What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-14 compared with 2023-08-14 · 329 added, 264 removed, 201 unchanged (75% of the section changed)

3 unchanged sentences

thousands, except for share and per share amounts)

2022 (Revised)

Three Months Ended

Six Months Ended

2022 (Revised)

Nine Months Ended

September 30,

Cost of goods sold

2 unchanged sentences

Total operating expenses

Loss from operations

Income (loss) from operations

Interest income

Other expense, net

Loss before income taxes

Other (income) expense, net

Income (loss) before income taxes

Income tax expense

Loss per share:

Net income (loss)

Income (loss) per share:

Weighted average common shares outstanding:

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thousands, except for share amounts)

September 30,

Current assets

5 unchanged sentences

Financing lease right-of-use assets

Deferred financing costs

LIABILITIES AND STOCKHOLDERS’ EQUITY

12 unchanged sentences

Common stock, $ 0.001 par value, 30,000,000 shares authorized;

9,994,545 and 9,644,545 shares issued and outstanding on June 30, 2023 and December 31, 2022, respectively

9,930,022 and 9,644,545 shares issued and outstanding on September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

6 unchanged sentences

Statements of Cash Flows

2022 (Revised)

Six Months Ended

2022 (Revised)

Nine Months Ended

September 30,

Operating activities

Adjustments to reconcile net loss to net cash provided by/ (used in) operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Amortization of right-of-use financing leases

9 unchanged sentences

Operating lease liabilities

Net cash provided by/ (used in) operating activities

Net cash used in operating activities

Investing activities

3 unchanged sentences

Net proceeds from the exercise of options for common stock

Net proceeds from issuance of common stock

Payment of deferred financing costs

Principal repayments of financing leases

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Acquisition of right-of-use assets and lease liabilities

Deferred financing costs included in accounts payable and accrued liabilities

Surrender and retirement of common stock

accompanying notes are an integral part of these consolidated financial statements.

POWER SOLUTIONS, INC.

Statements of Stockholders’ Equity

Consolidated Statements of Changes in Stockholders’

thousands, except for share amounts)

other compre- hensive

stockholders’

Balance - March 31, 2022 (revised)

Stock-based compensation

compre-hensive

Total stockholders’

Balance - June 30, 2022 (revised)

Balance - March 31, 2023

Stock-based compensation

Balance - September 30, 2022

Balance - June 30, 2023

other compre- hensive

stockholders’

Stock-based compensation

Exercise of stock options

Issuance of common stock, net of transaction costs

Surrender and retirement of common stock

Balance - September 30, 2023

compre-hensive

Total stockholders’

Balance - January 1, 2022

1 unchanged sentence

Exercise of stock options

Balance - June 30, 2022 (revised)

Balance - September 30, 2022

Balance - January 1, 2023

Net income (loss)

Stock-based compensation

Balance - June 30, 2023

Exercise of stock options

Issuance of common stock, net of transaction costs

Surrender and retirement of common stock

Balance - September 30, 2023

accompanying notes are an integral part of these consolidated financial statements.

POWER SOLUTIONS, INC.

Notes to Unaudited Consolidated Financial Statements

for the Quarterly Period Ended June 30, 2023

to Unaudited Consolidated Financial Statements for the Quarterly Period Ended September 30, 2023

thousands, except for share and per share amounts)

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and Critical Power Solutions (“Critical Power”).

accompanying unaudited interim consolidated financial statements of the Company have been prepared pursuant to the rules of the SEC and

reflect the accounts of the Company as of June 30, 2023.

Certain information and footnote disclosures, normally included in annual financial

statements prepared in accordance with accounting principles generally accepted in the United States (“U.S.

been condensed or omitted pursuant to those rules and regulations.

We believe that the disclosures made are adequate to make the information

presented not misleading to the reader.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments,

necessary to fairly state the financial position, results of operations and cash flows with respect to the interim consolidated financial

statements have been included.

The results of operations for the interim period are not necessarily indicative of the results for the

entire fiscal year.

The year-end balance sheet data was derived from audited financial statements but does not include all disclosures

required by U.S.

accompanying unaudited interim consolidated financial statements of the Company have been prepared pursuant to the rules of the SEC

and reflect the accounts of the Company as of September 30, 2023.

Certain information and footnote disclosures, normally included in

annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S.

GAAP”), have been condensed or omitted pursuant to those rules and regulations.

We believe that the disclosures made are

adequate to make the information presented not misleading to the reader.

In the opinion of management, all adjustments, consisting

only of normal recurring adjustments, necessary to fairly state the financial position, results of operations and cash flows with

respect to the interim consolidated financial statements have been included.

The results of operations for the interim period are

not necessarily indicative of the results for the entire fiscal year.

The year-end balance sheet data was derived from audited

financial statements but this filing does not include all disclosures required by U.S.

GAAP for a year-end balance sheet.

dollar amounts (except share and per share data) presented in the notes to our unaudited interim consolidated financial statements

are stated in thousands of dollars, unless otherwise noted.

Amounts may not foot due to rounding.

ASC 740-270 requires the use of an

estimated annual effective tax rate to compute the tax provision during an interim period unless certain exceptions are met.

used a discrete-period computation method to calculate taxes for the fiscal three and six-month period ended June 30, 2023.

Company anticipates that its annual effective tax rate will be 0 %

for the year ending December 31, 2023.

As of June 30, 2023, the Company continues to provide a 100 %

valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax

assets will not be realized.

dollar amounts (except share and per share data) presented in the notes to our unaudited interim consolidated financial statements are

stated in thousands of dollars, unless otherwise noted.

ASC 740-270 requires the use of an estimated

annual effective tax rate to compute the tax provision during an interim period unless certain exceptions are met.

We have used a discrete-period

computation method to calculate taxes for the fiscal three and nine-month period ended September 30, 2023.

The Company anticipates that

its annual effective tax rate will be 0 % for the year ending December 31, 2023.

As of September 30, 2023, the Company continues to provide

a 100 % valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred

tax assets will not be realized.

unaudited interim consolidated financial statements include the accounts of Pioneer and its wholly-owned subsidiaries.

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and its subsidiaries included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

accompanying financial statements have been prepared on a basis, which contemplates the realization of assets and the satisfaction of

liabilities in the normal course of business.

As shown in the accompanying financial statements, as of June 30, 2023, the Company had

$ 9,624 of cash on hand and working

capital of $ 14,363 .

The cash on hand was generated primarily from the sale of common stock under the ATM Program (as defined below) during the year ended

December 31, 2021 and payment of all unpaid principal and interest from the two subordinated promissory notes we received in connection

with the sale of the transformer business units in August 2019 for an aggregate principal amount of $ 7,500

(the “Seller Notes”) during the year ended December 31, 2022.

have met our cash needs through a combination of cash flows from operating activities and bank borrowings, the completion of the Equity

Transaction, proceeds from the sale of the CleanSpark common stock and warrants to purchase CleanSpark common stock, sale of common stock

under the ATM Program, funding from the Payroll Protection Program and collecting all unpaid principal and interest from the Seller Notes.

Our cash requirements historically were generally for operating activities, debt repayment, capital improvements and acquisitions.

expect to meet our cash needs with our working capital and cash flows from our operating activities.

We expect our cash requirements

to be generally for operating activities, product development and capital improvements.

The Company expects that its current cash balance

is sufficient to fund operations for the next twelve months.

December 13, 2021, we filed a prospectus supplement, which forms a part of our registration statement on Form S-3 (File No.

that was declared effective by the SEC on October 27, 2020, in connection with the offer and sale of up to an aggregate offering amount

of common stock that may be issued and sold under

the ATM Program.

We did not sell any shares of common stock under the ATM Program during the six months ended June 30, 2023.

30, 2023, $ 8,600

of common stock remained available for issuance

under the ATM Program.

accompanying financial statements have been prepared on a basis, which contemplates the realization of assets and the satisfaction

of liabilities in the normal course of business.

As shown in the accompanying financial statements, as of September 30, 2023, the

Company had $ 7,581

of cash on hand and working capital of $ 13,702 .

The cash on hand was generated primarily from the sale of common stock under the ATM Program (as defined below), payment of all

unpaid principal and interest from the two subordinated promissory notes we received in connection with the sale of the transformer

business units in August 2019 for an aggregate principal amount of $ 7,500 (the “Seller Notes”) during the year ended

December 31, 2022, and cash flows from operating activities.

On October 20, 2020, we entered into an At the Market Sale Agreement

Wainwright & Co., LLC (“Wainwright”), pursuant to which we may offer and sell our shares of common stock

from time to time through Wainwright, acting as sales agent or principal (the “ATM Program”).

Since October 20, 2020,

and through September 30, 2023, the Company sold an aggregate of 916,059

shares of common stock for aggregate gross proceeds of approximately $ 9,183 ,

before any sales agent fees and expenses payable by us under the ATM Program.

During the three and nine months ended September 30,

2023, the Company sold an aggregate of 27,559

shares of common stock for an aggregate consideration of approximately $ 184 ,

before any sales agent fees and expenses payable by us.

have historically met our cash needs through a combination of cash flows from operating activities and bank borrowings, the completion

of the Equity Transaction, proceeds from the sale of the CleanSpark common stock and warrants to purchase CleanSpark common stock, sale

of common stock under the ATM Program and collecting all unpaid principal and interest from

the Seller Notes.

Historically, our cash requirements were generally for operating activities, debt repayment, capital improvements and

acquisitions.

We expect to meet our cash needs with our working capital and cash flows from our operating activities.

We expect our cash

requirements to be generally for operating activities, product development and capital improvements.

The Company expects that its current

cash balance is sufficient to fund operations for the next twelve months.

December 13, 2021, we filed a prospectus supplement to a prospectus which forms a part of our registration statement on Form S-3 (File

333-249569) (the “Prior Shelf Registration Statement”), that was declared effective by the SEC on October 27, 2020 (the

“Prior ATM Prospectus”), in connection with the offer and sale of up to an aggregate offering amount of $ 8,600 of common

stock that may be issued and sold under the ATM Program.

Prior to the expiration of the Prior Shelf Registration Statement at the end

of its three-year term, we sold an aggregate of 27,559 shares of common stock for an aggregate consideration of approximately $ 184 , before

any sales agent fees and expenses payable by us, under the Prior ATM Prospectus.

On August 30, 2023, we filed a new registration statement

on Form S-3 (File No.

333-274266) to replace the Prior Shelf Registration Statement, including a base prospectus which covers the offering,

issuance and sale of up to $ 150,000 of common stock, preferred stock, warrants and/or units;

and a sales agreement prospectus covering

the offering, issuance and sale of up to a maximum aggregate offering price of $ 75,000 of common stock that may be issued and sold under

the ATM Program (the “New ATM Prospectus”).

The new registration statement was declared effective by the SEC on September

As of September 30, 2023, $ 75,000 of common stock remained available for issuance under the New ATM Prospectus.

and Uncertainties

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The continuing impacts of the COVID-19 endemic, as well as rising interest rates, inflation, changes in foreign currency

exchange rates and geopolitical developments (including the war in Ukraine) have resulted, and may continue to result, in a global slowdown

of economic activity, which may decrease demand for a broad variety of goods and services, including those provided by the Company’s

clients, while also disrupting supply channels, sales channels and advertising and marketing activities for an unknown period of time.

As a result of the current uncertainty in economic activity, the Company is unable to predict the potential size and duration of the

impact on its revenue and its results of operations, if any.

The extent of the potential impact of these macroeconomic factors on the

Company’s operational and financial performance will depend on a variety of factors, including the continuing impacts of the COVID-19

endemic and the extent of geopolitical disruption and their respective impacts on the Company’s clients, partners, industry, and

employees, all of which are uncertain at this time and cannot be accurately predicted.

The Company continues to monitor the effects of

these macroeconomic factors and intends to take steps deemed appropriate to limit the impact on its business.

During the six months ended

June 30, 2023, the Company was able to operate substantially at capacity.

exchange rates and geopolitical developments, such as the ongoing conflict between Russia and Ukraine, and the ongoing

conflict between Israel and Hamas, have resulted, and may continue to result, in a global slowdown of economic activity, which

may decrease demand for a broad variety of goods and services, including those provided by the Company’s clients, while also disrupting

supply channels, sales channels and advertising and marketing activities for an unknown period of time.

As a result of the current uncertainty

in economic activity, the Company is unable to predict the potential size and duration of the impact on its revenue and its results of

operations, if any.

The extent of the potential impact of these macroeconomic factors on the Company’s operational and financial

performance will depend on a variety of factors, including the continuing impacts of the COVID-19 endemic and the extent of geopolitical

disruption and their respective impacts on the Company’s clients, partners, industry, and employees, all of which are uncertain

at this time and cannot be accurately predicted.

The Company continues to monitor the effects of these macroeconomic factors and intends

to take steps deemed appropriate to limit the impact on its business.

During the nine months ended September 30, 2023, the Company was

able to operate substantially at capacity.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Company’s significant accounting policies are described in Note 2 to the audited consolidated financial statements included in

the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

There have been no significant changes in the Company’s

accounting policies during the second quarter of 2023.

have been no material changes to the significant accounting policies included in Note 2 to the audited consolidated financial statements

included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, except as disclosed in this note.

Accounting Pronouncements

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financial statements.

Accounting Standards Update (“ASU”) 2023-03,

“Presentation of Financial Statements (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing

Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718):

Amendments to SEC Paragraphs

Pursuant to SEC Staff Accounting Bulletin No.

120, SEC Staff Announcement at the March 24, 2022 Emerging Issues Task Force (“EITF”)

Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 - General Revision of Regulation S-X:

Income or Loss Applicable

to Common Stock.” ASU 2023-03 amends the ASC for SEC updates pursuant to SEC Staff Accounting Bulletin No.

SEC Staff Announcement

at the March 24, 2022 EITF Meeting;

and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 - General Revision of Regulation

Standards Update (“ASU”) 2023-03, “Presentation of Financial Statements (Topic 205), Income Statement - Reporting Comprehensive

Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic

Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

120, SEC Staff Announcement at the March 24, 2022 Emerging

Issues Task Force (“EITF”) Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 - General Revision

of Regulation S-X:

Income or Loss Applicable to Common Stock.” ASU 2023-03 amends the ASC for SEC updates pursuant to SEC Staff

Accounting Bulletin No.

SEC Staff Announcement at the March 24, 2022 EITF Meeting;

and Staff Accounting Bulletin Topic 6.B, Accounting

Series Release 280 - General Revision of Regulation S-X:

Income or Loss Applicable to Common Stock.

These updates were immediately effective and did not have a significant impact on our

financial statements.

On January 1, 2023, the Company adopted ASU 2016-13,

“Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,” using a modified

retrospective approach.

The standard amends several aspects of the measurement of credit losses related to certain financial instruments,

including the replacement of the existing incurred credit loss model and other models with the current expected credit losses model.

cumulative effect of adoption did not result in an adjustment to the allowance for credit loss, and accordingly, the Company’s accumulated

deficit as of January 1, 2023.

Company accounts for trade receivables at original invoice amount less an estimate made for expected credit losses.

The Company’s

allowance for expected credit losses on accounts receivable reflects management’s estimate of credit losses over the remaining

expected life of such assets, measured primarily using historical experience, as well as current conditions and forecasts that affect

the collectability of the reported amount.

These updates were immediately effective

and did not have a significant impact on our financial statements.

January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses

on Financial Instruments,” using a modified retrospective approach.

The standard amends several aspects of the measurement of credit

losses related to certain financial instruments, including the replacement of the existing incurred credit loss model and other models

with the current expected credit losses model.

The cumulative effect of adoption did not result in an adjustment to the allowance for

credit loss, and accordingly, the Company’s accumulated deficit as of January 1, 2023.

The Company accounts for trade receivables at original

invoice amount less an estimate made for expected credit losses.

The Company’s allowance for expected credit losses on accounts

receivable reflects management’s estimate of credit losses over the remaining expected life of such assets, measured primarily using

historical experience, as well as current conditions and forecasts that affect the collectability of the reported amount.

There were no

allowances for expected credit losses as of June

30, 2023 and December 31, 2022.

allowances for expected credit losses as of September 30, 2023 and December 31, 2022.

Deferred Financing Costs

legal, accounting and other third-party fees that are directly associated with equity financings are capitalized as deferred

financing costs and included as a non-current asset on the balance sheet until such financings are consummated.

After consummation

of the equity financing, these costs will be recorded in the stockholders’ equity section of the consolidated balance sheets as

a reduction of additional paid-in capital generated as a result of the offering, to the extent there are sufficient proceeds.

the equity financing no longer be considered probable of being consummated, all deferred financing costs would be charged to

operating expenses in the consolidated statements of operations.

of our products and services

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of promised products or services in an amount that reflects the consideration we expect to receive in exchange for those products or

the three months ended June 30, 2023, the Company recognized $ 2,467

of revenue over time and incurred costs of $ 2,103 .

During the three months ended June 30, 2022, the Company recognized $ 574

revenue over time and incurred costs of $ 592 .

Additionally, the Company recognized $ 7,773

of revenue at a point in time from the sale of our products during the three months ended June 30, 2023 and 2022, respectively.

revenues include maintenance contracts that are recognized over time based on the contract term and repair services which are

recognized as services are delivered.

The Company recognized $ 1,890 and

$ 1,857 of service revenue during the three months ended June 30, 2023 and 2022, respectively.

the six months ended June 30, 2023, the Company recognized $ 3,128

of revenue over time and incurred costs of $ 2,652 .

During the six months ended June 30, 2022, the Company recognized $ 900

revenue over time and incurred costs of $ 870 .

Additionally, the Company recognized $ 13,558

of revenue at a point in time from the sale of our products during the six months ended June 30, 2023 and 2022, respectively.

revenues include maintenance contracts that are recognized over time based on the contract term and repair services which are

recognized as services are delivered.

The Company recognized $ 3,952

of service revenue during the six months ended June 30, 2023 and 2022, respectively.

the three months ended June 30, 2023, the Company recognized approximately $ 3,285

of revenue that was recognized as deferred revenue at December 31, 2022, as compared to $ 214

revenue during the three months ended June 30, 2022 that was recognized as deferred revenue at December 31, 2021.

the six months ended June 30, 2023, the Company recognized approximately $ 7,794

of revenue that was recognized as deferred revenue at December 31, 2022, as compared to $ 2,056

of revenue during the six months ended June 30, 2022 that was recognized as deferred revenue at December 31, 2021.

the three months ended September 30, 2023, the Company recognized $ 8,919 of revenue over time and incurred costs of $ 6,408 .

three months ended September 30, 2022, the Company recognized $ 2,410 of revenue over time and incurred costs of $ 2,100 .

Additionally,

the Company recognized $ 1,461 and $ 1,788 of revenue at a point in time from the sale of our products during the three months ended September

30, 2023 and 2022, respectively.

revenues include maintenance contracts that are recognized over time based on the contract term and repair services which are recognized

as services are delivered.

The Company recognized $ 2,063 and $ 2,053 of service revenue during the three months ended September 30, 2023

and 2022, respectively.

the nine months ended September 30, 2023, the Company recognized $ 18,963 of revenue over time and incurred

costs of $ 13,195 .

During the nine months ended September 30, 2022, the Company recognized $ 3,309

of revenue over time and incurred

costs of $ 2,881 .

Additionally, the Company recognized $ 8,103 and $ 8,723

of revenue at a point in time from

the sale of our products during the nine months ended September 30, 2023 and 2022, respectively.

revenues include maintenance contracts that are recognized over time based on the contract term and repair services which are recognized

as services are delivered.

The Company recognized $ 6,014 and $ 5,444 of service revenue during the nine months ended September 30, 2023

and 2022, respectively.

During the three months ended September 30, 2023,

the Company recognized approximately $ 2,569 of revenue that was classified as deferred revenue as of December 31, 2022, as compared to $ 81

of revenue recognized during the three months ended September 30, 2022 that was classified as deferred revenue at December 31, 2021.

the nine months ended September 30, 2023, the Company recognized approximately $ 8,336 of revenue that was recognized as deferred revenue

at December 31, 2022, as compared to $ 2,137 of revenue during the nine months ended September 30, 2022 that was recognized as deferred

revenue at December 31, 2021.

Company manages its accounts receivable credit risk by performing credit evaluations and monitoring amounts due from the Company’s

1 unchanged sentence

or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable.

of June 30, 2023, two customers represented approximately 60 %

of the Company’s accounts receivable.

At December 31, 2022, three customers represented approximately 57 %,

of the Company’s accounts receivable.

the three months ended June 30, 2023, one customer represented approximately 63 %

of the Company’s revenue.

For the three months ended June 30, 2022, two customers represented approximately 35 %

of the Company’s revenue.

the six months ended June 30, 2023, two customers represented approximately 57 %

of the Company’s revenue.

For the six months ended June 30, 2022, three customers represented approximately 18 %, 16 %

of the Company’s revenue.

of September 30, 2023, three customers represented approximately 36 %, 16 % and 14 % of the Company’s accounts receivable.

31, 2022, three customers represented approximately 57 %, 13 % and 11 % of the Company’s accounts receivable.

the three months ended September 30, 2023, two customers represented approximately 54 % and 17 % of the Company’s revenue.

three months ended September 30, 2022, one customer represented approximately 54 % of the Company’s revenue.

the nine months ended September 30, 2023, two customers represented approximately 42 % and 22 % of the Company’s revenue.

nine months ended September 30, 2022, two customers represented approximately 31 % and 12 % of the Company’s revenue.

of a product requires that the buyer obtain permission in writing from the Company.

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and material.

Returns and warranties during the three and six months ended June 30, 2023 and 2022 were insignificant.

Returns and warranties during the three and nine months ended September 30, 2023 and 2022 were insignificant.

following table presents our revenues disaggregated by revenue discipline:

OF REVENUE DISAGGREGATED

Three Months Ended

Nine Months Ended

September 30,

Total revenue

“Note 9 - Business Segment and Geographic Information”.

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

connection with the preparation of our consolidated interim financial statements for the quarter ended September 30, 2022, we completed

an analysis of one of our customer contracts under ASC 606 and, as a result, we determined that the performance obligations are satisfied

See “Note 3 – Revenues in Notes to Consolidated Financial Statements” in Part I of this Quarterly Report

on Form 10-Q.

As a result of the analysis, we identified additional revenues to be recognized of $ 574

related to the three and six months ended June

30, 2022, respectively, along with the additional related cost of revenues of $ 592

respectively.

following tables reconcile the balances as previously reported in the Quarterly Reports on Form 10-Q as of and for the three and six

months ended June 30, 2022 to the as revised balances:

OF PRIOR PERIOD FINANCIAL STATEMENTS

Consolidated Statements of Operations (Unaudited)

The Three Months Ended

Consolidated Statements of Operations (Unaudited)

Cost of goods sold

Loss per share - basic and

Weighted average common shares

outstanding - basic and diluted

Consolidated Statements of Operations (Unaudited)

The Six Months Ended

Consolidated Statements of Operations (Unaudited)

Cost of goods sold

Loss per share - basic and

Weighted average common shares

outstanding - basic and diluted

Consolidated Balance Sheet (Unaudited)

Total current

Total current liabilities

Total liabilities

Total stockholders’

Consolidated Statements of Operations (Unaudited)

The Six Months Ended

Flows From Operating Activities (Unaudited)

Changes in current operating

assets and liabilities:

Net cash used in operating

Consolidated Statements of Operations (Unaudited)

The Six Months Ended

Statement of Stockholders’ Equity (Unaudited)

Accumulated deficit

Total stockholders’

accordance with SEC Staff Accounting Bulletin No.

108, we evaluated this revision based on an analysis of quantitative and qualitative

factors as to whether it was material to the consolidated statements of operations for the three and six months ended June 30, 2022 and

if amendments of previously filed financial statements with the SEC are required.

We determined that the adjustment is neither quantitatively

nor qualitatively material and, therefore, the revision does not have a material impact to the consolidated statements of operations

for the three and six months ended June 30, 2022 or other prior periods.

components of inventories are summarized below:

OF INVENTORIES

September 30,

Raw materials

Work in process

Total inventories

are stated at the lower of cost or a net realizable value determined on a weighted average method.

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OF PROPERTY AND EQUIPMENT

Machinery, vehicles

and equipment

September 30,

Machinery, vehicles and equipment

Furniture and fixtures

1 unchanged sentence

Leasehold improvements

Construction in progress

Property and equipment, gross

accumulated depreciation

property and equipment, net

expense was $ 97

for the three months ended June 30, 2023 and

2022, respectively.

expense was $ 227

for the six months ended June 30, 2023 and 2022,

respectively.

Total property and equipment, net

expense was $ 143 and $ 40 for the three months ended September 30, 2023 and 2022, respectively.

expense was $ 370 and $ 113 for the nine months ended September 30, 2023 and 2022, respectively.

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

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OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

September 30,

Accounts payable

accounts payable and accrued liabilities

liabilities primarily consist of accrued sales commissions, accrued compensation and benefits, accrued sales and use taxes and accrued

At June 30, 2023 and December 31, 2022, accrued sales commissions were $ 250

respectively.

Accrued compensation and benefits at June 30, 2023 and December 31, 2022 were $ 345

respectively.

Accrued sales and use taxes at June 30, 2023 and December 31, 2022 were $ 108

respectively, and there was $ 157 of

accrued insurance at June 30, 2023 as compared to $ 559

Accrued liabilities

Total accounts payable and accrued liabilities

Accrued liabilities primarily consist of accrued legal settlement costs,

accrued sales commissions, accrued compensation and benefits, accrued sales and use taxes and accrued insurance.

As of September 30, 2023

and December 31, 2022, accrued legal settlement costs were $ 3,500 and $ 0 , respectively.

See Note 10 for details.

As of September 30, 2023 and December 31, 2022, accrued sales commissions were $ 366 and $ 278 , respectively.

Accrued compensation

and benefits as of September 30, 2023 and December 31, 2022 were $ 312 and $ 213 , respectively.

Accrued sales and use taxes as of September 30,

2023 and December 31, 2022 were $ 30 and $ 258 , respectively, and there was no accrued insurance as of September 30, 2023 compared to $ 559

at December 31, 2022.

The remainder of accrued

liabilities are comprised of several insignificant accruals in connection with normal business operations.

June 30, 2023, one supplier represented approximately 15 %

of the Company’s accounts payable.

At December 31, 2022, none of the Company’s suppliers represented more than 10 %

of the Company’s accounts payable.

The remainder of accrued liabilities are comprised of several insignificant accruals in connection with normal

business operations.

September 30, 2023 and December 31, 2022, none of the Company’s suppliers represented more than 10 % of the Company’s accounts

STOCK-BASED COMPENSATION

summary of stock option activity during the six months ended June 30, 2023 is as follows:

summary of stock option activity during the nine months ended September 30, 2023 is as follows:

OF STOCK OPTION ACTIVITY

Stock Options

Weighted average

exercise price

contractual term

intrinsic value

Outstanding as of January 1, 2023

Outstanding as of June

Exercisable as of June

summary of RSU activity during the six months ended June 30, 2023 is as follows:

Outstanding as of September 30, 2023

Exercisable as of September 30, 2023

summary of RSU activity during the nine months ended September 30, 2023 is as follows:

OF RESTRICTED STOCK ACTIVITY

Weighted-average

grant-date fair value per share

fair value per

Weighted-average

Unvested restricted stock units

as of January 1, 2023

Unvested restricted stock units as

of January 1, 2023

Units granted

Unvested restricted stock

units as of June 30, 2023

compensation expense recorded for the three and six months ended June 30, 2023 was approximately $ 819

respectively.

Stock-based compensation expense recorded for the three and six months ended June 30, 2022 was approximately $ 659

respectively.

At June 30, 2023, there was $ 719

of stock-based compensation expense remaining

to be recognized in the consolidated statements of operations over a weighted average remaining period of 0.9

BASIC AND DILUTED LOSS PER COMMON SHARE

and diluted loss per common share is calculated based on the weighted average number of vested shares outstanding during the period.

The Company’s employee and director equity awards, as well as incremental shares issuable upon exercise of warrants, are not considered

in the calculations if the effect would be anti-dilutive.

of June 30, 2023 and 2022, diluted loss per share excludes potentially dilutive common shares related to 713,167

shares underlying stock options, respectively,

shares underlying nonvested RSUs, respectively,

as their effect was anti-dilutive.

units as of September 30, 2023

During the three and nine months ended September 30,

2023, the Company issued 10,000 shares of its common stock for consulting services with a fair value of $ 64,900 .

During the nine months ended September 30, 2023, the

Company issued 100,000 shares of common stock to its Chief Executive Officer (“CEO”) in connection with the

vesting of 100,0000 restricted stock units (“RSU”) on May 11, 2023.

The fair value of the RSUs on the date of grant was $ 575 ,

which was recognized immediately.

During the nine months ended September 30, 2023, the

Company issued 250,000 shares of common stock to its Chief Financial Officer (“CFO”) in connection with the vesting of 125,000

RSUs on May 1, 2022 and 125,000 RSUs on May 1, 2023.

During the three and nine months ended September 30, 2023, the CEO and

CFO each individually agreed to surrender shares of common stock to the Company, totaling an aggregate of 117,082 shares with a fair value of $ 720 in connection with income and payroll tax obligations paid by the Company

in connection with the vesting of the above mentioned RSUs.

The shares were subsequently cancelled and retired by the Company.

compensation expense recorded for the three and nine months ended September 30, 2023 was approximately $ 285 and $ 1,246 , respectively.

Stock-based compensation expense recorded for the three and nine months ended September 30, 2022 was approximately $ 143 and $ 859 , respectively.

As of September 30, 2023, there was $ 638 of stock-based compensation expense remaining to be recognized in the consolidated statements of

operations over a weighted average remaining period of 1.1 years.

BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE

and diluted income (loss) per common share is calculated based on the weighted average number of vested shares outstanding during the

The Company’s employee and director equity awards, as well as incremental shares issuable upon exercise of warrants, are

not considered in the calculations if the effect would be anti-dilutive.

The following table sets forth the computation of basic and

diluted income (loss) per share (in thousands, except per share data):

OF BASIC AND DILUTED LOSS PER SHARE

Three Months Ended

Nine Months Ended

September 30,

Net income (loss)

Weighted average basic shares outstanding

Effect of dilutive securities - equity based compensation plans

Weighted average diluted shares outstanding

Net income (loss) per common share:

of September 30, 2023 and 2022, diluted income (loss) per share excludes potentially dilutive common shares related to 718,167 and 670,667

shares underlying stock options, respectively, and 125,000 and 250,000 shares underlying nonvested RSUs, respectively, as their effect

was anti-dilutive.

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

19 unchanged sentences

OF SEGMENT INCOME AND LOSS

Power Solutions

Three Months Ended

Nine Months Ended

September 30,

T&D Solutions

Power Systems

Total revenue

Critical Power Solutions

Total revenue

Three Months Ended

Nine Months Ended

September 30,

Depreciation and amortization

Power Solutions

corporate overhead expenses

T&D Solutions

Critical Power Solutions

Unallocated corporate overhead expenses

Three Months Ended

Nine Months Ended

September 30,

Operating income (loss)

Power Solutions

corporate overhead expenses

T&D Solutions

Critical Power Solutions

Unallocated corporate overhead expenses

are attributable to countries based on the location of the Company’s customers:

OF REVENUES ARE ATTRIBUTABLE TO COUNTRIES BASED ON THE LOCATION

Three Months Ended

Nine Months Ended

September 30,

United States

COMMITMENTS AND CONTINGENCIES

Litigation and Claims

From time to time, the Company is a defendant or plaintiff

in various legal actions that arise in the normal course of business.

Liabilities for loss contingencies arising from claims, assessments,

litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of

the assessment can be reasonably estimated.

June 15, 2023, two individuals (the “Plaintiffs”) filed a complaint in the U.S.

District Court, District of Nebraska

naming the Company, its wholly-owned subsidiary, Titan Energy Systems, Inc., and an individual acting in his capacity as an employee

of the Company, collectively as defendants.

Plaintiffs filed an amended complaint on July 7, 2023 alleging negligent driving,

negligent entrustment, and negligent hiring, training and supervision, as a result of a car accident that occurred on September 9,

2019 involving the Plaintiffs and the individual.

According to the amended complaint, the Plaintiffs are seeking special damages

related to the injuries sustained by Plaintiffs.

On July 27, 2023, the defendants filed an Answer to Plaintiff’s Amended

On October 6, 2023, a mediation was held, but the parties did not reach a settlement.

The parties are in the beginning stages of the discovery process and are

working to schedule a settlement conference before the end of 2023.

As of September 30, 2023, the Company recognized a liability of $ 3,500

related to this matter, which was included within accounts payable and accrued liabilities, with a corresponding insurance receivable

of $ 3,500 related to the loss recovery, which was deemed to be probable and included within prepaid expenses and other current assets

on the consolidated balance sheet.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements