Core Insights - Pioneer Power Solutions, Inc. has announced multiple new contract wins across various sectors, highlighting its expanding role in powering critical operations and electrification initiatives [1] Group 1: Company Developments - The company is recognized as a leader in the design, manufacture, service, and integration of distributed energy resources, power generation equipment, and mobile electric vehicle charging solutions [1] - The new agreements signify the company's commitment to enhancing its service offerings and expanding its market presence [1]

Core Viewpoint - Pioneer Power Solutions, Inc. reported strong financial results for the second quarter of 2025, continuing a positive trend in performance [4]. Group 1: Financial Performance - The company delivered strong financial results for Q2 2025, indicating ongoing growth and stability [4]. - The earnings conference call was held on August 14, 2025, to discuss these results and recent business highlights [3]. Group 2: Management Participation - The call featured key participants including Nathan Mazurek (Chairman and CEO), Walter Michalec (CFO), and Geo Murickan (President of Pioneer eMobility) [2]. - The conference included a Q&A session for participants to engage with management [2].

Financial Data and Key Metrics Changes - Revenue increased by 150% year over year to $8.4 million, driven by significant sales and rentals of the mobile EV charging platform, eBoost [4][13] - Non-GAAP operating income from continuing operations was $218,000, compared to a non-GAAP operating loss of $137,000 in the same quarter last year, marking a year-over-year improvement of $355,000 [14] - Net loss from continuing operations improved to $1.2 million from $1.7 million in the previous year [14] - Cash on hand decreased to $18 million from $41.6 million at the end of 2024, primarily due to a special cash dividend and tax payments [15] Business Line Data and Key Metrics Changes - The eBoost order for a large public school district significantly contributed to revenue growth, with gross profit on these units more than doubling in the second quarter [5][13] - The company delivered initial units under the SparkCharge agreement, which could be worth up to $10 million, reflecting increasing demand for mobile EV charging solutions [5] Market Data and Key Metrics Changes - Total backlog was approximately $18 million, a decline of 23% compared to the prior quarter due to fulfillment of larger orders [6][7] - The electric school bus market continues to show strong momentum, with the school district scheduled to receive an additional 600 electric school buses over the next two years [5] Company Strategy and Development Direction - The company is focused on scaling its core business and launching HomeBoost, a residential and light commercial power system, expected to expand its addressable market [8][9] - The company sees growth potential in autonomous mobility, particularly in the robotaxi segment, which aligns with its mobile charging platform [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the business and the demand environment, with a reaffirmation of revenue guidance for the full year of $27 million to $29 million [16][10] - The company is optimistic about the breadth and quality of future opportunities, particularly in government agencies and transit authorities [5][10] Other Important Information - The company is preparing to launch HomeBoost, which integrates a natural gas engine with optional DC fast charging, expected to be a key growth driver for 2026 and beyond [9] - Management emphasized the importance of operational efficiency and productivity gains in achieving profitability [10] Q&A Session Summary Question: Details on the eBoost order with the charging services company - Management explained that the order could be up to $10 million, with variables based on size and timing of delivery [22] Question: Insights on the sales pipeline and order visibility - Management noted that government agencies move at different paces, while private businesses tend to be quicker in decision-making [26] Question: Launch milestones for HomeBoost - The launch has been delayed due to internal adjustments, with expectations for orders to begin in 2025 and accelerate in 2026 [30] Question: Future margin expectations - Management indicated that margins should remain stable or improve, with no expected erosion [34] Question: Revenue concentration and market evolution - California remains the primary market, but success with HomeBoost could diversify revenue sources [40] Question: Competitive landscape for eBoost and HomeBoost - Management noted reduced competition in the eBoost space, while HomeBoost is being kept under wraps until fully ready for market [60][61]

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Q2 2025 Performance Highlights](index=1&type=section&id=Q2%202025%20Performance%20Highlights) Pioneer Power reported robust financial performance in Q2 2025, with revenue increasing **147%** year-over-year to **$8.4 million**, driven by high-value orders, gross profit more than doubled, and non-GAAP operating income from continuing operations showed significant year-over-year improvement Q2 2025 Key Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change (YoY) | % Change (YoY) | | :------------------------------------ | :---------- | :---------- | :----------- | :------------- | | Revenue | $8.4 million | $3.4 million | +$5.0 million | +147% | | Gross Profit | $1.3 million | $641,000 | +$673,000 | +105% | | Gross Margin | 15.7% | 18.9% | -3.2% | - | | Operating Loss (GAAP) | $(1.7) million | $(1.7) million | $0 | 0% | | Non-GAAP Operating Income (Loss) | $218,000 | $(137,000) | +$355,000 | - | - First-half 2025 revenue grew **125%** to **$15.1 million**[1](index=1&type=chunk) [Strategic Developments](index=1&type=section&id=Strategic%20Developments) Pioneer Power secured a significant multi-year e-Boost award valued up to **$10 million** with a major Charging-as-a-Service provider, highlighting strong product collaboration and growing demand for mobile EV charging solutions, with continued focus on key electrification segments - Secured a watershed multi-year e-Boost award valued at up to **$10 million** in partnership with one of the largest Charging-as-a-Service (CaaS) providers in the United States[6](index=6&type=chunk) - Demand for Pioneer's solutions remains strong, driven by targeted marketing and sales efforts focused on segments actively investing in electrification, including state and local fleet operators, school districts, and robotaxi service providers[8](index=8&type=chunk) [Company Overview](index=4&type=section&id=Company%20Overview) [About Pioneer Power Solutions, Inc.](index=4&type=section&id=About%20Pioneer%20Power%20Solutions%2C%20Inc.) Pioneer Power Solutions, Inc. is a leading provider in the design, manufacture, integration, and service of distributed energy resources, power generation equipment, and mobile electric charging solutions for utility, industrial, and commercial markets - Pioneer Power Solutions, Inc. is a leader in the design, manufacture, integration, and service of distributed energy resources, power generation equipment, and mobile electric charging solutions[1](index=1&type=chunk)[23](index=23&type=chunk) - The company serves applications in the utility, industrial, and commercial markets[23](index=23&type=chunk) [e-Boost Product Portfolio](index=4&type=section&id=e-Boost%20Product%20Portfolio) e-Boost is Pioneer's flagship portfolio of smart, mobile EV charging solutions, launched in November 2021, establishing itself as a market leader by offering rapid, flexible, and sustainable off-grid charging solutions to a diverse client base - e-Boost is Pioneer's portfolio of smart, mobile EV charging solutions, known for its speed, flexibility, and sustainability[24](index=24&type=chunk) - Launched in November 2021, e-Boost has become a market leader, delivering mobile, off-grid charging solutions with unparalleled lead times[24](index=24&type=chunk) - It is trusted by electric bus and truck manufacturers, fleet management companies, municipalities, and EV infrastructure providers[24](index=24&type=chunk) [Detailed Financial Results - Q2 & H1 2025](index=2&type=section&id=Detailed%20Financial%20Results%20-%20Q2%20%26%20H1%202025) [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) Revenue for the second quarter of 2025 significantly increased by **147%** year-over-year, reaching **$8.4 million**, primarily driven by higher sales and rentals of the company's e-Boost mobile EV charging solutions Revenue Performance | Period | Revenue (in millions) | | :----- | :-------------------- | | Q2 2025 | $8.4 | | Q2 2024 | $3.4 | | Change | +$5.0 (147% increase) | - The increase in revenue was primarily due to an increase in sales and rentals of the Company's suite of mobile EV charging solutions, e-Boost[9](index=9&type=chunk) [Gross Profit and Margin Analysis](index=2&type=section&id=Gross%20Profit%20and%20Margin%20Analysis) Gross profit for Q2 2025 rose to **$1.3 million**, a **105%** increase from the prior year, mainly due to the significant increase in equipment sales and rentals, though the gross margin percentage decreased to **15.7%** from **18.9%** in Q2 2024 Gross Profit and Margin Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----------- | :---------- | :---------- | :----------- | | Gross Profit | $1.3 million | $641,000 | +$673,000 (105%) | | Gross Margin | 15.7% | 18.9% | -3.2% | - The increase in gross profit was primarily attributable to the significant increase in sales and rentals of the Company's equipment[10](index=10&type=chunk) [Operating Loss from Continuing Operations](index=2&type=section&id=Operating%20Loss%20from%20Continuing%20Operations) The operating loss from continuing operations remained consistent at **$(1.7) million** for both the second quarter of 2025 and 2024 Operating Loss from Continuing Operations | Period | Operating Loss (in millions) | | :----- | :--------------------------- | | Q2 2025 | $(1.7) | | Q2 2024 | $(1.7) | [Net Loss from Continuing Operations](index=2&type=section&id=Net%20Loss%20from%20Continuing%20Operations) Net loss from continuing operations improved by **$0.5 million**, decreasing from **$(1.7) million** in Q2 2024 to **$(1.2) million** in Q2 2025 Net Loss from Continuing Operations | Period | Net Loss (in millions) | | :----- | :--------------------- | | Q2 2025 | $(1.2) | | Q2 2024 | $(1.7) | | Change | +$0.5 (improvement) | [Overall Net Loss](index=2&type=section&id=Overall%20Net%20Loss) The company's overall net loss for Q2 2025 was **$(1.3) million**, an improvement from **$(2.3) million** in Q2 2024, despite including a loss from discontinued operations Overall Net Loss | Period | Net Loss (in millions) | Loss from Discontinued Operations (in millions) | | :----- | :--------------------- | :---------------------------------------------- | | Q2 2025 | $(1.3) | $(0.1) | | Q2 2024 | $(2.3) | $(0.6) | [Financial Position](index=2&type=section&id=Financial%20Position) [Balance Sheet Overview](index=2&type=section&id=Balance%20Sheet%20Overview) As of June 30, 2025, Pioneer Power held **$18.0 million** in cash and **$23.9 million** in working capital, with the decrease in cash primarily due to a **$16.7 million** special cash dividend payment and income tax payments, and no bank debt reported Key Balance Sheet Metrics | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :------------- | :-------------------------- | :------------------------------ | | Cash on Hand | $18.0 | $41.6 | | Working Capital | $23.9 | $26.7 | - The decrease in cash on hand is primarily due to a one-time special cash dividend payment of **$16.7 million** on January 7, 2025, and federal and state income tax payments[14](index=14&type=chunk) - The Company had no bank debt as of June 30, 2025[14](index=14&type=chunk) [2025 Outlook](index=2&type=section&id=2025%20Outlook) [Full-Year 2025 Revenue Guidance](index=2&type=section&id=Full-Year%202025%20Revenue%20Guidance) Management reaffirms its full-year 2025 revenue guidance of **$27 million** to **$29 million**, projecting approximately **20%** year-over-year growth, assuming no revenue contribution from the new HOMe-Boost solution and based on backlog translation, satisfactory order completion, and timely customer payments Full-Year 2025 Revenue Guidance | Metric | Guidance | | :-------------------- | :--------------- | | Full-Year 2025 Revenue | $27 million - $29 million | | Year-over-year Growth | Approximately 20% | - The revenue projection for 2025 assumes no contribution from Pioneer's new HOMe-Boost solution[15](index=15&type=chunk) - Assumptions for the outlook include backlog orders translating into revenue, satisfactory completion and delivery of orders, and timely payment by customers[17](index=17&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) [Definition and Purpose](index=3&type=section&id=Definition%20and%20Purpose) Pioneer Power utilizes non-GAAP operating income (loss) from continuing operations, which excludes corporate overhead, R&D, depreciation/amortization, and non-recurring professional fees, providing investors with supplemental information on operating performance and facilitating period-over-period comparisons, though it is not a substitute for GAAP measures - Non-GAAP operating income (loss) from continuing operations excludes corporate overhead expenses, research and development expenses, depreciation and amortization expenses, and non-recurring professional fees[7](index=7&type=chunk)[20](index=20&type=chunk)[35](index=35&type=chunk) - These non-GAAP measures provide useful supplemental information about operating performance and enable comparison of financial trends and results between periods, independent of business performance[20](index=20&type=chunk)[21](index=21&type=chunk) [Reconciliation of Non-GAAP Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The company provides a detailed reconciliation of GAAP operating loss from continuing operations to non-GAAP operating income (loss) from continuing operations for the three and six months ended June 30, 2025, and 2024, outlining specific adjustments Reconciliation of Non-GAAP Measures (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :------------------------------------ | :------ | :------ | :------ | :------ | | GAAP operating loss from continuing operations | $(1,708) | $(1,735) | $(4,055) | $(3,461) | | Corporate overhead expenses | 1,003 | 1,124 | 2,188 | 2,289 | | Research and development expenses | 534 | 238 | 614 | 449 | | Depreciation and amortization expenses | 301 | 168 | 582 | 296 | | Non-recurring professional fees | 88 | 68 | 181 | 99 | | **Non-GAAP operating income (loss) from continuing operations** | **$218** | **$(137)** | **$(490)** | **$(328)** | [Corporate Information](index=3&type=section&id=Corporate%20Information) [Earnings Conference Call Details](index=3&type=section&id=Earnings%20Conference%20Call%20Details) Pioneer Power's management will host a conference call on Thursday, August 14, 2025, at 4:30 p.m. Eastern Time to discuss the second quarter 2025 financial results, with details for live participation via phone and webcast, as well as replay access, provided - Management will host a conference call on Thursday, August 14, 2025, at 4:30 p.m. Eastern Time to discuss Q2 2025 financial results[17](index=17&type=chunk) - Dial-in numbers: 1-877-407-0789 (US) or 1-201-689-8562 (International), using confirmation code 13755251[18](index=18&type=chunk) - A live webcast will be accessible at https://viavid.webcasts.com/starthere.jsp?ei=1729486&tp_key=b546ab240d[19](index=19&type=chunk) [Forward-Looking Statements and Risk Factors](index=4&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This press release contains forward-looking statements subject to various known and unknown risks and uncertainties, many beyond the Company's control, including operational, economic, competitive, and regulatory factors, with investors advised to review SEC filings for detailed information - Forward-looking statements are not guarantees of future performance and are subject to various known and unknown risks and uncertainties[25](index=25&type=chunk) - Key risks include the Company's ability to successfully operate post-E-Bloc divestiture, increase revenue and profit, general economic conditions, competition, dependence on two customers, potential loss of key personnel, raw material price increases, backlog realization, labor disputes, changes in government regulations, stock liquidity, pandemics, and litigation[25](index=25&type=chunk) - More detailed information about risk factors is available in the Company's filings with the U.S. Securities and Exchange Commission (SEC), including Forms 10-K and 10-Q[26](index=26&type=chunk) [Contact Information](index=4&type=section&id=Contact%20Information) Contact details for investor relations are provided for inquiries - Contact: Brett Maas, Managing Partner, Hayden IR[27](index=27&type=chunk) - Phone: (646) 536-7331; Email: brett@haydenir.com[27](index=27&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The unaudited condensed consolidated statements of operations present the company's financial performance for the three and six months ended June 30, 2025, and 2024, detailing revenues, cost of goods sold, gross profit, operating expenses, and net loss Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | | For the Three Months Ended | | | For the Six Months Ended | | | :------------------------------------ | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | | June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | | Revenues | $8,370 | $3,395 | $15,110 | $6,710 | | Cost of goods sold | 7,056 | 2,754 | 13,648 | 5,534 | | Gross profit | 1,314 | 641 | 1,462 | 1,176 | | Selling, general and administrative | 2,488 | 2,138 | 4,903 | 4,188 | | Research and development | 534 | 238 | 614 | 449 | | Total operating expenses | 3,022 | 2,376 | 5,517 | 4,637 | | Operating loss from continuing operations | (1,708) | (1,735) | (4,055) | (3,461) | | Interest income, net | 183 | 20 | 431 | 51 | | Other income, net | 297 | - | 320 | 40 | | Loss before income taxes | (1,228) | (1,715) | (3,304) | (3,370) | | Income tax benefit | - | - | - | - | | Net loss from continuing operations | (1,228) | (1,715) | (3,304) | (3,370) | | (Loss) income from discontinued operations, net of income taxes | (100) | (568) | 1,047 | 52 | | Net loss | $(1,328) | $(2,283) | $(2,257) | $(3,318) | | Basic loss per share | $(0.12) | $(0.21) | $(0.21) | $(0.32) | | Diluted loss per share | $(0.12) | $(0.21) | $(0.21) | $(0.32) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The unaudited condensed consolidated balance sheets provide a snapshot of the company's financial position as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (in thousands) | ASSETS | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :-------------- | :---------------- | | Cash | $17,999 | $41,622 | | Accounts receivable, net | 4,884 | 7,826 | | Inventories | 5,783 | 6,068 | | Prepaid expenses and other current assets | 658 | 1,141 | | **Total current assets** | **29,324** | **56,657** | | Property and equipment, net | 5,371 | 6,503 | | Operating lease right-of-use assets | 413 | 530 | | Financing lease right-of-use assets | 413 | 221 | | Investments | 2,240 | 2,000 | | Lease receivable and other assets | 1,354 | 40 | | **Total assets** | **$39,115** | **$65,951** | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Accounts payable and accrued liabilities | $4,056 | $4,543 | | Current portion of operating lease liabilities | 178 | 244 | | Current portion of financing lease liabilities | 144 | 109 | | Deferred revenue | 923 | 991 | | Consideration due to buyer | - | 3,347 | | Income taxes payable | 107 | 4,079 | | Dividend payable | - | 16,665 | | **Total current liabilities** | **5,408** | **29,978** | | Operating lease liabilities, non-current portion | 248 | 301 | | Financing lease liabilities, non-current portion | 279 | 121 | | Other long-term liabilities | 141 | 122 | | **Total liabilities** | **6,076** | **30,522** | | Total stockholders' equity | 33,039 | 35,429 | | **Total liabilities and stockholders' equity** | **$39,115** | **$65,951** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The unaudited condensed consolidated statements of cash flows detail the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activities | For the Six Months Ended June 30, 2025 (in thousands) | For the Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :------------------------------------- | :------------------------------------- | | Net loss | $(2,257) | $(3,318) | | Net cash used in operating activities | $(3,963) | $(1,379) | | Net cash used in investing activities | $(2,940) | $(614) | | Net cash (used in)/ provided by financing activities | $(16,720) | $4,923 | | (Decrease)/ increase in cash | $(23,623) | $2,930 | | Cash, beginning of year | $41,622 | $3,582 | | Cash, end of year | $17,999 | $6,512 |

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's financial analysis [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including operations, balance sheets, cash flows, and equity changes, with accounting notes [Unaudited Condensed Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, costs, and net loss for the three and six months ended June 30, 2025 and 2024 Unaudited Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $8,370 | $3,395 | $15,110 | $6,710 | | Cost of goods sold | $7,056 | $2,754 | $13,648 | $5,534 | | Gross profit | $1,314 | $641 | $1,462 | $1,176 | | Operating expenses | $3,022 | $2,376 | $5,517 | $4,637 | | Operating loss from continuing operations | $(1,708) | $(1,735) | $(4,055) | $(3,461) | | Net loss | $(1,328) | $(2,283) | $(2,257) | $(3,318) | | Basic loss per share | $(0.12) | $(0.21) | $(0.21) | $(0.32) | | Diluted loss per share | $(0.12) | $(0.21) | $(0.21) | $(0.32) | [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This statement presents the company's assets, liabilities, and stockholders' equity as of June 30, 2025, and December 31, 2024 Unaudited Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash | $17,999 | $41,622 | | Total current assets | $29,324 | $56,657 | | Total assets | $39,115 | $65,951 | | Total current liabilities | $5,408 | $29,978 | | Total liabilities | $6,076 | $30,522 | | Total stockholders' equity | $33,039 | $35,429 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement outlines the company's cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(3,963) | $(1,379) | | Net cash used in investing activities | $(2,940) | $(614) | | Net cash (used in)/provided by financing activities | $(16,720) | $4,923 | | (Decrease)/increase in cash | $(23,623) | $2,930 | | Cash, end of year | $17,999 | $6,512 | [Unaudited Condensed Consolidated Statement of Changes in Stockholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Stockholders'%20Equity) This statement details changes in common stock, additional paid-in capital, and accumulated deficit for the periods ended June 30, 2025 and 2024 Unaudited Condensed Consolidated Statement of Changes in Stockholders' Equity (in thousands, except shares) | Metric (in thousands, except shares) | June 30, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------ | | Common Stock Shares (outstanding) | 11,095,266 | 10,917,038 | | Additional paid-in capital | $35,285 | $38,724 | | Accumulated deficit | $(2,257) | $(22,947) | | Total stockholders' equity | $33,039 | $15,788 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies, business organization, revenue recognition, and other financial disclosures [1. BUSINESS ORGANIZATION, NATURE OF OPERATIONS, RISKS AND UNCERTAINTIES](index=8&type=section&id=1.%20BUSINESS%20ORGANIZATION,%20NATURE%20OF%20OPERATIONS,%20RISKS%20AND%20UNCERTAINTIES) This note describes the company's business, its single operating segment, liquidity position, and key operational risks - Pioneer Power Solutions, Inc. designs, manufactures, services, and integrates distributed energy resources, power generation equipment, and mobile EV charging solutions, serving utility, industrial, and commercial markets[18](index=18&type=chunk) - The Company operates as a single reportable segment: Critical Power Solutions, following the sale of its Electrical Infrastructure business in October 2024[19](index=19&type=chunk) - As of June 30, 2025, the Company had **$17,999 thousand in cash** and **$23,916 thousand in working capital**, primarily from the PCEP sale, and expects this to be sufficient to fund operations for the next twelve months[24](index=24&type=chunk)[25](index=25&type=chunk) - The Company faces risks from rising interest rates, inflation, foreign currency fluctuations, geopolitical developments (Russia-Ukraine, Israel-Hamas conflicts), and changes in U.S. policy, which could impact demand, supply channels, and overall financial performance[26](index=26&type=chunk) [2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note confirms no material changes to accounting policies and outlines the assessment of new accounting guidance - No material changes to significant accounting policies since the Annual Report for the year ended December 31, 2024[29](index=29&type=chunk) - The Company is assessing the impact of new accounting guidance: ASU 2023-09 (Income Tax Disclosures, effective Jan 1, 2025), ASU 2024-03/2025-01 (Expense Disaggregation Disclosures, effective after Dec 15, 2026/2027), and ASU 2025-04 (Share-Based Customer Payments, effective after Dec 15, 2026)[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) [3. REVENUES](index=12&type=section&id=3.%20REVENUES) This note details the company's principal products and services, disaggregated revenue by discipline, and significant customer concentration - The Company's principal products and services include distributed energy resources, power generation equipment, and mobile electric vehicle charging solutions, primarily from its Critical Power business[39](index=39&type=chunk)[41](index=41&type=chunk) Disaggregated Revenue by Discipline (in thousands) | Revenue Discipline | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Products (ASC 606) | $4,213 | $838 | $7,985 | $1,947 | | Services (ASC 606) | $2,289 | $2,174 | $4,734 | $4,055 | | Sales-type lease revenue (ASC 842) | $1,410 | $- | $1,410 | $- | | Fixed lease revenue (ASC 842) | $458 | $383 | $981 | $708 | | **Total Revenue** | **$8,370** | **$3,395** | **$15,110** | **$6,710** | - Customer concentration risk is significant: for the three months ended June 30, 2025, two customers accounted for **31% and 19% of revenue**; for the six months, two customers accounted for **34% and 13%**. One customer represented **53% of total outstanding receivables** as of June 30, 2025[52](index=52&type=chunk)[53](index=53&type=chunk) [4. INVENTORIES](index=14&type=section&id=4.%20INVENTORIES) This note provides a breakdown of the company's inventory components, including raw materials and work in process Inventory Components (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :------------ | :------------ | :---------------- | | Raw materials | $4,235 | $4,899 | | Work in process | $1,548 | $1,169 | | **Total inventories** | **$5,783** | **$6,068** | [5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES](index=15&type=section&id=5.%20ACCOUNTS%20PAYABLE%20AND%20ACCURRED%20LIABILITIES) This note details the composition of accounts payable and accrued liabilities, including insurance, compensation, and warranty costs Accounts Payable and Accrued Liabilities (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Accounts payable | $3,255 | $3,054 | | Accrued liabilities | $801 | $1,489 | | **Total** | **$4,056** | **$4,543** | - Accrued liabilities primarily consist of accrued insurance (**$106 thousand** vs **$462 thousand**), accrued compensation and benefits (**$197 thousand** vs **$453 thousand**), and accrued warranty costs (**$212 thousand** vs **$117 thousand**) as of June 30, 2025, and December 31, 2024, respectively[60](index=60&type=chunk) [6. STOCK-BASED COMPENSATION](index=15&type=section&id=6.%20STOCK-BASED%20COMPENSATION) This note summarizes stock option activity and the associated stock-based compensation expense for the reporting periods Stock Option Activity (Six Months Ended June 30, 2025) | Metric | Value | | :------------------------ | :------------ | | Outstanding as of Jan 1, 2025 | 561,476 | | Forfeited/expired | (10,642) | | Outstanding as of June 30, 2025 | 550,834 | | Weighted average exercise price | $4.18 | | Weighted remaining contractual term | 4.80 years | | Aggregate intrinsic value | $199 | - Stock-based compensation expense was **$2 thousand** for Q2 2025 (down from **$96 thousand** in Q2 2024) and **$15 thousand** for YTD 2025 (down from **$321 thousand** in YTD 2024)[61](index=61&type=chunk) [7. INCOME TAXES](index=16&type=section&id=7.%20INCOME%20TAXES) This note explains the company's income tax provision, effective tax rate, and the impact of recent tax legislation - The Company recorded no income tax provision for the three and six months ended June 30, 2025, resulting in an effective tax rate (ETR) of **0%**, primarily due to a full valuation allowance on deferred tax assets and non-deductible permanent items[62](index=62&type=chunk)[67](index=67&type=chunk) - The Company applied the discrete method for interim income tax provision calculation due to earnings volatility and unreliable full-year forecasted income[64](index=64&type=chunk) - The 'Make Rural America and Main Street Grow Again Act' (One Big Beautiful Bill Act), enacted July 4, 2025, includes retroactive provisions for **100% bonus depreciation** and expensing R&D, but its effects are considered a nonrecognized subsequent event for Q2 2025 and are not expected to materially impact near-term cash tax obligations due to the Company's net operating loss position and valuation allowance[65](index=65&type=chunk)[66](index=66&type=chunk)[68](index=68&type=chunk) [8. DISCONTINUED OPERATIONS](index=17&type=section&id=8.%20DISCONTINUED%20OPERATIONS) This note details the sale of the Electrical Infrastructure segment and the resulting net income or loss from discontinued operations - On October 29, 2024, the Company sold its Electrical Infrastructure segment (PCEP) for **$48,000 thousand cash** and **$2,000 thousand in equity**, retaining an equity interest in Pioneer Investment LLC[69](index=69&type=chunk)[72](index=72&type=chunk) - The Company finalized a net working capital adjustment with the PCEP buyer on April 16, 2025, resulting in a **$1,147 thousand reduction in consideration** due to the buyer and a payment of **$2,200 thousand**[69](index=69&type=chunk) Net (Loss) Income from Discontinued Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) income from discontinued operations | $(100) | $(568) | $1,047 | $52 | [9. EQUITY-METHOD INVESTMENT](index=18&type=section&id=9.%20EQUITY-METHOD%20INVESTMENT) This note reports the income recognized from the company's equity method investment in Pioneer Investment LLC - The Company recorded income from its equity method investee (Pioneer Investment LLC) of **$297 thousand** for the three months ended June 30, 2025, and **$240 thousand** for the six months ended June 30, 2025[73](index=73&type=chunk) [10. BASIC AND DILUTED (LOSS) EARNINGS PER SHARE](index=18&type=section&id=10.%20BASIC%20AND%20DILUTED%20(LOSS)%20EARNINGS%20PER%20SHARE) This note presents the basic and diluted loss per share from continuing and discontinued operations, along with anti-dilutive securities Basic and Diluted Loss Per Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Loss per share from continuing operations (Basic & Diluted) | $(0.11) | $(0.16) | $(0.30) | $(0.32) | | (Loss) earnings per share from discontinued operations (Basic & Diluted) | $(0.01) | $(0.05) | $0.09 | $- | | **Basic loss per share** | **$(0.12)** | **$(0.21)** | **$(0.21)** | **$(0.32)** | | **Diluted loss per share** | **$(0.12)** | **$(0.21)** | **$(0.21)** | **$(0.32)** | Anti-Dilutive Securities Excluded from EPS Calculation | Security | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock options | 550,834 | 654,313 | 384,166 | 269,500 | [11. BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION](index=19&type=section&id=11.%20BUSINESS%20SEGMENT%20AND%20GEOGRAPHIC%20INFORMATION) This note identifies the company's single reportable segment, geographic revenue distribution, and customer concentration - The Company operates as a single reportable segment, Critical Power Solutions, which provides mobile high-capacity charging equipment, power generation equipment, and aftermarket field services[76](index=76&type=chunk) Revenues by Geographic Location (in thousands) | Country | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $8,255 | $3,395 | $14,881 | $6,710 | | Canada | $115 | $- | $229 | $- | | **Total** | **$8,370** | **$3,395** | **$15,110** | **$6,710** | - Customer concentration remains high, with two customers accounting for **31% and 19% of revenues** for the three months ended June 30, 2025, and **34% and 13%** for the six months ended June 30, 2025[79](index=79&type=chunk)[80](index=80&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial performance, liquidity, and capital resources, highlighting revenue growth and profitability [Business Overview](index=22&type=section&id=Business%20Overview) This section outlines Pioneer Power Solutions' core business activities, including product development and market expansion strategies - Pioneer Power Solutions designs, manufactures, integrates, services, and sells distributed energy resources, on-site power generation equipment, and mobile EV charging solutions to utility, industrial, and commercial markets[88](index=88&type=chunk) - The Company aims to grow through internal investments in product development and expansion of manufacturing, engineering, sales, and marketing personnel[89](index=89&type=chunk) [Recent Developments](index=22&type=section&id=Recent%20Developments) This section discusses the 'One Big Beautiful Bill Act' and its expected non-material impact on the company's tax obligations - The 'One Big Beautiful Bill Act,' enacted July 4, 2025, includes retroactive changes to U.S. corporate tax provisions, such as **100% bonus depreciation** and expensing R&D expenditures[91](index=91&type=chunk) - Due to the Company's net operating loss (NOL) position and full valuation allowance, these tax provisions are not expected to materially impact near-term cash tax obligations or financial statement income tax expense[92](index=92&type=chunk) [Description of Business Segment](index=22&type=section&id=Description%20of%20Business%20Segment) This section describes the company's single reportable segment, Critical Power Solutions, and its product and service offerings - Following the sale of the PCEP business unit in October 2024, the Company now operates with one reportable segment: Critical Power Solutions[93](index=93&type=chunk) - The Critical Power business provides mobile EV charging solutions (e-Boost), power generation equipment, and services (preventative maintenance, repairs, fuel polishing, remote monitoring) under the Pioneer eMobility and Pioneer Critical Power (Titan) brand names[93](index=93&type=chunk) [Critical Accounting Estimates](index=22&type=section&id=Critical%20Accounting%20Estimates) This section confirms no material changes to the company's critical accounting estimates during the reporting period - There were no material changes to the Company's critical accounting estimates during the three and six months ended June 30, 2025[94](index=94&type=chunk) [RESULTS OF OPERATIONS](index=24&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, including revenues, gross profit, operating expenses, and net loss for the reporting periods [Overview of June 30, 2025, and 2024, Operating Results](index=24&type=section&id=Overview%20of%20June%2030,%202025,%20and%202024,%20Operating%20Results) This overview summarizes the company's key operating metrics, including revenues, gross profit, operating expenses, and net loss Summary of Operating Results (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues (Critical Power Solutions) | $8,370 | $3,395 | $15,110 | $6,710 | | Gross profit | $1,314 | $641 | $1,462 | $1,176 | | Total operating expenses | $3,022 | $2,376 | $5,517 | $4,637 | | Operating loss from continuing operations | $(1,708) | $(1,735) | $(4,055) | $(3,461) | | Net loss | $(1,328) | $(2,283) | $(2,257) | $(3,318) | [Backlog](index=24&type=section&id=Backlog) This section reports the revenue backlog for the Critical Power business and its progression over recent quarters - Revenue backlog for the Critical Power business decreased by **$9,366 thousand**, or **34.4%**, to **$17,885 thousand** as of June 30, 2025, compared to **$27,251 thousand** as of June 30, 2024[99](index=99&type=chunk) Backlog Progression (in thousands) | Quarter End | Critical Power Solutions | Discontinued operation | Total order backlog | | :--------------- | :----------------------- | :--------------------- | :------------------ | | June 30, 2025 | $17,885 | $- | $17,885 | | March 31, 2025 | $23,231 | $- | $23,231 | | December 31, 2024 | $19,762 | $- | $19,762 | | September 30, 2024 | $24,038 | $42,112 | $66,150 | | June 30, 2024 | $27,251 | $39,670 | $66,921 | [Revenue](index=25&type=section&id=Revenue) This section analyzes the company's revenue growth by major product category, highlighting the impact of mobile EV charging solutions Revenue by Major Product Category (in thousands, except percentages) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Variance | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance | % Change | | :------- | :------------------------------- | :------------------------------- | :------- | :------- | :----------------------------- | :----------------------------- | :------- | :------- | | Equipment | $6,081 | $1,221 | $4,860 | 398.0% | $10,376 | $2,655 | $7,721 | 290.8% | | Service | $2,289 | $2,174 | $115 | 5.3% | $4,734 | $4,055 | $679 | 16.7% | | **Total Revenue** | **$8,370** | **$3,395** | **$4,975** | **146.5%** | **$15,110** | **$6,710** | **$8,400** | **125.2%** | - Total revenue from the Critical Power segment increased significantly by **146.5%** to **$8,370 thousand** for Q2 2025 and by **125.2%** to **$15,110 thousand** for YTD 2025, primarily driven by increased sales and rentals of mobile EV charging solutions (e-Boost)[101](index=101&type=chunk)[102](index=102&type=chunk) [Gross Profit and Margin](index=25&type=section&id=Gross%20Profit%20and%20Margin) This section examines changes in gross profit and margin, attributing decreases to an unfavorable sales mix and higher production costs Gross Profit and Margin (in thousands, except percentages) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Variance | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance | % Change | | :----- | :------------------------------- | :------------------------------- | :------- | :------- | :----------------------------- | :----------------------------- | :------- | :------- | | Gross profit | $1,314 | $641 | $673 | 105.0% | $1,462 | $1,176 | $286 | 24.3% | | Gross margin % | 15.7% | 18.9% | (3.2)% | | 9.7% | 17.5% | (7.8)% | | - Gross margin decreased to **15.7%** for Q2 2025 (from **18.9%**) due to an unfavorable sales mix, and to **9.7%** for YTD 2025 (from **17.5%**) primarily due to lower margins on initial eMobility units from higher production costs during process refinement[103](index=103&type=chunk)[104](index=104&type=chunk) [Operating Expenses](index=26&type=section&id=Operating%20Expenses) This section analyzes changes in selling, general and administrative (SG&A) and research and development (R&D) expenses Operating Expenses (in thousands, except percentages) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Variance | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance | % Change | | :--------------- | :------------------------------- | :------------------------------- | :------- | :------- | :----------------------------- | :----------------------------- | :------- | :------- | | Selling, general and administrative | $2,488 | $2,138 | $350 | 16.4% | $4,903 | $4,188 | $715 | 17.1% | | Research and development | $534 | $238 | $296 | 124.4% | $614 | $449 | $165 | 36.7% | | **Total operating expense** | **$3,022** | **$2,376** | **$646** | **27.2%** | **$5,517** | **$4,637** | **$880** | **19.0%** | - Selling, general and administrative (SG&A) expenses increased by **16.4%** for Q2 2025 and **17.1%** for YTD 2025, primarily due to higher trade show costs, commissions, and professional fees[106](index=106&type=chunk)[107](index=107&type=chunk) - Research and development (R&D) expenses increased by **124.4%** for Q2 2025 and **36.7%** for YTD 2025, driven by development activities for mobile e-Boost EV charging solutions[108](index=108&type=chunk) [Operating Loss from Continuing Operations](index=26&type=section&id=Operating%20Loss%20from%20Continuing%20Operations) This section details the operating loss from continuing operations, noting the impact of sales, rentals, gross profit, and SG&A expenses Operating Loss from Continuing Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Variance | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance | % Change | | :----- | :------------------------------- | :------------------------------- | :------- | :------- | :----------------------------- | :----------------------------- | :------- | :------- | | Operating loss from continuing operations | $(1,708) | $(1,735) | $27 | 1.6% | $(4,055) | $(3,461) | $(594) | (17.2)% | - Operating loss from continuing operations decreased by **1.6%** for Q2 2025 due to increased sales and rentals, but increased by **17.2%** for YTD 2025 primarily due to decreased gross profit and higher SG&A expenses[109](index=109&type=chunk)[110](index=110&type=chunk) [Non-Operating Income from Continuing Operations](index=27&type=section&id=Non-Operating%20Income%20from%20Continuing%20Operations) This section reports on interest income and other non-operating income, including gains from equity method investments Non-Operating Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest Income | $183 | $20 | $431 | $51 | | Other Income, net | $297 | $- | $320 | $40 | - Interest income increased significantly due to cash on hand[111](index=111&type=chunk) - Other income increased primarily due to a gain on the equity method investment[113](index=113&type=chunk) [Provision for Income Taxes](index=27&type=section&id=Provision%20for%20Income%20Taxes) This section explains the company's 0% effective tax rate, attributed to a full valuation allowance and discrete tax provision method - The Company recorded a **0% effective tax rate** for both the three and six months ended June 30, 2025, and 2024, primarily due to a full valuation allowance on deferred tax assets and the use of the discrete method for tax provision calculation[114](index=114&type=chunk)[115](index=115&type=chunk) [Net Loss per Share from Continuing Operations](index=27&type=section&id=Net%20Loss%20per%20Share%20from%20Continuing%20Operations) This section presents the net loss from continuing operations and the corresponding basic and diluted loss per share Net Loss from Continuing Operations per Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss from continuing operations | $(1,228) | $(1,715) | $(3,304) | $(3,370) | | Basic and diluted loss per share from continuing operations | $(0.11) | $(0.16) | $(0.30) | $(0.32) | [Income (loss) from Discontinued Operations](index=27&type=section&id=Income%20(loss)%20from%20Discontinued%20Operations) This section reports the income or loss from discontinued operations, primarily influenced by the PCEP Sale working capital adjustment Income (Loss) from Discontinued Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Loss from discontinued operations, net of tax | $(100) | $(568) | $1,047 | $52 | - The **$1,047 thousand income** from discontinued operations for the six months ended June 30, 2025, was primarily due to finalizing the net working capital adjustment from the PCEP Sale[121](index=121&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=28&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's cash position, working capital, cash flow activities, and future funding expectations - As of June 30, 2025, the Company had **$17,999 thousand in cash**, primarily from the PCEP Sale, and paid a one-time special cash dividend of **$16,665 thousand** on January 7, 2025[122](index=122&type=chunk) Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :------- | :-------- | :-------- | | Operating | $(3,963) | $(1,379) | | Investing | $(2,940) | $(614) | | Financing | $(16,720) | $4,923 | - Working capital decreased to **$23,916 thousand** as of June 30, 2025, from **$26,679 thousand** as of December 31, 2024[129](index=129&type=chunk) - The Company expects its current cash balance and operating cash flows to be sufficient to fund operations for the next twelve months, with cash requirements primarily for operating activities, capital improvements, and product development[131](index=131&type=chunk) [Capital Expenditures](index=30&type=section&id=Capital%20Expenditures) This section reports the company's additions to property and equipment for the six months ended June 30, 2025 and 2024 Additions to Property and Equipment (in thousands) | Period | 2025 | 2024 | | :----- | :--- | :--- | | Six months ended June 30 | $740 | $614 | [Known Trends, Events, Uncertainties and Factors That May Affect Future Operations](index=30&type=section&id=Known%20Trends,%20Events,%20Uncertainties%20and%20Factors%20That%20May%20Affect%20Future%20Operations) This section identifies factors that may impact future operations, including industry cyclicality, raw material prices, geopolitical conflicts, and policy changes - Future operating results are subject to quarterly variations due to the cyclical nature of the electrical equipment industry, changing customer requirements, and fluctuations in raw material prices (copper, steel, aluminum)[135](index=135&type=chunk) - Ongoing geopolitical conflicts (Russia-Ukraine, Israel-Hamas) and rising global inflation could adversely impact macroeconomic conditions, market volatility, and the Company's business[135](index=135&type=chunk) - Changes in U.S. policy regarding tariffs, trade, taxation, and the regulatory environment may also affect the Company's operations[135](index=135&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the reporting period - The Company has no applicable quantitative and qualitative disclosures about market risk[136](index=136&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of disclosure controls and internal control over financial reporting, identifying a material weakness and outlining remediation [Evaluation of Disclosure Controls and Procedures](index=31&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section concludes that disclosure controls were not effective due to a material weakness, despite management's additional financial analyses - Management, including the CEO and CFO, concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to an identified material weakness[137](index=137&type=chunk) - Despite the material weakness, management performed additional analyses and concluded that the unaudited condensed consolidated financial statements fairly state the financial position, results of operations, and cash flows in conformity with U.S. GAAP[137](index=137&type=chunk) [Material Weakness in Internal Control over Financial Reporting](index=31&type=section&id=Material%20Weakness%20in%20Internal%20Control%20over%20Financial%20Reporting) This section identifies a material weakness in internal control over financial reporting due to insufficient accounting personnel and lack of segregation of duties - A material weakness in internal control over financial reporting exists due to the lack of sufficient accounting personnel, leading to an inability to maintain proper segregation of duties[139](index=139&type=chunk) - This material weakness was present as of December 31, 2024, and continued to exist as of June 30, 2025[139](index=139&type=chunk) [Management's Plan to Remediate the Material Weakness](index=31&type=section&id=Management's%20Plan%20to%20Remediate%20the%20Material%20Weakness) This section outlines management's plan to remediate the material weakness through external engagement, ERP implementation, enhanced controls, and additional hiring - Management's remediation plan includes engaging external third parties, implementing a new ERP system for systemic enforcement of segregation of duties, enhancing process-level and general IT controls within the new ERP, and hiring additional accounting and finance personnel[140](index=140&type=chunk)[143](index=143&type=chunk) - The Company is committed to a strong internal control environment, but full implementation and confirmation of effectiveness will take time, and the material weakness will persist until remediation steps are fully tested[141](index=141&type=chunk) [Changes in Internal Control over Financial Reporting](index=31&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section confirms no other material changes in internal control over financial reporting beyond the identified material weakness - Other than the material weakness described, there have been no other changes in internal control over financial reporting during the three months ended June 30, 2025, that materially affected or are reasonably likely to materially affect internal control over financial reporting[142](index=142&type=chunk) [PART II. OTHER INFORMATION](index=32&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers other required disclosures, including legal proceedings, risk factors, equity sales, defaults, and exhibits [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not aware of any material legal proceedings or threatened litigation that could adversely affect its business - The Company is not aware of any material legal proceedings, threatened or pending litigation, or proceedings contemplated by governmental authorities that could have a material adverse effect on its business[145](index=145&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section highlights significant customer concentration as a key risk that could adversely affect the company's business and financial results - A significant portion of the Company's revenues has historically been concentrated and derived from a few customers, posing a risk of adverse effects on business, financial condition, and operating results if business from these customers is lost[147](index=147&type=chunk) - For the three months ended June 30, 2025, two customers accounted for **31% and 19% of revenues**; for the six months, two customers accounted for **34% and 13% of revenues**[148](index=148&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section indicates that there were no unregistered sales of equity securities or use of proceeds to report for the period - There were no unregistered sales of equity securities or use of proceeds to report[151](index=151&type=chunk) [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[152](index=152&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to the Company[153](index=153&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report for the period - There is no other information to report[154](index=154&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed or furnished with the Quarterly Report on Form 10-Q, including certifications and XBRL documents Exhibit Index | Exhibit No. | Description | | :---------- | :----------------------------------------------------------------------- | | 31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 31.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 32.1** | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | 32.2** | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | 101.INS* | Inline XBRL Instance Document | | 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | | 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | | 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document | | 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | 104* | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |

Financial Data and Key Metrics Changes - First quarter revenue more than doubled to $6,700,000, an increase of 103% compared to $3,300,000 in the same quarter last year [4][13] - Gross profit for Q1 was $148,000, resulting in a gross margin of approximately 2%, down from a gross profit of $535,000 and a 16% gross margin in the prior year [13] - Operating loss from continuing operations was $2,300,000, compared to a loss of $1,700,000 in the same quarter last year [14] - Net loss from continuing operations was $2,100,000, compared to a net loss of $1,700,000 in the prior year [15] - Total backlog at the end of Q1 was $23,200,000, an increase of 18% compared to the previous quarter [6] Business Line Data and Key Metrics Changes - The primary contributor to revenue growth was the completion of 10 eBoost units for a major public school district, part of a larger order for 25 units [4][5] - The sales pipeline for eBoost solutions is expanding, with active discussions with municipalities and major delivery providers [7][8] Market Data and Key Metrics Changes - The company is seeing increased demand for mobile EV charging solutions, particularly in the context of municipalities transitioning to electric fleets [8][34] - HomeBoost, a new residential and light commercial power system, is expected to drive growth and innovation starting in 2026 [9][10] Company Strategy and Development Direction - The company aims to improve gross margins as production efficiencies are realized with ongoing orders [6][14] - HomeBoost is positioned as a premium product, with a focus on energy resilience and fast charging for residential and light commercial markets [9][10] - The company is exploring partnerships and distribution channels to enhance market reach, especially for HomeBoost [48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in recovering margins in the second half of the year as production processes improve [21] - The company reaffirmed its revenue guidance for 2025, expecting total revenue between $27,000,000 and $29,000,000 [16] - Management noted that the current market gap for grid connections is expected to persist for at least five more years, indicating sustained demand for mobile solutions [34] Other Important Information - The company incurred a one-time special cash dividend payment of $16,700,000, impacting cash reserves [15][16] - The HomeBoost product launch is anticipated in the second half of 2025, with no impact on 2025 revenue guidance [25] Q&A Session Summary Question: How do you see margins recovering? - Management indicated that margins should improve in the second half of the year as production processes become more efficient [21] Question: How is the eBoost pipeline shaping up for 2026 revenue? - Management noted that a reasonable cutoff for closing deals to impact 2026 bookings would be around June [22][23] Question: Is HomeBoost suitable for users with solar panels? - Management confirmed that HomeBoost can operate in island mode, allowing users to disconnect from the grid if they have a natural gas connection [29] Question: How long will the eBoost market last? - Management believes the demand for mobile solutions will continue to grow due to challenges in obtaining grid connections [34] Question: How is the distribution network evolving? - Management highlighted the importance of channel partners and distributors to reach municipalities and states effectively [48] Question: What focus will the company have in 2026? - Management indicated that HomeBoost is expected to occupy a significant portion of their focus and resources moving forward [51][53]

Financial Data and Key Metrics Changes - First quarter revenue more than doubled to $6,700,000, an increase of 103% compared to $3,300,000 in the same quarter last year [13] - Gross profit for Q1 was $148,000, with a gross margin of approximately 2%, down from a gross profit of $535,000 and a 16% gross margin in the prior year [13] - Operating loss from continuing operations was $2,300,000, compared to a loss of $1,700,000 in the first quarter of the previous year [14] - Net loss from continuing operations was $2,100,000, compared to a net loss of $1,700,000 in the same quarter last year [15] - Total backlog at the end of Q1 was $23,200,000, an increase of 18% compared to the prior quarter [6] Business Line Data and Key Metrics Changes - The primary contributor to revenue growth was the initial completion of 10 eBoost units for a major public school district, part of a larger order for 25 units [4][5] - The sales pipeline for eBoost solutions is expanding, with active discussions with municipalities, transit authorities, and major delivery providers [7] Market Data and Key Metrics Changes - The company is experiencing increased demand for on-site power solutions, particularly in the electric vehicle charging sector [4] - The HomeBoost platform is positioned to meet growing energy demands in residential and light commercial markets [9] Company Strategy and Development Direction - The company aims to improve gross margins as production efficiencies are realized with ongoing orders [6][14] - HomeBoost is expected to be a significant growth driver in 2026 and beyond, with a focus on launching the product in the second half of 2025 [10][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in recovering margins in the second half of the year as production processes improve [22] - The company reaffirmed its revenue guidance for 2025, projecting total revenue between $27,000,000 and $29,000,000 [15] Other Important Information - Cash on hand as of March 31, 2025, was $25,800,000, down from $41,600,000 at the end of 2024, primarily due to a special cash dividend [15] Q&A Session Summary Question: How do you see margins recovering? - Management indicated that margins should improve in the second half of the year as production processes become more efficient [22] Question: How is the eBoost pipeline shaping up for 2026 revenue? - Management noted that June is a reasonable cutoff for closing deals that would contribute to 2026 bookings [24] Question: Is HomeBoost suitable for users with solar panels? - Management confirmed that HomeBoost can operate in island mode, allowing users to disconnect from the grid if they have a natural gas connection [31] Question: How long will the eBoost market last? - Management believes the demand for mobile solutions will continue to grow due to challenges in obtaining grid connections [35] Question: How is the distribution network evolving? - Management highlighted the importance of channel partners and distributors in reaching municipalities and states, indicating a need for more intermediaries [50] Question: What is the focus for 2026 regarding HomeBoost? - Management stated that HomeBoost is occupying a significant portion of their attention, with plans to contract manufacturing to focus on design and marketing [55]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Pioneer Power Solutions, Inc. for the quarter ended March 31, 2025, including statements of operations, balance sheets, cash flows, and changes in stockholders' equity, along with detailed notes. Key highlights include a significant increase in revenue but a decrease in gross profit, a net loss, and a strong cash position primarily from the PCEP sale, despite a large dividend payment [Unaudited Condensed Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a net loss of $(929)K for Q1 2025, an improvement from $(1,035)K in Q1 2024. Revenue significantly increased by 103.3% to $6,740K, but gross profit decreased by 72.3% due to a higher cost of goods sold. Income from discontinued operations positively contributed to the net result Unaudited Condensed Consolidated Statements of Operations (in thousands) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :--------------------- | :--------------------- | :----------- | | Revenues | $6,740 | $3,315 | +103.3% | | Cost of goods sold | $6,592 | $2,780 | +137.1% | | Gross profit | $148 | $535 | -72.3% | | Operating loss from continuing operations | $(2,346) | $(1,726) | -35.9% | | Net loss | $(929) | $(1,035) | +10.2% | | Basic loss per share | $(0.09) | $(0.10) | +10.0% | | Diluted loss per share | $(0.09) | $(0.10) | +10.0% | - Income from discontinued operations was **$1,147K** in Q1 2025, up from **$620K** in Q1 2024, significantly offsetting the net loss[10](index=10&type=chunk) [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased from $65,951K at December 31, 2024, to $47,476K at March 31, 2025, primarily driven by a significant reduction in cash and current liabilities. Stockholders' equity also saw a decrease during the period Unaudited Condensed Consolidated Balance Sheets (in thousands) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :-------------------------------- | :------------------------------ | :------------------------------- | :----- | | Cash | $25,840 | $41,622 | $(15,782) | | Total current assets | $38,626 | $56,657 | $(18,031) | | Total assets | $47,476 | $65,951 | $(18,475) | | Total current liabilities | $12,475 | $29,978 | $(17,503) | | Total liabilities | $12,963 | $30,522 | $(17,559) | | Total stockholders' equity | $34,513 | $35,429 | $(916) | - The significant decrease in current liabilities is largely due to the payment of a **$16,665K** dividend payable, which was present at December 31, 2024, but not at March 31, 2025[13](index=13&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company generated $1,502K cash from operating activities in Q1 2025, a significant improvement from cash used of $(1,950)K in Q1 2024. However, a large cash dividend payment led to substantial cash used in financing activities, resulting in an overall decrease in cash by $(15,782)K Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change | | :-------------------------------- | :--------------------- | :--------------------- | :----- | | Net cash provided by/(used in) operating activities | $1,502 | $(1,950) | +$3,452 | | Net cash used in investing activities | $(595) | $(213) | -$(382) | | Net cash used in/provided by financing activities | $(16,689) | $4,808 | -$(21,497) | | (Decrease) increase in cash | $(15,782) | $2,645 | -$(18,427) | | Cash, end of year | $25,840 | $6,227 | +$19,613 | - The primary driver for cash used in financing activities in Q1 2025 was a **$16,665K** payment of cash dividend[16](index=16&type=chunk) [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity decreased from $35,429K at January 1, 2025, to $34,513K at March 31, 2025, primarily due to the net loss incurred during the period, partially offset by stock-based compensation Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (in thousands) | Metric | January 1, 2025 (in thousands) | March 31, 2025 (in thousands) | Change | | :-------------------------------- | :----------------------------- | :---------------------------- | :----- | | Total stockholders' equity | $35,429 | $34,513 | $(916) | | Net loss | - | $(929) | $(929) | | Stock-based compensation | - | $13 | $13 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations for the financial statements, covering business operations, accounting policies, revenue recognition, and segment information. They highlight the company's focus on Critical Power Solutions after the PCEP sale, its liquidity position, and the impact of macroeconomic risks [1. BUSINESS ORGANIZATION, NATURE OF OPERATIONS, RISKS AND UNCERTAINTIES](index=8&type=section&id=1.%20BUSINESS%20ORGANIZATION,%20NATURE%20OF%20OPERATIONS,%20RISKS%20AND%20UNCERTAINTIES) Pioneer Power Solutions designs, manufactures, services, and integrates distributed energy resources, power generation equipment, and mobile EV charging solutions. The company operates with one reportable segment, Critical Power Solutions, following the sale of its Electrical Infrastructure business. The company maintains a strong liquidity position, primarily from the PCEP sale, and expects to fund operations for the next twelve months, though macroeconomic factors pose risks - Pioneer's core business focuses on distributed energy resources, power generation equipment, and mobile EV charging solutions for utility, industrial, and commercial markets[20](index=20&type=chunk) - The company operates with a single reportable segment, Critical Power Solutions, after the sale of its Electrical Infrastructure business in October 2024[21](index=21&type=chunk)[26](index=26&type=chunk) - As of March 31, 2025, the company had **$25,840K** cash and **$26,151K** working capital, primarily from the PCEP sale, and expects this to be sufficient for the next twelve months[26](index=26&type=chunk)[28](index=28&type=chunk) - Macroeconomic factors like rising interest rates, inflation, and geopolitical conflicts pose risks to demand, supply channels, and overall financial performance[29](index=29&type=chunk) [2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) No material changes to significant accounting policies were reported since the December 31, 2024 Annual Report, except for the ongoing assessment of new FASB ASUs related to income tax disclosures and expense disaggregation. The company also details its revenue recognition policy for bill and hold arrangements - No material changes to significant accounting policies since the last annual report[32](index=32&type=chunk) - The company is assessing the impact of new FASB ASUs 2023-09 (Income Taxes) and 2024-03/2025-01 (Expense Disaggregation Disclosures) on its consolidated financial statements[33](index=33&type=chunk)[34](index=34&type=chunk) - Revenue from bill and hold arrangements is recognized when the customer obtains control, meeting specific criteria such as legal title transfer, payment obligation, and product identification[35](index=35&type=chunk)[36](index=36&type=chunk) [3. REVENUES](index=12&type=section&id=3.%20REVENUES) Total revenues for Q1 2025 significantly increased to $6,740K from $3,315K in Q1 2024, driven by strong product sales, particularly from mobile EV charging equipment, including $2,337K from bill and hold arrangements. Service revenue also grew. The company has significant customer concentration, with two customers accounting for 39% and 11% of Q1 2025 revenue Revenue by Discipline (in thousands) | Revenue Discipline | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (YoY) | | :----------------- | :--------------------- | :--------------------- | :----------- | | Products | $3,773 | $1,109 | +240.2% | | Services | $2,444 | $1,881 | +29.9% | | Fixed lease revenue | $523 | $325 | +60.9% | | Total revenue | $6,740 | $3,315 | +103.3% | - Q1 2025 product revenue included **$2,337K** from bill and hold arrangements for mobile EV charging equipment, with no such arrangements in Q1 2024[43](index=43&type=chunk) - Customer concentration is high, with two customers contributing **39%** and **11%** of Q1 2025 revenue, and one customer representing **49%** of outstanding receivables as of March 31, 2025[46](index=46&type=chunk) [4. INVENTORIES](index=14&type=section&id=4.%20INVENTORIES) Total inventories increased slightly to $6,456K as of March 31, 2025, from $6,068K at December 31, 2024, primarily due to an increase in raw materials Inventories (in thousands) | Component | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------- | :---------------------------- | :------------------------------- | | Raw materials | $5,364 | $4,899 | | Work in process | $1,092 | $1,169 | | Total inventories | $6,456 | $6,068 | [5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES](index=15&type=section&id=5.%20ACCOUNTS%20PAYABLE%20AND%20ACCUMULATED%20LIABILITIES) Total accounts payable and accrued liabilities increased slightly to $4,720K as of March 31, 2025, from $4,543K at December 31, 2024. Accrued liabilities primarily consist of insurance, compensation, and warranty costs Accounts Payable and Accrued Liabilities (in thousands) | Component | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :---------------------------- | :------------------------------- | | Accounts payable | $3,376 | $3,054 | | Accrued liabilities | $1,344 | $1,489 | | Total accounts payable and accrued liabilities | $4,720 | $4,543 | - Accrued insurance decreased from **$462K** to **$282K**, while accrued warranty costs increased from **$117K** to **$157K**[52](index=52&type=chunk) [6. STOCK-BASED COMPENSATION](index=15&type=section&id=6.%20STOCK-BASED%20COMPENSATION) Stock-based compensation expense significantly decreased to $13K in Q1 2025 from $225K in Q1 2024. As of March 31, 2025, 554,167 stock options were outstanding with a weighted average exercise price of $4.19 Stock-Based Compensation Expense (in thousands) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (YoY) | | :----------------------- | :--------------------- | :--------------------- | :----------- | | Stock-based compensation | $13 | $225 | -94.2% | - As of March 31, 2025, **554,167** stock options were outstanding with a weighted average exercise price of **$4.19** and a remaining compensation expense of **$68K**[53](index=53&type=chunk) [7. INCOME TAXES](index=15&type=section&id=7.%20INCOME%20TAXES) The company recorded no income tax provision for Q1 2025 and Q1 2024, resulting in a 0% effective tax rate. This is primarily due to a full valuation allowance on deferred tax assets and the application of the discrete method for interim tax provision calculation given earnings volatility - The effective tax rate was **0%** for both Q1 2025 and Q1 2024, with no income tax benefit recognized despite pre-tax losses[54](index=54&type=chunk) - The **0% ETR** is primarily due to a full valuation allowance on federal, state, and foreign deferred tax assets, non-deductible permanent items, and the absence of discrete benefits or tax rate changes[56](index=56&type=chunk)[97](index=97&type=chunk) - The company applied the discrete method for interim income tax provision due to earnings volatility and the inability to estimate a reliable annual effective tax rate[57](index=57&type=chunk)[93](index=93&type=chunk) [8. DISCONTINUED OPERATIONS](index=17&type=section&id=8.%20DISCONTINUED%20OPERATIONS) The company finalized the sale of its Electrical Infrastructure segment (PCEP) on October 29, 2024. In Q1 2025, income from discontinued operations was $1,147K, primarily due to a reduction in consideration due to the buyer following the finalization of a net working capital adjustment - The Electrical Infrastructure segment was sold on October 29, 2024, for **$48,000K** cash and **$2,000K** in equity[58](index=58&type=chunk) Income from Discontinued Operations (in thousands) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :-------------------------------- | :--------------------- | :--------------------- | | Revenues | $0 | $5,275 | | Gross profit | $0 | $1,193 | | Operating income from discontinued operations | $0 | $620 | | Net income from discontinued operations | $1,147 | $620 | - The **$1,147K** income from discontinued operations in Q1 2025 resulted from a reduction in consideration due to the buyer after finalizing the net working capital adjustment for the PCEP sale[58](index=58&type=chunk)[96](index=96&type=chunk) [9. EQUITY-METHOD INVESTMENT](index=17&type=section&id=9.%20EQUITY-METHOD%20INVESTMENT) Following the deconsolidation of PCEP, the company retained an equity interest in Pioneer Investment LLC. In Q1 2025, a loss of $57K from this equity method investee was recorded - The company holds an equity interest in Pioneer Investment LLC through Rollover Units, resulting from the PCEP sale[61](index=61&type=chunk)[62](index=62&type=chunk) - A loss of **$57K** from the equity method investee was recorded in Q1 2025[61](index=61&type=chunk) [10. BASIC AND DILUTED EARNINGS (LOSS) PER SHARE](index=18&type=section&id=10.%20BASIC%20AND%20DILUTED%20EARNINGS%20(LOSS)%20PER%20SHARE) Basic and diluted loss per share from continuing operations was $(0.19) in Q1 2025, compared to $(0.16) in Q1 2024. Total basic and diluted loss per share improved to $(0.09) from $(0.10) due to positive contributions from discontinued operations Basic and Diluted Earnings (Loss) Per Share | Metric | Q1 2025 | Q1 2024 | | :-------------------------------- | :------ | :------ | | Loss from continuing operations | $(0.19) | $(0.16) | | Earnings from discontinued operations | $0.10 | $0.06 | | Basic loss per share | $(0.09) | $(0.10) | | Diluted loss per share | $(0.09) | $(0.10) | - Weighted average common shares outstanding (basic) increased to **11,120,266** in Q1 2025 from **10,112,310** in Q1 2024[64](index=64&type=chunk) [11. BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION](index=19&type=section&id=11.%20BUSINESS%20SEGMENT%20AND%20GEOGRAPHIC%20INFORMATION) The company operates as a single reportable segment, Critical Power Solutions, which provides mobile EV charging equipment, power generation equipment, and aftermarket field services. Revenues are primarily from the United States, with a small portion from Canada. Customer concentration remains high - The company's sole reportable segment is Critical Power Solutions, offering mobile EV charging, power generation equipment, and related services[66](index=66&type=chunk) Revenue by Geographic Location (in thousands) | Geographic Location | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :------------------ | :--------------------- | :--------------------- | | United States | $6,625 | $3,315 | | Canada | $115 | $0 | | Total | $6,740 | $3,315 | - Two customers, Eneridge Inc. and Verizon Communications Inc., accounted for **39%** and **11%** of Q1 2025 revenues, respectively[69](index=69&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition for the three months ended March 31, 2025, compared to the prior year. It highlights significant revenue growth in the Critical Power segment, a decrease in gross margin due to production costs, and an increased operating loss from continuing operations. The company's liquidity is strong due to the PCEP sale, but macroeconomic risks persist [Special Note Regarding Forward-Looking Statements](index=20&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section cautions readers that the report contains forward-looking statements subject to various risks and uncertainties, including general economic conditions, competition, key personnel loss, supply chain disruptions, and the ability to remediate material weaknesses in internal controls - Forward-looking statements are subject to risks such as general economic conditions, competition, loss of key personnel, supply chain disruptions, and the ability to maintain effective internal controls[74](index=74&type=chunk) - The company explicitly states it undertakes no obligation to publicly update or revise any forward-looking statement, except as required by law[76](index=76&type=chunk) [Business Overview](index=22&type=section&id=Business%20Overview) Pioneer Power Solutions designs, manufactures, integrates, services, and sells distributed energy resources, on-site power generation equipment, and mobile EV charging solutions to utility, industrial, and commercial markets. The company aims to grow through internal investments in product development and expansion of personnel - The company's business encompasses distributed energy resources, power generation equipment, and mobile EV charging solutions for diverse markets including government, delivery, school bus fleets, and EV charging developers[77](index=77&type=chunk) - Growth strategy involves internal investments in product development and expanding manufacturing, engineering, sales, and marketing personnel[78](index=78&type=chunk) [Description of Business Segment](index=22&type=section&id=Description%20of%20Business%20Segment) Following the sale of its PCEP business unit in October 2024, Pioneer Power Solutions now operates with a single reportable segment: Critical Power Solutions. This segment focuses on mobile EV charging solutions (e-Boost), power generation equipment, and comprehensive field services (Titan) - The company now operates solely under the Critical Power Solutions segment after selling its PCEP business unit in October 2024[80](index=80&type=chunk) - The Critical Power business provides mobile EV charging solutions (e-Boost), power generation equipment, and services like preventative maintenance, repairs, fuel polishing, and remote monitoring[80](index=80&type=chunk) [Critical Accounting Estimates](index=22&type=section&id=Critical%20Accounting%20Estimates) The company states there were no material changes to its critical accounting estimates during the three months ended March 31, 2025, referring readers to the Annual Report on Form 10-K for a detailed description - No material changes to critical accounting estimates occurred during Q1 2025[81](index=81&type=chunk) [RESULTS OF OPERATIONS](index=23&type=section&id=RESULTS%20OF%20OPERATIONS) The Critical Power Solutions segment experienced a significant revenue increase of 103.3% in Q1 2025, reaching $6,740K. However, gross profit declined by 72.3% to $148K due to higher production costs, leading to an increased operating loss from continuing operations of $(2,346)K. Net loss improved due to income from discontinued operations [Overview of March 31, 2025, and 2024, Operating Results](index=23&type=section&id=Overview%20of%20March%2031,%202025,%20and%202024,%20Operating%20Results) The Critical Power Solutions segment saw a significant revenue increase of 103.3% to $6,740K in Q1 2025, but gross profit declined by 72.3% to $148K due to higher cost of goods sold. This led to an increased operating loss from continuing operations of $(2,346)K Operating Results Overview (in thousands) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :--------------------- | :--------------------- | :----------- | | Critical Power Solutions Revenue | $6,740 | $3,315 | +103.3% | | Critical Power Solutions Gross profit | $148 | $535 | -72.3% | | Operating loss from continuing operations | $(2,346) | $(1,726) | -35.9% | | Net loss | $(929) | $(1,035) | +10.2% | [Backlog](index=23&type=section&id=Backlog) The Critical Power business backlog increased by 54.6% to $23,231K as of March 31, 2025, compared to $15,022K at March 31, 2024, indicating strong future revenue potential for the continuing operations Order Backlog (in thousands) | Segment | March 31, 2025 (in thousands) | March 31, 2024 (in thousands) | Change (YoY) | | :---------------------- | :---------------------------- | :---------------------------- | :----------- | | Critical Power Solutions | $23,231 | $15,022 | +54.6% | | Discontinued operation | $0 | $30,889 | -100% | | Total order backlog | $23,231 | $45,911 | -49.4% | - The increase in Critical Power backlog reflects strong customer commitments for products and services[84](index=84&type=chunk)[85](index=85&type=chunk) [Revenue](index=24&type=section&id=Revenue) Total revenue for the Critical Power segment more than doubled in Q1 2025, reaching $6,740K, primarily driven by a 199.6% increase in equipment sales and rentals of mobile EV charging solutions (e-Boost). Service revenue also grew by 29.9% Revenue by Category (in thousands) | Category | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Variance | % Change | | :--------- | :--------------------- | :--------------------- | :------- | :------- | | Equipment | $4,296 | $1,434 | $2,862 | 199.6% | | Service | $2,444 | $1,881 | $563 | 29.9% | | Total revenue | $6,740 | $3,315 | $3,425 | 103.3% | - The significant revenue growth was primarily attributed to increased sales and rentals of mobile EV charging solutions, e-Boost[86](index=86&type=chunk) [Gross Profit and Margin](index=24&type=section&id=Gross%20Profit%20and%20Margin) Gross profit for the Critical Power segment decreased by 72.3% to $148K in Q1 2025, resulting in a gross margin of 2.2%, down from 16.1% in Q1 2024. This decline was mainly due to lower margins on initial units of a specific contract in the Pioneer eMobility business, reflecting higher production costs during process refinement Gross Profit and Margin (in thousands) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Variance | % Change | | :----------- | :--------------------- | :--------------------- | :------- | :------- | | Gross profit | $148 | $535 | $(387) | (72.3%) | | Gross margin % | 2.2% | 16.1% | (13.9%) | - | - The decrease in gross margin was primarily due to higher costs incurred during the early stages of production for a contract in the Pioneer eMobility business, as manufacturing processes were being refined[87](index=87&type=chunk) [Operating Expenses](index=25&type=section&id=Operating%20Expenses) Total operating expenses increased by 10.3% to $2,494K in Q1 2025. Selling, general, and administrative (SG&A) expenses rose by 17.8% due to higher professional fees, while research and development (R&D) expenses decreased by 62.1% as the company focused on developing mobile e-Boost EV charging solutions Operating Expenses (in thousands) | Expense Category | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Variance | % Change | | :----------------------------- | :--------------------- | :--------------------- | :------- | :------- | | Selling, general and administrative | $2,414 | $2,050 | $364 | 17.8% | | Research and development | $80 | $211 | $(131) | (62.1%) | | Total operating expense | $2,494 | $2,261 | $233 | 10.3% | - SG&A as a percentage of revenue decreased to **35.8%** in Q1 2025 from **61.8%** in Q1 2024, reflecting the significant increase in total revenue[88](index=88&type=chunk) - R&D expenses were primarily related to developing mobile e-Boost EV charging solutions[89](index=89&type=chunk) [Operating Loss from Continuing Operations](index=25&type=section&id=Operating%20Loss%20from%20Continuing%20Operations) The operating loss from continuing operations increased by 35.9% to $(2,346)K in Q1 2025, compared to $(1,726)K in Q1 2024. This deterioration was mainly driven by the decrease in gross profit and the increase in selling, general, and administrative expenses Operating Loss from Continuing Operations (in thousands) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Variance | % Change | | :-------------------------------- | :--------------------- | :--------------------- | :------- | :------- | | Operating loss from continuing operations | $(2,346) | $(1,726) | $(620) | (35.9%) | [Non-Operating Income from Continuing Operations](index=26&type=section&id=Non-Operating%20Income%20from%20Continuing%20Operations) Interest income significantly increased to $247K in Q1 2025 from $31K in Q1 2024, primarily from cash on hand. Other non-operating income decreased, and no income tax provision was recorded due to a 0% effective tax rate Non-Operating Income (in thousands) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (YoY) | | :--------------- | :--------------------- | :--------------------- | :----------- | | Interest income | $247 | $31 | +$216 | | Other income, net | $23 | $40 | -$(17) | - The increase in interest income was primarily generated from the company's cash on hand[91](index=91&type=chunk) - No income tax provision was recorded for Q1 2025 or Q1 2024, resulting in a **0%** effective tax rate due to a full valuation allowance on deferred tax assets and the use of the discrete method[92](index=92&type=chunk)[93](index=93&type=chunk) [Net Loss per Share from Continuing Operations](index=26&type=section&id=Net%20Loss%20per%20Share%20from%20Continuing%20Operations) Net loss from continuing operations per basic and diluted share was $(0.19) in Q1 2025, an increase from $(0.16) in Q1 2024, reflecting the higher operating loss Net Loss per Share from Continuing Operations | Metric | Q1 2025 | Q1 2024 | | :-------------------------------- | :------ | :------ | | Net loss from continuing operations per basic and diluted share | $(0.19) | $(0.16) | [Income from Discontinued Operations](index=26&type=section&id=Income%20from%20Discontinued%20Operations) Income from discontinued operations, net of tax, increased to $1,147K in Q1 2025 from $620K in Q1 2024. This increase was primarily due to the finalization of a net working capital adjustment related to the PCEP sale Income from Discontinued Operations, Net of Tax (in thousands) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :--------------------- | :--------------------- | :----------- | | Income from discontinued operations, net of tax | $1,147 | $620 | +$527 | - The income in Q1 2025 was primarily due to a **$1,147K** adjustment from finalizing the net working capital with the buyer of the PCEP Sale[96](index=96&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=27&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) As of March 31, 2025, the company had $25,840K in cash and $26,151K in working capital, primarily from the PCEP sale. Cash used in financing activities was substantial due to a one-time special cash dividend payment. The company expects its current cash balance to fund operations for the next twelve months, despite ongoing macroeconomic uncertainties [General](index=27&type=section&id=General) The company's liquidity is strong, with $25,840K cash on hand as of March 31, 2025, largely from the PCEP sale. A significant one-time cash dividend of $16,665K was paid in January 2025. Macroeconomic factors continue to pose risks to the company's revenue and operations - Cash on hand as of March 31, 2025, was **$25,840K**, primarily generated from the PCEP Sale[98](index=98&type=chunk) - A one-time special cash dividend of **$16,665K** was paid on January 7, 2025[98](index=98&type=chunk) - Macroeconomic factors like rising interest rates, inflation, and geopolitical conflicts continue to pose risks to the company's revenue and operations[99](index=99&type=chunk) [Cash Provided by/ Used in Operating Activities](index=27&type=section&id=Cash%20Provided%20by/%20Used%20in%20Operating%20Activities) Cash provided by operating activities significantly improved to $1,502K in Q1 2025, compared to cash used of $(1,950)K in Q1 2024, mainly due to working capital fluctuations Net Cash Provided by/(Used in) Operating Activities (in thousands) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :--------------------- | :--------------------- | :----------- | | Net cash provided by/(used in) operating activities | $1,502 | $(1,950) | +$3,452 | [Cash Used in Investing Activities](index=27&type=section&id=Cash%20Used%20in%20Investing%20Activities) Cash used in investing activities increased to $595K in Q1 2025 from $213K in Q1 2024, primarily due to higher purchases of property and equipment Net Cash Used in Investing Activities (in thousands) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :--------------------- | :--------------------- | :----------- | | Net cash used in investing activities | $(595) | $(213) | -$(382) | [Cash Used in/ Provided by Financing Activities](index=27&type=section&id=Cash%20Used%20in/%20Provided%20by%20Financing%20Activities) Cash used in financing activities was $16,689K in Q1 2025, a significant shift from cash provided of $4,808K in Q1 2024. This change was primarily driven by the payment of a one-time special cash dividend Net Cash Used in/Provided by Financing Activities (in thousands) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :--------------------- | :--------------------- | :----------- | | Net cash used in/provided by financing activities | $(16,689) | $4,808 | -$(21,497) | - The substantial cash outflow in financing activities was mainly due to the **$16,665K** payment of a special cash dividend[104](index=104&type=chunk) [Working Capital](index=27&type=section&id=Working%20Capital) Working capital slightly decreased to $26,151K as of March 31, 2025, from $26,679K at December 31, 2024, despite a significant reduction in cash Working Capital and Cash on Hand (in thousands) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :-------------- | :---------------------------- | :------------------------------- | :----- | | Working capital | $26,151 | $26,679 | $(528) | | Cash on hand | $25,840 | $41,622 | $(15,782) | [Assessment of Liquidity](index=28&type=section&id=Assessment%20of%20Liquidity) The company expects its current cash balance of $25,840K, primarily from the PCEP sale, along with cash flows from operations, to be sufficient to fund operations, capital improvements, and product development for the next twelve months - The company anticipates its current cash balance and operating cash flows will be sufficient to fund operations for the next twelve months[108](index=108&type=chunk) - Cash requirements are expected for operating activities, capital improvements, and product development, particularly for new initiatives[108](index=108&type=chunk) [Capital Expenditures](index=28&type=section&id=Capital%20Expenditures) Capital expenditures, represented by additions to property and equipment, increased to $595K in Q1 2025 from $213K in Q1 2024 Additions to Property and Equipment (in thousands) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :--------------------- | :--------------------- | :----------- | | Additions to property and equipment | $595 | $213 | +$382 | [Known Trends, Events, Uncertainties and Factors That May Affect Future Operations](index=28&type=section&id=Known%20Trends,%20Events,%20Uncertainties%20and%20Factors%20That%20May%20Affect%20Future%20Operations) Future operating results are subject to quarterly variations due to the cyclical electrical equipment industry, changing customer requirements, and raw material price fluctuations. Geopolitical conflicts and global inflation continue to pose significant, unpredictable risks to the business and operations - Future operating results are subject to variability due to the cyclical nature of the electrical equipment industry, customer demands, and raw material price fluctuations (e.g., copper, steel, aluminum)[111](index=111&type=chunk) - Geopolitical conflicts (Russia-Ukraine, Israel-Hamas) and rising global inflation are significant, unpredictable factors that could adversely impact macroeconomic conditions and the company's business[111](index=111&type=chunk) - The company's sales are concentrated in industrial production and commercial construction markets, making it vulnerable to changes in these customer segments[111](index=111&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the company - The company has no applicable quantitative and qualitative disclosures about market risk[112](index=112&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to a material weakness in internal control over financial reporting related to insufficient accounting personnel and lack of segregation of duties. Remediation plans include engaging third parties, implementing a new ERP system, and hiring additional personnel [Evaluation of Disclosure Controls and Procedures](index=29&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to an identified material weakness. However, additional analyses confirmed that the financial statements fairly state the company's financial position - Disclosure controls and procedures were deemed not effective as of March 31, 2025, due to a material weakness[114](index=114&type=chunk) - Despite the material weakness, management concluded that the unaudited condensed interim consolidated financial statements fairly state the financial position, results of operations, and cash flows[114](index=114&type=chunk) [Material Weakness in Internal Control over Financial Reporting](index=29&type=section&id=Material%20Weakness%20in%20Internal%20Control%20over%20Financial%20Reporting) A material weakness exists in internal control over financial reporting due to insufficient accounting personnel, leading to a lack of proper segregation of duties. This weakness was present as of December 31, 2024, and continued through March 31, 2025 - A material weakness in internal control over financial reporting exists due to insufficient accounting personnel and a lack of proper segregation of duties[116](index=116&type=chunk) - This material weakness was identified as of December 31, 2024, and persisted as of March 31, 2025[116](index=116&type=chunk) [Management's Plan to Remediate the Material Weakness](index=29&type=section&id=Management's%20Plan%20to%20Remediate%20the%20Material%20Weakness) Management plans to remediate the material weakness by engaging external third parties, implementing a new ERP system to enforce segregation of duties, and hiring additional accounting and finance personnel - Remediation plans include engaging external third parties, implementing a new ERP system for systemic segregation of duties, and hiring additional accounting and finance personnel[117](index=117&type=chunk)[120](index=120&type=chunk) - The company acknowledges that full implementation and testing of these remediation efforts will take time[118](index=118&type=chunk) [Changes in Internal Control over Financial Reporting](index=29&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Other than the material weakness and remediation plans described, there were no other changes in internal control over financial reporting during Q1 2025 that materially affected or are reasonably likely to materially affect internal control over financial reporting - No other material changes in internal control over financial reporting occurred during Q1 2025, apart from the identified material weakness and remediation efforts[119](index=119&type=chunk) [PART II. OTHER INFORMATION](index=30&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently aware of or a party to any material legal proceedings, nor any threatened or pending litigation that could have a material adverse effect on its business, financial condition, or operating results - The company is not involved in any material legal proceedings or aware of any threatened litigation that could adversely affect its business[122](index=122&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section supplements the risk factors from the annual report, highlighting a revised risk factor concerning customer concentration. A significant portion of revenues historically comes from a few customers, and the loss of business from these customers could materially impact financial results - A significant portion of the company's revenues is concentrated among a few customers, posing a risk if business from these customers is lost[124](index=124&type=chunk) - In Q1 2025, Eneridge Inc. and Verizon Communications Inc. accounted for **39%** and **11%** of sales, respectively[124](index=124&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities or use of proceeds occurred[125](index=125&type=chunk) [Item 3. Defaults Upon Senior Securities](index=30&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities to report - No defaults upon senior securities occurred[126](index=126&type=chunk) [Item 4. Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[127](index=127&type=chunk) [Item 5. Other Information](index=30&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report - No other information to report[128](index=128&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or furnished with the Quarterly Report on Form 10-Q, including certifications from the CEO and CFO, and XBRL-related documents - The exhibits include certifications from the CEO and CFO (Sarbanes-Oxley Act Sections 302 and 906) and Inline XBRL documents[131](index=131&type=chunk) [SIGNATURES](index=32&type=section&id=SIGNATURES) The report is signed by Nathan J. Mazurek, Chief Executive Officer, and Walter Michalec, Chief Financial Officer, on May 15, 2025, certifying its submission - The report was signed by the CEO and CFO on May 15, 2025[135](index=135&type=chunk)

Revenue Growth - Full year revenue for 2024 was $22.9 million, representing a 106% increase compared to $11.1 million in 2023[8] - Q4 2024 revenue reached $9.8 million, a 265% increase from $2.7 million in Q4 2023, primarily driven by increased shipments and rentals of mobile EV charging equipment[9] - Revenues for the year ended December 31, 2024, increased to $22,879 million, up from $11,116 million in 2023, representing a growth of 105%[33] Profitability - Gross profit for 2024 was $5.5 million, with a gross margin of 24%, compared to $2.2 million and a 20% gross margin in 2023[15] - Net income for 2024 was $31,855 million, a significant turnaround from a net loss of $1,898 million in 2023[33] - Basic earnings per share for 2024 was $2.97, compared to a loss of $0.19 per share in 2023[33] Operating Performance - Operating loss from continuing operations for 2024 was $(5.2) million, an improvement of approximately $1.8 million or 25% from $(7.0) million in 2023[16] - Non-GAAP operating income from continuing operations for 2024 was $1.7 million, compared to a non-GAAP operating loss of $(1.3) million in 2023, marking a year-over-year improvement of approximately $3.0 million[8] - Operating loss from continuing operations improved to $(5,248) million in 2024 from $(7,035) million in 2023[39] Cash and Assets - Cash on hand increased to $41.6 million at the end of 2024, compared to $3.6 million at the end of 2023, reflecting an increase of approximately $38.0 million[19] - Total current assets increased to $56,657 million in 2024 from $27,683 million in 2023, a growth of 104%[35] - Cash balance at the end of 2024 was $41,622 million, a substantial increase from $3,582 million at the end of 2023[37] Liabilities and Financial Obligations - Total liabilities rose to $30,522 million in 2024, up from $18,804 million in 2023, indicating increased financial obligations[35] Backlog and Future Guidance - The backlog as of December 31, 2024, was $19.8 million, up from $16.7 million a year earlier, indicating a year-over-year increase of $3.1 million[8] - The company reaffirmed its revenue guidance for 2025, expecting revenue between $27 million and $29 million[20] Research and Development - Research and development expenses for 2024 were $1,050 million, up from $885 million in 2023, indicating continued investment in innovation[39] Charging Sessions - The number of charging sessions increased to 14,500 in 2024, a 93% increase from 7,500 sessions in 2023[5] Investment Activities - The company reported a net cash provided by investing activities of $38,876 million in 2024, primarily from the sale of the PCEP business[37]

Financial Data and Key Metrics Changes - In Q4 2024, revenue from continuing operations was $9.8 million, a 265% increase from $2.7 million in the same quarter last year [24][25] - Full-year 2024 revenue from continuing operations reached $22.9 million, up 106% from $11.1 million in 2023 [28] - The company narrowed its loss from continuing operations in 2024 to $3.3 million, compared to a loss of $6.3 million in 2023, marking a year-over-year improvement of approximately $3 million [30] Business Line Data and Key Metrics Changes - The eBoost mobile charging platform generated $22.9 million in revenue for 2024, more than double the $11.1 million in 2023, reflecting a year-over-year growth of 106% [9][28] - The critical power segment incurred an operating loss of $5.2 million in 2024, an improvement from a loss of $7 million in 2023 [29] Market Data and Key Metrics Changes - The company reported a total backlog of $19.8 million at the end of 2024, a 19% increase compared to the end of 2023 [14] - The markets most active for the company include transit buses, school buses, electric truck and van fleets, and large government and corporate fleets [18] Company Strategy and Development Direction - The company plans to focus on its critical power business, particularly the eBoost platform, and aims to diversify revenue streams to drive sustained long-term growth [13][19] - The launch of the HomeBoost product is targeted at high-end residential and light commercial segments, with plans to provide whole-home backup power and advanced EV charging capabilities [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving or surpassing the revenue guidance for 2025, reaffirming a target of $27 to $29 million [19][32] - The company is optimistic about the demand driven by rapid EV adoption and the increasing need for mobile and off-grid charging solutions [18] Other Important Information - The company sold its Pioneer Custom Electrical Products unit for $50 million, which included a cash payment of $48 million and an equity stake in Millpoint Capital [7][22] - A one-time special cash dividend of $1.50 per share was declared, returning $16.7 million to shareholders [8][32] Q&A Session Summary Question: What is driving the strong backlog and growth in eBoost? - Management indicated that the largest customer segment is government-related entities, particularly for transit and school buses [40] Question: How is the service equipment mix looking for 2025? - The company budgeted $2.5 million in lease and rental revenue for 2025, with expectations to potentially exceed that amount [42] Question: Can you provide an update on the HomeBoost product? - The HomeBoost product is being redesigned to enhance its aesthetic appeal and is targeted at high-end residential users and small businesses requiring reliable power solutions [46][47] Question: Should gross margins around 29% be expected going forward? - Management noted that the gross margins are expected to remain stable or improve, driven by a favorable mix of product and service revenues [51][52] Question: Are there any macroeconomic factors that could impact the outlook for 2025? - Management acknowledged that while macroeconomic factors could affect the business, the current demand from government entities for electric solutions is strong and unlikely to reverse [64]