Core Insights - Powerfleet, Inc. is a global leader in the AIoT SaaS mobile asset industry, focusing on driving business change and digital transformation for its customers [1][2] Company Overview - Powerfleet has over 30 years of experience in unifying business operations through data ingestion, harmonization, and integration, providing actionable insights to save lives, time, and money [2] - The company is headquartered in New Jersey, United States, and has a global presence with offices around the world [2] Upcoming Events - Powerfleet management is scheduled to present at the 21st Annual Craig-Hallum Institutional Investor Conference on May 29th and the William Blair Growth Stock Conference on June 4th at 2:00 PM CT [3]

Core Viewpoint - PowerFleet, Inc. is under investigation for potential securities fraud and unlawful business practices following its failure to timely file its Annual Report for the fiscal year ended December 31, 2023, and the need to restate previous financial statements [1][2]. Financial Reporting Issues - PowerFleet disclosed that its previously released financial statements for the fiscal years ended December 31, 2021, and 2022, as well as interim periods during 2022 and 2023, should no longer be relied upon and will be restated [2]. - The company indicated that the accounting treatment related to the redemption premium of its Series A convertible preferred stock required correction, leading to an increase in net loss attributable to common stockholders by approximately $5 million, $6 million, and $5 million for the fiscal years ended December 31, 2021, 2022, and the nine months ended September 30, 2023, respectively [3]. - Additionally, increases in convertible redeemable preferred stock are expected to be approximately $11 million, $16 million, and $21 million as of December 31, 2021, 2022, and September 30, 2023, respectively, along with corresponding decreases in additional paid-in capital [3]. Market Reaction - Following the announcement of these issues, PowerFleet's stock price fell by $0.31 per share, or 6.54%, closing at $4.43 per share on April 8, 2024 [4].

Core Insights - Powerfleet, Inc. announced the winners of its first-ever Customer Awards at the Heartbeat annual customer conference, recognizing innovation and business transformation in AIoT solutions [1][2] - The conference emphasized the importance of customer insights in enhancing mission-critical solutions and customer experience, particularly following the merger with MiX Telematics [2] Awards Summary - The Customer Awards were given in four categories: Safety, Sustainability, AIoT Innovator, and Overall Excellence [3] - Nucor received the Safety First Award for its commitment to safety metrics and culture [3] - Cardiff Bus was awarded the Green Award for achieving fleet sustainability and zero emissions through Powerfleet technology [3] - IMC Companies won the AIoT Innovator Award for effectively using Powerfleet Unity data insights to improve operations and reduce inefficiencies [3] - Walmart was recognized with the Excellence Award for its integration and utilization of Powerfleet solutions in its complex supply chain [3] Company Overview - Powerfleet is a global leader in AIoT software-as-a-service (SaaS) for mobile asset management, with over 30 years of experience [5] - The company focuses on unifying business operations through data integration and actionable insights, aiming to save lives, time, and money [5] - Powerfleet is headquartered in New Jersey, with a global presence [5]

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on PowerFleet (PWFL), and emphasizes the importance of using these recommendations in conjunction with other analytical tools like Zacks Rank for making informed investment decisions [1][4][6]. Brokerage Recommendations - PowerFleet has an average brokerage recommendation (ABR) of 1.13, indicating a consensus between Strong Buy and Buy, with 87.5% of recommendations being Strong Buy and 12.5% being Buy [2][4]. - The article highlights that brokerage analysts tend to exhibit a strong positive bias in their ratings, often issuing five "Strong Buy" recommendations for every "Strong Sell" [5][9]. Zacks Rank Comparison - Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, with a strong correlation to near-term stock price movements, contrasting with the ABR which is based solely on brokerage recommendations [7][10]. - The Zacks Rank for PowerFleet is 2 (Buy), reflecting a significant increase of 170.6% in the Zacks Consensus Estimate for the current year, indicating strong analyst optimism [13][14]. Timeliness and Freshness - The Zacks Rank is noted for its timeliness, as it quickly reflects changes in earnings estimates, unlike the ABR which may not be up-to-date [12].

Group 1 - PowerFleet (PWFL) is a notable stock in the Transportation sector, currently outperforming its peers with a year-to-date return of 60.2% compared to the sector average of 0.3% [4] - The Zacks Rank for PowerFleet is 2 (Buy), indicating a positive outlook based on earnings estimates and revisions, with a 300% increase in the consensus estimate for full-year earnings over the past quarter [3] - PowerFleet belongs to the Transportation - Services industry, which has an average loss of 5.8% this year, further highlighting its strong performance relative to its industry [5] Group 2 - Tsakos Energy (TNP) is another Transportation stock that has shown strong performance, with a year-to-date return of 30.1% and a Zacks Rank of 1 (Strong Buy) [4][5] - The Transportation group is ranked 12 within the Zacks Sector Rank, which includes 16 different groups [2] - The Transportation - Shipping industry, where Tsakos Energy operates, has seen a 17.5% increase since the beginning of the year, indicating a positive trend within that segment [6]

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K For the fiscal year ended December 31, 2023. ☐ 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) (State or other jurisdiction of (IRS Em ...

PowerFleet, Inc. (NASDAQ:PWFL) Q4 2023 Earnings Conference Call March 12, 2024 8:30 AM ET Company Participants Steve Towe - CEO David Wilson - CFO Conference Call Participants Scott Searle - ROTH MKM Mike Walkley - Canaccord Genuity Jaeson Schmidt - Lake Street Capital Markets Gary Prestopino - Barrington Research Matt Pfau - William Blair Operator Good morning. Welcome to PowerFleet's Fourth Quarter and Full-Year 2023 Conference Call. Joining us for today's presentation are the company's CEO, Steve Towe, a ...

Exhibit 10.1 EXECUTION FACILITIES AGREEMENT DATED 7 MARCH, 2024 USD85,000,000 TERM LOAN FACILITIES for POWERFLEET, INC arranged by FIRSTRAND BANK LIMITED (ACTING THROUGH ITS RAND MERCHANT BANK DIVISION) (as mandated lead arranger) CONTENTS | Clause | | Page | | --- | --- | --- | | 1. | Definitions and Interpretation | 1 | | 2. | The Facilities | 25 | | 3. | Purpose | 26 | | 4. | Conditions of Utilisation | 26 | | 5. | Utilisation | 28 | | 6. | Repayment | 29 | | 7. | Extension of Final Maturity Date | 29 | ...

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) PowerFleet's unaudited condensed consolidated financial statements for Q3 2023 detail financial position, performance, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) PowerFleet's balance sheet as of September 30, 2023, shows slight decreases in total assets and equity, with cash increasing Condensed Balance Sheet Summary (in thousands) | Account | Dec 31, 2022 | Sep 30, 2023 (Unaudited) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $17,680 | $19,297 | | Total current assets | $81,225 | $83,180 | | Goodwill | $83,487 | $83,487 | | Total assets | $217,435 | $216,106 | | **Liabilities & Equity** | | | | Total current liabilities | $45,714 | $48,633 | | Total liabilities | $77,055 | $76,543 | | Total stockholders' equity | $82,815 | $80,387 | | Total liabilities and stockholders' equity | $217,435 | $216,106 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2023 operations show flat revenues and a wider net loss, with a nine-month bargain purchase gain reducing the overall net loss Q3 Statement of Operations Highlights (in thousands, except per share data) | Metric | Q3 2022 | Q3 2023 | | :--- | :--- | :--- | | Total revenues | $34,288 | $34,195 | | Gross profit | $17,181 | $17,115 | | Loss from operations | $(1,218) | $(3,257) | | Net loss | $(2,300) | $(3,674) | | Net loss attributable to common stockholders | $(3,535) | $(4,969) | | Net loss per share - basic & diluted | $(0.10) | $(0.14) | Nine Months Ended Sep 30 Statement of Operations Highlights (in thousands) | Metric | 2022 | 2023 | | :--- | :--- | :--- | | Total revenues | $102,043 | $99,084 | | Gross profit | $47,810 | $49,767 | | Loss from operations | $(6,548) | $(8,281) | | Gain on bargain purchase - Movingdots | - | $7,517 | | Net loss | $(5,347) | $(1,882) | | Net loss attributable to common stockholders | $(8,994) | $(5,749) | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Nine-month cash flows show improved operating cash usage, positive investing cash from Movingdots acquisition, and increased financing cash usage Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2022 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,714) | $(232) | | Net cash (used in) provided by investing activities | $(4,001) | $3,269 | | Net cash used in financing activities | $(523) | $(1,349) | | **Net (decrease) increase in cash** | **$(9,748)** | **$1,618** | - The primary driver for positive cash flow from investing activities was the **$8.7 million** in cash assumed from the Movingdots acquisition[24](index=24&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the Movingdots acquisition gain, revenue recognition, debt, and the subsequent agreement to acquire MiX Telematics - On March 31, 2023, the Company acquired Movingdots GmbH. The fair value of identifiable net assets acquired (**$8.86 million**) exceeded the purchase consideration (**$1.35 million**), resulting in a gain on bargain purchase of approximately **$7.5 million**[41](index=41&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - On October 10, 2023, the Company entered into an agreement to acquire MiX Telematics Limited, which will become an indirect, wholly-owned subsidiary, with the transaction expected to close in the first quarter of 2024[138](index=138&type=chunk)[149](index=149&type=chunk) - The company has incurred recurring losses and had an accumulated deficit of **$143.3 million** as of September 30, 2023, though management believes current cash and future cash generation are sufficient to fund operations for at least the next 12 months[37](index=37&type=chunk)[39](index=39&type=chunk) Revenue by Source (in thousands) | Revenue Source | Q3 2022 | Q3 2023 | Nine Months 2022 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Products | $14,021 | $13,147 | $43,231 | $36,563 | | Services | $20,267 | $21,048 | $58,812 | $62,521 | | **Total** | **$34,288** | **$34,195** | **$102,043** | **$99,084** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A discusses flat Q3 revenues, increased net loss from SG&A, sufficient liquidity, and the Movingdots acquisition with the pending MiX Telematics deal [Results of Operations](index=49&type=section&id=Results%20of%20Operations) Q3 2023 operations show a slight revenue decrease, with product sales down and service revenue up, leading to a wider net loss from increased SG&A - Q3 2023 product revenue decreased by **$0.9 million (6.2%)** primarily due to reduced sales in Germany and Israel, reflecting strategic business decisions and geopolitical factors[195](index=195&type=chunk) - Q3 2023 service revenue increased by **$0.8 million (3.8%)** due to growth in the installed base generating recurring revenue[196](index=196&type=chunk) - Q3 2023 SG&A expenses rose by **$1.3 million (7.9%)**, driven by **$1.2 million** in transaction costs for the MiX Telematics deal and **$0.7 million** in expenses from the newly acquired Movingdots[200](index=200&type=chunk) - For the nine months ended Sep 30, 2023, net loss attributable to common stockholders decreased to **$5.7 million** from **$9.0 million** in the prior year, primarily due to the gain on bargain purchase for Movingdots and lower interest expense[212](index=212&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2023, the company had **$19.6 million** in cash and **$34.5 million** in working capital, with sufficient liquidity for 12 months and a new **$30 million** debt facility approved - As of September 30, 2023, the company had cash and cash equivalents of **$19.6 million** and working capital of **$34.5 million**[213](index=213&type=chunk)[224](index=224&type=chunk) - The company has received credit committee approval from its existing lender, Hapoalim, for a new 5-year term debt facility of approximately **$30 million**[188](index=188&type=chunk)[228](index=228&type=chunk) - The pending acquisition of MiX Telematics requires the company to obtain financing to redeem all outstanding Series A Convertible Preferred Stock[186](index=186&type=chunk)[226](index=226&type=chunk) - Management believes current cash and projected cash from operations are sufficient to fund the company for at least the next 12 months from the report's issuance date[189](index=189&type=chunk)[229](index=229&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable for the period, indicating no material changes to market risk exposures since the last annual report - The company has indicated that there are no applicable quantitative and qualitative disclosures about market risk for this period[245](index=245&type=chunk) [Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Internal control over financial reporting was ineffective as of December 31, 2022, due to material weaknesses in revenue allocation, software capitalization, and financial close processes - Management concluded that internal control over financial reporting was not effective as of December 31, 2022, and these weaknesses have not been remediated as of September 30, 2023[247](index=247&type=chunk) - Material weaknesses were identified in three areas: determining standalone selling prices (SSP) for revenue allocation, capitalizing costs for internal-use software, and controls over the financial statement close process[248](index=248&type=chunk)[249](index=249&type=chunk) - Remediation steps include implementing a new ERP system, utilizing external resources, enhancing documentation for management review, and training personnel[250](index=250&type=chunk)[254](index=254&type=chunk) [PART II - OTHER INFORMATION](index=59&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company faces various litigation, including two Brazilian tax disputes with potential exposures of **$1.3 million** and **$12.9 million**, where a loss is not probable - The company is defending a tax assessment in Brazil from August 2014 regarding VAT tax, with a total potential exposure of **$1.33 million** as of September 30, 2023, where legal counsel believes a loss is not probable[133](index=133&type=chunk) - A second tax dispute in Brazil from July 2015 alleges services should be classified as "telecommunication services," with an initial claim of approximately **$12.9 million**, which a favorable lower court ruling reduced to **$218,000**, now under appeal by the state, and counsel believes a loss is not probable[134](index=134&type=chunk) [Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors highlight potential adverse effects from the political, military, and economic conditions in Israel, including reservist call-ups and operational disruptions - A new risk factor has been added concerning the company's operations in Israel due to the political, military, and economic conditions, specifically citing the conflict that began on October 7, 2023[257](index=257&type=chunk)[258](index=258&type=chunk) - The conflict has resulted in the call-up of Israeli employees to active military duty, which could impact operations, alongside risks of damage to facilities or disruption to supply chains and trade[258](index=258&type=chunk)[259](index=259&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q3 2023, the company withheld **32,000** common shares to satisfy tax obligations for restricted stock vesting, not part of a repurchase plan Issuer Purchases of Equity Securities (Q3 2023) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2023 | 30,000 | $2.74 | | August 2023 | 1,000 | $2.30 | | September 2023 | 1,000 | $2.34 | | **Total** | **32,000** | **$2.71** | - The shares were withheld to satisfy minimum tax withholding obligations in connection with the vesting of restricted stock and were not part of a publicly announced repurchase program[262](index=262&type=chunk)[263](index=263&type=chunk) [Exhibits](index=61&type=section&id=Item%206.%20Exhibits) Exhibits include amendments to the 2018 Incentive Plan and a severance agreement, CEO/CFO certifications, and Inline XBRL financial statements - Filed exhibits include certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[265](index=265&type=chunk) - An amendment to the Severance Agreement with CEO Steve Towe and an amendment to the 2018 Incentive Plan are included as exhibits[265](index=265&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q3 2023 was $34.2 million, in line with the previous year, with a sequential increase of 7% [47] - Product revenue increased by 19% quarter-over-quarter, while service revenue grew by 11% year-over-year on a constant currency basis [31][47] - Adjusted EBITDA increased threefold to $2 million, reflecting successful cost management and investment in engineering talent [31][50] Business Line Data and Key Metrics Changes - Product gross margin improved from 22% to over 30%, indicating a shift towards higher-margin products [48] - Service gross margin was 61%, with adjustments for out-of-period expenses bringing it in line with the previous year's 64% [49] Market Data and Key Metrics Changes - North America remains the primary focus, showing strong pipeline growth and customer acquisition [79] - The Israeli market is facing temporary demand fluctuations due to ongoing conflict, but over 80% of its revenue is recurring subscription-based [51][62] Company Strategy and Development Direction - The combination with MiX is expected to increase annual revenues from $135 million to $280 million and adjusted EBITDA from $7 million to $39 million [20] - The company aims to position itself among the top global players in the industry, focusing on scale, technology, and financial performance [19][66] Management's Comments on Operating Environment and Future Outlook - Management acknowledges macroeconomic challenges, particularly in Israel, but remains confident in the recurring nature of its revenue streams [51][62] - The Unity platform is expected to drive new business and enhance customer retention through improved data integration and insights [87][99] Other Important Information - The company is implementing a global ERP system to improve operational efficiency and reporting capabilities [44][46] - The recent acquisition of Movingdots is seen as a strategic move to enhance technological capabilities in the AI space [22] Q&A Session Summary Question: Clarification on transformation costs and ERP systems - Management confirmed $1.4 million in one-time costs related to the MiX transaction and ongoing rationalization efforts [68] Question: Trends in pricing and competition - Management noted competitive pressures but emphasized their focus on maintaining pricing power through differentiated offerings [75][78] Question: Insights on the pipeline and regional performance - North America is showing strong pipeline growth, while Israel's B2B space remains robust despite short-term headwinds [79][80] Question: Adoption of the Unity platform - The Unity platform is facilitating new business wins and enhancing customer experience through integrated data solutions [86][99] Question: Performance across market segments - Safety solutions are gaining traction, particularly in warehouse and transportation sectors, with strong pipelines for Q4 [88][100]