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What changed in PIONEER POWER SOLUTIONS, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PIONEER POWER SOLUTIONS, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+161 added−225 removedSource: 10-K (2025-04-15) vs 10-K (2024-07-26)

Top changes in PIONEER POWER SOLUTIONS, INC.'s 2024 10-K

161 paragraphs added · 225 removed · 121 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe also purchase certain electrical components such as switches, fuses, protectors and circuit breakers from a variety of suppliers. These raw materials and components are available from and supplied by numerous sources at competitive prices. Unanticipated increases in raw material prices or disruptions in supply could increase production costs and adversely affect our profitability.
Biggest changeThese components are available from and supplied by numerous sources at competitive prices. Unanticipated increases in component prices or disruptions in supply could increase production costs and adversely affect our profitability. Our largest suppliers during the year ended December 31, 2024, included Taylor Power Systems, Inc., Gillette Generators Inc., Winco, Inc. and Kelly Generator & Equipment, Inc.
Summary of Critical Power Segment Offerings Product Category Solutions Suite of e-Boost Products ▪ e-Boost G.O.A.T.
Summary of Critical Power Segment Product Offerings Product Category Solutions Suite of e-Boost Products ▪ e-Boost G.O.A.T.
Critical Power Segment Within our Critical Power business, we are actively marketing our preventive maintenance services to new national accounts including: major national retailers, telecommunications companies, data centers, banks, hospitals and health care facilities, educational institutions and property management companies.
Within our Critical Power business, we are actively marketing our preventive maintenance services to new national accounts including: major national retailers, telecommunications companies, data centers, banks, hospitals and health care facilities, educational institutions and property management companies.
The contents of and the information on or accessible through our corporate website, including the investor relations portion of our website, are not a part of, and are not intended to be incorporated into, this report or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only. 6
The contents of and the information on or accessible through our corporate website, including the investor relations portion of our website, are not a part of, and are not intended to be incorporated into, this report or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only. 5
Competition We experience intense competition from a large number of electrical equipment manufacturers and from distributors and servicers of such equipment. The number and size of our competitors varies considerably by product line and service category, with many of our competitors tending to be small, highly specialized or focused on a certain geographic market area or customer.
Competition We experience intense competition from generator manufacturers and from distributors and servicers of such equipment. The number and size of our competitors varies considerably by product line and service category, with many of our competitors tending to be small, highly specialized or focused on a certain geographic market area or customer.
Service ▪ Scheduled preventative maintenance and 24/7 repair and support services provided for all makes and models of power generation equipment under one to five year contracts. ▪ Regional service and maintenance: provided by our technicians in the Midwest and Florida. ▪ National service and maintenance: provided by our technicians and a network of field service providers throughout the United States for multi-site, multi-state power generation equipment owners. ▪ UPS systems from major manufacturers.
Service ▪ Scheduled preventative maintenance and 24/7 repair and support services provided for all makes and models of power generation equipment under one- to five-year contracts. ▪ Regional service and maintenance: provided by our technicians in the Midwest and Florida. ▪ National service and maintenance: provided by our technicians and a network of field service providers throughout the United States for multi-site, multi-state power generation equipment owners. ▪ UPS systems from major manufacturers. 2 Power generation systems represent considerable investments that require proper maintenance and service in order to operate reliably during a time of emergency.
ITEM 1. BUSINESS. Overview Pioneer Power Solutions, Inc. and its wholly owned subsidiaries (referred to herein as the “Company,” “Pioneer,” “Pioneer Power,” “we,” “our” and “us”) design, manufacture, integrate, refurbish, service, distribute and sell electric power systems, distributed energy resources, power generation equipment and mobile electric vehicle (“EV”) charging solutions.
ITEM 1. BUSINESS. Overview Pioneer Power Solutions, Inc. and its wholly owned subsidiary (referred to herein as the “Company,” “Pioneer,” “Pioneer Power,” “we,” “our” and “us”) design, manufacture, integrate, service, and sell distributed energy resources, on site and mobile power generation equipment and a platform of mobile electric vehicle (“EV”) charging solutions.
Our revenue backlog as of December 31, 2023 was approximately $45,165, as compared to $38,278 as of December 31, 2022. During the year ended December 31, 2023, we experienced a surge in orders and contracts for our mobile EV charging solutions, e-Boost, which was the primary driver for the increase in our revenue backlog.
Our revenue backlog as of December 31, 2024, was approximately $19,762, as compared to $16,668 as of December 31, 2023. During the year ended December 31, 2024, we experienced a surge in orders and contracts for our mobile EV charging solutions, e-Boost, which was the primary driver for the increase in our revenue backlog.
To support our customers in managing their critical infrastructure, we maintain inventories of repair parts, a fleet of service vehicles and a staff of certified field service technicians in the Midwest and Florida.
Our power maintenance programs provide preventative maintenance, repair and support service for our customers’ power generation systems. To support our customers in managing their critical infrastructure, we maintain inventories of repair parts, a fleet of service vehicles and a staff of certified field service technicians in the Midwest and Florida.
We engineer, manufacture and integrate these offerings at our facility in Southern California. 2 Critical Power Segment Our Critical Power business designs, manufactures and sells mobile EV charging solutions under our e-Boost suite of products, in addition to distributing new power generation equipment, refurbishing and reselling used power generation equipment, and performing service and maintenance on our customers’ existing equipment.
Our Critical Power business designs, manufactures and sells mobile EV charging solutions under our e-Boost suite of products, in addition to distributing new power generation equipment, refurbishing and reselling used power generation equipment, and performing service and maintenance on our customers’ existing equipment.
During the years ended December 31, 2023 and 2022, we sold our electrical equipment and services to over 900 individual customers, and our twenty largest customers represented approximately 82% and 77% of our consolidated revenue, respectively.
During the years ended December 31, 2024, and 2023, we sold our electrical equipment and services to over 875 individual customers, and our 20 largest customers represented approximately 74% and 47% of our consolidated revenue, respectively.
In 2019, there were about 7.3 million chargers worldwide compared to an insignificant amount ten years ago, and the EV infrastructure has become a global priority as major governments and corporations have committed to spending billions of dollars towards building EV charging infrastructure.
In 2019, there were about 7.3 million chargers worldwide compared to an insignificant amount ten years ago, and the EV infrastructure has become a global priority as major governments and corporations have committed to spending billions of dollars towards building EV charging infrastructure. 3 Customers A substantial portion of the products and services we offer are sold directly to customers by our marketing and sales personnel operating from our office locations in the United States.
Business Strategy We believe we have established a stable platform from which to develop and grow our business lines, revenue, profitability and shareholder value. We are focused on internal growth through operating efficiencies, new product development, customer focus and our continued migration towards more highly-engineered products and specialized services.
Business Strategy We believe we have established a stable platform from which to develop and grow our business lines, revenue, profitability and shareholder value. We are focused on internal growth through operating efficiencies, new product development, customer focus and broadening and deepening our market penetration. We intend to build our revenue and net income through internal growth initiatives.
Our products and services are sold to a broad range of customers in the utility, industrial and commercial markets. Our customers include, but are not limited to, electric, gas and water utilities, data center developers and owners, EV charging infrastructure developers and owners, and distributed energy developers.
Our products and services are sold to a broad range of customers in the utility, industrial and commercial markets. Our customers include, but are not limited to, Federal and State government entities, package delivery businesses, school bus fleet operators, EV charging infrastructure developers and owners, and distributed energy developers.
We continue to develop new technologies to enhance existing products and services, and to expand the range of our offerings through research and development (“R&D”), licensing of intellectual property and acquisition of third-party businesses and technology. During the year ended December 31, 2023, we incurred $885 of R&D costs related to our mobile EV charging solutions, e-Boost.
We continue to develop new technologies to enhance existing products and services, and to expand the range of our offerings through research and development (“R&D”), licensing of intellectual property and acquisition of third-party businesses and technology.
On November 30, 2009, we merged with and into Pioneer Power Solutions, Inc., a Delaware corporation, for the sole purpose of changing our state of incorporation from Nevada to Delaware and changing our name to “Pioneer Power Solutions, Inc.” On September 24, 2013, we completed an underwritten public offering and our common stock began trading on the Nasdaq Capital Market under the symbol “PPSI”.
On November 30, 2009, we merged with and into Pioneer Power Solutions, Inc., a Delaware corporation, for the sole purpose of changing our state of incorporation from Nevada to Delaware and changing our name to “Pioneer Power Solutions, Inc”.
These products and services are marketed by our operations headquartered in Minnesota, currently doing business under our Pioneer eMobility (“e-Boost”), Titan Energy Systems Inc. (“Titan”) and Pioneer Critical Power brand names. Electrical Infrastructure Segment We design, manufacture, integrate and sell a wide range of electrical distribution and control equipment.
These products and services are marketed by our operations headquartered in Minnesota, currently doing business under our Pioneer eMobility (“e-Boost”) and Pioneer Critical Power (“Titan”) brand names.
The majority of our sales to customers were made pursuant to specific contract terms and conditions for each project. Marketing, Sales and Distribution A substantial portion of the products and services we offer are sold directly to customers by our marketing and sales personnel operating from our office locations in the United States.
The majority of our sales to customers were made pursuant to specific contract terms and conditions for each project.
Our direct sales force and authorized representatives market our products and services to end users and third parties, such as original equipment manufacturers, EPC firms, electrical wholesalers, energy developers and value-added integrators.
Our direct sales force and authorized representatives market our products and services to end users and third parties, such as original equipment manufacturers and their dealers, state and local governments, fleet management companies, school bus operators and various intermediary selling groups.
We are headquartered in Fort Lee, New Jersey and operate from three (3) additional locations in the United States for manufacturing, service and maintenance, engineering, and sales and administration.
We are headquartered in Fort Lee, New Jersey and operate from two (2) additional locations in the United States for manufacturing, service and maintenance, engineering, and sales and administration. U.S. dollars are reported in thousands, except for share and per share amounts (unless otherwise noted). Description of Business Segment In October 2024, we sold our Pioneer Custom Electrical Products Corp.
(“PCEP”) brand name. ● Our Critical Power business provides customers with our suite of mobile e-Boost© EV charging solutions, power generation equipment and all forms of preventative maintenance, repairs, remote monitoring and other equipment service on our customers’ equipment.
Following the PCEP Sale, we currently have one reportable segment - Critical Power Solutions (“Critical Power”). ● Our Critical Power business provides customers with our suite of mobile EV charging solutions, power generation equipment and all forms services, including but not limited to, preventative maintenance, repairs, fuel polishing, and remote monitoring.
In order to meet the rapidly growing demand for EV’s and the infrastructure supporting it, substantial investment in grid connectivity and enhancement will be required. 4 Customers For the years ended December 31, 2023 and 2022, 100% of our sales were to U.S. customers, represented in large part by companies involved in DG, regulated and non-regulated utilities, and industrial and wholesale business.
For the year ended December 31, 2024, 87% of our sales were to U.S. customers and 13% were to Canadian customers, compared to 100% of our sales being to U.S. customers for the year ended December 31, 2023. This was largely driven by companies involved in distributed generation, regulated and non-regulated utilities, and the industrial and wholesale sectors.
Approximately 42% and 20% of our sales during the year ended December 31, 2023 were made to Enchanted Rock Electric, LLC and Sequel Electrical Supply, LLC, respectively. Approximately 43% and 10% of our sales during the year ended December 31, 2022 were made to Enchanted Rock Electric, LLC and Southern California Gas Company, respectively.
Approximately 22% and 13% of our sales during the year ended December 31, 2024, were made to INF Associates, LLC and British Columbia Hydro and Power Authority, respectively. Approximately 14% of our sales during the year ended December 31, 2023, were made to Target Corporation.
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Description of Business Segments We have two reportable segments: Electrical Infrastructure Equipment (“Electrical Infrastructure”) and Critical Power Solutions (“Critical Power”). ● Our Electrical Infrastructure business provides equipment solutions that allow customers to effectively and efficiently protect, control, transfer, monitor and manage their electric energy usage and requirements. These solutions are marketed principally through our Pioneer Custom Electrical Products Corp.
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(“PCEP”) business unit to a buyer (the “PCEP Sale”) as a result of a strategic change to the operations of our business. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments for more information regarding the PCEP Sale.
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Our focus since approximately 2020 has been to address the Distributed Generation (“DG”) and Electric Vehicle Charging Infrastructure markets. We primarily compete in these markets with our E-Bloc product. E-Bloc combines an automatic transfer switch, circuit protection and special programmable controls into an integrated, compact outdoor system.
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A representative list of our direct competitors includes EV Power Pods LLC, DD Dannar LLC, Yoshi Inc., Caterpillar Inc., Cummins Inc. and Interstate Power Systems, Inc. Raw Materials and Suppliers The principal materials purchased by us are certain electrical and engine components such as generators, transfer switches, electric vehicle chargers and related parts from a variety of suppliers.
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We believe that demand for our Electrical Infrastructure solutions is driven primarily by customers’ demands to improve the cost of electricity, electrical resilience and reliability, and the world-wide transition to lower carbon emissions.
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During the years ended December 31, 2024 and 2023, we incurred $1,050 and $885, respectively, of R&D costs related to our mobile EV charging solutions, e-Boost. 4 Employees As of December 31, 2024, we had 60 employees consisting of 59 full-time employees and 1 part-time employee.
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In addition, we distinguish ourselves by producing a wide range of highly engineered power solutions, typically integrating circuit protection, metering and transmission schemes, as well as unitized medium and low voltage substations. Electrical Infrastructure equipment is sold either directly to end users, engineering, procurement and construction (“EPC”) firms, or through electrical distributors.
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On September 24, 2013, we completed an underwritten public offering, and our common stock began trading on the Nasdaq Capital Market under the symbol “PPSI”. Available Information Our corporate website is located at www.pioneerpowersolutions.com.
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We serve customers in a variety of industries including, but not limited to, utilities, EV charging infrastructure integrators, data center developers and owners, distributed energy resource developers, contractors, and renewable energy developers and producers.
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Summary of Electrical Infrastructure Segment Offerings Product Category Solutions Power Systems ▪ Integrated Power Centers (“IPC”): indoor and outdoor power systems integrating any combination of the following, but not limited to: switchgear, controls, engine generator sets, energy storage, fuel cells, solar power, and EV charging solutions marketed and internally designated as “E-Bloc” power solutions.
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Circuit Protective Equipment ▪ Low and medium voltage switchgear, switchboards and automatic transfer switches.
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Power generation systems represent considerable investments that require proper maintenance and service in order to operate reliably during a time of emergency. Our power maintenance programs provide preventative maintenance, repair and support service for our customers’ power generation systems.
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We intend to significantly increase the percentage of our sales derived from engineered-to-order products and differentiated services and believe this can be accomplished by targeting market segments such as EV charging infrastructure, microgrid developers, national and regional retailers, water treatment facilities, data centers and independent power producers which have growth characteristics exceeding the norm in our industry. 3 We intend to build our revenue and net income through internal growth initiatives.
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Electrical Infrastructure Segment We intend to accomplish our growth objectives within our Electrical Infrastructure segment by concentrating on our ability to deliver scalable solutions for the EV infrastructure, DG, and microgrid markets.
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Our Electrical Infrastructure equipment can be used in many applications and large vertical markets, including but not limited to, electrical, gas and water utilities, EV charging infrastructure integrators, and solar, microgrid and data center developers.
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However, several of our competitors have substantially greater financial and technical resources than us, including some of the world’s largest electrical products and industrial equipment manufacturing companies.
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A representative list of our direct competitors in our Electrical Infrastructure segment includes Crown Electric Engineering and Manufacturing, LLC, Industrial Electric Machinery, LLC, RESA Power, LLC, Switchgear Power Systems, LLC, Myers Power Products, Inc. and Powell Industries, Inc.
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We believe that we compete primarily on the basis of technical support and application expertise, engineering, manufacturing and service capabilities, equipment rating, quality, scheduling and price. In all our businesses, our objective is to focus our efforts on more specialized, challenging and complex applications.
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Accordingly, a critical element to the success of our business is responsiveness and flexibility in providing custom-engineered solutions to satisfy customer needs. As a result of our long-time presence in the industry, we possess a number of special designs and libraries of programming code for our equipment that were engineered and developed specifically for our customers.
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We believe these factors give us a competitive advantage and that they are a major contributor to our frequency of repeat customer orders and the longevity of our customer relationships. Raw Materials and Suppliers The principal raw materials purchased by us are steel, copper, sensors, circuit breakers, meters, cassettes and relays.
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Our largest suppliers during the year ended December 31, 2023 included Industrial Connections & Solutions, LLC, Royal Industrial Solutions, Schweitzer Engineering Laboratories, Inc., Eaton Corporation and Thyssenkrupp Materials NA.
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We did not incur any R&D costs during the year ended December 31, 2022. 5 Employees As of December 31, 2023, we had 143 employees consisting of 41 salaried staff and 102 hourly workers.
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Certain of our employees located at our manufacturing facility in Santa Fe Springs, California are covered by a collective bargaining agreement with Local Union 1710 of the International Brotherhood of Electrical Workers, AFL-CIO that expires in June 2027.
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Available Information Our corporate website is located at www.pioneerpowersolutions.com.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

44 edited+24 added−33 removed89 unchanged
Biggest changeAdditional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Form 10-K and our other filings with the SEC, before making an investment decision regarding our common stock. ● We have concluded that certain of our previously issued financial statements should not be relied upon and have restated certain of our previously issued consolidated financial statements which was time-consuming and expensive and could expose us to additional risks that could have a negative effect on us; ● The restatement of the Prior Financial Statements may lead to future stockholder litigation; ● We have identified material weaknesses in our internal control over financial reporting which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, which may adversely affect investor confidence in our company and, as a result, the value of our common stock; ● We are vulnerable to economic downturns in the commercial construction market, which may reduce the demand for some of our products and adversely affect our sales, net income, cash flow or financial condition; ● Our operating results may vary significantly from quarter to quarter, which makes our operating results difficult to predict and can cause our operating results in any particular period to be less than comparable quarters and expectations from time to time; ● Our industry is highly competitive; ● We currently derive a significant portion of our revenues from two customers.
Biggest changeAdditional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Form 10-K and our other filings with the SEC, before making an investment decision regarding our common stock. ● We have identified a material weakness in our internal control over financial reporting which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, which may adversely affect investor confidence in our company and, as a result, the value of our common stock; ● Failure to establish and maintain effective internal control over financial reporting may result in us not being able to accurately report our financial results, which could result in a loss of investor confidence and adversely affect the market price of our common stock; ● Our operating results may vary significantly from quarter to quarter, which makes our operating results difficult to predict and can cause our operating results in any particular period to be less than comparable quarters and expectations from time to time; ● Our industry is highly competitive; ● A significant portion of our revenues have historically been concentrated and derived from a few customers.
Factors that affect our operating results include the following: ● the size, timing and terms of sales and orders, especially large customer orders; 9 ● variations caused by customers delaying, deferring or canceling purchase orders or making smaller purchases than expected; ● the timing and volume of work under new agreements; ● the spending patterns of customers; ● customer orders received; ● a change in the mix of our products having different margins; ● a change in the mix of our customers, contracts and business; ● increases in design and manufacturing costs; ● the length of our sales cycles; ● the rates at which customers renew their contracts with us; ● changes in pricing by us or our competitors, or the need to provide discounts to win business; ● a change in the demand or production of our products caused by severe weather conditions; ● our ability to control costs, including operating expenses; ● losses experienced in our operations not otherwise covered by insurance; ● the ability and willingness of customers to pay amounts owed to us; ● the timing of significant investments in the growth of our business, as the revenue and profit we hope to generate from those expenses may lag behind the timing of expenditures; ● costs related to the acquisition and integration of companies or assets; ● general economic trends, including changes in equipment spending or national or geopolitical events such as economic crises, wars or incidents of terrorism; and ● future accounting pronouncements and changes in accounting policies.
Factors that affect our operating results include the following: ● the size, timing and terms of sales and orders, especially large customer orders; ● variations caused by customers delaying, deferring or canceling purchase orders or making smaller purchases than expected; ● the timing and volume of work under new agreements; ● the spending patterns of customers; ● customer orders received; ● a change in the mix of our products having different margins; ● a change in the mix of our customers, contracts and business; ● increases in design and manufacturing costs; ● the length of our sales cycles; ● the rates at which customers renew their contracts with us; ● changes in pricing by us or our competitors, or the need to provide discounts to win business; ● a change in the demand or production of our products caused by severe weather conditions; ● our ability to control costs, including operating expenses; ● losses experienced in our operations not otherwise covered by insurance; ● the ability and willingness of customers to pay amounts owed to us; ● the timing of significant investments in the growth of our business, as the revenue and profit we hope to generate from those expenses may lag behind the timing of expenditures; ● costs related to the acquisition and integration of companies or assets; ● general economic trends, including changes in equipment spending or national or geopolitical events such as economic crises, wars or incidents of terrorism; and ● future accounting pronouncements and changes in accounting policies.
Mazurek, our chairman, president and chief executive officer; ● sales of our common stock, including management shares; ● limited availability of freely-tradable “unrestricted” shares of our common stock to satisfy purchase orders and demand; ● our ability to execute our business plan; ● operating results that fall below expectations; ● loss of any strategic relationship; ● industry developments; ● economic and other external factors; ● our ability to manage the costs of maintaining adequate internal financial controls and procedures in connection with the acquisition of additional businesses; ● period-to-period fluctuations in our financial results; and ● announcements of acquisitions.
Mazurek, our chairman, president and chief executive officer; ● sales of our common stock, including management shares; 12 ● limited availability of freely-tradable “unrestricted” shares of our common stock to satisfy purchase orders and demand; ● our ability to execute our business plan; ● operating results that fall below expectations; ● loss of any strategic relationship; ● industry developments; ● economic and other external factors; ● our ability to manage the costs of maintaining adequate internal financial controls and procedures in connection with the acquisition of additional businesses; ● period-to-period fluctuations in our financial results; and ● announcements of acquisitions.
See also “— Failure to establish and maintain effective internal control over financial reporting may result in us not being able to accurately report our financial results, which could result in a loss of investor confidence and adversely affect the market price of our common stock. ” Failure to establish and maintain effective internal control over financial reporting may result in us not being able to accurately report our financial results, which could result in a loss of investor confidence and adversely affect the market price of our common stock.
See also “— Failure to establish and maintain effective internal control over financial reporting may result in us not being able to accurately report our financial results, which could result in a loss of investor confidence and adversely affect the market price of our common stock. ” 7 Failure to establish and maintain effective internal control over financial reporting may result in us not being able to accurately report our financial results, which could result in a loss of investor confidence and adversely affect the market price of our common stock.
Failure to accurately report our financial performance on a timely basis could also jeopardize our listing on Nasdaq. Delisting of our common stock on any exchange would reduce the liquidity of the market for our common stock, which would reduce the price of, and increase the volatility of, our common stock.
Failure to accurately report our financial performance on a timely basis could also jeopardize our listing on the Nasdaq Capital Market. Delisting of our common stock on any exchange would reduce the liquidity of the market for our common stock, which would reduce the price of, and increase the volatility of, our common stock.
See “— We have identified material weaknesses in our internal control over financial reporting which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.” In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely basis, which could cause a decline in the price of our common stock and harm our ability to raise capital.
See “— We have identified a material weakness in our internal control over financial reporting which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.” In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely basis, which could cause a decline in the price of our common stock and harm our ability to raise capital.
In addition, charges of this nature may cause us to violate net worth or other covenants that we may be subject to as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. 16 We may be unable to generate internal growth.
In addition, charges of this nature may cause us to violate net worth or other covenants that we may be subject to as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. 15 We may be unable to generate internal growth.
Unanticipated increases in raw material prices or disruptions in supply could increase production costs and adversely affect our profitability. We cannot provide any assurances that we will not experience difficulties sourcing our raw materials in the future. We may not be able to fully realize the revenue value reported in our backlog.
Unanticipated increases in component prices or disruptions in supply could increase production costs and adversely affect our profitability. We cannot provide any assurances that we will not experience difficulties sourcing our materials in the future. We may not be able to fully realize the revenue value reported in our backlog.
Material or significant loss of business from these customers could have an adverse effect on our business, financial condition and operating results; ● Certain of our business units have historically generated operating losses and negative cash flows, which may result in the usage of our cash; ● The departure or loss of key personnel could disrupt our business; ● Fluctuations in the price and supply of raw materials used to manufacture our products may reduce our profits; ● We may not be able to fully realize the revenue value reported in our backlog; ● We are subject to pricing pressure from our larger customers; ● Deterioration in the credit quality of several major customers could have a material adverse effect on our operating results and financial condition; ● We rely on third parties for key elements of our business whose operations are outside our control; ● Supply chain and shipping disruptions may result in shipping delays, a significant increase in shipping costs, and could increase product costs and result in lost sales and reputational damage, which may have a material adverse effect on our business, operating results and financial condition; ● Our business may face cybersecurity risk generally associated with our information technology systems which could materially affect our business, and our results of operations could be materially affected if our information technology systems (or third-party systems we rely on) are interrupted, damaged by unforeseen events, or fail for any extended period of time; ● Our business requires skilled labor, and we may be unable to attract and retain qualified employees; ● Our business operations are dependent upon our ability to engage in successful collective bargaining with our unionized workforce; ● Delaware law and our corporate charter and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable; ● Our stock price may be volatile, which could result in substantial losses for investors; ● Our risk management activities may leave us exposed to unidentified or unanticipated risks; ● Regulatory, environmental, monetary and other governmental policies could have a material adverse effect on our profitability; ● Global, market and economic conditions may negatively impact our business, financial condition and stock price; 7 ● We face risks associated with litigation and claims, which could impact our financial results and condition; ● Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline; ● We are subject to financial reporting and other requirements for which our accounting, internal audit and other management systems and resources may not be adequately prepared; ● There are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected; ● Any acquisitions that we have completed, or may complete in the future, may not perform as planned and could disrupt our business and harm our financial condition and operations; ● The success of our business depends on achieving our strategic objectives, including dispositions; ● If we do not conduct an adequate due diligence investigation of a target business that we acquire, we may be required subsequently to take write downs or write-offs, restructuring, and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment; ● We may be unable to generate internal growth; and ● In the event that we fail to satisfy any of the listing requirements of the Nasdaq Capital Market, our common stock may be delisted, which could affect our market price and liquidity.
Material or significant loss of business from these customers could have an adverse effect on our business, financial condition and operating results; ● Certain of our business units have historically generated operating losses and negative cash flows, which may result in the usage of our cash; ● Our operations have been curtailed following the PCEP Sale, and we have limited sources of revenue following such sale, which may negatively impact the value and liquidity of our common stock; ● The departure or loss of key personnel could disrupt our business; ● Fluctuations in the price and supply of materials used to manufacture our products may reduce our profits; ● We may not be able to fully realize the revenue value reported in our backlog; ● We are subject to pricing pressure from our larger customers; ● Deterioration in the credit quality of several major customers could have a material adverse effect on our operating results and financial condition; ● We rely on third parties for key elements of our business whose operations are outside our control; ● Supply chain and shipping disruptions may result in shipping delays, a significant increase in shipping costs, and could increase product costs and result in lost sales and reputational damage, which may have a material adverse effect on our business, operating results and financial condition; ● Our business may face cybersecurity risk generally associated with our information technology systems which could materially affect our business, and our results of operations could be materially affected if our information technology systems (or third-party systems we rely on) are interrupted, damaged by unforeseen events, or fail for any extended period of time; ● Our business requires skilled labor, and we may be unable to attract and retain qualified employees; ● Delaware law and our corporate charter and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable; ● Our stock price may be volatile, which could result in substantial losses for investors; 6 ● Our risk management activities may leave us exposed to unidentified or unanticipated risks; ● Regulatory, environmental, monetary and other governmental policies could have a material adverse effect on our profitability; ● Global, market and economic conditions may negatively impact our business, financial condition and stock price; ● We face risks associated with litigation and claims, which could impact our financial results and condition; ● Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline; ● We are subject to financial reporting and other requirements for which our accounting, internal audit and other management systems and resources may not be adequately prepared; ● There are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected; ● Any acquisitions that we have completed, or may complete in the future, may not perform as planned and could disrupt our business and harm our financial condition and operations; ● The success of our business depends on achieving our strategic objectives, including dispositions; ● If we do not conduct an adequate due diligence investigation of a target business that we acquire, we may be required subsequently to take write downs or write-offs, restructuring, and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment; ● We may be unable to generate internal growth; and ● In the event that we fail to satisfy any of the listing requirements of the Nasdaq Capital Market, our common stock may be delisted, which could affect our market price and liquidity.
In addition to us being unable to recover certain direct costs, canceled customer orders may also result in additional unrecoverable costs due to the resulting underutilization of our assets. We are subject to pricing pressure from our larger customers. We face significant pricing pressures in all of our business segments from our larger customers.
In addition to us being unable to recover certain direct costs, canceled customer orders may also result in additional unrecoverable costs due to the resulting underutilization of our assets. We are subject to pricing pressure from our larger customers. We face significant pricing pressures in our business segment from our larger customers.
If we continue to have these existing material weaknesses, other material weaknesses or significant deficiencies in the future, it could create a perception that our financial results do not fairly state our financial condition or results of operations. See “ Part II.
If we continue to have this existing material weakness, other material weaknesses or significant deficiencies in the future, it could create a perception that our financial results do not fairly state our financial condition or results of operations. See “ Part II.
Item 9A – Controls and Procedures. ” These material weaknesses could adversely affect our business, reputation, revenues, results of operations, financial condition, and liquidity. They could also adversely affect our ability to timely file periodic reports under the Exchange Act, and limit our ability to access the capital markets through equity or debt issuances.
Item 9A – Controls and Procedures. ” This material weakness could adversely affect our business, reputation, revenues, results of operations, financial condition, and liquidity. They could also adversely affect our ability to timely file periodic reports under the Exchange Act, and limit our ability to access the capital markets through equity or debt issuances.
For more information relating to the Company’s internal control over financial reporting, the material weaknesses that existed as of December 31, 2023, and the remediation activities undertaken by us, see Part II, Item 9A, Controls and Procedures of this Comprehensive Form 10-K.
For more information relating to the Company’s internal control over financial reporting, the material weakness that existed as of December 31, 2024, and the remediation activities undertaken by us, see Part II, Item 9A, Controls and Procedures of this Comprehensive Form 10-K.
We have identified material weaknesses in our internal control over financial reporting which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.
Risks Relating to Our Business and Industry We have identified a material weakness in our internal control over financial reporting which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.
We routinely have a backlog of work to be completed on contracts representing a significant portion of our annual sales. As of December 31, 2023, our order backlog was $45,165. Orders included in our backlog are represented by customer purchase orders and service contracts that we believe to be firm.
We routinely have a backlog of work to be completed on contracts representing a significant portion of our annual sales. As of December 31, 2024, our order backlog was $19,762. Orders included in our backlog are represented by customer purchase orders and service contracts that we believe to be firm.
In addition, due to the same material weaknesses, we determined that our disclosure controls and procedures were not effective as of December 31, 2023.
In addition, due to the same material weakness, we determined that our disclosure controls and procedures were not effective as of December 31, 2024.
Our business requires skilled labor, and we may be unable to attract and retain qualified employees. Our ability to maintain our productivity and profitability will be limited by our ability to employ, train and retain skilled personnel necessary to meet our requirements. We may experience shortages of qualified personnel.
Our ability to maintain our productivity and profitability will be limited by our ability to employ, train and retain skilled personnel necessary to meet our requirements. We may experience shortages of qualified personnel.
Successful claims for misappropriation or release of confidential or personal data brought against us in excess of available insurance or fines or other penalties assessed or any claim that results in significant adverse publicity against us could have a material adverse effect on our business and our reputation.
Successful claims for misappropriation or release of confidential or personal data brought against us in excess of available insurance or fines or other penalties assessed or any claim that results in significant adverse publicity against us could have a material adverse effect on our business and our reputation. 11 Our business requires skilled labor, and we may be unable to attract and retain qualified employees.
A significant deterioration in the economy could have an adverse effect on these accounts receivable, which could result in longer payment cycles, increased collection costs and defaults in excess of management’s expectations. Deterioration in the credit quality of our major customers could have a material adverse effect on our operating results and financial condition.
A significant deterioration in the economy could have an adverse effect on these accounts receivable, which could result in longer payment cycles, increased collection costs and defaults in excess of management’s expectations.
As a result of these material weaknesses, the Company’s management, under the supervision of the Audit Committee and with participation of the Company’s Chief Executive Officer and Chief Financial Officer, concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2023. 8 Although we are working to remedy the material weaknesses and ineffectiveness of the Company’s internal control over financial reporting and disclosure controls and procedures, there can be no assurance as to when the remediation plan will be fully developed and implemented or the outcome of such remediation efforts, or that in the future, additional material weaknesses will not exist, reoccur or otherwise be discovered, a risk that is significantly increased in light of the complexity of our business.
Although we are working to remedy the material weakness and ineffectiveness of the Company’s internal control over financial reporting and disclosure controls and procedures, there can be no assurance as to when the remediation plan will be fully developed and implemented or the outcome of such remediation efforts, or that in the future, additional material weaknesses will not exist, reoccur or otherwise be discovered, a risk that is significantly increased in light of the complexity of our business.
Section 203 could delay or prohibit mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price. 13 General Risk Factors Our stock price may be volatile, which could result in substantial losses for investors.
Section 203 of the Delaware General Corporation Law could delay or prohibit mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.
Accordingly, our operating results in any particular quarter may not be indicative of the results that you can expect for any other quarter or for an entire year. Our industry is highly competitive. The electrical equipment manufacturing industry is highly competitive.
Accordingly, our operating results in any particular quarter may not be indicative of the results that you can expect for any other quarter or for an entire year. Our industry is highly competitive. The electrical equipment manufacturing industry is highly competitive and barriers to entry to manufacture similar systems to the ones the Company sells is easily imitated.
This could in turn negatively affect our ability to access equity markets for capital. Any acquisitions that we have completed, or may complete in the future, may not perform as planned and could disrupt our business and harm our financial condition and operations.
Any acquisitions that we have completed, or may complete in the future, may not perform as planned and could disrupt our business and harm our financial condition and operations.
Before investing in our common stock you should carefully consider the following risks, together with the financial and other information contained in this Annual Report on Form 10–K for the year ended December 31, 2023 and our other periodic filings with the Securities and Exchange Commission.
ITEM 1A. RISK FACTORS Investing in our common stock involves a high degree of risk. Before investing in our common stock, you should carefully consider the following risks, together with the financial and other information contained in this Annual Report on Form 10–K for the year ended December 31, 2024, and our other periodic filings with the SEC.
In addition, the consequences of the ongoing conflict between Israel and Hamas, and the ongoing conflict between Russia and Ukraine, including related sanctions and countermeasures, and the effects of rising global inflation, are difficult to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business and operations.
In addition, the consequences of the ongoing conflict between Israel and Hamas, and the ongoing conflict between Russia and Ukraine, including related sanctions and countermeasures, and the effects of rising global inflation, are difficult to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business and operations. 13 Additionally, since the start of the Trump Administration in 2025, U.S. policy changes have been implemented at a rapid pace and additional changes are likely.
If we do not achieve internal growth, our results of operations will suffer and we will likely not be able to expand our operations or grow our business. We may not meet the continued listing requirements of Nasdaq, which could result in a delisting of our common stock.
If we do not achieve internal growth, our results of operations will suffer and we will likely not be able to expand our operations or grow our business. In the event that we fail to satisfy any of the listing requirements of the Nasdaq Capital Market, our common stock may be delisted, which could affect our market price and liquidity.
Over time, a control may be inadequate because of changes in conditions, such as growth of the company or increased transaction volume, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Over time, a control may be inadequate because of changes in conditions, such as growth of the company or increased transaction volume, or the degree of compliance with the policies or procedures may deteriorate.
As a result, we may be subject to carrier disruptions and increased costs due to factors that are beyond our control, including labor strikes, inclement weather, natural disasters and rapidly increasing fuel costs.
We rely on arrangements with third-party shippers and carriers such as independent shipping companies for timely delivery of our products to our customers. As a result, we may be subject to carrier disruptions and increased costs due to factors that are beyond our control, including labor strikes, inclement weather, natural disasters and rapidly increasing fuel costs.
In addition, there is a risk that one or more of our current or future service providers, manufacturers, suppliers, our third-party payors, and other partners could be negatively affected by difficult economic times, which could adversely affect our ability to attain our operating goals on schedule and on budget or meet our business and financial objectives. 14 In addition, we face several risks associated with international business and are subject to global events beyond our control, including war, public health crises, such as pandemics and epidemics, trade disputes, economic sanctions, trade wars and their collateral impacts and other international events.
In addition, there is a risk that one or more of our current or future service providers, manufacturers, suppliers, our third-party payors, and other partners could be negatively affected by difficult economic times, which could adversely affect our ability to attain our operating goals on schedule and on budget or meet our business and financial objectives.
Controls can also be circumvented by individual acts of certain persons, by collusion of two or more people or by management override of the controls. Due to the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected in a timely manner or at all.
Due to the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected in a timely manner or at all.
Prolonged supply chain disruptions that may impact us or our manufacturers and suppliers could interrupt product manufacturing, increase raw material and product lead times, increase raw material and product costs, impact our ability to meet customer demand and result in lost sales and reputational damage, all of which could have a material adverse effect on our business, financial condition and results of operations. 11 Our business may face cybersecurity risk generally associated with our information technology systems which could materially affect our business, and our results of operations could be materially affected if our information technology systems (or third-party systems we rely on) are interrupted, damaged by unforeseen events, or fail for any extended period of time.
Prolonged supply chain disruptions that may impact us or our manufacturers and suppliers could interrupt product manufacturing, increase raw material and product lead times, increase raw material and product costs, impact our ability to meet customer demand and result in lost sales and reputational damage, all of which could have a material adverse effect on our business, financial condition and results of operations.
As disclosed in Part II, Item 9A, Controls and Procedures of this Comprehensive Form 10-K, our management, including our Chief Executive Officer and our Chief Financial Officer, has determined that we had material weaknesses in our internal control over financial reporting as of December 31, 2023, due to the following material weaknesses: (i) the accounting for revenues and costs associated with over-time contracts, which resulted in material misstatements relating to the percentage of completion used to recognize revenue; (ii) the accounting for inventory and related cost of sales and (iii) lack of sufficient accounting personnel which negatively impacted the Company’s ability to maintain appropriate segregation of duties, and close, consolidate and file financial statements on a timely basis to meet SEC regulations.
As disclosed in Part II, Item 9A, Controls and Procedures of this Comprehensive Form 10-K, our management, including our Chief Executive Officer and our Chief Financial Officer, has determined that we had a material weakness in our internal control over financial reporting as of December 31, 2024 related to the lack of sufficient accounting personnel which negatively impacted the Company’s ability to maintain appropriate segregation of duties.
Controls and Procedures” in this Comprehensive Form 10-K, in connection with preparing our financial statements for the year ended December 31, 2023, management concluded that material weaknesses existed in our internal control over financial reporting due to the following material weaknesses: (i) the accounting for revenues and costs associated with over-time contracts, which resulted in material misstatements relating to the percentage of completion used to recognize revenue; (ii) the accounting for inventory and related cost of sales and (iii) lack of sufficient accounting personnel which negatively impacted the Company’s ability to maintain appropriate segregation of duties, and close, consolidate and file financial statements on a timely basis to meet SEC regulations.
Controls and Procedures” in this Comprehensive Form 10-K, in connection with preparing our financial statements for the year ended December 31, 2024, management concluded that a material weakness existed in our internal control over financial reporting related to the lack of sufficient accounting personnel which negatively impacted the Company’s ability to maintain appropriate segregation of duties.
A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.
Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within an organization will be detected.
Risks Relating to Our Organization Delaware law and our corporate charter and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.
An overall labor shortage, lack of skilled labor, increased turnover or labor inflation could have a material adverse impact on our operations, results of operations, liquidity or cash flows. Risks Relating to Our Organization Delaware law and our corporate charter and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.
Certain of our business units have historically generated operating losses and negative cash flows, which may result in the usage of our cash. We have two business units (PCEP and Titan), and these two units have been unable to earn positive income and generate positive cash flow in their recent history.
Business - Customers”. 9 Certain of our business units have historically generated operating losses and negative cash flows, which may result in the usage of our cash.
Our inability to manage our business in light of the competitive forces we face could have a material adverse effect on our results of operations. We currently derive a significant portion of our revenues from two customers. Material or significant loss of business from these customers could have an adverse effect on our business, financial condition and operating results.
Any change in the level of orders from customers could have a significant impact on our results of operations, and a loss of business from customers could have an adverse effect on our business, financial condition and operating results.
In addition, acquisitions can pose challenges in implementing the required processes, procedures and controls in the new operations. Companies that are acquired by us may not have disclosure controls and procedures or internal control over financial reporting that are as thorough or effective as those required by the securities laws that currently apply to us.
Companies that are acquired by us may not have disclosure controls and procedures or internal control over financial reporting that are as thorough or effective as those required by the securities laws that currently apply to us. 8 Our operating results may vary significantly from quarter to quarter, which makes our operating results difficult to predict and can cause our operating results in any particular period to be less than comparable quarters and expectations from time to time.
In addition, we rely on our current electrical and mechanical design engineers, many of whom are important to our operations and would be difficult to replace. We cannot be certain that any of these individuals will continue in their respective capacities for any particular period of time.
Mazurek, our principal executive officer, and on other senior officers who are responsible for the day-to-day management of our operating subsidiary. In addition, we rely on our current electrical and mechanical design engineers, many of whom are important to our operations and would be difficult to replace.
Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within an organization will be detected. The inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes.
The inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by individual acts of certain persons, by collusion of two or more people or by management override of the controls.
The departure or loss of key personnel, or the inability to hire and retain qualified employees, could negatively impact our ability to manage our business. 10 Fluctuations in the price and supply of raw materials used to manufacture our products may reduce our profits.
We cannot be certain that any of these individuals will continue in their respective capacities for any particular period of time. The departure or loss of key personnel, or the inability to hire and retain qualified employees, could negatively impact our ability to manage our business.
See also “ —Risks Relating to the Restatement of the Prior Financial Statements-- Failure to establish and maintain effective internal control over financial reporting may result in us not being able to accurately report our financial results, which could result in a loss of investor confidence and adversely affect the market price of our common stock .” 15 In addition, discovery and disclosure of a material weakness, including the material weaknesses identified in our internal control over financial reporting as of December 31, 2023, by definition, could have a material adverse impact on our consolidated financial statements.
Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. 14 In addition, discovery and disclosure of a material weakness, including the material weakness identified in our internal control over financial reporting as of December 31, 2024, by definition, could have a material adverse impact on our consolidated financial statements.
Loss of business from these customers could have an adverse effect on our business, financial condition and operating results. The majority of our sales to Enchanted Rock Electric, LLC and Sequel Electrical Supply, LLC were made pursuant to contract terms and conditions for each project. See “Item 1. Business - Customers”.
The majority of our sales to these customers and other customers in the past were made pursuant to contract terms and conditions for each project and it is expected that future sales will similarly be made pursuant to the relevant contract terms and conditions for future projects. See “Item 1.
We rely on third parties for key elements of our business whose operations are outside our control. We rely on arrangements with third-party shippers and carriers such as independent shipping companies for timely delivery of our products to our customers.
Deterioration in the credit quality of our major customers could have a material adverse effect on our operating results and financial condition. 10 We rely on third parties for key elements of our business whose operations are outside our control.
Removed
ITEM 1A. RISK FACTORS Investing in our common stock involves a high degree of risk.
Added
As a result of this material weakness, the Company’s management, under the supervision of the Audit Committee and with participation of the Company’s Chief Executive Officer and Chief Financial Officer, concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2024.
Removed
Risks Relating to the Restatement of the Prior Financial Statements We have concluded that certain of our previously issued financial statements should not be relied upon and have restated certain of our previously issued financial statements which was time-consuming and expensive and could expose us to additional risks that could have a negative effect on us.
Added
We do not expect that our disclosure controls and procedures and internal control over financial reporting will prevent all error or fraud. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.
Removed
As discussed in the Explanatory Note of this Comprehensive Form 10-K and in Note 2, “Restatement of Previously Issued Consolidated Financial Statements” under Item 8 of this Comprehensive Form 10-K, we have concluded that the Prior Financial Statements should not be relied upon.
Added
In addition, acquisitions can pose challenges in implementing the required processes, procedures and controls in the new operations.
Removed
We have restated our previously issued (i) audited consolidated financial statements as of and for the fiscal year ended December 31, 2022, included in the 2022 10-K, and (ii) unaudited condensed consolidated financial statements for the quarterly periods ended March 31, 2022, through September 30, 2023, included in the Form 10-Qs.
Added
On the service side of the Company’s business, we already compete with many other companies offering similar services. Many of these companies have a larger geographic footprint than Pioneer and substantially greater financial resources. A significant portion of our revenues have historically been concentrated and derived from a few customers.
Removed
The restatement process was time consuming and expensive and could expose us to additional risks that could have a negative effect on us.
Added
Material or significant loss of business from customers could have an adverse effect on our business, financial condition and operating results. We historically have depended, and expect to continue to depend on a small number of customers for a large portion of our business each quarter, due to the scope of certain projects.
Removed
In particular, we incurred substantial unanticipated expenses and costs, including audit, legal and other professional fees, in connection with the restatement of the Prior Financial Statements and the ongoing remediation of material weaknesses in our internal control over financial reporting.
Added
Approximately 22% and 13% of our sales during the year ended December 31, 2024, were made to INF Associates, LLC and British Columbia Hydro and Power Authority, respectively.
Removed
We are in the process of implementing certain remediation actions (see Part II, Item 9A, Controls and Procedures of this Comprehensive Form 10-K for a description of these remediation measures). To the extent these steps are not successful, we could be required to incur additional time and expense.
Added
After the sale of our PCEP business unit in October 2024, we now have one business unit (Critical Power), which has been unable to earn positive income and generate positive cash flow in its recent history. With $41,622 of cash on hand as of December 31, 2024, any such losses will negatively impact our cash balance.
Removed
Our management’s attention was also diverted from some aspects of the operation of our business in connection with the restatement of the Prior Financial Statements and these ongoing remediation efforts. In addition, the restatement and related matters could impair our reputation and could cause our counterparties to lose confidence in us.
Added
Our operations have been curtailed following the PCEP Sale, and we have limited sources of revenue following such sale, which may negatively impact the value and liquidity of our common stock.
Removed
Each of these occurrences could have an adverse effect on our business, results of operations, financial condition and stock price. The restatement of the Prior Financial Statements may lead to future stockholder litigation.
Added
The PCEP Sale has reduced the size of our business operations, and our sources of revenue are limited to our Critical Power segment following the closing of the PCEP Sale.
Removed
Lawsuits may be commenced against the Company and its officers and directors based in part or whole on allegations related to the restatement of the Prior Financial Statements.
Added
Although our board of directors may use a portion of the proceeds from the PCEP Sale to support the business operations remaining following the PCEP Sale, there can be no assurance that we will be successful at carrying out the operations of our remaining businesses, or that we will be successful at generating revenue.
Removed
As with any substantial litigation, the Company expects to devote significant time, attention and resources to the defense of the litigation, which may have a material adverse effect on the Company even if the litigation is resolved in a manner favorable to the Company, and cannot predict when or how the litigation will be resolved or estimate what the potential loss or range of loss would be, if any.
Added
A failure by us to secure additional sources of revenue following the closing of the PCEP Sale could negatively impact the value and liquidity of our common stock. The departure or loss of key personnel could disrupt our business. We depend heavily on the continued efforts of Nathan J.
Removed
These material weaknesses resulted in identified material misstatements to the financial statements, and the Prior Financial Statements are restated in this filing.
Added
Fluctuations in the price and supply of materials used to manufacture our products may reduce our profits. The principal materials purchased by us certain electrical and engine components such as generators, transfer switches, electric vehicle chargers and related parts from a variety of suppliers. These components are available from, and supplied by, numerous sources at competitive prices.
Removed
See also “—Risks Relating to Our Organization— We have identified material weaknesses in our internal control over financial reporting, and if we are unable to achieve and maintain effective internal control over financial reporting or effective disclosure controls, this could have a material adverse effect on our business .” We do not expect that our disclosure controls and procedures and internal control over financial reporting will prevent all error or fraud.
Added
Our business may face cybersecurity risk generally associated with our information technology systems which could materially affect our business, and our results of operations could be materially affected if our information technology systems (or third-party systems we rely on) are interrupted, damaged by unforeseen events, or fail for any extended period of time.
Removed
Risks Relating to Our Business and Industry We are vulnerable to economic downturns in the commercial construction market, which may reduce the demand for some of our products and adversely affect our sales, net income, cash flow or financial condition. A large portion of our business involves sales of our products in connection with commercial and industrial construction.
Added
General Risk Factors Our stock price may be volatile, which could result in substantial losses for investors.
Removed
Our sales to this sector are affected by the level of discretionary business spending. During economic downturns in this sector, the level of business discretionary spending may decrease. This decrease in spending will likely reduce the demand for some of our products and may adversely affect our sales, net income, cash flow or financial condition.
Added
In addition, we face several risks associated with international business and are subject to global events beyond our control, including war, public health crises, such as pandemics and epidemics, trade disputes, economic sanctions, trade wars and their collateral impacts and other international events.
Removed
Our operating results may vary significantly from quarter to quarter, which makes our operating results difficult to predict and can cause our operating results in any particular period to be less than comparable quarters and expectations from time to time.
Added
Changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas.
Removed
Principal competitors in our markets include Crown Electric Engineering and Manufacturing, LLC, Industrial Electric Machinery, LLC, RESA Power, LLC, Switchgear Power Systems, LLC, Myers Power Products, Inc. and Powell Industries, Inc.
Added
Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business.
Removed
Some of these competitors, as well as other companies in the broader electrical equipment manufacturing and service industry where we expect to compete, are significantly larger and have substantially greater resources than we do and are able to achieve greater economies of scale and lower cost structures than us and may, therefore, be able to provide their products and services to customers at lower prices than we are able to.
Added
Until we know what policy changes are made, whether those policy changes are challenged and subsequently upheld by the court system and how those changes impact our business and the business of our competitors over the long term, we will not know if, overall, we will benefit from them or be negatively affected by them.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe individuals currently serving in these roles are the Chief Financial Officer as the representative of our management, and the CEO of CCS Business Solutions, Inc. The CEO of CCS Business Solutions, Inc. has over 20 years of experience in the technology industry, with most of that experience being specifically in cybersecurity.
Biggest changeManagement, along with CCS Business Solutions, Inc., are responsible for day-to-day assessment and management of risks from cybersecurity threats, including the prevention, mitigation, detection, and remediation of cybersecurity incidents. The individuals currently serving in these roles are the Chief Financial Officer as the representative of our management, and the CEO of CCS Business Solutions, Inc .
Among other things, these providers perform a an audit of the datacenter from the top down annually, to ensure that controls are effective, still implemented to the fullest, and are meeting industry standards. We also have policies and procedures to oversee and identify the risks from cybersecurity threats associated with our use of third-party service providers.
Among other things, these providers perform an audit of the datacenter from the top down annually, to ensure that controls are effective, still implemented to the fullest, and are meeting industry standards. We also have policies and procedures to oversee and identify the risks from cybersecurity threats associated with our use of third-party service providers .
We routinely undertake activities to prevent, detect, and minimize the effects of cybersecurity incidents, including assessments of our data access in the form of user audits, real-time monitoring of risk on a per system level as it pertains to AV completeness, system vulnerabilities, and third-party patching.
Additionally, the board of directors considers risks from cybersecurity threats as part of its oversight of our business strategy and risk management . 16 We routinely undertake activities to prevent, detect, and minimize the effects of cybersecurity incidents, including assessments of our data access in the form of user audits, real-time monitoring of risk on a per system level as it pertains to AV completeness, system vulnerabilities, and third-party patching.
The program outlines governance, policies and procedures, and technology we use to oversee and identify risks from cybersecurity threats and is informed by previous cybersecurity incidents we have observed in our company, in our industry, and as reported by our cybersecurity partner CCS Business Solutions, Inc. 17 Management, along with CCS Business Solutions, Inc., are responsible for day-to-day assessment and management of risks from cybersecurity threats, including the prevention, mitigation, detection, and remediation of cybersecurity incidents.
The program outlines governance, policies and procedures, and technology we use to oversee and identify risks from cybersecurity threats and is informed by previous cybersecurity incidents we have observed in our company, in our industry, and as reported by our cybersecurity partner CCS Business Solutions, Inc .
This includes receiving reports and updates from our outside partner CCS Business Solutions, Inc. with respect to the management of risks from cybersecurity threats. Such reports cover our information technology security program, including its current status, capabilities, objectives and plans, as well as the evolving cybersecurity threat landscape.
Such reports cover our information technology security program, including its current status, capabilities, objectives and plans, as well as the evolving cybersecurity threat landscape.
He also has formal education with a degree in Computer Science with a concentration in Artificial Intelligence, mainly involving self-learning algorithms. The board of directors is responsible for oversight of risks from cybersecurity threats in conjunction with our senior management team and CCS Business Solutions, Inc.
The CEO of CCS Business Solutions, Inc. has over 20 years of experience in the technology industry, with most of that experience being specifically in cybersecurity. He also has formal education with a degree in Computer Science with a concentration in Artificial Intelligence, mainly involving self-learning algorithms .
Removed
Additionally, the board of directors considers risks from cybersecurity threats as part of its oversight of our business strategy and risk management.
Added
The board of directors is responsible for oversight of risks from cybersecurity threats in conjunction with our senior management team and CCS Business Solutions, Inc. This includes receiving reports and updates from our outside partner CCS Business Solutions, Inc. with respect to the management of risks from cybersecurity threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeApproximate Owned or s quare l ease Location Description f ootage e xpiration date Santa Fe Springs, California Manufacturing, sales, engineering and administration 40,000 August 2024 Champlin, Minnesota Manufacturing, sales, service and warehouse 16,000 March 2026 Miami, Florida Sales, service and warehouse 3,600 December 2024 Fort Lee, New Jersey Corporate management and sales office 2,700 December 2025 We believe our facilities are well maintained, in proper condition to operate at higher than current levels and are adequately insured.
Biggest changeApproximate Owned or square lease Location Description footage expiration date Champlin, Minnesota Manufacturing, sales, service and warehouse 16,000 March 2026 Miami, Florida Sales, service and warehouse 3,600 December 2029 Fort Lee, New Jersey Corporate management and sales office 2,700 December 2025 We believe our facilities are well maintained, in proper condition to operate at higher than current levels and are adequately insured.
We do not anticipate significant difficulty in renewing or extending existing leases as they expire, or in replacing them with equivalent facilities or office locations. 18
We do not anticipate significant difficulty in renewing or extending existing leases as they expire, or in replacing them with equivalent facilities or office locations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we may become involved in lawsuits, investigations and claims that arise in the ordinary course of business. On June 15, 2023, Terrence and Kay Mimick (the “Plaintiffs”) filed a complaint in the U.S.
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we may become involved in lawsuits, investigations and claims that arise in the ordinary course of business.
We can give no assurance that any other lawsuits or claims brought in the future will not have an adverse effect on our financial condition, liquidity or operating results.
We can give no assurance that any lawsuits or claims brought in the future will not have an adverse effect on our financial condition, liquidity or operating results.
We are not aware of any material proceedings in which any of our directors, officers or affiliates or any registered or beneficial shareholder of more than 5% of our common stock is an adverse party or has a material interest adverse to our interest. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 19 PART II
We are not aware of any material proceedings in which any of our directors, officers or affiliates or any registered or beneficial shareholder of more than 5% of our common stock is an adverse party or has a material interest adverse to our interest. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 17 PART II
As of the date hereof, we are not aware of or a party to any other legal proceedings to which we or any of our subsidiaries is a party or to which any of our property is subject, nor are we aware of any such threatened or pending litigation or any such proceedings known to be contemplated by governmental authorities that we believe could have a material adverse effect on our business, financial condition or operating results.
As of the date hereof, we are not aware of or a party to any legal proceedings to which we or our subsidiary is a party or to which any of our property is subject, nor are we aware of any such threatened or pending litigation or any such proceedings known to be contemplated by governmental authorities that we believe could have a material adverse effect on our business, financial condition or operating results.
Removed
District Court, District of Nebraska naming the Company, its wholly-owned subsidiary, Pioneer Critical Power, Inc., and an individual acting in his capacity as an employee of the Company, collectively as defendants.
Removed
Plaintiffs filed an amended complaint on July 7, 2023, alleging negligent driving, negligent entrustment, and negligent hiring, training and supervision, as a result of a car accident that occurred on September 9, 2019, and seeking special damages related to the injuries allegedly sustained by Plaintiffs.
Removed
The amended complaint also named Titan Energy Systems, Inc. as a defendant instead of Pioneer Critical Power, Inc. On July 27, 2023, the defendants filed an Answer to Plaintiff’s Amended Complaint. On October 6, 2023, a mediation was held, but the parties did not reach a settlement.
Removed
In June 2024 another mediation was held and the parties reached a settlement for all of the Plaintiffs’ claims. On May 26, 2023, the Company filed a complaint against PowerSecure, Inc. (“PowerSecure”) in Minnesota state court, which was subsequently removed to U.S.
Removed
District Court, District of Minnesota on June 20, 2023, alleging breach of contract, unjust enrichment and tortious interference (the “PowerSecure Action”). Thereafter, in the fourth quarter of 2023, the Company entered into a Settlement Agreement and Release with PowerSecure.
Removed
On January 4, 2024, the Company and PowerSecure stipulated to a voluntary dismissal of the PowerSecure Action with prejudice, and as a result, the PowerSecure Action was dismissed with prejudice on January 5, 2024.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe last reported sales price of our common stock on the Nasdaq Capital Market on July 25, 2024, was $4.42 per share. As of July 25, 2024, there were 37 holders of record of our common stock.
Biggest changeThe last reported sales price of our common stock on the Nasdaq Capital Market on April 11, 2025, was $2.53 per share. As of April 11, 2025, there were 38 holders of record of our common stock. U.S. dollars are reported in thousands, except for share and per share amounts (unless otherwise noted).
We did not repurchase any of our equity securities during the fourth quarter of the fiscal year ended December 31, 2023. ITEM 6. [RESERVED].
We did not repurchase any of our equity securities during the fourth quarter of the fiscal year ended December 31, 2024. ITEM 6. [RESERVED].
Removed
The timing and amount of future dividends could require us to seek capital funding to support our ongoing operations as our historical credit arrangements were terminated in connection with the sale of the transformer business units in August 2019 (the “Equity Transaction”).
Added
We have previously paid dividends to our stockholders, and on January 7, 2025, we paid a one-time special cash dividend of an aggregate of $16,665. We currently do not expect that comparable cash dividends will continue to be paid in the future.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table represents the progression of our backlog, by reporting segment, for the periods ended as indicated: December 31, 2023 2022 (Restated) Electrical Infrastructure $ 28,497 $ 31,994 Critical Power Solutions 16,668 6,284 Total order backlog $ 45,165 $ 38,278 22 Revenue The following table represents our revenues by reporting segment and major product category for the periods indicated (in thousands, except percentages): Year Ended December 31, 2023 2022 (Restated) Variance % Electrical Infrastructure Equipment $ 30,302 $ 16,260 $ 14,042 86.4 Service 75 10 65 650.0 30,377 16,270 14,107 86.7 Critical Power Solutions Equipment 3,413 2,229 1,184 53.1 Service 7,703 7,379 324 4.4 11,116 9,608 1,508 15.7 Total revenue $ 41,493 $ 25,878 $ 15,615 60.3 For the year ended December 31, 2023, our consolidated revenue increased by $15,615, or 60.3% to $41,493, up from $25,878 during the year ended December 31, 2022, primarily due to an increase in sales of our power systems from our Electrical Infrastructure segment and an increase in sales of our equipment from our Critical Power segment.
Biggest changeThe following table represents the progression of our backlog as of December 31, 2024 and 2023 (in thousands): December 31, 2024 2023 Critical Power Solutions $ 19,762 $ 16,668 Order backlog 19,762 16,668 Discountinued operation - 28,497 Total order backlog $ 19,762 $ 45,165 20 Revenue The following table represents our revenues by major product category for the periods indicated (in thousands, except percentages): For the Years Ended December 31, 2024 2023 Variance % Critical Power Solutions Equipment 12,262 3,413 8,849 259.3 Service 10,617 7,703 2,914 37.8 Total revenue $ 22,879 $ 11,116 $ 11,763 105.8 For the year ended December 31, 2024, our revenue from our Critical Power segment increased by $11,763, or 105.8% to $22,879, up from $11,116 during the year ended December 31, 2023, primarily due to an increase in shipments and rentals of our suite of mobile EV charging equipment, e-Boost©.
This information, as well as the selected financial data provided in Note 14 and our Consolidated Financial Statements and related notes included in this Annual Report on Form 10-K, should be referred to when reading our discussion and analysis of results of operations below.
This information, as well as the selected financial data provided in Note 13 and our Consolidated Financial Statements and related notes included in this Annual Report on Form 10-K, should be referred to when reading our discussion and analysis of results of operations below.
Other (Income) Expense . Other (income) expense in the consolidated statements of operations reports certain gains and losses associated with activities not directly related to our core operations. For the year ended December 31, 2023, other non-operating income was $524, as compared to other non-operating expense of $67 during the year ended December 31, 2022.
Other income in the consolidated statements of operations reports certain gains and losses associated with activities not directly related to our core operations. For the year ended December 31, 2024, other non-operating income was $50, as compared to other non-operating expense of $524 during the year ended December 31, 2023.
There can be no assurance that precautionary measures, whether adopted by us or imposed by others, will be effective, and such measures could negatively affect our sales, marketing, and client service efforts, delay and lengthen our sales cycles, decrease our employees’, clients’, or partners’ productivity, or create operational or other challenges, any of which could harm our business and results of operations. 26 Cash Used in Operating Activities .
There can be no assurance that precautionary measures, whether adopted by us or imposed by others, will be effective, and such measures could negatively affect our sales, marketing, and client service efforts, delay and lengthen our sales cycles, decrease our employees’, clients’, or partners’ productivity, or create operational or other challenges, any of which could harm our business and results of operations.
We continue to monitor the effects of these macroeconomic factors and intends to take steps deemed appropriate to limit the impact on our business. During the year ended December 31, 2023, we were able to operate substantially at capacity.
We continue to monitor the effects of these macroeconomic factors and intend to take steps deemed appropriate to limit the impact on our business. During the year ended December 31, 2024, we were able to operate substantially at capacity.
We are headquartered in Fort Lee, New Jersey and operate from three (3) additional locations in the United States for manufacturing, service and maintenance, engineering, and sales and administration. We intend to grow our business through continued internal investments in product development and expansion of our manufacturing, engineering, sales and marketing personnel.
We are headquartered in Fort Lee, New Jersey and operate from two (2) additional locations in the United States for manufacturing, service and maintenance, engineering, and sales and administration. 18 We intend to grow our business through continued internal investments in product development and expansion of our manufacturing, engineering, sales and marketing personnel.
Historically, our cash requirements were generally for operating activities, debt repayment, capital improvements and acquisitions. We expect to meet our cash needs with our working capital and cash flows from operating activities. We expect our cash requirements to be generally for operating activities, capital improvements and product development.
We expect to meet our cash needs with our working capital and cash flows from operating activities. We expect our cash requirements to be generally for operating activities, capital improvements and product development.
Included in other non-operating income during the year ended December 31, 2023, is a settlement gain of $525 related to a legal matter. Provision for Income Taxes .
Included in other non-operating income during the year ended December 31, 2023, was a settlement gain of $525 related to a legal matter and no such gain was recognized during the year ended December 31, 2024. Provision for Income Taxes .
Since October 20, 2020, and through December 31, 2023, we sold an aggregate of 916,059 shares of common stock for aggregate gross proceeds of approximately $8,904, before any sales agent fees and expenses payable by us under the ATM Program.
Since October 20, 2020, and through December 31, 2024, we sold an aggregate of 1,835,616 shares of common stock for aggregate gross proceeds of approximately $14,051, before any sales agent fees and expenses payable by us under the ATM Program.
Management has identified certain critical accounting estimates which are outlined below. In addition, there are other items within our consolidated financial statements that require estimation but are not deemed critical, as defined above. Changes in estimates used in these and other items could have a material impact on our financial statements.
As of December 31, 2024, no critical accounting estimates have been identified. In addition, there are other items within our consolidated financial statements that require estimation but are not deemed critical, as defined above. Changes in estimates used in these and other items could have a material impact on our consolidated financial statements.
We predominately sell to customers in the industrial production and commercial construction markets. Accordingly, changes in the condition of any of our customers may have a greater impact than if our sales were more evenly distributed between different end markets.
Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business. We predominately sell to customers in the industrial production markets. Accordingly, changes in the condition of any of our customers may have a greater impact than if our sales were more evenly distributed between different end markets.
These accounting principles require us to make estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expense during the periods presented.
Critical Accounting Estimates The preparation of consolidated financial statements and related disclosures are in conformity with U.S. GAAP. These accounting principles require us to make estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expense during the periods presented.
Capital Expenditures Our additions to property and equipment were $2,497 during the year ended December 31, 2023, as compared to $1,512 additions during the year ended December 31, 2022.
Capital Expenditures Our additions to property and equipment were $3,759 during the year ended December 31, 2024, as compared to $2,496 additions during the year ended December 31, 2023.
As of December 31, 2023, we had no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that had, or that may have, a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
We expect that our cash balance is sufficient to fund operations for the next twelve months from the date our consolidated financial statements are issued. 24 As of December 31, 2024, we had no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that had, or that may have, a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Wainwright & Co., LLC (“Wainwright”), pursuant to which we may offer and sell our shares of common stock from time to time through Wainwright, acting as sales agent or principal (the “ATM Program”).
On October 20, 2020, we entered into an At the Market Sale Agreement with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which we may offer and sell our shares of common stock from time to time through Wainwright, acting as sales agent or principal (the “ATM Program”).
During the year ended December 31, 2023, we sold an aggregate of 27,559 shares of common stock for an aggregate consideration of approximately $184, before any sales agent fees and expenses payable by us under the ATM Program.
During the year ended December 31, 2024, we sold an aggregate of 919,557 shares of common stock for an aggregate consideration of approximately $5,147, before any sales agent fees and expenses payable by us under the ATM Program. As of December 31, 2024, $69,853 of common stock remained available for issuance under the ATM Program.
Our products and services are sold to a broad range of customers in the utility, industrial and commercial markets. Our customers include, but are not limited to, electric, gas and water utilities, data center developers and owners, EV charging infrastructure developers and owners, and distributed energy developers.
Our products and services are sold to a broad range of customers in the utility, industrial and commercial markets. Our customers include, but are not limited to, Federal and State government entities, package delivery business’, school bus fleet operators, EV charging infrastructure developers and owners, and distributed energy developers.
Our net loss per basic and diluted share for the year ended December 31, 2023 was $0.19, compared to a net loss per basic and diluted share of $0.56 for the year ended December 31, 2022.
Our net loss from continuing operations per basic and diluted share for the year ended December 31, 2024, was $0.31, compared to a net loss from continuing operations per basic and diluted share of $0.63 for the year ended December 31, 2023. 23 LIQUIDITY AND CAPITAL RESOURCES General .
Our provision reflects an effective tax rate on loss before taxes of 0.0% for the year ended December 31, 2023, as compared to (0.1)% for the year ended December 31, 2022, as set forth below: Year Ended December 31, 2023 2022 (Restated) Variance Loss before income taxes $ (1,898 ) $ (5,412 ) $ 3,514 Income tax expense - 7 (7 ) Effective income tax rate % - (0.1 ) 0.1 25 Net Loss per Share We generated a net loss of $1,898 for the year ended December 31, 2023, as compared to a net loss of $5,419 during the year ended December 31, 2022.
Our provision for income taxes reflects an effective tax rate on loss before taxes of 29.7% for the year ended December 31, 2024, as compared to 0.0% for the year ended December 31, 2023, as set forth below (in thousands): For the Years Ended December 31, 2024 2023 Variance Loss before income taxes $ (4,767 ) $ (6,279 ) $ 1,512 Income tax income (1,418 ) - (1,418 ) Effective income tax rate % (29.7 ) - (29.7 ) Net Loss per Share from Continuing Operations We generated a net loss from continuing operations of $4,767 for the year ended December 31, 2024, as compared to $6,279 during the year ended December 31, 2023.
As a percentage of our consolidated revenue, selling, general and administrative expense decreased to 24.4% in the year ended December 31, 2023, as compared to 33.4% in the year ended December 31, 2022.
As a percentage of our consolidated revenue, selling, general and administrative expense decreased to 42.4% in the year ended December 31, 2024, as compared to 75.3% in the year ended December 31, 2023 primarily due to the increase in total revenue during the year ended December 31, 2024. R&D Expenses.
Our Critical Power business provides customers with our suite of mobile e-Boost© EV charging solutions, power generation equipment and all forms of preventative maintenance, repairs, remote monitoring and other service on our customers’ equipment.
Following the sale of our PCEP business unit in October 2024, described below under “Recent Developments”, we currently have one reportable segment: Critical Power. Our Critical Power business provides customers with our suite of mobile e-Boost© EV charging solutions, power generation equipment and all forms of preventative maintenance, repairs, remote monitoring and other service on our customers’ equipment.
The decrease in cash used in operating activities is primarily due to working capital fluctuations and the significant reduction to net loss of $3,521 during the year ended December 31, 2023. Cash Used in/Provided by Investing Activities.
Cash used in our operating activities was $6,212 during the year ended December 31, 2024, as compared to cash used in our operating activities of $3,895 during the year ended December 31, 2023. The increase in cash used in operating activities is primarily due to working capital fluctuations. Cash Provided by/ Used in Investing Activities.
Cash used in investing activities during the year ended December 31, 2023 was $2,497, as compared to cash provided by our investing activities of $4,722 during the year ended December 31, 2022.
Cash provided by investing activities during the year ended December 31, 2024, was $38,876, as compared to cash used in our investing activities of $2,496 during the year ended December 31, 2023. The increase in cash provided by investing activities is primarily due to the PCEP Sale during the year ended December 31, 2024.
New Accounting Pronouncements The information required by this Item is provided in “Note 2 - Summary of Significant Accounting Policies” to our consolidated financial statements for the year ended December 31, 2023 included in this Annual Report on Form 10-K.
For a further discussion of factors that may affect future operating results see the sections entitled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” New Accounting Pronouncements The information required by this Item is provided in “Note 2 - Summary of Significant Accounting Policies” to our consolidated financial statements for the year ended December 31, 2024, included in this Annual Report on Form 10-K.
We expect that product development and promotional activities related to our new initiatives will continue in the near future and we expect to continue to incur costs related to such activities. We expect that our cash balance is sufficient to fund operations for the next twelve months from the date our consolidated financial statements are issued.
We expect that product development and promotional activities related to our new initiatives will continue in the near future and we expect to continue to incur costs related to such activities.
Research and development expenses in our Critical Power segment consists of costs incurred in performing research and development activities, including salaries, benefits, overhead costs, depreciation, contract services and other related costs. During the year ended December 31, 2023, we incurred $885 of R&D expenses related to developing our mobile e-Boost EV charging solutions.
Research and development expenses in our Critical Power segment consists of costs incurred in performing research and development activities, including salaries, benefits, overhead costs, depreciation, contract services and other related costs.
Gross Profit and Margin The following table represents our gross profit by reporting segment for the periods indicated (in thousands, except percentages): Year Ended December 31, 2023 2022 (Restated) Variance % Electrical Infrastructure Gross profit $ 6,125 $ 1,218 $ 4,907 402.9 Gross margin % 20.2 7.5 12.7 Critical Power Solutions Gross profit 2,225 1,608 617 38.4 Gross margin % 20.0 16.7 3.3 Consolidated gross profit $ 8,350 $ 2,826 $ 5,524 195.5 Consolidated gross margin % 20.1 10.9 9.2 For the year ended December 31, 2023, our gross margin percentage was 20.1% of revenues, compared to 10.9% during the year ended December 31, 2022.
Gross Profit and Margin The following table represents our gross profit for the periods indicated (in thousands, except percentages): For the Years Ended December 31, 2024 2023 Variance % Critical Power Solutions Gross profit 5,514 2,225 3,289 147.8 Gross margin % 24.1 20.0 4.1 For the year ended December 31, 2024, our gross margin from our Critical Power segment increased to 24.1% of revenues, as compared to 20.0% during the year ended December 31, 2023.
These products and services are marketed by our operations headquartered in Minnesota, currently doing business under the Titan, Pioneer eMobility and Pioneer Critical Power brand names. 20 Critical Accounting Estimates The preparation of financial statements and related disclosures are in conformity with U.S. GAAP.
These products and services are marketed by our operations headquartered in Minnesota, currently doing business under the Titan, Pioneer eMobility and Pioneer Critical Power brand names. U.S. dollars are reported in thousands, except for share and per share amounts (unless otherwise noted).
For the year ended December 31, 2023, we had interest income of approximately $232, as compared to interest income of approximately $465 during the year ended December 31, 2022.
Non-Operating Income from Continuing Operations Interest Income . For the year ended December 31, 2024, we had interest income of approximately $431, as compared to interest income of approximately $232 during the year ended December 31, 2023. We generated the majority of our interest income from our cash on hand during the year ended December 31, 2024. Other Income .
The selling, general and administrative expense in our Critical Power segment increased by $215, or 6.2%, during the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to an increase in payroll related costs and business travel related costs.
For the year ended December 31, 2024, consolidated selling, general and administrative expense increased by approximately $1,337, or 16.0%, to $9,712, as compared to $8,375 during the year ended December 31, 2023, primarily due to an increase in payroll related expense.
We have historically met our cash needs through a combination of cash flows from operating activities and bank borrowings, the completion of the Equity Transaction, proceeds from the sale of the CleanSpark common stock and warrants to purchase CleanSpark common stock, sale of common stock under the ATM Program and collecting all unpaid principal and interest from the Seller Notes.
We have historically met our cash needs through a combination of cash flows from operating activities and bank borrowings, the completion of the sale of the transformer business units in August 2019 and the sale of common stock under the ATM Program. Historically, our cash requirements were generally for operating activities, debt repayment, capital improvements and acquisitions.
Cash used in our operating activities was $3,894 during the year ended December 31, 2023, as compared to cash used in our operating activities of $5,772 during the year ended December 31, 2022.
During the years ended December 31, 2024 and 2023, additions to our property and equipment were $3,759 and $2,496, respectively. Cash Provided by/ Used in Financing Activities. Cash provided by our financing activities was $5,376 during the year ended December 31, 2024, as compared to cash used in our financing activities $323 during the year ended December 31, 2023.
At December 31, 2023, we had $3,582 of cash on hand generated primarily from the sale of common stock under the ATM Program, payment of all unpaid principal and interest from the Seller Notes during the year ended December 31, 2022, and cash flows from operating activities.
As of December 31, 2024, we had $41,622 of cash on hand generated primarily from the PCEP Sale and the sale of common stock under the ATM Program.
Our summary of operating results during the years ended 2023 and 2022 are as follows: Year Ended December 31, 2023 2022 (Restated) Revenues Electrical Infrastructure $ 30,377 $ 16,270 Critical Power Solutions 11,116 9,608 Consolidated 41,493 25,878 Cost of goods sold Electrical Infrastructure 24,252 15,052 Critical Power Solutions 8,891 8,000 Consolidated 33,143 23,052 Gross profit 8,350 2,826 Selling, general and administrative 9,896 8,445 Depreciation and amortization 223 191 Research and development 885 - Total operating expenses 11,004 8,636 Operating loss from continuing operations (2,654 ) (5,810 ) Interest income (232 ) (465 ) Other (income) expense (524 ) 67 Loss before income taxes (1,898 ) (5,412 ) Income tax expense - 7 Net loss $ (1,898 ) $ (5,419 ) Backlog .
Our summary of operating results during the years ended December 31, 2024, and 2023 are as follows (in thousands): For the Years Ended December 31, 2024 2023 Revenues Critical Power Solutions $ 22,879 $ 11,116 Cost of goods sold Critical Power Solutions 17,365 8,891 Gross profit 5,514 2,225 Selling, general and administrative 9,672 8,190 Depreciation and amortization 40 185 Research and development 1,050 885 Total operating expenses 10,762 9,260 Operating loss from continuing operations (5,248 ) (7,035 ) Interest income 431 232 Other income, net 50 524 Loss before income taxes (4,767 ) (6,279 ) Income tax benefit (1,418 ) - Net loss from continuing operations (3,349 ) (6,279 ) Income from discontinued operations, net of income taxes 35,204 4,381 Net income (loss) $ 31,855 $ (1,898 ) Backlog .
Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” The discussion in this section has been impacted by the restatement described in the Explanatory Note at the beginning of this Comprehensive Form 10-K and in Note 2 and Note 4 of the consolidated financial statements of this Comprehensive Form 10-K.
Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” Overview We design, manufacture, integrate, service and sell distributed energy resources, on site power generation equipment and mobile EV charging solutions.
Backlog may vary significantly from reporting period to reporting period due to the timing of customer commitments. As of December 31, 2023, backlog from our E-Bloc power systems and related equipment was approximately $12,706, or 28.1% of the total backlog.
Backlog may vary significantly from reporting period to reporting period due to the timing of customer commitments. Our revenue backlog as of December 31, 2024, from our Critical Power business was $19,762, an increase of $3,094, or 18.6%, when compared to $16,668 as of December 31, 2023.
Operating income from our Electrical Infrastructure segment was $4,380 during the year ended December 31, 2023, as compared to essentially no operating income during the year ended December 31, 2022.
Income from Discontinued Operations Income from discontinued operations, net of tax was $35,204 during the year ended December 31, 2024, as compared to $4,381 during the year ended December 31, 2023.
As of December 31, 2023, we had working capital of $9,421, including $3,582 of cash, compared to working capital of $12,293, including $10,296 of cash on hand at December 31, 2022. Assessment of Liquidity .
The increase in cash provided by financing activities is primarily due to the sale of common stock under the ATM Program. Working Capital . As of December 31, 2024, we had working capital of $26,679, including $41,622 of cash, compared to working capital of $9,421, including $3,582 of cash on hand as of December 31, 2023. Assessment of Liquidity .
Our significant accounting policies are more fully described in Note 3 – Summary of Significant Accounting Policies, in our financial statements included elsewhere in this Annual Report. Revenue Recognition A significant portion of our business is derived from design and production contracts.
Our significant accounting policies are more fully described in Note 3 – Summary of Significant Accounting Policies, in our consolidated financial statements included elsewhere in this Annual Report. 19 RESULTS OF OPERATIONS Overview of December 31, 2024, and 2023 Operating Results Selected financial and operating data for our reportable business segment for the most recent two years is summarized below.
At December 31, 2023, we had $3,582 of cash on hand generated primarily from the sale of common stock under the ATM Program, payment of all unpaid principal and interest from the Seller Notes during the year ended December 31, 2022 and cash flows from operating activities.
As of December 31, 2024, we had $41,622 of cash on hand generated from the PCEP Sale and the sale of common stock under the ATM Program. On October 29, 2024, we closed on the PCEP Sale for gross cash proceeds of $48,000.
Removed
Certain of the financial and other information provided in this Management’s Discussion and Analysis of our financial condition and results of operations has been updated to reflect the restatement adjustments. Overview We design, manufacture, integrate, refurbish, service, distribute and sell electric power systems, distributed energy resources, power generation equipment and mobile EV charging solutions.
Added
Recent Developments On October 29, 2024, we entered into an Equity Contribution and Purchase Agreement (the “Equity Purchase Agreement”), by and among us, PCEP, Voltaris Power LLC (the “Buyer”) and Pioneer Investment LLC (“Investment”).
Removed
Our operations are divided into two reportable segments: Electrical Infrastructure segment and Critical Power segment. Our Electrical Infrastructure business provides equipment solutions that allow customers to effectively and efficiently protect, control, transfer, monitor and manage their electric energy usage and requirements. These solutions are marketed principally through our PCEP brand name.
Added
Pursuant to the terms of the Equity Purchase Agreement, we agreed to: (i) contribute 4% of all of the issued and outstanding equity interests of PCEP to Investment (the “Rollover Interests”) in exchange for Investment issuing $2,000 of common units (representing approximately 6% of Investment’s issued and outstanding common units on the Closing Date (as defined below)) (the “Rollover Units”) to us; and (ii) sell all of the issued and outstanding equity interests of PCEP other than the Rollover Interests to the Buyer ((i) and (ii) being, the “Equity Transaction”).
Removed
The accounting policies that reflect our more significant estimates and judgments and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described below.
Added
The Equity Transaction included total consideration of (i) $48,000 in cash, subject to adjustment pursuant to the terms of the Equity Purchase Agreement, and (ii) $2,000 in equity pursuant to Investment’s issuance of the Rollover Units to us. The Equity Transaction contains customary terms and conditions and are subject to working capital adjustments.
Removed
Revenue for these contracts is recognized proportionally over the term of the contract using an input method based on the proportion of labor hours incurred as compared to the total estimated labor hours for the fixed-fee contract performance obligations, which we consider the best available indicator of the pattern and timing in which contract performance obligations are fulfilled and control transfers to the customer.
Added
Following the execution of the Equity Purchase Agreement, the Equity Transaction was consummated on October 29, 2024 (the “Closing Date”). PCEP represented the entirety of our Electrical Infrastructure segment. The PCEP Sale was a result of a strategic change to the operations of our business.
Removed
This percentage is multiplied by the contracted dollar amount of the project to determine the amount of revenue to recognize in an accounting period. There are situations where the number of hours to complete projects may exceed our original estimate as a result of an increase in project scope or unforeseen events.
Added
The increase was predominately due to the increase in sales of our e-Boost equipment from our Pioneer eMobility business. 21 Operating Expenses The following table represents our operating expenses for the periods indicated (in thousands, except percentages): For the Years Ended December 31, 2024 2023 Variance % Selling, general and administrative $ 9,712 $ 8,375 $ 1,337 16.0 Research and development 1,050 885 165 18.6 Total operating expense $ 10,762 $ 9,260 $ 1,502 16.2 Selling, General and Administrative Expense .
Removed
The related impact on income is recognized using the cumulative catch-up method, which the Company recognizes in the current period. Recognition of revenue on a contract requires estimates of the total labor hours at completion and the measurement of progress towards completion.
Added
During the year ended December 31, 2024, we incurred $1,050 of R&D expenses related to developing our mobile e-Boost EV charging solutions as compared to $885 for the year ended December 31, 2023.
Removed
Due to the long-term nature of many of our contracts, developing the estimated total labor hours at completion often requires judgment. Factors that must be considered in estimating the total labor hours to be completed include the nature and complexity of the work to be performed and the risk and impact of delayed performance.
Added
The increase is primarily due to the gain on the sale of our Electrical Infrastructure segment. 22 Operating Income (Loss) from Continuing Operations The following table represents our operating loss for the periods indicated (in thousands): For the Years Ended December 31, 2024 2023 Variance % Operating loss from continuing operations $ (5,248 ) $ (7,035 ) $ 1,787 25.4 During the year ended December 31, 2024, our operating loss from continuing operations decreased by approximately $1,787, or 25.4%, to $5,248, as compared to $7,035 during the year ended December 31, 2023, primarily due to an increase in sales and rentals of our e-Boost equipment from our Pioneer eMobility business in addition to an increase in service sales.
Removed
At the outset of each contract, we gauge its complexity and perceived risks and establish an estimated total number of labor hours at completion in line with these expectations.
Added
Additionally, recent changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas.
Removed
We follow a standard contract review process in which we review the progress and performance on our ongoing contracts at least quarterly. 21 RESULTS OF OPERATIONS Overview of 2023 Operating Results Selected financial and operating data for our reportable business segments for the most recent two years is summarized below.
Added
The cash flows related to the discontinued operations have not been segregated and are included in the consolidated statements of cash flows. Cash Used in Operating Activities .
Removed
Our revenue backlog at December 31, 2023 was $45,165, an increase of $6,887, or 18.0%, when compared to $38,278 at December 31, 2022. During the year ended December 31, 2023, we experienced a surge in orders and contracts for our mobile EV charging solutions, e-Boost, which was the primary driver for the increase in our revenue backlog.
Added
Additionally, recent changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas.
Removed
Electrical Infrastructure . During the year ended December 31, 2023, revenue from our equipment sales increased by $14,042 or 86.4%, as compared to the year ended December 31, 2022, primarily due to increased sales of our E-Bloc power systems and related equipment, as well as medium and low voltage circuit protective equipment. Critical Power .
Removed
For the year ended December 31, 2023, revenue for our Critical Power segment increased by $1,508, or 15.7%, as compared to the year ended December 31, 2022, primarily due to an increase in sales of our new and refurbished generation equipment.
Removed
Electrical Infrastructure. For the year ended December 31, 2023, our gross margin increased by 12.7%, to 20.2%, from 7.5% for the year ended December 31, 2022. The increase was primarily due to the significant increase in sales of our E-Bloc power systems and related equipment and medium and low voltage circuit protective equipment and improved productivity from our manufacturing facility.
Removed
Critical Power . For the year ended December 31, 2023, our gross margin increased by 3.3%, to 20.0%, from 16.7% for the year ended December 31, 2022.
Removed
The increase was also primarily due to a favorable sales mix and the acceptance of price increases from our customers. 23 Operating Expenses The following table represents our operating expenses by reportable segment for the periods indicated (in thousands, except percentages): Year Ended December 31, 2023 2022 Variance % Electrical Infrastructure Selling, general and administrative $ 1,707 $ 1,197 $ 510 42.6 Depreciation and amortization 38 18 20 111.1 Segment operating expense $ 1,745 $ 1,215 $ 530 43.6 Critical Power Solutions Selling, general and administrative $ 3,679 $ 3,464 $ 215 6.2 Depreciation and amortization 176 147 29 19.7 Research and development 885 - 885 - Segment operating expense $ 4,740 $ 3,611 $ 1,129 26 Unallocated Corporate Overhead Expenses Selling, general and administrative $ 4,510 $ 3,784 $ 726 19.2 Depreciation and amortization 9 26 (17 ) (65.4 ) Segment operating expense $ 4,519 $ 3,810 $ 709 18.6 Consolidated Selling, general and administrative $ 9,896 $ 8,445 $ 1,451 17.2 Depreciation and amortization 223 191 32 16.8 Research and development 885 - 885 - Consolidated operating expense $ 11,004 $ 8,636 $ 2,368 27.4 Selling, General and Administrative Expense .
Removed
For the year ended December 31, 2023, consolidated selling, general and administrative expense, before depreciation and amortization, increased by $1,451, or 17.2%, to $9,896, as compared to $8,445 during the year ended December 31, 2022.
Removed
The selling, general and administrative expense in our Electrical Infrastructure segment increased by $510, or 42.6%, during the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to an increase in payroll related costs and third party commissions expense.
Removed
The selling, general and administrative expense in our unallocated corporate overhead expenses increased by $726, or 19.2%, during the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to an increase in payroll related costs, including stock-based compensation, professional fees and business travel related costs. Depreciation and Amortization Expenses .
Removed
Depreciation and amortization expense included in selling, general and administrative expense in our consolidated statement of operations have been disclosed as a separate component of operating expense in the tables above. Depreciation and amortization expense consists primarily of depreciation of fixed assets and amortization of right-of-use assets related to our finance leases and excludes amounts included in cost of sales.
Removed
For the year ended December 31, 2023, consolidated depreciation and amortization expense included in selling, general and administrative expense increased by $32, or 16.8%, as compared to the year ended December 31, 2022. R&D Expenses.
Removed
There were no R&D expenses incurred during 2022. 24 Operating Income (Loss) The following table represents our operating income (loss) by reportable segment for the periods indicated: Year Ended December 31, 2023 2022 (Restated) Variance % Electrical Infrastructure $ 4,380 $ 3 $ 4,377 145,900.0 Critical Power Solutions (2,515 ) (2,003 ) (512 ) (25.6 ) Unallocated corporate overhead expenses (4,519 ) (3,810 ) (709 ) (18.6 ) Loss from operations $ (2,654 ) $ (5,810 ) $ 3,156 54.3 Electrical Infrastructure .
Removed
The increase is primarily due to the large increase in sales of our power systems equipment and related equipment, reduced input costs and improved productivity from our manufacturing facility during the year ended December 31, 2023. Critical Power .
Removed
Operating loss from our Critical Power segment increased by $512, or 25.6%, during the year ended December 31, 2023, primarily due to an increase in payroll related costs and consulting, marketing and promotion fees related to our e-Boost initiative. General Corporate Expense .
Removed
Our general corporate expenses consist primarily of executive management, corporate accounting and human resources personnel, corporate office expenses, financing and corporate development activities, payroll and benefits administration, treasury, tax compliance, legal, stock-based compensation, public reporting costs and costs not specifically allocated to reportable business segments.
Removed
During the year ended December 31, 2023, our unallocated corporate overhead expense increased by $709, or 18.6%, as compared to the year ended December 31, 2022, primarily due to an increase in payroll related costs, including stock-based compensation, professional fees and business travel related costs. Non-Operating (Income) Expense Interest Income .
Removed
We generated the majority of our interest income from our cash on hand during the year ended December 31, 2023, as compared to generating the majority of our interest income from the two subordinated promissory notes (the “Seller Notes”) we received from the Equity Transaction, and our cash on hand, during the year ended December 31, 2022.
Removed
Quarterly Discussion and Analysis The Company has restated the unaudited condensed consolidated financial statements for the quarterly periods ended March 31, 2022 through September 30, 2023, originally included in its Quarterly Reports on Form 10-Q for the periods ended March 31, 2023, June 30, 2023 and September 30, 2023 (“Affected Periods”).
Removed
During 2022 and 2023, we recognized revenues associated with customer contracts with performance obligations satisfied over time (“Over Time Contracts”) using labor hours as the measure of progress.
Removed
Our underlying estimates of total labor hours required to complete Over Time Contracts were materially different from the actual labor hours required, which was determined to represent an error, and, as a result, the percentage of completion used to recognize revenue in the Affected Periods is materially different from the percentage of completion using actual labor hours incurred.
Removed
As a result, we restated revenues during the Affected Periods to adjust the percentage of completion based upon the actual labor hours incurred to complete each Over Time Contract.

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