ITI Iteris Incorporated New

You are cordially invited to attend a special meeting of stockholders of Iteris, Inc., a Delaware corporation (“Iteris,” the “Company,” “we” or “us”), to be held on October 22, 2024, at 10:00 a.m., Central Time. Based on our experience over the last four years, we have determined that a virtual meeting is most cost-effective for both Iteris and our stockholders. Therefore, the special meeting will only be held through the virtual meeting live webcast site located at www.virtualshareholdermeeting.com/ITI2024SM. Stockholders of record at the close of business on September 17, 2024, the record date for the special meeting, will be able to vote and submit questions and participate live in the webcast at www.virtualshareholdermeeting.com/ITI2024SM. A secure 16 digit control number that will allow you to participate in the meeting electronically can be found on the enclosed proxy card. For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting. This proxy statement is dated September 20, 2024, and was first mailed to stockholders of Iteris on or about September 20, 2024.

At the special meeting, you will be asked to consider and vote on three matters:

If the Merger is completed, you will be entitled to receive $7.20 in cash, without interest and subject to applicable withholding taxes, for each share of Iteris common stock, par value $0.10 (“Iteris common stock”), you own (unless you have properly demanded appraisal for your shares in accordance with, and have complied in all respects with, Section 262 of the General Corporation Law of the State of Delaware and such demand is not effectively withdrawn). The $7.20 per share in cash payable in connection with the consummation of the Merger represents a premium of approximately 68% over the closing price of Iteris common stock on August 8, 2024, which was the last trading day prior to the public announcement of the execution of the Merger Agreement.

After reviewing and considering the terms and conditions of the Merger and the factors more fully described in the enclosed proxy statement, our board of directors unanimously (i) determined that the transactions contemplated by the Merger Agreement, including the Merger, are advisable, fair to and in the best interests of Iteris and its stockholders; (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger; (iii) directed that the Merger Agreement be submitted to the stockholders of Iteris for its adoption at the special meeting; and (iv) recommended that Iteris’ stockholders adopt the Merger Agreement.

Our board of directors recommends that you vote: (1) “FOR” the proposal to adopt the Merger Agreement; (2) “FOR” the proposal to approve one or more adjournments of the special meeting to a later

date or dates if necessary; and (3) “FOR” the non-binding, advisory proposal to approve certain compensation that will or may become payable to our named executive officers in connection with the Merger.

The accompanying proxy statement contains, among other things, detailed information about Iteris, the special meeting, the Merger, the Merger Agreement and the Merger-related compensation. We encourage you to read the accompanying proxy statement, including its appendices and all documents incorporated by reference therein, carefully and in its entirety.

Your vote is very important, regardless of the number of shares of Iteris common stock that you own. We cannot complete the Merger unless the Merger Agreement is adopted by the affirmative vote of the holders of a majority of the voting power represented by the shares of outstanding Iteris common stock as of the record date entitled to vote on the matter. The failure of any stockholder of record to vote in person by ballot at the special meeting or to submit a proxy will have the same effect as a vote “AGAINST” the Merger Agreement. If you hold your shares in “street name,” the failure to instruct your broker, bank or nominee on how to vote your shares will have the same effect as a vote “AGAINST” the Merger Agreement. If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” the Merger Agreement.

We hope that you will be able to attend the special meeting. However, whether or not you plan to attend, please complete, sign, date and return the proxy card enclosed with the accompanying proxy statement, or, if your shares are held in “street name” through a broker, bank or nominee, instruct your broker, bank or nominee on how to vote your shares using the voting instruction form furnished by your broker, bank or nominee, as promptly as possible. Submitting a signed proxy by mail, over the Internet or by phone will ensure your shares are represented at the special meeting. If your shares are held in “street name” through a broker, bank or nominee, you may provide voting instructions through your broker, bank or nominee by completing and returning the voting instruction form provided by your broker, bank or nominee, or electronically over the Internet or by telephone through your broker, bank or nominee if such a service is provided. To provide voting instructions over the Internet or by telephone through your broker, bank or nominee, you should follow the instructions on the voting instruction form provided by your broker, bank or nominee.

The special meeting may be adjourned by the chairman of the meeting if a quorum is not present or by a majority of the shares represented in person or by proxy at the special meeting, whether or not there is a quorum.

On behalf of the board of directors and management of Iteris, I extend our appreciation for your continued support and your consideration of this matter.

Neither the U.S. Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved of the transactions described in this document or the accompanying proxy statement, including the Merger, passed upon the merits or fairness of such transactions, or passed upon the adequacy or accuracy of the disclosure in the accompanying proxy statement. Any representation to the contrary is a criminal offense.

Notice is hereby given that a special meeting of stockholders of Iteris, Inc., a Delaware corporation (“Iteris,” the “Company,” “we” or “us”), will be held on October 22, 2024, virtually via the Internet at www.virtualshareholdermeeting.com/ITI2024SM, at 10:00 a.m., Central Time, for the following purposes, as more fully described in the proxy statement accompanying this notice:

Only stockholders of record as of the close of business on September 17, 2024 are entitled to notice of the special meeting and to vote at the special meeting or at any adjournment or postponement thereof.

The accompanying proxy statement contains, among other things, detailed information about the Merger Proposal, the Adjournment Proposal and the Compensation Proposal. We encourage you to read the accompanying proxy statement, including its appendices and all documents incorporated by reference therein, carefully and in its entirety.

The affirmative vote of the holders of a majority of the voting power represented by the shares of Iteris common stock, par value $0.10 (“Iteris common stock”), outstanding as of the record date and entitled to vote on the matter, is required to approve the Merger Proposal. The affirmative vote of the holders of a majority of the shares of Iteris common stock present in person or represented by proxy at the special meeting and entitled to vote and voting on the matter is required to approve the Adjournment Proposal. The affirmative vote of the holders of a majority of the voting power represented by the shares of Iteris common stock present in person or represented by proxy at the special meeting and entitled to vote and voting on the matter is required to approve the Compensation Proposal.

Your vote is very important, regardless of the number of shares of Iteris common stock that you own. The failure of any stockholder of record to vote in person by ballot at the special meeting or to submit a signed proxy card will have the same effect as a vote “AGAINST” the Merger Proposal. If you hold your shares in “street name,” you should instruct your broker, bank or nominee on how to vote your shares using the voting instruction form furnished by your broker, bank or nominee. The failure to do so will have the same effect as a vote “AGAINST” the Merger Proposal, but assuming a quorum is present, will have no effect on the outcome of any vote on the Adjournment Proposal or the Compensation Proposal. Abstentions will have the same effect as a vote “AGAINST” the Merger Proposal, the Adjournment Proposal and the Compensation Proposal. If you sign, date and return your proxy card without indicating how you wish to vote on a proposal, your proxy will be voted “FOR” such proposal.

The presence at the special meeting, in person or by proxy, of the holders of a majority of the shares of outstanding Iteris common stock entitled to vote at the special meeting will constitute a quorum for the transaction

of business at the special meeting. Abstentions will be counted as present for purposes of determining the existence of a quorum. Shares held in “street name” for which the applicable broker, bank or nominee receives no instructions regarding how to vote on any of the proposals before the special meeting will not be counted as present at the special meeting for quorum purposes. Shares held in “street name” for which the applicable broker, bank or nominee receives instructions regarding how to vote on one or more but not all of the proposals before the special meeting will be counted present at the special meeting for quorum purposes.

Stockholders and beneficial owners who do not vote in favor of the Merger Proposal and who otherwise meet the requirements of Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”) will have the right to seek appraisal of the fair value of their shares of Iteris common stock, as determined in accordance with Section 262 of the DGCL. In addition to not voting in favor of the Merger Proposal, any stockholder or beneficial owner (as defined in Section 262 of the DGCL) wishing to exercise its appraisal rights must deliver a written demand for appraisal to Iteris before the vote on the Merger Proposal at the special meeting and must comply in all respects with the requirements of Section 262 of the DGCL, the text of which is attached as Appendix B to the accompanying proxy statement and is incorporated by reference therein.

Our board of directors recommends that you vote: (i) “FOR” the Merger Proposal; (ii) “FOR” the Adjournment Proposal; and (iii) “FOR” the Compensation Proposal.

Ensure that your shares of Iteris common stock are voted at the special meeting by submitting your proxy or, if your shares of Iteris common stock are held in “street name” through a broker, bank or nominee, by contacting your broker, bank or nominee. If you do not submit a proxy, vote in person at the special meeting or instruct your broker, bank or nominee how to vote your shares, it will have the same effect as voting “AGAINST” the Merger Proposal, but assuming a quorum is present, will have no effect on the outcome of any vote on the Adjournment Proposal or the Compensation Proposal.

If your shares of Iteris common stock are registered directly in your name: If you are a stockholder of record, you may submit a proxy to vote your shares of Iteris common stock by mail, over the Internet or by phone. Please follow the instructions on the enclosed form of proxy.

If your shares of Iteris common stock are held in the name of a broker, bank or nominee: You will receive voting instructions from the organization holding your account, and you must follow those instructions to vote your shares of Iteris common stock. As a beneficial owner, you have the right to direct your broker, bank or nominee on how to vote the shares of Iteris common stock in your account. Your broker, bank or nominee cannot vote on any of the proposals, including the Merger Proposal, without your instructions.

If you fail to submit a signed proxy card, fail to attend the special meeting or, if you hold your shares through a bank, broker or nominee, fail to provide voting instructions to your bank, broker or nominee, your shares of Iteris common stock will not be counted for purposes of determining whether a quorum is present at the special meeting. If you hold your shares of Iteris common stock through a broker, bank or nominee, you must obtain from the record holder a valid legal proxy issued in your name in order to vote in person at the special meeting. A stockholder providing a proxy may revoke it if such revocation is exercised by submitting a new proxy via Internet or telephone before 11:59 p.m., Eastern Time, the day before the special meeting, by completing, signing and dating a proxy bearing a later date and returning it to us before 11:59 p.m., Eastern Time, the day before the special meeting, by providing written notice of revocation to our Corporate Secretary, or by voting in person at the special meeting. See the instructions set forth in “Revocability of Proxies” on page 25 of the accompanying proxy statement. Attendance at the special meeting alone will not revoke a submitted proxy.

We encourage you to read the accompanying proxy statement, including its appendices and all documents incorporated by reference therein, carefully and in its entirety. If you have any questions concerning the Merger, the special meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of Iteris common stock, please contact our proxy solicitor:

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE SUBMIT YOUR PROXY OR INSTRUCT YOUR BROKER, BANK OR NOMINEE ON HOW TO VOTE YOUR SHARES USING THE VOTING INSTRUCTION FORM FURNISHED BY YOUR BROKER, BANK OR NOMINEE, AS PROMPTLY AS POSSIBLE.

The following questions and answers are intended to address some commonly asked questions regarding the special meeting, the Merger Agreement and the Merger. These questions and answers may not address all questions that may be important to you as a stockholder of Iteris. Please refer to the preceding section of this proxy statement entitled “Summary” and the more detailed information contained elsewhere in this proxy statement, its appendices, including the Merger Agreement, and the documents incorporated by reference herein, which you should read carefully and in their entirety.

The enclosed proxy is solicited on behalf of the Board for use at the special meeting of stockholders or at any adjournments or postponements thereof.

We will hold the special meeting on October 22, 2024, at 10:00 a.m., Central Time, unless the meeting is postponed or adjourned. The special meeting will be held in a virtual meeting format only and will be accessible through the Internet in order to provide expanded access, improved communication and cost savings for our stockholders. To attend and participate at the special meeting, you must access the meeting website at www.virtualshareholdermeeting.com/ITI2024SM and provide the 16 digit control number on your proxy card. Although no physical in-person meeting will be held, we have designed the format of the virtual special meeting to ensure that our stockholders of record who attend the special meeting will be afforded similar rights and opportunities to participate as they would at an in-person meeting, while providing an online experience available to all of our stockholders regardless of location. For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting.

At the special meeting, we will ask our stockholders of record as of the Record Date to consider and vote on the following proposals:

Only stockholders of record as of the close of business on the Record Date (September 17, 2024) are entitled to notice of the special meeting and to vote at the special meeting or at any adjournments or postponements thereof. Each holder of record of Iteris common stock on the Record Date will be entitled to one vote for each share of Iteris common stock held as of the Record Date on each matter submitted to our stockholders for approval at the special meeting. If you sell or transfer your shares of Iteris common stock after the Record Date but before the special meeting, you will transfer the right to receive the Merger Consideration, if the Merger is completed, to the person to whom you sell or transfer your shares of Iteris common stock, but you will retain your right to vote those shares at the special meeting.

As of the Record Date, there were 43,042,277 shares of Iteris common stock outstanding and entitled to be voted at the special meeting.

A quorum of stockholders is necessary to hold a special meeting. The holders of a majority of the shares of Iteris common stock entitled to vote at the special meeting, present in person or represented by proxy, will constitute a quorum at the special meeting. As a result, 21,521,139 shares must be represented by proxy or by stockholders present and entitled to vote at the special meeting to have a quorum. Shares that are voted to abstain on one or more of the proposals before the special meeting will be deemed to be present for quorum purposes. If you hold your shares in “street name,” and you fail to provide your Nominee with instructions on how to vote such shares on any of the proposals before the special meeting, your shares will not be deemed to be present at the special meeting for quorum purposes. If you provide your Nominee with instructions on how to vote on one or more but not all of the proposals before the special meeting, your shares will be deemed to be present at the special meeting for quorum purposes.

In the event that a quorum is not present at the special meeting, it is expected that the special meeting would be adjourned to a later date until a quorum is present. The special meeting may be adjourned by the chairman of the meeting if a quorum is not present or by a majority of the shares represented in person or by proxy at the special meeting, whether or not there is a quorum.

The affirmative vote of the holders of a majority of the shares of Iteris common stock outstanding as of the Record Date entitled to vote on the matter is required to approve the Merger Proposal. Adoption of the Merger Agreement by our stockholders is a condition to the closing of the Merger (the “Closing”). A failure to vote your shares of Iteris common stock, an abstention from voting or a broker non-vote (if any) will have the same effect as a vote “AGAINST” the Merger Proposal.

Approval of the Adjournment Proposal requires the affirmative vote of the holders of a majority of the shares of Iteris common stock present, in person or by proxy, at the special meeting and entitled to vote and voting on the matter.

Approval of the Compensation Proposal requires the affirmative vote of the holders of a majority of the shares of Iteris common stock present, in person or by proxy, at the special meeting and entitled to vote and voting on the matter. Assuming a quorum is present, the failure of any stockholder of record to submit a proxy or to vote in person by ballot at the special meeting, as well as broker non-votes, if any, will not have any effect on the Adjournment Proposal or the Compensation Proposal. Abstentions will have the same effect as a vote “AGAINST” the Adjournment Proposal and the Compensation Proposal.

Because the vote on the Compensation Proposal is only advisory in nature, it will not be binding on Iteris or the Board. Accordingly, because Iteris is contractually obligated to pay the compensation, such compensation will be paid or become payable, subject only to the conditions applicable thereto, if the Merger is consummated and regardless of the outcome of the Compensation Proposal.

As of the Record Date, our directors and executive officers beneficially owned and were entitled to vote an aggregate of 741,613 shares of Iteris common stock (excluding any shares that would be delivered upon exercise or conversion, as applicable, of Company Options, Company RSUs or Company PSUs), representing approximately 1.7% of the outstanding shares of Iteris common stock. Our directors and executive officers have informed us that they currently intend to vote all of their shares of Iteris common stock: (i) “FOR” the Merger Proposal; (ii) “FOR” the Adjournment Proposal; and (iii) “FOR” the Compensation Proposal. There are no contractual voting agreements in place with respect to the Merger.

If your shares of Iteris common stock are registered in your name with our transfer agent, Computershare, you may cause your shares to be voted at the special meeting by submitting your proxy or by voting in person at the special meeting. If you submit a proxy, the proxy holders will vote your shares of Iteris common stock according to your directions.

If you plan to attend the special meeting and wish to vote virtually, you will need to provide the secure 16 digit control number provided in your proxy card voting instruction form or in the email sending you the proxy statement. If you attend the special meeting and vote virtually, your vote will revoke any proxy previously submitted. If your shares are registered in your name, you are encouraged to vote by proxy even if you plan to attend the special meeting virtually.

Voting instructions are included on your proxy card. All shares of Iteris common stock represented by properly executed proxies received in time for the special meeting will be voted at the special meeting in accordance with the instructions of the stockholder. Properly executed proxies that do not contain voting instructions will be voted (i) “FOR” the Merger Proposal; (ii) “FOR” the Adjournment Proposal; and (iii) “FOR” the Compensation Proposal. If you are a beneficial owner of shares of Iteris common stock and your Nominee does not receive instructions from you about how your shares are to be voted, then your Nominee will vote your shares of Iteris common stock (i) “FOR” the Merger Proposal; (ii) “FOR” the Adjournment Proposal; and (iii) “FOR” the Compensation Proposal.

If your shares of Iteris common stock are held in “street name” through a Nominee, you may provide voting instructions through your Nominee by completing and returning the voting instruction form provided by your Nominee, or over the Internet or by telephone through your Nominee if such a service is provided. To provide voting instructions over the Internet or by telephone through your Nominee, you should follow the instructions on the voting instruction form provided by your Nominee. Under applicable stock exchange rules, Nominees have the discretion to vote your shares on routine matters if you fail to instruct your Nominee on how to vote your shares with respect

to such matters. The proposals in this proxy statement are non-routine matters, and Nominees, therefore, cannot vote on these proposals without your instructions. Generally, if a broker exercises its discretion on routine matters at a stockholder meeting, a stockholder’s shares will be voted on the routine matter in the manner directed by the broker but will constitute a “broker non-vote” on all of the non-routine matters to be presented at the stockholder meeting. Because all of the proposals to be voted on at the special meeting are non-routine matters, if you hold your shares in street name through a brokerage account, your broker will not be able to exercise its discretion to vote uninstructed shares on any of the proposals presented at the special meeting. As a result, we do not expect any broker non-votes at the special meeting. If you do not return your Nominee’s voting instruction form, do not provide voting instructions to your Nominee, if applicable, or do not attend the special meeting and vote in person with a proxy from your Nominee, such actions will have the same effect as if you voted “AGAINST” the Merger Proposal, but assuming a quorum is present, such actions will have no effect on the outcome of any vote on the Adjournment Proposal or the Compensation Proposal.

If you are a stockholder of record, you may revoke your proxy at any time before it is voted at the special meeting by:

Please note that to be effective, your new proxy card must be received by our Corporate Secretary by 11:59 p.m., Eastern Time, the day before the special meeting, unless you submit a new proxy by Internet or telephone as instructed on your proxy card before 11:59 p.m., Eastern Time, the day before the special meeting. If you have submitted a proxy and you attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted.

If you hold your shares of Iteris common stock in “street name,” you should contact your Nominee for instructions regarding how to revoke your voting instructions.

Any adjournment of the special meeting for the purpose of soliciting additional proxies will allow stockholders of Iteris who have already sent in their proxies to revoke them at any time prior to their use at the special meeting, as adjourned, however, any such proxies that are not revoked will be voted at any such special meeting, as adjourned. Additionally, if the special meeting is postponed, any proxies that are not revoked prior to their use at the special meeting, as postponed, will be voted at any such special meeting, as postponed.

The Board, after considering various factors described in “The Merger—Recommendation of Our Board of Directors and Reasons for the Merger” on page 41 of this proxy statement, unanimously (i) determined that the transactions contemplated by the Merger Agreement, including the Merger, are advisable, fair to and in the best interests of Iteris and its stockholders; (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger; (iii) directed that the Merger Agreement be submitted to the stockholders of Iteris for its adoption at the special meeting; and (iv) recommended that Iteris’ stockholders adopt the Merger Agreement.

The Board recommends that you vote: (i) “FOR” the Merger Proposal; (ii) “FOR” the Adjournment Proposal; and (iii) “FOR” the Compensation Proposal.

This proxy statement is being furnished in connection with the solicitation of proxies by the Board. Expenses incurred in connection with the printing and mailing of this proxy statement and in connection with notices or other

filings with any governmental entities under any laws are our responsibility. We have engaged the services of D.F. King to solicit proxies for the special meeting. In connection with its retention, D.F. King has agreed to provide proxy solicitation services in connection with the special meeting. We have agreed to pay D.F. King a fee of approximately $20,000, plus reasonable and documented out-of-pocket costs and expenses, for its services, and we will indemnify D.F. King for certain losses arising out of its proxy solicitation services. Copies of solicitation materials will also be furnished to banks, brokerage houses, fiduciaries and custodians holding shares of Iteris common stock in their names that are beneficially owned by others to forward to those beneficial owners. We may reimburse persons representing beneficial owners of Iteris common stock for their costs of forwarding solicitation materials to the beneficial owners. In addition to the solicitation of proxies by mail, proxies may be solicited by our directors, officers and employees, or representatives of D.F. King, in person or by telephone, email, fax or other means of communication, and we may pay persons holding shares for others their expenses for sending proxy materials to their principals. No additional compensation will be paid to our directors, officers or employees for their services in connection with the solicitation of proxies, but our directors and officers may be reimbursed for out-of-pocket expenses incurred in connection with the solicitation.

Assuming timely satisfaction of necessary closing conditions, including the approval of the Merger Proposal by our stockholders, we anticipate that the Merger will be consummated as early as the fourth quarter of calendar year 2024.

At this time, we know of no other matters to be submitted at the special meeting.

The proxy is available on the Internet by accessing www.proxyvote.com with your 16 digit control number for registered and beneficial holders. You can also access the materials at https://materials.proxyvote.com/46564T. Information on this website does not constitute part of this Proxy Statement and shall not be deemed incorporated by reference therein.

The SEC permits companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy materials with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders, which is commonly referred to as “householding.” Some street name holders of Iteris common stock may be “householding” our proxy statements, which means that we will deliver only one copy of our proxy statement to multiple stockholders who share the same address (if they appear to be members of the same family), unless we have received oral or written instructions to the contrary. This procedure reduces our printing and mailing costs and related fees. As indicated in the notice, a single proxy statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from an affected stockholder. Upon request, we will promptly deliver a separate copy of this proxy statement to you if you write us at our corporate offices at Iteris, Inc., 1250 S. Capital of Texas Hwy., Bldg. 1, Suite 330, Austin, TX 78746, Attention: Corporate Secretary, via email at proxymaterials@iteris.com or by telephone: (512) 382-9669. You may also contact us or your Nominee if you received multiple copies of the proxy materials and would prefer to receive a single copy in the future.

Record holders and beneficial owners of shares of common stock who have not voted in favor of the Merger, have properly demanded appraisal rights for such shares in accordance with Section 262 of the DGCL and have complied in all respects with Section 262 of the DGCL with respect to such shares (“Dissenting Shares”) will be entitled to statutory appraisal rights pursuant to Section 262 of the DGCL in connection with the Merger. This means that such stockholders and beneficial owners are entitled to seek appraisal of their Dissenting Shares and, if all requirements of Section 262 are met, to receive payment in cash for the “fair value” of such Dissenting Shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, as determined by the Delaware Court of Chancery, together with interest, if any, to be paid upon the amount determined to be the fair

value. The ultimate amount holders receive in an appraisal proceeding may be less than, equal to or more than the amount such holders would have received under the Merger Agreement. For a description of the rights of holders of Dissenting Shares and of the procedures to be followed in order to assert such rights and obtain payment of the fair value of such Dissenting Shares, see Section 262 of the DGCL, which is attached as Appendix B to this proxy statement, as well as the information set forth below.

IN ORDER TO PROPERLY EXERCISE YOUR APPRAISAL RIGHTS IN CONNECTION WITH THE MERGER, A RECORD HOLDER OR BENEFICIAL OWNER MUST DELIVER A WRITTEN DEMAND FOR APPRAISAL IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 262 OF THE DGCL TO ITERIS BEFORE THE VOTE IS TAKEN ON THE ADOPTION OF THE MERGER AGREEMENT AT THE SPECIAL MEETING, AND MUST NOT VOTE, IN PERSON OR BY PROXY, IN FAVOR OF THE MERGER PROPOSAL AND CONTINUE TO HOLD YOUR SHARES OF ITERIS COMMON STOCK OF RECORD FROM THE DATE OF MAKING THE DEMAND FOR APPRAISAL THROUGH THE EFFECTIVE TIME OF THE MERGER AND MUST COMPLY WITH THE OTHER REQUIREMENTS OF SECTION 262 OF THE DGCL. MERELY VOTING AGAINST THE MERGER PROPOSAL WILL NOT PRESERVE YOUR RIGHT TO APPRAISAL UNDER SECTION 262 OF THE DGCL. BECAUSE A PROXY THAT IS SIGNED AND SUBMITTED BUT DOES NOT OTHERWISE CONTAIN VOTING INSTRUCTIONS WILL, UNLESS REVOKED, BE VOTED IN FAVOR OF THE ADOPTION OF THE MERGER AGREEMENT, IF YOU SUBMIT A PROXY AND WISH TO EXERCISE YOUR APPRAISAL RIGHTS, YOU MUST INCLUDE VOTING INSTRUCTIONS TO VOTE YOUR SHARES OF ITERIS COMMON STOCK AGAINST, OR ABSTAIN WITH RESPECT TO, THE ADOPTION OF THE MERGER AGREEMENT. NEITHER VOTING AGAINST THE ADOPTION OF THE MERGER AGREEMENT, NOR ABSTAINING FROM VOTING OR FAILING TO VOTE ON THE MERGER PROPOSAL, WILL IN AND OF ITSELF CONSTITUTE A WRITTEN DEMAND FOR APPRAISAL SATISFYING THE REQUIREMENTS OF SECTION 262 OF THE DGCL. THE WRITTEN DEMAND FOR APPRAISAL MUST BE IN ADDITION TO AND SEPARATE FROM ANY PROXY OR VOTE ON THE ADOPTION OF THE MERGER AGREEMENT. IN VIEW OF THE COMPLEXITY OF THE DGCL, STOCKHOLDERS AND BENEFICIAL OWNERS WHO MAY WISH TO PURSUE APPRAISAL RIGHTS SHOULD PROMPTLY CONSULT THEIR LEGAL AND FINANCIAL ADVISORS.

If you have more questions about the Merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact our proxy solicitor:

This proxy statement, and the documents to which we refer you in this proxy statement, as well as information included in oral statements or other written statements made or to be made by us or on our behalf, may include “forward-looking statements” within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when Iteris or its management is discussing its beliefs, estimates or expectations. Such statements generally include words such as “believes,” “expects,” “intends,” “anticipates,” “estimates,” “continues,” “may,” “plan,” “will,” “goal” or similar expressions. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of our management about future events and are therefore subject to risks and uncertainties, many of which are outside the Iteris’ control, which could cause actual results to differ materially from what is contained in such forward-looking statements as a result of various factors, including, without limitation:

These and other factors are identified and described in more detail in Iteris’ Annual Report on Form 10-K for the year ended March 31, 2024, filed with the SEC on June 13, 2024, as amended on July 29, 2024, as well as Iteris’ subsequent filings, all of which are available online at www.sec.gov. Readers are cautioned not to place undue reliance on the Iteris’ projections and other forward-looking statements, which speak only as of the date thereof. Except as required by applicable law, Iteris undertakes no obligation to update any forward-looking statement or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

This discussion of the Merger is qualified in its entirety by reference to the Merger Agreement, which is attached as Appendix A to, and incorporated by reference into, this proxy statement. You should read the Merger Agreement carefully and in its entirety as it is the legal document that governs the Merger.

Iteris. is a provider of smart mobility infrastructure management solutions. Iteris’ cloud-enabled solutions help public transportation agencies, municipalities, commercial entities and other transportation infrastructure providers monitor, visualize and optimize mobility infrastructure to make mobility safe, efficient and sustainable. As a pioneer in intelligent transportation systems technology, Iteris’ advanced detection sensors, mobility and traffic data, software-as-a-service offerings and consulting services represent a comprehensive range of mobility infrastructure management solutions that serve customers in the United States and internationally. Our common stock is listed under the symbol “ITI” on Nasdaq.

Our principal executive offices are located at 250 S. Capital of Texas Hwy., Bldg. 1, Suite 330, Austin, TX 78746, and our telephone number is (512) 382-9669. For more information about Iteris, please visit our website, www. iteris.com. Our website address is provided as an inactive textual reference only. The information contained on our website is not incorporated into, and does not form a part of, this proxy statement or any other report or document on file with or furnished to the SEC. See “Where You Can Find More Information; Incorporation by Reference” on page 102 of this proxy statement.

Almaviva, the Italian Group leads the digital innovation field, with a global presence through a network of companies specialized in tech and industry-specific core business processes. The Almaviva Group designs, implements and manages advanced technological solutions and systems and related logistics structures for companies and public administrations operating in a variety of sectors, including, but not limited to, transport, logistics, agriculture, digital health, defense and security, energy, utilities, financial services, industry, telecommunications and media. The Almaviva Group strategic activities include a key role, constantly growing on the international market, in the IT sector applied to the Transportation & Logistics Industry. From exclusive skills in the railroad field to defining a complete proposal of solutions and services for integrated local public transportation and intermodal logistics, Almaviva creates and manages mission-critical enterprise solutions for the movement of people and goods. Parent’s principal executive offices are located at 00137 Rome Via di Casal Boccone, 188-190800, and its telephone number is (+39)-06.39931. Parent’s website address is www.almaviva.it/en_. The information provided on Parent’s website is not incorporated into, and does not form a part of, this proxy statement.

Merger Sub is a Delaware corporation that was formed on August 5, 2024, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, subject to the terms and conditions thereof. Merger Sub is an indirect wholly owned subsidiary of Parent. Upon consummation of the Merger, Merger Sub will cease to exist, and Iteris will survive the Merger as an indirect wholly owned subsidiary of Parent.

Upon the terms and subject to the conditions of the Merger Agreement, at the Effective Time, Merger Sub will merge with and into Iteris, with Iteris continuing as the Surviving Corporation and as an indirect wholly owned subsidiary of Parent. Iteris will cooperate with Parent to de-list Iteris common stock from Nasdaq and to de-register under the Exchange Act as soon as reasonably practicable following the Effective Time, and at such time, we will cease to be a publicly traded company and will no longer be obligated to file periodic reports with the SEC. If the Merger is completed, you will not own any shares of the capital stock of the Surviving Corporation and instead will only be entitled to receive the Merger Consideration described in “—Merger Consideration” on page 4 of this proxy statement or, with respect to Dissenting Shares, will only be entitled to receive the “fair value” of your Dissenting Shares as determined by the Delaware Court of Chancery pursuant to an appraisal proceeding as contemplated by Delaware law.

The Effective Time will occur upon the filing of the certificate of merger with the Secretary of State of the State of Delaware (or at such later time as we and Parent may agree and specify in the certificate of merger).

If the Merger Proposal is not approved by the stockholders of Iteris or if the Merger is not completed for any other reason, you will not receive any payment for your shares of Iteris common stock. Instead, we will remain a public company, Iteris common stock will continue to be listed and traded on Nasdaq and registered under the Exchange Act and we will be required to continue to file periodic reports with the SEC.

Furthermore, depending on the circumstances that would have caused the Merger not to be completed, it is possible that the price of Iteris common stock will decline significantly. If that were to occur, it is uncertain when, if ever, the price of Iteris common stock would return to the price at which it trades as of the date of this proxy statement.

Accordingly, if the Merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of Iteris common stock. If the Merger is not consummated, the Board will continue to evaluate and review our business operations, properties, dividend policy and capitalization, among other things, make such changes as are deemed appropriate and continue to seek to enhance stockholder value. If the Merger Proposal is not approved by the stockholders of Iteris or if the Merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to the Board will be offered or that our business, prospects or results of operation will not be adversely impacted.

In addition, under specified circumstances, we may be required to pay Parent the Company Termination Fee upon the termination of the Merger Agreement, as described under “The Merger Agreement—Termination Fees” on page 92 of this proxy statement.

At the Effective Time, each outstanding share of Iteris common stock (other than (i) Excluded Shares and (ii) Dissenting Shares) will be converted automatically into the right to receive the Merger Consideration. All shares of Iteris common stock converted into the right to receive the Merger Consideration will automatically be cancelled and cease to exist at the Effective Time, and each certificate formerly representing such shares will thereafter represent only the right to receive the Merger Consideration.

After the completion of the Merger, under the terms of the Merger Agreement, you will have the right to receive the Merger Consideration, but you will no longer have any rights as an Iteris stockholder (except that stockholders who hold Dissenting Shares will not have the right to receive the Merger Consideration but will instead have the right to receive a payment for the “fair value” of their Dissenting Shares as determined by the Delaware Court of Chancery pursuant to an appraisal proceeding as contemplated by Delaware law, as described in “The Merger—Appraisal Rights” on page 63 of this proxy statement).

Following completion of the Merger, Iteris will cease to be a publicly traded company and will become an indirect wholly owned subsidiary of Parent.

The Merger Consideration is fixed and will not be adjusted to reflect changes in the stock price of either company prior to the Closing. The Merger Consideration will, however, be adjusted appropriately to fully reflect the effect of any reclassification, recapitalization, stock split or readjustment of shares, or any stock dividend thereon, with respect to outstanding shares of capital stock of Iteris with a record date between the date of the Merger Agreement and the Effective Time.

The following chronology summarizes key meetings and events that led to the signing of the merger agreement. This chronology does not purport to catalog every contact or communication involving Iteris, the Board, Iteris’ senior management or any other parties, including their respective representatives.

As part of their ongoing evaluation of Iteris’ business, long-term prospects and strategies, the Board and Iteris’ senior management regularly review and assess Iteris’ operations, financial performance and prospects in light of industry conditions, the general economic environment and the potential impact of such conditions and economic environment on Iteris’ long-term strategic goals and plans, including potential opportunities for business combinations, acquisitions, dispositions and other financial and strategic alternatives and has at times included outside financial and legal advisors, all with the goal of enhancing value for Iteris’ stockholders.

From time to time, members of Iteris’ Board and senior management also have discussions with various parties about potential strategic transactions, and with investors who have advocated for a sale of Iteris.

As has been previously disclosed, on February 20, 2021, Iteris received an unsolicited proposal from Rekor Systems, Inc. (“Rekor”), proposing a cash and stock transaction whereby Iteris stockholders would receive $8.15 to $8.50 per share in equivalent value based on the price of Rekor stock at the time, consisting of $1.39 per share in cash and between 0.399 and 0.420 shares of Rekor stock (the “Rekor Proposal”). Following the proposed transaction, Iteris stockholders would own approximately 30% of the combined entity of Iteris and Rekor. Iteris retained a financial advisor to assist in the evaluation of the Rekor Proposal and worked with its outside counsel at Latham & Watkins LLP (“Latham & Watkins”).

On February 26, 2021 at a special Board meeting, the Board discussed the Rekor Proposal. Following discussion, the Board decided to reject the Rekor Proposal. Representatives of the Company communicated that decision to Rekor on February 26, 2021, stating that the combination of the two companies would not be in the best interest of Iteris’ stockholders. Rekor responded on February 27, 2021, acknowledging the rejection.

On March 8, 2021, Iteris announced that it had initiated a comprehensive review of strategic alternatives.

Over the course of February and March 2021, Iteris, directly and through its financial advisor, contacted eight parties, including a potential strategic party referred to as “Party A.”.

On December 7, 2021, Iteris announced that it had terminated its review of strategic alternatives. Iteris did not receive any proposals during its review

From late 2021 to early 2024, Iteris considered potential strategic alternatives with various strategic and private equity parties, and representatives of Iteris met or had conversations with representatives of certain of these parties. At such meetings, the parties discussed, among other things, Iteris’ strategic and financial position and potential commercial and strategic opportunities. On October 24, 2023, Iteris entered into a non-disclosure agreement with a private equity sponsor, referred to as “Party B”. Discussions with Party B focused on the desire to explore a possible commercial collaboration with one of Party B’s portfolio companies. During this period, the Board received updates from Iteris management and its financial and legal advisors regarding the discussions with such potentially interested parties and reviewed Iteris’ strategic and financial position in the context of potential strategic alternatives. No proposals or indications of interest were received by Iteris in connection with the foregoing discussions.

In December 2023, Almaviva contacted Iteris expressing interest in discussing a potential commercial collaboration. Iteris management met with representatives of Almaviva S.p.A (“Almaviva”), in December 2023 to discuss the strategic vision and market position of Iteris. Subsequently, representatives of Iteris and Almaviva met in person on February 19, 2024 to review the market position and solutions portfolio of Almaviva. At the conclusion of the second meeting, representatives of Almaviva raised their interest in exploring a potential transaction with Iteris.

On February 29, 2024 and March 1, 2024, the Board held a regularly scheduled meeting in person with Iteris management and representatives of Wyrick, Robbins, Yates & Ponton LLP (“Wyrick”), Iteris’ legal counsel, in

attendance. Mr. Bergera provided the Board with a summary of his discussions with Almaviva. Iteris’ Board and members of its management team then discussed and considered the discussions with Almaviva, along with Almaviva’s background, its business, geographic reach and product synergies. The Board and management of Iteris also discussed the retention of Latham & Watkins as legal counsel to Iteris and Morgan Stanley & Co. LLC (“Morgan Stanley”) as financial advisor to Iteris with respect to the discussions with Almaviva, Party B and other potential parties. The Board selected Morgan Stanley based on, among other things, Morgan Stanley’s qualifications, expertise and reputation and its knowledge of and involvement in recent transactions in Iteris’ industry. Representatives of Wyrick reviewed the fiduciary obligations of the Board when considering potential strategic transactions, including a potential sale transaction. The Board authorized management to continue to engage in discussions with Almaviva and Party B.

On March 1, 2024, Iteris entered into a mutual confidentiality agreement with Almaviva. The confidentiality agreement included a customary standstill provision, with an exception that permitted Almaviva to make confidential proposals to the Board, and that the standstill provision terminated upon the announcement of an alternative transaction for the sale of Iteris.

On March 5, 2024, representatives of Morgan Stanley held an introductory call with Goldman Sachs & Co, LLC (“Goldman Sachs”), Almaviva’s financial advisor, to discuss Almaviva’s interest in a transaction involving Iteris.

On March 7, 2024, Iteris entered into an indemnification agreement with Morgan Stanley related to investment banking services provided to Iteris in connection with a potential sale of Iteris. Morgan Stanley also disclosed to Iteris that it was not aware of any active investment banking relationships with Almaviva and that Morgan Stanley would provide a formal disclosure letter if and when any third party made any proposal.

On March 19, 2024, and March 21, 2024, members of Iteris management met with Almaviva via videoconference to review Iteris’ product strategy and solutions portfolio, and to further discuss commercial collaboration opportunities.

On March 27, 2024, Iteris conducted an in-person meeting with Party B to review Iteris’ product strategy and solutions portfolio, as well as to discuss a potential commercial collaboration with one of Party B’s portfolio companies.

On April 10, 2024, representatives of Morgan Stanley, at the direction of Iteris management, spoke with representatives of Goldman Sachs to follow up on the March 19, 2024 and March 21, 2024 meetings. Representatives of Goldman Sachs shared feedback from Almaviva and indicated that a non-binding proposal was forthcoming.

On April 12, 2024, Iteris received a non-binding proposal from Almaviva (the “Initial Almaviva Proposal”) providing for an all-cash acquisition of 100% of the capital stock of Iteris for a price of $6.15 per share, reflecting a 31% premium to Iteris’ share price of $4.71 as of the close of April 10, 2024. The Initial Almaviva Proposal indicated that the proposed transaction would not be subject to a financing contingency and that Almaviva expected to obtain committed financing from Goldman Sachs International, an affiliate of Almaviva’s financial advisor, Goldman Sachs, and/or with other financial institutions. Although the Initial Almaviva Proposal requested an exclusive process, Iteris did not grant Almaviva exclusivity or enter into any exclusive agreement with Almaviva. The Initial Almaviva Proposal did not include any provisions for management retention or board participation in the surviving corporation following the proposed transaction.

On April 15, 2024, representatives of Party B contacted Iteris to coordinate a call to discuss Iteris’ long-range solutions roadmap and review Iteris’ associated financial projections. On April 17, 2024, Iteris and Party B entered into an amendment to their existing mutual non-disclosure agreement to include a customary standstill provision, with an exception that permitted Party B to make confidential proposals to the Board. On April 18, 2024, representatives of Iteris and Party B held a videoconference to discuss Iteris’ long-range solutions roadmap and opportunities for commercial collaboration with one of Party B’s portfolio companies.

On April 21, 2024, the Board held a special meeting with members of Iteris’ senior management, representatives of Morgan Stanley, and a representative from Latham & Watkins. During the meeting, the Board discussed the background of the events that led to the Initial Almaviva Proposal, including conversations with Almaviva and Party B, and discussed potential engagement and response alternatives to Almaviva and Party B. Management presented Iteris’ five-year projections (the “Projections”), which were approved by the Board. Representatives of Morgan Stanley presented preliminary valuation analyses and, at the Board’s request, discussed Iteris’ stock trading and multiples over time, perspectives of the research community and comparable company benchmarking.

Representatives of Morgan Stanley, Iteris management and the Board also discussed views on the landscape of additional potentially interested buyers. A representative of Latham & Watkins reviewed with the Board its fiduciary duties and related considerations in connection with evaluating Iteris’ alternatives.

On April 21, 2024, the Board determined that the Initial Almaviva Proposal undervalued Iteris. The Board and its financial and legal advisors then discussed next steps with Almaviva and Party B, including responses to the Initial Almaviva Proposal, in the case of Almaviva, and upcoming meetings, in the case of Party B. The Board authorized members of management of Iteris to (i) reject the Initial Almaviva Proposal as it undervalued Iteris and its prospects and the Board believed Iteris’ five-year strategic plan, as reflected in the Projections, would generate meaningfully more value to Iteris’ stockholders than the Initial Almaviva Proposal and (ii) continue discussions with Party B. The Board also authorized members of Iteris management to provide the Projections to Almaviva.

On April 22, 2024, at the direction of the Iteris Board, management of Iteris spoke via telephone with Party B and informed Party B that the Iteris Board would be amenable to receiving a non-binding offer.

On April 23, 2024, management of Iteris met via videoconference with Party B to review Iteris’ financial projections in its publicly disclosed Vision 2027 investor presentation and certain non-public supporting information, which was provided to Party B shortly prior to such videoconference.

On the same day, members of Iteris management met with representatives of a private equity sponsor, referred to as “Party C,” at an industry conference. At the meeting, representatives of Party C discussed its interest in a range of strategic alternatives with respect to Iteris, including the potential acquisition of Iteris and integration with one of Party C’s existing portfolio companies.

On April 25, 2024, management of Iteris spoke via teleconference with representatives of Almaviva in response to the Initial Almaviva Proposal, stating that the Initial Almaviva Proposal significantly undervalued the value of Iteris. Following such conversation, Iteris delivered its written response to Almaviva explaining that the Initial Almaviva Proposal undervalued Iteris and its future prospects, and the Board believed Iteris’ five-year strategic plan, as reflected in the Projections, would generate meaningfully more value to Iteris’ stockholders than the Initial Almaviva Proposal. In the correspondence, Iteris offered to provide Almaviva with access to the Projections, and to make certain members of the management team available to discuss the Projections with Almaviva.

On April 30, 2024 Morgan Stanley, spoke via teleconference with Goldman Sachs to reiterate the information that management provided to Almaviva and to discuss the rationale of the Board’s conclusion and future steps to assist Almaviva’s understanding of the value of Iteris.

On May 5, 2024, Morgan Stanley sent a presentation to Goldman Sachs providing an overview of the Projections and additional information regarding Iteris’ products. The detailed Projections also were provided to Goldman Sachs, to be shared with Almaviva.

On May 7, 2024, Morgan Stanley disclosed to the Iteris Board that in the two years prior to that date, Morgan Stanley and its affiliates had not received any fees from Iteris, Almaviva or Party B for financial advisory or financing services.

On May 10, 2024, Goldman Sachs provided due diligence requests to Morgan Stanley, which Morgan Stanley shared with Iteris. On the same day, Iteris management and representatives of Party B met via videoconference. Representatives of Party B explained that it was unlikely to be able to provide a proposal to Iteris in the near-term.

On May 11, 2024, Goldman Sachs responded to Morgan Stanley with follow-up questions regarding the presentation provided on May 5, 2024, and requested a meeting with Iteris management.

On May 16, 2024, at a regular Board meeting, management and representatives of Morgan Stanley updated the Board on the status of the discussions with Almaviva, Party B, Party C, and other potential parties that could be interested in a sale transaction involving Iteris. Representatives of Morgan Stanley then left the meeting, and the Board discussed the terms of a draft Morgan Stanley engagement letter with management and representatives of Latham & Watkins.

On May 17, 2024, Iteris management spoke with representatives of Party C via teleconference to follow up on their April 23, 2024 discussion, and offered to introduce Party C to representatives of Morgan Stanley. Following such meeting, Iteris management introduced Party C to representatives of Morgan Stanley by email to set up an introductory call.

On May 22, 2024, Morgan Stanley spoke with Party C, who expressed an interest in Iteris and a desire to learn more about the individual segments of the business. Party C indicated they would follow-up with a list of items required for them to prepare a proposal.

On May 23, 2024, representatives of Iteris’ and Almaviva, together with representatives of Morgan Stanley and Goldman Sachs, held the first of two management meetings via videoconference. Iteris management reviewed the Company’s business, financial and strategic position provided to Goldman Sachs on May 5, 2024, as well as Iteris’ then-current long-range plan. Iteris management also provided responses to questions provided by Goldman Sachs on May 11, 2024, addressing revenue, cost of revenues, gross profit, capital expenditures, balance sheet items, cash flow, and other miscellaneous items. On the same day, representatives of Morgan Stanley and representatives of Party C held a teleconference to discuss Party C’s interest in Iteris, including its potential information requests and envisioned timeline.

On May 24, 2024, Iteris entered into a formal engagement letter with Morgan Stanley as financial advisor in connection with the proposed sale of Iteris. On the same day, Iteris management received an unsolicited call from representatives of a potential strategic party, referred to as “Party D”, inquiring about interest in a potential strategic partnership including a minority investment or control transaction involving Iteris. Additionally, on the same day, Party C provided its initial due diligence request list to representatives of Morgan Stanley, which Morgan Stanley shared with Iteris.

On May 29, 2024, as directed by the Board, representatives of Morgan Stanley held an introductory virtual meeting with representatives of Party D to understand its interest in Iteris. Representatives of Party D reiterated interest in exploring a potential strategic partnership, including a minority investment or a control transaction including Iteris. Representatives of Party D expressed an interest in setting up an in-person meeting, which was subsequently confirmed for July 15, 2024.

On May 30, 2024, representatives of Iteris’ and Almaviva management, together with representatives of Morgan Stanley and Goldman Sachs, held the second of two meetings via videoconference. Iteris management continued its review of responses to questions partially addressed during the May 23, 2024 videoconference and also responded to additional questions addressing miscellaneous business questions sent from Goldman Sachs to Morgan Stanley on May 29, 2024. Almaviva also inquired as to the date of Iteris’ earnings release and investor call for the fiscal year ended March 31, 2024.

On June 5, 2024, Iteris entered into a confidentiality agreement with Party C. The confidentiality agreement included a customary standstill provision, with an exception that permitted Party C to make confidential proposals to the Board.

On June 13, 2024, Iteris provided responses to Party C’s due diligence request list.

On June 26, 2024, Iteris received a revised proposal dated June 25, 2024 from Almaviva (the “Revised Almaviva Proposal”) providing for an all-cash acquisition of 100% of the capital stock of Iteris for a price of $7.00 per share, reflecting a 71% premium to Iteris’ share price of $4.09 as of the close of June 25, 2024. The Revised Almaviva Proposal indicated that the proposed transaction would not be subject to a financing contingency but was subject to confirmatory due diligence and negotiation of definitive documentation. Although the Revised Almaviva Proposal requested an exclusive process, Iteris did not grant Almaviva exclusivity or enter into any exclusive agreement with Almaviva. The Revised Almaviva Proposal did not include any provisions for management retention or Board participation in the surviving corporation following the proposed transaction.

On June 27, 2024, representatives of Morgan Stanley spoke with representatives of Goldman Sachs, regarding the terms of the Revised Almaviva Proposal. Representatives of Goldman Sachs indicated that it would be very difficult for Almaviva to further increase the proposal. The representatives also discussed Almaviva’s outstanding due diligence process if the parties determined to proceed. On the same day, representatives from Party A reached out, on an unsolicited basis, to Iteris management via email to meet.

On June 28, 2024, representatives of Morgan Stanley spoke with representatives from Party C to understand feedback following the diligence responses provided by Iteris management. Representatives from Party C expressed the challenges of pursuing a control transaction at a compelling valuation relative to Iteris’ current trading levels.

On July 2, 2024, Iteris management spoke with representatives of Party A, who expressed interest in setting up a meeting shortly thereafter and signing a confidentiality agreement.

On July 3, 2024, the Board held a meeting to consider the Revised Almaviva Proposal with representatives of Morgan Stanley, Latham & Watkins and Wyrick. During that meeting, representatives of Morgan Stanley discussed the financial terms of the Revised Almaviva Proposal, the market backdrop and various preliminary financial analyses. The Board discussed potential responses to Almaviva with respect to the Revised Almaviva Proposal, engagement and response alternatives with respect to other potential interested parties Iteris was in discussions with and overall process. The Board authorized the senior management of Iteris, and representatives of Morgan Stanley and Latham & Watkins, to continue discussions with interested parties on diligence matters and transaction terms, and to contact other potentially interested parties.

Subsequently, on various dates throughout July 2024, Iteris, Almaviva and their respective advisors held due diligence calls and in-person meetings to discuss, among other things, regulatory matters previously disclosed by Iteris, technology and product related matters, and financial, tax, human resources and other legal due diligence items.

Also on July 3, 2024, Iteris entered into a confidentiality agreement with Party D. The confidentiality agreement included a customary standstill provision, with an exception that permitted Party D to make confidential proposals to the Board.

On the same day, representatives of Morgan Stanley spoke with representatives of Goldman Sachs and conveyed that Iteris was willing to engage with Almaviva on diligence and further negotiations to determine if a transaction would be possible. Representatives of Morgan Stanley also indicated that the Revised Almaviva Proposal was not at a valuation at which the Board would be prepared to transact.

Between July 5, 2024 and July 12, 2024, representatives of Morgan Stanley contacted three additional parties that Morgan Stanley believed may have an interest in a transaction with Iteris, including a private equity sponsor with an existing portfolio company that would potentially acquire Iteris, referred to as “Party E”, and two potential strategic parties, referred to as “Party F” and “Party G”, respectively. Shortly after being contacted, Party F and Party G informed Morgan Stanley they would be unable to pursue a transaction with Iteris at such time.

On July 5, 2024, representatives of Morgan Stanley contacted representatives of Party E to coordinate a meeting to discuss the potential strategic opportunity with Iteris and discuss Party E’s interest.

On July 8, 2024, representatives of Morgan Stanley met via teleconference with representatives of Party E to discuss whether Party E would be interested in a potential strategic transaction with Iteris. Party E indicated their interest and representatives of Morgan Stanley discussed process and timing with respect to such potential transaction.

On the same day, representatives of Morgan Stanley met via teleconference with representatives of Party D to discuss process and timing with respect to a potential strategic transaction with Iteris. Representatives of Party D indicated caution with respect to such potential strategic transaction given their limited experience acquiring a public company.

On the same day, representatives of Latham & Watkins held a teleconference with representatives of King & Spalding LLP (“King & Spalding”), counsel for Almaviva, to discuss diligence and deal process.

On the same day, Iteris entered into a confidentiality agreement with Party A. The confidentiality agreement included a customary standstill provision, with an exception that permitted Party A to make confidential proposals to the Board and that the standstill provision terminated upon the announcement of an alternative transaction for the sale of Iteris. Later that same day, representatives of Morgan Stanley and Party A met via teleconference to provide Party A with a business and financial update of Iteris and to discuss Party A’s diligence process and envisioned timeline.

During the weeks of July 1, 2024 and July 8, 2024, Iteris granted the interested parties who had executed confidentiality agreements (i.e., Party A, Party D, Party E and Almaviva) with access to Iteris’ virtual data room, which contained the Projections. In addition, Iteris hosted management presentations with Party A, Party D, and Party E. During the period from July 8, 2024 to the signing of the Merger Agreement on August 8, 2024, Iteris and its representatives engaged in numerous discussions with, and furnished customary business, financial and legal diligence to, the interested parties and their respective representatives to facilitate their due diligence review.

On July 9, 2024, as directed by the Board, representatives of Morgan Stanley spoke with representatives of Party C, who indicated that they would be interested in exploring a potential transaction involving Iteris and would be willing to review additional due diligence materials, but they also reiterated challenges previously expressed.

On the same day, as directed by the Board, representatives of Morgan Stanley spoke with a representative of Party D’s financial advisor to discuss the timing of a potential strategic transaction and the upcoming management meeting.

On July 10, 2024, Iteris entered into a confidentiality agreement with Party E. The confidentiality agreement included a customary standstill provision, with an exception that permitted Party E to make confidential proposals to the Board, and that the standstill provision terminated upon the announcement of an alternative transaction for the sale of Iteris.

On the same day, as directed by the Board, representatives of Morgan Stanley sent an email to Party A, Party C, Party D and Party E, which included an overview of Iteris and supplementary materials, along with the Projections and a timeline of key dates to submit a proposal.

On the same day and shortly after sending the process email and supplementary materials, representatives of Party E contacted representatives of Morgan Stanley to discuss the supplementary materials provided alongside the process email and requested whether any confidential materials could be shared with a potential equity source to Party E.

On July 12, 2024, Party B confirmed with Iteris management and representatives of Morgan Stanley that Party B was unable to pursue a transaction at such time.

On July 15, 2024, Iteris management and representatives of Morgan Stanley met in person with representatives of Party D and its financial advisor in California. During the meeting, Iteris management and representatives of Party D discussed Iteris’ business strategy and the potential deal structure.

On July 16, 2024, the potential equity source to Party E joined the confidentiality agreement between Iteris and Party E and was granted access to the data room. On the same day, representatives of Latham & Watkins, King & Spalding, and Morgan Stanley had a teleconference regarding the legal process and timeline for the proposed transaction.

On July 17, 2024, representatives of Morgan Stanley delivered to Almaviva an initial draft of the Merger Agreement (“Initial Merger Agreement”), which included customary provisions with respect to Iteris’ ability to change its recommendation or terminate the Merger Agreement to accept a superior proposal, including the related termination fee payable to Almaviva by Iteris (the “Termination Fee”) of 2.0% of transaction equity value in such circumstances (collectively referred to as the “fiduciary out provisions”), along with provisions that required Almaviva to take all actions, including litigation, divestiture of assets and behavioral remedies, if necessary to obtain regulatory approvals (referred to as a “hell or high water” provision). On the same day, Iteris management participated in a management discussion with representatives of Party A and discussed various topics, including business and financial matters.

On July 18, 2024, representatives of Iteris and Party E, together with representatives of Morgan Stanley held a management meeting via teleconference. Iteris management reviewed Iteris’ business, financial and strategic position, as well as Iteris’ then-current long-range plan. Iteris management also discussed Iteris’ product portfolio, potential synergies that could be realized by Party E in connection with a potential strategic transaction by Party E’s existing portfolio company, representing additional value that could be shared with Iteris’ stockholders. Following such management meeting, representatives of Party E called representatives of Morgan Stanley to reiterate their interest in Iteris and requested additional due diligence items.

On July 22, 2024 through July 24, 2024, representatives of Iteris and certain of its advisors, and Almaviva and its advisors, met in-person at the Company’s offices in Santa Ana, California to further discuss, among other things, regulatory matters previously disclosed by Iteris, technology and product related matters, and financial, tax, human resource, commercial initiatives and legal due diligence items. A facility tour also was provided.

On July 24, 2024, Iteris management and representatives of Party D met by videoconference to discuss Iteris’ competition, contracts, and growth opportunities.

On July 25, 2024, the Board held a regular meeting, at which representatives of Morgan Stanley and Latham & Watkins updated the Board on the status of discussions with Almaviva and other interested parties. During that meeting, representatives of Morgan Stanley discussed recent trading in Iteris’ stock, comparable company benchmarking, and the status of outreach to, and the engagement of, the interested parties, along with process and timing of the overall proposed transaction. The Board authorized management of Iteris, Morgan Stanley and Latham & Watkins to continue discussions with interested parties on diligence and terms.

On the same day, Party A contacted representatives of Morgan Stanley to state that they will not be able to pursue a transaction at such time.

On July 26, 2024, King & Spalding sent a revised draft of the Merger Agreement to Latham & Watkins, reflecting changes to the representations and warranties, covenants, the fiduciary out provisions, raising the Termination Fee to equal 4% of transaction equity value, and also proposed that Almaviva would only have to use reasonable best efforts to litigate to obtain regulatory approvals, that divestitures and behavioral remedies would not be required with respect to Almaviva or Iteris, unless such remedy was consented to by Almaviva and was only binding on Iteris. On the same day, Party C informed representatives of Morgan Stanley that it would not be able to pursue a transaction at such time.

Between July 26, 2024, and August 8, 2024, representatives of Iteris and its advisors responded to numerous detailed due diligence requests addressing business, financial and legal questions from Almaviva and its representatives. In addition, Latham & Watkins and King & Spalding exchanged drafts of the Merger Agreement, including related disclosure schedules, negotiating the representations and warranties, covenants, fiduciary out provisions, Termination Fee amount and certain regulatory approval provisions.

On July 28, 2024, senior management of Iteris and representatives of Almaviva, met in-person at Iteris’ offices in Santa Ana, California. Representatives of Morgan Stanley and Goldman Sachs were present for introductions, and then left the meeting. Discussions between senior management of Iteris and representatives of Almaviva focused on ongoing litigation, Iteris’ financial and operational results for the June 30, 2024 quarter, the universe and status of Iteris’ current acquisition targets, Iteris’ organization and personnel, including key new hires.

On July 29, 2024, senior management of Iteris and representatives of Almaviva, Morgan Stanley and Goldman Sachs met in-person at Iteris’ offices in Santa Ana, California, and senior management of Iteris provided the representatives of Almaviva a tour of the Iteris facilities, with a focus on the Company’s supply chain, assembly, and test capabilities, as well as the Company’s engineering lab. The parties’ discussions also focused on various functional areas including product development, human resources and finance, as well as litigation matters. On the same day, representatives of Latham & Watkins spoke telephonically with representatives of King & Spalding regarding the timing for providing the draft debt commitment documents and the proposed structure of the debt financing that Almaviva plans to use to finance the proposed transaction.

On the same day, representatives of Morgan Stanley met via videoconference with representatives of Party E to discuss its outstanding diligence requirements and envisioned timeline to deliver a non-binding proposal.

On July 30, 2024, Representatives of Morgan Stanley provided the Board with an updated disclosure with respect to its relationships with Almaviva, Party D and Party E which was consistent with the disclosure previously provided.

On July 31, 2024, Party D delivered a non-binding proposal to Iteris (the “Party D Proposal”) offering to acquire 100% of the capital stock of Iteris for all cash consideration at a price per share of $7.00, reflecting a 47% premium to Iteris’ share price of $4.75 as of the close on July 29, 2024. The Party D Proposal indicated that the proposed transaction would not be subject to a financing contingency and Party D would finance the purchase price through cash on hand, but that the Party D Proposal was conditioned on Party D completing its due diligence. The Party D Proposal did not request exclusivity and Iteris did not grant Party D exclusivity or enter into any exclusive arrangement with Party D.

On August 1, 2024, Party E delivered a non-binding proposal to Iteris (the “Party E Proposal”) offering to acquire for all-cash consideration of 100% of the capital stock of Iteris at a price of between $7.00 and $7.75 per share, reflecting a 55% to 72% premium to Iteris’ trailing 90-day volume-weighted average per share as of close on July 30, 2024. The Party E Proposal indicated that the proposed transaction would not be subject to a

financing contingency but was conditioned on Party E completing due diligence and finalizing definitive agreements, and that Party E was committed to consummate the proposed transaction on an expedited basis but did not specify an expected timeline. The Party E Proposal did not request exclusivity and Iteris did not grant Party E exclusivity or enter into any exclusive agreement with Party E.

On the same day, the Board held a meeting to consider the Revised Almaviva Proposal, the Party D Proposal and Party E Proposal, with representatives of Morgan Stanley and Latham & Watkins. Wyrick also participated in the meeting. During that meeting, the Board discussed recent developments in the Company’s discussions with Almaviva, including the in-person meetings with Iteris management on July 28^th and July 29^th, along with the status of negotiations of the Merger Agreement with Almaviva. Representatives of Morgan Stanley discussed the financial terms of the Party D Proposal and Party E Proposal, including the broad indicative range of value provided in the Party E Proposal, and the uncertainty on a specific indicative price Party E may or may not ultimately offer, that neither proposal included a financing contingency and Party D would be using cash-on-hand to finance a proposed transaction. Representatives of Morgan Stanley also discussed that Party D’s diligence requirements were wide-ranging, and that the timing to complete such requirements was not specified. The Board discussed the likelihood of the interested parties to arrive at competitive terms, market conditions, deal certainty and related closing risks with each interested party. Representatives of Morgan Stanley also provided a market update and presented preliminary valuation materials to the Board, discussed recent stock price performance and Iteris’ forecast. The Board then authorized and instructed management of Iteris and Latham & Watkins and Morgan Stanley to provide Party E and Party D with the Initial Merger Agreement and communicate to each of Almaviva, Party E and Party D to expedite their process to finalize definitive terms.

On the same day, Latham & Watkins sent a revised draft of the Merger Agreement to King & Spalding, reflecting, among other things, changes to the representations and warranties, covenants, the fiduciary out provisions, lowering the related Termination Fee to equal 2.25% of transaction equity value, and reverting to a “hell or high water” provision with respect to regulatory approvals. At the direction of the Board, representatives of Morgan Stanley sent Party D and Party E the Initial Merger Agreement.

On August 2, 2024, at the direction of the Board, representatives of Morgan Stanley spoke with representatives of Goldman Sachs on a teleconference and relayed that the Board was in receipt of alternative proposals. Accordingly, representatives of Morgan Stanley emphasized the importance of improving the Revised Almaviva Proposals, given the competitive environment.

On August 3, 2024, Latham & Watkins sent King & Spalding an initial draft of the disclosure schedules, and representatives of Morgan Stanley, as directed by the Board, sent Party D and Party E the initial draft of the disclosure schedules.

That same day, King & Spalding sent a revised draft of the Merger Agreement to Latham & Watkins, reflecting Almaviva’s changes to, among other things, the representations and warranties, treatment of equity compensation upon consummation of the proposed transaction, interim operating covenants, fiduciary out provisions, increasing the related Termination Fee to 4% of transaction equity value, and watering down the regulatory approval covenant, such that Almaviva would only have to use reasonable best efforts to litigate to obtain regulatory approvals and that divestitures and behavioral remedies would not be required with respect to Almaviva or Iteris, unless such remedy was consented to by Almaviva and was only binding on Iteris.

On August 5, 2024, representatives of Latham & Watkins and King & Spalding met via videoconference to review key issues identified by Iteris in the draft Merger Agreement, with particular focus on the “hell or high water” provisions. Later that day, Latham & Watkins sent a revised draft of the Merger Agreement to King & Spalding, reflecting Iteris’ position to include, among other things, a “hell or high water” provision (the “August 5^th Iteris Merger Agreement”), and King & Spalding sent a revised draft of the disclosure schedules to Latham & Watkins.

Later the same day, the Board held a special meeting via videoconference with Iteris management and representatives of Morgan Stanley and Latham & Watkins in attendance, to discuss an update on Iteris’ strategic transaction process and proposals received. During that meeting, representatives of Morgan Stanley provided a market update including recent elevated volatility and investor uncertainty over the long-term economic growth outlook, then summarized discussions with Almaviva, including that Almaviva had not yet provided an update on their offer, but indicated their willingness to execute definitive documents on an expedited basis. Representatives of Morgan Stanley then provided an update of discussions with Party E, in which Party E indicated that it may be challenging to fully complete its due diligence efforts on an expedited timeframe, but that Party E had started to

meaningfully engage in due diligence. Representatives of Morgan Stanley also provided an update with respect to discussions with Party D, after connecting with its financial advisor on the same day. Party D’s financial advisor indicated that Party D would likely require several weeks of further due diligence and they would provide a revised timeline in the coming days. After discussion, the Board authorized management and its advisors to and continue to engage with Almaviva, Party E and Party D. In addition, representatives of Morgan Stanley disclosed that in the two years prior to July 30, 2024, neither Morgan Stanley nor its affiliates had received any fees from Iteris, Almaviva or Party D for financial advisory or financing services, but had received between $10 million and $20 million in fees from Party E and certain entities related to or affiliated with Party E for financial advisory and financing services, that Morgan Stanley or its affiliates is a lender of Party E or certain entities related to or affiliated with Party E and so far as Morgan Stanley is aware, as of July 30, 2024, Morgan Stanley held aggregate interests of between 0% and 1% in the common stock of Iteris, less than 2% in the common stock of three related entities or affiliates of Party E, and less than 1% in the common stock of Party D, which interests are held in connection with Morgan Stanley’s (i) investment management business, (ii) wealth management business, including client discretionary accounts or (iii) ordinary course trading activities, including hedging activities. Representatives of Latham & Watkins disclosed that in the two years prior to July 30, 2024, neither Latham & Watkins nor its affiliates had received any fees from Almaviva or Party D for legal services but had received between $10 million and $20 million in fees from Party E and certain entities related to or affiliated with Party E for legal services.

On August 6, 2024, representatives of Almaviva called senior management of Iteris to indicate that Almaviva has completed its due diligence, finalized its debt financing package, and substantially progressed on the remaining items in the Merger Agreement. During such call, representatives of Almaviva re-affirmed their all-cash consideration offer of $7.00 per share as set forth in the Revised Almaviva Proposal. Immediately after such call, representatives of Almaviva sent senior management of Iteris an email correspondence to confirm the items discussed and stated that if the Revised Almaviva Proposal was accepted by 11:59 p.m. eastern time on August 7, 2024, that Almaviva was prepared to execute the Merger Agreement on August 8, 2024.

On the same day, representatives of King & Spalding and Latham & Watkins met via videoconference to review key issues identified by Almaviva in the August 5^th Iteris Merger Agreement, including with respect to fiduciary out provisions and related Termination Fee, the “hell or high water” provision regarding regulatory approvals and certain employee benefits related matters. Later that day, King & Spalding sent a revised draft of the Merger Agreement to Latham & Watkins, reflecting Almaviva’s changes to the representations and warranties, covenants, fiduciary out provision, and the regulatory approval covenant, such that Almaviva would not be required to agree to sell, transfer, divest license or dispose any assets, properties or businesses or accept operational restrictions to receive regulatory approval, except if such actions solely related to the acquisition of Iteris and did not adversely impact the operations or business of the Iteris or surviving company in any material respects.

On August 6, 2024, and August 7, 2024, representatives of Iteris and Party E, together with representatives of Morgan Stanley and advisors to Party E, held videoconference due diligence sessions focused on finance, accounting, operations and tax matters. Following such management sessions, representatives of Morgan Stanley and Party E met via teleconference to discuss timeline and process, including indicating that Party E should provide their comments to the Initial Merger Agreement and clarity surrounding their price in advance of Iteris’ board meeting the next day.

On August 7, 2024, a representative of King & Spalding informed representatives of Latham & Watkins that Almaviva would be open to reducing the Termination Fee to 3.5% of the transaction equity value subject to Iteris’ agreement on the other key economic points.

On the same day, representatives of Party E called representatives of Morgan Stanley and indicated they were not sufficiently advanced in their due diligence efforts to provide a specific price per share within the range indicated in the Party E Proposal and they declined to provide an estimated timeline to complete their due diligence process. Additionally, representatives of Party E indicated that they were not yet in a position to submit comments to the Initial Merger Agreement.

Later that the same day, the Board held a special meeting via videoconference with Iteris management and representatives of Morgan Stanley and Latham & Watkins in attendance, to discuss an update on Iteris’ strategic transaction process and proposals received. During that meeting, representatives of Morgan Stanley summarized discussions with Party E and provided an update on the Party E’s status, including that Party E had increased their pace of due diligence, but that Party E had neither provided a markup of the Initial Merger Agreement or disclosure schedules nor had Party E provided clarity on its purchase price beyond the previously provided range. Next,

representatives of Morgan Stanley summarized discussions with Party D, including that Party D indicated it may be unable to provide a definitive proposal in a near-term timeline. Thereafter, representatives of Morgan Stanley summarized discussions with and provided an update with respect to Almaviva, including that Almaviva confirmed that the $7.00 cash price per share included in the Revised Almaviva Proposal remained its current price, that its due diligence was complete and that Almaviva was willing to execute definitive documentation as early as August 8, 2024. After discussion, the Board authorized Morgan Stanley and Iteris management to continue to engage Party E and Party D and to develop a counter proposal for Almaviva with respect to price per share, termination fee and approach to regulatory certainty.

On the same day, representatives of Iteris and Party E, together with representatives of Morgan Stanley, held a management meeting via teleconference. Iteris management reviewed Iteris’ financial and operational due diligence items.

On August 8, 2024, the Board held a special meeting via videoconference with Iteris management and representatives of Morgan Stanley and Latham & Watkins in attendance, to discuss an update on Iteris’ strategic transaction process and proposals received. During that meeting, representatives of Morgan Stanley noted that Almaviva had completed its diligence and negotiation of definitive documentation, including the Merger Agreement and financing documentation, confirmed their prior offer of $7.00 per share, and that Almaviva had informed Iteris management overnight that its terms were contingent on signing a definitive agreement on August 8, 2024 and that they did not foresee continuing to be engaged in discussions or negotiations beyond August 8, 2024. Representatives from Morgan Stanley reviewed with the Board the Almaviva offer. Representatives of Morgan Stanley then summarized discussions with Party E, noted that Party E had not updated its prior indication of interest which included a broad indicative range, and that in addition to not providing a more specific price proposal, Party E had not provided a markup of the Initial Merger Agreement. As such, Party E’s proposal was meaningfully uncertain and incomplete. Representatives of Morgan Stanley then provided an update with respect to discussions with Party D and noted that in response to the timeline that had been proposed to Party D to provide an updated proposal and markup of Initial Merger Agreement, Party D had not provided either, instead, Party D suggested they would need approximately two additional weeks for preliminary diligence and regulatory analysis, and several additional weeks after that to negotiate the Initial Merger Agreement. Next, representatives of Morgan Stanley and management of Iteris discussed response alternatives to Almaviva. The Board discussed with its advisors and Iteris management, among other things, terms that would maximize stockholder value and closing certainty, timing considerations, Almaviva’s current offer compared to the uncertainty of the Party E and Party D indicative proposals, market conditions, the ability of third parties including Party E and Party D to make topping bids, and potential responses from Almaviva to any counter proposal. After discussion, the Board authorized Morgan Stanley and Iteris management to present Almaviva with a counter proposal of $7.45 per share in cash, a Termination Fee equal to 2.5% of equity value and a “hell or high water” provision that would provide improved closing certainty on obtaining regulatory approval (“Iteris Counterproposal”).

Shortly thereafter, at the direction of the Board of Directors Iteris’ senior management and representatives of Morgan Stanley called representatives of Almaviva and Goldman Sachs to communicate the Iteris Counterproposal. During such call, representatives of Almaviva and Goldman Sachs rejected the Iteris Counterproposal, but agreed to further consider the matter. After such call, representatives of Almaviva emailed Iteris’ senior management a “Further Revised Almaviva Proposal” and stated that such Further Revised Almaviva Proposal was Almaviva’s “best and final” offer and was contingent on Almaviva and Iteris executing definitive documents on August 8, 2024. The Further Revised Almaviva Proposal provided a revised price of $7.20 per share in cash, a Termination Fee equal to 3.25% of transaction equity value and a “hell or high water” antitrust provision.

Shortly after receipt of the Further Revised Almaviva Proposal, the Board reconvened the special meeting via videoconference with Iteris management and representatives of Morgan Stanley and Latham & Watkins in attendance, to discuss an update on Iteris’ strategic transaction process and proposals received. Iteris management referred to the Further Almaviva Revised Proposal, which was provided to the Board prior to the meeting, and that the Further Revised Almaviva Proposal was their “best and final” and contingent on the parties executing definitive documents on August 8, 2024. After discussion relating to, among other things, Almaviva’s current offer compared to the uncertainty of Party E or Party D indicative proposals, and market conditions, the Board authorized Iteris management, Morgan Stanley and Latham & Watkins to continue to pursue the Further Revised Almaviva Proposal and finalize definitive documents.

On August 8, 2024, representatives of Latham & Watkins and King & Spalding held a meeting via videoconference to resolve the open issues in the disclosure schedules accompanying the Merger Agreement. Latham & Watkins and King & Spalding exchanged drafts of the Merger Agreement, including related disclosure schedules, resulting in a final form Merger Agreement to be presented for consideration by the Board.

Later the same day after markets closed, Iteris reported its financial results for the first quarter ended on June 30, 2024.

Later the same day, the Board reconvened the special meeting via videoconference, with Iteris management and representatives of Morgan Stanley and Latham & Watkins in attendance. Latham & Watkins reported on the resolution of the open issues in the Merger Agreement and accompanying disclosure schedules and noted that the execution versions of the Merger Agreement and the accompanying disclosure schedule had been made available for the Board to review. At the request of the Board, Morgan Stanley reviewed with the Board Morgan Stanley’s financial analysis of the $7.20 per share merger consideration and delivered to the Board its oral opinion, which was confirmed by delivery of a written opinion dated August 8, 2024, to the effect that, as of that date and based on and subject to various assumptions and limitations described in such opinion, the per-share merger consideration of $7.20 to be received in the merger by holders of Iteris’ common stock (other than Excluded Shares and Dissenting Shares) was fair, from a financial point of view, to such holders. After discussing the materials presented at the meeting, the Board unanimously approved and declared advisable the proposed transaction and the execution by Iteris of the Merger Agreement, to be effective August 8, 2024, and recommended that Iteris stockholders vote to adopt the Merger Agreement and approve the proposed transaction.

Iteris and Almaviva then executed the Merger Agreement, effective on August 8, 2024, after Iteris reported its financial results. Prior to the opening of trading in Iteris common stock on Nasdaq on August 9, 2024, Iteris issued a press release announcing the execution of the Merger Agreement on August 8, 2024.

Between September 10, 2024 and September 14, 2024, Iteris’ senior management met in-person with Almaviva to discuss, and agreed in principal to, a retention program for certain key employees. For additional information about such retention program, please see “The Merger—Interests of the Directors and Executive Officers of Iteris in the Merger—Retention Program” on page 58 of this proxy statement.

The Board, after consulting with its financial advisor and outside legal counsel and carefully reviewing and considering various factors described in “—Reasons for the Merger,” unanimously (i) determined that the transactions contemplated by the Merger Agreement, including the Merger, are advisable, fair to and in the best interests of Iteris and its stockholders; (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger; (iii) directed that the Merger Agreement be submitted to the stockholders of Iteris for its adoption at the special meeting; and (iv) recommended that Iteris’ stockholders adopt the Merger Agreement.

The Board recommends that you vote: (i) “FOR” the Merger Proposal; (ii) “FOR” the Adjournment Proposal; and (iii) “FOR” the Compensation Proposal.

At a meeting of the Board on August 8, 2024, the Board unanimously (i) determined that the transactions contemplated by the Merger Agreement, including the Merger, are advisable, fair to and in the best interests of Iteris and its stockholders; (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger; (iii) directed that the Merger Agreement be submitted to the stockholders of Iteris for its adoption at the special meeting; and (iv) recommended that Iteris’ stockholders adopt the Merger Agreement.

In reaching its decision to approve the Merger Agreement and the Merger, and to recommend that the Merger Agreement be adopted by Iteris’ stockholders, the Board evaluated the Merger Agreement and the Merger with Iteris’ management and Iteris’ legal and financial advisors and carefully considered a number of factors, including the following material factors:

The Board also considered a variety of risks and other potentially negative factors with respect to the Merger Agreement and the Merger, including the following material negative factors:

After taking into account the material factors set forth above, as well as others, the Board concluded that the potential benefits of the Merger to Iteris’ stockholders outweighed the potentially negative factors associated with the Merger. Accordingly, the Board unanimously determined that the Merger Agreement and the Merger are advisable, fair to and in the best interests of Iteris and its stockholders and recommends that the stockholders of Iteris approve and adopt the Merger Agreement.

The foregoing discussion summarizes the material factors considered by the Board, but is not intended to be exhaustive and is not listed in the relative order of importance. In light of the variety of factors considered in connection with its evaluation of the Merger, the Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. Moreover, each member of the Board applied his or her own business judgment to the process and may have given different weight to different factors. The Board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination and recommendation. The Board based its recommendation on the totality of the information presented, including its discussions with Iteris’ executive management and its financial advisors and outside legal counsel. This explanation of the reasoning of the Board and certain information presented in this section is forward-looking in nature and should be read in light of the factors set forth in “Cautionary Statement Concerning Forward-Looking Statements” on page 28 of this proxy statement.

Iteris retained Morgan Stanley to act as its exclusive financial advisor in connection with a potential sale of Iteris and to provide financial advice and assistance and, upon the request of Iteris, to render a financial opinion, in each case in connection therewith. Iteris selected Morgan Stanley to act as its financial advisor based on, among other things, Morgan Stanley’s qualifications, expertise and reputation and its knowledge of and involvement in recent transactions in Iteris’ industry. On August 8, 2024, Morgan Stanley rendered its oral opinion, subsequently confirmed in writing, to the Board to the effect that, as of that date, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley as set forth in Morgan Stanley’s written opinion, the Merger Consideration to be received by the holders of shares of Iteris common stock (other than holders of the Excluded Shares and Dissenting Shares) was fair from a financial point of view to such holders.

The full text of the written opinion of Morgan Stanley delivered to the Board, dated August 8, 2024, is attached as Appendix C and is incorporated by reference into this proxy statement in its entirety. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion. Stockholders of Iteris are urged to, and should, read the opinion carefully and in its entirety. Morgan Stanley’s opinion was directed to the Board and addressed only the fairness, from a financial point of view, of the Merger Consideration to be received by the holders of shares of Iteris common stock (other than holders of the Excluded Shares and Dissenting Shares). Morgan Stanley did not express any view on, and the opinion did not address, any other term or aspect of the Merger Agreement or the Merger or any term or aspect of any other agreement or instrument contemplated by the Merger Agreement or entered into in connection therewith. Morgan Stanley’s opinion did not address the relative merits of the Merger as compared to any other business or financial transaction or strategies, or other alternatives that might be available to Iteris, or whether or not such alternatives could be achieved or are available, nor did it address the underlying business decision of Iteris to enter into the Merger Agreement or proceed with any other transaction contemplated by the Merger Agreement. Morgan Stanley’s opinion was not intended to, and does not, constitute an opinion or recommendation as to how the stockholders of Iteris should vote at the special meeting. The summary of Morgan Stanley’s opinion set forth in this proxy statement is qualified in its entirety by reference to the full text of Morgan Stanley’s opinion.

In connection with rendering its opinion, Morgan Stanley, among other things:

In arriving at its opinion, Morgan Stanley assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to Morgan Stanley by Iteris, and formed a substantial basis for its opinion. With respect to the financial projections, Morgan Stanley assumed that they had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of Iteris of the future financial performance of Iteris. Morgan Stanley expressed no view as to such financial projections or the assumptions on which they were based. In addition, Morgan Stanley assumed that the Merger will be consummated in accordance with the terms set forth in the Merger Agreement without any waiver, amendment or delay of any terms or conditions, including, among other things, that Parent will obtain financing in accordance with the terms set forth in the Draft Commitment Letter and that the definitive Merger Agreement would not differ in any material respect from the draft thereof furnished to Morgan Stanley. Morgan Stanley did not express any view on, and Morgan Stanley’s opinion did not address, any other aspect of the Merger Agreement or the transactions contemplated thereby or any term or aspect of any other agreement or instrument contemplated by the Merger Agreement or entered into in connection therewith. Morgan Stanley assumed that in connection with the receipt of all the necessary governmental, regulatory or other approvals and consents required for the proposed Merger, no delays, limitations, conditions or restrictions will be imposed that would have a material adverse effect on the contemplated benefits expected to be derived in the proposed Merger. Morgan Stanley is not a legal, tax or regulatory advisor. Morgan Stanley is a financial advisor only and relied upon, without independent verification, the assessment of Iteris and its legal, tax or regulatory advisors with respect to legal, tax or regulatory matters. Morgan Stanley’s opinion does not address the relative merits of the Merger as compared to any other business or financial transaction or strategies, or other alternatives that might be available to Iteris, or whether or not such alternatives could be achieved or are available, nor does it address the underlying business decision of Iteris to enter into the Merger Agreement or proceed with any other transaction contemplated by the Merger Agreement. Morgan Stanley expressed no opinion with respect to the fairness of the amount or nature of the compensation to any of Iteris’ officers, directors or employees, or any class of such persons, relative to the Merger Consideration to be received by the holders of shares of Iteris common stock (other than holders of the Excluded Shares and Dissenting Shares) in the Merger. Morgan Stanley did not make any independent valuation or appraisal of the assets or liabilities of Iteris, nor was Morgan Stanley furnished with any such valuations or appraisals. Morgan Stanley’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Morgan Stanley as of, August 8, 2024. Events occurring after August 8, 2024, may affect Morgan Stanley’s opinion and the assumptions used in preparing it, and Morgan Stanley has not assumed any obligation to update, revise or reaffirm its opinion.

The following is a summary of the material financial analyses performed by Morgan Stanley in connection with its oral opinion and the preparation of its written opinion letter, dated as of August 8, 2024, to the Board. The

following summary is not a complete description of Morgan Stanley’s opinion or the financial analyses performed and factors considered by Morgan Stanley in connection with its opinion, nor does the order of analyses described represent the relative importance or weight given to those analyses. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses used by Morgan Stanley, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. The analyses listed in the tables and described below must be considered as a whole; considering any portion of such analyses and the factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying Morgan Stanley’s opinion. Unless stated otherwise, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before August 7, 2024, the last full trading day before the August 8, 2024 presentation by Morgan Stanley to the Board, and is not necessarily indicative of current market conditions.

In performing the financial analyses summarized below and in arriving at its opinion, Morgan Stanley, at the direction of the Board, used and relied upon, among other matters, certain financial projections provided by Iteris management on July 27, 2024, which were approved by the Board and are referred to in this section of the proxy statement as the “Management Plan.” The Management Plan is more fully described below in the section of this proxy statement captioned “—Certain Financial Projections” on page 52 of this proxy statement. In accordance with direction from the Board of Directors, Morgan Stanley utilized the Management Plan in its financial analyses described below.

Certain of the following terms are used throughout this summary of financial analyses:

Morgan Stanley performed a public trading comparables analysis, which attempts to provide an implied value of a company by comparing it to similar companies that are publicly traded. Morgan Stanley reviewed and compared certain financial estimates for Iteris with comparable publicly available consensus equity analyst research estimates for companies, selected based on Morgan Stanley’s professional judgment and experience, that share similar business characteristics and have certain comparable operating characteristics, including, among other things, similarly sized revenue and/or revenue growth rates, market capitalizations, profitability, scale and/or other similar operating characteristics (these companies are referred to herein as the “comparable companies”). For purposes of this analysis, Morgan Stanley analyzed the ratios comparing the AV to Adj. EBITDA (“AV / Adj. EBITDA”) for calendar years 2024 and 2025, based on consensus estimates, of the following companies. As approved by Iteris, Morgan Stanley utilized publicly available estimates prepared by equity research analysts and compiled by Capital IQ, available as of August 7, 2024. Results of the analysis for the comparable companies are indicated in the following table:

Based on its analysis of the relevant metrics for each of the comparable companies and taking into consideration the different business, financial and operating characteristics of the comparable companies as compared to Iteris and considering historical trading multiples of Iteris and upon the application of its professional judgment and experience, Morgan Stanley selected a representative range of AV / Adj. EBITDA multiples for calendar year 2024 of 9.0x to 12.5x and applied this range of multiples to the estimate of calendar year 2024 Adj. EBITDA of Iteris of $14 million and a representative range of AV / Adj. EBITDA multiples for calendar year 2025 of 7.0x to 10.0x and applied this range of multiples to the estimate of calendar year 2025 Adj. EBITDA of Iteris of $26 million, in each case, based on the estimated Adj. EBITDA provided by Iteris’ management in the Management Plan. Based on this analysis and the fully diluted share count of Iteris common stock provided by Iteris’ management, Morgan Stanley derived a range of implied per share prices as follows, each rounded to the nearest $0.10, as compared to the Merger Consideration payable pursuant to the Merger Agreement of $7.20 per share:

No company utilized in the publicly traded comparable companies analysis is identical to Iteris and hence the foregoing summary and underlying financial analyses involved considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading or other values of the companies to which Iteris was compared. In evaluating the comparable companies, Morgan Stanley made numerous judgments and assumptions with regard to industry performance, general business, regulatory, economic, market and financial conditions and other matters, many of which are beyond the control of Iteris, such as the impact of competition on the business of Iteris and the industry generally, industry growth and the absence of any adverse material change in the financial condition and prospects of Iteris or the industry or in the financial markets in general.

Morgan Stanley performed a precedent transactions analysis, which attempts to provide an implied value of a company based on publicly available financial terms. Morgan Stanley compared publicly available statistics for selected public infrastructure technology transactions. Morgan Stanley selected such transactions based on Morgan Stanley’s professional judgment and experience. For purposes of this analysis, Morgan Stanley analyzed the ratios of AV to the last 12 months’ (“LTM”) Adj. EBITDA of the target company based on publicly available information at the time of announcement.

The following is a list of the selected transactions reviewed, together with the applicable multiples:

Based on its professional judgment and experience and taking into consideration, among other things, (i) the observed multiples for the precedent transactions listed above (AV / LTM Adj. EBITDA reflecting a high of 19.1x, median of 15.8x, and a low of 10.1x), and (ii) the prevailing market environment for the valuation and performance of the companies in Iteris’ industry at the time of each transaction as compared to the current prevailing market trends, Morgan Stanley applied AV / LTM Adj. EBITDA multiples between 15.0x and 19.0x to Iteris’ LTM Adj. EBITDA as of June 30, 2024 of $12 million. Based on this analysis and the fully diluted share count of Iteris

common stock provided by Iteris’ management, Morgan Stanley derived a range of estimated implied values per share of Iteris common stock between $4.40 and $5.40, each rounded to the nearest $0.10, as compared to the consideration payable pursuant to the Merger Agreement of $7.20 per share.

No company or transaction utilized in the precedent transactions analysis is identical to Iteris or the Merger. In evaluating the precedent transactions, Morgan Stanley made numerous judgments and assumptions with regard to industry performance, general business, regulatory, economic, market and financial conditions and other matters, many of which are beyond the control of Iteris, such as the impact of competition on the business of Iteris and the industry generally, industry growth and the absence of any adverse material change in the financial condition and prospects of Iteris or the industry or in the financial markets in general.

Morgan Stanley performed a discounted cash flow analysis, which is designed to provide an implied value of a company by calculating the present value of the estimated future unlevered free cash flows and terminal value of a company. Morgan Stanley calculated a range of implied values per share of Iteris common stock based on estimates of future unlevered free cash flows for the second, third and fourth quarters of fiscal year 2025 and each of the fiscal years 2026 through and including 2029 contained in the Management Plan. For purposes of this analysis, unlevered free cash flow was calculated as EBIT (including the cost of stock-based compensation adjusted for other income and adjustments), less tax expense, plus depreciation and amortization, less change in net working capital, less capital expenditures.

The unlevered free cash flows and terminal values were discounted to present values as of June 30, 2024, at a discount rate ranging from 14.0% to 16.0%, which discount rates were selected, upon the application of Morgan Stanley’s professional judgment and experience, to reflect an estimate of Iteris weighted average cost of capital estimated using the capital asset pricing model method. To calculate terminal values, Morgan Stanley utilized perpetual growth rates of 1.5% to 2.5% as part of its analyses, with such rates selected upon the application of Morgan Stanley’s professional judgment and experience. To calculate the implied equity value, Morgan Stanley then adjusted the discounted value of unlevered free cash flows and terminal value by adding net cash of $21 million as of June 30, 2024, as provided by Iteris management.

Based on this analysis and the fully diluted share count of Iteris common stock provided by Iteris’ management, Morgan Stanley derived a range of estimated implied values per share of Iteris common stock of $6.90 to $8.40, rounded to the nearest $0.10, as compared to the consideration offered and payable pursuant to the Merger Agreement of $7.20 per share.

Morgan Stanley performed a discounted equity value analysis, which is designed to provide insight into a theoretical estimate of the future implied value of a company’s common equity as a function of that company’s estimated future earnings. The resulting equity value is subsequently discounted to arrive at an estimate of the implied present value for such company’s potential future per share equity value. In connection with this analysis, Morgan Stanley calculated a range of implied present equity values per share on a stand-alone basis for Iteris.

To calculate the discounted per share equity value for Iteris, Morgan Stanley utilized estimated Adj. EBITDA for the next 12 months (“NTM”) following March 31, 2026 of $49 million based on the Management Plan in addition to a range of $39 million to $50 million based on the Vision 2027 guidance. Based upon the application of its professional judgment and experience, Morgan Stanley applied a range of multiples of AV to NTM Adj. EBITDA as of March 31, 2026 of 7.0x to 11.0x, and discounted the resulting equity values to June 30, 2024 at a discount rate of 15.0% based on Morgan Stanley’s estimate of Iteris’ then-current cost of equity. Based on this analysis and the fully diluted share count of Iteris common stock and estimates for future share issuance from stock-based compensation provided by Iteris’ management, Morgan Stanley

derived a range of estimated implied values per share of Iteris common stock of $6.60 to $9.60 based on the Management Plan and $5.60 to $9.90 based on the Vision 2027 guidance, rounded to the nearest $0.10, as compared to the consideration offered and payable pursuant to the Merger Agreement of $7.20 per share.

Morgan Stanley observed additional factors that were not considered part of Morgan Stanley’s financial analysis with respect to its opinion but were noted as reference data for the Board, including the following information described under the sections of this proxy statement captioned “—Historical Trading Range,” “—U.S. Public Company Premiums Paid” and “—Broker Price Targets.”

For reference only, Morgan Stanley reviewed the historical trading range of Iteris common stock for the 52-week period ending August 7, 2024, the day prior to Morgan Stanley’s presentation to the Board, and noted a low and high per share closing price of $3.97 and $5.49 per share of Iteris common stock.

For reference only, Morgan Stanley reviewed comparable U.S. public company acquisitions between January 1, 2000 and June 30, 2024 for all-cash consideration for deals with an equity value implied by the related transaction consideration of $100 million or more, excluding terminated transactions, ESOPs, self-tenders, spin-offs, share repurchases, minority interest transactions, exchange offers, recapitalizations, restructurings and outlier data (less than 0% and greater than 200%), with a share price that was unaffected by transaction announcement, announcement of a competing bid or market rumors. Such analysis is designed to imply a value of a company based on publicly available financial terms of such transactions. The range of premiums paid in such comparable U.S. public company acquisitions had an upper quartile of 56% and a lower quartile of 21%.

Based on this analysis and the fully diluted share count of Iteris common stock provided by Iteris’ management, Morgan Stanley derived a range of estimated implied values per share of Iteris common stock of $4.90 to $6.30, rounded to the nearest $0.10, as of August 7, 2024, the day prior to Morgan Stanley’s presentation to the Board.

For reference only, Morgan Stanley reviewed and analyzed future public market trading price targets for Iteris common stock that were prepared and published by three equity research analysts on or before August 7, 2024, the day prior to Morgan Stanley’s presentation to the Board. These targets reflected each analyst’s estimate of the future public market trading price of Iteris common stock. The range of undiscounted analyst price targets was $7.00 to $12.00 per share of Iteris common stock. Morgan Stanley discounted the range of analyst price targets by 12 months, at a discount rate of 15.0% based on Morgan Stanley’s estimate of Iteris’ then-current cost of equity. Based on this analysis and the fully diluted share count of Iteris common stock provided by Iteris management, Morgan Stanley derived a range of estimated implied values per share of Iteris common stock of $6.10 to $10.40, rounded to the nearest $0.10.

The public market trading price targets published by equity research analysts do not necessarily reflect current market trading prices for Iteris common stock, and these estimates are subject to uncertainties, including the future financial performance of Iteris and future financial market conditions.

In connection with the review of the Merger by the Board, Morgan Stanley performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its opinion, Morgan Stanley considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor it considered. Morgan Stanley believes that selecting any portion of its analyses, without considering all analyses as a

whole, would create an incomplete view of the process underlying its analyses and opinion. In addition, Morgan Stanley may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis described above should not be taken to be Morgan Stanley’s view of the actual value of Iteris.

In performing its analyses, Morgan Stanley made numerous assumptions with respect to industry performance, general business, regulatory, economic, market and financial conditions and other matters, many of which are beyond the control of Iteris. These include, among other things, the impact of competition on the business of Iteris and the industry generally, industry growth, and the absence of any adverse material change in the financial condition and prospects of Iteris and the industry, and in the financial markets in general. Any estimates contained in Morgan Stanley’s analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates.

Morgan Stanley conducted the analyses described above solely as part of its analysis of the fairness from a financial point of view of the Merger Consideration to be received by the holders of shares of Iteris common stock (other than holders of the Excluded Shares and Dissenting Shares) pursuant to the Merger Agreement, and in connection with the delivery of its opinion dated August 8, 2024 to the Board. These analyses do not purpose to be appraisals or to reflect the prices at which shares of Iteris common stock might actually trade.

The Merger Consideration to be received by the holders of shares of Iteris common stock (other than holders of the Excluded Shares and Dissenting Shares) in the Merger pursuant to the Merger Agreement was determined through arm’s-length negotiations between Iteris and Parent, and was approved by the Board. Morgan Stanley acted as financial advisor to the Board during these negotiations but did not, however, recommend any specific consideration to Iteris or the Board, nor did Morgan Stanley opine that any specific consideration constituted the only appropriate consideration for the Merger. Morgan Stanley’s opinion did not address the relative merits of the Merger as compared to any other business or financial transaction or strategies, or other alternatives that might be available to Iteris, or whether or not such alternatives could be achieved or are available, nor did it address the underlying business decision of Iteris to enter into the Merger Agreement or proceed with any other transaction contemplated by the Merger Agreement. Morgan Stanley’s opinion was not intended to, and does not, constitute an opinion or recommendation as to how the stockholders of Iteris should vote at the Special Meeting.

Morgan Stanley’s opinion and its presentation to the Board was one of many factors taken into consideration by the Board in deciding to approve the execution, delivery and performance by Iteris of the Merger Agreement and the transactions contemplated thereby. Consequently, the analyses as described above should not be viewed as determinative of the opinion of the Board with respect to the Merger Consideration pursuant to the Merger Agreement or of whether the Board would have been willing to agree to different consideration. Morgan Stanley’s opinion was approved by a committee of Morgan Stanley investment banking and other professionals in accordance with its customary practice.

The Board retained Morgan Stanley based on, among other things, Morgan Stanley’s qualifications, expertise and reputation and its knowledge of and involvement in recent transactions in Iteris’ industry. Under the terms of its engagement letter dated May 24, 2024, Morgan Stanley provided Iteris financial advisory services and an opinion, described in this section and attached to this proxy statement as Appendix C, in connection with the Merger. As compensation for Morgan Stanley’s financial advisory services, Iteris has agreed to pay Morgan Stanley a fee, a substantial portion of which is contingent upon the closing of the Merger, which is estimated, as of the date of this proxy statement, to be approximately $10.5 million (the “Morgan Stanley Transaction Fee”). As compensation for Morgan Stanley rendering a financial opinion to the Board, Iteris paid Morgan Stanley a fee equal to approximately $2.1 million, which will be credited against the Morgan Stanley Transaction Fee payable if the Merger is consummated. Iteris has also agreed to reimburse Morgan Stanley for its reasonable and documented out-of-pocket expenses incurred from time to time in connection with Morgan Stanley’s engagement. In addition, Iteris has agreed to indemnify Morgan Stanley and its affiliates, its and their respective current and former officers, directors, employees and agents and each other entity or person, if any, controlling Morgan Stanley or any of its affiliates, from and against certain losses, claims, damages and liabilities related to, arising out of or in connection with Morgan Stanley’s engagement.

In the two years prior to the date of Morgan Stanley’s opinion, Morgan Stanley has not provided any financial advisory or financing services for Parent or, other than in connection with the Merger, Iteris, for which Morgan Stanley has received any fees in connection with such services. Morgan Stanley may seek to provide financial advisory and/or financing services to Parent and Iteris and their respective affiliates in the future and would expect to receive fees for the rendering of these services.

Morgan Stanley is a global financial services firm engaged in the securities, investment management and individual wealth management businesses. Morgan Stanley’s securities business is engaged in securities underwriting, trading and brokerage activities, foreign exchange, commodities and derivatives trading, prime brokerage, as well as providing investment banking, financing and financial advisory services. Morgan Stanley, its affiliates, directors and officers may at any time invest on a principal basis or manage funds that invest, hold long or short positions, finance positions, and may trade or otherwise structure and effect transactions, for their own account or the accounts of its customers, in debt or equity securities or loans of Parent, Iteris and their respective affiliates, or any other company, or any currency or commodity, that may be involved in this transaction, or any related derivative instrument.

Iteris has historically prepared and publicly issued limited guidance as to projected financial results for its then-current fiscal quarter or fiscal year in its press releases announcing its financial results for the immediately preceding fiscal quarter or fiscal year, as applicable. Iteris also provides, from time to time, a higher-level view on projected financial results over a longer time horizon, such as Vision 2027, which was an investor presentation presented by Iteris management in December 2021 and reiterated in June 2024. Vision 2027 includes certain financial targets for fiscal year 2027, including Iteris’ revenue target of approximately $260,000,000 to $290,000,000, gross margin target of 49% to 51% and Adj. EBITDA margin target of 16% to 19%. Such financial targets assumed that Iteris will earn $35,000,000 to $45,000,000 in inorganic revenue. Other than such public guidance, Iteris does not, as a matter of course, make public disclosure of detailed forecasts or projections of its expected financial performance for extended periods due to, among other things, the inherent difficulty of accurately predicting future periods and the likelihood that underlying assumptions and estimates may prove incorrect. However, in connection with the transaction, Iteris’ senior management prepared the Projections which were presented to and approved by the Board at its meeting held on April 21, 2024. In connection therewith, the Board instructed Iteris management and Morgan Stanley to provide interested parties with such information. The Projections contain certain non-public, unaudited, stand-alone financial projections for Iteris. The Projections were authorized for use by Iteris’ financial advisor, Morgan Stanley, for purposes of its financial analyses and opinion summarized under “—Opinion of Morgan Stanley” on page 45 of this proxy statement and were also furnished to Parent and certain other interested parties in connection with their respective due diligence review of Iteris as summarized under “—Background of the Merger” on page 31 of this proxy statement.

The Projections are included in the table below. The inclusion of this information should not be regarded as an indication that Iteris, its financial advisors or any of their respective representatives or any other recipient of this information considered, or now considers, the Projections to be necessarily predictive of future results. Iteris’ management advised the Board that the Projections represent Iteris’ management’s best estimates, at that time, of the future financial performance of Iteris and its business as currently configured as a stand-alone publicly listed company and do not take into account the transactions, including any costs incurred in connection with the transaction or any changes to Iteris’ operations or strategy that may be implemented after the completion of the transaction. As a result, actual results likely will differ, and may differ materially, from those contained in the Projections.

The following table is a summary of the Projections as described above.

The following is a calculation of the fully diluted shares of Iteris common stock outstanding as of August 8, 2024.

Iteris’ ability to achieve the results set forth in the Projections is expressly dependent upon certain assumptions, including with respect to broad trends in the industry in which Iteris operates. The Projections were not prepared with a view to public disclosure and are included herein only because such information was made available as described above. The Projections were not prepared with a view to comply with accounting principles generally accepted in the United States (“GAAP”), the published guidelines of the SEC regarding projections and forward-looking statements or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Furthermore, Deloitte & Touche LLP, Iteris’ independent registered public accountant, has not examined, reviewed, compiled or otherwise applied procedures to the Projections and, accordingly, assumes no responsibility for them and expresses no opinion on them. The Projections included herein have been prepared by, and are the responsibility of, Iteris’ management.

Although a summary of the Projections is presented with numerical specificity, the Projections reflect numerous variables, assumptions and estimates as to future events, including the achievement of various initiatives and risks to the achievement of such initiatives and operations and financial performance, made by Iteris’ management that Iteris’ management believed were reasonable at the time the Projections were prepared, taking into account the relevant information available to Iteris’ management at the time the Projections were prepared. However, this information is not fact and should not be relied upon as being necessarily indicative of actual future results.

In addition, the ability to achieve the Projections may depend on, in part, whether or not the strategic goals, objectives and targets are reached over the applicable period. The assumptions upon which the Projections were based necessarily involve judgments with respect to, among other things, future economic, competitive and regulatory conditions and financial market conditions and future business decisions that may not be realized and that are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, including, among other things, the inherent uncertainty of the business and economic conditions affecting the industry in which Iteris operates, and the risks and uncertainties described in the section titled “Cautionary Statement Concerning Forward-Looking Statements” on page 28 of this proxy statement, all of which are difficult or impossible to predict accurately and many of which are beyond our control. The Projections also reflect assumptions by Iteris management that are subject to change and are susceptible to multiple interpretations and periodic revisions based on actual results, revised prospects for the Iteris business, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated when such projections were prepared.

In addition, the Projections do not give effect to the Merger, including any costs incurred related to the Merger. As a result, there can be no assurance that the Projections will be realized, and actual results may be materially better or worse than those contained in the Projections. Since the Projections cover multiple years, that information by its nature becomes less predictive with each successive year. The inclusion of this information should not be regarded as an indication that the Board, Iteris, Iteris’ financial advisor or Parent, or any of their respective representatives and affiliates, or any other recipient of this information considered, or now considers, the Projections to be material information of Iteris or that actual future results will necessarily reflect the Projections, and the Projections should not be relied upon as such.

The summary of the Projections is not included herein to induce any stockholder to vote in favor of the Merger Proposal, the Adjournment Proposal, or the Compensation Proposal or to influence any stockholder to make any investment decision with respect to the Merger, including whether or not to seek appraisal rights with respect to shares of Iteris common stock. The Projections should be evaluated, if at all, in conjunction with the historical financial statements, risk factors and other information regarding Iteris contained in Iteris’ public filings with the SEC. See “Where You Can Find More Information; Incorporation by Reference” on page 102 of this proxy statement.

The Projections are forward-looking statements. For information on factors that may cause Iteris’ future results to materially vary, see “Cautionary Statement Concerning Forward-Looking Statements” on page 28 of this proxy statement.

Except to the extent required by applicable federal securities laws, we do not intend, and expressly disclaim any responsibility, to update or otherwise revise the Projections to reflect the occurrence of future events or changes in general economic or industry conditions, even if the assumptions underlying the Projections are shown to be in error. By including in this proxy statement a summary of certain financial projections, neither Iteris nor any of its representatives or advisors, nor Parent or any of its representatives and affiliates, makes any representation to any person regarding the ultimate performance of Iteris compared to the information contained in such financial projections and should not be read to do so.

In light of the foregoing factors and the uncertainties inherent in the Projections, stockholders are cautioned not to unduly rely on the Projections included herein.

Certain of the measures included in the Projections may be considered non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in accordance with GAAP and non-GAAP financial measures as used by Iteris may not be comparable to similarly titled amounts used by other companies.

When considering the recommendation of the Board that you vote “FOR” the Merger Proposal, you should be aware that certain of our directors and executive officers may have interests in the Merger that may be different from, or in addition to, your interests as a stockholder generally. The Board was aware of these interests in, among other matters, approving the Merger Agreement and the Merger and in recommending that the Merger Agreement be adopted by the stockholders of Iteris. See “—Background of the Merger” and “—Recommendation of Our Board of Directors and Reasons for the Merger” on pages 31 and 41 of this proxy statement, respectively. You should take these interests into account in deciding whether to vote “FOR” the approval of the Merger Agreement.

These interests are described in more detail below, and certain of them, including the compensation that may become payable in connection with the Merger to our named executive officers are subject to a non-binding, advisory vote of the stockholders of Iteris and are quantified in the narrative below and in “Proposal 3: Advisory Vote on Merger-Related Named Executive Officer Compensation” on page 96 of this proxy statement.

Under the Merger Agreement, the equity awards held by Iteris’ directors and executive officers and the Company ESPP will be treated as follows:

At the Effective Time, each Company Option, whether vested or unvested, that is outstanding immediately prior to the Effective Time will, automatically and without any required action on the part of the holder thereof or Iteris, be cancelled and converted into the right to receive (without interest) an amount of cash (subject to any withholding taxes) equal to the product of (x) the total number of shares of Iteris common stock underlying the Company Option, multiplied by (y) the excess, if any, of the Merger Consideration over the exercise price of such Company Option; provided, however, that any such Company Option with respect to which the exercise price subject thereto is equal to or greater than the Merger Consideration shall be cancelled for no consideration.

At the Effective Time, each outstanding award of Company RSUs will become fully vested and will, automatically and without any required action on the part of the holder thereof, be cancelled and converted into the right to receive (without interest) an amount in cash (subject to any withholding taxes) equal to (x) the total number of shares underlying such award of Company RSUs, multiplied by (y) the Merger Consideration.

At the Effective Time, each Company PSU that at such time is subject to performance-based vesting conditions will become vested as to the number of shares subject to such Company PSUs that would become “Vesting Eligible PSUs” as of the Effective Time in accordance with the applicable award agreement (provided, that, (A) notwithstanding anything to the contrary contained in the applicable award agreement, the achievement percentage for any performance period that has commenced but is not yet completed or has not yet commenced as of the Effective Time shall be set at “target” (or 100%) performance, and (B) for the avoidance of doubt, the multiplier under any Company PSU that is to be determined by reference to the Company’s stock price or total stockholder return shall be determined based on actual performance for the performance period in accordance with the applicable award agreement), and will, after giving effect to such vesting, automatically and without any required action on the part of the holder thereof or Iteris, be cancelled and be converted into the right to receive (without interest) an amount in cash (subject to any withholding taxes) equal to (x) the number of vested shares underlying such Company PSUs, multiplied by (y) the Merger Consideration. Any Company PSUs that do not vest in accordance

with the foregoing will be terminated as of the Effective Time for no consideration. Notwithstanding the foregoing, to the extent that any payment in respect of any Company RSU or Company PSU constitutes “nonqualified deferred compensation” subject to Section 409A of the Code, such amount shall be paid by Parent as provided under the terms of the Company Deferred Compensation Plan and any applicable deferral election or agreement relating to such Company RSU or Company PSU, as applicable, and that will not trigger a tax or penalty under Section 409A of the Code (after taking into account actions taken under Treas. Reg. 1-409A-3(j)(4)(ix)).

The following table sets forth, for each of Iteris’ directors and executive officers, (i) the number of shares of Iteris common stock underlying the Company Options, Company RSUs and Company PSUs held by each Iteris executive officer and director as of September 4, 2024, the latest practicable date to determine these numbers before the filing of this proxy statement, and (ii) the value of such equity awards as of such date determined by the treatment of such equity awards described above. All such amounts actually payable to each of Iteris’ directors and executive officers will be subject to any applicable withholding taxes and will be payable without interest. These amounts do not attempt to forecast any equity awards that may be granted following the date of this proxy statement. As a result of the foregoing assumptions, which may or may not actually occur or be accurate on the relevant date, the actual amounts to be received by Iteris’ directors and executive officers may materially differ from the amounts set forth below.

This table also does not include any outstanding rights to purchase shares under the Company ESPP held by our executive officers.