Business

Powerfleet Inc. Announces Restatement of Financial Reports Due to Accounting Adjustments

WOODCLIFF LAKE, N.J., April 5, 2024 /PRNewswire/ -- Powerfleet, Inc. (Nasdaq: PWFL), a renowned global leader in the AIoT software-as-a-service (SaaS) mobile asset management industry, has made a pivotal announcement today. The company has revealed that it is set to alter the historical accounting treatment concerning the redemption premium of its Series A convertible preferred stock. This amendment follows the full redemption of said stock, which was tied to the completion of Powerfleet's business merger with MiX Telematics Limited earlier this month, on April 2, 2024. This adjustment is resulting from an identified technical accounting issue and will necessitate a restatement of the financial statements for the fiscal years concluding on December 31, 2021, and 2022, in addition to each of the interim periods within the 2022 and 2023 fiscal years.

The discovery of the technical accounting issue happened during the final stage of preparation for the filing of the company's financial statements for the fiscal year that ended on December 31, 2023. Upon the subsequent evaluation, Powerfleet has ascertained the necessity of this restatement to adhere to the Generally Accepted Accounting Principles (GAAP). This calculated move, including voluntary revisions of the company's financial statements for the same intervals to correct unrelated and insignificant revisions, comes as part of a comprehensive scrutiny by Powerfleet’s management and the audit committee.

In a committed effort to conclude the restatement endeavor promptly and effectively, Powerfleet is actively working to finalize the process. The organization is dedicated to finalizing this task as swiftly and reasonably as possible. Given Powerfleet's robust position, stakeholders can expect the filing of the 2023 Form 10-K with the Securities and Exchange Commission to happen in April 2024.

Detailed Restatement Particulars

The adjustments to how the preferred stock accounting is handled will lead to several financial adjustments, including a non-cash charge that will affect the "Net loss attributable to common stockholders." Furthermore, there will be an increase in the "Convertible redeemable preferred stock" alongside a decrease in the "Additional paid-in capital" on the company’s balance sheet.

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Despite the changes in accounting practices, Powerfleet does not foresee any adverse effects affecting the prior statements of operations, cash flows, and adjusted EBITDA. The aforementioned modifications in the financial documentation of preferred stock are not anticipated to impact previously reported revenues, net losses, cash flows, or adjusted EBITDA for the fiscal years ended December 31, 2021, 2022, and 2023, along with the interim periods within the 2022 and 2023 fiscal years.

However, resultant from the restatement, Powerfleet did encounter a delay in filing its Annual Report on Form 10-K for the fiscal year that concluded on December 31, 2023, known as the "2023 Form 10-K." Consequently, the company received formal notification from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq"). The correspondence informed Powerfleet of the company's non-compliance with the timely filing requirements mandated by Nasdaq Listing Rule 5250(c)(1). As per the guidelines of Nasdaq rules, Powerfleet is allocated a 60-day window, commencing from the notice date, to present a compliance reinstatement plan that aligns with Nasdaq Listing Rule 5250(c)(1).

During this 60-day grace period, Powerfleet's common stock will continue its listing and trading on The Nasdaq Global Market, provided it adheres to other continued listing requirements specified by The Nasdaq Global Market.

Powerfleet at the Forefront of AIoT Innovations

Powerfleet stands at the helm of the AIoT SaaS mobile asset industry with more than three decades of cutting-edge experience. The company's overarching mission is to deliver unique business insights through advanced data parsing, regardless of the data’s origin. By orchestrating a harmonious integration of diverse data sets, Powerfleet equips corporate entities with invaluable knowledge, enabling them to save lives, time, and crucially, financial resources.

The company is not just renowned for its technology and innovation within the data ecosystem, but also for its people-centric approach. By empowering customers with knowledge and tools for sustained business improvement, Powerfleet transcends in its service to the industry. Based in New Jersey, United States, Powerfleet maintains a significant global presence with offices spread across the world. For more information, interested parties can visit Powerfleet's website.

Forward-Looking Statements: A Caution

This press release encapsulates forward-looking statements under federal securities laws. All statements, other than historical facts, should be treated as forward-looking statements. These include projections about the timely filing of the 2023 Form 10-K, detailing of the accounting restatement, and the anticipated impact on past financial outcomes. Powerfleet's management extends these forward-looking statements based on the current state of affairs, bearing no promises or guarantees, and recommends regard for risks periodically reported in Powerfleet's SEC filings. The company expressly clarifies that these forward-looking statements are valid as of the release date, and unless bound by law, Powerfleet has no obligation to refresh these statements in light of new information or future events.

Powerfleet Investor and Media Relations

For investor-related inquiries, the company has indicated the contacts as follows: Jody Burfening and Carolyn Capaccio at LHA Investor Relations. Stakeholders can communicate with the investor relations team via email at [email protected].

For media-related queries, Andrea Hayton is nominated as the contact person. Media representatives can reach out to Hayton at [email protected] or call +1 (610) 401-1999 for further information.

In conclusion, Powerfleet's announcement reflects its commitment to transparency and compliance with accounting principles. The prompt actions taken demonstrate the company's dedication to maintain trust with its shareholders, customers, and the larger market.

For further updates and information regarding the restatement process or any other corporate news, you can refer to Powerfleet's official documents and announcements. Visit Powerfleet Homepage for more details and stay informed about the company’s progression toward resolving the restatement.

In Closing

Powerfleet’s restatement initiative is indeed an instance that underscores the importance of diligent financial compliance within the corporate world. While accounting adjustments such as these could be perceived complex, they are essential for upholding the integrity of financial reporting. Powerfleet is moving forward with adept handling of this technical accounting revision, all set to proceed with its mission of innovation and customer-centric service delivery in the AIoT domain.

The news article concludes here, giving its readers a thorough understanding of Powerfleet, Inc.'s recent financial adjustments and its unwavering commitment to excellence and adherence to GAAP. With solid plans to address the situation at hand, Powerfleet reinforces its position as a leader in providing AIoT solutions and ensuring fiscal responsibility for long-term success.