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.

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 outstanding of the registrant’s common stock as of December ~~16, 2019~~10, 2020 was ~~34,158,785.~~35,034,722.

	November 30,			February 28,			November 30,			February 29,
Assets	2019			2019			2020			2020
Current assets:
Cash and cash equivalents	$	101,634		$	256,500		$	91,692		$	107,404
Short-term marketable securities		1,926			17,512
Accounts receivable, net		83,462			78,079			67,852			72,273
Inventories		44,035			32,033			32,162			36,778
Prepaid expenses and other current assets		22,196			19,373			23,520			21,411
Total current assets		253,253			403,497			215,226			237,866
Property and equipment, net		57,127			27,023			44,576			55,878
Operating lease right-of-use assets		24,108			-			17,653			20,626
Deferred income tax assets		30,372			22,626			4,441			4,437
Goodwill		105,584			80,805			94,468			106,335
Other intangible assets, net		66,501			47,165			38,943			45,895
Other assets		25,466			22,510			26,516			24,768
	$	562,411		$	603,626		$	441,823		$	495,805
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	32,955		$	-		$	4,790		$	33,119
Accounts payable		36,993			39,898			36,834			28,450
Accrued payroll and employee benefits		9,707			8,808			8,641			9,049
Deferred revenue		34,939			24,264			36,003			34,704
Other current liabilities		15,237			10,622			21,116			16,153
Total current liabilities		129,831			83,592			107,384			121,475
Long-term debt, net of current portion		176,378			275,905			180,646			177,088
Operating lease liabilities		27,090			-			19,217			24,279
Other non-current liabilities		38,459			38,476			35,258			35,044
Total liabilities		371,758			397,973			342,505			357,886
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; 3,000 shares authorized; no shares issued or outstanding		—			—
Common stock, $.01 par value; 80,000 shares authorized; 34,153 and 33,555 shares issued and outstanding at November 30, 2019 and February 28, 2019, respectively		342			336
Preferred stock, $.01 par value; 3,000 shares authorized; 0 shares issued or outstanding								—			—
Common stock, $.01 par value; 80,000 shares authorized; 35,035 and 34,322 shares issued and outstanding at November 30, 2020 and February 29, 2020, respectively								350			343
Additional paid-in capital		216,798			208,205			229,326			220,482
Accumulated deficit		(25,704	)		(2,227	)		(129,245	)		(81,531	)
Accumulated other comprehensive loss		(783	)		(661	)		(1,113	)		(1,375	)
Total stockholders' equity		190,653			205,653			99,318			137,919
	$	562,411		$	603,626		$	441,823		$	495,805

	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	November 30,						November 30,						November 30,						November 30,
	2019			2018			2019			2018			2020			2019			2020			2019
Revenues:
Products	$	63,192		$	67,571		$	188,782		$	221,461		$	58,327		$	65,930		$	162,376		$	195,867
Application subscriptions and related products and service		33,405			20,924			90,121			57,959
Application subscriptions and other services														29,685			30,667			89,388			83,036
Total revenues		96,597			88,495			278,903			279,420			88,012			96,597			251,764			278,903
Cost of revenues:
Products		42,225			41,397			118,494			134,795			37,773			43,569			110,561			121,659
Application subscriptions and related products and service		17,488			10,717			50,444			30,332
Application subscriptions and other services														15,234			16,144			44,335			47,279
Total cost of revenues		59,713			52,114			168,938			165,127			53,007			59,713			154,896			168,938
Gross profit		36,884			36,381			109,965			114,293			35,005			36,884			96,868			109,965
Operating expenses:
Research and development		7,742			7,177			22,552			21,377			6,783			7,742			20,096			22,552
Selling and marketing		14,683			12,746			45,198			37,766			14,647			14,683			41,026			45,198
General and administrative		14,283			11,719			44,660			37,146			13,642			14,283			41,210			44,660
Intangible asset amortization														1,855			3,325			5,591			9,683
Restructuring		848			1,247			3,120			5,196			92			848			2,551			3,120
Intangible asset amortization		3,325			2,893			9,683			8,534
Impairment loss														17,999			—			22,574			—
Total operating expenses		40,881			35,782			125,213			110,019			55,018			40,881			133,048			125,213
Operating income (loss)		(3,997	)		599			(15,248	)		4,274
Operating loss														(20,013	)		(3,997	)		(36,180	)		(15,248	)
Non-operating income (expense):
Investment income		1,108			1,398			4,445			3,258			584			1,108			1,282			4,445
Interest expense		(4,987	)		(5,134	)		(15,998	)		(11,566	)		(3,880	)		(4,987	)		(11,814	)		(15,998	)
Gain on legal settlement		—			2,500			—			15,833
Loss on extinguishment of debt (see Note 7)		(2,408	)		—			(2,408	)		(2,033	)
Loss on extinguishment of debt														—			(2,408	)		—			(2,408	)
Other income (expense)		232			(218	)		26			(721	)		(52	)		232			(43	)		26
Total non-operating income (expense)		(6,055	)		(1,454	)		(13,935	)		4,771
Income (loss) before income taxes and impairment loss and equity in net loss of affiliate		(10,052	)		(855	)		(29,183	)		9,045
Total non-operating expense														(3,348	)		(6,055	)		(10,575	)		(13,935	)
Loss before income taxes and impairment loss in investment of affiliate														(23,361	)		(10,052	)		(46,755	)		(29,183	)
Income tax benefit (provision)		2,637			778			6,236			(496	)		(319	)		2,637			(825	)		6,236
Income (loss) before impairment loss and equity in net loss of affiliate		(7,415	)		(77	)		(22,947	)		8,549
Impairment loss and equity in net loss of affiliate		—			(445	)		(530	)		(1,414	)
Net income (loss)	$	(7,415	)	$	(522	)	$	(23,477	)	$	7,135
Earnings (loss) per share:
Loss before impairment loss in investment of affiliate														(23,680	)		(7,415	)		(47,580	)		(22,947	)
Impairment loss in investment of affiliate														—			—			—			(530	)
Net loss													$	(23,680	)	$	(7,415	)	$	(47,580	)	$	(23,477	)
Loss per share:
Basic	$	(0.22	)	$	(0.02	)	$	(0.70	)	$	0.20		$	(0.68	)	$	(0.22	)	$	(1.39	)	$	(0.70	)
Diluted	$	(0.22	)	$	(0.02	)	$	(0.70	)	$	0.20		$	(0.68	)	$	(0.22	)	$	(1.39	)	$	(0.70	)
Shares used in computing earnings (loss) per share:
Shares used in computing loss per share:
Basic		33,822			34,561			33,589			34,950			34,599			33,822			34,292			33,589
Diluted		33,822			34,561			33,589			35,769			34,599			33,822			34,292			33,589
Comprehensive income (loss):
Net income (loss)	$	(7,415	)	$	(522	)	$	(23,477	)	$	7,135
Net loss													$	(23,680	)	$	(7,415	)	$	(47,580	)	$	(23,477	)
Other comprehensive income (loss):
Foreign currency translation adjustments		1,165			(29	)		(122	)		(12	)		1,062			1,165			262			(122	)
Total comprehensive income (loss)	$	(6,250	)	$	(551	)	$	(23,599	)	$	7,123
Total comprehensive loss													$	(22,618	)	$	(6,250	)	$	(47,318	)	$	(23,599	)

	Nine Months Ended						Nine Months Ended
	November 30,						November 30,
	2019			2018			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(23,477	)	$	7,135
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net loss							$	(47,580	)	$	(23,477	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation expense		14,054			6,602			15,008			14,054
Intangible asset amortization expense		9,683			8,534			5,591			9,683
Stock-based compensation expense		9,378			8,088			9,499			9,378
Amortization of discount and debt issuance costs		11,031			7,999			7,712			11,031
Impairment loss								22,574			—
Impairment of operating lease right-of-use (ROU) assets		1,210			—			—			1,210
Noncash operating lease cost		3,440			—			3,943			3,440
Loss on extinguishment of debt		2,408			2,033			—			2,408
Revenue assigned to factors		(5,016	)		—			(4,864	)		(5,016	)
Deferred tax assets, net		(5,701	)		(716	)		372			(5,701	)
Impairment loss and equity in net loss of affiliate		530			1,414
Tax benefits on vested and exercised equity awards		—			591
Other		812			691			397			1,342
Changes in operating assets and liabilities:
Accounts receivable		(1,145	)		(1,005	)		4,772			(1,145	)
Inventories		(5,747	)		4,454			4,919			(5,747	)
Prepaid expenses and other assets		(1,853	)		(5,222	)		(4,427	)		(1,853	)
Accounts payable		(7,652	)		(3,826	)		7,514			(7,652	)
Accrued liabilities		(1,805	)		6,716			5,778			(1,805	)
Deferred revenue		3,797			4,605			(2,323	)		3,797
Operating lease liabilities		(644	)		—			(4,542	)		(644	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		3,303			48,093			24,343			3,303
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of marketable securities		35,129			36,461			6,264			35,129
Purchases of marketable securities		(19,543	)		(43,103	)		(6,264	)		(19,543	)
Capital expenditures		(17,637	)		(8,884	)		(11,090	)		(17,637	)
Acquisitions, net of cash acquired		(60,634	)		—			—			(60,634	)
Advances to affiliate		(530	)		(1,519	)
Other		901			(103	)		—			371
NET CASH USED IN INVESTING ACTIVITIES		(62,314	)		(17,148	)		(11,090	)		(62,314	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of 2025 Convertible Notes		—			230,000
Payment of debt issuance costs of 2025 Convertible Notes		—			(7,305	)
Purchase of capped call on 2025 Convertible Notes		—			(21,160	)
Proceeds from Paycheck Protection Program Loan								10,000			—
Repayment of Paycheck Protection Program Loan								(10,000	)		—
Proceeds from revolving credit facility, net of issuance cost								19,944			—
Repayment of 2020 Convertible Notes								(27,599	)		—
Repayment of revolving credit facility								(20,000	)		—
Repurchase of 2020 Convertible Notes		(94,683	)		(53,683	)		—			(94,683	)
Proceeds from unwind of note hedges and warrants on 2020 Convertible Notes		—			3,122
Repurchases of common stock		—			(39,000	)
Taxes paid related to net share settlement of vested equity awards		(1,827	)		(3,520	)		(1,557	)		(1,827	)
Proceeds from exercise of stock options and contributions to employee stock purchase plan (ESPP)		1,048			124
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(95,462	)		108,578
Proceeds from exercise of stock options and contributions to employee stock purchase plan								909			1,048
NET CASH USED IN FINANCING ACTIVITIES								(28,303	)		(95,462	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(393	)		(513	)		(662	)		(393	)
Net change in cash and cash equivalents		(154,866	)		139,010			(15,712	)		(154,866	)
Cash and cash equivalents at beginning of period		256,500			132,603			107,404			256,500
Cash and cash equivalents at end of period	$	101,634		$	271,613		$	91,692		$	101,634

	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	November 30,						November 30,						November 30,						November 30,
	2019			2018			2019			2018			2020			2019			2020			2019
Total stockholders' equity, beginning balances	$	193,296		$	209,736		$	205,653		$	198,916		$	118,978		$	193,296		$	137,919		$	205,653

Common stock and additional paid-in capital:
Beginning balances		213,533			223,329			208,541			218,574			226,718			213,533			220,825			208,541
Equity component of 2025 Convertible Notes, net of tax		—			—			—			51,902
Purchase of capped call on 2025 Convertible Notes, net of tax		—			—			—			(15,870	)
Debt issuance costs of 2025 Convertible Notes allocated to equity, net of tax		—			—			—			(1,649	)
Equity component of the repurchased 2020 Convertible Notes		—			—			—			(6,088	)
Unwind of note hedges and warrants of 2020 Convertible Notes		—			—			—			3,122
Stock-based compensation expense		3,652			2,941			9,378			8,088			3,030			3,652			9,499			9,378
Shares issued on net share settlement of equity awards		(98	)		(174	)		(1,827	)		(3,520	)		(72	)		(98	)		(1,557	)		(1,827	)
Exercise of stock options and contributions to ESPP		53			23			1,048			124			-			53			909			1,048
Repurchases of common stock		—			(10,436	)		—			(39,000	)
Ending balances		217,140			215,683			217,140			215,683			229,676			217,140			229,676			217,140

Accumulated deficit:
Beginning balances		(18,289	)		(12,963	)		(2,227	)		(19,459	)		(105,565	)		(18,289	)		(81,531	)		(2,227	)
Cumulative adjustment upon adoption of ASU 2016-01, net of tax		—			—			—			434
Cumulative adjustment upon adoption of ASC 606, net of tax		—			—			—			(1,595	)
Net income (loss)		(7,415	)		(522	)		(23,477	)		7,135
Cumulative effect of adoption of ASC 326														—			—			(134	)		—
Net loss														(23,680	)		(7,415	)		(47,580	)		(23,477	)
Ending balances		(25,704	)		(13,485	)		(25,704	)		(13,485	)		(129,245	)		(25,704	)		(129,245	)		(25,704	)

Accumulated other comprehensive income/(loss):
Accumulated other comprehensive income:
Beginning balances		(1,948	)		(630	)		(661	)		(199	)		(2,175	)		(1,948	)		(1,375	)		(661	)
Cumulative adjustment upon adoption of ASU 2016-01, net of tax		—			—			—			(434	)
Other comprehensive income (loss), net of tax		1,165			(15	)		(122	)		(12	)
Foreign currency translation adjustment														1,062			1,165			262			(122	)
Ending balances		(783	)		(645	)		(783	)		(645	)		(1,113	)		(783	)		(1,113	)		(783	)

Total stockholders' equity, ending balances	$	190,653		$	201,553		$	190,653		$	201,553		$	99,318		$	190,653		$	99,318		$	190,653


See accompanying notes to condensed consolidated financial statements.	See accompanying notes to condensed consolidated financial statements.												See accompanying notes to condensed consolidated financial statements.

NOTE 1 - DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CalAmp Corp. (referred to herein as “CalAmp”, “the Company”, “we”, “our”, or “us”) is a global ~~telematics~~technology solutions pioneer leading transformation into a mobile connected economy. We help reinvent businesses and improve lives around the globe with technology solutions that streamline complex mobile Internet of Things (“IoT”) deployments through wireless connectivity solutions and derived data intelligence. Our software applications, scalable cloud services, and intelligent devices collect and assess business-critical data anywhere in the world from ~~mobile assets~~industrial machines, commercial and passenger vehicles, their drivers and contents. We are a global organization that is headquartered in Irvine, California. ~~We operate under two reportable segments: Telematics Systems and Software & Subscription Services.~~

In March 2020, the World Health Organization declared the spread of ~~Tracker Network (UK) Limited (“Tracker UK”),~~COVID-19 as a ~~LoJack licensee and a market leader in~~ ~~stolen vehicle recovery~~ (“SVR”) telematics services across the United Kingdom, for a cash purchase price of $13.1 million. On March 19, 2019, we completed the acquisition of Car Track, S.A. de C.V. (“LoJack Mexico”), the exclusive licensee of LoJack technology for the Mexican market. We purchased the remaining 87.5%pandemic. The full impact of the ~~LoJack Mexico shares~~COVID-19 outbreak remains uncertain as of the time of this report given the diversity of rules and regulations in the U.S. and other countries in which we operate. The pandemic has resulted in travel restrictions, prohibitions of non-essential activities, disruption and shutdown of businesses and greater uncertainty in global financial markets. The effect of the outbreak may continue to impact our operating results depending on the severity of the pandemic and the actions taken or to be taken by governments and private businesses in relation to its containment. We cannot predict the extent to which the COVID-19 outbreak will negatively impact our business or operating results at this time.

We have considered all known and reasonably available information that existed as of November 30, 2020, in making accounting judgments, estimates and disclosures. We are monitoring the potential effects of the health care related and economic conditions of COVID-19 in assessing certain matters including (but not limited to) supply chain disruptions, decreases in customer demand for our products and services, potential longer-term effects on our customer and distribution channels particularly in the U.S. and relevant end markets as well as other developments. If the impact results in longer-term closures of businesses and economic recessionary conditions, we ~~did not own~~may recognize additional material asset impairments, charges for ~~a cash purchase price of $14.3 million. On April 12, 2019, we acquired Synovia Solutions LLC (“Synovia”), a North American market leader~~uncollectible accounts receivable in ~~fleet safety~~future periods and management for K-12 school bus and state and local government fleets for a cash purchase price of $49.8 million. Combined with the recent acquisitions of Tracker UK and LoJack Mexico, the Synovia acquisition expands our fleet management and vehicle safety services portfolio and accelerates our transformation to high-value subscription-based services. See Note 2 for a description of these acquisitions.incur additional restructuring charges.

Certain notes and other information included in the audited financial statements in our Annual Report on Form 10-K for the fiscal year ended February ~~28, 2019~~29, 2020 are condensed in or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with our ~~2019~~2020 Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission (“SEC”) on May ~~1, 2019.~~6, 2020.

In the opinion of our management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary to present fairly our financial position at November 30, ~~2019~~2020 and our results of operations for the three and nine months ended November 30, ~~2019~~2020 and ~~2018.~~2019. The results of operations for such periods are not necessarily indicative of results to be expected for the full fiscal ~~year.~~year ending February 28, 2021.

All intercompany transactions and accounts have been eliminated in consolidation.

~~Revenue Recognition~~Historically, we had 2 reportable segments, Software & Subscription Services and Telematics Systems. During the first quarter of fiscal 2021, our President and Chief Executive Officer (the “CEO”), who is our current Chief Operating Decision Maker (“CODM”), realigned our operational structure into 3 reportable segments: Software & Subscriptions Services, Telematics Products and LoJack U.S. SVR Products. We have recast certain prior period amounts to conform to the way our CODM regularly reviews segment performance.

On December 16, 2020, our Board of Directors approved a plan for management to commence with the wind down of the LoJack U.S. SVR operations. This business unit has historically provided stolen vehicle recovery (SVR) products operating on a radio frequency allocated by the FCC for domestic automotive dealerships. These products and related ~~judgments~~services have been provided predominately as a hardware-based offering that no longer aligns with our core strategy. We will continue supporting our existing customers and law enforcement partners to allow sufficient time for an orderly transition out of the business. Additionally, we will continue operating and investing in our LoJack international business which operates in a subscription-based business model and is well aligned with our core SaaS strategy.

In the fourth quarter of fiscal 2020, we determined that the prolonged secular decline in revenues from our legacy LoJack U.S. SVR products coupled with the slower than anticipated market penetration of our telematics solutions in the U.S. automotive dealership channel represented determinate indications of impairment. These factors were further exacerbated by the continuing unfavorable impact that the COVID-19 pandemic has had on the automotive end markets over the past several months. We recorded impairment losses during the fourth quarter of fiscal 2020 as well as the first quarter of fiscal 2021 related to goodwill, certain intangible assets and other long-lived assets. These impairment charges were related to our assessment of economic conditions, our expectations of future business conditions and trends, as well as our projected revenues, earnings, and cash flows.

Based upon our decision to wind down the LoJack U.S. SVR business and our current and prior quarterly impairment assessments, we recorded impairment losses as follows (in thousands):

Products. ~~In accordance with ASC 606, we~~ We recognize revenue from product and accessories sales upon transfer of control of promised products to customers in an amount that reflects the transaction price, which is generally the stand-alone selling prices of the promised goods. For product shipments made on the basis of “FOB Destination” terms, revenue is recorded when the products reach the customer. Customers generally do not have a right of return except for defective products returned during the warranty period. We record estimated commitments related to customer incentive programs as reductions of revenues.

~~Professional Services.~~ Software-as-a-Service (“SaaS”).We ~~also provide various professional services to customers. These include project management, engineering services, installation services~~recognize our SaaS revenues and ~~an on-going early warning automated notification service, which are typically distinct from other performance obligations and revenue is recognized as the~~ related ~~services are performed. For certain professional service contracts, we recognize revenue based on the proportion of total costs incurred to-date over the estimated~~ cost of ~~the contract, which is an input method.~~revenues in our Application subscriptions and other service revenues and cost of revenues on SaaS arrangements that combine various hardware devices over a stipulated service period.

~~Software-as-a-Service (“SaaS”)~~. Our integrated SaaS-based ~~subscriptions~~solutions for our ~~fleet management, vehicle finance~~tracking, monitoring and ~~certain other verticals~~recovery services provide ~~our~~ customers with the ability to wirelessly communicate with monitoring devices installed in vehicles and other mobile or remote assets through our software applications. The transaction price for a typical SaaS arrangement includes the price for the ~~hardware, accessories,~~customized device, installation and application subscriptions. ~~Generally,~~We have applied our judgment in determining that these integrated arrangements typically represent single performance obligations satisfied over time.

Accordingly, we defer the recognition of revenue for the customized devices that only function with our applications and are sold only on an integrated basis with our proprietary applicable subscriptions. Such customized devices and the application services are not sold separately. In such circumstances, the associated ~~product~~device related costs are recorded as deferred costs on the balance sheet. ~~The upfront fees for the devices are not distinct from the subscription service and are combined into the subscription service performance obligation.~~ Generally, these service arrangements do not provide the customer with the right to take possession of the software supporting the subscription service at any time. Revenues from subscription services are recognized ratably on a straight-line basis over the term of the subscription. The deferred ~~product~~ revenue and deferred ~~product~~ cost amounts are amortized to application subscriptions and ~~related products and~~other services revenue ~~along with the~~and cost of ~~revenue,~~revenues, respectively, on a straight-line basis over the estimated average in-service lives of these devices, which ~~are~~is generally three to five years ~~in the vehicle finance and four years in the fleet management verticals.~~for our services. In certain fleet management contracts, we provide devices as part of the

subscription contracts but we retain control of such devices. Under such arrangements, the cost of the devices is capitalized as property and equipment and depreciated over the estimated useful life of three to five years. The related subscription revenues of these arrangements are recognized as services are rendered. Our deferred revenue under ASC 606 also includes prepayments from our customers for various subscription services but does not include future subscription fees associated with customers’ unexercised contract renewal rights. ~~The product revenues for certain customer arrangements are included within the caption~~ ~~Application subscriptions and related products and service revenue~~ ~~in our statement of comprehensive income (loss) as the products and services are customarily part of one customer contractual arrangement.~~

In certain customer arrangements, we ~~also~~ sell devices ~~together with~~and monitoring services ~~for which~~separately to customers and sell similar devices on a stand-alone basis to licensees. Accordingly, we recognize revenues for the sales of the devices ~~are recognized~~ upon transfer of control to the customer and recognize revenue for the related monitoring services ~~are recognized~~ over the service period. The allocation of the transaction price is based on relative estimated stand-alone selling prices for the devices and the monitoring services. ~~The revenues under these arrangements~~

Professional Services. We also provide various professional services to customers. These include project management, engineering services and installation services, which are ~~also included within~~typically distinct from other performance obligations and are recognized as the ~~caption~~ ~~Application subscriptions and~~ related ~~products and~~services are performed. For certain professional service ~~revenues~~ ~~in our statement~~contracts, we recognize revenue over time based on the proportion of ~~comprehensive income (loss).~~total costs incurred to-date over the estimated cost of the contract, which is an input method.

Sales taxes. We have elected to record revenue net of taxes collected from customers that are remitted to governmental authorities, with the collected taxes recorded within the caption Other current liabilities until remitted to the relevant government authority.

Contract Balances. Timing of revenue recognition may differ from the timing on our invoicing to customers. Contract liabilities are comprised of billings to or payments received from our customers in advance of performance under the contract. We refer to these contract

liabilities as “Deferred Revenues” in the accompanying condensed consolidated financial statements. During ~~the three and nine months~~fiscal quarter ended November 30, ~~2019,~~2020, we recognized ~~$4.7 million and $18.9~~$30.7 million in revenue from the ~~beginning~~ deferred revenue balance of ~~$51.4~~$62.2 million ~~on March 1, 2019, respectively.~~as of February 29, 2020. Certain incremental costs of obtaining a contract with a customer consist of deferred costs of hardware and sales commissions. The deferred costs of hardware are capitalized and amortized over the estimated useful life of the device on a straight-line basis. Our contract assets are primarily attributed to prepaid sales commissions, which are recognized on a straight-line basis over the life of the corresponding contracts. Prepaid commissions totaled $4.5 million as of November 30, 2020, of which $2.7 million was classified as non-current.

We disaggregate revenue from contracts with customers into reportable segments, geography, type of goods and services and timing of revenue recognition. See Note 1715 for our revenue by segment and geography. The disaggregation of revenue by type of goods and services and by timing of revenue recognition, which reflect the immaterial corrections as discussed below, was as follows (in thousands):

	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	November 30,				November 30,				November 30,				November 30,
	2019		2018		2019		2018		2020		2019		2020		2019
Revenue by type of goods and services:
Telematics devices and accessories	$	66,281	$	68,417	$	200,340	$	228,698	$	58,327	$	65,930	$	162,376	$	195,867
Professional services		3,741		4,672		7,724		7,354
Rental income and other services										6,095		6,586		14,508		16,766
Recurring application subscriptions		26,575		15,406		70,839		43,368		23,590		24,081		74,880		66,270
Total	$	96,597	$	88,495	$	278,903	$	279,420	$	88,012	$	96,597	$	251,764	$	278,903

	Three Months Ended				Nine Months Ended				Three Months Ended					Nine Months Ended
	November 30,				November 30,				November 30,					November 30,
	2019		2018		2019		2018		2020			2019		2020		2019
Revenue by timing of revenue recognition:
Revenue recognized at a point in time	$	66,281	$	68,417	$	200,340	$	228,698	$	64,070		$	71,813	$	175,944	$	210,018
Revenue recognized over time		30,316		20,078		78,563		50,722		23,942			24,784		75,820		68,885
Total	$	96,597	$	88,495	$	278,903	$	279,420	$	88,012	��	$	96,597	$	251,764	$	278,903

Telematics devices and accessories presented in the table above ~~are~~include devices sold ~~on a stand-alone basis~~in customer arrangements that include both the device and ~~revenue is recognized at a point in time.~~monitoring services. Recurring application subscriptions revenues include the amortization for customized devices functional only with application subscriptions.

Remaining performance obligations represent contracted revenue that has not yet been recognized, which includes deferred revenue on our condensed consolidated balance sheets and unbilled amounts that will be recognized as revenue in future periods. As of November 30, ~~2019,~~2020 and February 29, 2020, we have estimated ~~the~~ remaining performance obligations for contractually committed revenues of ~~$64.0~~$135.1 million and $134.5 million, respectively. As of ~~which~~November 30, 2020, we expect to recognize approximately 17% in fiscal 2021 and 42% in fiscal 2022. As of ~~those revenues through the remainder of fiscal~~February 29, 2020, we expected to recognize approximately 44% in fiscal 2021 and ~~22%~~26% in fiscal 2022. We have utilized the practical expedient exception within ASC 606 and exclude contracts that have original durations of less than one year from the aforementioned remaining performance obligation disclosure.

~~The purchase price~~Revision of ~~an acquisition is allocated~~Previously Issued Condensed Consolidated Financial Statements. Subsequent to the ~~underlying assets acquired and liabilities assumed based upon their estimated fair value at the date of acquisition. To the extent the purchase price exceeds the fair value~~issuance of the ~~net identifiable tangible~~consolidated financial statements for the year ended February 29, 2020, we concluded that the presentation of revenues and ~~intangible assets acquired~~cost of revenues should be adjusted to present product and ~~liabilities assumed, such excess is allocated to goodwill. We determine~~service revenues and the ~~estimated fair values after review and consideration~~related cost of ~~relevant~~revenues for each separately in accordance with SEC Regulation S-X, Rule 5-03(b). Additionally, certain historical information ~~including discounted cash flows, quoted market prices and other estimates we made. We may refine~~in the preliminary purchase price allocation, as necessary, during the measurement period of up to one year after the acquisition closing date as we obtain more information as to facts and circumstances existing at the acquisition date impacting the asset valuations and liabilities assumed. Goodwill acquired in business combinations is assignednotes to the ~~reporting unit expected~~condensed consolidated financial statements have been revised to ~~benefit from~~reflect the ~~combination as~~impact of these corrections. We have determined that the correction of these classification errors is not material to the previously issued consolidated financial statements. The following table summarizes the impact of the ~~acquisition date. Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred.~~immaterial adjustments.

We consider all highly liquid investments with maturities at date of purchase of three months or less to be cash equivalents.

Accounts receivable consists of amounts due to us from sales arrangements executed in our normal business activities and are recorded at invoiced amounts. Our payment terms generally range between 30 to 60 days and we do not offer financing options. We present the aggregate accounts receivable balance net of an allowance for doubtful accounts. Generally, collateral and other security is not obtained for outstanding accounts receivable. Credit losses, if any, are recognized based on management’s evaluation of historical collection experience, customer-specific financial conditions as well as an evaluation of current industry trends and general economic conditions. Past due balances are assessed by management on a periodic basis and balances are written off when the customer’s financial condition no longer warrants pursuit of collection. Although we expect to collect amounts due, actual collections may differ from estimated amounts.

Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. Except for the increase in expected credit losses, we are not aware of any specific event or circumstances that would require an update to our estimates or assumptions or a revision of the carrying value of our assets or liabilities as of the date of this Quarterly Report on Form 10-Q. These estimates and assumptions may change as new events occur and additional information is obtained. As a result, actual results could differ materially from these estimates and assumptions.

We analyzed the credit risk associated with our accounts receivables and lease receivables. Our historical loss rates have not shown any significant differences between customer industries or geographies, and, upon adoption of ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”), we grouped all accounts receivables and lease receivables into a single portfolio. As disclosed in Note 15, Segment Information and Geographic Data, we do not have significant international geographic concentrations of revenue, and, as a result, we do not have significant concentrations of accounts receivables or lease receivables in any single geography outside of the United States. As a result of our adoption of ASU 2016-13 effective March 1, 2020, we recognized the cumulative effect of initially applying the guidance as a $0.1 million addition to our allowance for doubtful accounts with an offsetting adjustment to accumulated deficit.

The allowance for doubtful accounts totaled ~~$3.5~~$4.1 million and ~~$1.8~~$3.1 million as of November 30, ~~2019~~2020 and February ~~28, 2019,~~29, 2020, respectively.

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. We ~~evaluate~~test goodwill for impairment onin accordance with the provisions of ASC 350, Intangibles – Goodwill and Other, (“ASC 350”). Goodwill is tested for impairment at least annually at the reporting unit level or whenever events or changes in circumstances indicate that goodwill might be impaired. ASC 350 provides that an ~~annual basis in~~entity has the ~~fourth quarter, or on an interim basis, if we believe indicators of impairment exist. We~~option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, ~~we conclude that~~after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, ~~we conduct a two-step quantitative goodwill~~then additional impairment testing is not required. However, if an entity concludes otherwise, then it is required to perform an impairment test. ~~The first step~~

In accordance with Accounting Standards Update 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which we adopted in the fourth quarter of fiscal 2020, the impairment test involves comparing the estimated fair value of a reporting unit with its carrying value, including goodwill. If the estimated fair value exceeds carrying value, goodwill is considered not to be impaired. If, however, the fair value of the reporting unit ~~with its~~is less than carrying ~~value. If~~value, then an impairment loss is recognized in an amount equal to the amount that the carrying ~~amount~~value of the reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit’s fair value, we perform the second step of the goodwill impairment test. The second step of the goodwill impairment test involves comparing the implied fair value of the reporting unit’s goodwill with the carrying value of the goodwill. The amount by which the carrying value of the goodwill exceeds its implied fair value will be recognized as an impairment loss.unit.

Long-lived assets to be held and used, including identifiable intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans or changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability by a comparison of the carrying amount of the assets or asset group to future undiscounted net cash flows expected to be generated by the lowest level of asset group. ~~Given the interdependencies of revenues across our segments, product and service verticals, and geographies, our asset groups are generally our two operating segments.~~ If the assets or asset group are impaired, the impairment recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for similar investment of like risk.

We estimate the fair value of property and equipment based on the cost method of valuation (Level 3 determination of fair value). Significant inputs to the valuation model include estimated asset lives, obsolescence factors and estimated salvage values.

The recoverability assessment with respect to each of the tradenames used in our operations requires us to estimate the fair value of the asset as of the assessment date. Such determination is made using discounted cash flow techniques (Level 3 determination of fair value). Significant inputs to the valuation model include:

We estimate the fair value of goodwill and other long-lived assets other than tradenames based on discounted cash flow techniques (Level 3 determination of fair value). Significant inputs to the valuation model include:

We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in our financial statements. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly manner in an arm’s-length transaction between market participants at the measurement date. Fair value is estimated by using the following hierarchy:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

We account for our convertible senior notes as separate liability and equity components. We determine the carrying amount of the liability component based on the fair value of a similar debt instrument excluding the embedded conversion option at the issuance date. The carrying amount of the equity component representing the conversion option is calculated by deducting the carrying value of the liability component from the principal amount of the notes as a whole. This difference represents a debt discount that is amortized to interest expense over the term of the notes using the effective interest rate method. The equity component of the notes is included in stockholders’ equity and is not remeasured as long as it continues to meet the conditions for equity classification. We allocate transaction costs related to the issuance of the notes to the liability and equity components using the same proportions as the initial carrying value of the notes. Transaction costs attributable to the liability component are being amortized to interest expense using the effective interest method over the respective term of the notes, and transaction costs attributable to the equity components are netted with the equity component of the note in stockholders’ equity. We account for the cost of the capped calls as a reduction to additional paid-in capital.

We accrue for patent litigation and other contingencies whenever we determine that an unfavorable outcome is probable and a liability is reasonably estimable. The amount of the accrual is estimated based on a review of each claim, including the type and facts of the claim and our

assessment of the merits of the claim. These accruals are reviewed at least on a quarterly basis and are adjusted to reflect the impact of recent negotiations, settlements, court rulings, advice from legal counsel and other events pertaining to the case. Such accruals, if any, are recorded as general and administrative expense in our condensed consolidated statements of comprehensive ~~income (loss).~~loss. Although we take considerable measures to mitigate our exposure in these matters, litigation is unpredictable; however, we believe that we have valid defenses with respect to pending legal matters against us as well as adequate provisions for probable and estimable losses. All costs for legal services are expensed as incurred.

We translate the assets and liabilities of our non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation included in accumulated other comprehensive income (loss) during the period. The aggregate foreign currency transaction exchange rate gain included in determining income (loss) before income taxes was $0.3 million and $1.1 million for the three and nine months ended November 30, 2020, respectively. The aggregate foreign currency transaction exchange rate gain (losses) included in determining income (loss) before income taxes ~~were immaterial~~was $1.2 million and $(0.1) million for ~~both~~ the three and nine months ended November 30, 2019, ~~and 2018.~~respectively.

Other comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss) (“OCI”). OCI refers to revenue, expenses and gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity and excluded from net income (loss). Our OCI consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency.

Board, or FASB, issued Accounting Standards Update, or ASU, 2016-13, Financial Instruments - Credit Losses, or ASC 326. The new standard amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology. We adopted the new allowance for credit losses accounting standard on March 1, 2020 by means of recognizing the cumulative effect of initially applying the guidance as a $0.1 million addition to our allowance for doubtful accounts with an offsetting adjustment to accumulated deficit.

In August 2018, the ~~Financial Accounting Standards Board (“FASB”)~~FASB issued ~~Accounting Standards Update~~ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That isIs a Service Contract ~~(“ASU 2018-15”). The amendments in ASU 2018-15 provide guidance to align~~, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing ~~implementation~~ costs incurred to develop or obtain internal-use ~~software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by~~software. We adopted this ~~update. The new guidance is~~standard prospectively effective ~~for our fiscal year 2021 beginning on~~ March 1, 2020. ~~We do not anticipate this pronouncement will have a significant impact on our consolidated financial statements upon adoption.~~

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment~~. This guidance eliminates Step 2 from the goodwill impairment test and instead requires that an entity measure the impairment of goodwill assigned to a reporting unit if the carrying value of assets and liabilities assigned to the reporting unit, including goodwill, exceed the reporting unit's fair value. The new guidance must be adopted for annual and interim goodwill tests by us in fiscal year 2021 beginning on March 1, 2020. After the adoption of this standard, which will be applied prospectively, we will follow a one-step model for goodwill impairment. We do not anticipate this pronouncement will have a significant impact on our consolidated financial statements upon adoption.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases~~, which was further clarified by ASU 2018-10, Codification Improvements to Topic 842, Leases, and ASU 2018-11, Leases – Targeted Improvement, both issued in July 2018. ASU 2016-02 affects all entities that lease assets and establishes a right-of-use (“ROU”) model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases. Leases will be classified as either finance or operating, with the classification affecting the pattern of expense recognition in the income statement. ASU 2018-10 clarifies or corrects unintended application of guidance related to ASU 2016-02. The amendments affect narrow aspects of ASU 2016-02 related to the implicit rate in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. ASU 2018-11 adds a transition option for all entities and a practical expedient only for lessors. The transition option allows entities to not apply the new leases standard in the comparative periods, which they present in their financial statements in the year of adoption. Under the transition option, entities can opt to continue to apply the legacy guidance in ASC 840, “Leases”, including its disclosure requirements, in the comparative periods presented in the year they adopt the new leases standard. Entities that elect this transition option will still be required to adopt the new leases standard using the modified retrospective transition method required by the standard, but they will recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. For leases existing at, or entered into after the beginning of the earliest comparative period presented in the financial statements, lessees and lessors must apply a modified retrospective transition approach.

We applied the transition requirements on the adoption date of March 1, 2019, rather than at the beginning of the earliest comparative period presented. This approach allows for a cumulative effect adjustment in the period of adoption, and prior periods will not be restated. In addition, we elected the package of practical expedients permitted under the transition guidance, which does not require reassessment of prior conclusions related to contracts containing a lease, lease classification and initial direct lease costs. As an accounting policy election, we excluded short-term leases (term of 12 months or less) from the balance sheet presentation and accounted for non-lease and lease components in a contract as a single lease component for certain asset classes. Subsequent to the filing of our Form 10-Q for the period ended August 31, 2019, we identified certain immaterial adjustments related to amounts recorded for the adoption of ASC 842. The revised amounts for ROU assets and lease liabilities as of March 1, 2019 are $25.6 million and $29.1 million, respectively. The effect on our condensed statements of comprehensive income (loss) for the fiscal 2020 periods was immaterial. See Note 9, ~~Leases, for additional details.~~

~~In addition to the Tracker UK acquisition in February 2019, we completed two additional acquisitions, LoJack Mexico and Synovia, during the first quarter of fiscal 2020.~~

Pursuant to our business combinations accounting policy, we estimated the preliminary fair values of net tangible and intangible assets acquired, and the excess of the consideration transferred over the aggregate of such fair values was recorded as goodwill. The preliminary fair values of net tangible assets and intangible assets acquired were based upon preliminary valuations. Our estimates and assumptions reflected in such preliminary valuations are subject to change within the measurement period (up to one year from the acquisition date). The primary areas that remain preliminary relate to the fair values of intangible assets acquired, certain tangible assets and liabilities acquired, certain legal matters, deferred income taxes and goodwill. We expect to continue to obtain information to assist in determining the fair values of the net assets acquired during the measurement period. The following are the preliminary purchase price allocations as of November 30, 2019 for the three acquisitions (in thousands):

Tracker UK

LoJack Mexico

Synovia

Purchase price

$
13,097

$
14,306

$
29,500

Add debt paid at closing

-

-

20,296

Less cash acquired

(66
)

(1,586
)

(905
)
Net cash paid

13,031

12,720

48,891

Less amount released from escrow

(973
)

-

-

Net consideration

12,058

12,720

48,891

Add previously held interest

-

2,021

-

Fair value of net assets and liabilities assumed:

Current assets other than cash

$
3,549

$
4,933

$
10,354

Property and equipment

1,017

3,228

24,840

Customer relationships

2,354

7,000

16,700

Trade name

2,354

-

1,600

Developed technology

1,830

-

3,800

Deferred tax assets

-

-

2,061

Other non-current assets

104

1,301

-

Current liabilities

(3,111
)

(2,361
)

(4,468
)

Due to factors

-

-

(19,676
)

Deferred revenue

(3,162
)

(4,507
)

(4,319
)

Deferred tax liability

(824
)

(1,039
)

-

Other non-current liabilities

(201
)

-

-

Total fair value of net assets acquired

3,910

8,555

30,892

Goodwill

$
8,148

$
6,186

$
17,999

~~Effective February 25, 2019, we acquired Tracker UK, a LoJack licensee, for a total purchase price of £10.0 million, or $13.1 million, which was funded from our cash on hand.~~ As a result of the ~~acquisition, Tracker UK became a wholly-owned subsidiary~~adoption, we recorded certain costs, particularly those incurred during the application development phase, related to the implementation of cloud computing arrangements in prepaid expenses which historically had been recorded in property and ~~is consolidated with our financial statements beginning February 25, 2019 as a component of our Software & Subscription Services reportable segment.~~

We paid a premium (i.e., goodwill) over the fair value of the net tangible and identified intangible assets acquired, as we believe Tracker UK’s highly recognizable brand and extensive law enforcement relationships across the United Kingdom will help usequipment. Capitalized costs related to ~~drive our European expansion by leveraging our complete portfolio of telematics devices,~~ cloud and software services to develop advanced connected car solutions targeting auto dealers, OEMs, insurance providers and other enterprise customers. This acquisition enables us to integrate our European operations around advanced SVR and telematics solutions to support key enterprise customer opportunities on a pan-European basis.

~~The goodwill arising from the acquisition of Tracker UK is not deductible for income tax purposes.~~

On March 19, 2019, we acquired LoJack Mexico, the exclusive licensee of LoJack technology for the Mexican market. LoJack Mexico will leverage our telematics and software-as-a-service solutions to expand product offering to its substantial subscriber base as well as serve auto dealers and OEMs, insurance providers and leasing companies throughout Mexico. We purchased the remaining 87.5% of the LoJack Mexico shares that we did not own for a cash purchase price of $14.3 million. Our previously held 12.5% equity interest in LoJack Mexico was determined to have a fair value of $2.0 million at acquisition date which resulted in a gain of $0.3 million, which was recorded as investment income in our condensed consolidated statements of comprehensive income (loss)computing arrangements for the nine months ended November 30, ~~2019. LoJack Mexico is consolidated with our financial statements effective March 19, 2019 as a component of our Software & Subscription Services reportable segment.~~

~~On April 12, 2019, we acquired Synovia, a North American market leader~~2020, which are included in ~~fleet safety~~prepaid expenses and management for K-12 school bus and state and local government fleets, for a total cash purchase price of $49.8 million. Combined with the recent acquisitions of Tracker UK and LoJack Mexico, the Synovia acquisition expands our fleet management and vehicle safety services portfolio. This acquisition also accelerates our transformation to high-value subscription-based services. ~~Synovia is consolidated with our financial statements effective April 12, 2019 as a component of our Software & Subscription Services reportable segment.~~

In conjunction with the acquisition of Synovia, we assumed the rights and obligations under certain revenue assignment arrangements with several financial institutions (the “Factors”). Pursuant to the terms of the arrangements, Synovia sold to the Factors rights to all future revenues of certain subscription contractsother current assets on ~~a non-recourse basis for credit approved accounts. Under ASC 805,~~ ~~Business Combination, we recorded the amounts due to the Factors as a debt obligation at the fair value as of the acquisition date and the outstanding amount is presented as part of our long-term debt in~~ our condensed consolidated balance ~~sheet (see Note 7).~~sheets, were not material.

In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40), which removes certain separation models for convertible debt instruments and convertible preferred stock that require the separation of a convertible debt instrument into a debt component and an equity or derivative component. The ~~fair value~~ASU also expands disclosure requirements for convertible instruments and simplifies areas of the guidance for diluted earnings-per-share calculations that are impacted by the amendments. The standard is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted. We are evaluating the impact of the adoption of this ~~debt of $19.7 million was determined using a pre-tax cost of debt of 4.7% at the time of our acquisition of Synovia.~~

We paid a premium (i.e., goodwill) over the fair value of the net tangible and identified intangible assets acquired, as we believe we will expand our fleet management and vehicle safety services portfolio and will increase our customer reach by gaining access to a base of high-value and low-churn subscribers.

~~The goodwill arising from the acquisition of Synovia is deductible for income tax purposes.~~

We incurred approximately $1.1 million for the acquisition of Synovia and LoJack Mexico the nine months ended November 30, 2019 and $0.9 million in fiscal 2019. The acquisition-related costs were primarily legal expenses, which were recorded as part of our general and administrative expenses.

~~Pro forma financial information for the three and nine months ended November 30, 2018 for acquired companies is not disclosed as the results are not material to our condensed~~guidance on its consolidated financial statements.

	As of November 30, 2019												As of November 30, 2020
							Balance Sheet Classification												Balance Sheet Classification
							of Fair Value												of Fair Value
			Unrealized				Cash and		Short-Term						Unrealized				Cash and
	Adjusted		Gains		Fair		Cash		Marketable		Other		Adjusted		Gains		Fair		Cash		Other
	Cost		(Losses)		Value		Equivalents		Securities		Assets		Cost		(Losses)		Value		Equivalents		Assets
Cash	$	28,396	$	—	$	28,396	$	28,396	$	—	$	—	$	30,900	$	—	$	30,900	$	30,900	$	—
Level 1:
Money market funds		16,202		—		16,202		16,202		—		—		17,792		—		17,792		17,792		—
Mutual funds (1)		4,367		444		4,811		—		—		4,811		2,127		357		2,484		—		2,484
International equities		296		1		297		—		—		297
Level 2:
Repurchase agreements		54,000		—		54,000		54,000		—		—		43,000		—		43,000		43,000		—
Corporate bonds		4,962		—		4,962		3,036		1,926		—
Total	$	108,223	$	445	$	108,668	$	101,634	$	1,926	$	5,108	$	93,819	$	357	$	94,176	$	91,692	$	2,484

	As of February 28, 2019													As of February 29, 2020
								Balance Sheet Classification												Balance Sheet Classification
								of Fair Value												of Fair Value
			Unrealized					Cash and		Short-Term						Unrealized				Cash and
	Adjusted		Gains			Fair		Cash		Marketable		Other		Adjusted		Gains		Fair		Cash		Other
	Cost		(Losses)			Value		Equivalents		Securities		Assets		Cost		(Losses)		Value		Equivalents		Assets
Cash	$	26,084	$	—		$	26,084	$	26,084	$	—	$	—	$	31,895	$	—	$	31,895	$	31,895	$	—
Level 1:
Money market funds		154,428		—			154,428		154,428		—		—		5,508		—		5,508		5,508		—
Mutual funds (1)		6,023		390			6,413		—		—		6,413		3,926		26		3,952		—		3,952
International equities		296		(73	)		223		—		—		223
Level 2:
Repurchase agreements		72,000		—			72,000		72,000		—		—		60,000		—		60,000		60,000		—
Corporate bonds		21,502		(2	)		21,500		3,988		17,512		—		10,001		—		10,001		10,001		—
Total	$	280,333	$	315		$	280,648	$	256,500	$	17,512	$	6,636	$	111,330	$	26	$	111,356	$	107,404	$	3,952

	November 30,		February 28,		November 30,		February 29,
	2019		2019		2020		2020
Raw materials	$	22,734	$	14,141	$	13,976	$	18,118
Work in process		18		72
Finished goods		21,283		17,820		18,186		18,660
	$	44,035	$	32,033	$	32,162	$	36,778

		Gross						Accumulated Amortization						Effect of Foreign Currency Translation					Net					Gross										Accumulated Amortization						Net
	Useful Life	Feb. 28, 2019		Addi- tions		Nov. 30, 2019		Feb. 28, 2019		Expense		Nov. 30, 2019		Nov. 30, 2019			Feb. 28, 2019		Nov. 30, 2019		Feb. 28, 2019		Useful Life	Feb. 29, 2020		Additions & Adjustments, net (1)			Impair- ment			Nov. 30, 2020		Feb. 29, 2020		Expense		Nov. 30, 2020		Feb. 29, 2020		Nov. 30, 2020
Developed technology	2-7 years	$	23,603		3,800	$	27,403	$	18,253	$	2,385	$	20,638		(28	)		—	$	6,737	$	5,350	4-6 years	$	27,363		51			(478	)	$	26,936	$	21,437	$	2,269	$	23,706	$	5,926	$	3,230
Tradenames	10 years		40,091		1,600		41,691		12,644		2,947		15,591		(42	)		—		26,058		27,447	10 years		30,093		74			—			30,167		16,303		1,591		17,894		13,790		12,273
Customer lists	4-7 years		25,304		—		25,304		21,307		1,258		22,565		—			—		2,739		3,997	4-7 years		25,304		—			—			25,304		22,903		48		22,951		2,401		2,353
Dealer and customer relationships	7-12 years		16,850		23,700		40,550		6,908		3,065		9,973		(11	)		—		30,566		9,942	10-15 years		34,139		(3	)		(1,005	)		33,131		10,753		1,656		12,409		23,386		20,722
Patents	5 years		589		—		589		160		28		188		—			—		401		429	5 years		589		—			—			589		197		27		224		392		365
		$	106,437	$	29,100	$	135,537	$	59,272	$	9,683	$	68,955	$	(81	)	$	-	$	66,501	$	47,165		$	117,488	$	122		$	(1,483	)	$	116,127	$	71,593	$	5,591	$	77,184	$	45,895	$	38,943

Intangible assets with finite lives are amortized on a straight-line basis over the expected period to be benefited by future cash flows. We monitor and assess these assets for impairment on a periodic basis. Our assessment includes various new product lines and services, which leverage the existing intangible assets as well as consideration of historical and projected revenues and cash flows. AsBased upon our decision to commence with the wind down of the LoJack U.S. SVR business, we performed an assessment of the carrying amount of the related intangible assets supporting these products. Our assessment of the future cash flows generated by these assets concluded that an impairment loss was present and recorded an impairment loss of $0.5 million for Developed technology and $1.0 million for U.S. dealer relationships during nine months ended November 30, ~~2019, we determined that there was no impairment of intangible assets.~~2020.

Estimated future amortization expense as of November 30, ~~2019~~2020 is as follows (in thousands):

2020 (remainder)	$	4,144
2021		11,497
2021 (remainder)			$	1,554
2022		9,863		5,533
2023		9,643		5,381
2024		6,583		4,537
2025				4,422
Thereafter		24,771		17,516
	$	66,501	$	38,943

In the first quarter of fiscal 2021, we recorded a goodwill impairment loss of $3.9 million related to the LoJack U.S. SVR Products reporting unit. An impairment loss equal to the remaining U.S. SVR Products goodwill balance of $8.1 million was recorded in the third quarter of fiscal 2021 in connection with our decision to wind down the LoJack U.S. SVR Products business (Note 1).

	November 30,		February 28,		November 30,		February 29,
	2019		2019		2020		2020
Deferred cost	$	8,396	$	10,094	$	5,090	$	7,818
Deferred compensation plan assets		6,983		6,413		6,958		6,041
Lease receivables, non-current		2,648		-		9,364		5,992
Prepaid commissions		1,979		-		2,747		2,318
Other		5,460		6,003		2,357		2,599
	$	25,466	$	22,510	$	26,516	$	24,768

We have a non-qualified deferred compensation plan in which certain members of management and all non-employee directors are eligible to participate. Participants may defer a portion of their compensation until retirement or another date specified by them in accordance with the plan. We are funding the plan obligations through cash deposits to a Rabbi Trust that are invested in various equities, bond, money market mutual funds and COLI in generally the same proportion as investment elections made by the participants. The deferred compensation plan liability is included in other non-current liabilities in the accompanying consolidated balance sheets.

The following table provides a summary of our debt as of November 30, ~~2019~~2020 and February ~~28, 2019~~29, 2020 (in thousands):

	Maturity	Effective			November 30,			February 28,			Maturity	Effective			November 30,			February 29,
	Date	Interest Rate			2019			2019			Date	Interest Rate			2020			2020
2020 Convertible Notes, 1.625% fixed rate	May 15, 2020		6.20	%	$	27,599		$	122,527		May 15, 2020		6.20	%	$	-		$	27,599
2025 Convertible Notes, 2.00% fixed rate	August 1, 2025		7.56	%		230,000			230,000		August 1, 2025		7.56	%		230,000			230,000
Due to factors	2020 - 2024		4.70	%		15,167			—		2020 - 2024		4.70	%		11,023			14,371
Total term debt						272,766			352,527							241,023			271,970
Unamortized discount and issuance costs						(63,433	)		(76,622	)						(55,587	)		(61,763	)
Less: Current portion of long-term term debt						(32,955	)		—							(4,790	)		(33,119	)
Long-term debt, net of current portion					$	176,378		$	275,905						$	180,646		$	177,088

The effective interest rates for the convertible notes include the interest on the notes and amortization of the discount. As of November 30, ~~2019~~2020 and February ~~28, 2019,~~29, 2020, the fair value of the ~~convertible notes,~~2025 Convertible Notes was $191 million and $197 million, respectively, based on Level 2 ~~inputs, was $217 million and $303 million, respectively.~~

In May 2015, we issued $172.5 million principal amount of 1.625% convertible senior unsecured notes due in 2020 (“2020 Convertible Notes”). These notes require semi-annual interest payments at a rate of 1.625% until maturity, conversion or purchase, which will be no later than in May 15, 2020.

The notes will be convertible into cash, shares of our common stock or a combination of cash and shares of common stock, at our election based on initial conversion price of $32.5256. In July 2018, we repurchased $50 million in aggregate principal amount of these notes for $53.8 million, resulting in a loss on extinguishment of $2.0 million and $6.1 million charged to additional paid-in capital. We also received $3.1 million from the unwinding of certain hedging instruments related to these notes.

In October and November 2019, we entered into separate, privately negotiated purchase agreements to repurchase approximately $94.9 million in aggregate principal amount of these notes for $94.7 million. The repurchase is accounted for as an extinguishment of debt, not a modification of debt. The fair value of the liability was determined using a discounted cash flow analysis at a market interest rate for nonconvertible debt based on the remaining maturity of the 2020 Convertible Notes, which represented a Level 3 fair value measurement. The carrying value of the repurchased notes was $92.3 million, resulting in a loss on extinguishment of debt of $2.4 million. Our intent is to settle the $27.6 million remaining principal amount of the 2020 Convertible Notes in cash upon maturity.inputs.

In July 2018, we issued debt of $230.0 million aggregate principal amount of convertible senior unsecured notes due in 2025 (“2025 Convertible Notes”). These notes ~~will~~ require semi-annual interest payments at a rate of 2.00% until maturity, conversion, redemption or repurchase, which will be no later than August 1, 2025. We may redeem the notes at our option at any time on or after August 6, 2022 at a cash redemption price equal to the principal amount plus accrued interest, but only if the last reported sale price per share of our stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (ii) the trading day immediately before the date we send such notice. The 2025 Convertible Notes are convertible into cash, shares of our common stock or a combination of both, at our election, based on an initial conversion price of $30.7450. Holders may convert their 2025 Convertible Notes at their option upon the occurrence of certain events, as defined in the 2025 Indenture. Approximately $51.9 million, net of tax, was allocated to additional paid-in capital upon issuance of these notes.

In July 2018, in connection with the 2025 Convertible Notes, we entered into capped call transactions with certain option counterparties who were initial purchasers of the 2025 Convertible Notes. The capped call transactions are expected to reduce the potential dilution of earnings per share upon conversion of the 2025 Convertible Notes. Under the capped call transactions, we purchased options relating to 7.48 million shares of common stock underlying the notes, with a strike price equal to the conversion price of the notes and with a cap price equal to $41.3875. We paid $21.2 million for the note hedges and as a result, approximately $15.9 million, net of tax, was recorded as a reduction to additional paid-in capital within stockholders’ equity.

In October and November 2019, we repurchased approximately $94.9 million in aggregate principal amount of the 1.625% convertible senior unsecured notes for $94.7 million, which had a carrying value of $92.3 million, resulting in a loss on extinguishment of debt of $2.4 million. On May 15, 2020, we repaid the remaining principal balance of $27.6 million of the 1.625% convertible senior unsecured notes issued in May 2015.

On March 30, 2018, we entered into a revolving credit facility with JP Morgan Chase Bank, N.A. that provides for borrowings up to $50.0 million. This revolving credit facility was extended on March 27, 2020 with a new maturity date of March 30, 2022. At our election, the borrowings under this revolving credit facility bear interest at (a) for base rate loans, a base rate based on the highest of (i) 0%, (ii) the rate of interest publicly announced by JP Morgan Chase Bank, N.A. (the “Agent”) as its prime rate in effect at its principal office in New York City, (iii) the overnight bank funding rate as determined by the Federal Reserve Bank of New York plus 0.50% and (iv) the LIBOR-based rate for a one-month interest period on such day plus 1%; or (b) for Eurodollar loans, the higher of (x) 1.00% and (y) the LIBOR-based rate for one, three or six months (as selected by the Company) for Eurodollar deposits. An applicable margin is added based on the Company’s senior leverage ratio, ranging from 1.50% to 2.00% for base rate loans, and from 2.50% to 3.00% for Eurodollar loans. We will also pay a commitment fee based on our senior leverage ratio ranging from 0.40% to 0.50%, payable quarterly in arrears, on the average daily unused amount of the Credit Facility. Amounts owing under the credit agreement and related credit documents are guaranteed by the Company and certain of its subsidiaries. We have also granted security interests in substantially all of our respective assets to secure these obligations. The net proceeds available under the revolving credit facility can be used for repayment of existing debt, working capital and general corporate purposes. On November 19, 2020, we repaid the $20.0 million borrowings outstanding under the revolving credit facility and accrued interest of $0.1 million. There were 0 borrowings outstanding under this revolving credit facility at November 30, 2020.

The revolving credit facility contains certain negative and affirmative covenants including financial covenants that require us to maintain a minimum level of earnings before interest, income taxes, depreciation, amortization and other non-cash charges (Adjusted EBITDA) to interest ratio, a minimum senior indebtedness ratio and a total indebtedness coverage ratio, all measured on a quarterly basis. As of November 30, 2020, we were in compliance with our covenants under the revolving credit facility.

In conjunction with the acquisition of Synovia on April 12, 2019, ~~(see Note 2),~~ we assumed the rights and obligations under certain revenue assignment arrangements with several financial institutions (the “Factors”). Pursuant to the terms of the arrangements, Synovia sold to the Factors rights to all future revenues of certain subscription contracts on a non-recourse basis for credit approved accounts. The sales price paid represents a percentage of the total contract value (generally 80%) due to Synovia at the beginning of the contract, with the total customer contract balance to be paid by the customers to the Factors over the contract period. The cost of the transaction was recorded as a contra-liability, and was recognized as interest expense over the term of the subscription contract using the effective interest method, while the assigned customer obligation is amortized to subscription revenues using the straight-line method.

These arrangements with the Factors met the criteria in ASC 470-10-25, Sales of Future Revenues or Various Other Measures of Income, ~~(“ASC 470”),~~ which relates to cash received from an investor in exchange for a specified percentage or amount of revenue or other measure of income of a particular product line, business segment, trademark, patent, or contractual right for a defined period. Under this guidance, the arrangement qualified as a debt instrument for accounting purposes due to Synovia’s significant continuing involvement in the generation of cash flows due to the Factors. Further, under ASC 805, Business Combination, we recorded the amounts due to the Factors as a debt obligation at fair value in the opening ~~balance sheet and the outstanding amount is presented as part of our long-term debt in our condensed consolidated~~ balance sheet. The fair value of this debt of $19.7 million was determined using a pre-tax cost of debt of 4.7% at the time of our acquisition of Synovia. The discount of $1.5 million ~~will be~~is being amortized under the interest method. During ~~the~~ three months ended November 30, 2020 and 2019, we recognized $0.1 million and $0.2 million of interest expense related to this debt, respectively. During the nine months ended November 30, 2020 and 2019, we recognized ~~$0.2~~$0.4 million and $0.5 million of interest expense related to this debt, respectively. The revenues recognized from this arrangement of $4.9 million and $5.0 million were considered a non-cash activity in our condensed consolidated statements of cash flows for the nine months ended November 30, ~~2019.~~2020 and 2019, respectively.

On March 30, 2018, we entered into a revolving credit facility with J.P. Morgan Chase Bank, dated as of March 30, 2018 (the “Credit Agreement”) that provides for borrowings up to $50.0 million. This revolving credit facility expires on March 30, 2020. At our election, the borrowings under this revolving credit facility bear interest at either a LIBOR-based variable rate plus an applicable margin, or at the greater of the Prime Rate, the NYFRB Rate plus an applicable margin rate and one-month LIBOR-based variable rate plus an applicable margin rate (each as defined in the Credit Agreement) determined based on our senior leverage ratio from time to time. The net proceeds available under the revolving credit facility can be used for working capital and general corporate purposes. There were no borrowings outstanding under this revolving credit facility at November 30, 2019.

The revolving credit facility contains certain negative and affirmative covenants including financial covenants that require us to maintain a minimum level of earnings before interest, income taxes, depreciation, amortization and other non-cash charges (Adjusted EBITDA) to interest ratio, a minimum senior indebtedness ratio and a total indebtedness coverage ratio, all measured on a quarterly basis. As of November 30, 2019, we were in compliance with our covenants under the revolving credit facility.

~~Beginning in the first quarter of~~Since fiscal 2019, we ~~commenced~~executed under a plan to capture certain synergies and cost savings related to streamlining our global operations and sales organization, as well as rationalize certain leased properties that ~~are~~were not fully occupied. Our plan is aligned with our strategy to integrate the global sales organization and further outsource manufacturing functions in order to drive operational efficiency, increase supplier geographic diversity, and reduce operating expenses. To date, total restructuring charges were ~~$11.1~~$15.0 million, comprised of ~~$6.2~~$9.1 million in severance and employee related costs, and ~~$5.0~~$5.9 million for vacant office and manufacturing facility space. Restructuring charges related to vacant office and manufacturing facility space ~~was~~were due primarily to the vacancy in Canton, Massachusetts of ~~$4.5 million.~~$3.3 million, which was sub-leased starting in May 2020. The anticipated rent payments for the ceased-use leased facilities will be made through December 2025. Substantially all charges related to severance and employee costs were under the Telematics ~~Systems~~Products and LoJack U.S. SVR Products reportable ~~segment.~~segments. As a result of the adoption of ASC 842, effective March 1, 2019, the balance of the restructuring liability related to certain facility leases ~~have~~has been reclassified as a reduction of the Operating lease right-of-use assets in our condensed consolidated balance sheet.

For the three ~~months ended November 30, 2019, total restructuring charges were $0.8 million, all of which were related to severance~~ and ~~employee costs. For the~~ nine months ended November 30, ~~2019,~~2020, total restructuring charges were ~~$3.1~~$0.1 million ~~which was~~and $2.6 million, respectively. Total restructuring charges incurred to date in fiscal 2021 were comprised of ~~$1.9~~$2.3 million in severance and employee related costs, which included $0.9 million stock-based compensation, and ~~$1.2~~$0.3 million for vacant ~~office space. Substantially all charges were recorded under the Telematics Systems reportable segment. The impairment of $1.2 million for the vacant office space was recorded as a reduction of~~ ~~Operating lease right-of-use assets~~ ~~in our condensed consolidated balance sheet as of November 30, 2019.~~facilities. The restructuring liabilities related to personnel were included in Accrued payroll and employee benefits in our condensed consolidated balance sheets as of November 30, ~~2019~~2020 and February ~~28, 2019.~~29, 2020.

The following table summarizes the charges resulting from the implementation of the restructuring plan (in thousands):

The anticipated rent payments for the vacant portion of leased facilities will be made through December 2025. There is no guarantee that the termination and cease use charges will not exceed the estimates or that the impact of any future potential sub-lease rentals will be realized.

The following table summarizes the activity resulting from the implementation of the restructuring plan within other current and non-current liabilities (in thousands):

As described in Note 1, our Board of Directors approved a plan to commence the wind down of the LoJack U.S. SVR operations as the products and services currently provided no longer aligns with our core strategy. Currently, we expect to incur up to $2.0 million nonrecurring cash charge related to severance and personnel costs in the fourth quarter. Additionally, we expect that we will incur contract termination and other related costs as we proceed with the wind down, which we are unable to estimate at this time.

We have various non-cancelable operating leases for our offices in California, Texas, Massachusetts, Indiana, Minnesota and Virginia in the United States, and Italy, Mexico and the United Kingdom. We also have various non-cancelable operating leases for towers and vehicles throughout the United States, Italy and Mexico. These leases expire at various times through 2028. Certain lease agreements contain renewal options, rent abatement, and escalation clauses that are factored into our determination of lease payments when appropriate.

The table below presents lease-related assets and liabilities recorded on the condensed consolidated balance sheet (in thousands):

	Classification	November 30, 2019		Classification	November 30, 2020
Assets
Operating lease right-of-use assets	Operating lease right-of-use assets	$	24,108	Operating lease right-of-use assets	$	17,653

Liabilities
Operating lease liabilities (current)	Other current liabilities	$	4,877	Other current liabilities	$	6,148
Operating lease liabilities (noncurrent)	Operating lease liabilities		27,090	Operating lease liabilities		19,217
Total lease liabilities		$	31,967		$	25,365

The following lease costs were included in our condensed consolidated statements of comprehensive ~~income (loss)~~loss as follows (in thousands):

					For the Three Months Ended November 30,				For the Nine Months Ended November 30,
	Three Months Ended November 30, 2019		Nine Months Ended November 30, 2019		2020		2019		2020		2019
Operating lease cost	$	663	$	4,636	$	1,763	$	663	$	5,127	$	4,636
Short-term lease cost		112		676		59		112		238		676
Variable lease cost		116		189		108		116		337		189
Total lease cost	$	891	$	5,501	$	1,930	$	891	$	5,702	$	5,501

The table below presents supplemental information related to operating leases during the nine months ended November 30, ~~2019~~2020 (in thousands, except weighted-average information):

Cash paid for amounts included in the measurement of operating lease liabilities	$	4,581		$	5,682
Right-of-use assets obtained in exchange for new operating lease liabilities	$	4,342		$	5,425
Weighted average remaining lease term	7.8 years				4.71
Weighted average discount rate		5.45	%		5.17	%

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of November 30, ~~2019~~2020 (in thousands):

Remainder of 2020	$	2,099
2021		6,246
Remainder of 2021				$	2,406
2022		5,650			7,115
2023		5,510			6,598
2024		5,266			4,895
2025					3,113
Thereafter		15,356			2,900
Total minimum lease payments		40,127			27,027
Less imputed interest		(8,160	)		(1,662	)
Present value of future minimum lease payments		31,967			25,365
Less current obligations under leases		(4,877	)		(6,148	)
Long-term lease obligations	$	27,090		$	19,217

~~Disclosures Related~~In connection with the wind down of LoJack U.S. SVR operations (further described in Note 1), we reassessed the lease periods and related renewal assumptions for tower leases associated with this business to ~~Periods Prior~~better align with our current transition period projections. As a result, we recorded an estimated reduction of $4.4 million to ~~Adoption of New Lease Standard~~

~~Minimum~~right-of-use assets and related lease ~~payments under operating leases with non-cancelable terms in excess of one year~~liabilities as of ~~February 28, 2019, were~~November 30, 2020. These estimates may change in future periods as ~~follows (in thousands):~~we proceed with the wind down.

We use the assets and liabilities method when accounting for income taxes. Under this method, deferred income tax asset and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. ~~Under U.S. GAAP we are allowed~~

We evaluate our estimated annual effective tax rate (“ETR”) on a quarterly basis based on current and forecasted operating results. The relationship between our income tax provision or benefit and our pretax book income or loss can vary significantly from period to ~~make an accounting policy choice~~period considering, among other factors, the overall level of pretax book income or loss and changes in the blend of jurisdictional income or loss that is taxed at different rates and changes in valuation allowances. The income tax expense of $0.3 million and $0.8 million for the three and nine months ended November 30, 2020, respectively, was primarily attributable to either: (1) treat taxes due on future GILTI inclusions in U.S. taxable income as a current-period expense when incurred (the “period cost method”); or (2) factor in such amounts into our measurementone of our ~~deferred taxes (the “deferred method”). We have elected to account for GILTI as a period cost in the year the tax is incurred. Accordingly, no GILTI-related deferred amounts were recorded.~~

Deferred tax assets are to be reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Significant management judgment is required in assessing the realizability of our deferred tax assets. We consider all available evidence, both positive and negative, in assessing the extent to which a valuation allowance should be applied against our deferred tax assets. If, based on our assessment, we determine that it is more likely than not (intended to mean a likelihood that it is more than 50%) that some portion or all of the deferred tax assets will not be realized, a valuation allowance is established.

Since we were profitable for the last two fiscal years and began to incur losses this current fiscal year, the assessment as to the need for a valuation allowance is difficult since there is both positive and negative evidence present. The ultimate realization of deferred tax assets is dependent upon generation of future taxable income in each tax jurisdiction during the periods in which the temporary differences become deductible. We have considered the scheduled reversal of deferred liabilities, projected future taxable income and tax planning strategies, and have determined, based on our assessment of both objective and subjective evidence that it is more likely than not that we will realize our net deferred tax assets at this time. However, we will continue to reassess these facts and circumstances in future quarters and we can provide no assurance as to whether a valuation allowance will be required in the future.

~~We file~~foreign subsidiaries. Any income tax ~~returns in~~benefit associated with the ~~U.S. federal and states jurisdictions as well as Puerto Rico, Mexico, Canada, Ireland, Italy, United Kingdom, the Netherlands, Brazil and New Zealand. Certain income tax returns~~pre-tax loss for the years 2014 through present remain open to examination by U.S. federal and state tax authorities. Our tax returns in the foreign jurisdictions remain open for examination for varying years from 2013 to the present. We believe that we have adequate reserves for any uncertain tax positions. It is reasonably possible the amount of unrecognized tax benefits that could be realized within the next 12 months is $0.6 million.

Our net deferred tax assets increased during the nine months ending November 30, 2019 as a result of recording a deferred tax asset for additional net operating loss carryforwards for the period, reversal of valuation allowance against foreign tax credits and recording a preliminary net deferred tax asset relating to our acquisitions through the quarter ended November 30, ~~2019 (see Note 2).~~2020, resulting primarily from the U.S. jurisdiction, is offset by a full valuation allowance.

Basic earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period plus the dilutive effect of outstanding stock options and restricted stock-based awards using the treasury stock method.

The calculation of the basic and diluted ~~income (loss)~~loss per share of common stock is as follows (in thousands, except per share value):

Three Months Ended

Nine Months Ended

November 30,

November 30,

2019

2018

2019

2018

Net income (loss)

$
(7,415
)

$
(522
)

$
(23,477
)

$
7,135

Basic weighted average number of common shares outstanding

33,822

34,561

33,589

34,950

Effect of stock options and restricted stock units computed on treasury stock method

—

—

—

819

Diluted weighted average number of common shares outstanding

33,822

34,561

33,589

35,769

Earnings (loss) per share:

Basic

$
(0.22
)

$
(0.02
)

$
(0.70
)

$
0.20

Diluted

$
(0.22
)

$
(0.02
)

$
(0.70
)

$
0.20

	Three Months Ended						Nine Months Ended
	November 30,						November 30,
	2020			2019			2020			2019
Net loss	$	(23,680	)	$	(7,415	)	$	(47,580	)	$	(23,477	)
Basic and diluted weighted average number of common shares outstanding		34,599			33,822			34,292			33,589

Loss per share:
Basic	$	(0.68	)	$	(0.22	)	$	(1.39	)	$	(0.70	)
Diluted	$	(0.68	)	$	(0.22	)	$	(1.39	)	$	(0.70	)

All outstanding options and restricted stock units for the three and nine months ended November 30, ~~2019~~2020 and ~~for the three months ended November 30, 2018~~2019 were excluded from the computation of diluted earnings per share because we reported a net loss for each of these periods and the effect of inclusion would be antidilutive.

We have the option to pay cash, issue shares of common stock or any combination thereof for the aggregate amount due upon conversion of the ~~convertible senior notes.~~2025 Convertible Notes. It is our intent to settle the principal amount of these notes with cash, and therefore, we use the treasury stock method for calculating any potential dilutive effect of the conversion option on diluted earnings (loss) per share. From the time of the issuance of the notes, the average market price of our common stock has been less than the initial conversion price of the notes, and consequently no0 shares have been included in diluted earnings per share for the conversion value of the notes.

On June 7, 2018, our Board of Directors adopted the CalAmp Corp. 2018 Employee Stock Purchase Plan (the “ESPP”), which was approved by our stockholders on July 25, 2018. The ESPP provides for the issuance of 1,750,000 shares of our common stock. The first enrollment under the ESPP Plan commenced in February 2019. There are two enrollment periods each year that commence on February 1^st ~~and August 1~~^st ~~and lasts for six months. Stock-based compensation expense related to the ESPP for the three and nine months ended November 30, 2019 was $0.2 million and $0.4 million, respectively.~~

Stock-based compensation expense is included in the following captions of the condensed consolidated statements of comprehensive ~~income (loss)~~loss (in thousands):

	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	November 30,				November 30,				November 30,				November 30,
	2019		2018		2019		2018		2020		2019		2020		2019
Cost of revenues	$	221	$	251	$	558	$	640	$	184	$	221	$	562	$	558
Research and development		723		538		1,769		1,323		798		723		2,167		1,769
Selling and marketing		1,058		808		2,709		2,059		770		1,058		2,035		2,709
General and administrative		1,650		1,344		4,342		4,066		1,278		1,650		3,860		4,342
Restructuring										-		-		875		-
	$	3,652	$	2,941	$	9,378	$	8,088	$	3,030	$	3,652	$	9,499	$	9,378

Changes in our outstanding stock options during the nine months ended November 30, ~~2019~~2020 were as follows (options in thousands):

	Number of Options			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value		Number of Options			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
Outstanding at February 28, 2019		1,054		$	13.44		5.8
Outstanding at February 29, 2020											1,071		$	14.65		6.2
Granted		171			11.11						—			—
Exercised		(106	)		2.35						(70	)		4.03
Forfeited or expired		—			—						(152	)		17.52
Outstanding at November 30, 2019		1,119		$	14.14		6.2	$	1,380
Exercisable at November 30, 2019		681		$	12.46		4.7	$	1,380
Outstanding at November 30, 2020											849		$	15.02		5.8	$	408
Exercisable at November 30, 2020											578		$	14.37		4.8	$	408

Changes in our outstanding restricted stock shares, performance stock units (“PSUs”) and restricted stock units (“RSUs”) during the nine months ended November 30, ~~2019~~2020 were as follows (restricted shares, PSUs and RSUs in thousands):

	Number of Restricted Shares, PSUs and RSUs			Weighted Average Grant Date Fair Value		Shares Retained to Cover Statutory Minimum Withholding Taxes		Number of Restricted Shares, PSUs and RSUs			Weighted Average Grant Date Fair Value		Shares Retained to Cover Statutory Minimum Withholding Taxes
Outstanding at February 28, 2019		1,507		$	19.77
Outstanding at February 29, 2020									2,215		$	14.47
Granted		1,561			11.30				1,856			7.94
Vested		(467	)		18.91		159		(636	)		15.07		207
Forfeited		(229	)		17.30				(277	)		12.44
Outstanding at November 30, 2019		2,372		$	14.58
Outstanding at November 30, 2020									3,158		$	10.69

As of November 30, ~~2019,~~2020, there was ~~$31.0~~$25.9 million of total unrecognized stock-based compensation cost related to outstanding nonvested equity awards that is expected to be recognized as an expense over a weighted-average remaining vesting period of ~~3.4~~3.7 years.

Comprehensive income (loss) consists of two components, net income (loss) and Other Comprehensive Income (Loss) (“OCI”). OCI refers to revenue, expenses, and gains and losses that under GAAP are recorded as an element of stockholders’ equity but are excluded from net income. Our OCI consists of currency translation adjustments from our foreign subsidiaries that do not use the U.S. dollar as their functional currency.

~~The following table shows the changes in Accumulated Other Comprehensive Income (Loss) for the nine months ended November 30, 2019 (in thousands):~~

We sell telematics products and services to large global enterprises in the industrial equipment, transportation and automotive market verticals. One customer in the heavy equipment industry accounted for 19% and 16% of our ~~customers~~consolidated revenue for the three and nine months ended November 30, 2020, respectively, and 14% and 13% of our consolidated revenue for the three and nine months ended November 30, 2019, respectively. The same customer accounted for ~~more than 10%~~19% of our ~~total revenue and~~consolidated accounts receivable ~~as follows (rounded):~~

We purchase a significant amount of our ~~product~~ inventory from certain manufacturers or suppliers including components, assemblies and electronic manufacturing parts. These suppliers are located in ~~Asia.~~Asia, including China. The inventory is purchased under standard supply agreements that outline the terms of the product delivery. The title and risk of loss of the product ~~passes~~generally pass to us upon shipment from the manufacturers’ plant or warehouse. For the three and nine months ended November 30, 2020, 4 of our suppliers accounted for approximately 58% and 61% of our total inventory purchases, respectively. For the three and nine months ended November 30, 2019, 3 of our suppliers accounted for approximately 42% and 46% of total inventory purchases, respectively. As identified below, some of these manufacturers accounted for more than 10% of our ~~purchases and~~ accounts payable as follows (rounded):

	November 30,			February 28,			November 30,			February 29,
	2019			2019			2020			2020
Accounts payable:
Supplier A		19	%		30	%		7	%		11	%
Supplier B		9	%		18	%		14	%		11	%

Supplier C								14	%		8	%

We are currently reliant upon these suppliers for products. Although we believe that we can obtain products from other sources, the loss of a significant supplier could have a material impact on our financial condition and results of operations as the products that are being purchased may not be available on similar terms from another supplier.

All products have a one- or two-year limited warranty against manufacturing defects and workmanship. We estimate the future costs relating to product returns subject to our warranty and record a reserve upon shipment of our products. We periodically adjust our estimate for actual warranty claims and historical claims experience as well as the impact of known product operational issues. During the second fiscal quarter, we recorded $1.4 million in the resolution of a product performance matter with a customer which was paid as of November 30, 2020. The warranty reserve is included in Other Current Liabilities in the condensed consolidated balance sheets. Activity in the accrued warranty costs liability is as follows (in thousands):

	Nine Months Ended						Nine Months Ended
	November 30,						November 30,
	2019			2018			2020			2019
Balance at beginning of period	$	1,399		$	5,734		$	987		$	1,399
Charged to costs and expenses		657			856			2,354			657
Deductions		(703	)		(5,117	)		(2,157	)		(703	)
Balance at end of period	$	1,353		$	1,473		$	1,184		$	1,353

	November 30,		February 28,		November 30,		February 29,
	2019		2019		2020		2020
Deferred revenue	$	29,046	$	27,106	$	24,214	$	27,452
Deferred compensation plan liability		6,943		6,409		6,965		5,919
Accrued restructuring costs (see Note 8)		-		2,175
Deferred tax liability		974		963
Deferred rent		-		365
Other		1,496		1,458		4,079		1,673
	$	38,459	$	38,476	$	35,258	$	35,044

	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	November 30,				November 30,				November 30,				November 30,
	2019		2018		2019		2018		2020		2019		2020		2019
Interest expense on 2020 Convertible Notes:
Stated interest at 1.625% per annum	$	356	$	498	$	1,352	$	1,810	$	-	$	356	$	93	$	1,352
Amortization of discount and issue costs		1,038		1,412		3,989		5,034		-		1,038		289		3,989
		1,394		1,910		5,341		6,844		-		1,394		382		5,341
Interest expense on 2025 Convertible Notes:
Stated interest at 2.00% per annum		1,150		1,150		3,476		1,661		1,150		1,150		3,463		3,476
Amortization of discount and issue costs		2,203		2,044		6,531		2,945		2,374		2,203		7,014		6,531
		3,353		3,194		10,007		4,606		3,524		3,353		10,477		10,007
Other interest expense		240		30		650		116		356		240		955		650
Total interest expense	$	4,987	$	5,134	$	15,998	$	11,566	$	3,880	$	4,987	$	11,814	$	15,998

“Net cash provided by operating activities” includes cash payments for interest expense and income taxes as follows (in thousands):

	Nine Months Ended				Nine Months Ended
	November 30,				November 30,
	2019		2018		2020		2019
Cash payments for interest and income taxes:
Interest expense paid	$	4,368	$	2,550	$	2,983	$	4,368
Income tax paid	$	749	$	768
Income tax paid, net of refunds					$	653	$	749

~~Our business activities are organized into two~~Prior to the fourth quarter of fiscal 2020, our 2 reportable segments, ~~– Telematics Systems and~~ Software & Subscription ~~Services. Our organizational structure is based on a number of factors that our CEO, the Chief Operating Decision Maker (“CODM”), uses to evaluate~~Services and ~~operate the business, which include, but are not limited to, customer base, homogeneity of products and technology.~~

~~Our~~ Telematics Systems, ~~segment offers a portfolio~~also represented our 2 reporting units for goodwill impairment testing. During the fourth quarter of ~~wireless data communications products, which includes asset tracking~~fiscal 2020, our former CODM changed our reporting structure, resulting in 4 reporting units ~~mobile telematics devices, fixed and mobile wireless gateways and routers. These wireless networking devices underpin a wide range~~with 2 reporting units under each of our ~~own, as well as third-party software~~reportable segments. During the first quarter of fiscal 2021, our President and ~~service solutions worldwide~~Chief Executive Officer, who is our current CODM, realigned our operational structure into 3 reportable segments: Software & Subscriptions Services, Telematics Products and ~~are critical for applications demanding secure, reliable and business-critical communications. Telematics Systems~~LoJack U.S. SVR Products. We have recast certain prior period amounts to conform to the way our CODM regularly reviews segment ~~revenues consist primarily of stand-alone product sales.~~performance.

Our Software & Subscription Services segment offers cloud-based, application enablement and telematics service platforms that facilitate integration of our own applications, as well as those of third parties, through open Applications Programing Interfaces (“APIs”) to deliver full-featured IoT solutions to a wide range of customers and markets. Our scalable proprietary SaaS offerings enable rapid and cost-effective deployment of high-value solutions for customers all around the globe. Software & Subscription Services segment revenues include SaaS, professional services, devices sold with tracking, monitoring and recovery services, accessories, and amortization of deferred revenue for customized devices functional only with application subscriptions that are not sold separately.

Our Telematics Products segment offers a portfolio of wireless data communications products, which includes asset tracking units, mobile telematics devices, fixed and mobile wireless gateways and routers. These wireless networking devices underpin a wide range of our own, as well as third-party software and service solutions worldwide and are critical for applications demanding secure, reliable and business-critical communications. Telematics Product segment revenues consist primarily of stand-alone product sales.

Our LoJack U.S. SVR Product segment represents the portfolio of security and protection products and services for tracking and recovering cars, trucks and other valuable mobile assets in the United States. LoJack U.S. SVR Product segment revenues consist primarily of stand-alone product sales. As previously described in Note 1, our Board of Directors approved a plan for management to commence a process to wind down LoJack U.S. SVR operations.

Segment information ~~for the three and nine months ended November 30, 2019 and 2018~~ is as follows (in thousands):

	Three Months Ended November 30, 2019												Three Months Ended November 30, 2018												Three Months Ended November 30, 2020															Three Months Ended November 30, 2019
	Operating Segments												Operating Segments												Reportable Segments															Reportable Segments
	Telematics Systems			Software & Subscription Services			Corporate Expenses			Total			Telematics Systems			Software & Subscription Services			Corporate Expenses			Total			Software & Subscription Services			Telematics Products		��	LoJack U.S. SVR Products			Corporate Expenses			Total			Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total
Revenues	$	63,192		$	33,405					$	96,597		$	68,552		$	19,943					$	88,495		$	34,396		$	44,071		$	9,545					$	88,012		$	33,405		$	51,895		$	11,297					$	96,597
Gross profit	$	20,956		$	15,928					$	36,884		$	26,284		$	10,097					$	36,381		$	17,266		$	13,804		$	3,935					$	35,005		$	15,928		$	16,116		$	4,840					$	36,884
Gross margin		33	%		48	%					38	%		38	%		51	%					41	%		50	%		31	%		41	%					40	%		48	%		31	%		43	%					38	%
Adjusted EBITDA	$	4,518		$	7,254		$	(867	)	$	10,905		$	9,276		$	3,612		$	(1,465	)	$	11,423		$	8,927		$	766		$	87		$	(1,009	)	$	8,771		$	7,254		$	4,700		$	(182	)	$	(867	)	$	10,905

	Nine Months Ended November 30, 2019												Nine Months Ended November 30, 2018												Nine Months Ended November 30, 2020															Nine Months Ended November 30, 2019
	Operating Segments												Operating Segments												Operating Segments															Operating Segments
	Telematics Systems			Software & Subscription Services			Corporate Expenses			Total			Telematics Systems			Software & Subscription Services			Corporate Expenses			Total			Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total			Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total
Revenues	$	188,782		$	90,121					$	278,903		$	222,004		$	57,416					$	279,420		$	96,121		$	130,342		$	25,301					$	251,764		$	90,121		$	152,027		$	36,755					$	278,903
Gross profit	$	70,277		$	39,688					$	109,965		$	86,189		$	28,104					$	114,293		$	47,583		$	39,885		$	9,400					$	96,868		$	39,688		$	54,344		$	15,933					$	109,965
Gross margin		37	%		44	%					39	%		39	%		49	%					41	%		50	%		31	%		37	%					38	%		44	%		36	%		43	%					39	%
Adjusted EBITDA	$	19,025		$	13,575		$	(3,479	)	$	29,121		$	31,772		$	9,907		$	(4,390	)	$	37,289		$	22,854		$	2,413		$	(1,259	)	$	(3,327	)	$	20,681		$	13,575		$	17,904		$	1,121		$	(3,479	)	$	29,121

The amount shown for each period in the “Corporate Expenses” column above consists of expenses that are not allocated to the business segments. These non-allocated corporate expenses include salaries and benefits of certain corporate staff and expenses such as audit fees, investor relations, stock listing fees, director and officer liability insurance, and director fees and expenses.

Our CODM evaluates each segment based on earnings before interest, taxes, depreciation, amortization and certain other charges (“Adjusted EBITDA”) and we therefore consider Adjusted EBITDA to be a primary measure of operating performance of our ~~operating~~reportable segments. The adjustments to our net income (losses) prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) to calculate Adjusted EBITDA are itemized below (in thousands):

	Three Months Ended November 30,						Nine Months Ended November 30,						Three Months Ended November 30,						Nine Months Ended November 30,
	2019			2018			2019			2018			2020			2019			2020			2019
Net income (loss)	$	(7,415	)	$	(522	)	$	(23,477	)	$	7,135
Net loss													$	(23,680	)	$	(7,415	)	$	(47,580	)	$	(23,477	)
Investment income		(1,108	)		(1,398	)		(4,445	)		(3,258	)		(584	)		(1,108	)		(1,282	)		(4,445	)
Interest expense		4,987			5,134			15,998			11,566			3,880			4,987			11,814			15,998
Income tax provision		(2,637	)		(778	)		(6,236	)		496
Income tax provision (benefit)														319			(2,637	)		825			(6,236	)
Depreciation		5,018			2,261			14,054			6,602			5,025			5,018			15,008			14,054
Amortization of intangible assets		3,325			2,893			9,683			8,534			1,855			3,325			5,591			9,683
Stock-based compensation		3,652			2,941			9,378			8,088			3,030			3,652			8,624			9,378
Loss on extinguishment of debt		2,408			—			2,408			2,033			—			2,408			—			2,408
Impairment loss and equity in net loss of affiliate		—			445			530			1,414
Impairment loss														17,999			—			22,574			—
Restructuring charges		848			1,247			3,120			5,196			92			848			2,551			3,120
Non-recurring legal expenses		957			2,116			5,541			5,253			205			957			1,168			5,541
Acquisition and integration related expenses		382			—			1,572			—			—			382			—			1,572
Gain on LoJack battery performance legal Settlement		—			(2,500	)		-			(15,833	)
Other		488			(416	)		995			63			630			488			1,388			1,525
Adjusted EBITDA	$	10,905		$	11,423		$	29,121		$	37,289		$	8,771		$	10,905		$	20,681		$	29,121

Our CODM does not obtain identifiable assets by segment because our businesses share resources, functions and facilities. We do not have significant long-lived assets outside the United States.

	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	November 30,				November 30,				November 30,				November 30,
	2019		2018		2019		2018		2020		2019		2020		2019
United States	$	69,961	$	67,088	$	201,678	$	208,152	$	60,823	$	69,961	$	171,318	$	201,678
Europe, Middle East and Africa		14,818		10,328		41,625		37,460		13,771		14,818		45,214		41,625
Latin America		1,044		832		4,307		4,961
Canada		2,236		3,249		7,553		6,951
South America										7,349		5,518		19,078		16,494
Asia and Pacific Rim		3,044		3,465		7,394		10,704		4,034		3,044		8,077		7,394
All other		5,494		3,533		16,346		11,192		2,035		3,256		8,077		11,712
	$	96,597	$	88,495	$	278,903	$	279,420	$	88,012	$	96,597	$	251,764	$	278,903

Revenues by geographic area are based upon the country of billing. The geographic location of distributors and OEM customers may be different from the geographic location of the ultimate end users of the products and services provided by us. No single non-U.S. country accounted for more than 10% of our revenue in the three and nine months ended November 30, ~~2019~~2020 and ~~2018.~~2019.

~~As previously disclosed in~~On May 6, 2020, we filed our Form 10-Q for the fiscal quarter ended May 31, 2019 that was filed with the U.S. Securities and Exchange Commission on June 28, 2019, we filed motions with the court seeking judgment as a matter of law and for a new trial in response to the patent infringement law suit filed by Omega Patents, LLC (“Omega”) that was decided against us in 2016. The court denied our motions on November 14, 2017. We then appealed to the Court of Appeals for the Federal Circuit (the “Federal Circuit”). The appeal was fully briefed, and the court heard oral argument on January 9, 2019. On April 8, 2019, the Federal Circuit vacated the compensatory and enhanced damages and attorney’s fees awarded by the trial court to Omega. The Federal Circuit also set aside the jury’s verdict that our alleged infringement was willful, and remanded the case for a new trial. As a result, substantially all of the previously reserved legal provisions of $19.1 million as of November 30, 2018 were reversed as of February 28, 2019. The reversal was recorded as a reduction of general and administrative expenses in our consolidated statement of comprehensive income10-K for the fiscal year ended February ~~28, 2019. The new trial began~~29, 2020 which disclosed the current status of the Omega patent infringement claim. In summary, on ~~September 23, 2019 in~~March 20, 2020, the U.S. District Court for the Middle District of Florida and on September 30, 2019, the jury determined that the Company infringed two of the four patents; however, the jury found that there was no willful infringement. On the first patent (U.S. Pat. No. 7,671,727), the jury found only one unit infringed, and assessed $1 in damages. On the second patent (U.S. Pat. No. 8,032,278), the jury found direct infringement and awarded damages at a rate of $5 per unit,(the “Trial Court”) denied our motion for total damages of approximately $4.6 million. On November 26, 2019 the U.S. District Court for the Middle District of Florida entered judgment, awarding Omega damages of $4.6 million, together with pre-judgment interest in the amount of $0.8 million through September 30, 2019. We plan to file motions with the court seeking judgmentjudgement as a matter of law ~~in our favor and, alternatively,~~(“JMOL”), a new ~~trial. If, following resolution~~trial, and remittitur of ~~those motions,~~damages. Also, on March 20, 2020, the ~~judgment against~~Trial Court denied Omega’s motion for a new trial on willfulness. On April 1, 2020, the ~~Company remains intact, we intend~~Trial Court denied Omega’s motion to ~~again pursue an appeal at~~enhance the ~~Federal Circuit.~~

~~In connection with this claim, we have accrued our best estimate~~royalty rate beyond the jury’s award of $5 per unit and motion to conduct post-trial discovery on CalAmp’s other OBD-II compliant LMUs. On April 3, 2020, the Trial Court denied Omega’s final motion regarding infringement of the ~~probable liability based on reasonable royalty rates for similar technologies. It~~VPODs. Omega’s cross-appeal reply brief, which will be the final brief in the appeal, is ~~reasonably possible that the judgement and amounts described above could be upheld.~~due December 21, 2020.

We also initiated ex parte reexamination proceedings filed in the U.S. Patent and Trademark Office seeking to invalidate a number of Omega’s patents involved in the litigation. Those proceedings currently remain pending. We continue to believe that our products do not infringe on any of Omega’s patents. ~~While it~~

In connection with this claim, we have accrued our best estimate of the probable liability based on reasonable royalty rates for similar technologies. It is ~~not feasible to predict with certainty~~reasonably possible that the ~~outcome of this litigation,~~judgement and amounts described above could be upheld, which would exceed the amounts we ~~believe that its ultimate resolution would not~~ have ~~a material adverse effect on our consolidated results of operations, financial condition and cash flows.~~accrued.

In addition to the foregoing matters, from time to time as a normal consequence of doing business, various claims and litigation may be asserted or commenced against us. In particular, ~~in the ordinary course of business,~~ we may receive claims concerning ~~personnel matters,~~ contract performance or claims that our products or services infringe the intellectual property of third ~~parties. In connection with these matters, we may be required to enter into license agreements or other settlement arrangements that require us to make significant payments~~parties which are in the ~~future.~~ordinary course of business. While the outcome of any such claims or litigation cannot be predicted with certainty, ~~we do~~management does not believe that the outcome of ~~any~~ such matters existing at the present time would have a material adverse effect on our condensed consolidated results of operations, financial condition ~~and~~or cash flows.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OFOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our discussion and analysis of financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues, costs and expenses during the reporting periods. Actual results could differ materially from these estimates. The critical accounting policies listed below involve our more significant accounting judgments and estimates that are used in the preparation of the consolidated financial statements. These policies are described in greater detail in Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) under Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended February ~~28, 2019,~~29, 2020, as filed with the U.S. Securities and Exchange Commission on May ~~1, 2019,~~6, 2020, and include the following areas:

We are a telematics pioneer leading transformation in a mobile connected economy. We help reinvent businesses and improve lives around the globe with technology solutions that streamline complex Internet of Things (“IoT”) ~~developments~~deployment through wireless connectivity solutions and derived data intelligence. Our software applications, scalable cloud services, and intelligent devices collect and assess business-critical data from mobile assets and their contents. ~~Our business is organized into~~Historically, we had two reportable ~~segments: Telematics Systems and~~segments, Software & Subscription ~~Services.~~Services and Telematics Systems. During the first quarter of fiscal 2021, our President and Chief Executive Officer, who is our current Chief Operating Decision Maker (“CODM”), realigned our operational structure into three reportable segments: Software & Subscriptions Services, Telematics Products and LoJack U.S. SVR Products. Our organizational structure is based on a number of factors that our CEO, as the ~~Chief Operating Decision Maker (“CODM”),~~CODM, uses to evaluate and operate the business, which include, but are not limited to, customer base, homogeneity of products, and technology within these ~~two~~three segments. A description of the reportable business segments is provided below.

~~On February 25, 2019, we completed our acquisition of Tracker Network (UK) Limited (“Tracker UK”), a LoJack licensee and a market leader in~~ ~~stolen vehicle recovery~~ (“SVR”) telematics services across the United Kingdom, for a cash purchase price of $13.1 million. On March 19, 2019, we completed the acquisition of Car Track, S.A. de C.V. (“LoJack Mexico”), the exclusive licensee of LoJack technology for the Mexican market. We purchased the remaining 87.5% of the LoJack Mexico shares that we did not own for a cash purchase price of $14.3 million. On April 12, 2019, we acquired Synovia Solutions LLC (“Synovia”), a North American market leader in fleet safety and management for K-12 school bus and state and local government fleets for a cash purchase price of $49.8 million. Combined with the recent acquisitions of Tracker UK and LoJack Mexico, the Synovia acquisition expands our fleet management and vehicle safety services portfolio and accelerates our transformation to high-value subscription-based services. See Note 2 for a description of these acquisitions.

Our Telematics Systems segment offers a series of advanced telematics and SVR products for the broader connected vehicle marketplace, which enable customers to optimize their operations by collecting, monitoring and effectively reporting business-critical information and desired intelligence from high-value remote and mobile assets. Our telematics products include asset tracking units, mobile telematics devices, mobile gateways, and routers. These wireless networking devices underpin a wide range of solutions, and are ideal for applications demanding secure, reliable and business-critical communications.

Our Software & Subscription Services segment offers cloud-based application enablement and telematics service platforms that facilitate integration of our own applications, as well as those of third parties, through open Application Programming Interfaces (“APIs”) to deliver full-featured mobile IoT solutions to a wide range of customers and markets. Our scalable proprietary applications and other subscription services enable rapid and cost-effective development of high-value solutions for customers all around the globe. ~~Effective as of the respective transaction dates, our recently acquired businesses, Tracker UK, LoJack Mexico and Synovia, became components of this segment (see Note 2).~~

26Our Telematics Products segment offers a series of advanced telematics products for the broader connected vehicle marketplace, which enable customers to optimize their operations by collecting, monitoring and effectively reporting business-critical information and desired intelligence from high-value remote and mobile assets. Our telematics products include asset tracking units, mobile telematics devices, mobile gateways, and routers. These wireless networking devices underpin a wide range of solutions, and are ideal for applications demanding secure, reliable and business-critical communications.

Our LoJack U.S. SVR Products segment offers a series of security and protection products and services for tracking and recovering vehicles. Our Stolen Vehicle Recovery (“SVR”) solution is the only one directly integrated with law enforcement that has a 90%+ recovery rate and over $1 billion worth of recoveries in the U.S. alone. As described in Note 1 to the accompanying condensed consolidated financial statements, our Board of Directors approved a plan for management to commence the wind down of LoJack U.S. SVR operations.

In addition to our U.S. GAAP results, we present Adjusted EBITDA as a supplemental non-GAAP measure of our performance. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that excludes or includes amounts to be different than the most directly comparable measure calculated and presented in accordance with ~~generally accepted accounting principles~~GAAP in the statements of comprehensive ~~income (loss),~~loss, balance sheets or statements of cash flows. We define Adjusted EBITDA as ~~Earnings Before Investment Income, Interest Expenses, Taxes, Depreciation, Amortization,~~earnings before investment income, interest expenses, taxes, depreciation, amortization, stock-based compensation, acquisition and integration expenses, non-cash costs and expenses arising from purchase accounting adjustments, litigation provision, gain from legal settlement and certain other adjustments. Our CEO, as the CODM, uses Adjusted EBITDA to evaluate and monitor segment performance. We believe this non-GAAP financial information provides additional insight into our ongoing performance and have therefore chosen to provide this information to investors for a more consistent basis of comparison to help

investors evaluate our results of ongoing operations and enable more meaningful period-to-period comparisons. Pursuant to the rule and regulations of the ~~U.S. Securities and Exchange Commission~~SEC regarding the use of non-GAAP financial measures, we have provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measure. See Note 1715 to the accompanying condensed consolidated financial statements for additional information related to Adjusted EBITDA by reportable segments and reconciliation to net ~~income (loss).~~loss.

In December 2019, a strain of coronavirus entitled COVID-19 emerged in China and spread to other countries including to the United States. In March 2020, the World Health Organization declared COVID-19 to be a public health pandemic of international concern, which has resulted in travel restrictions and in some cases, prohibitions of non-essential activities, disruption and shutdown of businesses and greater uncertainty in global financial markets.

In the United States and other geographies in which we and our customers, partners and service providers operate, the health concerns as well as political or governmental developments in response to COVID-19 could result in economic, social or labor instability or prolonged contractions in certain end markets which could slow the sales process, result in customers not purchasing or renewing contracts or failing to make payments. These events could have a material adverse effect on the business and results of operations and financial condition.

Our business and operating results depend on telematics product sales, device installations and related subscription-based services. In certain situations, the outbreak has limited our ability to install devices in the nine months ended November 30, 2020. The effect of the outbreak may continue to impact our operating results depending on the severity of the pandemic and the actions taken or to be taken by governments and private businesses in relation to its containment.

We have adopted several measures in response to the COVID-19 outbreak, including instructing employees to work from home, implementing certain cost and cash flow control measures to address potential declines in billings and cash collections from customers, shifting the manner in which we engage with customers and restricting non-critical business travel by our employees. As a result of the work and travel restrictions, substantially all of our sales and installation services activities are being conducted or managed remotely.

On December 16, 2020, our Board of Directors approved a plan for management to commence with the wind down of the LoJack U.S. operations. This business unit has historically provided SVR products operating on a radio frequency allocated by the FCC for domestic automotive dealerships. These products and related services have been provided predominately as a hardware-based offering that no longer aligns with our core strategy. We will continue supporting existing customers and law enforcement partners to allow sufficient time for an orderly transition out of the business. Additionally, we will continue operating and investing in our LoJack international business which operates in a subscription-based business model and is well aligned with our core SaaS strategy.

Three months ended November 30, ~~2019~~2020 compared to three months ended November 30, ~~2018:~~2019:

	Three Months Ended November 30,																Three Months Ended November 30,
	2019					2018											2020					2019
(In thousands)	$		% of Revenue			$		% of Revenue			$ Change			% Change			$		% of Revenue			$		% of Revenue			$ Change			% Change
Segment
Telematics Systems	$	63,192		65.4	%	$	68,552		77.5	%	$	(5,360	)		(7.8	%)
Software & Subscription Services		33,405		34.6	%		19,943		22.5	%		13,462			67.5	%	$	34,396		39.1	%	$	33,405		34.6	%	$	991			3.0	%
Telematics Products																		44,071		50.1	%		51,895		53.7	%		(7,824	)		(15.1	%)
LoJack U.S. SVR Products																		9,545		10.8	%		11,297		11.7	%		(1,752	)		(15.5	%)
Total	$	96,597		100.0	%	$	88,495		100.0	%	$	8,102			9.2	%	$	88,012		100.0	%	$	96,597		100.0	%	$	(8,585	)		(8.9	%)

~~Telematics Systems~~Software & Subscription Services revenue ~~decreased~~increased by ~~$5.4~~$1.0 million or ~~7.8%~~3.0% for the three months ended November 30, ~~2019~~2020 compared to the same period last year. The increase was primarily due to revenue growth in our government, municipalities and K-12 school bus end markets as well as our international recovery services specifically in Italy and the United Kingdom, partially offset by a decrease in revenue in Mexico as a result of the COVID-19 pandemic.

Telematics Products revenue decreased by $7.8 million or 15.1% for the three months ended November 30, 2020 compared to the same period last year. The decrease was attributable to reduced sale volume ~~in three product categories including MRM telematics, OEM/network products and legacy LoJack SVR products. The decrease in MRM telematics products sales was primarily~~ due to a ~~reduction~~decline in ~~sales volume~~demand from our small-to-medium sized customers adversely impacted by the uncertain market conditions prompted by the COVID-19. The decline was partially offset by an increase in OEM/Network products revenue as we accelerate the migration to ~~a few larger customers. The decrease in OEM/network~~LTE products ~~was attributable to a reduction in sales to~~with one of our largest ~~OEM/network products customer which is in the middle of a product line transition and also commencing the rollout of the initial phase of a 3G-to-4G LTE retrofit program.~~customers. We expect this overall

decline in Telematics Products to be temporary and to be offset by ~~demands from our customers~~increased customer demand in the early part of fiscal 2022 as the 3G network sunset becomes more ~~imminent. Legacy~~ imminent and the effects of the COVID-19 pandemic diminish.

LoJack USU.S. SVR Products revenue ~~continues~~decreased by $1.8 million or 15.5% for the three months ended November 30, 2020 compared to ~~decline~~the same period last year. The decrease was due to a decline in customer demand attributed to the COVID-19 outbreak in the U.S. since February 2020 as well as a technology transition from proprietary radio frequency technology to GPS-based telematics solutions. ~~We expect this decline to continue but be offset to a degree over time~~

Gross Profit by ~~revenues from our recent acquisitions and future growth in our telematics solutions, such as SureDrive and LotSmart within our Software & Subscription Services segment.~~Segment

Consolidated gross profit decreased by ~~$13.5~~$1.9 million or ~~67.5%~~5.1% for the three months ended November 30, ~~2019~~2020 compared to the same period last year. The ~~increase~~decline in consolidated gross profit was ~~primarily~~ due to lower revenue from our Telematics and LoJack U.S. SVR Products primarily as a result of the ~~three recent acquisitions of Tracker UK, LoJack Mexico and Synovia, coupled with growth in LoJack Italy.~~

COVID-19 pandemic. Consolidated gross ~~profit~~margin increased by ~~$0.5 million or 1.4%~~160 basis points for the three months ended November 30, ~~2019~~2020 compared to the same period last ~~year. The increase in absolute dollar terms was~~year due to continued growth in Software & Subscription Services ~~partially offset by lower revenue and gross profits in the Telematics Systems business~~ as described above.

Consolidated gross margin decreased by 290 basis for the three months ended November 30, 2019 compared to the same period last year. Gross margin for Telematics Systems decreased to 33.2% for the three months ended November 30, 2019 from 38.3% for the three months ended November 30, 2018. Gross margin was impacted principally by product mix coupled with incremental charges for excess and obsolete inventory and unfavorable manufacturing variances as we proceed with the closure of our manufacturing facility in Oxnard, California within the next 90 days. Gross margin for Software & Subscription Services was 47.7% for the three months ended November 30, 2019 compared to 50.6% for the same period last year. The decrease was primarily driven by the recently acquired businesses as the gross profit was impacted by purchase price adjustments to deferred revenue.

Cost of revenues above excludes ~~the~~ restructuring related costs, which is shown separately in ~~the~~ operating expenses in our condensed ~~consolidation statement~~consolidated statements of comprehensive ~~income (loss).~~loss.

	Three Months Ended November 30,																Three Months Ended November 30,
	2019					2018											2020					2019
(In thousands)	$		% of Revenue			$		% of Revenue			$ Change			% Change			$		% of Revenue			$		% of Revenue			$ Change			% Change
Research and development	$	7,742		8.0	%	$	7,177		8.1	%	$	565			7.9	%	$	6,783		7.7	%	$	7,742		8.0	%	$	(959	)		(12.4	%)
Selling and marketing		14,683		15.2	%		12,746		14.4	%		1,937			15.2	%		14,647		16.6	%		14,683		15.2	%		(36	)		(0.2	%)
General and administrative		14,283		14.8	%		11,719		13.2	%		2,564			21.9	%		13,642		15.5	%		14,283		14.8	%		(641	)		(4.5	%)
Intangible asset amortization																		1,855		2.1	%		3,325		3.4	%		(1,470	)		(44.2	%)
Restructuring		848		0.9	%		1,247		1.4	%		(399	)		(32.0	%)		92		0.1	%		848		0.9	%		(756	)		(89.2	%)
Intangible asset amortization		3,325		3.4	%		2,893		3.3	%		432			14.9	%
Impairment loss																		17,999		20.5	%		—		0.0	%		17,999			100.0	%
Total	$	40,881		42.3	%	$	35,782		40.4	%	$	5,099			14.3	%	$	55,018		62.5	%	$	40,881		42.3	%	$	14,137			34.6	%

Consolidated research and development expense ~~increased~~decreased by ~~$0.6~~$1.0 million or ~~7.9%~~12.4% for the three months ended November 30, ~~2019~~2020 compared to the same period last ~~year.~~year as we implemented certain cost containment measures in connection with the COVID-19 outbreak. We will continue to invest in research and development of new products and ~~technologies to be sold through the U.S. and international sales channels.~~technologies.

Consolidated selling and marketing expense ~~increased by $1.9 million or 15.2%~~remained consistent for the three months ended November 30, ~~2019~~2020 compared to the same period last year. We will invest in additional headcount in sales and marketing as we gain greater visibility into customer demand as the effects of the COVID-19 pandemic diminish.

Consolidated general and administrative expenses decreased by $0.6 million or 4.5% for the three months ended November 30, 2020 compared to the same period last year. The ~~increase~~decrease was primarily driven by ~~additional compensation expenses related to an increase in headcount~~lower personnel costs due to reduced headcount and lower outside professional service fees as we gain synergies and cost savings from the integration of acquired businesses.

~~Consolidated general and administrative expenses increased~~Amortization of intangibles decreased by ~~$2.6~~$1.5 million or ~~21.9%~~44.2% for the three months ended November 30, ~~2019~~2020 compared to the same period last ~~year. The increase was primarily driven by additional compensation expenses related to an increase in headcount~~year due to ~~acquired businesses~~reduced amortization resulting from the intangible asset impairment losses recorded in fiscal 2020 and ~~partially offset by decreases~~first quarter in professional fees related to certain non-recurring legal matters. We began partial operations on our new Enterprise Resource Planning (“ERP”) system in June 2019, which also resulted in increased general and administrative expenses. Certain implementation costs on our new ERP system were capitalized as Property and Equipment in our condensed consolidated balance sheets.fiscal 2021.

As described in Note 87 to the accompanying condensed consolidated financial statements, during ~~the three months ended May 31, 2018,~~fiscal 2019, we commenced a plan to capture certain synergies and cost savings related to streamlining our global operations and sales organization as well as rationalize certain leased properties that ~~are partially~~were vacant. We incurred ~~additional~~ charges of $0.1 million for this initiative during the three months ended November 30, ~~2019. Total restructuring~~2020, which were primarily personnel related. Restructuring costs are shown separately in operating expenses in our condensed consolidated statements of comprehensive loss.

On December 16, 2020, our Board of Directors approved a plan for management to commence with the wind down the LoJack U.S. SVR operations. Based on our decision, coupled with our assessment of economic conditions and trends, we recorded an impairment loss aggregating $18.0 million, comprised of write-downs of $8.8 million of property and equipment and other assets, $8.1 million of goodwill and $1.1 million of intangible assets.

Investment income decreased ~~$0.4~~to$0.6 million ~~or 32%~~ for the three months ended November 30, 2019 compared to the same period last year. The decrease was attributable to lower restructuring costs related to personnel charges. Restructuring costs are shown separately in the operating expenses in our condensed consolidated statement of comprehensive income (loss).

~~Amortization of intangibles increased by $0.4 million or 14.9% for the three months ended November 30, 2019 compared to the same period last year due to the addition of intangible assets resulting~~2020 from ~~recent business acquisitions.~~

~~Investment income decreased by $0.3 million to~~ $1.1 million for the three months ended November 30, ~~2019 from $1.4~~2019. The decrease was primarily driven by lower rates of interest earned on invested funds.

Interest expense decreased to$3.9 million for the three months ended November 30, ~~2018. The decrease was primarily due to a decrease in investment income on Rabbi Trust assets that serve to informally fund our non-qualified deferred compensation plan during the period.~~

~~Interest expense decreased by $0.1 million to~~2020 from $5.0 million for the three months ended November 30, 2019 ~~from $5.1 million~~as we fully repaid the 2020 Convertible Notes in first quarter of the current fiscal year. Interest expense for the three months ended November 30, ~~2018 primarily due to lower stated~~2020 included interest ~~expense, amortization~~paid for the $20.0 million borrowing under revolving line of ~~debt discount and issue costs that resulted from the repurchase of the 2020 Convertible Notes. The decrease was partially offset by the amortization of discount of Due to Factors.~~credit, which we fully repaid on November 19, 2020.

During the three months ended November 30, 2018, we recognized a $2.5 million gain from the legal settlement with a former supplier of LoJack. The final payment on the legal settlement was received in February 2019.

During the three months ended November 30, 2019, we recognized a loss of $2.4 million on extinguishment of debt on the repurchase of $94.9 million of our 2020 Convertible Notes in October and November 2019.

Other non-operating ~~income~~expense was $0.1 million for the three months ended November 30, ~~2019 was $0.2 million,~~2020 as compared to ~~a loss~~other non-operating income of $0.2 million for the ~~comparable period of the prior year~~three months ended November 30, 2019. The change was primarily due to ~~a favorable~~an unfavorable shift in foreign currency exchange rates.

GAAP-basis net loss in the three months ended November 30, ~~2019~~2020 was ~~$7.4~~$23.7 million as compared to a net loss of ~~$0.5~~$7.4 million in the three months ended November 30, ~~2018.~~2019. The ~~$6.9~~$16.3 million increase in the net loss ~~is due to~~was primarily driven by the ~~operating~~$18.0 million impairment loss ~~resulting from an increase~~recorded in connection with the commencement of the wind down of our LoJack U.S. SVR operations, partially offset by lower operating expenses ~~during the quarter due to recent acquisitions~~ as described ~~above and a $2.4 million loss on extinguishment of debt.~~above.

	Three Months Ended November 30,												Three Months Ended November 30,
(In thousands)	2019			2018			$ Change			% Change			2020			2019			$ Change			% Change
Segment
Telematics Systems	$	4,518		$	9,276		$	(4,758	)		(51.3	%)
Software & Subscription Services		7,254			3,612			3,642			100.8	%	$	8,927		$	7,254		$	1,673			23.1	%
Telematics Products														766			4,700			(3,934	)		(83.7	%)
LoJack U.S. SVR Products														87			(182	)		269			(147.8	%)
Corporate Expenses		(867	)		(1,465	)		598			(40.8	%)		(1,009	)		(867	)		(142	)		16.4	%
Total Adjusted EBITDA	$	10,905		$	11,423		$	(518	)		(4.5	%)	$	8,771		$	10,905		$	(2,134	)		(19.6	%)

Adjusted EBITDA for Software & Subscription Services increased by $1.6 million compared to the same period last year primarily due to higher gross profit as described above. Adjusted EBITDA for Telematics ~~Systems in the three months ended November 30, 2019~~Products decreased by ~~$4.8~~$3.9 million compared to the same period last year primarily due to a decline in revenue resulting from decreased sales volume ~~and acquisition of Synovia Solutions~~in connection with the COVID-19 pandemic as described above. Adjusted EBITDA for ~~Software & Subscription Services increased by $3.6 million compared to the same period last year primarily due to higher gross profit~~LoJack U.S. SVR Products and ~~partially offset by higher operating expenses as a result of the recently acquired businesses described above. Adjusted EBITDA for~~ Corporate Expenses ~~decreased due to lower legal expenses.~~remained consistent year-over-year.

See Note ~~17 for information related to Adjusted EBITDA by reportable segments and a reconciliation to GAAP-basis net income (loss).~~

~~Nine months ended November 30, 2019 compared to nine months ended November 30, 2018:~~

Telematics Systems revenue decreased by $33.2 million or 15.0% for the nine months ended November 30, 2019 compared to the same period last year. The decrease was attributable to reduced sale volume in three product categories including MRM telematics, OEM/network products and legacy LoJack SVR products. The decrease in MRM telematics products sales was primarily due to a reduction in sales volume to a few larger customers including Synovia Solutions, which we acquired in in April 2019, and is now contributing to our Software & Subscription Services segment. The decrease in OEM/network products was attributable to a reduction in sales to our largest OEM/network products customer which is in the middle of a product line transition and also commencing the rollout of the initial phase of a 3G-to-4G LTE retrofit program. We expect this decline to be temporary and to be offset by demands from our customers as the 3G network sunset becomes more imminent. Legacy LoJack SVR revenue continued its secular decline due to a technology transition from proprietary radio frequency technology to GPS-based telematics solutions. We expect this decline to continue but be offset to a degree over time by revenues from our recent acquisitions and future growth in our telematics solutions, such as SureDrive and LotSmart within our Software & Subscription Services segment.

Software & Subscription Services revenue increased by $32.7 million or 57.0% for the nine months ended November 30, 2019 compared to the same period last year. The increase was due primarily to the three recent acquisitions of Tracker UK, LoJack Mexico and Synovia, coupled with growth in LoJack Italy.

Consolidated gross profit decreased by $4.3 million or 3.8% for the nine months ended November 30, 2019 compared to the same period last year. The decrease in absolute dollar terms was due to lower revenue in the Telematics Systems business partially offset by continued growth in Software & Subscription Services as described above.

Consolidated gross margin decreased by 150 basis points for the nine months ended November 30, 2019 from 40.9% for the same period last year, which was primarily attributable to a decrease in gross margin from the Telematics Systems business. Our gross margin performance was impacted principally by product mix coupled with incremental charges for excess and obsolete inventory and unfavorable manufacturing variances as we proceed with the closure of our manufacturing facility in Oxnard, California within the next 90 days. Gross margin for Software & Subscription Services decreased to 44.0% for the nine months ended November 30, 2019 from 48.9% for the same period last year. The decrease was primarily driven by the recently acquired businesses, as gross profit is impacted by purchase price adjustments to deferred revenue.

~~Cost of revenues above excludes the restructuring related costs, which is shown separately in the operating expenses in our condensed consolidation statement of comprehensive income (loss).~~

Consolidated research and development expense increased by $1.2 million or 5.5% for the nine months ended November 30, 2019 compared to the same period last year. The increase was primarily driven by additional compensation expenses related to an increase in headcount due to acquired businesses. We will continue to invest in research and development of new products and technologies to be sold through the U.S. and international sales channels.

Consolidated selling and marketing expense increased by $7.4 million or 19.7% for the nine months ended November 30, 2019 compared to the same period last year. The increase was primarily driven by additional compensation expenses related to an increase in headcount due to the acquired businesses.

Consolidated general and administrative expense increased by $7.5 million or 20.2% for the nine months ended November 30, 2019 compared to the same period last year. The increase was primarily driven by additional compensation expenses related to an increase in headcount due to acquired businesses and increases in legal and professional fees related to the acquisitions and certain non-recurring legal matters. We began partial operations on the new ERP system in June 2019, which resulted in increased general and administrative expense. Certain implementation costs on our new ERP system were capitalized as Property and Equipment in our condensed consolidated balance sheets.

~~As described in Note 8~~15 to the accompanying condensed consolidated financial statements during the nine months ended November 30, 2019, we incurred an additional $3.1 million in restructuring costs related to the cost savings plan that commenced in May 2018. Total restructuring costs decreased $2.1 million or 40% for the nine months ended November 30, 2019 compared to the same period last year. The decrease was attributable to lower restructuring costs related to vacant office and manufacturing plant facilities. For the nine months ended November 30, 2018, we partially vacated these facilities and recorded a cost of $2.7 million. During the nine months ended November 30, 2019, we fully vacated certain offices, which resulted in a cost of $1.2 million. Restructuring costs are shown separately in the operating expenses in our condensed consolidated statement of comprehensive income (loss).

Amortization of intangibles increased by $1.1 million or 13.5% for the nine months ended November 30, 2019 compared to the same period last year due to the addition of intangible assets resulting from recent business acquisitions.

Investment income increased by $1.1 million to $4.4 million for the nine months ended November 30, 2019 from $3.3 million for the nine months ended November 30, 2018. The increase was due to dividend income we received from LoJack Mexico and a gain as further discussed in Note 2 from the fair value adjustment of our previously held interest in LoJack Mexico.

Interest expense increased to $16.0 million for the nine months ended November 30, 2019 from $11.6 million for the nine months ended November 30, 2018 primarily due to additional interest and amortization of debt discount and issue costs related to the 2025 Convertible Notes issued in July 2018 and amortization of discount of Due to Factors.

During the nine months ended November 30, 2018, we recognized a $15.8 million gain from the legal settlement with a former supplier of LoJack. The final payment on the legal settlement was received in February 2019.

During the nine months ended November 30, 2019, we recognized a loss of $2.4 million on extinguishment of debt on the repurchase of $94.9 million of our 2020 Convertible Notes in October and November 2019.

~~During the nine months ended November 30, 2018, we recognized a loss of $2.0 million on extinguishment of debt on the repurchase of $53.8 million of our 2020 Convertible Notes in July 2018.~~

Other non-operating income for the nine months ended November 30, 2019 was $26 thousand and increased from an expense of $0.7 million for the comparable period of the prior year due to an favorable shift in foreign currency exchange rates.

GAAP-basis net loss in the nine months ended November 30, 2019 was $23.5 million as compared to a net income of $7.1 million in the nine months ended November 30, 2018. The $30.6 million decrease in income is due to the operating loss resulting from an increase in operating expenses during the year due to recent acquisitions as described above coupled with a $15.8 million decrease in non-operating gain from a legal settlement that was fully recognized in fiscal 2019.

Adjusted EBITDA for Telematics Systems in the nine months ended November 30, 2019 decreased by $12.7 million or 40.1% compared to the same period last year primarily due to a decline in revenue resulting from decreased sales volume and acquisition of a customer as described above. Adjusted EBITDA for Software & Subscription Services increased by $3.7 million or 37.0% compared to the same period last year primarily due to recently acquired businesses.

~~See Note 17~~ for information related to Adjusted EBITDA by reportable segments and a reconciliation to GAAP-basis net income (loss).

An income tax expense of $0.3 million was recorded for the three months ended November 30, 2020, compared to an income tax benefit of ~~$6.2~~$2.6 million in the same period last year. The $2.9 million increase in tax expense was primarily driven by a pre-tax loss in the current period which did not result in an income tax benefit due to the recording of a valuation allowance against our net deferred tax assets.

Nine months ended November 30, 2020 compared to nine months ended November 30, 2019:

Software & Subscription Services revenue increased by $6.0 million or 6.7% for the nine months ended November 30, 2020 compared to the same period last year. The increase was primarily due to revenue growth in fleet management, government, municipalities and K-12 school bus end markets as well as our international recovery services specifically in Mexico and the United Kingdom, partially offset by a decrease in revenue due to decline in installation for businesses such as Italy as a result of COVID-19 pandemic.

Telematics Products revenue decreased by $21.7 million or 14.3% for the nine months ended November 30, 2020 compared to the same period last year. The decrease was attributable to reduced sale volume due to a decline in demand from our small-to-medium sized customers adversely impacted by the uncertain market conditions prompted by the COVID-19. The decline was partially offset by an increase in OEM/Network products revenue as we accelerate the migration to LTE products with one of our largest customers. We expect this overall decline in Telematics Products to be temporary and to be offset by increased customer demand in the early part of fiscal 2022 as the 3G network sunset becomes more imminent and the effects of the COVID-19 pandemic diminish.

LoJack U.S. SVR Products revenue decreased by $11.5 million or 31.2% for the nine months ended November 30, 2020 compared to the same period last year. The decrease was due to a decline in customer demand attributed to the COVID-19 outbreak in the U.S. since February 2020 as well as a technology transition from proprietary radio frequency technology to GPS-based telematics solutions.

Consolidated gross profit decreased by $13.1 million or 11.9% for the nine months ended November 30, 2020 compared to the same period last year, and consolidated gross margin decreased by 90 basis points for the nine months ended November 30, 2020 compared to the same period last year. The decline in consolidated gross profit and gross margin was due to lower revenue in our Telematics and LoJack U.S. SVR Products as a result of the COVID-19 pandemic as well as a $1.4 million one-time charge related to the resolution of a product performance matter with a customer. The decline in gross margin was partially offset by continued growth in Software & Subscription Services as described above.

Cost of revenues above excludes restructuring related costs, which is shown separately in operating expenses in our condensed consolidated statements of comprehensive loss.

An income tax expense of $0.8 million was recorded for the nine months ended November 30, ~~2019,~~2020, compared to an income tax ~~provision~~benefit of ~~$0.5~~$6.2 million in the same period last year. The ~~change~~$7.0 million increase in tax expense was primarily driven by a pre-tax loss in the current ~~year and a reversal~~period which did not result in an income tax benefit due to the recording of a valuation allowance against foreign tax credits, partially offset by a one-time discrete tax charge related to net equity based compensation “shortfalls” and a restructuring of foreign operations during the nine months ended November 30, 2019. Our effective tax rate was 21.4% and 5.5% for the nine months ended November 30, 2019 and 2018, respectively.

As of November 30, 2019, we had approximately $25.8 million in U.S. net deferred income tax assets. The net deferred income tax assets include approximately $7.8 million and $2.4 million of federal and state net operating loss carryforwards and approximately $11.3 million and $7.4 million federal and state tax credits, respectively. These deferred income tax assets can be used to reduce our taxable income and income taxes payable in future periods. Many of these net operating loss carryforwards and tax credits will expire if they are not used within certain periods. Based on our historical three-year cumulative income and certain tax planning strategies we continue to believe that our net deferred ~~income~~ tax assets will more likely than not be utilized before their expiration. We continue to closely monitor all available evidence in considering the amount of valuation allowance that is required on our U.S. net deferred tax assets.assets.

Consistent with fiscal ~~2019,~~2020, our primary recurring cash needs have been for working capital purposes and capital expenditures. We have historically funded our principal business activities through cash flows generated from operations. As we continue to grow our customer base and increase our revenues, there will be a need for working capital in the future. Our immediate sources of liquidity are cash and cash equivalents, ~~marketable securities~~ and our revolving credit facility. As of November 30, ~~2019,~~2020, we have ~~$103.6~~$91.7 million of cash and cash equivalents ~~and marketable securities~~ and $50 million available under our revolving credit facility. ~~During the third quarter of fiscal 2020, we repurchased $95 million of our 2020 Convertible Notes. We expect to settle the $27.6 million remaining 2020 Convertible Notes due May 2020 with cash.~~ Additionally, we expect to continue to finance our operations with cash on hand and cash generated from operations.

On March 30, 2018, we entered into a revolving credit facility with ~~J.P. Morgan~~JPMorgan Chase Bank, N.A. that ~~provides~~provided for borrowings of up to ~~$50.0~~$50 million. ~~This~~On March 27, 2020, we entered into an amendment of the revolving credit facility ~~expires on March 30, 2020 and we are currently in discussion with J.P. Morgan~~ to extend the term ~~for at least 12 months. At our election, the~~to March 30, 2022. Borrowings under this revolving credit facility bear interest at either a Prime or LIBOR-based variable rate ~~plus an applicable margin, or at the greater of the Prime Rate, the NYFRB Rate plus an applicable margin rate and~~as selected by us on a ~~one-month LIBOR-based variable rate plus an applicable margin rate (each as defined in the Credit Agreement), in each case determined based on our senior leverage ratio from time to time.~~periodic basis. This revolving credit facility contains financial covenants that require us to maintain a minimum level of earnings before interest, income taxes, depreciation, amortization and other noncash charges (EBITDA) and minimum debt coverage ratios. ~~There were no borrowings outstanding on this~~In May 2020, we borrowed $20 million under the revolving credit facility, atwhich was fully repaid on November ~~30, 2019.~~

As described in Note 2 to the accompanying consolidated financial statements, in February 2019, we acquired Tracker UK for $13.1 million. In March 2019, we completed the acquisition of 87.5% LoJack Mexico shares for $14.3 million. In April 2019, we acquired Synovia for $49.8 million. We funded these acquisitions from cash on hand. As part of the Synovia acquisition, we assumed the rights and obligations from the Synovia revenue assignments as described in Note 7. The revenues recognized from this arrangement of $5.0 million were considered a non-cash financing activity for the nine months ended November 30, 2019.19, 2020.

We are a defendant in various legal proceedings, including the Omega patent infringement claim, involving intellectual property claims and contract disputes in which the final resolutions have not been determined at this time. In connection with these matters, we may be required to enter into license agreements or other settlement arrangements that require us to make significant payments in the future. While it is not feasible to predict with certainty the outcome of these legal proceedings, based on currently available information, we believe that the ultimate resolution of these matters would not have a material adverse effect on our condensed consolidated results of operations, financial condition and cash flows.

See Note ~~18,~~16, Legal Proceedings, of the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on legal proceedings.

Cash flows from operating activities consist of net income (loss) adjusted for certain non-cash items, including depreciation, intangible asset amortization, stock-based compensation expense, amortization of discount and debt issue costs, deferred income taxes, ~~impairment loss and equity in net loss~~amortization of ~~affiliate,~~certain revenue assignment arrangements and the effect of changes in components of working capital.

Our cash flow from operating activities are attributable to our net income (loss) as well as how well we manage our working capital, which is dictated by the volume of products we purchase from our manufacturers or suppliers and then sell to our customers along with the payment and collection terms that we negotiate with them.

We purchase a majority of our products from significant suppliers located in Asia, that generally provide us 60-day payment terms for products purchased. We are currently reliant upon these suppliers for products. Although we believe that we can obtain products from other sources, the loss of a significant supplier could have a material impact on our financial condition and results of operations as the products that are being purchased may not be available on similar terms from another supplier.

Our significant customers are located in the United States and certain foreign countries. We believe that our relationships with our key customers are very good and that these customers are in good financial condition. We generally grant credit to our customers based on their financial viability and our historical collection experience with them. We typically require payment from them within 30 to 4560 days of our invoice date with a few exceptions that extend the credit terms ~~upto~~up to 90 days.

For the nine months ended November 30, 2020, net cash provided by operating activities was $24.3 million and net loss was $47.6 million. Our non-cash expenses, comprised principally of depreciation, intangible asset amortization, stock-based compensation expense, amortization of debt discount and issue costs, impairment losses and deferred income taxes totaled $65.1 million. These non-cash expenses are partially offset by non-cash revenues of $4.9 million related to acquired revenue assignment arrangements. Changes in operating assets and liabilities generated a $11.7 million cash inflow, primarily driven by changes in working capital including an increase in accounts payable and accrued liabilities, decrease in inventories and accounts receivable and partially offset by an increase in prepaid expenses and other assets.

For the nine months ended November 30, 2019, net cash provided by operating activities was $3.3 million and net loss was $23.5 million. Our non-cash expenses, comprised principally of depreciation, intangible asset amortization, stock-based compensation expense, amortization of debt discount and issue costs, and deferred income taxes totaled $44.4 million. These non-cash expenses are partially offset by non-cash revenues of $5.0 million related to ~~the Synovia~~acquired revenue assignment arrangements and $2.4 million losses incurred from repurchase of the 2020 Convertible Notes. Changes in operating assets and liabilities, net of the effects of our acquisitions, resulted in a $15.0 million cash outflow, primarily driven by changes in working capital including an increase in accounts receivable and inventory, and decrease in accounts payable.

For the nine months ended November 30, 2018, net cash provided by operating activities was $48.1 million. Net income was $7.1 million, which was primarily attributable to $15.8 million cash received from the settlement with a former supplier of LoJack that was realized as non-operating income during the period. We received the remaining $2.5 million in installments in the fourth quarter ending February 28, 2019. Our non-cash items, comprised principally of depreciation, intangible assets amortization, stock-based compensation expense, amortization of convertible debt issue costs and discount, loss on extinguishment of debt, deferred income taxes and equity in net loss of our affiliate and non-cash assigned revenues totaled $34.0 million. Changes in operating assets and liabilities created a $5.6 million source of cash, primarily driven by changes in working capital including an increase in deferred revenue and decrease in inventory but partially offset by an increase in prepaid expense and decrease in accounts payable. The increases in our working capital accounts were attributable to an increase in sales volume in the most recent quarter.

For the nine months ended November 30, ~~2019~~2020 and ~~2018,~~2019, our net cash used in investing activities was ~~$62.3~~$11.1 million and ~~$17.1~~$62.3 million, respectively. In each of these periods, our primary investing activities consisted of the purchase and sale of marketable securities in accordance with our corporate investment policy as well as capital expenditures. During the nine months ended November 30, 2019, we also acquired Synovia and LoJack Mexico for $48.9 million and $12.7 million, net of cash acquired, respectively.

We expect that we will make additional capital expenditures in the future, including the ~~further build-out of our corporate offices and IT infrastructure, and the~~ devices that we lease to customers ~~on the Synovia~~under subscription ~~agreements. All of these will be done~~agreements in order to support the future growth of our business.

For the nine months ended November 30, ~~2019~~2020 and ~~2018,~~2019, our net cash ~~(used in) or provided by~~used in financing activities was ~~$(95.5)~~$28.3 million and ~~$108.6~~$95.5 million, respectively. In each of these periods, we ~~have~~had payments for taxes related to the net share settlement of vested equity awards and the proceeds from the exercise of stock options and contributions to ~~ESPP.~~our employee stock purchase plan. During the nine months ended November 30, 2020, we repaid our 2020 Convertible Notes of $27.6 million, as well as borrowed and repaid $20.0 million from our revolving credit facility. During the nine months ended November 30, 2019, we entered into separate, privately negotiated purchase agreements to repurchase approximately $94.9 million in aggregate principal amount of ~~these~~convertible notes for $94.7 million.

~~During~~We continue to monitor the ~~nine months ended~~impact of COVID-19 on our operating results and liquidity as the pandemic has had an unfavorable impact on our financial condition and results of operations and we believe the pandemic may continue to have an unfavorable impact going forward. We have implemented certain cost containment and cash flow control measures especially in areas such as personnel, travel and other discretionary spend.

On December 16, 2020, our Board of Directors approved a plan for management to commence with the wind down of the LoJack U.S. SVR operations. We will continue supporting our existing customers and law enforcement partners to allow sufficient time for an orderly transition out of the business. We expect the wind down of the LoJack U.S. SVR operations to accelerate the secular decline in revenues for

these legacy products. The decline in revenues will be offset by expense reductions as contemplated in our wind down plan. These actions may have a negative impact on our consolidated cash flows.

As of November 30, ~~2018,~~2020, we had ~~a net~~ cash ~~inflow~~and cash equivalents of ~~$201.5~~$91.7 million and $50 million available under our existing revolving credit facility. Accordingly, we believe that our existing cash and cash equivalents, funds anticipated to be generated from our operations and available borrowing on our revolving credit facility will be sufficient to meet our working capital needs for at least the ~~issuance of the 2025 Convertible Notes, partially offset by net cash outflow of $50.6 million for the repurchase of the 2020 Convertible Notes and $28.6 million repurchase of our common stock.~~ next 12 months.

We have no off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of the U.S. Securities and Exchange Commission Regulation S-K.

During the third quarter of fiscal ~~2020,~~2021, there were no significant changes to our estimates of future payments under our fixed contractual obligations and commitments as presented in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for our fiscal year ended February ~~28, 2019~~29, 2020 as filed with the ~~Securities and Exchange Commission~~SEC on May ~~1, 2019.~~6, 2020.

Forward looking statements in this Form 10-Q which include, without limitation, statements relating to our plans, strategies, objectives, expectations, intentions, projections and other information regarding future performance, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “may”, “will”, “could”, “plans”, “intends”, “seeks”, “believes”, “anticipates”, “expects”, “estimates”, “judgment”, “goal”, and variations of these words and similar expressions, are intended to identify forward-looking statements. These forward-looking statements reflect our current views with respect to future events and financial performance and are subject to certain risks and uncertainties that are difficult to predict, including, without limitation, product demand, competitive pressures and pricing declines in our markets, the timing of customer approvals of new product designs, intellectual property infringement claims, interruption or failure of our Internet-based systems used to wirelessly configure and communicate with the tracking and monitoring devices that we sell, the phased implementation of our ERP system, the effect of tariffs on exports from China, and other countries, the ongoing effects of the COVID-19 pandemic, and other risks and uncertainties that are set forth in Part I, Item 1A of the Annual Report on Form 10-K for the fiscal year ended February ~~28, 2019~~29, 2020 as filed with the ~~U.S. Securities and Exchange Commission~~SEC on May ~~1, 2019.~~6, 2020. Such risks and uncertainties could cause actual results to differ materially from historical or anticipated results. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

ITEM 3. QUANTITATIVE AND ~~QUALITATIVE~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have international operations, giving rise to exposure to market risks from changes in currency exchange rates. A cumulative foreign currency translation loss of ~~$0.8~~$0.3 million related to our foreign subsidiaries is included in “Accumulated other comprehensive loss” in the Stockholders' Equity section of the condensed consolidated balance sheet at November 30, ~~2019.~~2020. The aggregate foreign currency transaction exchange rate ~~loss~~income (loss) included in determining loss before income taxes and impairment loss ~~and equity~~ in ~~net loss~~investment of affiliate were de minimus nfor both the nine months ended November 30, ~~2019~~2020 and ~~2018.~~2019.

As our international operations grow, our risks associated with fluctuation in foreign currency rates will become greater, and we will continue to reassess our approach to managing this risk. In addition, currency fluctuations or a weakening U.S. dollar could increase the costs of our international expansion and operation.

Our exposure to market rate risk for changes in interest rates relates primarily to our investment portfolio. The primary objective of our investment activities is to preserve principal and liquidity while at the same time maximizing yields without significantly increasing risk. To achieve this objective, we maintain our investment portfolio in a variety of available-for-sale fixed debt securities, including both government and corporate obligations and money market funds. Investments in fixed rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in prevailing interest rates. Due in part to these factors, we may suffer losses in principal if we need the funds prior to maturity and we choose to sell securities that have declined in market value due to changes in interest rates or perceived credit risk related to the securities’ issuers.

As the majority of our investment portfolio has a short-term nature, we do not believe an immediate increase or decrease in interest rate would have a material effect on the fair market value of our portfolio, and therefore, we do not expect our operating results or cash flows to be materially affected by a sudden change in market interest rates.

We do not believe our cash equivalents ~~and short-term marketable securities~~ have significant risk of default or illiquidity. However, we cannot provide absolute assurance that in the future our investments will not be subject to adverse changes in market value. In addition, we maintain significant amounts of cash and cash equivalents at one or more financial institutions that are in excess of federally insured limits. We cannot be assured that we will not experience losses on these deposits.

Loans outstanding under our revolving credit facility bear interest at either euro currency rate plus a margin or the base rate (highest of (i) 0%, (ii) the rate of interest publicly announced by the Agent as its prime rate in effect at its principal office in New York City, (iii) the overnight bank funding rate as determined by the Federal Reserve Bank of New York plus 0.50% and (iv) the LIBOR-based rate for a one-month interest period on such day plus 1%). An applicable margin is added based on the Company’s senior leverage ratio, ranging from 1.50% to 2.00% for base rate loans, and from 2.50% to 3.00% for Eurodollar loans. Changes in interest rate would impact our variable rate borrowings. As of November 30, 2020, there was no outstanding borrowing under our revolving credit facility.

Our principal executive officer and principal financial officer have concluded, based on their evaluation of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report, that our disclosure controls and procedures are effective to ensure that the information required to be disclosed in reports that are filed or submitted under the Exchange Act is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and that such information is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the ~~U.S. Securities and Exchange Commission.~~SEC.

In connection with our initiative to integrate and enhance our global information technology systems and business processes, we initiated the phased implementation of a new ERP ~~system. The ERP~~ system ~~is being implemented~~which started in ~~phases throughout~~ fiscal 2020 and ~~continuing~~continues into fiscal 2021. ~~The first phase was completed during the second quarter of fiscal 2020.~~ As a result of this implementation, we modified certain existing internal controls over financial reporting as well as implemented new controls and procedures related to the new ERP system. Other than the continued implementation of our ERP system, there were no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d 15(f) under the Exchange Act) that occurred during the third quarter of fiscal ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

See Note ~~18,~~16, Legal Proceedings, of the Notes to Unaudited Condensed Consolidated Financial Statements above for information regarding the legal proceedings in which we are involved.

The reader is referred to Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended February ~~28, 2019,~~29, 2020, as filed with the ~~U.S. Securities and Exchange Commission~~SEC on May ~~1, 2019,~~6, 2020, for a discussion of factors that could materially affect our business, financial condition, results of operations, or future results in addition to the risk factors below:

~~Ongoing changes to U.S. tax, tariff and import/export regulations may~~The Coronavirus (COVID-19) pandemic could have a ~~negative effect~~material adverse impact on our business, results of operations and financial condition.

In December 2019, a novel strain of coronavirus disease (“COVID-19”) was first reported in Wuhan, China. Less than four months later, on March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The outbreak has spread globally, resulting in the implementation of significant governmental measures, including lockdowns, closures, quarantines and travel restrictions, intended to control the spread of the virus. The COVID-19 outbreak has already caused severe global disruptions.

Additionally, we, and other companies, are taking precautions, such as requiring employees to work remotely and imposing travel restrictions. These restrictions, and future prevention and mitigation measures, are likely to have an adverse impact on global economic conditions ~~financial markets~~ and consumer confidence and spending, which could materially adversely affect the supply and demand for our ~~business.~~

~~We import certain~~ products and ~~components from suppliers~~solutions. Uncertainties regarding the economic impact of COVID-19 is likely to result in China. In 2018, the Office of the U.S. Trade Representative (the “USTR”) enacted tariffs on imports into the U.S. from China. In September 2018, the USTR enacted another tariff on the import of certain Chinese products with an additional combined import value of approximately $250 billion. On August 28, 2019, the USTR issued a notice increasing the rate of additional duty from 10% to 15% on the $300 billion worth of certain articles, and the first tranche of those duties went into effect at the 15% rate on September 1, 2019. The second tranche of those duties had been scheduled to go into effect on December 15, 2019. On December 13, 2019, the United States and China each confirmed that the two countries had reached a “Phase One” deal in the ongoing trade war, resulting in suspension of that second tranche. Although some of the products and components we import are affected by the tariffs, at this time, we do not expect these tariffs to have a materialsustained market turmoil, which could also negatively impact on our business, financial condition ~~or results~~and cash flows. For example, as a result of ~~operations. However, it is possible that further tariffs may be imposed on imports~~COVID-19, we have experienced lower sales of our ~~products, or that~~LoJack U.S. SVR Products coupled with slower than anticipated market penetration of our ~~business will be impacted by retaliatory trade measures taken by China~~telematics solutions in the U.S. automotive dealership channel. Further, this pandemic could negatively affect our ability to sell-through our backlog. Our ability to manage normal commercial relationships with our suppliers, contract manufacturers, and customers may suffer. Our customers could shift purchases to lower-priced or other ~~countries~~perceived value offerings during the pandemic-caused economic downturn as a result of various factors, including workforce reductions, reduced access to credit, and changes in federal economic policy. In particular, customers may become more conservative in response to these conditions and seek to reduce their purchases and inventories. Our results of operations depend upon, among other things, our ability to maintain and increase sales volume with our existing ~~or future tariffs, causing us~~customers, our ability to ~~raise prices or make changes to~~attract new consumers, and the financial condition of our ~~operations, any of which could have~~customers. Decreases in demand for our products and solutions without a ~~negative impact~~corresponding decrease in costs would put downward pressure on our ~~revenue or operating~~margins and would negatively impact our financial results.

~~Additionally,~~Governmental organizations, such as the ~~announcement~~U.S. Centers for Disease Control and Prevention and state and local governments, have recommended and/or imposed increased community-based interventions, including event cancellations, social distancing measures, and restrictions on gatherings of more than ten people. As discussed, significant government measures, including lockdowns, closures, quarantines and travel restrictions have been implemented and continue to be in effect, and in the ~~Referendum~~future, government authorities may impose similar and/or additional restrictions on people’s movement, public gatherings and businesses. The extent of the U.K.’s Membership of the European Union (referred to as Brexit), advising for the exit of the U.K. from the European Union, could cause disruptions to and create uncertainty surrounding our business, particularly given our recent efforts to expand our business throughout Europe through our acquisition of Tracker UK. Brexit could affect our relationships with our existing and future customers, suppliers and employees, which could in turn have an adverseCOVID-19’s effect on our ~~business,~~operational and financial ~~results and operations.~~

~~We may experience significant disruptions in our operations resulting from our enterprise resource planning system initiatives.~~

Weperformance will depend on ~~our information technology systems for~~future developments, including the ~~efficient functioning~~duration, spread and intensity of ~~our global business, including accounting, billing, data storage, purchasing~~the outbreak, all of which are uncertain and ~~inventory management. In order~~difficult to ~~integrate and enhance our global operations, we initiated~~predict considering the ~~phased implementation of an ERP~~ system across our global operating locations to support our operations. The implementation of this ERP system required, and will continue to require, the investment of human and financial resources. We have incurred and expect to incur additional expenses as we continue to implement, enhance and develop our ERP system.rapidly evolving landscape. As a result, it is not currently possible to ascertain the overall impact of COVID-19 on our ~~ERP initiatives, we may encounter difficulties in operating our business, which~~business. However, if the pandemic continues to evolve into a severe worldwide health crisis, the disease could disrupt our operations, including our ability to timely ship and track customer orders, determine inventory requirements, manage our supply chain, manage customer billing and adequately service our customers. If we experience significant disruptions resulting from our ERP initiatives, our business and operations could be disrupted, including our ability to report accurate and timely financial results. Accordingly, such events may disrupt or reduce the efficiency of our global operations and have a material adverse effect on our ~~operating~~business, results of operations, financial condition and cash ~~flows.~~flows and adversely impact the trading price of our common stock.

Repurposing of satellite spectrum by adjacent operators of L-band spectrum for terrestrial services could interfere with our GPS IoT products and services.

In 2011, the U.S. Federal Communications Commission (“FCC”) granted Ligado Networks (then known as Lightsquared) (“Ligado”), a waiver to convert its L-band satellite spectrum to terrestrial use, including a 10 MHz band close to the spectrum that we use for all of our Global Positioning System (“GPS”) products and services. That waiver was subsequently suspended in 2012 due to concerns about potential interference to GPS operations. Ligado sought another waiver in 2015, that it then amended in 2018, to modify its L-band mobile satellite service network with a terrestrial-only proposal designed to address GPS industry-wide concerns. In April 2020, the FCC granted Ligado’s waiver request. We oppose this waiver grant out of concern for the interference that we believe Ligado’s proposed operations would cause to our IoT GPS devices. Ligado’s operations pursuant to the waiver would result in terrestrial use of L-band spectrum and, such operations may interfere with, and harmfully affect, the performance of the Global Navigation Satellite System (“GNSS”) receivers in our IoT GPS devices that operate in the 1559-1610MHz band, which is adjacent to, and within range of, the L-band downlink allocation for GPS operations. Ligado’s L-band terrestrial operations could impact our operations and impose costs on us to retrofit or replace affected GNSS receivers, which could have a material adverse effect on our business, results of operations, and financial condition.

Our revolving credit facility contains, among other things, certain negative and affirmative covenants including financial covenants that require us to maintain a minimum level of earnings before interest, income taxes, depreciation, amortization and other non-cash charges (Adjusted EBITDA) to interest ratio, a minimum senior indebtedness ratio and a total indebtedness coverage ratio, all measured on a quarterly basis. While we have not previously breached and are not currently in breach of these or any other covenants contained in our credit agreement, there can be no guarantee that we will not breach these covenants in the future.

Additionally, our ability to comply with these covenants may be affected by events beyond our control, including the COVID-19 pandemic. A breach of any of these covenants could result in a default under the credit agreement and related credit documents, which could cause all of the outstanding indebtedness under our revolving credit facility to become immediately due and payable. These covenants could also limit our ability to seek capital through the incurrence of new indebtedness or, if we are unable to meet our obligations, require us to repay any outstanding amounts with sources of capital we may otherwise use to fund our business.

The following disclosure is included in this Quarterly Report on Form 10-Q in lieu of filing a Current Report on Form 8-K with respect to disclosure required under Item 2.05 thereof.

On December 16, 2020, our Board of Directors approved a plan for management to commence with the wind down of the LoJack U.S. SVR operations. This business unit has historically provided stolen vehicle recovery (SVR) services and products operating on a radio frequency allocated by the FCC for domestic automotive dealerships. These products and related services have been provided predominately as a hardware-based offering that no longer aligns with our core strategy. As part of our commitment to public safety, we will continue supporting our existing customers and law enforcement partners to allow sufficient time for an orderly transition out of the business. A precise date for completing the wind down has not yet been fixed.

As part of the wind down, we expect the secular decline in revenues from the legacy LoJack U.S. SVR product sales to accelerate over the next three to six months. To offset the impact of declining revenues, we will execute various cost reduction measures in order to achieve cost savings beginning in fiscal year 2022. In the fourth quarter of fiscal 2021, we are anticipating up to $2.0 million non-recurring cash charges related to severance and personnel costs. This estimate is preliminary and subject to a number of assumptions and risks, and our actual results may vary. We will also incur various contract termination and other related costs as we proceed with the wind down, which we are unable to estimate at this time.

Our evaluation of various alternative courses of action that we may take related to the wind down is in progress and we may incur additional costs as a result of such actions. Therefore, we are unable to make a good faith determination of an estimate or range of estimates of other major types of costs that we may incur in connection with the wind down called for by paragraph (b) of Item 2.05 of Form 8-K, nor are we able to make a good faith determination of an estimate or range of estimates called for by paragraphs (c) and (d) of Item 2.05 of Form 8-K. We undertake to update this disclosure upon determination of such estimates or ranges of estimates.

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.

Delaware		95-3647070
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

15635 Alton Parkway, Suite 250
Irvine, California		92618
(Address of principal executive offices)		(Zip Code)

Title of each class	Trading symbol	Name of Each Exchange On Which Registered
Common stock, $0.01 per share	CAMP	Nasdaq Global Select Market

		Page Number
	PART I – FINANCIAL INFORMATION

ITEM 1.	Financial statements	3

	Condensed consolidated balance sheets (unaudited) as of November 30, ~~2019~~2020 and February ~~28, 2019~~29, 2020	3

	Condensed consolidated statements of comprehensive ~~income (loss)~~loss (unaudited) for the three and nine months ended November 30, ~~2019~~2020 and ~~2018~~2019	4

	Condensed consolidated statements of cash flows (unaudited) for the nine months ended November 30, ~~2019~~2020 and ~~2018~~2019	5

	Condensed consolidated statements of stockholders’ equity (unaudited) for the three and nine months ended November 30, ~~2019~~2020 and ~~2018~~2019	6

	Notes to unaudited condensed consolidated financial statements	7

ITEM 2.	Management’s discussion and analysis of financial condition and results of operations	2625

ITEM 3.	Quantitative and qualitative disclosures about market risk	34

ITEM 4.	Controls and procedures	34


PART II – OTHER INFORMATION

ITEM 1.	Legal proceedings	35

ITEM 1A.	Risk factors	35

ITEM 6.5.	~~Exhibits~~Other Information	36

ITEM 6.	Exhibits	37

	Telematics Systems		Software & Subscription Services			Total
Balance as of February 28, 2019	$	51,203	$	29,602		$	80,805
Acquisition of Synovia and LoJack Mexico (Note 2)		—		24,185			24,185
Effect of exchange rate change on goodwill		—		(33	)		(33	)
Other (1)		—		627			627
Balance as of November 31, 2019	$	51,203	$	54,381		$	105,584

	Software & Subscription Services		Telematics Products		LoJack U.S. SVR Products			Total
Balance as of February 29, 2020	$	55,132	$	39,180	$	12,023		$	106,335
Impairment loss		—		—		(12,023	)		(12,023	)
Effect of exchange rate change on goodwill		156		—		—			156
Balance as of November 30, 2020	$	55,288	$	39,180	$	-		$	94,468

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

	Three Months Ended November 30, 2020		Nine Months Ended November 30, 2020
LoJack U.S. SVR Products goodwill	$	8,099	$	12,023
Other long-lived assets		8,782		9,068
Other intangible assets:
Dealer and customer relationships		640		1,005
Developed technology		478		478
Total	$	17,999	$	22,574

	Three Months Ended November 30, 2019							Nine Months Ended November 30, 2019
	As Reported		Adjustment			As Corrected		As Reported		Adjustment			As Corrected
Revenues:
Products	$	63,192	$	2,738		$	65,930	$	188,782	$	7,085		$	195,867
Application subscriptions and other services		33,405		(2,738	)		30,667		90,121		(7,085	)		83,036
Total revenues	$	96,597	$	-		$	96,597	$	278,903	$	-		$	278,903
Cost of revenues:
Products	$	42,225	$	1,344		$	43,569	$	118,494	$	3,165		$	121,659
Application subscriptions and other services		17,488		(1,344	)		16,144		50,444		(3,165	)		47,279
Total cost of revenues	$	59,713	$	-		$	59,713	$	168,938	$	-		$	168,938

	Tracker UK						LoJack Mexico						Synovia
Purchase price				$	13,097					$	14,306					$	29,500
Add debt paid at closing					-						-						20,296
Less cash acquired					(66	)					(1,586	)					(905	)
Net cash paid					13,031						12,720						48,891
Less amount released from escrow					(973	)					-						-
Net consideration					12,058						12,720						48,891
Add previously held interest					-						2,021						-
Fair value of net assets and liabilities assumed:
Current assets other than cash	$	3,549					$	4,933					$	10,354
Property and equipment		1,017						3,228						24,840
Customer relationships		2,354						7,000						16,700
Trade name		2,354						-						1,600
Developed technology		1,830						-						3,800
Deferred tax assets		-						-						2,061
Other non-current assets		104						1,301						-
Current liabilities		(3,111	)					(2,361	)					(4,468	)
Due to factors		-						-						(19,676	)
Deferred revenue		(3,162	)					(4,507	)					(4,319	)
Deferred tax liability		(824	)					(1,039	)					-
Other non-current liabilities		(201	)					-						-
Total fair value of net assets acquired					3,910						8,555						30,892
Goodwill				$	8,148					$	6,186					$	17,999

	Three Months Ended November 30, 2020								Three Months Ended November 30, 2019
	Personnel			Facilities		Total			Personnel		Facilities		Total
Cost of revenue	$	(28	)	$	145	$	117		$	100	$	-	$	100
Research and development		-			-		-			97		-		97
Selling and marketing		4			-		4			454		-		454
General and administrative		(29	)		-		(29	)		197		-		197
Total	$	(53	)	$	145	$	92		$	848	$	-	$	848

2020	$	7,565
2021		6,386
2022		6,242
2023		6,199
2024		6,126
Thereafter		7,659
Total minimum lease payments	$	40,177

	Cumulative Foreign Currency Translation
Balances at February 28, 2019	$	(661	)
Other comprehensive loss, net of tax		(122	)
Balances at November 30, 2019	$	(783	)

	Nine Months Ended November 30,
	2019					2018
(In thousands)	$		% of Revenue			$		% of Revenue			$ Change			% Change
Segment
Telematics Systems	$	188,782		67.7	%	$	222,004		79.5	%	$	(33,222	)		(15.0	%)
Software & Subscription Services		90,121		32.3	%		57,416		20.5	%		32,705			57.0	%
Total	$	278,903		100.0	%	$	279,420		100.0	%	$	(517	)		(0.2	%)

~~Exhibit 10.1~~		~~Amendment No. 2 to Employment Agreement between the Company and Kurtis Binder dated October 23, 2019~~

Exhibit 31.1		Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2		Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101 .INS		Inline XBRL Instance Document

101 .SCH		Inline XBRL Taxonomy Extension Schema Document

101 .CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101 .LAB		Inline XBRLTaxonomy Extension Label Linkbase Document

101 .PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

		CALAMP CORP.

December ~~19, 2019~~17, 2020		/s/ Kurtis Binder
Date		EVP & Chief Financial Officer
		(Principal Financial Officer and Chief Accounting Officer)