year end from December 31 to March 31 in order to better align the Company’s reporting calendar with the April 2, 2024 close of the MiX Combination and MiX Telematics’ historical March 31 fiscal year end. These financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures for the fiscal year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K for the year then ended, and the audited consolidated financial statements and related disclosures for the three-month transition period ended March 31, 2024 included in the Company’s Transition Report on Form 10-KT for the period then ended.

Restatement of Previously Issued Consolidated Financial Statements

In connection with the preparation of the Company’s audited consolidated financial statements for the year ended December 31, 2023, the Company determined that the accounting for the redemption premium associated with its Series A convertible preferred stock (“Series A Preferred Stock”) was understated resulting in an understatement of “net loss attributable to common stockholders” and “net loss per share attributable to common stockholders” for each period, an understatement of the value of the convertible redeemable preferred stock as of each balance sheet date, and an overstatement of the additional paid-in capital as of each balance sheet date. The required adjustments to correct the redemption value of the calculation of the Series A Preferred Stock and the related accretion of the value of the preferred stock in the consolidated statement of operations included the recording of a non-cash accretion which resulted in an increase in the net loss attributable to common stockholders, an increase in the “convertible redeemable preferred stock”, and a decrease of “additional paid-in capital” for the fiscal years ended December 31, 2021 and 2022 and each of the interim periods during the 2022 and 2023 fiscal years.
11

The correction of the error resulted in reporting the value of the convertible preferred stock including the accretion to the redemption value from the date of original issuance through each balance sheet date applying the interest method. The restatement to non-cash accretion resulted in an increase in the net loss attributable to common stockholders and a decrease in “additional paid-in capital” of $1,604 and $1,667 for the three-month period ended June 30, 2023 and three-month period ended September 30, 2023, respectively. The Company had determined that it was appropriate to restate the financial statements for the fiscal years ended December 31, 2021 and 2022 and each of the interim periods during the 2022 and 2023 fiscal years included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”). In addition, the Company also corrected other unrelated immaterial errors that were previously either unrecorded or recorded as out-of-period adjustments. For additional information refer to Note 2 to the financial statements included in the 2023 Annual Report.

Going Concern

As of September 30, 2024, the Company had cash and cash equivalents and restricted cash of $89,036 and working capital of $81,209. The Company’s primary sources of cash are cash flows from sales of products and services, its holdings of cash, cash equivalents and proceeds from the sale of its capital stock and borrowings under its credit facilities. See Note 13 for additional information on the Company’s available credit facilities.

Management believes the Company’s cash, cash equivalents, and restricted cash of $89,036 as of September 30, 2024, in conjunction with cash expected to be generated from the execution of its strategic plan over the next 12 months, and proceeds from the Company’s credit facilities are sufficient to fund the projected operations for at least the next 12 months from the issuance date of these financial statements (November 12, 2024) and service the Company’s 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 the Company 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 the Company and would be implemented, if assumed levels of revenue and gross margin are not achieved and additional funding is not obtained.


NOTE 2 - USE OF ESTIMATES

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company continually evaluates estimates used in the preparation of the financial statements for reasonableness. The most significant estimates relate to assumptions used in business combinations, allowance for credit losses, income taxes, realization of deferred tax assets, accounting for uncertain tax positions, the impairment of intangible assets, including goodwill and long-lived assets, capitalized software development costs, inventory reserves, standalone selling prices (“SSP”), valuation of the derivative asset, and market-based stock-based compensation costs. Actual results could differ from those estimates.


NOTE 3 - ACQUISITION

On April 2, 2024, the Company consummated the MiX Combination. On the Implementation Date, Powerfleet Sub acquired all the issued ordinary shares of MiX Telematics (including those represented by MiX Telematics’ American Depositary Shares) through the implementation of a scheme of arrangement in accordance with Sections 114 and 115 of the South African Companies Act, No. 71 of 2008, as amended, in exchange for shares of the Company’s common stock. As a result, MiX Telematics became the Company’s indirect, wholly owned subsidiary.

The MiX Combination met the criteria for a business combination to be accounted for using the acquisition method under ASC 805, Business Combinations (“ASC 805”), with the Company identified as the legal and the accounting acquirer.

The Company was determined to be the accounting acquirer under Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), based on the evaluation of the following facts and circumstances favoring Powerfleet as the accounting acquirer over those supporting MiX Telematics as the accounting acquirer:
•The majority of the Board of Directors is comprised by Directors with prior affiliation to the Company. In addition the Company’s Board Chairperson continued in the role post the acquisition date;
•Post acquisition the majority of the senior management team, including the Chief Executive Officer, comprised of the Company’s senior management team who were already operating in that capacity for the Company prior to the acquisition date;
12

•While the voting rights of 65.5% in favor of MiX Telematics is an indicator that MiX Telematics is the acquirer, the Company believes that the weight of the indicator is tempered given that the negotiated premium paid by Powerfleet to MiX Telematics contributed to the relative ownership split, and that, qualitatively, the significant reduction in the carryover MiX Telematics institutional investor base would have reduced the legacy MiX Telematics shareholders’ ability to control the combined entity, particularly in the light of the significant concentration of institutional investors on the Powerfleet side; and
•While no individual or organized group owns a large minority interest in the combined entity, the Company notes that the largest institutional investor post-transaction is an investor of legacy Powerfleet. Additionally, the Company also notes that, immediately following the closing of the Business Combination, 30% out of the approximately 35% of total shares held by shareholders of legacy Powerfleet were concentrated in the Company’s top 20 institutional shareholders, compared to only 9% out of the approximately 65% of total shares held by shareholders of legacy MiX Telematics.

The acquisition of MiX Telematics and its business will, among other things:
•create a mobile asset IoT SaaS organization with significant scale, serving all mobile asset types. The increased scale is expected to enable the combined entity to more efficiently serve its customers and create advantages to compete in an industry characterized by the need for high pace of development and innovation;
•enable the Company to maximize significant cross-sell and upsell opportunities within its large joint customer base due to the joint entity’s combined geographical footprint, deep vertical expertise and expanded software solution sets coupled with its extensive direct and indirect sales channel capabilities; and
•enable the combined organization to accelerate the delivery of top-class solutions with improved competitive advantage by integrating Powerfleet’s and MiX Telematics’ world-class engineering and technology teams.

The preliminary estimated fair value of the consideration transferred for MiX Telematics was $362,005 as of the Implementation Date, which consisted of the following:

(in thousands, except for share price and exchange ratio)April 2,
2024
Number of MiX Telematics ordinary shares outstanding554,021 
Exchange ratio0.12762
Shares of Powerfleet common stock to be issued for MiX Telematics ordinary shares outstanding70,704 
Powerfleet stock price*5.12
Fair value of Powerfleet common stock transferred to MiX Telematics shareholders362,005 
Replacement of acquiree’s equity awards by the acquirer**7,818 
Total fair value of preliminary consideration369,823 

* Powerfleet’s closing share price on April 2, 2024.
** The portion of the fair-value-based measure of the replacement award that is part of the consideration transferred in exchange for the acquiree equals the portion of the acquiree award that is attributable to pre-combination vesting.

Preliminary Allocation of Purchase Price

The purchase price was allocated to the assets and liabilities assumed based on the estimated fair values at the date of acquisition. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill. Goodwill is primarily attributed to the assembled workforce, expected synergies from future expected economic benefits, including enhanced revenue growth from expanded products and capabilities, as well as substantial cost savings from duplicative overheads, streamlined operations and enhanced efficiency. Goodwill is not deductible for tax purposes. Goodwill associated with the acquisition has not yet been assigned to the Company’s geographical regions pending finalization of the purchase accounting.









13

The preliminary allocation of purchase price was as follows (in thousands):

April 2,
2024
Assets acquired:
Cash and cash equivalents$26,737 
Restricted cash794 
Accounts receivable, net 24,250 
Inventory, net4,142 
Prepaid expenses and other current assets8,886 
Fixed assets, net35,587 
Intangible assets, net153,000 
Right-of-use asset3,794 
Deferred tax assets1,093 
Other assets973 
Total assets acquired$259,256 
Liabilities assumed:
Short-term bank debt and current maturities of long-term debt$20,158 
Accounts payable and accrued expenses26,400 
Deferred revenue - current6,394 
Lease liability - current859 
Income taxes payable355 
Lease liability - less current portion2,852 
Deferred tax liability48,725 
Other long-term liabilities484 
Total liabilities assumed$106,227 
Total identifiable net assets acquired$153,029 
Non-controlling interest(5)
Goodwill216,799 
Purchase price consideration$369,823 

The above fair values of assets acquired and liabilities assumed are preliminary and are based on the information that was available as of the reporting date. The Company’s allocation of the preliminary purchase price to certain assets acquired and liabilities assumed is provisional and the Company will continue to adjust those estimates as additional information pertaining to events or circumstances present at April 2, 2024 becomes available and final valuation and analysis are completed. During the three-month period ended September 30, 2024, the Company recognized an adjustment of $425 against goodwill. In addition, the Company is still in the process of determining the fair value of acquired assets and assumed liabilities, which may also result in adjustments of the provisional amounts recorded. The fair values of the assets acquired and liabilities assumed, including the identifiable assets acquired, have been preliminarily determined using the income and cost approach, and are partially based on inputs that are unobservable. The Company used discounted cash flow (“DCF”) analyses, which represent Level 3 fair value measurements, to assess certain components of its purchase price allocation as a result of the acquisition. The fair value of the customer relationships was determined using the multi-period excess earnings method. The fair value of the tradename and developed technology was determined using an income approach based on the relief from royalty method.

For the fair value estimates, the Company used (i) forecasted future cash flows, (ii) historical and projected financial information, (iii) synergies including cost savings, (iv) revenue growth rates, (v) customer attrition rates, (vi) royalty rates, and (vii) discount rates, as relevant, that market participants would consider when estimating fair values. These estimates require judgment and are subject to change. Differences between the preliminary estimates and final accounting may occur, and those could be material.
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The Company believes that the information provides a reasonable basis for estimating the fair values of the acquired assets and assumed liabilities, but the potential for measurement period adjustments exists based on the Company’s continuing review of matters related to the acquisition. Adjustments to initial preliminary fair value of the assets acquired and assumed liabilities during the measurement period until April 2, 2025, will be recorded during the period in which the adjustments are determined, including the effect on earnings of any amounts we would have recorded in previous periods if the accounting had been completed (i.e. the historical reported financial statements will not be retrospectively adjusted).

The provisional amounts for assets acquired and liabilities assumed include:
•The fair value of accounts receivable and other receivables which may be subject to adjustment for reassessment of collectability as of the date of acquisition, collections and other adjustment subsequent to the acquisition;
•Property, and equipment, for which the preliminary estimates are subject to revision for finalization of preliminary appraisals;
•Right-of-use assets and lease liabilities, which will be subject to adjustment upon completion of the review of the inputs, including sublease assumptions, for the calculations;
•Acquired inventory, which values are still being assessed on an individual basis;
•Prepaid expenses, accounts payable and accrued expenses, which will be subject to adjustment based upon completion of working capital clean up and assessment of other factors;
•The recognition and measurement of contract assets and contract liabilities acquired in accordance with ASC 606 will be subject to adjustment upon completion of assessment;
•Acquired intangible assets will be subject to adjustment as additional assets are identified, estimates and forecasts are refined and disaggregated, useful lives are finalized, and other factors deemed relevant are considered;
•Deferred income taxes will be subject to adjustment based upon the completion of the review of the book and tax bases of assets acquired and liabilities assumed, applicable tax rates and the impact of the revisions of estimates for the items described above; and
•Goodwill will be subject to adjustment for the impact of the revisions of estimates for the items described above.

The Company expects to complete the purchase price allocation as soon as practicable, but no later than one year from the acquisition date.

Acquired Identifiable Intangible Assets

The following table sets forth preliminary estimated fair values of the components of the identifiable intangible assets acquired and their estimated useful lives:

(in thousands)Fair valueWeighted average useful lives
Trade name$10,000 14years
Developed technology30,000 5years
Customer relationships113,000 13years
$153,000 

Acquisition-Related Expenses

The Company expensed a total of $20,443 of acquisition-related costs in the consolidated statement of operations related to the MiX Combination, of which $152 was expensed in the three-month period ended September 30, 2024 and $14,643 was expensed in the six-month period ended September 30, 2024.

Unaudited Pro Forma Financial Information

The business acquired in the MiX Combination contributed revenue of $43,825 and a net profit of $2,007, after amortization of identified intangibles, for the three-month period ended September 30, 2024 and revenue of $87,514 and a net loss of $4,925 for the six-month period ended September 30, 2024.





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NOTE 4 - CASH AND CASH EQUIVALENTS

The Company considers all highly liquid debt instruments with an original maturity of three months or less when purchased to be cash equivalents unless they are legally or contractually restricted. The Company’s cash and cash equivalent balances exceed Federal Deposit Insurance Corporation (“FDIC”) and other local jurisdictional limits. Restricted cash at March 31, 2024 consisted of escrow amounts of $85,000 for a facilities agreement (the “Facilities Agreement”) with FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB”) deposited in escrow for the MiX Combination and cash of $310 held in escrow for purchases from a vendor. Restricted cash at September 30, 2024 consists of cash of $311 held in escrow for purchases from a vendor, cash of $856 held by MiX Telematics Enterprise BEE Trust (a VIE which is consolidated) to be used solely for the benefit of its beneficiaries, cash securing guarantees of $56 issued in respect of property lease agreements entered into by MiX Telematics Australasia, and $61,850 held by the Company in accordance with the terms of the Subscription Agreement, dated as of September 18, 2024 (the “Subscription Agreement”), by and among the Company and various accredited investors party thereto (the “Investors”), pursuant to which the Investors purchased from the Company, and the Company agreed to issue to such Investors, an aggregate of 20,000,000 shares of the Company’s common stock at a price per share of $3.50 for aggregate gross proceeds of $70,000 (the “Private Placement”). The Private Placement was consummated on October 1, 2024. See Note 24 - Subsequent Events for additional information on the Private Placement and related transactions.


NOTE 5 - REVENUE RECOGNITION

The Company and its subsidiaries generate revenue from sales of systems and products and from customer SaaS and hosting infrastructure fees. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Sales, value add, and other taxes the Company collects concurrently with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as an expense. The expected costs associated with the Company’s base warranties continue to be recognized as an expense when the products are sold (see Note 14).

Revenue is recognized when performance obligations under the terms of a contract with the customer are satisfied. Product sales are recognized at a point in time when title transfers, when the products are shipped, or when control of the system is transferred to the customer, which usually is upon delivery of the system and when contractual performance obligations have been satisfied. The Company utilizes significant judgment to determine whether control of the hardware has transferred to the customer (i.e. distinct to the customer separate from SaaS services provided). For products which are not distinct to the customer separate from the SaaS services provided, the Company considers both hardware and SaaS services a bundled performance obligation.

Under the applicable accounting guidance, all of the Company’s billings for future services are deferred and classified as a current and long-term liability. The deferred revenue is recognized over the service contract life, ranging from one to five years, beginning at the time that a customer acknowledges acceptance of the equipment and service. Payment terms are generally 30 days after invoice date.

The Company recognizes revenue for remotely hosted SaaS agreements and post-contract maintenance and support agreements beyond its standard warranties over the life of the contract. Revenue is recognized ratably over the service periods and the cost of providing these services is expensed as incurred. Amounts invoiced to customers which are not recognized as revenue are classified as deferred revenue and classified as current or long-term based upon the terms of future services to be delivered. Deferred revenue also includes prepayment of extended maintenance, hosting and support contracts.

The Company earns other service revenues from installation services, training and technical support services which are short-term in nature and revenue for these services is recognized at the time of performance when the service is provided.

The Company also derives revenue from leasing arrangements. Such arrangements provide for monthly payments covering product or system sale, maintenance, support and interest. These arrangements meet the criteria to be accounted for as operating or sales-type leases. Accordingly, for sales-type leases an asset is established for the “sales-type lease receivable” at the present value of the expected lease payments and revenue is deferred and recognized over the service contract, as described above. Maintenance revenues and interest income are recognized monthly over the lease term.

The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative SSP. Judgment is required to determine the SSP for each distinct performance obligation. The Company generally determines standalone selling prices based on observable prices charged to customers. Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of its transactions, the customer demographic, price lists, its go-to-market strategy and historical and current
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sales and contract prices. As the Company’s go-to-market strategies evolve, it may modify its pricing practices in the future, which could result in changes to SSP.

In certain cases, the Company is able to establish SSP based on observable prices of products or services sold separately in comparable circumstances to similar customers. The Company uses a single amount to estimate SSP when it has observable prices. If SSP is not directly observable, for example when pricing is highly variable, the Company uses a range of SSP. The Company determines the SSP range using information that may include pricing practices or other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customer size.

The Company recognizes an asset for the incremental costs of obtaining the contract arising from the sales commissions to distributors and employees because the Company expects to recover those costs through future fees from the customers. The Company amortizes the asset over one to five years because the asset relates to the services transferred to the customer during the contract term of one to five years.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which the Company has the right to invoice for services performed.

The following table presents the Company’s revenues disaggregated by revenue source for the three and six months ended September 30, 2023 and 2024 (in thousands):

Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
Products$13,233 $20,293 $24,317 $39,031 
Services21,010 56,725 42,018 113,417 
$34,243 $77,018 $66,335 $152,448 

The balances of contract assets and contract liabilities from contracts with customers are as follows as of March 31, 2024 and September 30, 2024 (in thousands):

March 31, 2024September 30, 2024
Contract Assets:
Deferred contract cost (1)
$2,632 $7,408 
Deferred costs - current$42 $13 
Contract Liabilities
Deferred revenue – services (2)
$10,674 $14,153 
Deferred revenue – products (2)
60 968 
10,734 15,121 
Less: Deferred revenue – current(5,842)(10,447)
Deferred revenue – less current portion$4,892 $4,674 
(1) Deferred Contract costs are included in Other assets on the condensed consolidated balance sheets.
(2) The Company records deferred revenues when cash payments are received or due in advance of the Company’s performance. For the three-month periods ended September 30, 2023 and 2024, the Company recognized revenue of $1,416 and $2,499, respectively, which was included in the deferred revenue balance at the beginning of each reporting period. For the six-month periods ended September 30, 2023 and 2024, the Company recognized revenue of $3,190 and $5,486, respectively, which was
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included in the deferred revenue balance at the beginning of each reporting period. The Company expects to recognize as revenue through year 2029, when it transfers those goods and services and, therefore, satisfies its performance obligation to the customers.


NOTE 6 - ALLOWANCE FOR CREDIT LOSSES

The Company’s receivables were evaluated to determine an appropriate allowance for credit losses. For trade receivables, the Company’s historical collections were analyzed by the number of days past due to determine the uncollectible rate in each range of days past due and considerations of any changes expected in the future. The estimate of the allowance for credit losses is charged to the allowance for credit losses based on the age of receivables multiplied by the historical uncollectible rate for the range of days past due or earlier if the account is deemed uncollectible for other reasons. Recoveries of amounts previously charged as uncollectible are credited to the allowance for credit losses.

An analysis of the allowance for credit losses for the periods ended September 30, 2023 and 2024 is as follows (in thousands):

Six Months Ended September 30,
20232024
Allowance for credit losses, March 31$2,328 $3,197 
Current period provision for expected credit losses933 4,369 
Write-offs charged against the allowance
(617)(2,688)
Foreign currency translation33 443 
Allowance for credit losses, September 30$2,677 $5,321 


NOTE 7 - PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other current assets comprise the following (in thousands):
March 31,
2024		September 30,
2024
Sales-type lease receivables, current$1,100 $1,135 
Prepaid expenses*2,817 8,021 
Contract assets1,162 — 
Tax receivables125 716 
VAT receivable
— 4,303 
Sundry debtors— 3,531 
Other current assets2,887 279 
$8,091 $17,985 

*This includes the prepaid portion of total deferred contract assets.



NOTE 8 - INVENTORY

Inventory, which primarily consists of finished goods and components used in the Company’s products, is stated at the lower of cost or net realizable value using the “moving average” cost method or the first-in first-out (FIFO) method. Inventory is shown net of a valuation reserve of $538 at March 31, 2024 and $1,330 at September 30, 2024.








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Inventories consist of the following (in thousands):

March 31,
2024		September 30,
2024
Components$9,403 $11,133 
Work in process49 82 
Finished goods, net12,206 12,273 
$21,658 $23,488 


NOTE 9 - FIXED ASSETS

Fixed assets are stated at cost, less accumulated depreciation and amortization, and are summarized as follows (in thousands):

March 31,
2024		September 30,
2024
Installed and uninstalled products$11,030 $50,322 
Computer software11,496 13,042 
Computer and electronic equipment6,179 7,166 
Furniture and fixtures2,361 4,039 
Leasehold improvements1,498 1,447 
Plant and equipment— 365 
Assets in progress— 98 
32,564 76,479 
Accumulated depreciation and amortization(19,845)(24,551)
$12,719 $51,928 

Depreciation and amortization expense for the three- and six-month periods ended September 30, 2023 was $671 and $1,638, respectively, and for the three- and six- month periods ended September 30, 2024 was $5,227 and $9,976, respectively.


NOTE 10 - INTANGIBLE ASSETS AND GOODWILL

The Company capitalizes costs for software to be sold, marketed, or leased to customers. Costs incurred internally in researching and developing software products are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. The amortization of these costs is included in cost of revenue over the estimated life of the products.














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The following table summarizes identifiable intangible assets of the Company as of March 31, 2024 and September 30, 2024 (in thousands):

September 30, 2024Useful Lives (In Years)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Amortized:
Customer relationships
9 - 13
$132,264 $(13,171)$119,093 
Trademark and tradename
3 - 15
17,553 (4,625)12,928 
Patents
7 - 11
628 (508)120 
Technology
5 - 7
43,745 (13,912)29,833 
Software to be sold or leased
3 - 6
6,416 (1,235)5,181 
200,606 (33,451)167,155 
Unamortized:
Customer list104 — 104 
Trademark and tradename61 — 61 
165 — 165 
Total$200,771 $(33,451)$167,320 

March 31, 2024Useful Lives (In Years)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Amortized:
Customer relationships
9 - 12
$19,264 $(8,012)$11,252 
Trademark and tradename
3 - 15
7,553 (3,877)3,676 
Patents
7 - 11
628 (464)164 
Technology
 7
10,911 (10,911)— 
Software to be sold or leased
3
5,159 (764)4,395 
43,515 (24,028)19,487 
Unamortized:
Customer list104 — 104 
Trademark and tradename61 — 61 
165 — 165 
Total$43,680 $(24,028)$19,652 

At September 30, 2024, the weighted-average amortization periods for customer relationships, trademarks and tradenames, patents, technology, and capitalized software to be sold or leased were 12.8, 12.1, 7.0, 5.0, and 3.0 years, respectively.

Amortization expense for the three- and six-month periods ended September 30, 2023 was $1,813 and $3,169, respectively, and for the three- and six-month periods ended September 30, 2024 was $3,837 and $9,423, respectively.



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Estimated future amortization expense for each of the five succeeding fiscal years for these intangible assets is as follows:

2025 (remaining)$9,504 
202622,144 
202720,630 
202818,127 
202914,741 
Thereafter82,009 
$167,155 

Refer to Note 3 for the change in the carrying amount of goodwill from April 1, 2024 to September 30, 2024 as a result of the MiX Combination.

For the six-month period ended September 30, 2024, the Company did not identify any indicators of impairment.


NOTE 11 - STOCK-BASED COMPENSATION

During the three-month period ended June 30, 2024, the Company granted options to purchase 375 shares of common stock with time-based vesting conditions.

During the three-month period ended September 30, 2024, the Company did not grant any options to purchase shares of common stock with time-based vesting conditions.

[A] Stock Options:

The following table summarizes the activity relating to the Company’s market-based stock options for the six-month period ended September 30, 2024:
OptionsWeighted-
Average
Exercise Price 		Weighted Average Contractual Remaining Term (years)
Aggregate Intrinsic Values (in thousands)
Outstanding as of April 1, 2024
5,445 13.39 — — 
Granted— — — — 
Exercised— — — — 
Forfeited(50)3.13 — — 
Outstanding as of September 30, 2024
5,395 13.487.46$2,293 
Vested as of September 30, 2024
— — — $— 
















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The following table summarizes the activity relating to the Company’s stock options, excluding the market-based stock options, for the six-month period ended September 30, 2024:

OptionsWeighted-
Average
Exercise Price		Weighted Average Contractual Remaining Term (years)
Aggregate Intrinsic Values (in thousands)
Outstanding as of April 1, 2024
1,979 4.68 — — 
Granted375 4.31 — — 
Exercised— — — — 
Forfeited(45)5.96 — — 
Outstanding as of September 30, 2024
2,309 4.596.82$1,600 
Vested as of September 30, 2024
1,972 4.64 6.33$1,370 

The fair value of each option grant on the date of grant is estimated using the Black-Scholes option-pricing model reflecting the following weighted-average assumptions:

September 30, 2023September 30, 2024
Expected volatility 55.6 %60.2 %
Expected life of options6.16.5
Risk free interest rate3.87 %4.23 %
Dividend yield— — 
Weighted-average fair value of options granted during the year$1.66$2.66

Expected volatility is based on historical volatility of the Company’s common stock and the expected life of options is based on historical data with respect to employee exercise periods.

The Company recorded stock-based compensation expense of $781 and $1,366 for the three- and six-month periods ended September 30, 2023, respectively, and $627 and $2,444 for the three- and six-month periods ended September 30, 2024, respectively, in connection with awards made under the stock option plans. The increase in the recognized expense is due to the approved acceleration of vesting of unvested restricted stock and stock option awards with time-based vesting conditions that were outstanding under the Powerfleet equity plans (including any inducement awards with time-based vesting) in connection with the closing of the MiX Combination. The accelerated vesting of the Company’s equity awards is not part of what was acquired in the MiX Combination, nor what was paid for in the MiX Combination, because it was for the benefit of the Company’s employees rather than for the benefit of MiX Telematics’ employees. Therefore, the acceleration of the equity awards was treated as a separate transaction from the MiX Combination and the acceleration of vesting was accounted for immediately upon closing of the MiX Combination on April 2, 2024.

The fair value of options vested during the six-month periods ended September 30, 2023 and 2024 was $42 and $1,552, respectively. There were no option exercises that occurred during the six-month periods ended September 30, 2023 and 2024.

As of September 30, 2024, there was $883 of total unrecognized compensation costs related to unvested options granted under the Company’s stock option plans excluding the market-based stock options that were granted to certain senior managers, including the Company’s executive officers. That cost is expected to be recognized over a weighted-average period of 1.21 years.

As of September 30, 2024, there was $3,021 of total unrecognized compensation costs related to unvested options granted under the Company’s stock option plans for the market-based stock options that were granted to certain senior managers, including the Company’s executive officers. That cost is expected to be recognized over a weighted-average period of 2.23 years.

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The Company estimates forfeitures at the time of valuation and reduces expenses ratably over the vesting period. This estimate is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate.

[B] Restricted Stock Awards:

The Company grants restricted stock to employees, whereby the employees are contractually restricted from transferring the shares until they are vested. The stock is unvested at the time of grant, and, upon vesting, there are no legal restrictions on the stock. Some participants have the option to have their shares withheld for their taxes upon vesting. Shares withheld for taxes are treated as a purchase of treasury stock. The fair value of each share is based on the Company’s closing stock price on the date of the grant. A summary of all unvested restricted stock for the six-month period ended September 30, 2024 is as follows:

Number of
Unvested Shares
Weighted- Average
Grant Date Fair Value
Unvested, March 31, 2024
1,370 2.68 
Granted54 5.45 
Vested(1,370)2.68 
Forfeited or expired— — 
Unvested, September 30, 2024
54 5.45 

The Company recorded stock-based compensation expenses of $320 and $587 for the three- and six-month periods ended September 30, 2023, respectively, and $125 and $3,220 for the three- and six-month periods ended September 30, 2024, respectively, in connection with restricted stock grants. As of September 30, 2024, there was $183 of total unrecognized compensation cost related to unvested shares. That cost is expected to be recognized over a weighted-average period of 0.62 years. The increase in the recognized expense is due to the approved acceleration of vesting of unvested restricted stock and stock option awards with time-based vesting conditions that are outstanding under the Powerfleet equity plans (including any inducement awards with time-based vesting) in connection with the closing of the MiX Combination. The accelerated vesting of the Company’s equity awards is not part of what was acquired in the MiX Combination, nor what was paid for in the MiX Combination because it was for the benefit of the Company’s employees rather than for the benefit of MiX Telematics’ employees. Therefore, the acceleration of the equity awards was treated as a separate transaction from the MiX Combination and the acceleration of vesting was accounted for immediately upon closing of the MiX Combination on April 2, 2024.

[C] Stock Appreciation Rights:

In connection with the closing of the MiX Combination, the Company assumed each of MiX Telematics’ share plans. MiX Telematics issued equity-classified share incentives under the MiX Telematics Long-Term Incentive Plan (“LTIP”) to directors and certain key employees within the Company.

The LTIP provides for three types of grants to be issued, namely performance shares, restricted share units and stock appreciation rights (“SARs”). On the Implementation Date, the only issued and outstanding equity awards under the LTIP were SARs, and the Company assumed the outstanding SARs in issue. No additional performance shares or restricted share units will be issued or assumed by the Company.

The replacement of MiX Telematics’ share-based payment awards has been treated as a modification under ASC 718, Compensation—Stock Compensation as of the Implementation Date. The fair value of the replacement SARs issued was allocated between pre-combination and post-combination service based on the vesting period. The fair value related to pre-combination service is included as part of the fair value of the consideration in the MiX Combination (see Note 3), and the fair value related to post-combination service is to be recognized as an expense over the remaining vesting period.

The total stock-based compensation expense recognized during the three- and six-month periods ended September 30, 2024 was $637 and $1,600, respectively.





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The following table summarizes the activities for the outstanding SARs:

Number of SARsWeighted-
Average
Exercise Price		Weighted Average Contractual Remaining Term (years)
Aggregate Intrinsic Values (in thousands)
Outstanding as of April 1, 2024
— — 
Acquired through MiX Combination5,740 2.61 
Granted— — 
Exercised(677)2.97 
Forfeited(491)2.42 
Outstanding as of September 30, 2024
4,572 2.573.16
Vested as of September 30, 2024
1,420 3.08 1.41$2,710 

As of September 30, 2024, there was $6,848 of unrecognized compensation cost related to unvested SARs. This amount is expected to be recognized over a weighted-average period of 3.05 years.


NOTE 12 - NET LOSS PER SHARE

Net loss per share for the three- and six-month periods ended September 30, 2023 and 2024 are as follows:

Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
Basic and diluted loss per share
Net loss attributable to common stockholders$(6,510)$(1,888)$(12,679)$(24,225)
Net loss per share attributable to common stockholders - basic and diluted$(0.18)$(0.02)$(0.36)$(0.23)
Weighted-average common share outstanding - basic and diluted35,653 107,532 35,629 107,335 

Basic loss per share is calculated by dividing net loss attributable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution assuming common shares were issued upon the exercise of outstanding options and the proceeds thereof were used to purchase outstanding common shares. Dilutive potential common shares include outstanding stock options, warrants and restricted stock and performance share awards. We include participating securities (unvested share-based payment awards and equivalents that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of earnings per share pursuant to the two-class method. The Company’s participating securities consist solely of preferred stock, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company.








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NOTE 13 - SHORT-TERM BANK DEBT AND LONG-TERM DEBT

March 31,
2024
September 30,
2024
Short-term bank debt$— $31,968 
Current maturities of long-term debt$1,951 $3,371 
Long-term debt - less current maturities$113,810 $111,011 

Short-Term Bank Debt

As of September 30, 2024 short-term debt comprised $31,813 of borrowing facilities and $155 of book overdrafts.

Standard Bank Facility

The Standard Bank facility is in the form of a customer foreign currency account overdraft facility (the “CFC Overdraft Facility”). The CFC Overdraft Facility entitles MiX Telematics to utilize a maximum amount of R70,000 (the equivalent of $4,090 as of September 30, 2024). The CFC Overdraft Facility bears interest at the South African prime interest rate less 1.2% per annum. As of September 30, 2024, the South African prime interest rate was 11.50%. As of September 30, 2024, $0 of the CFC Overdraft Facility was utilized.

There is a suretyship agreement entered into with Standard Bank providing that MiX Telematics and only one subsidiary being MiX Telematics International (Pty) Ltd, binds themselves as surety(ies) and co-principal debtor(s) for the payment, when due, of all the present and future debts of any kind of MiX Telematics and MiX Telematics International to Standard Bank. The Standard Bank facility has no fixed renewal date and is repayable on demand.

RMB Facility

On March 7, 2024, as part of the MiX Combination, MiX Telematics and Powerfleet entered into the Facilities Agreement with RMB. Following the signing of the Facilities Agreement, MiX Telematics entered into a Facility Notice and General Terms and Conditions (the “Credit Agreement”) with RMB on March 14, 2024 for a 364-day committed general banking facility of R350,000 (the equivalent of $20,451 as at September 30, 2024) (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 entered into on March 7, 2024, which is described in more detail below.

The RMB General Facility is repayable on demand and has a term of 365 days from the Available Date (as defined therein). Repayment of the RMB General Facility, including capitalized interest, is due by the earlier of (a) the Available Date or (b) April 2, 2025, unless extended by agreement between MiX Telematics and RMB. Interest rate for the RMB General Facility is calculated at South African prime rate minus 0.75% per annum and will be calculated on the daily outstanding balance, compounded monthly in arrears and repaid quarterly. As of September 30, 2024, $19,728 of the RMB General Facility was utilized.

Hapoalim Debt

As of September 30, 2024, Powerfleet Israel Ltd. (“Powerfleet Israel”) had utilized approximately $12,085 under the Hapoalim Revolving Facilities, which are described below.

Long-Term Debt

Hapoalim Debt

In connection with the Pointer acquisition, Powerfleet Israel incurred New Israeli Shekels (“NIS”) denominated debt in term loan borrowings on October 3, 2019 under a Credit Agreement (the “Prior Credit Agreement”) with Bank Hapoalim B.M. (“Hapoalim”), pursuant to which Hapoalim agreed to provide Powerfleet Israel with two senior secured term loan facilities in an initial aggregate principal amount of $30,000 (composed of two facilities in the aggregate principal amount of $20,000 and $10,000, respectively and a five-year revolving credit facility to Pointer denominated in NIS in an initial aggregate principal amount of $10,000 (collectively, the “Prior Credit Facilities”). The Prior Credit Facilities were scheduled to mature on October 3, 2024.

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On March 18, 2024, Powerfleet Israel and Pointer (collectively, the “Borrowers”) entered into an amended and restated credit agreement (the “A&R Credit Agreement”), which refinanced the facilities under, and amended and restated, the Prior Credit Agreement. The A&R Credit Agreement provides for (i) two senior secured term loan facilities denominated in NIS to Powerfleet Israel in an aggregate principal amount of $30,000 (composed of two facilities in the aggregate principal amounts of $20,000 and $10,000, respectively) (“Hapoalim Facility A” and “Hapoalim Facility B,” respectively, and, collectively, the “Hapoalim Term Facilities”) and (ii) two revolving credit facilities to Pointer in an aggregate principal amount of $20,000 (composed of two revolvers in the aggregate principal amounts of $10,000 and $10,000, respectively) (“Hapoalim Facility C” and “Hapoalim Facility D,” respectively, and, collectively, the “Hapoalim Revolving Facilities” and, together with the Hapoalim Term Facilities, the “Hapoalim Credit Facilities”). Powerfleet Israel drew down $30,000 in cash under the Hapoalim Term Facilities on March 18, 2024 and used the proceeds to prepay approximately $11,200, representing the remaining outstanding balance, of the Prior Credit Facilities, with the remaining proceeds distributed to Powerfleet. The proceeds of the Hapoalim Revolving Facilities may be used by Pointer for general corporate purposes, including working capital and capital expenditures. As of September 30, 2024, Pointer had utilized $12,085 under the Hapoalim Revolving Facilities. The available undrawn facility balance at September 30, 2024 was $7,915.

The interest rates for borrowings under Hapoalim Facility A and Hapoalim Facility B are Hapoalim’s prime rate + 2.2% per annum, and Hapoalim’s prime rate + 2.3% per annum, respectively. Hapoalim’s prime rate at September 30, 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. 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. The Hapoalim Revolving Facilities mature on March 18, 2025.

Borrowings under the Hapoalim Term Facilities are voluntarily prepayable at any time, in whole or in part, and are not subject to any prepayment premium. Voluntary prepayments of the Hapoalim Term Facilities must be made in minimum increments of NIS 1 million. In addition to certain customary mandatory prepayment requirements, the A&R Credit Agreement also requires Powerfleet Israel to make prepayments on the Hapoalim Term Facilities to the extent it receives distributions from Pointer, except for any such distributions made to cover certain expenses of Powerfleet Israel in its normal course of operations.

The A&R Credit Agreement contains certain customary affirmative and negative covenants, including financial covenants with respect to Pointer’s net debt levels which must be less than 100% of Working Capital as defined in the A&R Credit Agreement, the ratio of each Borrower’s net debt to Pointer’s EBITDA must not exceed 4.75, Powerfleet Israel’s minimum equity which must not be less than $60,000, and the ratio of Powerfleet Israel’s equity to its total assets which must be greater than 35% and the ratio of Pointer’s net debt to EBITDA ratio must not exceed 2. The occurrence of any event of default under the A&R Credit Agreement may result in all outstanding indebtedness under the Hapoalim Credit Facilities becoming immediately due and payable. The financial covenants have been met for the quarter ending September 30, 2024.

The Hapoalim Credit Facilities continue to be secured by first ranking and exclusive fixed and floating charges, including by Powerfleet Israel over the entire share capital of Pointer and by Pointer over all of its assets, as well as cross guarantees between Powerfleet Israel and Pointer, except that the Borrowers’ holdings in Pointer do Brasil Comercial Ltda., Pointer Argentina and Pointer South Africa are excluded from such floating charges. No other assets of the Company will serve as collateral under the Hapoalim Credit Facilities.

The Hapoalim Term Facilities under the A&R Credit Agreement have been accounted for as modifications of the term facilities that were provided under the Prior Credit Agreement because the change in the present value of the cash flows under the A&R Credit Agreement is less than 10% of the present value of the cash flows under the Prior Credit Agreement. The proceeds of the Hapoalim Term Facilities ($30,000), less the prepayment of the term loans under the Prior Credit Facility (approximately
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$11,200), amounting to approximately $18,800, has been recognized as an increase in the carrying value of the prior term loans that was recognized previously.

For the three- and six-month periods ended September 30, 2023, the Company recorded $29 and $64, respectively, of additional deferred costs to the original debt issuance costs and the refinancing fee paid to Hapoalim. For the three-month period ended September 30, 2024, the Company recorded $15 of amortization of the original debt issuance costs and the refinancing fee paid to Hapoalim. For the six-month period ended September 30, 2024, the Company recorded a credit of $15 net of additional deferred costs to the original debt issuance costs and amortization of the original debt issuance costs. The Company recorded charges of $133 and $285 to interest expense on its consolidated statements of operations for the three- and six-month periods ended September 30, 2023, respectively, and $591and $1,246 for the three- and six-month periods ended September 30, 2024, respectively, related to interest expense associated with the Hapoalim debt.

RMB Debt

On March 7, 2024, the Company entered into the Facilities Agreement with RMB, pursuant to which RMB agreed to provide the Company with two term loan facilities in an aggregate principal amount of $85,000, composed of Facility A and Facility B, each with a principal amount of $42,500 (“RMB Facility A” and “RMB Facility B,” respectively, and collectively, the “RMB Facilities”). The Company drew down $85,000 in cash under the RMB Facilities on March 13, 2024, and the proceeds to redeem all the outstanding shares of the Series A Preferred Stock and for general corporate purposes. The RMB Facilities are guaranteed by the Company, I.D. Systems and Movingdots GmbH (“Movingdots”), and there is a security agreement over the shares in Main Street 2000 Proprietary Limited (“MS2000”), I.D. Systems, and Movingdots.

The interest rates of borrowings under RMB Facility A and RMB Facility B are 8.699% per annum and 8.979% per annum, respectively. Interest is payable quarterly in arrears. RMB Facility A matures on March 31, 2027, and RMB Facility B matures on March 31, 2029. The Company may prepay the RMB Facilities at any time, subject to a minimum reduction of $5,000 and multiples of $1,000. If the Company prepays any amount during the first or second annual period of the funding, a refinancing fee equal to 2% or 1%, respectively, of the prepayment will be payable. Also, the RMB Facilities are mandatorily prepayable upon the occurrence of uncertain future events, such as a change of control or a transfer of the business. In the event that either prepayment occurs, the respective prepayment amount will be adjusted for RMB’s break gains or losses, which relate mainly to the unwinding of interest rate derivatives (the “Prepayment Derivative”) which RMB entered into with third parties to fix the interest rates on the RMB Facilities. Since RMB’s break gains/losses could result in the Company prepaying at a discount, or a premium, of 10% or more to the initial carrying amount of the RMB Facilities, the optional and contingent repayment features were to be embedded derivatives in the scope of ASC 815-15 Embedded Derivatives. The Prepayment Derivative within each RMB Facility has been bifurcated and accounted for at fair value separately from the respective debt-host contracts which are accounted for at amortized cost. The terms of the debt-host contracts have been bifurcated to adjust the carrying value of the debt upon separating the derivative. Upon initial recognition of the RMB Facilities, a Prepayment Derivative asset of $610 and $1,616 for RMB Facility A and RMB Facility B, respectively, was recognized with a corresponding increase in the initial carrying amount of each debt-host contract. The fair value of the embedded derivative is estimated using a “with-and-without” approach as the difference between the value of the RMB Facilities with and without the embedded derivative using both the binomial lattice model and discounted cash flow analysis.

The following key assumptions were used in March 31, 2024 and September 30, 2024:

Facility AFacility B
Credit spread volatility50 %35 %
Credit spread4.48 %4.99 %
Credit ratingB-B-
Risk free rate
SOFR spot rate*
SOFR spot rate*
* As of March 31, 2024 and September 30, 2024, the Secured Overnight Financing Rate (SOFR) spot rate was 5.34% and 4.96% respectively.

The Prepayment Derivative is classified as a Level 3 in the fair value hierarchy due to the use of at least one significant unobservable input which is the credit spread volatility. At inception, the credit spread was an observable input based on the transaction price of the debt; however, in future periods, it will also be an unobservable input. For the Prepayment Derivative asset in RMB Facility A, a change of -10% in credit spread volatility would result in a decrease in the derivative asset of $113, while a change of +10% in credit spread volatility would result in an increase in the derivative asset of $111. For the Prepayment Derivative asset in RMB Facility B, a change of -10% in credit spread volatility would result in a decrease in the derivative asset of $265, while a change of +10% in credit spread volatility would result in an increase in the derivative asset of
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$264. The Prepayment Derivative assets are included in Other assets and their fair values were $610 and $1,616 for RMB Facility A and RMB Facility B, respectively, as of March 31, 2024 and, $1,536 and $2,887 for RMB Facility A and RMB Facility B, respectively, as of September 30, 2024. The debt-host contracts are accounted for at amortized cost. Total debt issuance costs of approximately $1,000 were incurred. For the three- and six-month periods ended September 30, 2024, the Company recorded $69 and $146, respectively, of amortization of the original debt issuance costs and the refinancing fee to RMB.

For the three- and six-month periods ended September 30, 2024, the Company recorded interest expense of $1,920 and $3,790, respectively.
Scheduled contractual maturities of the long-term debt as of September 30, 2024 are as follows:

2025 (remaining)$984 
20264,923 
202747,916 
20285,415 
202954,316 
113,554 
Less: Current portion(3,371)
Plus debt costs and prepayment828 
Total$111,011 


NOTE 14 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following (in thousands):

March 31,
2024		September 30,
2024
Accounts payable$20,025 $41,821 
Accrued warranty1,138 1,523 
Accrued compensation8,956 14,305 
Government authorities3,062 6,439 
Other current liabilities827 2,010 
$34,008 $66,098 


















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The following table summarizes warranty activity for the six months ended September 30, 2023 and 2024 (in thousands):

Six Months Ended September 30,
20232024
Accrued warranty reserve, beginning of year$2,255 $2,926 
Accrual for product warranties issued710 242 
Product replacements and other warranty expenditures(210)(202)
Expiration of warranties ((over)/under warranty accrual)(141)15 
Acquired through MiX Combination— 356 
Foreign currency translation difference— 33 
Accrued warranty reserve, end of period (1)
$2,614 $3,370 
(1) Includes non-current accrued warranty included in other long-term liabilities at September 30, 2023 and 2024 of $1,822 and $1,847, respectively.


NOTE 15 - STOCKHOLDERS' EQUITY

Convertible Redeemable Preferred Stock:

The Company is authorized to issue 150 shares of preferred stock, par value $0.01 per share of which 100 shares are designated Series A Preferred Stock and 50 shares are undesignated.

Series A Preferred Stock

In connection with the completion of the Pointer acquisition, on October 3, 2019, the Company issued 50 shares of Series A Preferred Stock to ABRY Senior Equity V, L.P., ABRY Senior Equity Co-Investment Fund V, L.P and ABRY Investment Partnership, L.P. (the “Investors”). Concurrently with the closing of the MiX Combination on April 2, 2024, the Company used the net proceeds received from RMB and from incremental borrowing capacity as a result of the refinancing of credit facilities with Hapoalim to redeem in full for $90,300 for all of the outstanding shares of the Series A Preferred Stock.

Dividends

Holders of Series A Preferred Stock were entitled to receive cumulative dividends at a minimum rate of 7.5% per annum (calculated on the basis of the Series A Issue Price), quarterly in arrears. The dividends were payable at the Company’s election, in kind, through the issuance of additional shares of Series A Preferred Stock, or in cash, provided no dividend payment failure had occurred and was continuing and that there had not previously occurred two or more dividend payment failures. Commencing on the 66-month anniversary of the date on which any shares of Series A Preferred Stock were first issued (the “Original Issuance Date”), and on each monthly anniversary thereafter, the dividend rate would increase by 100 basis points, until the dividend rate reached 17.5% per annum, subject to the Company’s right to defer the increase for up to three consecutive months on terms set forth in the Company’s Amended and Restated Certificate of Incorporation (the “Charter”). During the three- and six-month periods ended September 30, 2023, the Company paid dividends in amounts equal to $1,129 and $2,257, respectively, to the holders of the Series A Preferred Stock, and $25 during the six-month period ended September 30, 2024. Dividends for the period ended March 31, 2024, plus accrued dividends through April 2, 2024, were paid in cash on the redemption date of the Series A Preferred Stock.









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NOTE 16 - ACCUMULATED OTHER COMPREHENSIVE LOSS

Comprehensive loss includes net loss and foreign currency translation gains and losses.

The accumulated balances for each classification of other comprehensive loss for the six-month period ended September 30, 2024 are as follows (in thousands):

Foreign currency translation adjustmentAccumulated other comprehensive loss
Balance at April 1, 2024
$(985)$(985)
Net current period change(379)(379)
Balance at September 30, 2024
$(1,364)$(1,364)

The accumulated balances for each classification of other comprehensive loss for the six-month period ended September 30, 2023 are as follows (in thousands):

Foreign currency translation adjustmentAccumulated other comprehensive loss
Balance at April 1, 2023
$(1,098)$(1,098)
Net current period change(806)(806)
Balance at September 30, 2023
$(1,904)$(1,904)


NOTE 17 - SEGMENT INFORMATION

The Company operates in one reportable segment, wireless IoT asset management. The following table summarizes revenues by geographic region (in thousands):

Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
North America$20,212 $21,255 $36,977 $42,396 
Israel10,247 11,751 21,152 22,411 
Africa807 24,178 1,670 48,578 
Europe and Middle East430 9,178 1,029 17,043 
Other2,547 10,656 5,507 22,020 
$34,243 $77,018 $66,335 $152,448 

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March 31,
2024		September 30,
2024
Long lived assets by geographic region:
North America$4,083 $8,621 
Israel3,946 2,804 
Africa705 31,031 
Europe and Middle East2,850 4,898 
Other1,135 4,574 
$12,719 $51,928 


NOTE 18 - INCOME TAXES

The Company records its interim tax provision based upon a projection of the Company’s annual effective tax rate (“AETR”). This AETR is applied to the year-to-date consolidated pre-tax income to determine the interim provision for income taxes before discrete items. The Company updates the AETR on a quarterly basis as the pre-tax income projections are revised and tax laws are enacted. The effective tax rate (“ETR”) each period is impacted by a number of factors, including the relative mix of domestic and foreign earnings and adjustments to recorded valuation allowances. The currently forecasted ETR may vary from the actual year-end due to the changes in these factors.

Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
Domestic pre-tax book loss$(4,123)$(7,136)$(14,312)$(23,611)
Foreign pre-tax book income (expense)870 5,509 7,791 738 
Total loss before income taxes(3,253)(1,627)(6,521)(22,873)
Income tax benefit (expense)(295)(256)(289)(1,309)
Net loss before non-controlling interest
$(3,548)$(1,883)$(6,810)$(24,182)
Effective tax rate(9.07)%(15.73)%(4.43)%(5.72)%
For the three- and six-month periods ended September 30, 2023 and 2024, the effective tax rate differed from the statutory tax rates primarily due to the mix of domestic and foreign earnings amongst taxable jurisdictions, recorded valuation allowances to fully reserve against deferred tax assets in jurisdictions, and certain discrete items.


NOTE 19 - LEASES

The Company determines whether an arrangement is a lease at inception. The Company has operating leases for office space, office equipment and vehicles. The Company’s leases have remaining lease terms of 1 year to 5 years, some of which include options to extend the lease term for up to 5 years.

Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. The operating lease ROU asset also includes any lease payments made in advance of lease commencement and excludes lease incentives. The lease terms used in the calculations of the operating ROU assets and operating lease liabilities include options to extend or terminate the lease when the Company is reasonably certain that it will exercise those options. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
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The Company has lease agreements with lease and non-lease components, which are generally not accounted for separately.

Where lease terms are 12-months or less, and meet the criteria for short-term lease classification, no ROU asset and no lease liability are recognized. Lease costs associated with the short-term leases are included in selling, general and administrative expenses on the Company’s condensed consolidated statements of operations.

The components of lease cost are as follows (in thousands):

Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
Short-term lease cost$119 $228 $238 $435 

Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows (in thousands):

Six Months Ended September 30,
20232024
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations$856 $1,262 
Reduction of right-of-use assets due to MiX Combination (1)
$— $(933)
(1) Subsequent to the MiX Combination, certain leases were terminated or modified due to the consolidation of leased space.

Weighted-average remaining lease term and discount rate for our operating leases are as follows:

September 30,
2024
Weighted-average remaining lease term - operating leases (in years) (1)
3.28
Weighted-average discount rate7.6 %
(1) Including expected renewals where appropriate.

Scheduled maturities of operating lease liabilities outstanding as of September 30, 2024 are as follows (in thousands):

October 2024 - March 2025$2,331 
20263,260 
20272,012 
20281,319 
20291,114 
Thereafter1,420 
Total lease payments11,456 
Less: Imputed interest(1,495)
Present value of lease payments$9,961 








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NOTE 20 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s cash and cash equivalents, restricted cash and investments in securities are carried at fair value. The carrying value of financing receivables approximates fair value due to the interest rate implicit in the instruments approximating current market rates. The carrying value of accounts receivable, accounts payable and accrued liabilities and short-term bank debt approximates their fair values due to the short period to maturity of these instruments. The fair value of the loans to external parties included in other non-current assets is determined using unobservable market data (Level 3 inputs), that represent management’s estimate of current interest rates that a commercial lender would charge the borrowers. The fair value of the Company’s debt is based on observable relevant market information and future cash flows discounted at current rates, which are Level 2 measurements. The Prepayment Derivative within the RMB Facilities is classified as a Level 3 in the fair value hierarchy due to the use of at least one significant unobservable input which is the credit spread volatility (see Note 13).

March 31, 2024September 30, 2024
Carrying AmountFair ValueCarrying AmountFair Value
Loans to external parties$475 $475 $209 $209 
Debt$115,761 $116,278 $146,349 $150,420 
Prepayment derivative$2,226 $2,226 $4,423 $4,423 


NOTE 21 - CONCENTRATION OF CUSTOMERS

For the three- and six-month periods ended September 30, 2023 and 2024, there were no customers that generated revenues greater than 10% of the Company’s consolidated total revenues or generated greater than 10% of the Company’s consolidated accounts receivable.


NOTE 22 - COMMITMENTS AND CONTINGENCIES

From time to time, the Company is involved in various litigation matters involving claims incidental to its business and acquisitions, including employment matters, acquisition-related claims, patent infringement and contractual matters, among other issues. While the outcome of any such litigation matters cannot be predicted with certainty, management currently believes that the outcome of these proceedings, including the matters described below, either individually or in the aggregate, will not have a material adverse effect on its business, results of operations or financial condition. The Company records reserves related to legal matters when losses related to such litigation or contingencies are both probable and reasonably estimable.

In August 2014, Pointer do Brasil Comercial Ltda. (“Pointer Brazil”) received a notification of lack of payment of VAT tax (Brazilian ICMS tax) in the amount of $195 plus $1,055 of interest and penalty, totaling $1,347 as of March 31, 2024 and $1,250 as of September 30, 2024. The Company is vigorously defending this tax assessment before the administrative court in Brazil, but in light of the administrative and judicial processes in Brazil, it could take up to 14 years before the dispute is finally resolved. In case the administrative court rules against the Company, the Company could claim before the judicial court, an appellate court in Brazil, a substantial reduction of interest charged, potentially reducing the Company’s total exposure. The Company’s legal counsel is of the opinion that the chance of loss is not probable and for this reason the Company has not made any provision.

In July 2015, Pointer Brazil received a tax deficiency notice alleging that the services provided by Pointer Brazil should be classified as “telecommunication services” and therefore Pointer Brazil should be subject to the state value-added tax. The aggregate amount claimed to be owed under the notice was approximately $11,770 as of September 30, 2024. On August 14, 2018, the lower chamber of the State Tax Administrative Court in São Paulo rendered a decision that was favorable to Pointer Brazil in relation to the ICMS demands, but adverse in regards to the clerical obligation of keeping in good order a set of ICMS books and related tax receipts. The remaining claim after this administrative decision is $204. The state has appealed to the higher chamber of the State Tax Administrative Court. The Company’s legal counsel is of the opinion that the chance of loss is not probable and that no material costs will arise in respect to these claims. For this reason, the Company has not made any provision.

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Mobile Telephone Networks Proprietary Limited (“MTN”), a network service provider of MiX Telematics Africa, a subsidiary of the Company, is entitled to claw back payments from MiX Telematics Africa in the event of early cancellation of the agreement or certain base connections not being maintained over the term of an amended network services agreement between the parties or certain base connections not being maintained over the term of such agreement. No connection incentives will be received in terms of the amended network services agreement. The maximum potential liability under the arrangement as of March 31, 2024 and September 30, 2024 was $841 and $791, respectively. No loss is considered probable under this arrangement.

On August 30, 2024, Fleet Connect Solutions LLC (“Fleet Connect”) filed a complaint against the Company in the United States District Court for the Eastern District of Texas alleging infringement of a number of Fleet Connect’s patents. The Company filed an answer to Fleet Connect’s complaint on November 8, 2024, denying the claims together with counterclaims to invalidate Fleet Connect’s patents. The Company simultaneously filed a Section 101 motion seeking to invalidate some of the patents. The Company is evaluating the claims with patent counsel, however based on currently available information, the Company is unable to make a reasonable estimate of loss or range of losses, if any, arising from this matter.

NOTE 23 - RECENT ACCOUNTING PRONOUNCEMENTS

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires additional operating segment disclosures in annual and interim consolidated financial statements. ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and for interim periods beginning after December 15, 2024 on a retrospective basis, with early adoption permitted. The Company is evaluating the effect of adopting ASU 2023-07.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a retrospective or prospective basis. The Company is evaluating the effect of adopting ASU 2023-09.


NOTE 24 - SUBSEQUENT EVENTS

Business Combination

On October 1, 2024, the Company consummated the acquisition of Fleet Complete (as defined below) contemplated by the Share Purchase Agreement, dated as of September 18, 2024 (as amended, the “Purchase Agreement”), by and among Golden Eagle Topco, LP (“Golden Eagle LP”), the persons that are party to the Purchase Agreement under the heading “Other Sellers” (the “Other Sellers” and, together with Golden Eagle LP, the “Sellers”), the Company and Powerfleet Canada Holdings Inc. and a wholly owned subsidiary of the Company (the “Canadian SPV” and, together with the Company, the “Purchasers”). The foregoing transactions are hereinafter referred to as the “FC Acquisition.”.

Pursuant to the terms the Purchase Agreement, the Purchasers acquired all of the direct and indirect common shares in the capital of Golden Eagle Canada Holdings, Inc. (“Canada Holdco”) and Complete Innovations Holdings Inc. (“CIH”), and all of the issued and outstanding shares of common stock of Golden Eagle Holdings, Inc. (together with Canada Holdco and CIH, “Fleet Complete”), in exchange for payment by the Purchasers of an aggregate purchase price of $200 million, subject to certain customary working capital and other adjustments as described in the Purchase Agreement (as adjusted, the “Purchase Price”).

$15 million of the Purchase Price payable in the FC Acquisition was satisfied by the issuance of 4,285,714 shares of the Company’s common stock to an existing indirect shareholder of Fleet Complete, with the remainder paid in cash. $60 million of the cash portion of the Purchase Price was funded by the Private Placement, as described below, and $125 million of the cash portion of the Purchase Price was funded with a senior secured term loan facility provided by RMB, as described below. $3.85 million of the Purchase Price has been placed into escrow to secure purchase price adjustment payment obligations under the Purchase Agreement and certain tax liabilities.

Concurrently with the closing of the FC Acquisition, on October 1, 2024, the Company consummated the Private Placement. $60 million of such gross proceeds funded a portion of the Purchase Price with the remaining $10 million in proceeds expected to be used by the Company for working capital and general corporate purposes. $62 million, net of costs, was received by September 30, 2024, with the remaining $8 million received on October 1, 2024.

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Given the proximity between the transaction close date and the Company’s Quarterly Report on Form 10-Q, the preliminary purchase price allocation has not yet been completed. Management expects to complete the purchase price allocation in the third quarter of the 2025 fiscal year.

RMB Term Facility

On September 27, 2024, the Company, together with I.D. Systems and Movingdots, each a wholly owned subsidiary of the Company, entered into a Facility Agreement (the “Facility Agreement”) with RMB, pursuant to which RMB agreed to provide the Company with a term loan facility in an aggregate principal amount of $125 million (the “New RMB Term Facility”). The Company drew down the full amount of the New RMB Term Facility on October 1, 2024, and used the proceeds to pay a portion of the Purchase Price, as described above.

The Company’s obligations under the New RMB Term Facility are guaranteed, on a joint and several basis, by the Company, I.D. Systems and Movingdots. The New RMB Term Facility is secured by a first priority security interest over the entire share capital of I.D. Systems, Movingdots, MS2000 and Canadian SPV, each a wholly owned subsidiary of the Company. No other assets of the Company will serve as collateral under the New RMB Term Facility.

The New RMB Term Facility is repayable on October 31, 2029.

The New RMB Term Facility may be voluntarily prepaid at any time upon prior written notice, in whole or in part, subject to payment of a refinancing fee equal to (i) 2% of the amount prepaid if such prepayment occurs before October 1, 2025, or (ii) 1% of the amount prepaid if such prepayment occurs on or after October 1, 2025, but before October 1, 2026. No refinancing fee is payable if prepayment occurs on or after October 1, 2026. If voluntary prepayments are made in part, they must be made in minimum amounts of $5 million in integral multiples of $1 million. In addition, the Facility Agreement provides for certain customary mandatory prepayment requirements.

In the event of any prepayment during a quarterly interest period the Company is also required to pay, or receive from, RMB an amount, such that RMB would be in the same economic position for that interest period had the prepayment only occurred at the end of such period. The amount payable or receivable will be calculated relative to the interest that RMB would be able to obtain by placing the amount prepaid on deposit with a leading bank in the London interbank market for a period from the prepayment until the end of such interest period.

The New RMB Term Facility bears interest at 5% per annum (or 7%, if an event of default is occurring), plus the applicable term SOFR reference rate (or an interpolated rate if SOFR is unavailable), payable quarterly on March 31, June 30, September 30, and December 31 each year, and on October 31, 2029.

The Company paid a non-refundable deal structuring fee of $1.25 million to RMB on October 1, 2024.

The Company may be required to make certain indemnity-type payments to RMB should RMB’s returns on the New RMB Term Facility be lower than those envisaged, for example due to changes in tax implications and increased costs of servicing the facility.

The Facility Agreement contains certain customary affirmative and negative covenants, including financial covenants with respect to the ratio of the Company’s consolidated total net borrowings to consolidated EBITDA and the ratio of the Company’s consolidated EBITDA to consolidated total finance costs. The Facility Agreement also includes representations, warranties, events of default and other provisions customary for financings of this type. The occurrence of any event of default under the Facility Agreement may result in all outstanding indebtedness under the New RMB Term Facility becoming immediately due and payable.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations


The following discussion and analysis of the consolidated financial condition and results of operations of Powerfleet, Inc. and its subsidiaries (“Powerfleet,” the “Company,” “we,” “our” or “us”) should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing in Part I, Item 1 of this report. In the following discussions, most percentages and dollar amounts have been rounded to aid presentation, and, accordingly, all amounts are approximations. Amounts throughout this discussion and analysis for our unaudited interim condensed consolidated statements for the three- and six-month periods ended September 30, 2023 have been restated to reflect the impact of the restatement as described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 Annual Report”).

In connection with the preparation of the Company’s audited consolidated financial statements for the year ended December 31, 2023, the Company determined that the accounting for the redemption premium associated with its Series A convertible preferred stock (“Series A Preferred Stock”) was understated resulting in an understatement of “net loss attributable to common stockholders” and “net loss per share attributable to common stockholders” for each period, an understatement of the value of the convertible redeemable preferred stock as of each balance sheet date, and an overstatement of the additional paid-in capital as of each balance sheet date. The required adjustments to correct the redemption value of the calculation of the Series A Preferred Stock and the related accretion of the value of the preferred stock in the consolidated statement of operations included the recording of a non-cash accretion which resulted in an increase in the net loss attributable to common stockholders, an increase in the “convertible redeemable preferred stock”, and a decrease of “additional paid-in capital” for the fiscal years ended December 31, 2021 and 2022 and each of the interim periods during the 2022 and 2023 fiscal years.

The correction of the error resulted in reporting the value of the convertible preferred stock including the accretion to the redemption value from the date of original issuance through each balance sheet date applying the interest method. The Company had determined that it was appropriate to restate the financial statements for the fiscal years ended December 31, 2021 and 2022 and each of the interim periods during the 2022 and 2023 fiscal years included in the 2023 Annual Report. In addition, the Company also corrected other unrelated immaterial errors that were previously either unrecorded or recorded as out-of-period adjustments. For additional information refer to Note 2 to the financial statements included in the 2023 Annual Report.

Cautionary Note Regarding Forward-Looking Statements

This report contains “forward-looking statements” (within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which may include information concerning our beliefs, plans, objectives, goals, expectations, strategies, anticipations, assumptions, estimates, intentions, future events, future revenues or performance, capital expenditures and other information that is not historical information. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. When used in this report, the words “seek,” “estimate,” “expect,” “anticipate,” “project,” “plan,” “contemplate,” “plan,” “continue,” “intend,” “believe” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon our current expectations and various assumptions. We believe there is a reasonable basis for its expectations and beliefs, but there can be no assurance that we will realize our expectations or that our beliefs will prove to be correct.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this report. Important factors that could cause our actual results to differ materially from those expressed as forward-looking statements herein include, but are not limited, to: the ability to recognize the anticipated benefit of the MiX Combination and the FC Acquisition; the possibility that we may not be able to integrate successfully the businesses, operations and employees of MiX Telematics and Fleet Complete; the ability of our supply chain to deliver certain key components; changes in technology or products, which may be more difficult or costly, or less effective, than anticipated; our ability to secure our information technology systems against breaches; the effects of competition from a wide variety of local, regional, national and other providers of wireless solutions; our ability to navigate the international political, economic and geographic landscape; future economic and business conditions, including the conflict between Israel and Hamas; the failure of the markets for our products to continue to develop; our inability to adequately protect our intellectual property; changes in laws and regulations or changes in generally accepted accounting policies, rules and practices; and other risks detailed from time to time in our filings with the Securities and
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Exchange Commission (the “SEC”), including our Transition Report on Form 10-KT for the period ended March 31, 2024 (the “Form 10-KT”).

There may be other factors of which we are currently unaware or which we currently deem immaterial that may cause our actual results to differ materially from the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date they are made and are expressly qualified in their entirety by the cautionary statements included in this report. Except as may be required by law, we undertake no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances occurring after the date they were made or to reflect the occurrence of unanticipated events, or otherwise.
Overview

Powerfleet is a global leader of Internet-of-Things (“IoT”) solutions providing valuable business intelligence for managing high-value enterprise assets that improve operational efficiencies.

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

On April 2, 2024, we consummated the MiX Combination, pursuant to which MiX Telematics became our indirect, wholly owned subsidiary. MiX Telematics is a leading global provider of fleet and mobile asset management solutions delivered as SaaS to over one million global subscribers spanning more than 120 countries. MiX Telematics’ products and services provide enterprise fleets, small fleets, and consumers with efficiency, safety, compliance, and security solutions. The acquisition is expected to provide us with operational synergies and access to a broader base of customers.

The consolidated financial statements as of and for the three- and six-month periods ended September 30, 2024 include the financial results of MiX Telematics and its subsidiaries from the closing date of the MiX Combination. See Note 3, “Acquisition” in Part I, Item 1, “Financial Statements (Unaudited)” for additional information. No operating results for MiX Telematics are included in the comparative period for the three- and six-month periods ended September 30, 2023.

On May 8, 2024, our Board of Directors approved a change in our fiscal year end from December 31 to March 31 in order to better align our reporting calendar with the April 2, 2024 close of the MiX Combination and MiX Telematics’ historical March 31 fiscal year end. This decision was already being considered by Powerfleet executives before the MiX Combination, as part of a broader finance transformation initiative, which includes shifting and outsourcing back-office functions (including central corporate accounting) from the United States to a more cost-effective solution in South Africa. The decision was also driven by aligning the fiscal year with the close of the MiX Combination for investors and aligning the timing of audit work with the winter months in South Africa to help attract and retain accounting talent.

On October 1, 2024, we consummated the FC Acquisition, pursuant to which we acquired Fleet Complete. Fleet Complete is a leading provider of essential fleet, asset, and mobile workforce management solutions across North America, Australia, and Europe. A majority of Fleet Complete’s revenue is generated through strong distribution partnerships with major international telecommunications providers and market-leading original equipment manufacturer (“OEM”) partners. See Note 24, “Subsequent Events” in Part I, Item 1, “Financial Statements (Unaudited)” for additional information.

Our Powerfleet for Warehouse solutions are designed to provide on-premise or in-facility asset and operator management, monitoring, and visibility for industrial 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.

Our Powerfleet for Logistics solutions are designed to provide bumper-to-bumper 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 systems 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.

Our Powerfleet for Vehicles solutions are designed both to enhance the vehicle fleet management process, whether it’s a rental car, a private fleet, or automotive OEM partners. We achieve this by providing critical information that can be used to increase revenues, reduce costs and improve customer service.

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Our patented technologies are a proven solution for organizations that must monitor and analyze their assets to improve safety, increase efficiency, reduce costs, and drive profitability. Our offerings are sold under the global brands Powerfleet, Pointer, Cellocator, MiX by Powerfleet, and Fleet Complete.

We have an established history of IoT device development and innovation creating devices that can withstand harsh and rugged environments. With 51 patents and patent applications and over 25 years’ experience, we believe we are well positioned to evolve our offerings for even greater value to customers through our cloud-based applications for unified operations.

We deliver advanced data solutions that connect mobile assets to increase visibility, operational efficiency and profitability. Across our spectrum of vertical markets, we differentiate ourselves by developing mobility platforms that collect data from unique sensors. Further, because we are OEM agnostic, we help organizations view and manage their mixed assets homogeneously. All of our solutions are paired with software as a service (“SaaS”) and analytics platforms to provide an even deeper level of insights and understanding of how assets are utilized and how drivers and operators operate those assets. These insights include a full set of key performance indicators (“KPIs”) to drive operational and strategic decisions. Our customers typically get a return on their investment in less than 12 months from deployment.

Our enterprise software applications have machine learning capabilities and are built to integrate with our customers’ management systems to provide a single, integrated view of asset and operator activity across multiple locations while providing real-time enterprise-wide benchmarks and peer-industry comparisons. We look for analytics, as well as the data contained therein, to differentiate us from our competitors, adding significant value to customers’ business operations, and helping to contribute to their bottom line. Our solutions also feature open application programming interfaces (“APIs”) for additional integrations and development to boost other enterprise management systems and third-party applications.

We market and sell our connected IoT data solutions to a wide range of customers in the commercial and government sectors. Our customers operate in diverse markets, such as manufacturing, automotive manufacturing, wholesale and retail, food and grocery distribution, pharmaceutical and medical distribution, construction, mining, utilities, aerospace, vehicle rental, as well as logistics, shipping, transportation, energy and field services. Traditionally, these businesses have relied on manual, often paper-based, processes or on-premise legacy software to operate their high-value assets, manage workforce resources, and distributed sites; and face environmental, safety, and other regulatory requirements. In today’s landscape, it is crucial for these businesses to invest in solutions that enable easy analysis and sharing of real-time information.

Our Solutions

We provide critical actionable information that powers unified operations throughout organizations. We are solving the challenge of inefficient data collection, real-time visibility, and analysis that leads to transformative business operations. Our SaaS cloud-based applications take data from our IoT devices and ecosystem of third-party and partner applications to present actionable information for customers to increase efficiencies, improve safety and security, and increase their profitability in easy-to-understand reports, dashboards, and real-time alerts.

Key Applications of our IoT Solutions

We provide real-time intelligence for organizations with high-value assets allowing them to make informed decisions and ultimately improve their operations, safety, and bottom line. Our applications enable organizations to capture IoT data from various types of assets with devices and sensors creating a holistic view for analysis and action.

The core applications that our IoT solutions address include:

End-to-end Visibility: Organizations with expensive assets such as vehicles, machinery, or equipment need to keep track of where the assets are located, monitor for misuse, and understand how and when assets are being used. By having complete visibility of their assets, customers can improve security, utilization and customer service. In addition, our visibility solutions help with personnel workflows and resource management, freight visibility through load status, equipment availability status, dwell and idle time, geofencing, two-way temperature control and management, multizone temperature monitoring, arrival and departure times, and supply chain allocation.

Regulatory Compliance: Businesses must comply with government regulations and provide proof of compliance, which is commonly an onerous process to enforce and maintain. Our solutions provide critical data points and reports to help
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customers stay within compliance, avoid fines for non-compliance, and automate the reporting process. We deliver real-time position reports, hours-of-service, temperature monitoring and control, electronic safety checklists, workflow management, controlling vehicle access to only authorized operators, inspection reports, and history logs of use.

Improve Safety: Our applications are designed to provide asset and operator management, monitoring, and visibility for safer environments. Our solutions allow our customers to monitor their fleet of vehicles on various parameters, including but not limited to, vehicle location, speed, engine fault codes, driver behavior, eco-driving, and ancillary sensors and can receive reports and alerts, either automatically or upon request wirelessly via the internet, email, mobile phone or an SMS. In addition, our dash camera provides critical video capture that can be used to help exonerate drivers when in accidents or help bolster training and coaching programs of employees. We also offer preventative solutions such as safety warning products to alert vehicle operators of objects or pedestrians in their pathway to prevent accidents, injuries, and damage. Our analytics platform features dashboards with KPIs and can help managers identify patterns, trends and outliers that can be used as flags for interventions.

Drive Operational Efficiency & Productivity: To increase utilization of mobile assets, our solutions enable the identification of a change in status, real-time location, geo-fencing alerts when an asset is approaching or leaving its destination, cargo status, and on-board intelligence utilizing a motion sensor and proprietary logic that identifies the beginning of a drive and the end of a drive. Having this information enables customers to increase capacity, speed of service, right-size their fleets, and improve communication internally and with customers. In addition, customers can increase revenue per mile, reduce claims and claims processing times, and reduce the number of assets needed. This is achieved through proving such things as two-way integrated workflows for drivers, control assignments and work change, Electronic Driver Logging and automated record keeping for regulatory compliance, monitoring of asset pools and geofence violations, and various reporting insights that flag under-utilized assets, the closest assets, and alerts on dwell time and exceeding the allotted time for loading and unloading.

We help customers to automate processes and increase productivity of their employees. Our applications enable customers to determine where operators are assigned and can temporarily reassign them based on peak needs, evaluate any disparity in the amount employees are paid compared to the time they actually spend operating a vehicle. Our applications help answer the question of why does it take some employees longer than others to do specific tasks, where to focus labor resources, and how to forecast vehicles and operators needed for future workflow.

In addition, for our rental car vertical, our applications automatically upload vehicle identification number, mileage and fuel data as a vehicle enters and exits the rental lot, which can significantly expedite the rental and return processes for travelers, and provide the rental company with more timely inventory status, more accurate billing data that can generate higher fuel-related revenue, and an opportunity to utilize customer service personnel for more productive activities, such as inspecting vehicles for damage and helping customers with luggage.

Our solution for “car sharing” permits a rental car company to remotely control, track and monitor their rental vehicles wherever they are parked. Whether for traditional “pod-based” rental or for the emerging rent-anywhere model, the system, through APIs integrated into any rental company’s fleet management system, (i) manages member reservations by smart phone or Internet, and (ii) charges members for vehicle use by the hour.

For our customers with a variety of make-model-years in their fleet, we have developed an unmatched library of certified vehicle code interfaces through our second-generation On-Board Diagnostics, industry standard. Our patented fleet management system helps fleet owners improve asset utilization, reduce capital costs, and cut operating expenses, such as vehicle maintenance or service and support.

Increase Security: Our solutions allow our customers to reduce theft and improve inventory management. Customers can lockdown their assets with automated e-mail or text message alerts, emergency tracking of assets (higher frequency of reports) if theft is expected, geo-fencing alerts when an asset enters a prohibited geography or location, and near real-time sensors that alert based on changes in temperature and shock, among other things. We also provide stolen vehicle retrieval (“SVR”) services in Israel and South Africa. In Israel most of the SVR products used to provide our SVR services are mainly sold to (i) local car dealers and importers that in turn sell the products equipped in the vehicle to the end users who purchase the SVR services directly from us, or (ii) leasing companies which purchase our SVR services in order to secure their own vehicles. In South Africa our distribution partners include automobile dealers, aftermarket automotive parts and service suppliers, automobile insurers and retailers.

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Reduce Costs

We enable our customers to improve asset utilization, reduce capital costs, and cut operating expenses, such as vehicle maintenance or service and support. Our solutions provide engine performance, machine diagnostics, fuel consumption, and battery life to improve preventative maintenance scheduling, increase uptime, and gain a longer service life of equipment. Through our software applications, customers can optimize capacity, analyze resource allocation, and improve utilization of assets to reduce capital expenses such as purchasing new or leasing additional equipment. Our applications provide root cause analysis for any cargo claims and helps with exoneration of drivers in accidents via dash camera visibility.

Analytics and Machine Learning

Our analytics platforms provide our customers with a holistic view of their asset activity across their enterprise. For example, our image machine learning system allows us to process images from our freight camera and other sources and identify key aspects of operations and geospatial information such as location, work being accomplished, type of cargo, how cargo is loaded and if there are any visible issues such as damage.

Key Performance Indicators & Benchmarks

Our cloud-based software applications provide a single, integrated view of asset activity across multiple locations, generating enterprise-wide benchmarks, peer-industry comparisons, and deeper insights into asset operations. In addition, our customers can set real-time alerts for exception-based reporting or critical activity that needs immediate attention. This enables management teams to make more informed, effective decisions, raise asset performance standards, increase productivity, reduce costs, and enhance safety.

Specifically, our analytics platforms allow users to quantify best-practice enterprise benchmarks for asset utilization and safety, reveal variations and inefficiencies in asset activity across both sites and geographic regions, or identify opportunities to eliminate or reallocate assets, to reduce capital and operating costs. We provide an extensive set of decision-making tools and a variety of standard and customized reports to help businesses improve overall operations.

We look for analytics and machine learning to make a growing contribution to drive platform and SaaS revenue, further differentiate our offerings and add value to our solutions. We also use our analytics platform for our own internal platform quality control.

Services

Hosting Services: We provide the use of our systems as a remotely hosted service, with the system server and application software residing in our colocation center or on a cloud platform provider’s infrastructure (e.g., Azure, AWS). This approach helps us reduce support costs and improve quality control. It separates the system from the restrictions of the customers’ local IT networks, which helps reduce their system support efforts and makes it easier for them to receive the benefits of system enhancements and upgrades. Our hosting services are typically offered with extended maintenance and support services over a multi-year term of service, with automatic renewals following the end of the initial term.

Software as a Service: We provide system monitoring, help desk technical support, escalation procedure development, routine diagnostic data analysis and software updates services as part of the ongoing contract term. These services ensure deployed systems remain in optimal performance condition throughout the contract term and provide access to newly developed features and functions on an annual basis.

Maintenance Services: We provide a warranty on the hardware components of our system. During the warranty period, we either replace or repair defective hardware. We also make extended maintenance contracts available to customers and offer ongoing maintenance and support on a time and materials basis.

Customer Support and Consulting Services for Ease of Use, Adoption, and Added Value: We have developed a framework for the various phases of system training and support that offer our customers both structure and flexibility. Major training phases include hardware installation and troubleshooting, software installation and troubleshooting, “train-the-trainer” training on asset hardware operation, preliminary software user training, system administrator training, information technology issue training, ad hoc training during system launch and advanced software user training.
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Increasingly, training services are provided through scalable online interactive training tools. Support and consulting services are priced based on the extent of training that the customer requests. To help our customers derive the most benefit from our system, we supply a broad range of documentation and support including videos, interactive online tools, hardware user guides, software manuals, vehicle installation overviews, troubleshooting guides, and issue escalation procedures.

We provide our consulting services both as a standalone service to study the potential benefits of implementing an IoT business intelligence solution and as part of the system implementation itself. In some instances, customers prepay us for extended maintenance, support and consulting services. In those instances, the payment amount is recorded as deferred revenue and revenue is recognized over the service period.

Growth Strategy

As a leading global provider of IoT SaaS solutions for high-value enterprise assets, our objective is to drive optimized operations and create safer environments. During the quarter ended March 31, 2023, we began to consolidate and augment many of our existing capabilities on a single customer software platform branded as “Unity.” We have designed our Unity platform to enable rapid and deep integration with IoT devices and third-party business systems to a highly scalable data pipeline that powers artificial intelligence-driven insights to help companies save lives, time, and money. Unity is an increasingly important initiative to meet our objective of becoming a leading global provider of IoT SaaS solutions for high-value enterprise assets to drive optimized operations and create safer environments. To achieve this goal, we intend to prove value, retain and grow business with existing customers and pursue opportunities with new customers by:

•focusing our business solutions by vertical markets and go to market strategies to each market;
•positioning ourselves as an innovative thought leader;
•maintaining a world class sales and marketing team;
•identifying, seizing, and managing revenue opportunities;
•expanding our customer base, achieving wider market penetration and educating customers with mixed assets in their organization about our other applications, including new solutions available as a result of our transactions with MiX Telematics and Fleet Complete;
•implementing improved marketing, sales and support strategies;
•shortening our initial sales cycles by helping our customers through:
◦identifying and quantifying benefits expected from our solutions;
◦accelerating transitions from implementation to roll-out; and
◦building service revenue through long-term SaaS contracts;
•differentiating our product offering through analytics, machine learning, unique sensors, and value-added services;
•producing incremental revenue at a high profit margin; and
•expanding our partnerships and integrations.

We also plan to expand into new applications and markets by:

•pursuing opportunities to integrate our system with computer hardware and software vendors, including:
◦OEMs;
◦transportation management systems;
◦warehouse management systems;
◦labor and timecard systems;
◦enterprise resource planning; and
◦yard management systems;
•establishing relationships with global distributors; and
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•evaluating and pursuing strategically sound acquisitions of companies.

Recent Developments

Higher interest rates and inflation, fluctuations in currency values, supply chain disruptions and the conflicts between Russia and Ukraine, and between Israel and Hamas, have resulted in significant economic disruption and adversely impacted the broader global economy, including our customers and suppliers. Given the dynamic and uncertain nature of the current macroeconomic environment, we cannot reasonably estimate the impact of such developments on our financial condition, results of operations or cash flows into the foreseeable future. The ultimate extent of the effects of these developments remain highly uncertain, and such effects could exist for an extended period of time.

Risks to Our Business

We expect that many customers who utilize our solutions will do so as part of a large-scale deployment of these solutions across multiple or all divisions of their organizations. A customer’s decision to deploy our solutions throughout its organization will involve a significant commitment of its resources. Accordingly, initial implementations may precede any decision to deploy our solutions enterprise-wide. Throughout this sales cycle, we may spend considerable time and expense educating and providing information to prospective customers about the benefits of our solutions, and there can be no assurance that our solutions will be deployed on a wider scale by the customer.

The timing of the deployment of our solutions may vary widely and will depend on the specific deployment plan of each customer, the complexity of the customer’s organization and the difficulty of such deployment. Customers with substantial or complex organizations may deploy our solutions in large increments on a periodic basis. Accordingly, we may receive purchase orders for significant dollar amounts on an irregular and unpredictable basis. Long sales cycles, as well as our expectation that customers will tend to place large orders sporadically with short lead times, may cause our revenue and results of operations to vary significantly and unexpectedly from quarter to quarter. These variations could materially and adversely affect the market price of our common stock.

Our ability to increase our revenues and generate net income will depend on a number of factors, including, for example, our ability to:

•increase sales of products and services to our existing customers;
•convert our initial programs into larger or enterprise-wide purchases by our customers;
•increase market acceptance and penetration of our products; and
•develop and commercialize new products and technologies.

We have incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of $179.0 million as of September 30, 2024.

Management believes our cash and cash equivalents and restricted cash of $89.0 million ($61.9 million of proceeds from the Private Placement, net of costs to issue common stock, was held in restricted cash at September 30, 2024, and subsequently used for the FC Acquisition on October 1, 2024) as of September 30, 2024 in conjunction with the debt proceeds from our lenders, plus cash generated from the execution of our strategic plan over the next 12 months, are sufficient to fund the projected operations for at least the next 12 months from the issuance date of these condensed consolidated financial statements (November 12, 2024) and service our outstanding obligations.

Additional risks and uncertainties to which we are subject are described under the heading “Risk Factors” in Part II, Item 1A of this report and in the Form 10-KT.

Critical Accounting Policies

For the three- and six-month periods ended September 30, 2024, there were no significant changes to our critical accounting policies as identified in the Form 10-KT.



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Results of Operations

The following table sets forth, for the periods indicated, certain operating information expressed as a percentage of revenue:
Three Months Ended September 30,Six Months Ended September 30,
2023
(As Restated)		202420232024
Revenues:
Products38.6 %26.3 %36.7 %25.6 %
Services61.4 %73.7 %63.3 %74.4 %
Total revenues100.0 %100.0 %100.0 %100.0 %
Cost of revenues:
Cost of products25.8 %18.1 %26.2 %17.5 %
Cost of services24.2 %28.2 %23.8 %29.4 %
Total cost of revenues50.0 %46.3 %50.1 %46.9 %
Gross profit50.0 %53.7 %49.9 %53.1 %
Operating expenses:
Selling, general and administrative expenses51.9 %48.5 %52.7 %60.4 %
Research and development expenses7.1 %4.5 %7.0 %4.3 %
Total operating expenses59.0 %52.9 %59.7 %64.7 %
(Loss)/profit from operations(9.0)%0.7 %(9.8)%(11.6)%
Interest income0.1 %0.2 %0.1 %0.3 %
Interest expense(0.4)%(5.2)%(0.5)%(4.4)%
Bargain purchase - Movingdots— %— %0.4 %— %
Other (expense)/income, net(0.1)%2.2 %— %0.7 %
Net loss before income taxes(9.5)%(2.1)%(9.8)%(15.0)%
Income tax expense(0.9)%(0.3)%(0.4)%(0.9)%
Net loss before non-controlling interest(10.4)%(2.4)%(10.3)%(15.9)%
Non-controlling interest— %— %— %— %
Net loss(10.4)%(2.5)%(10.3)%(15.9)%
Accretion of preferred stock(5.4)%— %(5.4)%— %
Preferred stock dividend(3.3)%— %(3.4)%(0.0)%
Net loss attributable to common stockholders(19.0)%(2.5)%(19.1)%(15.9)%


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Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
REVENUES. Revenues increased by $42.8 million, or 124.9%, to $77.0 million in the three months ended September 30, 2024, from $34.2 million in the same period in 2023.

Revenues from products increased by $7.1 million, or 53.4%, to $20.3 million in the three months ended September 30, 2024, from $13.2 million in the same period in 2023. The increase in product revenues was primarily due to the MiX Telematics business acquired which contributed $8.9 million in product revenues for the three months ended September 30, 2024, offset by lower demand from logistics customers in North America.

Revenues from services increased by $35.7 million, or 170.0%, to $56.7 million in the three months ended September 30, 2024 from $21.0 million in the same period in 2023. The increase in services revenues was principally due to the MiX Telematics business acquired which contributed $34.9 million in service revenues for the three months ended September 30, 2024.

COST OF REVENUES. Cost of revenues increased by $18.5 million, or 108.2%, to $35.7 million in the three months ended September 30, 2024, from $17.1 million for the same period in 2023. The MiX Telematics business acquired contributed $17.5 million to cost of revenues for the three months ended September 30, 2024. Gross profit was $41.3 million in the three months ended September 30, 2024, compared to $17.1 million for the same period in 2023. As a percentage of revenues, gross profit increased to 53.7% in the three months ended September 30, 2024 from 50.0% in the same period in 2023.

Cost of products increased by $5.1 million, or 57.5%, to $13.9 million in the three months ended September 30, 2024, from $8.8 million in the same period in 2023. Gross profit for products was $6.4 million in the three months ended September 30, 2024, compared to $4.4 million in the same period in 2023. As a percentage of product revenues, gross profit decreased to 31.4% in the three months ended September 30, 2024 from 33.2% in the same period in 2023. The decrease in gross profit as a percentage of product revenues was principally due to inventory write offs from product line rationalization following the MiX Combination.

Cost of services increased by $13.5 million, or 162.2%, to $21.7 million in the three months ended September 30, 2024, from $8.3 million in the same period in 2023. The MiX Telematics business acquired contributed $12.6 million to cost of services for the three months ended September 30, 2024. Gross profit for services was $35.0 million in the three months ended September 30, 2024, compared to $12.7 million in the same period in 2023. As a percentage of service revenues, gross profit increased to 61.7% in the three months ended September 30, 2024 from 60.5% in the same period in 2023, as a result of the contribution from the MiX Telematics business acquired.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative (“SG&A”) expenses increased by $19.6 million, or 110.0%, to $37.3 million in the three months ended September 30, 2024, compared to $17.8 million in the same period in 2023, principally due to the MiX Telematics business acquired which contributed $18.1 million of SG&A expenses (excluding one-time costs), $1.4 million in acquisition-related expenses and $1.1 million in restructuring costs for the three months ended September 30, 2024. As a percentage of revenues, SG&A expenses, excluding $3.9 million in one-time transaction costs and restructuring costs, decreased to 43.4% in the three months ended September 30, 2024, from 51.9% in the same period in 2023.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development (“R&D”) expenses increased by $1.0 million, or 41.6%, to $3.4 million in the three months ended September 30, 2024, compared to $2.4 million in the same period in 2023, principally due to $1.5 million incurred by the MiX Telematics business post-transaction. As a percentage of revenues, R&D expenses decreased to 4.5% in the three months ended September 30, 2024, from 7.1% in the same period in 2023.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS. Net loss attributable to common stockholders was $1.9 million, or $(0.02) per basic and diluted share, for the three months ended September 30, 2024, as compared to net loss of $6.5 million, or $(0.18) per basic and diluted share, for the same period in 2023. The net loss was primarily the result of $1.4 million in one-time transaction costs, $1.4 million in integration-related costs, $1.1 million in restructuring costs, and $1.2 million from the commencement of amortization of MiX Telematics acquisition-related intangibles, partially offset by $2.2 million gain in other income from the derivative mark-to-market adjustment.


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Six Months Ended September 30, 2024 Compared to Six Months Ended September 30, 2023
REVENUES. Revenues increased by $86.1 million, or 129.8%, to $152.4 million in the six months ended September 30, 2024, from $66.3 million in the same period in 2023.

Revenues from products increased by $14.7 million, or 60.5%, to $39.0 million in the six months ended September 30, 2024, from $24.3 million in the same period in 2023. The increase in product revenues was primarily due to the MiX Telematics business acquired which contributed $17.7 million in product revenues for the six months ended September 30, 2024, offset by lower demand from logistics customers in North America.

Revenues from services increased by $71.4 million, or 169.9%, to $113.4 million in the six months ended September 30, 2024, from $42.0 million in the same period in 2023. The increase in services revenues was principally due to the MiX Telematics business acquired which contributed $69.8 million in service revenues for the six months ended September 30, 2024.

COST OF REVENUES. Cost of revenues increased by $38.2 million, or 115.2%, to $71.5 million in the six months ended September 30, 2024, from $33.2 million for the same period in 2023. The MiX Telematics acquired business contributed $36.9 million to cost of revenues for the six months ended September 30, 2024. Gross profit was $81.0 million in the six months ended September 30, 2024, compared to $33.1 million for the same period in 2023. As a percentage of revenues, gross profit increased to 53.1% in the six months ended September 30, 2024 from 49.9% in the same period in 2023.

Cost of products increased by $9.3 million, or 53.4%, to $26.7 million in the six months ended September 30, 2024, from $17.4 million in the same period in 2023. Gross profit for products was $12.4 million in the six months ended September 30, 2024, compared to $6.9 million in the same period in 2023. As a percentage of product revenues, gross profit increased to 31.6% in the six months ended September 30, 2024 from 28.5% in the same period in 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 including in warehouse solutions.

Cost of services increased by $29.0 million, or 183.1%, to $44.8 million in the six months ended September 30, 2024, from $15.8 million in the same period in 2023. The MiX Telematics acquired business contributed $24.9 million to cost of services for the six months ended September 30, 2024. Gross profit for services was $68.6 million in the six months ended September 30, 2024, compared to $26.2 million in the same period in 2023. As a percentage of service revenues, gross profit decreased to 60.5% in the six months ended September 30, 2024 from 62.4% in the same period in 2023. The decrease in gross profit as a percentage of revenues was mainly due to the commencement of amortization of MiX Telematics acquisition-related intangibles.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. SG&A expenses increased by $57.1 million, or 163.4%, to $92.1 million in the six months ended September 30, 2024, compared to $35.0 million in the same period in 2023, principally due to the MiX Telematics business acquired which contributed $35.4 million of SG&A expenses (excluding one-time costs), $17.3 million in acquisition-related expenses, $4.7 million in accelerated stock-based compensation costs and $2.3 million in restructuring costs for the six months ended September 30, 2024. As a percentage of revenues, SG&A expenses, excluding $24.3 million in one-time transaction, restructuring and accelerated stock-based compensation costs, decreased to 44.5% in the six months ended September 30, 2024, from 52.7% in the same period in 2023.

RESEARCH AND DEVELOPMENT EXPENSES. R&D expenses increased by $1.9 million, or 40.7%, to $6.5 million in the six months ended September 30, 2024, compared to $4.6 million in the same period in 2023, principally due to $2.9 million incurred by the MiX Telematics business post-transaction. As a percentage of revenues, R&D expenses decreased to 4.3% in the six months ended September 30, 2024, from 7.0% in the same period in 2023.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS. Net loss attributable to common stockholders was $24.2 million, or $(0.23) per basic and diluted share, for the six months ended September 30, 2024, as compared to net loss of $12.7 million, or $(0.36) per basic and diluted share, for the same period in 2023. The net loss was primarily the result of $15.6 million in one-time transaction costs, $1.7 million in integration-related costs, $2.3 million in restructuring costs, $4.7 million in accelerated stock-based compensation costs and $4.2 million from the commencement of amortization of MiX Telematics acquisition-related intangibles, partially offset by $2.2 million gain in other income from the derivative mark-to-market adjustment.

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Non-GAAP Financial Information

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.
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. We do not regard this non-GAAP measures as a substitute for, or superior to, the equivalent measure calculated and presented in accordance with GAAP or that calculated using financial measure that is calculated in accordance with GAAP.
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), income tax expense, depreciation and amortization, stock-based compensation, foreign currency gains/losses, restructuring-related expenses, gain on bargain purchase (Movingdots), derivative mark-to market adjustment and acquisition-related expenses.
We have included adjusted EBITDA in this Quarterly Report on Form 10-Q 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. In particular, the exclusion of certain expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results.

A reconciliation of net loss attributable to common stockholders (the most directly comparable financial measure presented in accordance with GAAP) to adjusted EBITDA for the periods shown is presented below.
Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA
Three Months Ended September 30,Six Months Ended September 30,
2023
(As Restated)		202420232024
(In thousands)
Net loss attributable to common stockholders$(6,510)$(1,888)$(12,679)$(24,225)
Non-controlling interest— 5 6 18 
Preferred stock dividend and accretion2,962 — 5,863 25 
Interest expense, net131 3,345 588 6,261 
Income tax expense295 256 289 1,309 
Depreciation and amortization2,485 9,064 4,807 19,399 
Stock-based compensation1,101 1,371 1,953 7,300 
Foreign currency (gains)/losses(49)636 (411)745 
Restructuring-related expenses142 1,069 567 2,267 
Gain on bargain purchase - Movingdots— — (283)— 
Derivative mark-to-market adjustment— (2,197)— (2,197)
Acquisition-related expenses1,232 1,406 1,455 15,571 
Integration-related expenses
— 1,410 — 1,739 
Adjusted EBITDA$1,789 $14,477 $2,155 $28,212 
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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Some of these limitations are:
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
•adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
•adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;
•other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure; and
•certain of the adjustments (such as restructuring costs) made in calculating adjusted EBITDA are those that management believes are not representative of our underlying operations and, therefore, are subjective in nature.

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

On October 3, 2019, in connection with the completion of the Pointer acquisition, we issued and sold 50,000 shares of the Series A Preferred Stock to ABRY Senior Equity V, L.P., ABRY Senior Equity Co-Investment Fund V, L.P and ABRY Investment Partnership, L.P. (the “Investors”) pursuant to the terms of an Investment and Transaction Agreement, dated as of March 13, 2019 (as amended, the “Investment Agreement”), for an aggregate purchase price of $50.0 million. The proceeds received from such sale were used to finance a portion of the cash consideration payable in our acquisition of Pointer.

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 outstanding shares of our Series A 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 above and incremental borrowing capacity as a result of the refinancing of Credit Facilities to redeem the full $90.3 million value of the outstanding shares of Series A Preferred Stock.

In addition, our wholly owned subsidiaries, Powerfleet Israel and Pointer (collectively, the “Borrowers”) 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 March 18, 2025, 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. As of September 30, 2024, Powerfleet Israel had utilized approximately $12.1 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 September 30, 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.
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The interest rate for borrowings under Hapoalim Facility C is, with respect to NIS-denominated loans, Hapoalim’s prime rate + 2.5%, and with respect to U.S. dollar-denominated loans, 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 with RMB and MiX Telematics entered into the Credit Agreement on March 14, 2024, for 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 entered into on March 7, 2024, which is described in more detail below.

The RMB General Facility is repayable on demand and has a term of 365 days from the Available Date (as defined therein). Repayment of the RMB General Facility, including capitalized interest, is due by the earlier of (a) the Available Date or (b) April 2, 2025, unless extended by agreement between MiX Telematics and RMB. Interest rate for the RMB General Facility is calculated at South African prime rate minus 0.75% per annum and will be calculated on the daily outstanding balance, compounded monthly in arrears and repaid quarterly. As of September 30, 2024, $19,728 of the RMB General Facility was utilized.

MiX Telematics also has the CFC Overdraft Facility with Standard Bank. The CFC Overdraft Facility entitles MiX Telematics to utilize a maximum amount of R70.0 million (the equivalent of $4.1 million as of September 30, 2024). The CFC Overdraft Facility bears interest at the South African prime interest rate less 1.2% per annum. As of September 30, 2024, the CFC Overdraft Facility was not utilized.

There is a suretyship agreement entered into with Standard Bank providing that MiX Telematics and only one subsidiary being MiX Telematics International (Pty) Ltd, binds themselves as surety(ies) and co-principal debtor(s) for the payment, when due, of all the present and future debts of any kind of MiX Telematics and MiX Telematics International to Standard Bank.

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 conflicts between Russia and Ukraine and between Israel and Hamas, rising interest rates, fluctuations in currency values, 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.


Capital Requirements

As of September 30, 2024, we had cash and cash equivalents (including restricted cash) of $89.0 million and working capital of $81.2 million compared to cash and cash equivalents (including restricted cash) of $109.7 million and working capital of $126.2 million as of March 31, 2024. 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. $61.9 million of proceeds from the Private Placement, net of costs to issue common stock, was held in restricted cash at September 30, 2024, which was used for the FC Acquisition on October 1, 2024. The FC Acquisition is
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also expected to be a source of positive cash flow, together with the MiX Combination completed on April 2, 2024. 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.

Operating Activities
During the six months ended September 30, 2024, net cash used in operating activities was $10.8 million, compared to net cash used in operating activities of $2.1 million for the same period in 2023. The net cash used in operating activities for the six months ended September 30, 2024 primarily included non-cash charges of $7.3 million for stock-based compensation, $19.4 million for depreciation and amortization expense, $4.4 million for bad debts expense, $0.9 million for shares issued for transaction bonuses related to the MiX Combination and $1.5 million for ROU asset amortization. Changes in operating assets and liabilities included:
•an increase in accounts receivables of $12.6 million;
•an increase in prepaid expenses and other assets of $3.0 million;
•an increase in deferred costs of $3.6 million; offset by
•an decrease in accounts payable of $0.1 million;
•a decrease in lease liabilities of $1.9 million; and
•a decrease in inventory, net of reserve of $1.0 million.

Investing Activities

Net cash provided by investing activities for the six months ended September 30, 2024 was $12.9 million, compared to net cash used in investing activities of $3.5 million for the same period in 2023. The net cash provided by investing activities was primarily due to $27.5 million in net cash assumed from the MiX Combination, partially offset by $10.5 million for the purchase of fixed assets and $4.7 million for capitalized software development costs. The net cash used in investing activities of $3.5 million in the same period in 2023 was primarily for the purchase of fixed assets of $1.4 million and $2.0 million for capitalized software development costs.

Financing Activities

During the six months ended September 30, 2024, net cash used in financing activities was $22.3 million, compared to a neutral position from financing activities for the same period in 2023. The cash used in financing activities was primarily due to the repayment of Series A Preferred Stock of $90.3 million following the MiX Combination, partially offset by $61.9 million received from the Private Placement, less costs, related to the FC Acquisition and $10.0 million received from short-term bank debt.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Inflation

Inflation and other macroeconomic conditions in the United States have resulted in higher costs of raw materials, freight, and labor, which has impacted our operating costs. In addition, we operate in several emerging market economies that are particularly vulnerable to the impact of inflationary pressures that could materially and adversely impact our operations in the foreseeable future.




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Business Acquisitions

In addition to focusing on our core applications, we adapt our systems to meet our customers’ broader asset management needs and seek opportunities to expand our solution offerings through strategic acquisitions.

On April 2, 2024, we consummated the MiX Combination, pursuant to which MiX Telematics became our indirect, wholly owned subsidiary. See Note 3, “Acquisition,” in Part I, Item 1, “Financial Statements (Unaudited)” for additional information.

On October 1, 2024, we consummated the FC Acquisition, pursuant to which Fleet Complete became our wholly owned subsidiary. See Note 24, “Subsequent Events” in Part I, Item 1, “Financial Statements (Unaudited)” for additional information.

Impact of Recently Issued Accounting Pronouncements

The Company is subject to recently issued accounting standards, accounting guidance and disclosure requirements. For a description of these new accounting standards, see Note 23 to our consolidated financial statements contained in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.


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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.

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Item 4. Controls and Procedures
a. Disclosure controls and procedures.

We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Due to the inherent limitations of controls systems, irrespective of how well controls are designed and operated, not all misstatements may be detected. These inherent limitations include, but are not limited to faulty judgments in decision-making, breakdown in controls can occur because of a simple error or mistake and/or controls can be circumvented by the individual act of persons, by the collusion of two or more people, or by management override of control.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such terms is defined in Rules 13a-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness, as of September 30, 2024, of our internal control over financial reporting. Based on that evaluation, we concluded that, internal control over financial reporting were not effective as of September 30, 2024, due to material weaknesses in our internal control over financial reporting as disclosed in the 2023 Annual Report and the Form 10-KT.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified material weaknesses in the design and operation of controls related to the determination of standalone selling prices, cost capitalized for internal use software, the accounting for business acquisitions, valuation of goodwill, measurement and valuation of the convertible redeemable preferred stock and the financial statement close process, which includes the information technology general controls in the areas of user access and change management over key information technology systems that support our financial reporting processes, the related process-level information technology dependent manual controls and application controls.

As disclosed in Note 3, “Acquisition,” in Part I, Item 1, “Financial Statements (Unaudited),” we completed the MiX Combination on April 2, 2024. We excluded MiX Telematics’ disclosure controls and procedures that are subsumed by their internal control over financial reporting from the scope of management’s assessment of the effectiveness of our disclosure controls and procedures. This exclusion is in accordance with the guidance issued by the SEC that an assessment of a recently acquired business’s internal control over financial reporting may be omitted from management’s assessment of internal control over financial reporting for one year following the acquisition. As a result of our integration of MiX Telematics’ disclosure controls and procedures, certain controls will be evaluated and may be changed. MiX Telematics’ total revenues constituted approximately 57% of our consolidated revenues for the six months ended September 30, 2024. MiX Telematics’ total assets constituted approximately 35% of our consolidated total assets as of September 30, 2024.

As disclosed in Note 24, “Subsequent Events,” in Part I, Item 1, “Financial Statements (Unaudited),” we completed the FC Acquisition on October 1, 2024. Fleet Complete’s disclosure controls and procedures will be excluded from the scope of management’s assessment of the effectiveness of our disclosure controls and procedures. This exclusion is in accordance with the guidance issued by the SEC that an assessment of a recently acquired business’s internal control over financial reporting may be omitted from management’s assessment of internal control over financial reporting for one year following the acquisition.

Remediation

As described in “Item 9A. Controls and Procedures” in Part II of the 2023 Annual Report and the Form 10-KT, we started the implementation of the remediation plan to address the material weaknesses mentioned above, including the material weakness reported for MiX Telematics. The remediation plan includes:

•Investigating and understanding the root causes of the control deficiencies that resulted in the material weaknesses, and will continue to refine the remediation plan in conjunction with the integration of operations, procedures, control processes and information systems.
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•Utilizing external resources to support efforts to rework certain control gaps across the various processes in Israel and the United States with identified deficiencies.
•Implementing enhanced documentation associated with management review controls and validation of the completeness and accuracy of key reports across the group.
•Training of relevant personnel reinforcing existing and/or enhanced policies with regards to the appropriate steps and procedures required to be performed related to the execution and documentation of internal controls.

In addition, as part the business combination with MiX Telematics, we are in the process of migrating and integrating the central corporate accounting functions and teams. This integration includes:

•Adopting and implementing a standardized ERP system to be used across the company;
•Evaluating and integrating accounting principles to align and adopt consistent accounting policies and practices;
•Leveraging a larger highly qualified central corporate accounting team;
•Utilizing a more mature internal risk team to coordinate management's efforts to design and implement systems, processes and controls that are documented and widely understood and followed throughout the organization.

Management will continue with the implementation of the remediation plan and will reassess and test the design and operating effectiveness of controls. The material weaknesses will not be considered remediated until applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are designed and operating effectively.


b. Changes in internal control over financial reporting.

Except for the controls related to the material weaknesses reported in the 2023 Annual Report and the Form 10-KT related to the measurement and valuation of the acquired assets and liabilities assumed in connection with the business acquisitions, the annual measurement and valuation of our reporting unit, controls over the financial statement close process, specifically that the primary ERP had ineffective IT general controls in the area of user access and change management over key IT systems that support the financial reporting processes, and the measurement and valuation of the convertible redeemable preferred stock, there were no other changes in our system of internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

During the quarter ended June 30, 2024, we completed the MiX Combination. As part of our ongoing post-transaction activities, we continue the process of planning and rolling out the implementation of the ERP and subscription billing system to certain Powerfleet operations. Furthermore, as part of our integration activities, we expect additional changes to the internal control over financial reporting as we continue with our integration activities, which include the evaluation, rationalization and standardization of internal control over financial reporting. While we believe the controls in the post-transaction environment, supported by a uniform ERP system, will enhance the internal control environment, there are inherent risks associated to the integration and implementation of a new ERP system. We will continue to evaluate the processes and controls related to the integration and system implementation, as well as the assessment of the design adequacy and operating effectiveness of internal control over financial reporting throughout fiscal year 2025.

Other than as described above under “Remediation”, the integration efforts and the implementation of the ERP system, there were no changes to the Company's internal control over financial reporting, as defined in Rule 13a-15(f) and 15d- 15(f) promulgated under the Exchange Act, during the three months ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
54

PART II - OTHER INFORMATION

Item 1. Legal Proceedings
In the ordinary course of its business, we are at times subject to various legal proceedings. For a description of our material pending legal proceedings, see Note 22 to our consolidated financial statements contained in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

55

Item 1A. Risk Factors

Our business is subject to numerous risks, a number of which are described under Part I, Item 1A. “Risk Factors” in the Form 10-KT. As of September 30, 2024, there have been no material changes to the risk factors previously disclosed, other than as set forth below.

We may not realize the anticipated benefits and cost savings of the MiX Combination and FC Acquisition.
The success of the MiX Combination and the FC Acquisition will depend, in part, on our ability to realize the anticipated benefits and cost savings from combining the businesses. Our ability to realize these anticipated benefits and cost savings is subject to certain risks, including, among others:
•the parties’ ability to successfully combine their respective businesses;
•the risk that the combined businesses will not perform as expected;
•the extent to which the parties will be able to realize the expected synergies, which include realizing potential savings from re-assessing priority assets and aligning investments, eliminating duplication and redundancy, adopting an optimized operating model between the companies and leveraging scale, and creating value resulting from the combination of the three businesses;
•the possibility that the aggregate consideration being paid for MiX Telematics and Fleet Complete is greater than the value we will derive from the MiX Combination and the FC Acquisition;
•the possibility that the combined company will not achieve the unlevered free cash flow that the parties have projected;
•the incurrence of additional indebtedness in connection with the MiX Combination and the FC Acquisition and the resulting limitations placed on the combined company’s operations; and
•the assumption of known and unknown liabilities of MiX Telematics and Fleet Complete, including potential tax and employee-related liabilities.
If we are not able to successfully integrate the businesses within the anticipated time frame, or at all, the anticipated cost savings, synergies operational efficiencies and other benefits of the MiX Combination and the FC Acquisition may not be realized fully or may take longer to realize than expected, and the combined company may not perform as expected.
Integrating our, MiX Telematics’ and Fleet Complete’s businesses may be more difficult, time-consuming or costly than expected.
We and MiX Telematics operated independently prior to completion of the MiX Combination on April 2, 2024, and we, together with MiX Telematics, and Fleet Complete operated independently prior to completion of the FC Acquisition on October 1, 2024. There can be no assurances that our businesses can be integrated successfully. It is possible that the integration process could result in the loss of key employees, the disruption of our company’s ongoing business or unexpected integration issues, such as higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. Specifically, issues that must be addressed in integrating the operations of our company, MiX Telematics and Fleet Complete in order to realize the anticipated benefits of the transactions so that the combined business performs as expected include, among others:
•combining the companies’ separate operational, financial, reporting and corporate functions;
•integrating the companies’ technologies, products and services;
•identifying and eliminating redundant and underperforming operations and assets;
•harmonizing the companies’ operating practices, employee development, compensation and benefit programs, internal controls and other policies, procedures and processes;
•addressing possible differences in corporate cultures and management philosophies;
•maintaining employee morale and retaining key management and other employees;
•attracting and recruiting prospective employees;
•consolidating the companies’ corporate, administrative and information technology infrastructure;
•coordinating sales, distribution and marketing efforts;
•managing the movement of certain businesses and positions to different locations;
•maintaining existing agreements with customers and vendors and avoiding delays in entering into new agreements with prospective customers and vendors;
•coordinating geographically dispersed organizations; and
•effecting potential actions that may be required in connection with obtaining regulatory approvals.
56

In addition, at times, the attention of certain members of our management and our resources may be focused on the integration of the businesses and diverted from day-to-day business operations, which may disrupt our ongoing business and, consequently, the business of the combined company.
The market price for shares of our common stock may decline as a result of the MiX Combination and the FC Acquisition, including as a result of some of our stockholders adjusting their portfolios.
The market value of our common stock at the time of consummation of each of the MiX Combination and the FC Acquisition varied significantly from the prices of our common stock before the date the respective transaction agreements were executed and the respective closing dates of the transactions. The market price of our common stock may decline if, among other things, the operational cost savings estimates in connection with the integration of our, MiX Telematics’ and Fleet Complete’s business are not realized, or if the costs related to the MiX Combination and FC Acquisition are greater than expected. The market price also may decline if we do not achieve the perceived benefits of the MiX Combination and FC Acquisition as rapidly or to the extent anticipated by financial or industry analysts or if the effect of the MiX Combination and FC Acquisition on our financial position, results of operations or cash flows is not consistent with the expectations of financial or industry analysts.
In addition, sales of our common stock by our stockholders after the completion of the MiX Combination and FC Acquisition may cause the market price of our common stock to decrease. Existing shareholders may decide to sell their shares of our common stock. Certain of our other stockholders, such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell shares of our common stock. Such sales of our common stock could have the effect of depressing the market price for our common stock.
Any of these events may make it more difficult for us to sell equity or equity-related securities and have an adverse impact on the price of our common stock.
The MiX Combination and the FC Acquisition may not be accretive, and may be dilutive, to the combined company’s earnings per share, which may negatively affect the market price of shares of our common stock.
We currently believe the MiX Combination and the FC Acquisition will result in a number of benefits, including cost savings, operating efficiencies, and stronger demand for our products and services, and that the MiX Combination and FC Acquisition will be accretive to our earnings. This belief is based, in part, on preliminary current estimates that may materially change. In addition, future events and conditions, including adverse changes in market conditions, additional transaction and integration-related costs and other factors such as the failure to realize some or all of the anticipated benefits of the MiX Combination and FC Acquisition, could decrease or delay the accretion that is currently anticipated or could result in dilution. Any dilution of, or decrease in or delay of any accretion to, the combined company’s earnings per share could cause the price of shares of our common stock to decline or grow at a reduced rate.
These risks should be carefully considered together with the other information set forth in this report, which could materially affect our business, financial condition and future results. The risks described under Part I, Item 1A. “Risk Factors” in the Form 10-KT are not the only risks we face. Risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and operating results.

In connection with the MiX Combination and the FC Acquisition, we have incurred significant additional indebtedness to finance the redemption of our Series A 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 outstanding shares of the Series A 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 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, the proceeds of which may be used to redeem all the outstanding shares of the Series A 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 to redeem in full all of the outstanding shares of the Series A Preferred Stock.

Additionally, 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 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.

57

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.

Fleet Complete derives a significant portion of its revenues from two major customers, the loss of one or more of which could have a materially adverse effect on our business.
We strive to maintain a diverse customer base; however, a significant portion of Fleet Complete’s operating revenues is generated from two major North American telecommunications companies, the loss of one or more of which could have a material adverse effect on our business. Approximately 42% and 44% of Fleet Complete’s revenues during the years ended September 30, 2023 and 2022, respectively, were derived from these two major customers. Loss of business from these customers could have an adverse effect on our business, financial condition and operating results. There is no assurance any of
our customers, including these two customers, will continue to utilize our services, renew our existing contracts, or continue to
purchase our products and services at the same volume levels.
58

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer

During the quarterly period ended September 30, 2024, no shares were repurchased by the Company.


Item 6. Exhibits

The following exhibits are filed with this Quarterly Report on Form 10-Q:

Exhibits:

Exhibit
Number		Description
101
The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets as of March 31, 2024 and September 30, 2024; (ii) Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2023 and 2024; (iii) Condensed Consolidated Statements of Comprehensive Loss for the three months ended September 30, 2023 and 2024; (iv) Condensed Consolidated Statement of Changes in Stockholders’ Equity for the periods April 1, 2023 through September 30, 2023 and April 1, 2024 through September 30, 2024 (v) Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2023 and 2024; and (vi) Notes to Condensed Consolidated Financial Statements.
104
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL (included as Exhibit 101).
*Furnished herewith.
†
Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules or exhibits upon request by the SEC.
¥
Management contract or compensatory plan or arrangement.
+
Pursuant to Item 601(b)(10)(iv) of Regulation S-K, certain portions of this exhibit have been redacted. Redacted information is indicated by [***].

59

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
POWERFLEET, INC.
Date: November 12, 2024
By: /s/ Steve Towe
Steve Towe
Chief Executive Officer
(Principal Executive Officer)
Date: November 12, 2024
By: /s/ David Wilson
David Wilson
Chief Financial Officer
(Principal Financial and Accounting Officer)

60

Exhibit 31.1

CERTIFICATE OF PRINCIPAL EXECUTIVE OFFICER
Pursuant to Securities Exchange Act Rules 13a--14(a) and 15d--14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Steve Towe, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Powerfleet, Inc. (the “Registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.


Date: November 12, 2024                         /s/ Steve Towe
Steve Towe
Chief Executive Officer
(Principal Executive Officer)


Exhibit 31.2

CERTIFICATE OF PRINCIPAL FINANCIAL OFFICER
Pursuant to Securities Exchange Act Rules 13a--14(a) and 15d--14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, David Wilson, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Powerfleet, Inc. (the “Registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.


Date: November 12, 2024                         /s/ David Wilson
David Wilson
Chief Financial Officer
(Principal Financial and Accounting Officer)


Exhibit 32

CERTIFICATE OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Powerfleet, Inc. (the “Company”) to which this certification is attached and as filed with the Securities and Exchange Commission (the “SEC”) on the date hereof (the “Report”), each of the undersigned officers of the Company hereby certifies, pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)     The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.


Date: November 12, 2024                          /s/ Steve Towe
Steve Towe
Chief Executive Officer
(Principal Executive Officer)


Date: November 12, 2024                          /s/ David Wilson
David Wilson
Chief Financial Officer
(Principal Financial and Accounting Officer)

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Report or as a separate disclosure document.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

v3.24.3
COVER - shares
 6 Months Ended
Sep. 30, 2024
Nov. 08, 2024
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2024  
Document Transition Report false  
Entity File Number 001-39080  
Entity Registrant Name POWERFLEET, INC.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 83-4366463  
Entity Address, Address Line One 123 Tice Boulevard  
Entity Address, City or Town Woodcliff Lake,  
Entity Address, State or Province NJ  
Entity Address, Postal Zip Code 07677  
City Area Code (201)  
Local Phone Number 996-9000  
Title of 12(b) Security Common Stock, par value $0.01 per share  
Trading Symbol AIOT  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   132,138,557
Amendment Flag false  
Entity Central Index Key 0001774170  
Current Fiscal Year End Date --03-31  
Document Fiscal Year Focus 2025  
Document Fiscal Period Focus Q2  
v3.24.3
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
 [1]
Current assets:    
Cash and cash equivalents $ 25,962 $ 24,354
Restricted cash 63,074 85,310
Accounts receivables, net of allowance for credit losses of $3,197 and $5,321 as of March 31, 2024 and September 30, 2024, respectively 64,819 30,333
Inventory, net 23,488 21,658
Deferred costs - current 13 42
Prepaid expenses and other current assets 17,985 8,091
Total current assets 195,341 169,788
Fixed assets, net 51,928 12,719
Goodwill 300,283 83,487
Intangible assets, net 167,320 19,652
Right-of-use asset 9,402 7,428
Severance payable fund 3,864 3,796
Deferred tax asset 3,602 2,781
Other assets 16,595 9,029
Total assets 748,335 308,680
Current liabilities:    
Short-term bank debt and current maturities of long-term debt 35,339 1,951
Accounts payable and accrued expenses 66,098 34,008
Deferred revenue - current 10,447 5,842
Lease liability - current 2,248 1,789
Total current liabilities 114,132 43,590
Long-term debt - less current maturities 111,011 113,810
Deferred revenue - less current portion 4,674 4,892
Lease liability - less current portion 7,713 5,921
Accrued severance payable 4,677 4,597
Deferred tax liability 52,113 4,465
Other long-term liabilities 2,905 2,496
Total liabilities 297,225 179,771
Commitments and Contingencies (Note 22)
Convertible redeemable preferred stock: Series A - 100 shares authorized, $0.01 par value; 60 and 0 shares issued and outstanding at March 31, 2024 and September 30, 2024, respectively, at redemption value of $90,273 at March 31, 2024 0 90,273
STOCKHOLDERS’ EQUITY    
Preferred stock; authorized 50,000 shares, $0.01 par value 0 0
Common stock; authorized 175,000 shares, $0.01 par value; 38,709 and 109,884 shares issued at March 31, 2024 and September 30, 2024, respectively; shares outstanding, 37,212 and 107,821 at March 31, 2024 and September 30, 2024, respectively 1,096 387
Additional paid-in capital 641,736 202,607
Accumulated deficit (178,996) (154,796)
Accumulated other comprehensive loss (1,364) (985)
Treasury stock; 1,497 and 2,063 common shares at cost at March 31, 2024 and September 30, 2024, respectively (11,518) (8,682)
Total Powerfleet, Inc. stockholders’ equity 450,954 38,531
Non-controlling interest 156 105
Total equity 451,110 38,636
Total liabilities, convertible redeemable preferred stock, and stockholders’ equity $ 748,335 $ 308,680
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Statement of Financial Position [Abstract]    
Allowance for credit losses $ 5,321 $ 3,197
Temporary equity, shares authorized (in shares) 100,000 100,000
Temporary equity, par value (in dollars per share) $ 0.01 $ 0.01
Temporary equity, shares issued (in shares) 0 60,000
Temporary equity, shares outstanding (in shares) 0 60,000
Temporary equity, redemption value $ 0 $ 90,273 [1]
Preference shares, authorized (in shares) 50,000,000 50,000,000
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 175,000,000 175,000,000
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares issued (in shares) 109,884,000 38,709,000
Common stock, shares outstanding (in shares) 107,821,000 37,212,000
Treasury stock (in shares) 2,063,000 1,497,000
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
Condensed Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenues:        
Total revenues $ 77,018 $ 34,243 $ 152,448 $ 66,335
Cost of revenues:        
Total cost of revenues 35,675 17,136 71,457 33,210
Gross profit 41,343 17,107 80,991 33,125
Operating expenses:        
Selling, general and administrative expenses 37,335 17,778 92,117 34,976
Research and development expenses 3,435 2,426 6,536 4,646
Total operating expenses 40,770 20,204 98,653 39,622
(Loss)/profit from operations 573 (3,097) (17,662) (6,497)
Interest income 168 23 472 45
Interest expense (4,042) (154) (6,733) (327)
Bargain purchase - Movingdots 0 0 0 283
Other (expense)/income, net 1,674 (25) 1,050 (25)
Net loss before income taxes (1,627) (3,253) (22,873) (6,521)
Income tax expense (256) (295) (1,309) (289)
Net loss before non-controlling interest (1,883) (3,548) (24,182) (6,810)
Non-controlling interest (5) 0 (18) (6)
Net loss (1,888) (3,548) (24,200) (6,816)
Accretion of preferred stock 0 (1,834) 0 (3,606)
Preferred stock dividend 0 (1,128) (25) (2,257)
Net loss attributable to common stockholders (1,888) (6,510) (24,225) (12,679)
Net loss attributable to common stockholders $ (1,888) $ (6,510) $ (24,225) $ (12,679)
Net loss per share attributable to common stockholders - basic (in dollars per share) $ (0.02) $ (0.18) $ (0.23) $ (0.36)
Net loss per share attributable to common stockholders - diluted (in dollars per share) $ (0.02) $ (0.18) $ (0.23) $ (0.36)
Weighted average common shares outstanding - basic (in shares) 107,532 35,653 107,335 35,629
Weighted average common shares outstanding - diluted (in shares) 107,532 35,653 107,335 35,629
Products        
Revenues:        
Total revenues $ 20,293 $ 13,233 $ 39,031 $ 24,317
Cost of revenues:        
Total cost of revenues 13,929 8,842 26,680 17,392
Services        
Revenues:        
Total revenues 56,725 21,010 113,417 42,018
Cost of revenues:        
Total cost of revenues $ 21,746 $ 8,294 $ 44,777 $ 15,818
v3.24.3
Condensed Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Statement of Comprehensive Income [Abstract]        
Net loss attributable to common stockholders - basic $ (1,888) $ (6,510) $ (24,225) $ (12,679)
Net loss attributable to common stockholders - diluted (1,888) (6,510) (24,225) (12,679)
Foreign currency translation adjustment (797) (906) (379) (806)
Total other comprehensive income (797) (906) (379) (806)
Comprehensive loss $ (2,685) $ (7,416) $ (24,604) $ (13,485)
v3.24.3
Condensed Consolidated Statement of Changes in Stockholders’ Equity - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock
Additional Paid-In Capital
Accumulated Deficit
Accumulated Other Comprehensive Income/(Loss)
Treasury Stock
Non-Controlling Interest
Beginning balance (in shares) at Mar. 31, 2023   37,621          
Beginning balance at Mar. 31, 2023 $ 73,302 $ 376 $ 218,473 $ (135,961) $ (1,098) $ (8,554) $ 66
Increase (Decrease) in Stockholders' Equity              
Net loss attributable to common stockholders (6,171)   (2,902) (3,269)      
Net income (loss) attributable to non-controlling interest 6           6
Foreign currency translation adjustment 91       100   (9)
Forfeiture of restricted shares (in shares)   (82)          
Exercise of stock options (in shares)   16          
Exercise of stock options 36   36        
Issuance of restricted shares (in shares)   162          
Issuance of restricted shares 0 $ 1 (1)        
Shares withheld pursuant to vesting of restricted stock (4)         (4)  
Stock-based compensation 852   852        
Ending balance (in shares) at Jun. 30, 2023   37,717          
Ending balance at Jun. 30, 2023 68,112 $ 377 216,458 (139,230) (998) (8,558) 63
Beginning balance (in shares) at Mar. 31, 2023   37,621          
Beginning balance at Mar. 31, 2023 73,302 $ 376 218,473 (135,961) (1,098) (8,554) 66
Increase (Decrease) in Stockholders' Equity              
Net loss attributable to common stockholders (12,679)            
Net income (loss) attributable to non-controlling interest 6            
Shares issued in connection with MiX Combination 0            
Ending balance (in shares) at Sep. 30, 2023   38,699          
Ending balance at Sep. 30, 2023 61,707 $ 387 214,587 (142,778) (1,904) (8,648) 63
Beginning balance (in shares) at Jun. 30, 2023   37,717          
Beginning balance at Jun. 30, 2023 68,112 $ 377 216,458 (139,230) (998) (8,558) 63
Increase (Decrease) in Stockholders' Equity              
Net loss attributable to common stockholders (6,510)   (2,962) (3,548)      
Net income (loss) attributable to non-controlling interest 0            
Foreign currency translation adjustment (906)       (906)    
Issuance of restricted shares (in shares)   982          
Issuance of restricted shares 0 $ 10 (10)        
Shares withheld pursuant to vesting of restricted stock (90)         (90)  
Stock-based compensation 1,101   1,101        
Ending balance (in shares) at Sep. 30, 2023   38,699          
Ending balance at Sep. 30, 2023 $ 61,707 $ 387 214,587 (142,778) (1,904) (8,648) 63
Beginning balance (in shares) at Mar. 31, 2024 37,212 38,709          
Beginning balance at Mar. 31, 2024 $ 38,636 [1] $ 387 202,607 (154,796) (985) (8,682) 105
Increase (Decrease) in Stockholders' Equity              
Net loss attributable to common stockholders (22,337)   (25) (22,312)     0
Net income (loss) attributable to non-controlling interest 13           13
Foreign currency translation adjustment 426       418   8
Issuance of restricted shares (in shares)   54          
Issuance of restricted shares 0 $ 1 (1)        
Shares issued for transaction bonus (in shares)   174          
Shares issued for transaction bonus 889 $ 1 888        
Shares issued in connection with MiX Combination (in shares)   70,704          
Shares issued in connection with MiX Combination 362,005 $ 707 361,298        
Acquired through MiX Combination 7,823   7,818       5
Shares withheld pursuant to vesting of restricted stock (2,836)         (2,836)  
Stock-based compensation 5,929   5,929        
Ending balance (in shares) at Jun. 30, 2024   109,641          
Ending balance at Jun. 30, 2024 $ 390,548 $ 1,096 578,514 (177,108) (567) (11,518) 131
Beginning balance (in shares) at Mar. 31, 2024 37,212 38,709          
Beginning balance at Mar. 31, 2024 $ 38,636 [1] $ 387 202,607 (154,796) (985) (8,682) 105
Increase (Decrease) in Stockholders' Equity              
Net loss attributable to common stockholders (24,225)            
Net income (loss) attributable to non-controlling interest 18            
Shares issued in connection with MiX Combination $ 362,005            
Ending balance (in shares) at Sep. 30, 2024 107,821 109,884          
Ending balance at Sep. 30, 2024 $ 451,110 $ 1,096 641,736 (178,996) (1,364) (11,518) 156
Beginning balance (in shares) at Jun. 30, 2024   109,641          
Beginning balance at Jun. 30, 2024 390,548 $ 1,096 578,514 (177,108) (567) (11,518) 131
Increase (Decrease) in Stockholders' Equity              
Net loss attributable to common stockholders (1,888)     (1,888)      
Net income (loss) attributable to non-controlling interest 5           5
Foreign currency translation adjustment (777)       (797)   20
Proceeds from private placement, net of costs to issue common stock 61,851   61,851        
Exercise of stock options (in shares)   243          
Stock-based compensation $ 1,371   1,371        
Ending balance (in shares) at Sep. 30, 2024 107,821 109,884          
Ending balance at Sep. 30, 2024 $ 451,110 $ 1,096 $ 641,736 $ (178,996) $ (1,364) $ (11,518) $ 156
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Cash flows from operating activities    
Net loss $ (24,200) $ (6,816)
Adjustments to reconcile net loss to cash used in operating activities:    
Non-controlling interest 18 6
Gain on bargain purchase 0 (283)
Inventory reserve 904 617
Stock based compensation expense 7,300 1,953
Depreciation and amortization 19,399 4,807
Right-of-use assets, non-cash lease expense 1,515 1,242
Derivative mark-to-market adjustment (2,197) 0
Bad debts expense 4,369 933
Deferred income taxes (283) 285
Shares issued for transaction bonuses 889 0
Lease termination and modification losses 184 0
Other non-cash items 1,522 126
Changes in operating assets and liabilities:    
Accounts receivables (12,553) (3,866)
Inventories 955 (2,023)
Prepaid expenses and other current assets (3,009) 51
Deferred costs (3,619) 332
Deferred revenue (99) 222
Accounts payable and accrued expenses (71) 1,498
Lease liabilities (1,856) (1,247)
Accrued severance payable, net 40 91
Net cash used in operating activities (10,792) (2,072)
Cash flows from investing activities    
Acquisition, net of cash assumed 27,531 0
Proceeds from sale of fixed assets 217 0
Capitalized software development costs (4,676) (2,047)
Capital expenditures (10,454) (1,441)
Repayment of loan advanced to external parties 294 0
Net cash (used in)/provided by investing activities 12,912 (3,488)
Cash flows from financing activities    
Repayment of long-term debt (978) (2,656)
Short-term bank debt, net 9,955 4,996
Purchase of treasury stock upon vesting of restricted stock (2,836) (94)
Payment of preferred stock dividend and redemption of preferred stock (90,298) (2,257)
Proceeds from private placement, net 61,851 0
Proceeds from exercise of stock options, net 0 36
Cash paid on dividends to affiliates (6) 0
Net cash from/(used in) financing activities (22,312) 25
Effect of foreign exchange rate changes on cash and cash equivalents (436) 53
Net decrease in cash and cash equivalents, and restricted cash (20,628) (5,482)
Cash and cash equivalents, and restricted cash at beginning of the period 109,664 25,089
Reconciliation of cash and cash equivalents, and restricted cash    
Cash and cash equivalents 24,354 [1] 24,780
Restricted cash 63,074 310
Cash, cash equivalents, and restricted cash 89,036 19,607
Supplemental disclosure of cash flow information:    
Taxes 774 115
Interest 6,262 538
Noncash investing and financing activities:    
Common stock issued for transaction bonus 9 0
Shares issued in connection with MiX Combination $ 362,005 $ 0
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
DESCRIPTION OF THE COMPANY AND BASIS OF PRESENTATION
 6 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
DESCRIPTION OF THE COMPANY AND BASIS OF PRESENTATION DESCRIPTION OF THE COMPANY AND BASIS OF PRESENTATION
Description of the Company

Powerfleet, Inc. (the “Company” or “Powerfleet”) is a global leader of Internet-of-Things (“IoT”) solutions providing valuable business intelligence for managing high-value enterprise assets that improve operational efficiencies. The Company has a primary listing on The Nasdaq Global Market and a secondary listing on the Main Board of the Johannesburg Stock Exchange.

I.D. Systems, Inc. (“I.D. Systems”) was incorporated in the State of Delaware in 1993. Powerfleet was incorporated in the State of Delaware in February 2019 for the purpose of effectuating the transactions pursuant to which the Company acquired Pointer Telocation Ltd. (“Pointer”) and commenced operations on October 3, 2019. Upon the closing of such transactions, Powerfleet became the parent entity of I.D. Systems and Pointer.

On April 2, 2024 (the “Implementation Date”), the Company consummated the transactions contemplated by the Implementation Agreement, dated as of October 10, 2023 (the “Implementation Agreement”), that the Company entered into with Main Street 2000 Proprietary Limited, a private company incorporated in the Republic of South Africa and a wholly owned subsidiary of the Company (“Powerfleet Sub”), and MiX Telematics Limited, a public company incorporated under the laws of the Republic of South Africa (“MiX Telematics”), pursuant to which MiX Telematics became an indirect, wholly owned subsidiary of the Company (the “MiX Combination”). The consolidated financial statements as of and for the six months ended September 30, 2024 include the financial results of MiX Telematics and its subsidiaries from the Implementation Date. See Note 3 for additional information.
Basis of Preparation

The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the consolidated financial position of the Company as of March 31, 2024 and September 30, 2024, the consolidated results of its operations for the three- and six-month periods ended September 30, 2023 and 2024, the consolidated change in stockholders’ equity for the three- and six-month periods ended September 30, 2023 and 2024, and the consolidated cash flows for the six-month periods ended September 30, 2023 and 2024. The results of operations for the three- and six-month periods ended September 30, 2024 are not necessarily indicative of the operating results for the full year. On May 8, 2024, the Company’s Board of Directors approved a change in our fiscal year end from December 31 to March 31 in order to better align the Company’s reporting calendar with the April 2, 2024 close of the MiX Combination and MiX Telematics’ historical March 31 fiscal year end. These financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures for the fiscal year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K for the year then ended, and the audited consolidated financial statements and related disclosures for the three-month transition period ended March 31, 2024 included in the Company’s Transition Report on Form 10-KT for the period then ended.

Restatement of Previously Issued Consolidated Financial Statements

In connection with the preparation of the Company’s audited consolidated financial statements for the year ended December 31, 2023, the Company determined that the accounting for the redemption premium associated with its Series A convertible preferred stock (“Series A Preferred Stock”) was understated resulting in an understatement of “net loss attributable to common stockholders” and “net loss per share attributable to common stockholders” for each period, an understatement of the value of the convertible redeemable preferred stock as of each balance sheet date, and an overstatement of the additional paid-in capital as of each balance sheet date. The required adjustments to correct the redemption value of the calculation of the Series A Preferred Stock and the related accretion of the value of the preferred stock in the consolidated statement of operations included the recording of a non-cash accretion which resulted in an increase in the net loss attributable to common stockholders, an increase in the “convertible redeemable preferred stock”, and a decrease of “additional paid-in capital” for the fiscal years ended December 31, 2021 and 2022 and each of the interim periods during the 2022 and 2023 fiscal years.
The correction of the error resulted in reporting the value of the convertible preferred stock including the accretion to the redemption value from the date of original issuance through each balance sheet date applying the interest method. The restatement to non-cash accretion resulted in an increase in the net loss attributable to common stockholders and a decrease in “additional paid-in capital” of $1,604 and $1,667 for the three-month period ended June 30, 2023 and three-month period ended September 30, 2023, respectively. The Company had determined that it was appropriate to restate the financial statements for the fiscal years ended December 31, 2021 and 2022 and each of the interim periods during the 2022 and 2023 fiscal years included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”). In addition, the Company also corrected other unrelated immaterial errors that were previously either unrecorded or recorded as out-of-period adjustments. For additional information refer to Note 2 to the financial statements included in the 2023 Annual Report.
Going Concern

As of September 30, 2024, the Company had cash and cash equivalents and restricted cash of $89,036 and working capital of $81,209. The Company’s primary sources of cash are cash flows from sales of products and services, its holdings of cash, cash equivalents and proceeds from the sale of its capital stock and borrowings under its credit facilities. See Note 13 for additional information on the Company’s available credit facilities.

Management believes the Company’s cash, cash equivalents, and restricted cash of $89,036 as of September 30, 2024, in conjunction with cash expected to be generated from the execution of its strategic plan over the next 12 months, and proceeds from the Company’s credit facilities are sufficient to fund the projected operations for at least the next 12 months from the issuance date of these financial statements (November 12, 2024) and service the Company’s 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 the Company 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 the Company and would be implemented, if assumed levels of revenue and gross margin are not achieved and additional funding is not obtained.
v3.24.3
USE OF ESTIMATES
 6 Months Ended
Sep. 30, 2024
Disclosure Use Of Estimates [Abstract]  
USE OF ESTIMATES USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company continually evaluates estimates used in the preparation of the financial statements for reasonableness. The most significant estimates relate to assumptions used in business combinations, allowance for credit losses, income taxes, realization of deferred tax assets, accounting for uncertain tax positions, the impairment of intangible assets, including goodwill and long-lived assets, capitalized software development costs, inventory reserves, standalone selling prices (“SSP”), valuation of the derivative asset, and market-based stock-based compensation costs. Actual results could differ from those estimates.
v3.24.3
ACQUISITION
 6 Months Ended
Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
ACQUISITION ACQUISITION
On April 2, 2024, the Company consummated the MiX Combination. On the Implementation Date, Powerfleet Sub acquired all the issued ordinary shares of MiX Telematics (including those represented by MiX Telematics’ American Depositary Shares) through the implementation of a scheme of arrangement in accordance with Sections 114 and 115 of the South African Companies Act, No. 71 of 2008, as amended, in exchange for shares of the Company’s common stock. As a result, MiX Telematics became the Company’s indirect, wholly owned subsidiary.

The MiX Combination met the criteria for a business combination to be accounted for using the acquisition method under ASC 805, Business Combinations (“ASC 805”), with the Company identified as the legal and the accounting acquirer.

The Company was determined to be the accounting acquirer under Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), based on the evaluation of the following facts and circumstances favoring Powerfleet as the accounting acquirer over those supporting MiX Telematics as the accounting acquirer:
•The majority of the Board of Directors is comprised by Directors with prior affiliation to the Company. In addition the Company’s Board Chairperson continued in the role post the acquisition date;
•Post acquisition the majority of the senior management team, including the Chief Executive Officer, comprised of the Company’s senior management team who were already operating in that capacity for the Company prior to the acquisition date;
•While the voting rights of 65.5% in favor of MiX Telematics is an indicator that MiX Telematics is the acquirer, the Company believes that the weight of the indicator is tempered given that the negotiated premium paid by Powerfleet to MiX Telematics contributed to the relative ownership split, and that, qualitatively, the significant reduction in the carryover MiX Telematics institutional investor base would have reduced the legacy MiX Telematics shareholders’ ability to control the combined entity, particularly in the light of the significant concentration of institutional investors on the Powerfleet side; and
•While no individual or organized group owns a large minority interest in the combined entity, the Company notes that the largest institutional investor post-transaction is an investor of legacy Powerfleet. Additionally, the Company also notes that, immediately following the closing of the Business Combination, 30% out of the approximately 35% of total shares held by shareholders of legacy Powerfleet were concentrated in the Company’s top 20 institutional shareholders, compared to only 9% out of the approximately 65% of total shares held by shareholders of legacy MiX Telematics.

The acquisition of MiX Telematics and its business will, among other things:
•create a mobile asset IoT SaaS organization with significant scale, serving all mobile asset types. The increased scale is expected to enable the combined entity to more efficiently serve its customers and create advantages to compete in an industry characterized by the need for high pace of development and innovation;
•enable the Company to maximize significant cross-sell and upsell opportunities within its large joint customer base due to the joint entity’s combined geographical footprint, deep vertical expertise and expanded software solution sets coupled with its extensive direct and indirect sales channel capabilities; and
•enable the combined organization to accelerate the delivery of top-class solutions with improved competitive advantage by integrating Powerfleet’s and MiX Telematics’ world-class engineering and technology teams.

The preliminary estimated fair value of the consideration transferred for MiX Telematics was $362,005 as of the Implementation Date, which consisted of the following:

(in thousands, except for share price and exchange ratio)April 2,
2024
Number of MiX Telematics ordinary shares outstanding554,021 
Exchange ratio0.12762
Shares of Powerfleet common stock to be issued for MiX Telematics ordinary shares outstanding70,704 
Powerfleet stock price*5.12
Fair value of Powerfleet common stock transferred to MiX Telematics shareholders362,005 
Replacement of acquiree’s equity awards by the acquirer**7,818 
Total fair value of preliminary consideration369,823 

* Powerfleet’s closing share price on April 2, 2024.
** The portion of the fair-value-based measure of the replacement award that is part of the consideration transferred in exchange for the acquiree equals the portion of the acquiree award that is attributable to pre-combination vesting.

Preliminary Allocation of Purchase Price

The purchase price was allocated to the assets and liabilities assumed based on the estimated fair values at the date of acquisition. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill. Goodwill is primarily attributed to the assembled workforce, expected synergies from future expected economic benefits, including enhanced revenue growth from expanded products and capabilities, as well as substantial cost savings from duplicative overheads, streamlined operations and enhanced efficiency. Goodwill is not deductible for tax purposes. Goodwill associated with the acquisition has not yet been assigned to the Company’s geographical regions pending finalization of the purchase accounting.
The preliminary allocation of purchase price was as follows (in thousands):

April 2,
2024
Assets acquired:
Cash and cash equivalents$26,737 
Restricted cash794 
Accounts receivable, net 24,250 
Inventory, net4,142 
Prepaid expenses and other current assets8,886 
Fixed assets, net35,587 
Intangible assets, net153,000 
Right-of-use asset3,794 
Deferred tax assets1,093 
Other assets973 
Total assets acquired$259,256 
Liabilities assumed:
Short-term bank debt and current maturities of long-term debt$20,158 
Accounts payable and accrued expenses26,400 
Deferred revenue - current6,394 
Lease liability - current859 
Income taxes payable355 
Lease liability - less current portion2,852 
Deferred tax liability48,725 
Other long-term liabilities484 
Total liabilities assumed$106,227 
Total identifiable net assets acquired$153,029 
Non-controlling interest(5)
Goodwill216,799 
Purchase price consideration$369,823 

The above fair values of assets acquired and liabilities assumed are preliminary and are based on the information that was available as of the reporting date. The Company’s allocation of the preliminary purchase price to certain assets acquired and liabilities assumed is provisional and the Company will continue to adjust those estimates as additional information pertaining to events or circumstances present at April 2, 2024 becomes available and final valuation and analysis are completed. During the three-month period ended September 30, 2024, the Company recognized an adjustment of $425 against goodwill. In addition, the Company is still in the process of determining the fair value of acquired assets and assumed liabilities, which may also result in adjustments of the provisional amounts recorded. The fair values of the assets acquired and liabilities assumed, including the identifiable assets acquired, have been preliminarily determined using the income and cost approach, and are partially based on inputs that are unobservable. The Company used discounted cash flow (“DCF”) analyses, which represent Level 3 fair value measurements, to assess certain components of its purchase price allocation as a result of the acquisition. The fair value of the customer relationships was determined using the multi-period excess earnings method. The fair value of the tradename and developed technology was determined using an income approach based on the relief from royalty method.

For the fair value estimates, the Company used (i) forecasted future cash flows, (ii) historical and projected financial information, (iii) synergies including cost savings, (iv) revenue growth rates, (v) customer attrition rates, (vi) royalty rates, and (vii) discount rates, as relevant, that market participants would consider when estimating fair values. These estimates require judgment and are subject to change. Differences between the preliminary estimates and final accounting may occur, and those could be material.
The Company believes that the information provides a reasonable basis for estimating the fair values of the acquired assets and assumed liabilities, but the potential for measurement period adjustments exists based on the Company’s continuing review of matters related to the acquisition. Adjustments to initial preliminary fair value of the assets acquired and assumed liabilities during the measurement period until April 2, 2025, will be recorded during the period in which the adjustments are determined, including the effect on earnings of any amounts we would have recorded in previous periods if the accounting had been completed (i.e. the historical reported financial statements will not be retrospectively adjusted).

The provisional amounts for assets acquired and liabilities assumed include:
•The fair value of accounts receivable and other receivables which may be subject to adjustment for reassessment of collectability as of the date of acquisition, collections and other adjustment subsequent to the acquisition;
•Property, and equipment, for which the preliminary estimates are subject to revision for finalization of preliminary appraisals;
•Right-of-use assets and lease liabilities, which will be subject to adjustment upon completion of the review of the inputs, including sublease assumptions, for the calculations;
•Acquired inventory, which values are still being assessed on an individual basis;
•Prepaid expenses, accounts payable and accrued expenses, which will be subject to adjustment based upon completion of working capital clean up and assessment of other factors;
•The recognition and measurement of contract assets and contract liabilities acquired in accordance with ASC 606 will be subject to adjustment upon completion of assessment;
•Acquired intangible assets will be subject to adjustment as additional assets are identified, estimates and forecasts are refined and disaggregated, useful lives are finalized, and other factors deemed relevant are considered;
•Deferred income taxes will be subject to adjustment based upon the completion of the review of the book and tax bases of assets acquired and liabilities assumed, applicable tax rates and the impact of the revisions of estimates for the items described above; and
•Goodwill will be subject to adjustment for the impact of the revisions of estimates for the items described above.

The Company expects to complete the purchase price allocation as soon as practicable, but no later than one year from the acquisition date.

Acquired Identifiable Intangible Assets

The following table sets forth preliminary estimated fair values of the components of the identifiable intangible assets acquired and their estimated useful lives:

(in thousands)Fair valueWeighted average useful lives
Trade name$10,000 14years
Developed technology30,000 5years
Customer relationships113,000 13years
$153,000 

Acquisition-Related Expenses

The Company expensed a total of $20,443 of acquisition-related costs in the consolidated statement of operations related to the MiX Combination, of which $152 was expensed in the three-month period ended September 30, 2024 and $14,643 was expensed in the six-month period ended September 30, 2024.

Unaudited Pro Forma Financial Information

The business acquired in the MiX Combination contributed revenue of $43,825 and a net profit of $2,007, after amortization of identified intangibles, for the three-month period ended September 30, 2024 and revenue of $87,514 and a net loss of $4,925 for the six-month period ended September 30, 2024.
v3.24.3
CASH AND CASH EQUIVALENTS
 6 Months Ended
Sep. 30, 2024
Cash and Cash Equivalents [Abstract]  
CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments with an original maturity of three months or less when purchased to be cash equivalents unless they are legally or contractually restricted. The Company’s cash and cash equivalent balances exceed Federal Deposit Insurance Corporation (“FDIC”) and other local jurisdictional limits. Restricted cash at March 31, 2024 consisted of escrow amounts of $85,000 for a facilities agreement (the “Facilities Agreement”) with FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB”) deposited in escrow for the MiX Combination and cash of $310 held in escrow for purchases from a vendor. Restricted cash at September 30, 2024 consists of cash of $311 held in escrow for purchases from a vendor, cash of $856 held by MiX Telematics Enterprise BEE Trust (a VIE which is consolidated) to be used solely for the benefit of its beneficiaries, cash securing guarantees of $56 issued in respect of property lease agreements entered into by MiX Telematics Australasia, and $61,850 held by the Company in accordance with the terms of the Subscription Agreement, dated as of September 18, 2024 (the “Subscription Agreement”), by and among the Company and various accredited investors party thereto (the “Investors”), pursuant to which the Investors purchased from the Company, and the Company agreed to issue to such Investors, an aggregate of 20,000,000 shares of the Company’s common stock at a price per share of $3.50 for aggregate gross proceeds of $70,000 (the “Private Placement”). The Private Placement was consummated on October 1, 2024. See Note 24 - Subsequent Events for additional information on the Private Placement and related transactions.
v3.24.3
REVENUE RECOGNITION
 6 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
REVENUE RECOGNITION REVENUE RECOGNITION
The Company and its subsidiaries generate revenue from sales of systems and products and from customer SaaS and hosting infrastructure fees. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Sales, value add, and other taxes the Company collects concurrently with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as an expense. The expected costs associated with the Company’s base warranties continue to be recognized as an expense when the products are sold (see Note 14).

Revenue is recognized when performance obligations under the terms of a contract with the customer are satisfied. Product sales are recognized at a point in time when title transfers, when the products are shipped, or when control of the system is transferred to the customer, which usually is upon delivery of the system and when contractual performance obligations have been satisfied. The Company utilizes significant judgment to determine whether control of the hardware has transferred to the customer (i.e. distinct to the customer separate from SaaS services provided). For products which are not distinct to the customer separate from the SaaS services provided, the Company considers both hardware and SaaS services a bundled performance obligation.

Under the applicable accounting guidance, all of the Company’s billings for future services are deferred and classified as a current and long-term liability. The deferred revenue is recognized over the service contract life, ranging from one to five years, beginning at the time that a customer acknowledges acceptance of the equipment and service. Payment terms are generally 30 days after invoice date.

The Company recognizes revenue for remotely hosted SaaS agreements and post-contract maintenance and support agreements beyond its standard warranties over the life of the contract. Revenue is recognized ratably over the service periods and the cost of providing these services is expensed as incurred. Amounts invoiced to customers which are not recognized as revenue are classified as deferred revenue and classified as current or long-term based upon the terms of future services to be delivered. Deferred revenue also includes prepayment of extended maintenance, hosting and support contracts.

The Company earns other service revenues from installation services, training and technical support services which are short-term in nature and revenue for these services is recognized at the time of performance when the service is provided.

The Company also derives revenue from leasing arrangements. Such arrangements provide for monthly payments covering product or system sale, maintenance, support and interest. These arrangements meet the criteria to be accounted for as operating or sales-type leases. Accordingly, for sales-type leases an asset is established for the “sales-type lease receivable” at the present value of the expected lease payments and revenue is deferred and recognized over the service contract, as described above. Maintenance revenues and interest income are recognized monthly over the lease term.

The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative SSP. Judgment is required to determine the SSP for each distinct performance obligation. The Company generally determines standalone selling prices based on observable prices charged to customers. Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of its transactions, the customer demographic, price lists, its go-to-market strategy and historical and current
sales and contract prices. As the Company’s go-to-market strategies evolve, it may modify its pricing practices in the future, which could result in changes to SSP.

In certain cases, the Company is able to establish SSP based on observable prices of products or services sold separately in comparable circumstances to similar customers. The Company uses a single amount to estimate SSP when it has observable prices. If SSP is not directly observable, for example when pricing is highly variable, the Company uses a range of SSP. The Company determines the SSP range using information that may include pricing practices or other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customer size.

The Company recognizes an asset for the incremental costs of obtaining the contract arising from the sales commissions to distributors and employees because the Company expects to recover those costs through future fees from the customers. The Company amortizes the asset over one to five years because the asset relates to the services transferred to the customer during the contract term of one to five years.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which the Company has the right to invoice for services performed.

The following table presents the Company’s revenues disaggregated by revenue source for the three and six months ended September 30, 2023 and 2024 (in thousands):

Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
Products$13,233 $20,293 $24,317 $39,031 
Services21,010 56,725 42,018 113,417 
$34,243 $77,018 $66,335 $152,448 

The balances of contract assets and contract liabilities from contracts with customers are as follows as of March 31, 2024 and September 30, 2024 (in thousands):

March 31, 2024September 30, 2024
Contract Assets:
Deferred contract cost (1)
$2,632 $7,408 
Deferred costs - current$42 $13 
Contract Liabilities
Deferred revenue – services (2)
$10,674 $14,153 
Deferred revenue – products (2)
60 968 
10,734 15,121 
Less: Deferred revenue – current(5,842)(10,447)
Deferred revenue – less current portion$4,892 $4,674 
(1) Deferred Contract costs are included in Other assets on the condensed consolidated balance sheets.
(2) The Company records deferred revenues when cash payments are received or due in advance of the Company’s performance. For the three-month periods ended September 30, 2023 and 2024, the Company recognized revenue of $1,416 and $2,499, respectively, which was included in the deferred revenue balance at the beginning of each reporting period. For the six-month periods ended September 30, 2023 and 2024, the Company recognized revenue of $3,190 and $5,486, respectively, which was
included in the deferred revenue balance at the beginning of each reporting period. The Company expects to recognize as revenue through year 2029, when it transfers those goods and services and, therefore, satisfies its performance obligation to the customers.
v3.24.3
ALLOWANCE FOR CREDIT LOSSES
 6 Months Ended
Sep. 30, 2024
Receivables [Abstract]  
ALLOWANCE FOR CREDIT LOSSES ALLOWANCE FOR CREDIT LOSSES
The Company’s receivables were evaluated to determine an appropriate allowance for credit losses. For trade receivables, the Company’s historical collections were analyzed by the number of days past due to determine the uncollectible rate in each range of days past due and considerations of any changes expected in the future. The estimate of the allowance for credit losses is charged to the allowance for credit losses based on the age of receivables multiplied by the historical uncollectible rate for the range of days past due or earlier if the account is deemed uncollectible for other reasons. Recoveries of amounts previously charged as uncollectible are credited to the allowance for credit losses.

An analysis of the allowance for credit losses for the periods ended September 30, 2023 and 2024 is as follows (in thousands):

Six Months Ended September 30,
20232024
Allowance for credit losses, March 31$2,328 $3,197 
Current period provision for expected credit losses933 4,369 
Write-offs charged against the allowance
(617)(2,688)
Foreign currency translation33 443 
Allowance for credit losses, September 30$2,677 $5,321 
v3.24.3
PREPAID EXPENSES AND OTHER ASSETS
 6 Months Ended
Sep. 30, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
PREPAID EXPENSES AND OTHER ASSETS PREPAID EXPENSES AND OTHER ASSETS
Prepaid expenses and other current assets comprise the following (in thousands):
March 31,
2024		September 30,
2024
Sales-type lease receivables, current$1,100 $1,135 
Prepaid expenses*2,817 8,021 
Contract assets1,162 — 
Tax receivables125 716 
VAT receivable
— 4,303 
Sundry debtors— 3,531 
Other current assets2,887 279 
$8,091 $17,985 

*This includes the prepaid portion of total deferred contract assets.
v3.24.3
INVENTORY
 6 Months Ended
Sep. 30, 2024
Inventory Disclosure [Abstract]  
INVENTORY INVENTORY
Inventory, which primarily consists of finished goods and components used in the Company’s products, is stated at the lower of cost or net realizable value using the “moving average” cost method or the first-in first-out (FIFO) method. Inventory is shown net of a valuation reserve of $538 at March 31, 2024 and $1,330 at September 30, 2024.
Inventories consist of the following (in thousands):

March 31,
2024		September 30,
2024
Components$9,403 $11,133 
Work in process49 82 
Finished goods, net12,206 12,273 
$21,658 $23,488 
v3.24.3
FIXED ASSETS
 6 Months Ended
Sep. 30, 2024
Property, Plant and Equipment [Abstract]  
FIXED ASSETS FIXED ASSETS
Fixed assets are stated at cost, less accumulated depreciation and amortization, and are summarized as follows (in thousands):

March 31,
2024		September 30,
2024
Installed and uninstalled products$11,030 $50,322 
Computer software11,496 13,042 
Computer and electronic equipment6,179 7,166 
Furniture and fixtures2,361 4,039 
Leasehold improvements1,498 1,447 
Plant and equipment— 365 
Assets in progress— 98 
32,564 76,479 
Accumulated depreciation and amortization(19,845)(24,551)
$12,719 $51,928 

Depreciation and amortization expense for the three- and six-month periods ended September 30, 2023 was $671 and $1,638, respectively, and for the three- and six- month periods ended September 30, 2024 was $5,227 and $9,976, respectively.
v3.24.3
INTANGIBLE ASSETS AND GOODWILL
 6 Months Ended
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS AND GOODWILL INTANGIBLE ASSETS AND GOODWILL
The Company capitalizes costs for software to be sold, marketed, or leased to customers. Costs incurred internally in researching and developing software products are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. The amortization of these costs is included in cost of revenue over the estimated life of the products.
The following table summarizes identifiable intangible assets of the Company as of March 31, 2024 and September 30, 2024 (in thousands):

September 30, 2024Useful Lives (In Years)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Amortized:
Customer relationships
9 - 13
$132,264 $(13,171)$119,093 
Trademark and tradename
3 - 15
17,553 (4,625)12,928 
Patents
7 - 11
628 (508)120 
Technology
5 - 7
43,745 (13,912)29,833 
Software to be sold or leased
3 - 6
6,416 (1,235)5,181 
200,606 (33,451)167,155 
Unamortized:
Customer list104 — 104 
Trademark and tradename61 — 61 
165 — 165 
Total$200,771 $(33,451)$167,320 

March 31, 2024Useful Lives (In Years)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Amortized:
Customer relationships
9 - 12
$19,264 $(8,012)$11,252 
Trademark and tradename
3 - 15
7,553 (3,877)3,676 
Patents
7 - 11
628 (464)164 
Technology
 7
10,911 (10,911)— 
Software to be sold or leased
3
5,159 (764)4,395 
43,515 (24,028)19,487 
Unamortized:
Customer list104 — 104 
Trademark and tradename61 — 61 
165 — 165 
Total$43,680 $(24,028)$19,652 

At September 30, 2024, the weighted-average amortization periods for customer relationships, trademarks and tradenames, patents, technology, and capitalized software to be sold or leased were 12.8, 12.1, 7.0, 5.0, and 3.0 years, respectively.

Amortization expense for the three- and six-month periods ended September 30, 2023 was $1,813 and $3,169, respectively, and for the three- and six-month periods ended September 30, 2024 was $3,837 and $9,423, respectively.
Estimated future amortization expense for each of the five succeeding fiscal years for these intangible assets is as follows:

2025 (remaining)$9,504 
202622,144 
202720,630 
202818,127 
202914,741 
Thereafter82,009 
$167,155 

Refer to Note 3 for the change in the carrying amount of goodwill from April 1, 2024 to September 30, 2024 as a result of the MiX Combination.

For the six-month period ended September 30, 2024, the Company did not identify any indicators of impairment.
v3.24.3
STOCK-BASED COMPENSATION
 6 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION
During the three-month period ended June 30, 2024, the Company granted options to purchase 375 shares of common stock with time-based vesting conditions.

During the three-month period ended September 30, 2024, the Company did not grant any options to purchase shares of common stock with time-based vesting conditions.

[A] Stock Options:

The following table summarizes the activity relating to the Company’s market-based stock options for the six-month period ended September 30, 2024:
OptionsWeighted-
Average
Exercise Price 		Weighted Average Contractual Remaining Term (years)
Aggregate Intrinsic Values (in thousands)
Outstanding as of April 1, 2024
5,445 13.39 — — 
Granted— — — — 
Exercised— — — — 
Forfeited(50)3.13 — — 
Outstanding as of September 30, 2024
5,395 13.487.46$2,293 
Vested as of September 30, 2024
— — — $— 
The following table summarizes the activity relating to the Company’s stock options, excluding the market-based stock options, for the six-month period ended September 30, 2024:

OptionsWeighted-
Average
Exercise Price		Weighted Average Contractual Remaining Term (years)
Aggregate Intrinsic Values (in thousands)
Outstanding as of April 1, 2024
1,979 4.68 — — 
Granted375 4.31 — — 
Exercised— — — — 
Forfeited(45)5.96 — — 
Outstanding as of September 30, 2024
2,309 4.596.82$1,600 
Vested as of September 30, 2024
1,972 4.64 6.33$1,370 

The fair value of each option grant on the date of grant is estimated using the Black-Scholes option-pricing model reflecting the following weighted-average assumptions:

September 30, 2023September 30, 2024
Expected volatility 55.6 %60.2 %
Expected life of options6.16.5
Risk free interest rate3.87 %4.23 %
Dividend yield— — 
Weighted-average fair value of options granted during the year$1.66$2.66

Expected volatility is based on historical volatility of the Company’s common stock and the expected life of options is based on historical data with respect to employee exercise periods.

The Company recorded stock-based compensation expense of $781 and $1,366 for the three- and six-month periods ended September 30, 2023, respectively, and $627 and $2,444 for the three- and six-month periods ended September 30, 2024, respectively, in connection with awards made under the stock option plans. The increase in the recognized expense is due to the approved acceleration of vesting of unvested restricted stock and stock option awards with time-based vesting conditions that were outstanding under the Powerfleet equity plans (including any inducement awards with time-based vesting) in connection with the closing of the MiX Combination. The accelerated vesting of the Company’s equity awards is not part of what was acquired in the MiX Combination, nor what was paid for in the MiX Combination, because it was for the benefit of the Company’s employees rather than for the benefit of MiX Telematics’ employees. Therefore, the acceleration of the equity awards was treated as a separate transaction from the MiX Combination and the acceleration of vesting was accounted for immediately upon closing of the MiX Combination on April 2, 2024.

The fair value of options vested during the six-month periods ended September 30, 2023 and 2024 was $42 and $1,552, respectively. There were no option exercises that occurred during the six-month periods ended September 30, 2023 and 2024.

As of September 30, 2024, there was $883 of total unrecognized compensation costs related to unvested options granted under the Company’s stock option plans excluding the market-based stock options that were granted to certain senior managers, including the Company’s executive officers. That cost is expected to be recognized over a weighted-average period of 1.21 years.

As of September 30, 2024, there was $3,021 of total unrecognized compensation costs related to unvested options granted under the Company’s stock option plans for the market-based stock options that were granted to certain senior managers, including the Company’s executive officers. That cost is expected to be recognized over a weighted-average period of 2.23 years.
The Company estimates forfeitures at the time of valuation and reduces expenses ratably over the vesting period. This estimate is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate.

[B] Restricted Stock Awards:

The Company grants restricted stock to employees, whereby the employees are contractually restricted from transferring the shares until they are vested. The stock is unvested at the time of grant, and, upon vesting, there are no legal restrictions on the stock. Some participants have the option to have their shares withheld for their taxes upon vesting. Shares withheld for taxes are treated as a purchase of treasury stock. The fair value of each share is based on the Company’s closing stock price on the date of the grant. A summary of all unvested restricted stock for the six-month period ended September 30, 2024 is as follows:

Number of
Unvested Shares
Weighted- Average
Grant Date Fair Value
Unvested, March 31, 2024
1,370 2.68 
Granted54 5.45 
Vested(1,370)2.68 
Forfeited or expired— — 
Unvested, September 30, 2024
54 5.45 

The Company recorded stock-based compensation expenses of $320 and $587 for the three- and six-month periods ended September 30, 2023, respectively, and $125 and $3,220 for the three- and six-month periods ended September 30, 2024, respectively, in connection with restricted stock grants. As of September 30, 2024, there was $183 of total unrecognized compensation cost related to unvested shares. That cost is expected to be recognized over a weighted-average period of 0.62 years. The increase in the recognized expense is due to the approved acceleration of vesting of unvested restricted stock and stock option awards with time-based vesting conditions that are outstanding under the Powerfleet equity plans (including any inducement awards with time-based vesting) in connection with the closing of the MiX Combination. The accelerated vesting of the Company’s equity awards is not part of what was acquired in the MiX Combination, nor what was paid for in the MiX Combination because it was for the benefit of the Company’s employees rather than for the benefit of MiX Telematics’ employees. Therefore, the acceleration of the equity awards was treated as a separate transaction from the MiX Combination and the acceleration of vesting was accounted for immediately upon closing of the MiX Combination on April 2, 2024.

[C] Stock Appreciation Rights:

In connection with the closing of the MiX Combination, the Company assumed each of MiX Telematics’ share plans. MiX Telematics issued equity-classified share incentives under the MiX Telematics Long-Term Incentive Plan (“LTIP”) to directors and certain key employees within the Company.

The LTIP provides for three types of grants to be issued, namely performance shares, restricted share units and stock appreciation rights (“SARs”). On the Implementation Date, the only issued and outstanding equity awards under the LTIP were SARs, and the Company assumed the outstanding SARs in issue. No additional performance shares or restricted share units will be issued or assumed by the Company.

The replacement of MiX Telematics’ share-based payment awards has been treated as a modification under ASC 718, Compensation—Stock Compensation as of the Implementation Date. The fair value of the replacement SARs issued was allocated between pre-combination and post-combination service based on the vesting period. The fair value related to pre-combination service is included as part of the fair value of the consideration in the MiX Combination (see Note 3), and the fair value related to post-combination service is to be recognized as an expense over the remaining vesting period.

The total stock-based compensation expense recognized during the three- and six-month periods ended September 30, 2024 was $637 and $1,600, respectively.
The following table summarizes the activities for the outstanding SARs:

Number of SARsWeighted-
Average
Exercise Price		Weighted Average Contractual Remaining Term (years)
Aggregate Intrinsic Values (in thousands)
Outstanding as of April 1, 2024
— — 
Acquired through MiX Combination5,740 2.61 
Granted— — 
Exercised(677)2.97 
Forfeited(491)2.42 
Outstanding as of September 30, 2024
4,572 2.573.16
Vested as of September 30, 2024
1,420 3.08 1.41$2,710 

As of September 30, 2024, there was $6,848 of unrecognized compensation cost related to unvested SARs. This amount is expected to be recognized over a weighted-average period of 3.05 years.
v3.24.3
NET LOSS PER SHARE
 6 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
NET LOSS PER SHARE NET LOSS PER SHARE
Net loss per share for the three- and six-month periods ended September 30, 2023 and 2024 are as follows:

Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
Basic and diluted loss per share
Net loss attributable to common stockholders$(6,510)$(1,888)$(12,679)$(24,225)
Net loss per share attributable to common stockholders - basic and diluted$(0.18)$(0.02)$(0.36)$(0.23)
Weighted-average common share outstanding - basic and diluted35,653 107,532 35,629 107,335 
Basic loss per share is calculated by dividing net loss attributable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution assuming common shares were issued upon the exercise of outstanding options and the proceeds thereof were used to purchase outstanding common shares. Dilutive potential common shares include outstanding stock options, warrants and restricted stock and performance share awards. We include participating securities (unvested share-based payment awards and equivalents that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of earnings per share pursuant to the two-class method. The Company’s participating securities consist solely of preferred stock, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company.
v3.24.3
SHORT-TERM BANK DEBT AND LONG-TERM DEBT
 6 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
SHORT-TERM BANK DEBT AND LONG-TERM DEBT SHORT-TERM BANK DEBT AND LONG-TERM DEBT
March 31,
2024
September 30,
2024
Short-term bank debt$— $31,968 
Current maturities of long-term debt$1,951 $3,371 
Long-term debt - less current maturities$113,810 $111,011 

Short-Term Bank Debt

As of September 30, 2024 short-term debt comprised $31,813 of borrowing facilities and $155 of book overdrafts.

Standard Bank Facility

The Standard Bank facility is in the form of a customer foreign currency account overdraft facility (the “CFC Overdraft Facility”). The CFC Overdraft Facility entitles MiX Telematics to utilize a maximum amount of R70,000 (the equivalent of $4,090 as of September 30, 2024). The CFC Overdraft Facility bears interest at the South African prime interest rate less 1.2% per annum. As of September 30, 2024, the South African prime interest rate was 11.50%. As of September 30, 2024, $0 of the CFC Overdraft Facility was utilized.

There is a suretyship agreement entered into with Standard Bank providing that MiX Telematics and only one subsidiary being MiX Telematics International (Pty) Ltd, binds themselves as surety(ies) and co-principal debtor(s) for the payment, when due, of all the present and future debts of any kind of MiX Telematics and MiX Telematics International to Standard Bank. The Standard Bank facility has no fixed renewal date and is repayable on demand.

RMB Facility

On March 7, 2024, as part of the MiX Combination, MiX Telematics and Powerfleet entered into the Facilities Agreement with RMB. Following the signing of the Facilities Agreement, MiX Telematics entered into a Facility Notice and General Terms and Conditions (the “Credit Agreement”) with RMB on March 14, 2024 for a 364-day committed general banking facility of R350,000 (the equivalent of $20,451 as at September 30, 2024) (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 entered into on March 7, 2024, which is described in more detail below.

The RMB General Facility is repayable on demand and has a term of 365 days from the Available Date (as defined therein). Repayment of the RMB General Facility, including capitalized interest, is due by the earlier of (a) the Available Date or (b) April 2, 2025, unless extended by agreement between MiX Telematics and RMB. Interest rate for the RMB General Facility is calculated at South African prime rate minus 0.75% per annum and will be calculated on the daily outstanding balance, compounded monthly in arrears and repaid quarterly. As of September 30, 2024, $19,728 of the RMB General Facility was utilized.

Hapoalim Debt

As of September 30, 2024, Powerfleet Israel Ltd. (“Powerfleet Israel”) had utilized approximately $12,085 under the Hapoalim Revolving Facilities, which are described below.

Long-Term Debt

Hapoalim Debt

In connection with the Pointer acquisition, Powerfleet Israel incurred New Israeli Shekels (“NIS”) denominated debt in term loan borrowings on October 3, 2019 under a Credit Agreement (the “Prior Credit Agreement”) with Bank Hapoalim B.M. (“Hapoalim”), pursuant to which Hapoalim agreed to provide Powerfleet Israel with two senior secured term loan facilities in an initial aggregate principal amount of $30,000 (composed of two facilities in the aggregate principal amount of $20,000 and $10,000, respectively and a five-year revolving credit facility to Pointer denominated in NIS in an initial aggregate principal amount of $10,000 (collectively, the “Prior Credit Facilities”). The Prior Credit Facilities were scheduled to mature on October 3, 2024.
On March 18, 2024, Powerfleet Israel and Pointer (collectively, the “Borrowers”) entered into an amended and restated credit agreement (the “A&R Credit Agreement”), which refinanced the facilities under, and amended and restated, the Prior Credit Agreement. The A&R Credit Agreement provides for (i) two senior secured term loan facilities denominated in NIS to Powerfleet Israel in an aggregate principal amount of $30,000 (composed of two facilities in the aggregate principal amounts of $20,000 and $10,000, respectively) (“Hapoalim Facility A” and “Hapoalim Facility B,” respectively, and, collectively, the “Hapoalim Term Facilities”) and (ii) two revolving credit facilities to Pointer in an aggregate principal amount of $20,000 (composed of two revolvers in the aggregate principal amounts of $10,000 and $10,000, respectively) (“Hapoalim Facility C” and “Hapoalim Facility D,” respectively, and, collectively, the “Hapoalim Revolving Facilities” and, together with the Hapoalim Term Facilities, the “Hapoalim Credit Facilities”). Powerfleet Israel drew down $30,000 in cash under the Hapoalim Term Facilities on March 18, 2024 and used the proceeds to prepay approximately $11,200, representing the remaining outstanding balance, of the Prior Credit Facilities, with the remaining proceeds distributed to Powerfleet. The proceeds of the Hapoalim Revolving Facilities may be used by Pointer for general corporate purposes, including working capital and capital expenditures. As of September 30, 2024, Pointer had utilized $12,085 under the Hapoalim Revolving Facilities. The available undrawn facility balance at September 30, 2024 was $7,915.

The interest rates for borrowings under Hapoalim Facility A and Hapoalim Facility B are Hapoalim’s prime rate + 2.2% per annum, and Hapoalim’s prime rate + 2.3% per annum, respectively. Hapoalim’s prime rate at September 30, 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. 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. The Hapoalim Revolving Facilities mature on March 18, 2025.

Borrowings under the Hapoalim Term Facilities are voluntarily prepayable at any time, in whole or in part, and are not subject to any prepayment premium. Voluntary prepayments of the Hapoalim Term Facilities must be made in minimum increments of NIS 1 million. In addition to certain customary mandatory prepayment requirements, the A&R Credit Agreement also requires Powerfleet Israel to make prepayments on the Hapoalim Term Facilities to the extent it receives distributions from Pointer, except for any such distributions made to cover certain expenses of Powerfleet Israel in its normal course of operations.

The A&R Credit Agreement contains certain customary affirmative and negative covenants, including financial covenants with respect to Pointer’s net debt levels which must be less than 100% of Working Capital as defined in the A&R Credit Agreement, the ratio of each Borrower’s net debt to Pointer’s EBITDA must not exceed 4.75, Powerfleet Israel’s minimum equity which must not be less than $60,000, and the ratio of Powerfleet Israel’s equity to its total assets which must be greater than 35% and the ratio of Pointer’s net debt to EBITDA ratio must not exceed 2. The occurrence of any event of default under the A&R Credit Agreement may result in all outstanding indebtedness under the Hapoalim Credit Facilities becoming immediately due and payable. The financial covenants have been met for the quarter ending September 30, 2024.

The Hapoalim Credit Facilities continue to be secured by first ranking and exclusive fixed and floating charges, including by Powerfleet Israel over the entire share capital of Pointer and by Pointer over all of its assets, as well as cross guarantees between Powerfleet Israel and Pointer, except that the Borrowers’ holdings in Pointer do Brasil Comercial Ltda., Pointer Argentina and Pointer South Africa are excluded from such floating charges. No other assets of the Company will serve as collateral under the Hapoalim Credit Facilities.

The Hapoalim Term Facilities under the A&R Credit Agreement have been accounted for as modifications of the term facilities that were provided under the Prior Credit Agreement because the change in the present value of the cash flows under the A&R Credit Agreement is less than 10% of the present value of the cash flows under the Prior Credit Agreement. The proceeds of the Hapoalim Term Facilities ($30,000), less the prepayment of the term loans under the Prior Credit Facility (approximately
$11,200), amounting to approximately $18,800, has been recognized as an increase in the carrying value of the prior term loans that was recognized previously.

For the three- and six-month periods ended September 30, 2023, the Company recorded $29 and $64, respectively, of additional deferred costs to the original debt issuance costs and the refinancing fee paid to Hapoalim. For the three-month period ended September 30, 2024, the Company recorded $15 of amortization of the original debt issuance costs and the refinancing fee paid to Hapoalim. For the six-month period ended September 30, 2024, the Company recorded a credit of $15 net of additional deferred costs to the original debt issuance costs and amortization of the original debt issuance costs. The Company recorded charges of $133 and $285 to interest expense on its consolidated statements of operations for the three- and six-month periods ended September 30, 2023, respectively, and $591and $1,246 for the three- and six-month periods ended September 30, 2024, respectively, related to interest expense associated with the Hapoalim debt.

RMB Debt

On March 7, 2024, the Company entered into the Facilities Agreement with RMB, pursuant to which RMB agreed to provide the Company with two term loan facilities in an aggregate principal amount of $85,000, composed of Facility A and Facility B, each with a principal amount of $42,500 (“RMB Facility A” and “RMB Facility B,” respectively, and collectively, the “RMB Facilities”). The Company drew down $85,000 in cash under the RMB Facilities on March 13, 2024, and the proceeds to redeem all the outstanding shares of the Series A Preferred Stock and for general corporate purposes. The RMB Facilities are guaranteed by the Company, I.D. Systems and Movingdots GmbH (“Movingdots”), and there is a security agreement over the shares in Main Street 2000 Proprietary Limited (“MS2000”), I.D. Systems, and Movingdots.

The interest rates of borrowings under RMB Facility A and RMB Facility B are 8.699% per annum and 8.979% per annum, respectively. Interest is payable quarterly in arrears. RMB Facility A matures on March 31, 2027, and RMB Facility B matures on March 31, 2029. The Company may prepay the RMB Facilities at any time, subject to a minimum reduction of $5,000 and multiples of $1,000. If the Company prepays any amount during the first or second annual period of the funding, a refinancing fee equal to 2% or 1%, respectively, of the prepayment will be payable. Also, the RMB Facilities are mandatorily prepayable upon the occurrence of uncertain future events, such as a change of control or a transfer of the business. In the event that either prepayment occurs, the respective prepayment amount will be adjusted for RMB’s break gains or losses, which relate mainly to the unwinding of interest rate derivatives (the “Prepayment Derivative”) which RMB entered into with third parties to fix the interest rates on the RMB Facilities. Since RMB’s break gains/losses could result in the Company prepaying at a discount, or a premium, of 10% or more to the initial carrying amount of the RMB Facilities, the optional and contingent repayment features were to be embedded derivatives in the scope of ASC 815-15 Embedded Derivatives. The Prepayment Derivative within each RMB Facility has been bifurcated and accounted for at fair value separately from the respective debt-host contracts which are accounted for at amortized cost. The terms of the debt-host contracts have been bifurcated to adjust the carrying value of the debt upon separating the derivative. Upon initial recognition of the RMB Facilities, a Prepayment Derivative asset of $610 and $1,616 for RMB Facility A and RMB Facility B, respectively, was recognized with a corresponding increase in the initial carrying amount of each debt-host contract. The fair value of the embedded derivative is estimated using a “with-and-without” approach as the difference between the value of the RMB Facilities with and without the embedded derivative using both the binomial lattice model and discounted cash flow analysis.

The following key assumptions were used in March 31, 2024 and September 30, 2024:

Facility AFacility B
Credit spread volatility50 %35 %
Credit spread4.48 %4.99 %
Credit ratingB-B-
Risk free rate
SOFR spot rate*
SOFR spot rate*
* As of March 31, 2024 and September 30, 2024, the Secured Overnight Financing Rate (SOFR) spot rate was 5.34% and 4.96% respectively.

The Prepayment Derivative is classified as a Level 3 in the fair value hierarchy due to the use of at least one significant unobservable input which is the credit spread volatility. At inception, the credit spread was an observable input based on the transaction price of the debt; however, in future periods, it will also be an unobservable input. For the Prepayment Derivative asset in RMB Facility A, a change of -10% in credit spread volatility would result in a decrease in the derivative asset of $113, while a change of +10% in credit spread volatility would result in an increase in the derivative asset of $111. For the Prepayment Derivative asset in RMB Facility B, a change of -10% in credit spread volatility would result in a decrease in the derivative asset of $265, while a change of +10% in credit spread volatility would result in an increase in the derivative asset of
$264. The Prepayment Derivative assets are included in Other assets and their fair values were $610 and $1,616 for RMB Facility A and RMB Facility B, respectively, as of March 31, 2024 and, $1,536 and $2,887 for RMB Facility A and RMB Facility B, respectively, as of September 30, 2024. The debt-host contracts are accounted for at amortized cost. Total debt issuance costs of approximately $1,000 were incurred. For the three- and six-month periods ended September 30, 2024, the Company recorded $69 and $146, respectively, of amortization of the original debt issuance costs and the refinancing fee to RMB.

For the three- and six-month periods ended September 30, 2024, the Company recorded interest expense of $1,920 and $3,790, respectively.
Scheduled contractual maturities of the long-term debt as of September 30, 2024 are as follows:

2025 (remaining)$984 
20264,923 
202747,916 
20285,415 
202954,316 
113,554 
Less: Current portion(3,371)
Plus debt costs and prepayment828 
Total$111,011 
v3.24.3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 6 Months Ended
Sep. 30, 2024
Payables and Accruals [Abstract]  
ACCOUNTS PAYABLE AND ACCRUED EXPENSES ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following (in thousands):

March 31,
2024		September 30,
2024
Accounts payable$20,025 $41,821 
Accrued warranty1,138 1,523 
Accrued compensation8,956 14,305 
Government authorities3,062 6,439 
Other current liabilities827 2,010 
$34,008 $66,098 
The following table summarizes warranty activity for the six months ended September 30, 2023 and 2024 (in thousands):

Six Months Ended September 30,
20232024
Accrued warranty reserve, beginning of year$2,255 $2,926 
Accrual for product warranties issued710 242 
Product replacements and other warranty expenditures(210)(202)
Expiration of warranties ((over)/under warranty accrual)(141)15 
Acquired through MiX Combination— 356 
Foreign currency translation difference— 33 
Accrued warranty reserve, end of period (1)
$2,614 $3,370 
(1) Includes non-current accrued warranty included in other long-term liabilities at September 30, 2023 and 2024 of $1,822 and $1,847, respectively.
v3.24.3
STOCKHOLDERS' EQUITY
 6 Months Ended
Sep. 30, 2024
Equity [Abstract]  
STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY
Convertible Redeemable Preferred Stock:

The Company is authorized to issue 150 shares of preferred stock, par value $0.01 per share of which 100 shares are designated Series A Preferred Stock and 50 shares are undesignated.

Series A Preferred Stock

In connection with the completion of the Pointer acquisition, on October 3, 2019, the Company issued 50 shares of Series A Preferred Stock to ABRY Senior Equity V, L.P., ABRY Senior Equity Co-Investment Fund V, L.P and ABRY Investment Partnership, L.P. (the “Investors”). Concurrently with the closing of the MiX Combination on April 2, 2024, the Company used the net proceeds received from RMB and from incremental borrowing capacity as a result of the refinancing of credit facilities with Hapoalim to redeem in full for $90,300 for all of the outstanding shares of the Series A Preferred Stock.

Dividends

Holders of Series A Preferred Stock were entitled to receive cumulative dividends at a minimum rate of 7.5% per annum (calculated on the basis of the Series A Issue Price), quarterly in arrears. The dividends were payable at the Company’s election, in kind, through the issuance of additional shares of Series A Preferred Stock, or in cash, provided no dividend payment failure had occurred and was continuing and that there had not previously occurred two or more dividend payment failures. Commencing on the 66-month anniversary of the date on which any shares of Series A Preferred Stock were first issued (the “Original Issuance Date”), and on each monthly anniversary thereafter, the dividend rate would increase by 100 basis points, until the dividend rate reached 17.5% per annum, subject to the Company’s right to defer the increase for up to three consecutive months on terms set forth in the Company’s Amended and Restated Certificate of Incorporation (the “Charter”). During the three- and six-month periods ended September 30, 2023, the Company paid dividends in amounts equal to $1,129 and $2,257, respectively, to the holders of the Series A Preferred Stock, and $25 during the six-month period ended September 30, 2024. Dividends for the period ended March 31, 2024, plus accrued dividends through April 2, 2024, were paid in cash on the redemption date of the Series A Preferred Stock.
v3.24.3
ACCUMULATED OTHER COMPREHENSIVE LOSS
 6 Months Ended
Sep. 30, 2024
Equity [Abstract]  
ACCUMULATED OTHER COMPREHENSIVE LOSS ACCUMULATED OTHER COMPREHENSIVE LOSS
Comprehensive loss includes net loss and foreign currency translation gains and losses.

The accumulated balances for each classification of other comprehensive loss for the six-month period ended September 30, 2024 are as follows (in thousands):

Foreign currency translation adjustmentAccumulated other comprehensive loss
Balance at April 1, 2024
$(985)$(985)
Net current period change(379)(379)
Balance at September 30, 2024
$(1,364)$(1,364)

The accumulated balances for each classification of other comprehensive loss for the six-month period ended September 30, 2023 are as follows (in thousands):

Foreign currency translation adjustmentAccumulated other comprehensive loss
Balance at April 1, 2023
$(1,098)$(1,098)
Net current period change(806)(806)
Balance at September 30, 2023
$(1,904)$(1,904)
v3.24.3
SEGMENT INFORMATION
 6 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION
The Company operates in one reportable segment, wireless IoT asset management. The following table summarizes revenues by geographic region (in thousands):

Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
North America$20,212 $21,255 $36,977 $42,396 
Israel10,247 11,751 21,152 22,411 
Africa807 24,178 1,670 48,578 
Europe and Middle East430 9,178 1,029 17,043 
Other2,547 10,656 5,507 22,020 
$34,243 $77,018 $66,335 $152,448 
March 31,
2024		September 30,
2024
Long lived assets by geographic region:
North America$4,083 $8,621 
Israel3,946 2,804 
Africa705 31,031 
Europe and Middle East2,850 4,898 
Other1,135 4,574 
$12,719 $51,928 
v3.24.3
INCOME TAXES
 6 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The Company records its interim tax provision based upon a projection of the Company’s annual effective tax rate (“AETR”). This AETR is applied to the year-to-date consolidated pre-tax income to determine the interim provision for income taxes before discrete items. The Company updates the AETR on a quarterly basis as the pre-tax income projections are revised and tax laws are enacted. The effective tax rate (“ETR”) each period is impacted by a number of factors, including the relative mix of domestic and foreign earnings and adjustments to recorded valuation allowances. The currently forecasted ETR may vary from the actual year-end due to the changes in these factors.

Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
Domestic pre-tax book loss$(4,123)$(7,136)$(14,312)$(23,611)
Foreign pre-tax book income (expense)870 5,509 7,791 738 
Total loss before income taxes(3,253)(1,627)(6,521)(22,873)
Income tax benefit (expense)(295)(256)(289)(1,309)
Net loss before non-controlling interest
$(3,548)$(1,883)$(6,810)$(24,182)
Effective tax rate(9.07)%(15.73)%(4.43)%(5.72)%
For the three- and six-month periods ended September 30, 2023 and 2024, the effective tax rate differed from the statutory tax rates primarily due to the mix of domestic and foreign earnings amongst taxable jurisdictions, recorded valuation allowances to fully reserve against deferred tax assets in jurisdictions, and certain discrete items.
v3.24.3
LEASES
 6 Months Ended
Sep. 30, 2024
Leases [Abstract]  
LEASES LEASES
The Company determines whether an arrangement is a lease at inception. The Company has operating leases for office space, office equipment and vehicles. The Company’s leases have remaining lease terms of 1 year to 5 years, some of which include options to extend the lease term for up to 5 years.

Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. The operating lease ROU asset also includes any lease payments made in advance of lease commencement and excludes lease incentives. The lease terms used in the calculations of the operating ROU assets and operating lease liabilities include options to extend or terminate the lease when the Company is reasonably certain that it will exercise those options. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
The Company has lease agreements with lease and non-lease components, which are generally not accounted for separately.

Where lease terms are 12-months or less, and meet the criteria for short-term lease classification, no ROU asset and no lease liability are recognized. Lease costs associated with the short-term leases are included in selling, general and administrative expenses on the Company’s condensed consolidated statements of operations.

The components of lease cost are as follows (in thousands):

Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
Short-term lease cost$119 $228 $238 $435 

Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows (in thousands):

Six Months Ended September 30,
20232024
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations$856 $1,262 
Reduction of right-of-use assets due to MiX Combination (1)
$— $(933)
(1) Subsequent to the MiX Combination, certain leases were terminated or modified due to the consolidation of leased space.

Weighted-average remaining lease term and discount rate for our operating leases are as follows:

September 30,
2024
Weighted-average remaining lease term - operating leases (in years) (1)
3.28
Weighted-average discount rate7.6 %
(1) Including expected renewals where appropriate.

Scheduled maturities of operating lease liabilities outstanding as of September 30, 2024 are as follows (in thousands):

October 2024 - March 2025$2,331 
20263,260 
20272,012 
20281,319 
20291,114 
Thereafter1,420 
Total lease payments11,456 
Less: Imputed interest(1,495)
Present value of lease payments$9,961 
v3.24.3
FAIR VALUE OF FINANCIAL INSTRUMENTS
 6 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE OF FINANCIAL INSTRUMENTS FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company’s cash and cash equivalents, restricted cash and investments in securities are carried at fair value. The carrying value of financing receivables approximates fair value due to the interest rate implicit in the instruments approximating current market rates. The carrying value of accounts receivable, accounts payable and accrued liabilities and short-term bank debt approximates their fair values due to the short period to maturity of these instruments. The fair value of the loans to external parties included in other non-current assets is determined using unobservable market data (Level 3 inputs), that represent management’s estimate of current interest rates that a commercial lender would charge the borrowers. The fair value of the Company’s debt is based on observable relevant market information and future cash flows discounted at current rates, which are Level 2 measurements. The Prepayment Derivative within the RMB Facilities is classified as a Level 3 in the fair value hierarchy due to the use of at least one significant unobservable input which is the credit spread volatility (see Note 13).

March 31, 2024September 30, 2024
Carrying AmountFair ValueCarrying AmountFair Value
Loans to external parties$475 $475 $209 $209 
Debt$115,761 $116,278 $146,349 $150,420 
Prepayment derivative$2,226 $2,226 $4,423 $4,423 
v3.24.3
CONCENTRATION OF CUSTOMERS
 6 Months Ended
Sep. 30, 2024
Risks and Uncertainties [Abstract]  
CONCENTRATION OF CUSTOMERS CONCENTRATION OF CUSTOMERS
For the three- and six-month periods ended September 30, 2023 and 2024, there were no customers that generated revenues greater than 10% of the Company’s consolidated total revenues or generated greater than 10% of the Company’s consolidated accounts receivable.
v3.24.3
COMMITMENTS AND CONTINGENCIES
 6 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES
From time to time, the Company is involved in various litigation matters involving claims incidental to its business and acquisitions, including employment matters, acquisition-related claims, patent infringement and contractual matters, among other issues. While the outcome of any such litigation matters cannot be predicted with certainty, management currently believes that the outcome of these proceedings, including the matters described below, either individually or in the aggregate, will not have a material adverse effect on its business, results of operations or financial condition. The Company records reserves related to legal matters when losses related to such litigation or contingencies are both probable and reasonably estimable.

In August 2014, Pointer do Brasil Comercial Ltda. (“Pointer Brazil”) received a notification of lack of payment of VAT tax (Brazilian ICMS tax) in the amount of $195 plus $1,055 of interest and penalty, totaling $1,347 as of March 31, 2024 and $1,250 as of September 30, 2024. The Company is vigorously defending this tax assessment before the administrative court in Brazil, but in light of the administrative and judicial processes in Brazil, it could take up to 14 years before the dispute is finally resolved. In case the administrative court rules against the Company, the Company could claim before the judicial court, an appellate court in Brazil, a substantial reduction of interest charged, potentially reducing the Company’s total exposure. The Company’s legal counsel is of the opinion that the chance of loss is not probable and for this reason the Company has not made any provision.

In July 2015, Pointer Brazil received a tax deficiency notice alleging that the services provided by Pointer Brazil should be classified as “telecommunication services” and therefore Pointer Brazil should be subject to the state value-added tax. The aggregate amount claimed to be owed under the notice was approximately $11,770 as of September 30, 2024. On August 14, 2018, the lower chamber of the State Tax Administrative Court in São Paulo rendered a decision that was favorable to Pointer Brazil in relation to the ICMS demands, but adverse in regards to the clerical obligation of keeping in good order a set of ICMS books and related tax receipts. The remaining claim after this administrative decision is $204. The state has appealed to the higher chamber of the State Tax Administrative Court. The Company’s legal counsel is of the opinion that the chance of loss is not probable and that no material costs will arise in respect to these claims. For this reason, the Company has not made any provision.
Mobile Telephone Networks Proprietary Limited (“MTN”), a network service provider of MiX Telematics Africa, a subsidiary of the Company, is entitled to claw back payments from MiX Telematics Africa in the event of early cancellation of the agreement or certain base connections not being maintained over the term of an amended network services agreement between the parties or certain base connections not being maintained over the term of such agreement. No connection incentives will be received in terms of the amended network services agreement. The maximum potential liability under the arrangement as of March 31, 2024 and September 30, 2024 was $841 and $791, respectively. No loss is considered probable under this arrangement.

On August 30, 2024, Fleet Connect Solutions LLC (“Fleet Connect”) filed a complaint against the Company in the United States District Court for the Eastern District of Texas alleging infringement of a number of Fleet Connect’s patents. The Company filed an answer to Fleet Connect’s complaint on November 8, 2024, denying the claims together with counterclaims to invalidate Fleet Connect’s patents. The Company simultaneously filed a Section 101 motion seeking to invalidate some of the patents. The Company is evaluating the claims with patent counsel, however based on currently available information, the Company is unable to make a reasonable estimate of loss or range of losses, if any, arising from this matter.
v3.24.3
RECENT ACCOUNTING PRONOUNCEMENTS
 6 Months Ended
Sep. 30, 2024
Accounting Changes and Error Corrections [Abstract]  
RECENT ACCOUNTING PRONOUNCEMENTS RECENT ACCOUNTING PRONOUNCEMENTS
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires additional operating segment disclosures in annual and interim consolidated financial statements. ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and for interim periods beginning after December 15, 2024 on a retrospective basis, with early adoption permitted. The Company is evaluating the effect of adopting ASU 2023-07.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a retrospective or prospective basis. The Company is evaluating the effect of adopting ASU 2023-09.
v3.24.3
SUBSEQUENT EVENTS
 6 Months Ended
Sep. 30, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS SUBSEQUENT EVENTS
Business Combination

On October 1, 2024, the Company consummated the acquisition of Fleet Complete (as defined below) contemplated by the Share Purchase Agreement, dated as of September 18, 2024 (as amended, the “Purchase Agreement”), by and among Golden Eagle Topco, LP (“Golden Eagle LP”), the persons that are party to the Purchase Agreement under the heading “Other Sellers” (the “Other Sellers” and, together with Golden Eagle LP, the “Sellers”), the Company and Powerfleet Canada Holdings Inc. and a wholly owned subsidiary of the Company (the “Canadian SPV” and, together with the Company, the “Purchasers”). The foregoing transactions are hereinafter referred to as the “FC Acquisition.”.

Pursuant to the terms the Purchase Agreement, the Purchasers acquired all of the direct and indirect common shares in the capital of Golden Eagle Canada Holdings, Inc. (“Canada Holdco”) and Complete Innovations Holdings Inc. (“CIH”), and all of the issued and outstanding shares of common stock of Golden Eagle Holdings, Inc. (together with Canada Holdco and CIH, “Fleet Complete”), in exchange for payment by the Purchasers of an aggregate purchase price of $200 million, subject to certain customary working capital and other adjustments as described in the Purchase Agreement (as adjusted, the “Purchase Price”).

$15 million of the Purchase Price payable in the FC Acquisition was satisfied by the issuance of 4,285,714 shares of the Company’s common stock to an existing indirect shareholder of Fleet Complete, with the remainder paid in cash. $60 million of the cash portion of the Purchase Price was funded by the Private Placement, as described below, and $125 million of the cash portion of the Purchase Price was funded with a senior secured term loan facility provided by RMB, as described below. $3.85 million of the Purchase Price has been placed into escrow to secure purchase price adjustment payment obligations under the Purchase Agreement and certain tax liabilities.

Concurrently with the closing of the FC Acquisition, on October 1, 2024, the Company consummated the Private Placement. $60 million of such gross proceeds funded a portion of the Purchase Price with the remaining $10 million in proceeds expected to be used by the Company for working capital and general corporate purposes. $62 million, net of costs, was received by September 30, 2024, with the remaining $8 million received on October 1, 2024.
Given the proximity between the transaction close date and the Company’s Quarterly Report on Form 10-Q, the preliminary purchase price allocation has not yet been completed. Management expects to complete the purchase price allocation in the third quarter of the 2025 fiscal year.

RMB Term Facility

On September 27, 2024, the Company, together with I.D. Systems and Movingdots, each a wholly owned subsidiary of the Company, entered into a Facility Agreement (the “Facility Agreement”) with RMB, pursuant to which RMB agreed to provide the Company with a term loan facility in an aggregate principal amount of $125 million (the “New RMB Term Facility”). The Company drew down the full amount of the New RMB Term Facility on October 1, 2024, and used the proceeds to pay a portion of the Purchase Price, as described above.

The Company’s obligations under the New RMB Term Facility are guaranteed, on a joint and several basis, by the Company, I.D. Systems and Movingdots. The New RMB Term Facility is secured by a first priority security interest over the entire share capital of I.D. Systems, Movingdots, MS2000 and Canadian SPV, each a wholly owned subsidiary of the Company. No other assets of the Company will serve as collateral under the New RMB Term Facility.

The New RMB Term Facility is repayable on October 31, 2029.

The New RMB Term Facility may be voluntarily prepaid at any time upon prior written notice, in whole or in part, subject to payment of a refinancing fee equal to (i) 2% of the amount prepaid if such prepayment occurs before October 1, 2025, or (ii) 1% of the amount prepaid if such prepayment occurs on or after October 1, 2025, but before October 1, 2026. No refinancing fee is payable if prepayment occurs on or after October 1, 2026. If voluntary prepayments are made in part, they must be made in minimum amounts of $5 million in integral multiples of $1 million. In addition, the Facility Agreement provides for certain customary mandatory prepayment requirements.

In the event of any prepayment during a quarterly interest period the Company is also required to pay, or receive from, RMB an amount, such that RMB would be in the same economic position for that interest period had the prepayment only occurred at the end of such period. The amount payable or receivable will be calculated relative to the interest that RMB would be able to obtain by placing the amount prepaid on deposit with a leading bank in the London interbank market for a period from the prepayment until the end of such interest period.

The New RMB Term Facility bears interest at 5% per annum (or 7%, if an event of default is occurring), plus the applicable term SOFR reference rate (or an interpolated rate if SOFR is unavailable), payable quarterly on March 31, June 30, September 30, and December 31 each year, and on October 31, 2029.

The Company paid a non-refundable deal structuring fee of $1.25 million to RMB on October 1, 2024.

The Company may be required to make certain indemnity-type payments to RMB should RMB’s returns on the New RMB Term Facility be lower than those envisaged, for example due to changes in tax implications and increased costs of servicing the facility.

The Facility Agreement contains certain customary affirmative and negative covenants, including financial covenants with respect to the ratio of the Company’s consolidated total net borrowings to consolidated EBITDA and the ratio of the Company’s consolidated EBITDA to consolidated total finance costs. The Facility Agreement also includes representations, warranties, events of default and other provisions customary for financings of this type. The occurrence of any event of default under the Facility Agreement may result in all outstanding indebtedness under the New RMB Term Facility becoming immediately due and payable.
v3.24.3
DESCRIPTION OF THE COMPANY AND BASIS OF PRESENTATION (Policies)
 6 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Basis of preparation The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the consolidated financial position of the Company as of March 31, 2024 and September 30, 2024, the consolidated results of its operations for the three- and six-month periods ended September 30, 2023 and 2024, the consolidated change in stockholders’ equity for the three- and six-month periods ended September 30, 2023 and 2024, and the consolidated cash flows for the six-month periods ended September 30, 2023 and 2024. The results of operations for the three- and six-month periods ended September 30, 2024 are not necessarily indicative of the operating results for the full year. On May 8, 2024, the Company’s Board of Directors approved a change in our fiscal year end from December 31 to March 31 in order to better align the Company’s reporting calendar with the April 2, 2024 close of the MiX Combination and MiX Telematics’ historical March 31 fiscal year end. These financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures for the fiscal year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K for the year then ended, and the audited consolidated financial statements and related disclosures for the three-month transition period ended March 31, 2024 included in the Company’s Transition Report on Form 10-KT for the period then ended
USE OF ESTIMATES USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company continually evaluates estimates used in the preparation of the financial statements for reasonableness. The most significant estimates relate to assumptions used in business combinations, allowance for credit losses, income taxes, realization of deferred tax assets, accounting for uncertain tax positions, the impairment of intangible assets, including goodwill and long-lived assets, capitalized software development costs, inventory reserves, standalone selling prices (“SSP”), valuation of the derivative asset, and market-based stock-based compensation costs. Actual results could differ from those estimates.
RECENT ACCOUNTING PRONOUNCEMENTS RECENT ACCOUNTING PRONOUNCEMENTS
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires additional operating segment disclosures in annual and interim consolidated financial statements. ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and for interim periods beginning after December 15, 2024 on a retrospective basis, with early adoption permitted. The Company is evaluating the effect of adopting ASU 2023-07.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a retrospective or prospective basis. The Company is evaluating the effect of adopting ASU 2023-09.
v3.24.3
ACQUISITION (Tables)
 6 Months Ended
Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Schedule of Consideration Transferred, the Assets Acquired and Resulting Deferred Tax
The preliminary estimated fair value of the consideration transferred for MiX Telematics was $362,005 as of the Implementation Date, which consisted of the following:

(in thousands, except for share price and exchange ratio)April 2,
2024
Number of MiX Telematics ordinary shares outstanding554,021 
Exchange ratio0.12762
Shares of Powerfleet common stock to be issued for MiX Telematics ordinary shares outstanding70,704 
Powerfleet stock price*5.12
Fair value of Powerfleet common stock transferred to MiX Telematics shareholders362,005 
Replacement of acquiree’s equity awards by the acquirer**7,818 
Total fair value of preliminary consideration369,823 

* Powerfleet’s closing share price on April 2, 2024.
** The portion of the fair-value-based measure of the replacement award that is part of the consideration transferred in exchange for the acquiree equals the portion of the acquiree award that is attributable to pre-combination vesting.
Schedule of Preliminary Allocation of Purchase Price
The preliminary allocation of purchase price was as follows (in thousands):

April 2,
2024
Assets acquired:
Cash and cash equivalents$26,737 
Restricted cash794 
Accounts receivable, net 24,250 
Inventory, net4,142 
Prepaid expenses and other current assets8,886 
Fixed assets, net35,587 
Intangible assets, net153,000 
Right-of-use asset3,794 
Deferred tax assets1,093 
Other assets973 
Total assets acquired$259,256 
Liabilities assumed:
Short-term bank debt and current maturities of long-term debt$20,158 
Accounts payable and accrued expenses26,400 
Deferred revenue - current6,394 
Lease liability - current859 
Income taxes payable355 
Lease liability - less current portion2,852 
Deferred tax liability48,725 
Other long-term liabilities484 
Total liabilities assumed$106,227 
Total identifiable net assets acquired$153,029 
Non-controlling interest(5)
Goodwill216,799 
Purchase price consideration$369,823 
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination
The following table sets forth preliminary estimated fair values of the components of the identifiable intangible assets acquired and their estimated useful lives:

(in thousands)Fair valueWeighted average useful lives
Trade name$10,000 14years
Developed technology30,000 5years
Customer relationships113,000 13years
$153,000 
v3.24.3
REVENUE RECOGNITION (Tables)
 6 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Schedule of Disaggregation of Revenue
The following table presents the Company’s revenues disaggregated by revenue source for the three and six months ended September 30, 2023 and 2024 (in thousands):

Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
Products$13,233 $20,293 $24,317 $39,031 
Services21,010 56,725 42,018 113,417 
$34,243 $77,018 $66,335 $152,448 
Schedule of Contract with Customer, Contract Asset, Contract Liability
The balances of contract assets and contract liabilities from contracts with customers are as follows as of March 31, 2024 and September 30, 2024 (in thousands):

March 31, 2024September 30, 2024
Contract Assets:
Deferred contract cost (1)
$2,632 $7,408 
Deferred costs - current$42 $13 
Contract Liabilities
Deferred revenue – services (2)
$10,674 $14,153 
Deferred revenue – products (2)
60 968 
10,734 15,121 
Less: Deferred revenue – current(5,842)(10,447)
Deferred revenue – less current portion$4,892 $4,674 
(1) Deferred Contract costs are included in Other assets on the condensed consolidated balance sheets.
(2) The Company records deferred revenues when cash payments are received or due in advance of the Company’s performance. For the three-month periods ended September 30, 2023 and 2024, the Company recognized revenue of $1,416 and $2,499, respectively, which was included in the deferred revenue balance at the beginning of each reporting period. For the six-month periods ended September 30, 2023 and 2024, the Company recognized revenue of $3,190 and $5,486, respectively, which was
included in the deferred revenue balance at the beginning of each reporting period. The Company expects to recognize as revenue through year 2029, when it transfers those goods and services and, therefore, satisfies its performance obligation to the customers.
v3.24.3
ALLOWANCE FOR CREDIT LOSSES (Tables)
 6 Months Ended
Sep. 30, 2024
Receivables [Abstract]  
Schedule of Allowance for Credit Loss
An analysis of the allowance for credit losses for the periods ended September 30, 2023 and 2024 is as follows (in thousands):

Six Months Ended September 30,
20232024
Allowance for credit losses, March 31$2,328 $3,197 
Current period provision for expected credit losses933 4,369 
Write-offs charged against the allowance
(617)(2,688)
Foreign currency translation33 443 
Allowance for credit losses, September 30$2,677 $5,321 
v3.24.3
PREPAID EXPENSES AND OTHER ASSETS (Tables)
 6 Months Ended
Sep. 30, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Schedule of Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets comprise the following (in thousands):
March 31,
2024		September 30,
2024
Sales-type lease receivables, current$1,100 $1,135 
Prepaid expenses*2,817 8,021 
Contract assets1,162 — 
Tax receivables125 716 
VAT receivable
— 4,303 
Sundry debtors— 3,531 
Other current assets2,887 279 
$8,091 $17,985 

*This includes the prepaid portion of total deferred contract assets.
v3.24.3
INVENTORY (Tables)
 6 Months Ended
Sep. 30, 2024
Inventory Disclosure [Abstract]  
Schedule of Inventories
Inventories consist of the following (in thousands):

March 31,
2024		September 30,
2024
Components$9,403 $11,133 
Work in process49 82 
Finished goods, net12,206 12,273 
$21,658 $23,488 
v3.24.3
FIXED ASSETS (Tables)
 6 Months Ended
Sep. 30, 2024
Property, Plant and Equipment [Abstract]  
Schedule of Fixed Assets
Fixed assets are stated at cost, less accumulated depreciation and amortization, and are summarized as follows (in thousands):

March 31,
2024		September 30,
2024
Installed and uninstalled products$11,030 $50,322 
Computer software11,496 13,042 
Computer and electronic equipment6,179 7,166 
Furniture and fixtures2,361 4,039 
Leasehold improvements1,498 1,447 
Plant and equipment— 365 
Assets in progress— 98 
32,564 76,479 
Accumulated depreciation and amortization(19,845)(24,551)
$12,719 $51,928 
v3.24.3
INTANGIBLE ASSETS AND GOODWILL (Tables)
 6 Months Ended
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Finite-Lived Intangible Assets
The following table summarizes identifiable intangible assets of the Company as of March 31, 2024 and September 30, 2024 (in thousands):

September 30, 2024Useful Lives (In Years)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Amortized:
Customer relationships
9 - 13
$132,264 $(13,171)$119,093 
Trademark and tradename
3 - 15
17,553 (4,625)12,928 
Patents
7 - 11
628 (508)120 
Technology
5 - 7
43,745 (13,912)29,833 
Software to be sold or leased
3 - 6
6,416 (1,235)5,181 
200,606 (33,451)167,155 
Unamortized:
Customer list104 — 104 
Trademark and tradename61 — 61 
165 — 165 
Total$200,771 $(33,451)$167,320 

March 31, 2024Useful Lives (In Years)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Amortized:
Customer relationships
9 - 12
$19,264 $(8,012)$11,252 
Trademark and tradename
3 - 15
7,553 (3,877)3,676 
Patents
7 - 11
628 (464)164 
Technology
 7
10,911 (10,911)— 
Software to be sold or leased
3
5,159 (764)4,395 
43,515 (24,028)19,487 
Unamortized:
Customer list104 — 104 
Trademark and tradename61 — 61 
165 — 165 
Total$43,680 $(24,028)$19,652 
Schedule of Indefinite-Lived Intangible Assets
The following table summarizes identifiable intangible assets of the Company as of March 31, 2024 and September 30, 2024 (in thousands):

September 30, 2024Useful Lives (In Years)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Amortized:
Customer relationships
9 - 13
$132,264 $(13,171)$119,093 
Trademark and tradename
3 - 15
17,553 (4,625)12,928 
Patents
7 - 11
628 (508)120 
Technology
5 - 7
43,745 (13,912)29,833 
Software to be sold or leased
3 - 6
6,416 (1,235)5,181 
200,606 (33,451)167,155 
Unamortized:
Customer list104 — 104 
Trademark and tradename61 — 61 
165 — 165 
Total$200,771 $(33,451)$167,320 

March 31, 2024Useful Lives (In Years)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Amortized:
Customer relationships
9 - 12
$19,264 $(8,012)$11,252 
Trademark and tradename
3 - 15
7,553 (3,877)3,676 
Patents
7 - 11
628 (464)164 
Technology
 7
10,911 (10,911)— 
Software to be sold or leased
3
5,159 (764)4,395 
43,515 (24,028)19,487 
Unamortized:
Customer list104 — 104 
Trademark and tradename61 — 61 
165 — 165 
Total$43,680 $(24,028)$19,652 
Schedule of Estimated Future Amortization Expense
Estimated future amortization expense for each of the five succeeding fiscal years for these intangible assets is as follows:

2025 (remaining)$9,504 
202622,144 
202720,630 
202818,127 
202914,741 
Thereafter82,009 
$167,155 
v3.24.3
STOCK-BASED COMPENSATION (Tables)
 6 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Schedule of Stock Options
The following table summarizes the activity relating to the Company’s market-based stock options for the six-month period ended September 30, 2024:
OptionsWeighted-
Average
Exercise Price 		Weighted Average Contractual Remaining Term (years)
Aggregate Intrinsic Values (in thousands)
Outstanding as of April 1, 2024
5,445 13.39 — — 
Granted— — — — 
Exercised— — — — 
Forfeited(50)3.13 — — 
Outstanding as of September 30, 2024
5,395 13.487.46$2,293 
Vested as of September 30, 2024
— — — $— 
The following table summarizes the activity relating to the Company’s stock options, excluding the market-based stock options, for the six-month period ended September 30, 2024:

OptionsWeighted-
Average
Exercise Price		Weighted Average Contractual Remaining Term (years)
Aggregate Intrinsic Values (in thousands)
Outstanding as of April 1, 2024
1,979 4.68 — — 
Granted375 4.31 — — 
Exercised— — — — 
Forfeited(45)5.96 — — 
Outstanding as of September 30, 2024
2,309 4.596.82$1,600 
Vested as of September 30, 2024
1,972 4.64 6.33$1,370 
Schedule of Fair Value Valuation Assumptions
The fair value of each option grant on the date of grant is estimated using the Black-Scholes option-pricing model reflecting the following weighted-average assumptions:

September 30, 2023September 30, 2024
Expected volatility 55.6 %60.2 %
Expected life of options6.16.5
Risk free interest rate3.87 %4.23 %
Dividend yield— — 
Weighted-average fair value of options granted during the year$1.66$2.66
Schedule of Restricted Stock Activity A summary of all unvested restricted stock for the six-month period ended September 30, 2024 is as follows:
Number of
Unvested Shares
Weighted- Average
Grant Date Fair Value
Unvested, March 31, 2024
1,370 2.68 
Granted54 5.45 
Vested(1,370)2.68 
Forfeited or expired— — 
Unvested, September 30, 2024
54 5.45 
Schedule of Unvested SARs Activities
The following table summarizes the activities for the outstanding SARs:

Number of SARsWeighted-
Average
Exercise Price		Weighted Average Contractual Remaining Term (years)
Aggregate Intrinsic Values (in thousands)
Outstanding as of April 1, 2024
— — 
Acquired through MiX Combination5,740 2.61 
Granted— — 
Exercised(677)2.97 
Forfeited(491)2.42 
Outstanding as of September 30, 2024
4,572 2.573.16
Vested as of September 30, 2024
1,420 3.08 1.41$2,710 
v3.24.3
NET LOSS PER SHARE (Tables)
 6 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Schedule of Net Loss Per Share Basic and Diluted
Net loss per share for the three- and six-month periods ended September 30, 2023 and 2024 are as follows:

Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
Basic and diluted loss per share
Net loss attributable to common stockholders$(6,510)$(1,888)$(12,679)$(24,225)
Net loss per share attributable to common stockholders - basic and diluted$(0.18)$(0.02)$(0.36)$(0.23)
Weighted-average common share outstanding - basic and diluted35,653 107,532 35,629 107,335 
v3.24.3
SHORT-TERM BANK DEBT AND LONG-TERM DEBT (Tables)
 6 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Schedule of Short-Term Debt
March 31,
2024
September 30,
2024
Short-term bank debt$— $31,968 
Current maturities of long-term debt$1,951 $3,371 
Long-term debt - less current maturities$113,810 $111,011 
Schedule of Key Assumptions
The following key assumptions were used in March 31, 2024 and September 30, 2024:

Facility AFacility B
Credit spread volatility50 %35 %
Credit spread4.48 %4.99 %
Credit ratingB-B-
Risk free rate
SOFR spot rate*
SOFR spot rate*
* As of March 31, 2024 and September 30, 2024, the Secured Overnight Financing Rate (SOFR) spot rate was 5.34% and 4.96% respectively.
Schedule of Contractual Maturities of Long-Term Debt
Scheduled contractual maturities of the long-term debt as of September 30, 2024 are as follows:

2025 (remaining)$984 
20264,923 
202747,916 
20285,415 
202954,316 
113,554 
Less: Current portion(3,371)
Plus debt costs and prepayment828 
Total$111,011 
v3.24.3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)
 6 Months Ended
Sep. 30, 2024
Payables and Accruals [Abstract]  
Schedule of Accounts Payable and Accrued Liabilities
Accounts payable and accrued expenses consist of the following (in thousands):

March 31,
2024		September 30,
2024
Accounts payable$20,025 $41,821 
Accrued warranty1,138 1,523 
Accrued compensation8,956 14,305 
Government authorities3,062 6,439 
Other current liabilities827 2,010 
$34,008 $66,098 
Schedule of Product Warranty Liability
The following table summarizes warranty activity for the six months ended September 30, 2023 and 2024 (in thousands):

Six Months Ended September 30,
20232024
Accrued warranty reserve, beginning of year$2,255 $2,926 
Accrual for product warranties issued710 242 
Product replacements and other warranty expenditures(210)(202)
Expiration of warranties ((over)/under warranty accrual)(141)15 
Acquired through MiX Combination— 356 
Foreign currency translation difference— 33 
Accrued warranty reserve, end of period (1)
$2,614 $3,370 
(1) Includes non-current accrued warranty included in other long-term liabilities at September 30, 2023 and 2024 of $1,822 and $1,847, respectively.
v3.24.3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)
 6 Months Ended
Sep. 30, 2024
Equity [Abstract]  
Schedule of Accumulated Other Comprehensive Loss
The accumulated balances for each classification of other comprehensive loss for the six-month period ended September 30, 2024 are as follows (in thousands):

Foreign currency translation adjustmentAccumulated other comprehensive loss
Balance at April 1, 2024
$(985)$(985)
Net current period change(379)(379)
Balance at September 30, 2024
$(1,364)$(1,364)

The accumulated balances for each classification of other comprehensive loss for the six-month period ended September 30, 2023 are as follows (in thousands):

Foreign currency translation adjustmentAccumulated other comprehensive loss
Balance at April 1, 2023
$(1,098)$(1,098)
Net current period change(806)(806)
Balance at September 30, 2023
$(1,904)$(1,904)
v3.24.3
SEGMENT INFORMATION (Tables)
 6 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
Schedule of Revenues and Long Lived Assets by Geographical Region
The Company operates in one reportable segment, wireless IoT asset management. The following table summarizes revenues by geographic region (in thousands):

Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
North America$20,212 $21,255 $36,977 $42,396 
Israel10,247 11,751 21,152 22,411 
Africa807 24,178 1,670 48,578 
Europe and Middle East430 9,178 1,029 17,043 
Other2,547 10,656 5,507 22,020 
$34,243 $77,018 $66,335 $152,448 
March 31,
2024		September 30,
2024
Long lived assets by geographic region:
North America$4,083 $8,621 
Israel3,946 2,804 
Africa705 31,031 
Europe and Middle East2,850 4,898 
Other1,135 4,574 
$12,719 $51,928 
v3.24.3
INCOME TAXES (Tables)
 6 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Schedule of Income Before Income Tax Domestic and Foreign
Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
Domestic pre-tax book loss$(4,123)$(7,136)$(14,312)$(23,611)
Foreign pre-tax book income (expense)870 5,509 7,791 738 
Total loss before income taxes(3,253)(1,627)(6,521)(22,873)
Income tax benefit (expense)(295)(256)(289)(1,309)
Net loss before non-controlling interest
$(3,548)$(1,883)$(6,810)$(24,182)
Effective tax rate(9.07)%(15.73)%(4.43)%(5.72)%
v3.24.3
LEASES (Tables)
 6 Months Ended
Sep. 30, 2024
Leases [Abstract]  
Schedule of Components of Lease Cost
The components of lease cost are as follows (in thousands):

Three Months Ended September 30,Six Months Ended September 30,
2023202420232024
Short-term lease cost$119 $228 $238 $435 
Schedule of Cash Flow Information and Non Cash Activity of Operating Leases
Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows (in thousands):

Six Months Ended September 30,
20232024
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations$856 $1,262 
Reduction of right-of-use assets due to MiX Combination (1)
$— $(933)
(1) Subsequent to the MiX Combination, certain leases were terminated or modified due to the consolidation of leased space.
Schedule of Weighted Average Remaining Lease Term and Discount Rate
Weighted-average remaining lease term and discount rate for our operating leases are as follows:

September 30,
2024
Weighted-average remaining lease term - operating leases (in years) (1)
3.28
Weighted-average discount rate7.6 %
(1) Including expected renewals where appropriate.
Schedule Maturities of Operating Lease Liabilities
Scheduled maturities of operating lease liabilities outstanding as of September 30, 2024 are as follows (in thousands):

October 2024 - March 2025$2,331 
20263,260 
20272,012 
20281,319 
20291,114 
Thereafter1,420 
Total lease payments11,456 
Less: Imputed interest(1,495)
Present value of lease payments$9,961 
v3.24.3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)
 6 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Schedule of Fair Value of Financial Instruments
March 31, 2024September 30, 2024
Carrying AmountFair ValueCarrying AmountFair Value
Loans to external parties$475 $475 $209 $209 
Debt$115,761 $116,278 $146,349 $150,420 
Prepayment derivative$2,226 $2,226 $4,423 $4,423 
v3.24.3
DESCRIPTION OF THE COMPANY AND BASIS OF PRESENTATION (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Sep. 30, 2023
Jun. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Mar. 31, 2024
Mar. 31, 2023
New Accounting Pronouncements or Change in Accounting Principle [Line Items]                
Net loss attributable to common stockholders $ (1,888) $ (22,337) $ (6,510) $ (6,171) $ (24,225) $ (12,679)    
Additional paid-in capital 641,736       641,736   $ 202,607 [1]  
Cash and cash equivalents 25,962   19,297   25,962 19,297 24,354 [1] $ 24,780
Working capital 81,209       81,209      
Cash including restricted cash and cash equivalents $ 89,036   19,607   $ 89,036 19,607 $ 109,664 $ 25,089
Adjustments                
New Accounting Pronouncements or Change in Accounting Principle [Line Items]                
Net loss attributable to common stockholders     (1,667) (1,604)        
Additional paid-in capital     $ (1,667) $ (1,604)   $ (1,667)    
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
ACQUISITION - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended 12 Months Ended
Sep. 30, 2024
Sep. 30, 2024
Dec. 31, 2023
Apr. 02, 2024
Powerfleet Israel Ltd.        
Business Acquisition [Line Items]        
Percentage of top 20 institutional investor (percent)       30.00%
MiX Telematics        
Business Acquisition [Line Items]        
Percentage of top 20 institutional investor (percent)       9.00%
Total percentage of shares held by shareholders       65.00%
MiX Telematics        
Business Acquisition [Line Items]        
Voting rights       35.00%
Goodwill, recognized adjustment $ 425      
Acquisition-related costs 152 $ 14,643 $ 20,443  
Pro forma revenue 43,825 87,514    
Pro forma net (loss) profit $ 2,007 $ (4,925)    
MiX Telematics | MiX Telematics        
Business Acquisition [Line Items]        
Voting rights       65.50%
v3.24.3
ACQUISITION - Estimated Fair Value of the Consideration Transferred (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
Apr. 02, 2024
Sep. 30, 2024
Sep. 30, 2023
Business Acquisition [Line Items]      
Powerfleet stock price (in dollars per share) $ 5.12 $ 2.66 $ 1.66
MiX Telematics      
Business Acquisition [Line Items]      
Number of MiX Telematics ordinary shares outstanding (in shares) 554,021    
Exchange ratio 12.762%    
Shares of Powerfleet common stock to be issued for MiX Telematics ordinary shares outstanding (in shares) 70,704    
Total fair value of preliminary consideration $ 369,823    
MiX Telematics | Fair value of Powerfleet common stock transferred to MiX Telematics shareholders      
Business Acquisition [Line Items]      
Fair value of Powerfleet common stock transferred to MiX Telematics shareholders 362,005    
MiX Telematics | Replacement Equity Awards      
Business Acquisition [Line Items]      
Replacement of acquiree's equity awards by the acquirer $ 7,818    
v3.24.3
ACQUISITION - Schedule of Consideration Transferred, the Assets Acquired and Liabilities Assumed (Details) - USD ($)
$ in Thousands
Apr. 02, 2024
Sep. 30, 2024
Mar. 31, 2024
 [1]
Liabilities assumed:      
Goodwill   $ 300,283 $ 83,487
MiX Telematics      
Assets acquired:      
Cash and cash equivalents $ 26,737    
Restricted cash 794    
Accounts receivable, net 24,250    
Inventory, net 4,142    
Prepaid expenses and other current assets 8,886    
Fixed assets, net 35,587    
Intangible assets, net 153,000    
Right-of-use asset 3,794    
Deferred tax assets 1,093    
Other assets 973    
Total assets acquired 259,256    
Liabilities assumed:      
Short-term bank debt and current maturities of long-term debt 20,158    
Accounts payable and accrued expenses 26,400    
Deferred revenue - current 6,394    
Lease liability - current 859    
Income taxes payable 355    
Lease liability - less current portion 2,852    
Deferred tax liability 48,725    
Other long-term liabilities 484    
Total liabilities assumed 106,227    
Total identifiable net assets acquired 153,029    
Non-controlling interest (5)    
Goodwill 216,799    
Total fair value of preliminary consideration $ 369,823    
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
ACQUISITION - Schedule of Identifiable Intangible Assets Acquired and Estimated Useful Lives (Details) - MiX Telematics
$ in Thousands
Apr. 02, 2024
USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]  
Intangible assets, net $ 153,000
Trade name  
Acquired Finite-Lived Intangible Assets [Line Items]  
Intangible assets, net $ 10,000
Weighted average useful lives 14 years
Developed technology  
Acquired Finite-Lived Intangible Assets [Line Items]  
Intangible assets, net $ 30,000
Weighted average useful lives 5 years
Customer relationships  
Acquired Finite-Lived Intangible Assets [Line Items]  
Intangible assets, net $ 113,000
Weighted average useful lives 13 years
v3.24.3
CASH AND CASH EQUIVALENTS (Details) - USD ($)
$ / shares in Units, $ in Thousands
Oct. 01, 2024
Sep. 30, 2024
Sep. 18, 2024
Mar. 31, 2024
Subsequent Event        
Restricted Cash and Cash Equivalents        
Escrow deposit $ 3,850      
Private Placement        
Restricted Cash and Cash Equivalents        
Escrow deposit     $ 61,850  
Private Placement | Subsequent Event        
Restricted Cash and Cash Equivalents        
Sale of stock, number of shares issued in transaction (in shares) 20,000,000      
Sale of stock, price per share (in dollars per share) $ 3.50      
Sale of stock, gross consideration received on transaction $ 70,000      
MiX Telematics Enterprise BEE Trust        
Restricted Cash and Cash Equivalents        
Cash   $ 856    
Facilities Agreement        
Restricted Cash and Cash Equivalents        
Escrow deposit       $ 85,000
Vendor Related Property        
Restricted Cash and Cash Equivalents        
Escrow deposit   311   $ 310
Lease Agreements        
Restricted Cash and Cash Equivalents        
Cash   $ 56    
v3.24.3
REVENUE RECOGNITION - Disaggregated By Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Capitalized Contract Cost        
Total revenues $ 77,018 $ 34,243 $ 152,448 $ 66,335
Products        
Capitalized Contract Cost        
Total revenues 20,293 13,233 39,031 24,317
Services        
Capitalized Contract Cost        
Total revenues $ 56,725 $ 21,010 $ 113,417 $ 42,018
v3.24.3
REVENUE RECOGNITION - Contract Assets and Contract Liabilities from Contracts With Customers (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Mar. 31, 2024
Contract Assets:          
Deferred contract cost $ 7,408   $ 7,408   $ 2,632
Deferred costs - current 13   13   42 [1]
Contract Liabilities          
Deferred revenue 15,121   15,121   10,734
Less: Deferred revenue – current (10,447)   (10,447)   (5,842) [1]
Deferred revenue - less current portion 4,674   4,674   4,892 [1]
Revenue 2,499 $ 1,416 5,486 $ 3,190  
Service          
Contract Liabilities          
Deferred revenue 14,153   14,153   10,674
Product          
Contract Liabilities          
Deferred revenue $ 968   $ 968   $ 60
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
ALLOWANCE FOR CREDIT LOSSES - Schedule of Allowance for Credit Losses (Details) - USD ($)
$ in Thousands
 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Accounts Receivable, Allowance for Credit Loss [Roll Forward]    
Allowance for credit losses, beginning balance $ 3,197 $ 2,328
Current period provision for expected credit losses 4,369 933
Write-offs charged against the allowance (2,688) (617)
Foreign currency translation 443 33
Allowance for credit losses, ending balance $ 5,321 $ 2,677
v3.24.3
PREPAID EXPENSES AND OTHER ASSETS (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Sales-type lease receivables, current $ 1,135 $ 1,100
Prepaid expenses 8,021 2,817
Contract assets 0 1,162
Tax receivables 716 125
VAT receivable 4,303 0
Sundry debtors 3,531 0
Other current assets 279 2,887
Prepaid expenses and other current assets $ 17,985 $ 8,091 [1]
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
INVENTORY - Narrative (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Inventory Disclosure [Abstract]    
Inventory valuation reserve $ 1,330 $ 538
v3.24.3
INVENTORY - Schedule of Inventories (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Inventory Disclosure [Abstract]    
Components $ 11,133 $ 9,403
Work in process 82 49
Finished goods, net 12,273 12,206
Inventory, net $ 23,488 $ 21,658 [1]
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
FIXED ASSETS - Schedule of Owned Property, Plant and Equipment (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Property, Plant and Equipment    
Property, plant and equipment, gross $ 76,479 $ 32,564
Accumulated depreciation and amortization (24,551) (19,845)
Property, plant and equipment, net, total 51,928 12,719 [1]
Installed and uninstalled products    
Property, Plant and Equipment    
Property, plant and equipment, gross 50,322 11,030
Computer software    
Property, Plant and Equipment    
Property, plant and equipment, gross 13,042 11,496
Computer and electronic equipment    
Property, Plant and Equipment    
Property, plant and equipment, gross 7,166 6,179
Furniture and fixtures    
Property, Plant and Equipment    
Property, plant and equipment, gross 4,039 2,361
Leasehold improvements    
Property, Plant and Equipment    
Property, plant and equipment, gross 1,447 1,498
Plant and equipment    
Property, Plant and Equipment    
Property, plant and equipment, gross 365 0
Assets in progress    
Property, Plant and Equipment    
Property, plant and equipment, gross $ 98 $ 0
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
FIXED ASSETS - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Property, Plant and Equipment [Abstract]        
Depreciation, depletion and amortization, nonproduction $ 5,227 $ 671 $ 9,976 $ 1,638
v3.24.3
INTANGIBLE ASSETS AND GOODWILL - Schedule of Intangible Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount $ 200,606 $ 43,515
Accumulated Amortization (33,451) (24,028)
Net Carrying Amount 167,155 19,487
Indefinite-Lived Intangible Assets [Line Items]    
Indefinite-lived intangible assets (excluding goodwill) 165 165
Gross Carrying Amount 200,771 43,680
Accumulated Amortization (33,451) (24,028)
Net Carrying Amount 167,320 19,652 [1]
Customer list    
Indefinite-Lived Intangible Assets [Line Items]    
Indefinite-lived intangible assets (excluding goodwill) 104 104
Trademark and tradename    
Indefinite-Lived Intangible Assets [Line Items]    
Indefinite-lived intangible assets (excluding goodwill) 61 61
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 132,264 19,264
Accumulated Amortization (13,171) (8,012)
Net Carrying Amount 119,093 11,252
Indefinite-Lived Intangible Assets [Line Items]    
Accumulated Amortization $ (13,171) $ (8,012)
Customer relationships | Minimum    
Finite-Lived Intangible Assets [Line Items]    
Useful Lives (In Years) 9 years 9 years
Customer relationships | Maximum    
Finite-Lived Intangible Assets [Line Items]    
Useful Lives (In Years) 13 years 12 years
Trademark and tradename    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount $ 17,553 $ 7,553
Accumulated Amortization (4,625) (3,877)
Net Carrying Amount 12,928 3,676
Indefinite-Lived Intangible Assets [Line Items]    
Accumulated Amortization $ (4,625) $ (3,877)
Trademark and tradename | Minimum    
Finite-Lived Intangible Assets [Line Items]    
Useful Lives (In Years) 3 years 3 years
Trademark and tradename | Maximum    
Finite-Lived Intangible Assets [Line Items]    
Useful Lives (In Years) 15 years 15 years
Patents    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount $ 628 $ 628
Accumulated Amortization (508) (464)
Net Carrying Amount 120 164
Indefinite-Lived Intangible Assets [Line Items]    
Accumulated Amortization $ (508) $ (464)
Patents | Minimum    
Finite-Lived Intangible Assets [Line Items]    
Useful Lives (In Years) 7 years 7 years
Patents | Maximum    
Finite-Lived Intangible Assets [Line Items]    
Useful Lives (In Years) 11 years 11 years
Technology    
Finite-Lived Intangible Assets [Line Items]    
Useful Lives (In Years)   7 years
Gross Carrying Amount $ 43,745 $ 10,911
Accumulated Amortization (13,912) (10,911)
Net Carrying Amount 29,833 0
Indefinite-Lived Intangible Assets [Line Items]    
Accumulated Amortization $ (13,912) $ (10,911)
Technology | Minimum    
Finite-Lived Intangible Assets [Line Items]    
Useful Lives (In Years) 5 years  
Technology | Maximum    
Finite-Lived Intangible Assets [Line Items]    
Useful Lives (In Years) 7 years  
Software to be sold or leased    
Finite-Lived Intangible Assets [Line Items]    
Useful Lives (In Years)   3 years
Gross Carrying Amount $ 6,416 $ 5,159
Accumulated Amortization (1,235) (764)
Net Carrying Amount 5,181 4,395
Indefinite-Lived Intangible Assets [Line Items]    
Accumulated Amortization $ (1,235) $ (764)
Software to be sold or leased | Minimum    
Finite-Lived Intangible Assets [Line Items]    
Useful Lives (In Years) 3 years  
Software to be sold or leased | Maximum    
Finite-Lived Intangible Assets [Line Items]    
Useful Lives (In Years) 6 years  
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
INTANGIBLE ASSETS AND GOODWILL - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Finite-Lived Intangible Assets [Line Items]        
Amortization expense $ 3,837 $ 1,813 $ 9,423 $ 3,169
Customer relationships | Average        
Finite-Lived Intangible Assets [Line Items]        
Weighted-average amortization period (in years) 12 years 9 months 18 days   12 years 9 months 18 days  
Trademark and tradename | Average        
Finite-Lived Intangible Assets [Line Items]        
Weighted-average amortization period (in years) 12 years 1 month 6 days   12 years 1 month 6 days  
Patents | Average        
Finite-Lived Intangible Assets [Line Items]        
Weighted-average amortization period (in years) 7 years   7 years  
Technology | Average        
Finite-Lived Intangible Assets [Line Items]        
Weighted-average amortization period (in years) 5 years   5 years  
Software to be sold or leased | Average        
Finite-Lived Intangible Assets [Line Items]        
Weighted-average amortization period (in years) 3 years   3 years  
v3.24.3
INTANGIBLE ASSETS AND GOODWILL - Schedule of Estimated Future Amortization Expense (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]    
2025 (remaining) $ 9,504  
2026 22,144  
2027 20,630  
2028 18,127  
2029 14,741  
Thereafter 82,009  
Net Carrying Amount $ 167,155 $ 19,487
v3.24.3
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Time-based vesting          
Share-based Compensation Arrangement by Share-based Payment Award          
Granted (in shares) 0 375      
Stock Options          
Share-based Compensation Arrangement by Share-based Payment Award          
Stock-based compensation expense $ 627   $ 781 $ 2,444 $ 1,366
Total fair value of share options vested       1,552 42
Unrecognized compensation costs 883     $ 883  
Expected period for recognition of unvested awards       1 year 2 months 15 days  
Stock Options One          
Share-based Compensation Arrangement by Share-based Payment Award          
Unrecognized compensation costs 3,021     $ 3,021  
Expected period for recognition of unvested awards       2 years 2 months 23 days  
Restricted Stock          
Share-based Compensation Arrangement by Share-based Payment Award          
Stock-based compensation expense 125   $ 320 $ 3,220 $ 587
Expected period for recognition of unvested awards       7 months 13 days  
Unrecognized compensation to non-vested shares 183     $ 183  
SARs          
Share-based Compensation Arrangement by Share-based Payment Award          
Stock-based compensation expense 637     1,600  
Unrecognized compensation costs $ 6,848     $ 6,848  
Expected period for recognition of unvested awards       3 years 18 days  
v3.24.3
STOCK-BASED COMPENSATION - Schedule of Stock Options (Details) - USD ($)
$ / shares in Units, $ in Thousands
 6 Months Ended
Sep. 30, 2024
Stock Options Including Market Based Stock  
Options  
Outstanding, beginning balance (in shares) 5,445
Granted (in shares) 0
Exercised (in shares) 0
Forfeited (in shares) (50)
Outstanding, ending balance (in shares) 5,395
Vested (in shares) 0
Weighted- Average Exercise Price  
Outstanding, beginning balance (in dollars per share) $ 13.39
Granted (in dollars per share) 0
Exercised (in dollars per share) 0
Forfeited (in dollars per share) 3.13
Outstanding, ending balance (in dollars per share) 13.48
Vested (in dollars per share) $ 0
Weighted average remaining contractual term, outstanding 7 years 5 months 15 days
Aggregate intrinsic value, outstanding $ 2,293
Aggregate intrinsic value, vest $ 0
Stock Options Excluding Market Based Stock  
Options  
Outstanding, beginning balance (in shares) 1,979
Granted (in shares) 375
Exercised (in shares) 0
Forfeited (in shares) (45)
Outstanding, ending balance (in shares) 2,309
Vested (in shares) 1,972
Weighted- Average Exercise Price  
Outstanding, beginning balance (in dollars per share) $ 4.68
Granted (in dollars per share) 4.31
Exercised (in dollars per share) 0
Forfeited (in dollars per share) 5.96
Outstanding, ending balance (in dollars per share) 4.59
Vested (in dollars per share) $ 4.64
Weighted average remaining contractual term, outstanding 6 years 9 months 25 days
Weighted average remaining contractual term, vest 6 years 3 months 29 days
Aggregate intrinsic value, outstanding $ 1,600
Aggregate intrinsic value, vest $ 1,370
v3.24.3
STOCK-BASED COMPENSATION - Schedule of Fair Value Valuation Assumptions (Details) - $ / shares
 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Apr. 02, 2024
Share-Based Payment Arrangement [Abstract]      
Expected volatility 60.20% 55.60%  
Expected life of options 6 years 6 months 6 years 1 month 6 days  
Risk free interest rate 4.23% 3.87%  
Dividend yield 0.00% 0.00%  
Weighted-average fair value of options granted during the year (in dollars per share) $ 2.66 $ 1.66 $ 5.12
v3.24.3
STOCK-BASED COMPENSATION - Schedule of All Unvested Restricted Stock (Details) - RSUs
 6 Months Ended
Sep. 30, 2024
$ / shares
shares
Number of Unvested Shares  
Unvested as of beginning of period (in shares) | shares 1,370
Granted (in shares) | shares 54
Vested (in shares) | shares (1,370)
Forfeited or expired (in shares) | shares 0
Unvested as of end of period (in shares) | shares 54
Weighted- Average Grant Date Fair Value  
Unvested as of beginning of period (in dollars per share) | $ / shares $ 2.68
Granted (in dollars per share) | $ / shares 5.45
Vested (in dollars per share) | $ / shares 2.68
Forfeited or expired (in dollars per share) | $ / shares 0
Unvested as of end of period (in dollars per share) | $ / shares $ 5.45
v3.24.3
STOCK-BASED COMPENSATION - Schedule of Activities for the Outstanding SARs (Details) - Stock Appreciation Rights
$ / shares in Units, $ in Thousands
 6 Months Ended
Sep. 30, 2024
USD ($)
$ / shares
shares
Number of SARs  
Outstanding, beginning balance (in shares) | shares 0
Acquired through MiX Combination (in shares) | shares 5,740
Granted (in shares) | shares 0
Exercised (in shares) | shares (677)
Forfeited (in shares) | shares (491)
Outstanding, ending balance (in shares) | shares 4,572
Vested (in shares) | shares 1,420
Weighted- Average Exercise Price  
Outstanding, beginning balance (in dollars per share) | $ / shares $ 0
Acquired through MiX Combination (in dollars per share) | $ / shares 2.61
Granted (in dollars per share) | $ / shares 0
Exercised (in dollars per share) | $ / shares 2.97
Forfeited (in dollars per share) | $ / shares 2.42
Outstanding, ending balance (in dollars per share) | $ / shares 2.57
Vested (in dollars per share) | $ / shares $ 3.08
Stock Options Additional Disclosures  
Weighted average contractual remaining term, outstanding (in years) 3 years 1 month 28 days
Weighted average contractual remaining term, vested (in years) 1 year 4 months 28 days
Aggregate intrinsic values, vested | $ $ 2,710
v3.24.3
NET LOSS PER SHARE - Schedule of Net Loss Per Share Basic and Diluted (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Sep. 30, 2023
Jun. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Basic and diluted loss per share            
Net loss attributable to common stockholders - basic $ (1,888) $ (22,337) $ (6,510) $ (6,171) $ (24,225) $ (12,679)
Net loss attributable to common stockholders - diluted $ (1,888)   $ (6,510)   $ (24,225) $ (12,679)
Net loss per share attributable to common stockholders - basic (in dollars per share) $ (0.02)   $ (0.18)   $ (0.23) $ (0.36)
Net loss per share attributable to common stockholders - diluted (in dollars per share) $ (0.02)   $ (0.18)   $ (0.23) $ (0.36)
Weighted-average common share outstanding - basic (in shares) 107,532   35,653   107,335 35,629
Weighted-average common share outstanding - diluted (in shares) 107,532   35,653   107,335 35,629
v3.24.3
SHORT-TERM BANK DEBT AND LONG-TERM DEBT - Schedule of Long-Term Debt (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Debt Disclosure [Abstract]    
Short-term bank debt $ 31,968 $ 0
Current maturities of long-term debt 3,371 1,951
Long-term debt - less current maturities $ 111,011 $ 113,810 [1]
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
SHORT-TERM BANK DEBT AND LONG-TERM DEBT - Narrative (Details)
₪ in Millions
 3 Months Ended 6 Months Ended 12 Months Ended
Mar. 18, 2024
USD ($)
loan
Mar. 14, 2024
USD ($)
Mar. 13, 2024
USD ($)
Mar. 07, 2024
USD ($)
loan
Sep. 30, 2024
USD ($)
loan
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
loan
Sep. 30, 2023
USD ($)
Mar. 31, 2024
USD ($)
Sep. 30, 2024
ILS (₪)
loan
Mar. 14, 2024
ZAR (R)
Nov. 15, 2022
ZAR (R)
Line of Credit Facility                        
Borrowing facilities outstanding         $ 31,813,000   $ 31,813,000          
Book overdrafts         155,000   $ 155,000          
Proceeds to prepay loan $ 11,200,000                      
Line of Credit                        
Line of Credit Facility                        
Debt instrument, basis spread on variable rate             6.00%          
Debt instrument, term             5 years          
RMB Facility                        
Line of Credit Facility                        
Maximum borrowing capacity   $ 20,451,000                    
Debt instrument, basis spread on variable rate       0.75%                
Debt instrument, variable interest rate, type       Prime Rate [Member]                
Amount of facility utilized         $ 19,728,000   $ 19,728,000          
Hapoalim Term Facilities                        
Line of Credit Facility                        
Proceeds from lines of credit $ 30,000,000           30,000,000          
Proceeds to prepay loan             $ 11,200,000          
Equity to total assets, percentage         35.00%   35.00%     35.00%    
Net debt to EBITDA ratio         2   2     2    
Present value of cash flow maximum availability, percentage         10.00%   10.00%     10.00%    
Increase in carrying amount             $ 18,800,000          
Increase in deferred finance cost           $ 29,000 15,000 $ 64,000        
Amortization of debt issuance costs         $ 15,000   15,000          
Recorded interest expense         591,000 $ 133,000 1,246,000 $ 285,000        
Hapoalim Term Facilities | Line of Credit                        
Line of Credit Facility                        
Minimum repayment amount | ₪                   ₪ 1    
Hapoalim Term Facilities | Powerfleet Israel Ltd.                        
Line of Credit Facility                        
Amount of facility utilized         $ 12,085,000   $ 12,085,000          
Number of loans (loan) | loan 2       2   2     2    
Aggregate principal amount $ 30,000,000       $ 30,000,000   $ 30,000,000          
Minimum equity requirement         $ 60,000   $ 60,000          
Hapoalim Term Facilities | Pointer Telocation Ltd.                        
Line of Credit Facility                        
Net debt levels, percentage         100.00%   100.00%     100.00%    
EBITDA, maximum ratio         4.75   4.75     4.75    
Term A Facility | Line of Credit                        
Line of Credit Facility                        
Debt instrument, basis spread on variable rate             2.20%          
Term A Facility | Line of Credit | Period One                        
Line of Credit Facility                        
Principal amortization rate         10.00%   10.00%     10.00%    
Term A Facility | Line of Credit | Period Two                        
Line of Credit Facility                        
Principal amortization rate         25.00%   25.00%     25.00%    
Term A Facility | Line of Credit | Period Three                        
Line of Credit Facility                        
Principal amortization rate         27.50%   27.50%     27.50%    
Term A Facility | Line of Credit | Period Four                        
Line of Credit Facility                        
Principal amortization rate         27.50%   27.50%     27.50%    
Term A Facility | Line of Credit | Period Five                        
Line of Credit Facility                        
Principal amortization rate         10.00%   10.00%     10.00%    
Term A Facility | Powerfleet Israel Ltd.                        
Line of Credit Facility                        
Aggregate principal amount 20,000,000       $ 20,000,000   $ 20,000,000          
Term B Facility | Line of Credit                        
Line of Credit Facility                        
Debt instrument, basis spread on variable rate             2.30%          
Term B Facility | Powerfleet Israel Ltd.                        
Line of Credit Facility                        
Aggregate principal amount $ 10,000,000       10,000,000   $ 10,000,000          
Term C Facility | NIS-denominated loans                        
Line of Credit Facility                        
Debt instrument, basis spread on variable rate             2.50%          
Term C Facility | U.S. dollar-denominated loans                        
Line of Credit Facility                        
Debt instrument, basis spread on variable rate             2.15%          
Term D Facility | Line of Credit                        
Line of Credit Facility                        
Interest rate 0.50%                      
RMB Debt                        
Line of Credit Facility                        
Number of loans (loan) | loan       2                
Aggregate principal amount       $ 85,000,000                
Proceeds from lines of credit     $ 85,000,000                  
Minimum repayment amount       1,000,000                
Amortization of debt issuance costs         69,000   $ 146,000          
Recorded interest expense         $ 1,920,000   $ 3,790,000          
Subject to a minimum, reduction       5,000,000                
Prepayment at discount (premium)         10.00%   10.00%     10.00%    
Debt issuance costs       $ 1,000,000                
RMB Debt | Period One                        
Line of Credit Facility                        
First annual required prepayment, refinancing fee rate       2.00%                
RMB Debt | Period Two                        
Line of Credit Facility                        
First annual required prepayment, refinancing fee rate       1.00%                
RMB Facility B                        
Line of Credit Facility                        
Debt instrument, basis spread on variable rate             4.96%   5.34%      
Debt instrument, variable interest rate, type                 Secured Overnight Financing Rate (SOFR) [Member]      
Aggregate principal amount       $ 42,500,000                
Interest rate       8.979%                
Loan prepayment derivative       $ 1,616,000 $ 2,887,000   $ 2,887,000   $ 1,616,000      
RMB Facility B | 10 Percent Decrease In Spread                        
Line of Credit Facility                        
Increase (decrease) in derivative assets       265,000                
RMB Facility B | 10 Percent Increase In Spread                        
Line of Credit Facility                        
Increase (decrease) in derivative assets       264,000                
RMB Facility A                        
Line of Credit Facility                        
Debt instrument, basis spread on variable rate             4.96%   5.34%      
Debt instrument, variable interest rate, type             Secured Overnight Financing Rate (SOFR) [Member]          
Aggregate principal amount       $ 42,500,000                
Interest rate       8.699%                
Loan prepayment derivative       $ 610,000 1,536,000   $ 1,536,000   $ 610,000      
RMB Facility A | 10 Percent Decrease In Spread                        
Line of Credit Facility                        
Increase (decrease) in derivative assets       113,000                
RMB Facility A | 10 Percent Increase In Spread                        
Line of Credit Facility                        
Increase (decrease) in derivative assets       $ 111,000                
SOUTH AFRICA                        
Line of Credit Facility                        
Debt instrument, basis spread on variable rate             11.50%          
CFC Overdraft Facility | Standard Bank Limited                        
Line of Credit Facility                        
Maximum borrowing capacity         4,090,000   $ 4,090,000         R 70,000,000
Debt instrument, basis spread on variable rate             1.20%          
Amount of facility utilized         0   $ 0          
General Committed Banking Facility | Standard Bank Limited                        
Line of Credit Facility                        
Debt instrument, variable interest rate, type             Prime Rate [Member]          
Line of Credit | RMB Facility                        
Line of Credit Facility                        
Maximum borrowing capacity | R                     R 350,000,000  
Credit facility, period   364 days                    
Revolving Credit Facility                        
Line of Credit Facility                        
Undrawn borrowing remaining         7,915,000   $ 7,915,000          
Revolving Credit Facility | Pointer Telocation Ltd.                        
Line of Credit Facility                        
Amount of facility utilized         12,085,000   12,085,000          
Number of loans (loan) | loan 2                      
Aggregate principal amount $ 20,000,000       $ 10,000,000   $ 10,000,000          
Debt instrument, term             5 years          
Revolving Credit Facility | Term C Facility | Pointer Telocation Ltd.                        
Line of Credit Facility                        
Aggregate principal amount 10,000,000                      
Revolving Credit Facility | Term D Facility | Pointer Telocation Ltd.                        
Line of Credit Facility                        
Aggregate principal amount $ 10,000,000                      
v3.24.3
SHORT-TERM BANK DEBT AND LONG-TERM DEBT - Schedule of Key Assumptions (Details)
 6 Months Ended 12 Months Ended
Sep. 30, 2024
Mar. 31, 2024
RMB Facility A    
Line of Credit Facility    
Debt instrument, variable interest rate, type Secured Overnight Financing Rate (SOFR) [Member]  
Debt instrument, basis spread on variable rate 4.96% 5.34%
RMB Facility A | Credit spread volatility    
Line of Credit Facility    
Debt instrument, measurement input 0.50  
RMB Facility A | Credit spread    
Line of Credit Facility    
Debt instrument, measurement input 0.0448  
RMB Facility B    
Line of Credit Facility    
Debt instrument, variable interest rate, type   Secured Overnight Financing Rate (SOFR) [Member]
Debt instrument, basis spread on variable rate 4.96% 5.34%
RMB Facility B | Credit spread volatility    
Line of Credit Facility    
Debt instrument, measurement input 0.35  
RMB Facility B | Credit spread    
Line of Credit Facility    
Debt instrument, measurement input 0.0499  
v3.24.3
SHORT-TERM BANK DEBT AND LONG-TERM DEBT - Schedule of Contractual Maturities of Long-Term Debt (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Debt Disclosure [Abstract]    
2025 (remaining) $ 984  
2026 4,923  
2027 47,916  
2028 5,415  
2029 54,316  
Long-term debt 113,554  
Less: Current portion (3,371) $ (1,951)
Plus debt costs and prepayment 828  
Long-term debt - less current maturities $ 111,011 $ 113,810 [1]
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Payables and Accruals [Abstract]    
Accounts payable $ 41,821 $ 20,025
Accrued warranty 1,523 1,138
Accrued compensation 14,305 8,956
Government authorities 6,439 3,062
Other current liabilities 2,010 827
Accounts payable and accrued expenses $ 66,098 $ 34,008 [1]
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Schedule of Product Warranty Liability (Details) - USD ($)
$ in Thousands
 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease)    
Accrued warranty reserve, beginning of year $ 2,926 $ 2,255
Accrual for product warranties issued 242 710
Product replacements and other warranty expenditures (202) (210)
Expiration of warranties ((over)/under warranty accrual) 15 (141)
Acquired through MiX Combination 356 0
Foreign currency translation difference 33 0
Accrued warranty reserve, end of period 3,370 2,614
Accrued warranty 3,370 2,614
Other Noncurrent Liabilities    
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease)    
Accrued warranty reserve, end of period 1,847 1,822
Accrued warranty $ 1,847 $ 1,822
v3.24.3
STOCKHOLDERS' EQUITY (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Apr. 02, 2024
Mar. 31, 2024
Oct. 03, 2019
Class of Stock              
Preference shares, authorized (in shares) 50,000,000   50,000,000     50,000,000  
Preferred stock, par value (in dollars per share) $ 0.01   $ 0.01     $ 0.01  
Preferred stock dividend $ 0 $ (1,128) $ (25) $ (2,257)      
Redeemable Preferred Stock              
Class of Stock              
Preference shares, authorized (in shares) 150,000   150,000        
Preferred stock, par value (in dollars per share) $ 0.01   $ 0.01        
Series A Preferred Stock              
Class of Stock              
Preference shares, authorized (in shares) 100,000   100,000        
Preference shares, issued (in shares)             50,000
Preferred stock redemption amount         $ 90,300    
Dividend rate annual increase 1.00%   1.00%        
Dividends   $ 1,129 $ 25        
Series A Preferred Stock | Minimum              
Class of Stock              
Preferred stock, dividend rate, percentage     7.50%        
Series A Preferred Stock | Maximum              
Class of Stock              
Preferred stock, dividend rate, percentage     17.50%        
Undesignated Preferred Stock              
Class of Stock              
Preference shares, authorized (in shares) 50,000   50,000        
v3.24.3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($)
$ in Thousands
 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Increase (Decrease) in Stockholders' Equity    
Beginning balance $ 38,636 [1] $ 73,302
Net current period change (379) (806)
Ending balance 451,110 61,707
Accumulated other comprehensive loss    
Increase (Decrease) in Stockholders' Equity    
Beginning balance (985) (1,098)
Ending balance (1,364) (1,904)
Foreign currency translation adjustment    
Increase (Decrease) in Stockholders' Equity    
Beginning balance (985) (1,098)
Net current period change (379) (806)
Ending balance $ (1,364) $ (1,904)
[1] Derived from audited balance sheet as of March 31, 2024.
v3.24.3
SEGMENT INFORMATION - Schedule of Revenues and Long Lived Assets by Geographical Region (Details)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
segment
Sep. 30, 2023
USD ($)
Mar. 31, 2024
USD ($)
Segment Reporting [Abstract]          
Number of reportable segments | segment     1    
Revenues from External Customers and Long-Lived Assets          
Total revenues $ 77,018 $ 34,243 $ 152,448 $ 66,335  
Long lived assets 51,928   51,928   $ 12,719
North America          
Revenues from External Customers and Long-Lived Assets          
Total revenues 21,255 20,212 42,396 36,977  
Long lived assets 8,621   8,621   4,083
Israel          
Revenues from External Customers and Long-Lived Assets          
Total revenues 11,751 10,247 22,411 21,152  
Long lived assets 2,804   2,804   3,946
Africa          
Revenues from External Customers and Long-Lived Assets          
Total revenues 24,178 807 48,578 1,670  
Long lived assets 31,031   31,031   705
Europe and Middle East          
Revenues from External Customers and Long-Lived Assets          
Total revenues 9,178 430 17,043 1,029  
Long lived assets 4,898   4,898   2,850
Other          
Revenues from External Customers and Long-Lived Assets          
Total revenues 10,656 $ 2,547 22,020 $ 5,507  
Long lived assets $ 4,574   $ 4,574   $ 1,135
v3.24.3
INCOME TAXES - Schedule of Income Before Income Tax Domestic and Foreign (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Income Tax Disclosure [Abstract]        
Domestic pre-tax book loss $ (7,136) $ (4,123) $ (23,611) $ (14,312)
Foreign pre-tax book income (expense) 5,509 870 738 7,791
Net loss before income taxes (1,627) (3,253) (22,873) (6,521)
Income tax benefit (expense) (256) (295) (1,309) (289)
Net loss before non-controlling interest $ (1,883) $ (3,548) $ (24,182) $ (6,810)
Effective tax rate (as a percent) (15.73%) (9.07%) (5.72%) (4.43%)
v3.24.3
LEASES - Narrative (Details)
Sep. 30, 2024
Lessee, Lease, Description  
Lease renewal term (in years) 5 years
Minimum  
Lessee, Lease, Description  
Remaining lease term (in years) 1 year
Maximum  
Lessee, Lease, Description  
Remaining lease term (in years) 5 years
v3.24.3
LEASES - Schedule of Components of Lease Cost (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Leases [Abstract]        
Short-term lease cost $ 228 $ 119 $ 435 $ 238
v3.24.3
LEASES - Schedule of Cash Flow Information and Non Cash Activity of Operating Leases (Details) - USD ($)
$ in Thousands
 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Non-cash activity:    
Right-of-use assets obtained in exchange for lease obligations $ 1,262 $ 856
Reduction of right-of-use assets due to MiX Combination $ (933) $ 0
v3.24.3
LEASES - Schedule of Weighted Average Remaining Lease Term and Discount Rate (Details)
Sep. 30, 2024
Leases [Abstract]  
Weighted-average remaining lease term - operating leases (in years) 3 years 3 months 10 days
Weighted-average discount rate 7.60%
v3.24.3
LEASES - Scheduled Maturities of Operating Lease Liabilities (Details)
$ in Thousands
Sep. 30, 2024
USD ($)
Leases [Abstract]  
October 2024 - March 2025 $ 2,331
2026 3,260
2027 2,012
2028 1,319
2029 1,114
Thereafter 1,420
Total lease payments 11,456
Less: Imputed interest (1,495)
Present value of lease payments $ 9,961
v3.24.3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Fair Value of Financial Instruments (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Level 3 | Carrying Amount    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis    
Loans to external parties $ 209 $ 475
Prepayment derivative 4,423 2,226
Level 3 | Fair Value    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis    
Loans to external parties 209 475
Prepayment derivative 4,423 2,226
Level 2 | Carrying Amount    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis    
Debt 146,349 115,761
Level 2 | Fair Value    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis    
Debt $ 150,420 $ 116,278
v3.24.3
COMMITMENTS AND CONTINGENCIES (Details) - USD ($)
$ in Thousands
 1 Months Ended 6 Months Ended
Aug. 14, 2018
Aug. 31, 2014
Sep. 30, 2024
Mar. 31, 2024
Loss Contingencies [Line Items]        
Damages sought value $ 204      
Maximum | Amended Network Service Agreement with MTN        
Loss Contingencies [Line Items]        
Estimate of possible loss     $ 791 $ 841
Pointer do Brasil Comercial Ltda        
Loss Contingencies [Line Items]        
Interest   $ 195    
Penalty   $ 1,055    
Total interest and penalty     1,250 $ 1,347
Loss contingency damages sought value     $ 11,770  
v3.24.3
SUBSEQUENT EVENTS (Details) - USD ($)
Oct. 01, 2024
Sep. 30, 2024
Sep. 27, 2024
Sep. 18, 2024
New RMB Term Facility        
Subsequent Event        
Refinancing fee prepayment, minimum amount     $ 5,000,000  
Refinancing fee prepayment, integral multiples amount     $ 1,000,000  
Interest rate     5.00%  
Interest rate, default interest rate     7.00%  
Period One | New RMB Term Facility        
Subsequent Event        
Refinancing fee payment, percentage     2.00%  
Period Two | New RMB Term Facility        
Subsequent Event        
Refinancing fee payment, percentage     1.00%  
Period Three | New RMB Term Facility        
Subsequent Event        
Refinancing fee payment, percentage     0.00%  
Private Placement        
Subsequent Event        
Escrow deposit       $ 61,850,000
Sale of stock, consideration received per transaction   $ 62,000,000    
RMB Term Facility        
Subsequent Event        
Aggregate principal amount     $ 125,000,000  
Subsequent Event        
Subsequent Event        
Escrow deposit $ 3,850,000      
Subsequent Event | New RMB Term Facility        
Subsequent Event        
Payment for non-refundable deal structuring fee 1,250,000      
Subsequent Event | Private Placement        
Subsequent Event        
Sale of stock, remaining cost to issue common stock received on transaction 8,000,000      
Subsequent Event | RMB Term Facility        
Subsequent Event        
Proceeds from issuance of long-term debt 125,000,000      
Fleet Complete | Subsequent Event        
Subsequent Event        
Total fair value of preliminary consideration 200,000,000      
Business acquisition, equity interest issued or issuable, purchase price $ 15,000,000      
Shares of Powerfleet common stock to be issued for MiX Telematics ordinary shares outstanding (in shares) 4,285,714      
Business acquisition, cash portion purchase price $ 60,000,000      
Sale of stock, working capital $ 10,000,000      
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